Immune Response Corp. said investors misread the company'spriorities when they bid down the stock on Friday based onreports that the company was delaying clinical tests of itspreventive AIDS vaccine.

The company said it remains on track to file next year formarketing approval for a therapeutic vaccine.

The stock (NASDAQ:IMNR) fell $1.75 to $26.75 after trading aslow as $24.75 during the session. News reports said thepreventive vaccine would be delayed because of liability issuessurrounding the use of the killed vaccine virus in healthypeople.

"Our business focus has always been on developing a treatmentfor already-infected patients," said spokesman Steven Basta.Phase II/III trials of the company's HIV Immunotherapeuticvaccine are due to be completed in September. ImmuneResponse plans to file in 1993 for FDA marketing approval, andwill begin additional Phase III trials prior to filing.

While the company has always said its focus is on atherapeutic, "it would be lovely to have a vaccine you could gointo uninfected people with," said Franklin Berger, a biotechanalyst with Labe & Associates.

Berger estimated the U.S. therapeutic vaccine market at about200,000 patients and the preventive market at 500,000 to750,000 patients.

The San Diego company still hopes to test the preventivevaccine in healthy volunteers this year, said Basta.

"We think the product is completely safe," he said. The vaccineconsists of a whole virus irradiated and chemically killed.

Another liability issue arises from the fact that people infectedwith HIV may not test positive in antibody tests for six months.Such people might take the preventive vaccine withoutknowing that they were already infected and test positive forthe virus later.

Analyst Berger said this could be mitigated by polymerasechain reaction tests for the viral antigen. The tests, whileexpensive, would detect infected individuals immediately, hesaid.

-- Karen Bernstein BioWorld Staff

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