<PAGE>
As filed with the Securities and Exchange Commission on June 9, 1998.
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE IMMUNE RESPONSE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 33-0255679
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5935 Darwin Court
Carlsbad, California 92008
(760) 431-7080
(Address, including zip code, and telephone number, including
area code of registrant's principal executive offices)
Copies to:
DENNIS J. CARLO, Ph.D. THOMAS E. SPARKS, JR., ESQ.
President and Chief Executive Officer Pillsbury Madison & Sutro LLP
The Immune Response Corporation P. O. Box 7880
5935 Darwin Court San Francisco, CA 94120-7880
Carlsbad, California 92008 (415) 983-1000
(760) 431-7080
(Name, address, including zip code, and
telephone number, including area code,
of agent for service)
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement as determined
by the Selling Stockholder.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box: [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
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<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED SHARE(2) PRICE REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.0025 par value 1,700,000 shares $11.375 $19,337,500 $5,705
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</TABLE>
(1) Represents shares issuable upon conversion of, or upon issuance of
dividends on, the Company's Series F Convertible Preferred Stock. This
Registration Statement also covers such indeterminate number of additional
shares, if any, as shall be issuable from time to time as required by the
terms of the Series F Convertible Preferred Stock.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), based upon the average of the high and low price
reported on the Nasdaq National Market on June 4, 1998.
The registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such state.
SUBJECT TO COMPLETION, DATED JUNE 9, 1998
THE IMMUNE RESPONSE CORPORATION
1,700,000 SHARES OF COMMON STOCK
(PAR VALUE $0.0025 PER SHARE)
--------------------
This Prospectus covers the public offering, which is not being
underwritten, of 1,700,000 shares (the "Shares") of Common Stock, $0.0025 par
value, of The Immune Response Corporation ("Immune Response" or the "Company")
issuable to certain persons named in this Prospectus (the "Selling
Stockholders"). The Shares are issuable upon conversion of, or upon issuance
of dividends on, 200 shares of Series F Convertible Preferred Stock sold by
the Company to certain accredited investors in a private placement in April
1998 for gross proceeds of $10,000,000 (the "Private Placement"). The Series
F Convertible Preferred Stock is convertible into Common Stock initially at a
conversion price equivalent to $14.07 per share of Common Stock. At the
initial conversion price, 710,732 shares of Common Stock are issuable upon
conversion of the 200 shares of Series F Convertible Preferred Stock. If
prior to April 24, 1999 the average of the closing bid prices for the Common
Stock during any 20 consecutive trading day period subsequent to May 28, 1998,
and the closing bid price for a share of Common Stock on April 24, 1999 is not
greater than $14.07, then the conversion price of the Series F Convertible
Preferred Stock will be adjusted downward on April 24, 1999 (or sooner if the
Company issues Common Stock at less than $14.07 per share prior to April 24,
1999) and quarterly thereafter. The new lower conversion price will be equal
to the average of the closing bid prices of the Common Stock during the 30
consecutive trading days immediately preceding the date of adjustment of the
conversion price unless the conversion price then in effect is lower, in which
case the conversion price would not be adjusted. The conversion price of the
Series F Preferred Stock will also be adjusted for events such as subdivisions
or combinations of the Common Stock and reorganizations, reclassifications,
consolidations, merger or sale of the Company. The Series F Convertible
Preferred Stock bears a dividend of 7.5% per annum, which is generally payable
in shares of Common Stock. The Company is obligated to use its best efforts
to keep the registration statement, of which this Prospectus is a part,
effective until the earlier of (i) the date as of which the Selling
Stockholders may sell all of their Shares without restriction pursuant to Rule
144(k) promulgated under the Securities Act of 1933 (or successor thereto) or
(ii) the date on which (A) the Selling Stockholders have sold all their shares
and (B) none of the shares of Series F Preferred Stock issued in the Private
Placement is outstanding.
The Company's Common Stock is traded on the Nasdaq National Market under
the symbol "IMNR." On June 9, 1998, the last reported sale price of the
Company's Common Stock on the Nasdaq National Market was $11.125.
The Shares are being offered on behalf of the Selling Stockholders, and
the Company will not receive any proceeds from the offering. The Shares may
be sold or distributed from time to time by the Selling Stockholders, or by
pledgees, donees or transferees of, or other successors in interest to, the
Selling Stockholders, directly to one or more purchasers (including pledgees)
or through brokers, dealers or underwriters who may act solely as agents or
may acquire Shares as principals, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices, at negotiated
prices, or at fixed prices, which may be changed. The distribution of the
Shares may be effected in one or more of the following methods: (i) ordinary
brokers' transactions, which may include long or short sales; (ii)
transactions involving cross or block trades or otherwise on the Nasdaq
National Market or such other exchange or market on which the Common Stock is
listed for trading; (iii) purchases by brokers, dealers or underwriters as
principal and resale by such purchasers for their own accounts pursuant to
this Prospectus; (iv) "at the market" to or through market makers or into an
existing market for the Common Stock; (v) in other ways not involving market
makers or established trading markets, including direct sales to purchasers or
<PAGE>
sales effected through agents; (vi) through transactions in options, swaps or
other derivatives (whether exchange-listed or otherwise); or (vii) any
combination of the foregoing, or by any other legally available means. In
addition, the Selling Stockholders or their successors in interest may enter
into hedging transactions with broker-dealers who may engage in short sales of
Shares in the course of hedging the positions they assume with the Selling
Stockholders. The Selling Stockholders or their successors in interest may
also enter into option or other transactions with broker-dealers that require
the delivery by such broker-dealers of the Shares, in which Shares may be
resold thereafter pursuant to this Prospectus. The Selling Stockholders or
their successors in interest may also pledge shares as collateral for margin
accounts and such shares could be resold pursuant to the terms of such
accounts. See "Plan of Distribution."
All expenses (estimated to be $60,000) of the registration of the Common
Stock covered by this Prospectus will be borne by the Company pursuant to a
preexisting agreement, except that the Company will not pay any Selling
Stockholder's underwriting discounts or selling commissions.
The Company will not receive any proceeds from the sale of the Shares.
The Selling Stockholders and any broker-dealers, agents or underwriters that
participate with the Selling Stockholders in the distribution of the Shares
may be determined to be "underwriters" within the meaning of Section 2(11) of
the Securities Act of 1933, as amended (the "Securities Act"), and any
commissions received by them and any profit on the sale of the Shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. See "Selling Stockholders" and "Plan of
Distribution."
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THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
COMMENCING ON PAGE 5 OF THIS PROSPECTUS.
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------
The date of this Prospectus is __________, 1998
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<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy statements and other information filed by the Company can be (i)
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C., and
at the Commission's Chicago Regional Office, 500 West Madison Street, Chicago,
Illinois; and New York Regional Office, 7 World Trade Center, New York, New
York and (ii) accessed via a Web site maintained by the Commission
(http://www.sec.gov). Copies of such material can also be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549 at prescribed rates.
The Company has filed with the Commission a Registration Statement on
Form S-3 (Commission File No. 333-___) under the Securities Act, with respect
to the Common Stock offered hereby (the "Registration Statement"). This
Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and the Common Stock, reference is
made to the Registration Statement and the exhibits and schedules thereto.
Statements contained in this Prospectus as to the contents of any contract or
other document are not necessarily complete, and, in each instance, reference
is made to the copy of such contract or document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference. Copies of the Registration Statement, including all exhibits
thereto, may be obtained from the Commission's principal office in Washington,
D.C. upon payment of the fees prescribed by the Commission, or may be examined
without charge at the offices of the Commission.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents previously filed with the Commission are hereby
incorporated by reference into this Prospectus:
1. The Company's Annual Report on Form 10-K for the year ended December
31, 1997 (File No. 0-18006);
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998;
3. The Company's Current Report on Form 8-K dated April 24, 1998;
4. The description of Immune Response Common Stock set forth in the
Registration Statement on Form 8-A filed on March 30, 1990; and
5. The description of the Preferred Stock Purchase rights for Series E
Participating Preferred Stock, par value $0.001, set forth in the Registration
Statement on Form 8-A filed on March 4, 1992.
All documents subsequently filed by Immune Response pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of the
offering to which this Prospectus relates shall be deemed to be incorporated
by reference into this Prospectus and to be part of this Prospectus from the
date of filing thereof.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus
and the Registration Statement of which it is a part to the extent that a
statement contained herein or in any other subsequently filed document which
also is incorporated herein modifies or replaces such statement. Any
statement so modified or superseded shall not be deemed, in its unmodified
form, to constitute a part of this Prospectus or such Registration Statement.
Upon written or oral request, the Company will provide without charge to
each person to whom a copy of this Prospectus is delivered a copy of the
documents incorporated by reference herein (other than exhibits to such
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<PAGE>
documents unless such exhibits are specifically incorporated by reference
therein). Requests should be submitted in writing or by telephone at (760)
431-7080 to The Immune Response Corporation, at the principal executive
offices of the Company, 5935 Darwin Court, Carlsbad, California 92008.
SPECIAL NOTE REGARDING FORWARD-LOOKING INFORMATION
When used in this Prospectus, the words "intends to," "believes,"
"anticipates," "expects" and similar expressions are intended to identify
forward-looking statements. These forward-looking statements are based
largely on the Company's expectations and are subject to a number of risks and
uncertainties, certain of which are beyond the Company's control. For a
discussion of certain of such risks, see "Risk Factors." These
forward-looking statements speak only as of the date of this Prospectus. The
Company expressly disclaims any obligation or undertaking to release publicly
any updates or revisions to any forward-looking statement contained herein to
reflect any change in the Company's expectations with regard thereto or any
change in events, conditions or circumstances on which any such statement is
based.
THE COMPANY
Immune Response is a biopharmaceutical company developing immune-based
therapies to induce specific T cell responses for the treatment of HIV,
autoimmune diseases and cancer. The Company is conducting clinical trials for
its immune-based therapies for HIV, rheumatoid arthritis, psoriasis, multiple
sclerosis, colon cancer and brain cancer and preclinical studies for melanoma
and prostate cancers. In addition, the Company is developing a targeted
delivery technology for gene therapy which is designed to enable the
intravenous injection of genes for delivery directly to the liver. The
Company's gene therapy program is currently focused on diseases of the liver
and is in preclinical studies for the treatment of hemophilia and hepatitis.
The Company's strategy is to retain ownership of these proprietary
technologies and to seek corporate collaborations or joint ventures for
certain disease-specific applications.
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<PAGE>
RISK FACTORS
UNCERTAINTY OF PRODUCT DEVELOPMENT AND CLINICAL TESTING
The Company has not completed the development of any products and there
can be no assurance any products will be successfully developed. The Company
has been in existence since 1986, and to date only six of its product
candidates have entered clinical trials. The Company's potential immune-based
therapies for HIV, autoimmune disease, cancer and gene therapy products
currently under development will require significant additional research and
development efforts and regulatory approvals prior to potential
commercialization. To achieve profitable operations, the Company must
successfully develop, manufacture, introduce and market products. There can
be no assurance that any of the Company's potential products will prove to be
safe and effective in clinical trials, that United States Food and Drug
Administration ("FDA") or other regulatory approvals will be obtained or that
such products will achieve market acceptance.
The Company's potential HIV immune-based therapy, REMUNE, is in a Phase
III clinical endpoint trial designed to provide evidence of efficacy based on
clinical endpoints. There can be no assurance that the results of such
clinical trial will demonstrate that REMUNE is safe and efficacious or, that
even if the results of the clinical trial are considered successful by the
Company, that the FDA will not require the Company to conduct additional large
scale clinical trials with REMUNE before the FDA will consider approving
REMUNE for commercial sale. Failure to successfully complete the Phase III
clinical endpoint trial in a timely fashion and a failure to obtain FDA
approval of REMUNE will materially and adversely affect the Company. There
can be no assurance that the results of the Phase III trial will be consistent
with Phase II results. Even if the results of the Phase III trial are
consistent with the results of the Phase II trial, there can be no assurance
that the FDA would approve REMUNE for marketing. In addition, REMUNE is being
tested in a Phase II clinical trial in Thailand, in a pediatric Phase I
clinical trial in the United States and in combination trials with approved
HIV therapies in the United States and Spain. Failure of these trials to
demonstrate the safety and effectiveness of REMUNE could have a material
adverse effect on the regulatory approval process for this potential product.
The Company's other potential immune-based therapies and gene therapy
technologies are at a much earlier stage of development than REMUNE. The
Company's gene therapy technology and certain of its technologies for the
treatment of cancer have not yet been tested in humans and there can be no
assurance that human testing of potential products based on such technologies
will be permitted by regulatory authorities or, that even if human testing is
permitted, that products based on such technologies will be developed and
shown to be safe or efficacious. Potential immune-based therapies based on
certain of the Company's autoimmune technologies and certain of its cancer
technologies are at an early stage of clinical testing and there can be no
assurance that such products will be shown to be safe, efficacious or receive
regulatory approval.
There can be no assurance that the results of the Company's preclinical
studies and clinical trials will be indicative of future clinical trial
results. A commitment of substantial resources to conduct time-consuming
research, preclinical studies and clinical trials, including the REMUNE Phase
III clinical endpoint trial will be required if the Company is to develop any
products. Delays in planned patient enrollment in the Company's current
clinical trials or future clinical trials may result in increased costs,
program delays or both. There can be no assurance that any of the Company's
potential products will prove to be safe and effective in clinical trials,
that FDA or other regulatory approvals will be obtained or that such products
will achieve market acceptance. Any products resulting from these programs are
not expected to be successfully developed or commercially available for a
number of years, if at all.
There can be no assurance that unacceptable toxicities or side effects
will not occur at any time in the course of human clinical trials or, if any
products are successfully developed and approved for marketing, during
commercial use of the Company's products. The appearance of any such
unacceptable toxicities or side effects could interrupt, limit, delay or abort
the development of any of the Company's products or, if previously approved,
necessitate their withdrawal from the market. Furthermore, there can be no
assurance that disease resistance will not limit the efficacy of potential
products.
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<PAGE>
ADDITIONAL FINANCING REQUIREMENTS AND ACCESS TO CAPITAL
The Company will need to raise additional funds to conduct research and
development, preclinical studies and clinical trials necessary to bring its
potential products to market and establish manufacturing and marketing
capabilities. The Company anticipates that in 1998, the REMUNE clinical trials
will continue to represent a significant portion of the Company's overall
expenditures. The Company also anticipates that costs related to the
development of REMUNE will continue to increase as the Company approaches
possible commercialization. The anticipated costs with respect to REMUNE will
depend on many factors, including the results of interim analyses of the data
from the Phase III clinical endpoint trial, the availability of third party
reimbursement for expanded access protocols for REMUNE, the potential for
accelerated approval and certain other factors which will influence the
Company's determination of the appropriate continued investment of the
Company's financial resources in this program. The Company's future capital
requirements will depend on many factors, including continued scientific
progress in its research and development programs, the scope and results of
preclinical studies and clinical trials, the time and costs involved in
obtaining regulatory approvals, the costs involved in filing, prosecuting and
enforcing patent claims, competing technological and market developments, the
cost of manufacturing scale-up, effective commercialization activities and
arrangements and other factors not within the Company's control. The Company
intends to seek additional funding through public or private financings,
arrangements with corporate collaborators or other sources. If funds are
acquired through collaborations, the Company will likely be required to
relinquish some or all rights to products that the Company may have otherwise
developed itself. Adequate funds may not be available when needed or on terms
acceptable to the Company. Insufficient funds may require the Company to
scale back or eliminate some or all of its research and development programs
or license to third parties products or technologies that the Company would
otherwise seek to develop itself. The Company believes that its existing
resources, including interest thereon will enable the Company to maintain its
current and planned operations beyond 1998.
PATENTS AND PROPRIETARY TECHNOLOGY
The Company has filed, or participated as licensee, in the filing of a
number of patent applications in the United States and many international
countries. The Company files applications as appropriate for patents covering
its products and processes. The Company has been issued patents, or has
licensed patents, covering certain aspects of its proposed immune-based
therapies for HIV, autoimmune disease, cancer and gene therapy technologies.
The Company's success may depend in part on its ability to obtain patent
protection for its products and processes. The Company is aware that a group
working with Connetics Corporation has received a United States patent related
to autoimmune disease research that covers technology similar to that used by
the Company.
There can be no assurance that the Company will be able to negotiate any
necessary cross licenses, and if not successful, failure to do so could have a
negative impact on the Company. There can be no assurance that the Company's
patent applications will be issued as patents or that any of its issued
patents, or any patent that may be issued in the future, will provide the
Company with adequate protection for the covered products, processes or
technology.
The patent positions of biotechnology and pharmaceutical companies can be
highly uncertain, and involve complex legal and factual questions. Therefore,
the breadth of claims allowed in biotechnology and pharmaceutical patents
cannot be predicted. The Company also relies upon unpatented trade secrets
and know how, and no assurance can be given that others will not independently
develop substantially equivalent trade secrets or know how. In addition,
whether or not the Company's patents are issued, or issued with limited
coverage, others may receive patents which contain claims applicable to the
Company's product. There can be no assurance that any of the Company's
patents, or any patents issued to the Company in the future, will afford
meaningful protection against competitors. Defending any such patent could be
costly to the Company, and there can be no assurance that the patent would be
held valid by a court of competent jurisdiction.
The Company also relies on protecting its proprietary technology in part
through confidentiality agreements with its corporate collaborators,
employees, consultants and certain contractors. There can be no assurance
that these agreements will not be breached, that the Company will have
adequate remedies for any breach, or that the Company's trade secrets will not
otherwise become known or independently discovered by its competitors.
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<PAGE>
It is possible that the Company's products or processes will infringe, or
will be found to infringe, patents not owned or controlled by the Company,
such as the patent owned by Connetics Corporation. If any relevant claims of
third-party patents are upheld as valid and enforceable, the Company could be
prevented from practicing the subject matter claimed in such patents, or would
be required to obtain licenses or redesign its products or processes to avoid
infringement. There can be no assurance that such licenses would be available
at all or on terms commercially reasonable to the Company or that the Company
could redesign its products or processes to avoid infringement. Litigation may
be necessary to defend against claims of infringement, to enforce patents
issued to the Company or to protect trade secrets. Such litigation could
result in substantial costs and diversion of management efforts regardless of
the results of such litigation and an adverse result could subject the Company
to significant liabilities to third parties, require disputed rights to be
licensed or require the Company to cease using such technology.
HISTORY OF OPERATING LOSSES
As of March 31, 1998, the Company had an accumulated deficit of $161.4
million. The Company has not generated revenues from the commercialization of
any products and expects to incur substantial net operating losses over the
next several years. There can be no assurance that the Company will be able
to generate sufficient product revenue to become profitable at all or on a
sustained basis. The Company expects to have quarter-to-quarter fluctuations
in expenses, some of which could be significant, due to expanded research,
development and clinical trial activities.
LENGTHY APPROVAL PROCESS AND UNCERTAINTY OF GOVERNMENT REGULATORY REQUIREMENTS
Clinical testing, manufacture, promotion and sale of the Company's drug
products are subject to extensive regulation by numerous governmental
authorities in the United States, principally the FDA, and corresponding state
and foreign regulatory agencies. The Company believes that REMUNE and most of
its other potential immune-based therapies will be regulated by the FDA as
biological drug products under current regulations of the FDA. Biological
products must be shown to be safe, pure and potent (i.e., effective) and are
subject to the same regulatory requirements as nonbiological products under
the FDC Act, as amended by the FDA Modernization Act, except that a biological
product licensed under the Public Health Services Act ("PHS Act") is not
required to have an approved NDA under the Federal Food, Drug and Cosmetic Act
("FDC Act"). The FDA Modernization Act directed the FDA to take measures to
minimize the differences in the review and approval of marketing applications
for biological and nonbiological products. The FDA Modernization Act also
made significant revisions to the statutory requirements with regard to the
approval of new biological and nonbiological products. Among other things,
the FDA Modernization Act established a new statutory program for the approval
of fast track drugs, streamlined clinical research, and revised the content of
product approval applications and the FDA review process. The FDA is required
to issue regulations and guidelines in order to implement certain of these new
requirements. Until the FDA implements these regulations and guidelines, it
is impossible to predict the impact of the FDA Modernization Act on the review
and approval of any marketing applications that the Company may submit to the
FDA. The FDC Act, the PHS Act and other federal and state statutes and
regulations govern or influence the testing, manufacture, safety,
effectiveness, labeling, storage, recordkeeping, approval, advertising,
distribution and promotion of biological prescription drug products.
Noncompliance with applicable requirements can result in, among other things,
fines, injunctions, seizure of products, total or partial suspension of
product marketing, failure of the government to grant premarket approval,
withdrawal of marketing approvals and criminal prosecution.
The regulatory process for new therapeutic drug products, including the
required preclinical studies and clinical testing, is lengthy and expensive
and there can be no assurance that necessary FDA clearances will be obtained
in a timely manner, if at all. There can be no assurance as to the length of
the clinical trial period or the number of patients the FDA will require to be
enrolled in the clinical trials in order to establish the safety and efficacy
of the Company's products. The Company may encounter significant delays or
excessive costs in its efforts to secure necessary approvals, and regulatory
requirements are evolving and uncertain. Future United States or foreign
legislative or administrative acts could also prevent or delay regulatory
approval of the Company's products. There can be no assurance that the
Company will be able to obtain the necessary approvals for clinical trials,
manufacturing or marketing of any of its products under development. Even if
commercial regulatory approvals are
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<PAGE>
obtained, they may include significant limitations on the indicated uses for
which a product may be marketed. In addition, a marketed product is subject
to continual FDA review. Later discovery of previously unknown problems or
failure to comply with the applicable regulatory requirements may result in
restrictions on the marketing of a product or withdrawal of the product from
the market, as well as possible civil or criminal sanctions.
The steps required before a biological drug product may be marketed in
the United States generally include preclinical studies and the filing of an
IND application with the FDA. Reports of results of preclinical studies and
clinical trials for biological drug products are submitted to the FDA in the
form of a Biologics Licensing Application ("BLA") for approval for marketing
and commercial shipment. Submission of a BLA does not assure FDA approval for
marketing. The BLA review process may take a number of years to complete,
although reviews of applications for treatments of AIDS, cancer and other
life-threatening diseases may be accelerated or expedited. Failure of the
Company to receive FDA marketing approval for REMUNE or any of its other
products under development on a timely basis could have a material adverse
effect on the Company's business, financial condition and results of
operations. In addition to obtaining approval for each biological drug
product, an ELA usually must be filed and approved by the FDA.
Among the other requirements for BLA approval is the requirement that
prospective manufacturers conform to the FDA's Good Manufacturing Practices
("GMP") requirements specifically for biological drugs, as well as for other
drugs. In complying with the FDA's GMP requirements, manufacturers must
continue to expend time, money and effort in production, recordkeeping and
quality control to assure that the product meets applicable specifications and
other requirements. Failure to comply with the FDA's drug GMP requirements
subjects the manufacturer to possible FDA regulatory action. There can be no
assurance that the Company or its contract manufacturers, if any, will be able
to maintain compliance with the FDA's drug GMP requirements on a continuing
basis. Failure to maintain such compliance could have a material adverse
effect on the Company's business, financial condition and results of
operations.
The Company believes its proprietary GeneDrug and cancer treatment
therapies will likely be regulated as biological products. As with the
Company's other potential products, the gene therapy and cancer products will
be subject to extensive FDA regulation throughout the product development
process, and there can be no assurance that any of these products will be
successful at securing the requisite FDA marketing approval on a timely basis,
if at all.
The FDA Modernization Act also amended the FDC Act to permit expanded
access to individuals and larger groups to unapproved new therapeutic and
diagnostic products. Although the new law largely codifies existing FDA
regulations in this area, it expands access to all investigational therapies
under certain conditions. Although the FDA has granted expanded access to
REMUNE for those patients who are ineligible to enroll in the Phase III
clinical endpoint trial, the FDA has to date not designated expanded access
protocols for REMUNE as "treatment" protocols. Either expanded access or a
treatment protocol designation might permit third party reimbursement of some
of the costs associated with making REMUNE available to patients in such an
expanded access context. There can be no assurance that the FDA will
determine that REMUNE meets all of the FDA's criteria for use of an
investigational drug for treatment use or that, even if the product is allowed
for treatment use, that third party payers will provide reimbursement for any
of the costs of treatment with REMUNE.
The FDA also has issued regulations to accelerate the approval of or to
expedite the review of new biological drug products for serious or
life-threatening illnesses that provide meaningful therapeutic benefit to
patients over existing treatments. Under the accelerated approval program,
the FDA may grant marketing approval for a biological or nonbiological drug
product earlier than would normally be the case. In addition to the
accelerated approval process, the FDA has established procedures designed to
expedite the development, evaluation and marketing of new therapies intended
to treat persons with life-threatening and severely debilitating illnesses,
especially when no satisfactory alternative therapy exists. In addition, the
FDA Modernization Act established a new statutory program for the approval of
fast track drugs, including biological products. There can be no assurance
that the FDA will consider REMUNE or any other of the Company's products under
development to be an appropriate candidate for accelerated approval, expedited
review or fast track designation.
-8-
<PAGE>
To market any drug products outside of the United States, the Company is
also subject to numerous and varying foreign regulatory requirements,
implemented by foreign health authorities, governing the design and conduct of
human clinical trials and marketing approval. The approval procedure varies
among countries and can involve additional testing, and the time required to
obtain approval may differ from that required to obtain FDA approval. The
foreign regulatory approval process includes all of the risks associated with
obtaining FDA approval set forth above, and approval by the FDA does not
ensure approval by the health authorities of any other country.
TECHNOLOGICAL CHANGE AND COMPETITION
The biotechnology industry continues to undergo rapid change and
competition is intense in the fields of HIV, autoimmune disease, cancer and
gene therapy, and such competition is expected to increase. The Company will
compete with fully integrated pharmaceutical companies, small biotechnology
companies, universities and research organizations. There can be no assurance
that competitors have not or will not succeed in developing technologies and
products that are more effective than any which have been or are being
developed by the Company or which would render the Company's technology and
products obsolete and noncompetitive. Many of the Company's competitors have
substantially greater experience, financial and technical resources and
production, marketing and development capabilities than the Company.
Accordingly, certain of the Company's competitors may succeed in obtaining
regulatory approval for products more rapidly or effectively than the Company.
If the Company commences commercial sales of its products, it will also be
competing with respect to manufacturing efficiency and sales and marketing
capabilities, areas in which it currently has no experience. There can be no
assurance that competitors will not develop and commercialize more effective
or affordable products.
DEPENDENCE ON THIRD PARTIES
The Company's strategy for the research, development and
commercialization of its products requires entering into various arrangements
with corporate collaborators, licensors, licensees and others, and the
Company's commercial success is dependent upon these outside parties
performing their respective contractual responsibilities, including the
analysis of the data generated in the Company's clinical trials. The amount
and timing of resources such third parties will devote to these activities may
not be within the control of the Company. There can be no assurance that such
parties will perform their obligations as expected and the failure of third
parties to perform their obligations would have a material adverse effect on
the Company. Although the Company has collaborative agreements with several
universities and research institutions, the Company's agreement with Bayer is
the only collaborative agreement that provides the Company with contract
revenue. There can be no assurance that these collaborations will result in
the development of any commercial products. Immune Response intends to seek
additional collaborative arrangements to develop and commercialize certain of
its products. There can be no assurance that the Company will be able to
negotiate collaborative arrangements on favorable terms, or at all, in the
future, or that its current or future collaborative arrangements will be
successful.
DEPENDENCE ON KEY PERSONNEL
Since its inception, Immune Response has relied on the technical and
management skills of its experienced staff. The Company does not maintain key
man life insurance on any of its personnel. The Company's success also
depends in large part upon its ability to attract and retain highly qualified
scientific and management personnel. The Company faces competition for such
personnel from other companies, academic institutions, government entities and
other organizations. There can be no assurance that the Company will be
successful in hiring or retaining requisite personnel.
LACK OF COMMERCIAL MANUFACTURING AND MARKETING EXPERIENCE
The Company has a manufacturing facility for REMUNE located in King of
Prussia, Pennsylvania, and a pilot manufacturing facility in Carlsbad,
California for its other products. The Company has not yet manufactured its
product candidates in commercial quantities. No assurance can be given that
the Company, on a timely basis, will be able to make the transition from
manufacturing clinical trial quantities to commercial production quantities
successfully or be able to arrange for contract manufacturing. The Company
believes it will be able to manufacture
-9-
<PAGE>
REMUNE for initial commercialization, if the product obtains FDA approval, but
it has not yet demonstrated the capability to manufacture REMUNE in commercial
quantities, or its autoimmune disease, cancer and gene therapy treatments in
large-scale clinical or commercial quantities. The Company has no experience
in the sales, marketing and distribution of pharmaceutical products. There
can be no assurance that the Company will be able to establish sales,
marketing and distribution capabilities or make arrangements with its
collaborators, licensees or others to perform such activities or that such
efforts will be successful. There can be no assurance of market acceptance of
the Company's products, if they are developed and approved for
commercialization.
The manufacture of the Company's products involves a number of steps and
requires compliance with stringent quality control specifications imposed by
the Company itself and by the FDA. Moreover, the Company's products can only
be manufactured in a facility that has undergone a satisfactory inspection by
the FDA. For these reasons, the Company would not be able quickly to replace
its manufacturing capacity if it were unable to use its manufacturing
facilities as a result of a fire, natural disaster (including an earthquake),
equipment failure or other difficulty, or if such facilities are deemed not in
compliance with the FDA's drug GMP requirements and the non-compliance could
not be rapidly rectified. The Company's inability or reduced capacity to
manufacture its products would have a material adverse effect on the Company's
business and results of operations.
The Company may enter into arrangements with contract manufacturing
companies to expand its own production capacity in order to meet requirements
for its products, or to attempt to improve manufacturing efficiency. If the
Company chooses to contract for manufacturing services and encounters delays
or difficulties in establishing relationships with manufacturers to produce,
package and distribute its finished products, clinical trials, market
introduction and subsequent sales of such products would be adversely
affected. Further, contract manufacturers must also operate in compliance with
the FDA's drug GMP requirements; failure to do so could result in, among other
things, the disruption of product supplies. Until recently, biologic product
licenses could not be held by any company unless it performed significant
manufacturing operations. The FDA recently amended its regulations in this
regard, and the Company believes that under these new regulations it can now
hold licenses for its biological products without performing significant
manufacturing steps. Nonetheless, the Company's potential dependence upon
third parties for the manufacture of its products may adversely affect the
Company's profit margins and its ability to develop and deliver such products
on a timely and competitive basis.
UNCERTAINTY OF PRODUCT PRICING, REIMBURSEMENT AND RELATED MATTERS
The Company's ability to earn sufficient returns on its products will
depend in part on the extent to which reimbursement for the costs of such
products and related treatments will be available from government health
administration authorities, private health coverage insurers, managed care
organizations and other organizations. Third party payors are increasingly
challenging the price of medical products and services. If purchasers or
users of the Company's products are not able to obtain adequate reimbursement
for the cost of using such products, they may forego or reduce such use.
Significant uncertainty exists as to the reimbursement status of newly
approved health care products, and there can be no assurance that adequate
third party coverage will be available. Failure to obtain appropriate
reimbursement would have a material adverse effect on the Company.
PRODUCT LIABILITY EXPOSURE
The Company faces an inherent business risk of exposure to product
liability and other claims in the event that the development or use of its
technology or prospective products is alleged to have resulted in adverse
effects. While the Company has taken, and will continue to take, what it
believes are appropriate precautions, there can be no assurance that it will
avoid significant liability exposure. Although the Company currently carries
product liability insurance for clinical trials, there can be no assurance
that the Company has sufficient coverage, or can obtain sufficient coverage,
at a reasonable cost. An inability to obtain product liability insurance at
acceptable cost or to otherwise protect against potential product liability
claims could prevent or inhibit the commercialization of products developed by
the Company. A product liability claim could have a material adverse effect
on the Company's business, financial condition and results of operations.
-10-
<PAGE>
HAZARDOUS MATERIALS/ENVIRONMENTAL MATTERS
Although the Company does not currently manufacture commercial quantities
of its product candidates, it produces limited quantities of such products for
its clinical trials. The Company's research and development processes involve
the controlled storage, use and disposal of hazardous materials, biological
hazardous materials and radioactive compounds. The Company is subject to
federal, state and local laws and regulations governing the use, manufacture,
storage, handling and disposal of such materials and certain waste products.
Although the Company believes that its safety procedures for handling and
disposing of such materials comply with the standards prescribed by such laws
and regulations, the risk of accidental contamination or injury from these
materials cannot be completely eliminated. In the event of such an accident,
the Company could be held liable for any damages that result, and any such
liability could exceed the resources of the Company. There can be no
assurance that the Company will not be required to incur significant costs to
comply with current or future environmental laws and regulations nor that the
operations, business or assets of the Company will not be materially or
adversely affected by current or future environmental laws or regulations.
SUBORDINATION OF COMMON STOCK TO PREFERRED STOCK
The Company's Common Stock is expressly subordinate to the Company's
Series F Convertible Preferred Stock in the event of the liquidation,
dissolution or winding up of the Company. If the Company were to cease
operations and liquidate its assets, there can be no assurance that there
would be any remaining value available for distribution to the holders of
Common Stock after providing for the Series F Convertible Preferred Stock
liquidation preference.
VOLATILITY OF STOCK PRICE AND ABSENCE OF DIVIDENDS
The market price of Immune Response's common stock, like that of the
common stock of many other biopharmaceutical companies, has been and is likely
to be highly volatile. Factors such as the results of preclinical studies and
clinical trials by the Company, its collaborators or its competitors, other
evidence of the safety or efficacy of products of the Company or its
competitors, announcements of technological innovations or new products by the
Company or its competitors, governmental regulatory actions, changes or
announcements in reimbursement policies, developments with the Company's
collaborators, developments concerning patent or other proprietary rights of
the Company or its competitors (including litigation), concern as to the
safety of the Company's products, period-to-period fluctuations in the
Company's operating results, changes in estimates of the Company's performance
by securities analysts, market conditions for biopharmaceutical stocks in
general and other factors not within the control of the Company could have a
significant adverse impact on the market price of the common stock. The
Company has never paid cash dividends on its common stock and does not
anticipate paying any cash dividends in the foreseeable future.
EFFECT OF CERTAIN ANTI-TAKEOVER PROVISIONS
The Company's Certificate of Incorporation and Bylaws include provisions
that could discourage potential takeover attempts and make attempts by
stockholders to change management more difficult. The approval of 66 2/3
percent of the Company's voting stock is required to approve certain
transactions and to take certain stockholder actions, including the calling of
special meetings of stockholders and the amendment of any of the anti-takeover
provisions contained in the Company's Certificate of Incorporation. Further,
pursuant to the terms of its stockholder rights plan, the Company has
distributed a dividend of one right for each outstanding share of common
stock. These rights will cause substantial dilution to the ownership of a
person or group that attempts to acquire the Company on terms not approved by
the Board of Directors and may have the effect of deterring hostile takeover
attempts.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares
offered hereby.
-11-
<PAGE>
INCOME TAX CONSIDERATIONS
Each prospective purchaser should consult his or her own tax advisor with
respect to the income tax issues and consequences of holding and disposing of
the Common Stock.
-12-
<PAGE>
SELLING STOCKHOLDERS
As of May 15, 1998 there were four (4) Selling Stockholders, as set forth
below. Share ownership information is based solely upon either information
furnished to the Company or reports furnished to the Company by the respective
individuals or entities, as the case may be, pursuant to the rules of the
Commission:
<TABLE>
<CAPTION>
Percentage of
Common Stock to be
Shares of Common Held After Sale
Stock Issuable Upon Assuming Full
Conversion of the Conversion of
Series F Convertible Series F Convertible
Preferred Stock Number of Preferred Stock and
Held at Shares Being Sale of
Selling Stockholders May 15, 1998(1) Offered(1) Common Stock
- --------------------------------------------------- -------------------- ------------ --------------------
<S> <C> <C> <C>
Themis Partners L.P. . . . . . . . . . . . . . . . 167,022 167,022 0
Heracles Fund . . . . . . . . . . . . . . . . . . . 508,173 508,173 0
Brown Simpson Strategic Growth Fund, Ltd. . . . . . 28,429 28,429 0
Brown Simpson Strategic Growth Fund, L.P. . . . . . 7,107 7,107 0
</TABLE>
- --------------
(1) Excludes additional shares of Common Stock which would be issuable to the
Selling Stockholders upon conversion of the Series F Convertible Preferred
Stock if the conversion price is adjusted downward pursuant to the terms of
the Series F Convertible Preferred Stock and excludes shares of Common
Stock which will be issuable to the Selling Stockholders to pay the
dividend of 7.5% per annum payable on the Series F Convertible Preferred
Stock.
There has been no material relationship between the Selling Stockholders
and the Company in the past three years except as a result of ownership of
the Series F Convertible Preferred Stock.
PLAN OF DISTRIBUTION
The Shares are being offered on behalf of the Selling Stockholders, and
the Company will not receive any proceeds from the offering. The Shares may
be sold or distributed from time to time by the Selling Stockholders, or by
pledgees, donees or transferees of, or other successors in interest to, the
Selling Stockholders, directly to one or more purchasers (including pledgees)
or through brokers dealers or underwriters who may act solely as agents or
may acquire Shares as principals, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices, at negotiated
prices, or at fixed prices, which may be changed. The distribution of the
Shares may be effected in one or more of the following methods: (i) ordinary
brokers' transactions, which may include long or short sales; (ii)
transactions involving cross or block trades or otherwise on the Nasdaq
National Market or such other exchange or market on which the Common Stock is
listed for trading; (iii) purchases by brokers, dealers or underwriters as
principal and resale by purchasers for their own accounts pursuant to this
Prospectus; (iv) "at the market" to or through market makers or into an
existing market for the Common Shares; (v) in other ways not involving market
makers or established trading markets, including direct sales to purchasers
or sales effected through agents; (vi) through transactions in options, swaps
or other derivatives (whether exchange-listed or otherwise); or (vii) any
combination of the foregoing, or by any other legally available means. In
addition, the Selling Stockholders or their successors in interest may enter
into hedging transactions with broker-dealers who may engage in short sales
of Shares in the course of hedging the positions they assume with the Selling
Stockholders. The Selling Stockholders or its successors in interest may
also enter into option or other transactions with broker-dealers that require
the delivery by such broker-dealers of the Shares, in which Shares may be
resold thereafter pursuant to this Prospectus. The Selling Stockholders or
their successors in interest may also
-13-
<PAGE>
pledge shares as collateral for margin accounts and such shares could be
resold pursuant to the terms of such accounts.
Brokers, dealers, underwriters or agents participating in the
distribution of the Shares as agents may receive compensation in the form of
commissions, discounts or concessions from the Selling Stockholders and/or
purchasers of the Shares for whom such broker-dealers may act as agent, or to
whom they may sell as principal, or both (which compensation as to a
particular broker-dealer may be less than or in excess of customary
commissions). The Selling Stockholders and any broker-dealers who act in
connection with the sale of Shares hereunder may be deemed to be
"Underwriters" within the meaning of the Securities Act, and any commissions
they receive and proceeds of any sale of Shares may be deemed to be
underwriting discounts and commission under the Securities Act. Neither the
Company nor the Selling Stockholders can presently estimate the amount of
such compensation. The Company knows of no existing arrangement between the
Selling Stockholders, any other stockholder, broker, dealer, underwriter or
agent relating to the sale or distribution of the Shares.
There can be no assurance that any of the Shares will be sold by the
Selling Stockholders. To the extent required, (i) the Shares to be sold
hereby, (ii) the name of the Selling Stockholders, (iii) the purchase price,
(iv) the name of any such agent, dealer or underwriter, (v) any applicable
commissions, discounts or other terms constituting compensation with respect
to a particular offer, (vi) disclosure that such broker or dealer did not
conduct any investigation to verify information set out or incorporated by
reference in this Prospectus and (vii) other facts material to the
transaction will be set forth in an accompanying Prospectus Supplement.
All expenses (estimated to be $60,000) of the registration of the Common
Stock covered by this Prospectus will be borne by the Company pursuant to
preexisting agreements, except that the Company will not pay any Selling
Stockholder's underwriting discounts or selling commissions.
The Company has agreed to indemnify the Selling Stockholders against
certain liabilities in connection with this registration, including
liabilities under the Securities Act.
In order to comply with certain states securities laws, if applicable,
the Common Stock will not be sold in a particular state unless such
securities have been registered or qualified for sale in such state or any
exemption from registration or qualification is available and complied with.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Shares offered
hereby are being passed upon for the Company by Pillsbury Madison & Sutro
LLP, San Francisco, California.
EXPERTS
The consolidated financial statements of Immune Response appearing in
Immune Response's Annual Report (Form 10-K) for the year ended December 31,
1997 have been audited by Arthur Andersen LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein by
reference in reliance upon the authority of such firms as experts in
accounting and auditing.
-14-
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
No dealer, salesperson or any other person has been authorized to give
any information or to make any representation not contained in this
Prospectus in connection with the offer made by this Prospectus and, if given
or made, such information or representation must not be relied upon as having
been authorized by the Company or the Selling Stockholders. This Prospectus
does not constitute an offer to sell or a solicitation of an offer to buy any
securities other than the registered securities to which it relates, or an
offer in any jurisdiction to any person to whom it is unlawful to make such
an offer in such jurisdiction. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create any
implication that the information contained herein is correct at any time
subsequent to the date hereof.
-----------------
TABLE OF CONTENTS
PAGE
Available Information. . . . . . . . . . . . . . . . . . . . .. . . . . . . 3
Documents Incorporated by Reference. . . . . . . . . . . . . .. . . . . . . 3
Special Note Regarding Forward-looking
Information. . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 4
The Company. . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 4
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 5
Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 11
Income Tax Considerations. . . . . . . . . . . . . . . . . . .. . . . . . . 12
Selling Stockholders . . . . . . . . . . . . . . . . . . . . .. . . . . . . 13
Plan of Distribution . . . . . . . . . . . . . . . . . . . . .. . . . . . . 13
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 14
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 14
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1,700,000 Shares
Common Stock
THE IMMUNE
RESPONSE CORPORATION
---------------
PROSPECTUS
---------------
__________, 1998
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses in connection with the
sale and distribution of the securities being registered hereby, other than
underwriting discounts and commissions. All amounts are estimated except the
Securities and Exchange Commission registration fee and the Nasdaq National
Market listing fee.
<TABLE>
<CAPTION>
Amount
-------
<S> <C>
SEC registration fee . . . . . . . . . . . . . . . . . . $ 5,705
Blue Sky fees and expenses . . . . . . . . . . . . . . . 1,000
Accounting fees and expenses . . . . . . . . . . . . . . 5,000
Legal fees and expenses . . . . . . . . . . . . . . . . . 20,000
Registrar and transfer agent's fees . . . . . . . . . . . 1,000
NNM listing fee . . . . . . . . . . . . . . . . . . . . . 17,500
Miscellaneous fees and expenses . . . . . . . . . . . . . 9,795
-------
Total $60,000
-------
-------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the "Delaware GCL")
permits the Company's board of directors to indemnify any person against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with any
threatened, pending or completed action, suit or proceeding in which such
person is made a party by reason of his being or having been a director,
officer, employee or agent of the Company, in terms sufficiently broad to
permit such indemnification under certain circumstances for liabilities
(including reimbursement for expenses incurred) arising under the Securities
Act of 1933, as amended (the "Act"). The Delaware GCL provides that
indemnification pursuant to its provisions is not exclusive of other rights of
indemnification to which a person may be entitled under any by-law, agreement,
vote of stockholders or disinterested directors, or otherwise.
Article VII of the Company's Restated Certificate of Incorporation, as
amended, and Article V of the Company's Bylaws, provide for indemnification of
the Company's directors, officers, employees and other agents to the maximum
extent permitted by law.
In addition, the Company has entered into separate indemnification
agreements with its directors and officers that will require the Company,
among other things, to indemnify them against certain liabilities that may
arise by reason of their status or service as directors or officers to the
fullest extent not prohibited by law.
II-1
<PAGE>
ITEM 16. EXHIBITS
Exhibit
Number Description of Document*
- -------- ------------------------------------------------------------------
5.1 Opinion of Pillsbury Madison & Sutro LLP regarding the legality of
the securities being registered.
10.1(1) Securities Purchase Agreement dated as of April 24, 1998 by and
among the Company and the Selling Stockholders.
10.2(1) Registration Rights Agreement dated as of April 24, 1998 by and
among the Company and the Selling Stockholders.
23.1 Consent of independent public accountants.
23.2 Consent of Pillsbury Madison & Sutro LLP (included in its opinion
filed as Exhibit 5.1 to this Registration Statement).
24.1 Power of Attorney (see page II-4).
- -----------
* Parenthetical references after description of exhibits relate to the
exhibit number under which exhibits were initially filed.
(1) Incorporated by reference to the exhibits of the same number to the
Company's Report on Form 8-K dated April 24, 1998 (Commission File
No. 0-18006).
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Act"), may be permitted to directors, officers
and controlling persons of the Company pursuant to the foregoing provisions,
or otherwise, the Company has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a director, officer or
controlling person of the Company in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Company will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The undersigned Company hereby undertakes:
(1) To file during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement; (i) to
include any prospectus required by Section 10(a)(3) of the Act; (ii) to
reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in this Registration
Statement; and (iii) to include any material information with respect to
the plan of distribution not previously disclosed in this Registration
Statement or any material change to such information in this Registration
Statement; provided, however, that paragraphs (i) and (ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
II-2
<PAGE>
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") that are incorporated by reference in
this Registration Statement.
(2) That, for the purpose of determining any liability under the Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) For purposes of determining any liability under the Act, each
filing of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act which is incorporated by reference in
this Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
II-3
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3, and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Carlsbad, State of California, June 9, 1998.
THE IMMUNE RESPONSE CORPORATION
By /s/ Dennis J. Carlo
-------------------------------------
Dennis J. Carlo, Ph.D.
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears
below constitutes and appoints Dennis J. Carlo, Ph.D. and Charles J. Cashion and
each of them, his true and lawful attorneys-in-fact and agents, each with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments, including
post-effective amendments, to this Registration Statement, and to file the same,
with exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that each of said attorneys-in-fact and agents or their substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Dennis J. Carlo President, Chief Executive Officer June 9, 1998
- --------------------------- and Director (Principal Executive
Dennis J. Carlo, Ph.D. Officer)
/s/ Charles J. Cashion Senior Vice President, Finance and June 9, 1998
- --------------------------- Administration, Chief Financial
Charles J. Cashion Officer, Secretary and Treasurer
(Principal Financial and Principal
Accounting Officer)
/s/ James B. Glavin Chairman of the Board June 9, 1998
- ---------------------------
James B. Glavin
Director June 9, 1998
- ---------------------------
Kevin B. Kimberlin
II-4
<PAGE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
- --------------------------- Director June 9, 1998
Gilbert S. Omenn
- --------------------------- Director June 9, 1998
Melvin Perelman
/s/ John Simon Director June 9, 1998
- ---------------------------
John Simon
/s/ William M. Sullivan Director June 9, 1998
- ---------------------------
William M. Sullivan
/s/ Philip M. Young Director June 9, 1998
- ---------------------------
Philip M. Young
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
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<TABLE>
<CAPTION>
Exhibit
Number Description of Document*
- --------- ---------------------------------------------------------------
<S> <C>
5.1 Opinion of Pillsbury Madison & Sutro LLP regarding the legality
of the securities being registered.
10.1(1) Securities Purchase Agreement dated as of April 24, 1998 by and
among the Company and the Selling Stockholders.
10.2(1) Registration Rights Agreement dated as of April 24, 1998 by and
among the Company and the Selling Stockholders.
23.1 Consent of independent public accountants.
23.2 Consent of Pillsbury Madison & Sutro LLP (included in its
opinion filed as Exhibit 5.1 to this Registration Statement).
24.1 Power of Attorney (see page II-4).
</TABLE>
- ----------------
(1) Incorporated by reference to the exhibits of the same number to the
Company's Report on Form 8-K dated April 24, 1998 (Commission File
No. 0-18006).
<PAGE>
Exhibit 5.1
PILLSBURY MADISON & SUTRO LLP
2550 Hanover Street
Palo Alto, California 94304
June 9, 1998
The Immune Response Corporation
5935 Darwin Court
Carlsbad, California 92008
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We are acting as counsel for The Immune Response Corporation, a Delaware
corporation (the "Company"), in connection with the registration under the
Securities Act of 1933, as amended, of 1,700,000 shares of Common Stock, par
value $0.0025 per share (the "Common Stock"), of the Company to be offered and
sold by certain stockholders of the Company (the "Selling Stockholders"),
which are issuable upon conversion of, or upon issuance of dividends on, 200
shares of the Company's Series F Convertible Preferred Stock (the "Preferred
Stock"). In this regard we have participated in the preparation of a
Registration Statement on Form S-3 relating to such shares of Common Stock.
Such Registration Statement, as amended, is herein referred to as the
"Registration Statement."
We are of the opinion that the Common Stock to be offered and sold by the
Selling Stockholders have been duly authorized and, when issued to the Selling
Stockholders by the Company in accordance with the terms of the Preferred
Stock referenced above, will be legally issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Registration Statement and in the Prospectus included therein.
Very truly yours,
/s/ Pillsbury Madison & Sutro LLP
<PAGE>
EXHIBIT 23.1
------------
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated January 19,
1998 included in The Immune Response Corporation's Form 10-K for the year
ended December 31, 1997 and to all references to our Firm included in this
registration statement.
Arthur Andersen LLP
San Diego, California
June 9, 1998
