According to a press release dated November 14, 2006, the Immune Response Corporation announced that the Company has reached an agreement with class counsel to settle the consolidated federal securities law class action litigation filed against the Company in 2001, as well as the related California state-court derivative lawsuit, without admitting to any wrongdoing, fault or liability. The settlements also include Company directors and officers who were named in the lawsuits. The class action settlement, for approximately $9.6 million, will have no effect on the Company's operations, cash flow or financial position, as it is within insurance limits. The settlement is conditioned on notice to the class members and court approval. The preliminary settlement approval hearing is scheduled to occur on December 4, 2006.
As disclosed by the Company’s FORM 10-Q for the quarterly period ended June 30, 2006, several complaints have been consolidated into a single action under the name In re Immune Response Securities Litigation by order of the Court, and a consolidated, amended complaint was filed in July 2003. The consolidated, amended complaint names the Company and certain of its former officers as defendants, as well as Agouron Pharmaceuticals, Inc. and one of its officers. The consolidated, amended complaint alleges that the Company, Agouron and/or such officers violated federal securities laws by misrepresenting and failing to disclose certain information about the results of clinical trials of Remune®. On October 31, 2003 the defendants filed motions to dismiss the consolidated, amended complaint. The court denied these motions on June 7, 2005.
The original Complaint charges that Immune and Agouron withheld the results of Remune's major clinical trial, and instead hyped the prospects of Remune, even though defendants knew during the Class Period that Remune had no effect upon people with HIV and AIDS. The Complaint further alleges Defendants' false misrepresentations that Remune was effective in the fight against AIDS operated to artificially inflate the price of Immune stock.