Back to GetFilings.com
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the Quarter Ended September 30, 2002 Commission File No. 0-20948
-------
AUTOIMMUNE INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 13-348-9062
(State of Incorporation) (I.R.S. Employer Identification No.)
1199 Madia Street, Pasadena, CA 91103
(Address of Principal Executive Offices)
(626) 792-1235
(Registrant's Telephone No., including Area Code)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
---------------- ---------------
Number of shares outstanding of the registrant's Common Stock as of
October 31, 2002:
Common Stock, par value $.01 16,919,623 shares outstanding
AUTOIMMUNE INC.
QUARTER ENDED SEPTEMBER 30, 2002
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page Number
Item 1 - Financial Statements
Balance Sheet
December 31, 2001 and September 30, 2002 .................. 2
Statement of Operations
for the three and nine months ended September 30, 2001
and 2002 and for the period from inception
(September 9, 1988) through September 30, 2002 ............ 3
Statement of Cash Flows
for the nine months ended September 30, 2001 and 2002
and for the period from inception (September 9, 1988)
through September 30, 2002. ............................... 4
Notes to the Unaudited Financial Statements ................... 5
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations ................. 7
Item 3 - Quantitative and Qualitative Disclosures about Market Risk .... 9
Item 4 - Controls and Procedures ....................................... 9
PART II - OTHER INFORMATION
Item 6(a) - Exhibits ................................................... 10
Item 6(b) - Reports on Form 8-K ........................................ 10
Signatures ............................................................. 11
Certifications ......................................................... 12
1
AUTOIMMUNE INC.
(A development stage company)
BALANCE SHEET
(Unaudited)
December 31, September 30,
2001 2002
------------------- ------------------
ASSETS
Current assets:
Cash and cash equivalents $ 3,929,000 $ 5,226,000
Marketable securities 6,863,000 4,970,000
Prepaid expenses and other current assets 42,000 62,000
------------------- ------------------
Total current assets 10,834,000 10,258,000
Fixed assets, net - -
Other assets 100,000 100,000
------------------- ------------------
$ 10,934,000 $ 10,358,000
=================== ==================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 47,000 $ 43,000
Accrued expenses 90,000 156,000
------------------- ------------------
Total current liabilities 137,000 199,000
------------------- ------------------
Stockholders' equity:
Common stock, $.01 par value; 25,000,000 shares
authorized; 16,919,623 shares issued and
outstanding at December 31, 2001 and September 30, 2002 169,000 169,000
Additional paid-in capital 118,102,000 118,102,000
Deficit accumulated during the development stage (107,474,000) (108,112,000)
------------------- ------------------
Total stockholders' equity 10,797,000 10,159,000
------------------- ------------------
$ 10,934,000 $ 10,358,000
=================== ==================
The accompanying notes are an integral part of these financial statements.
2
AUTOIMMUNE INC.
(A development stage company)
STATEMENT OF OPERATIONS
(Unaudited)
Period from
inception
Three months ended Nine months ended (September 9, 1988)
September 30, September 30, September 30, September 30, through
2001 2002 2001 2002 September 30, 2002
----------------- ---------------- ----------------- ---------------- ------------------
Revenue:
License rights $ 1,318,000 $ 18,000 $ 1,333,000 $ 48,000 $ 5,406,000
Option fees - - - - 2,200,000
Research and development
revenue under collaborative
agreements - - - - 955,000
----------------- ---------------- ----------------- ---------------- ------------------
Total revenues 1,318,000 18,000 1,333,000 48,000 8,561,000
----------------- ---------------- ----------------- ---------------- ------------------
Costs and expenses:
Research and development:
Related party 90,000 16,000 120,000 46,000 19,773,000
All other 65,000 195,000 180,000 283,000 91,797,000
General and administrative 119,000 100,000 465,000 506,000 17,429,000
----------------- ---------------- ----------------- ---------------- ------------------
Total costs and expenses 274,000 311,000 765,000 835,000 128,999,000
----------------- ---------------- ----------------- ---------------- ------------------
Total operating loss 1,044,000 (293,000) 568,000 (787,000) (120,438,000)
----------------- ---------------- ----------------- ---------------- ------------------
Interest income 97,000 48,000 381,000 149,000 12,633,000
Interest expense - - - - (303,000)
----------------- ---------------- ----------------- ---------------- ------------------
Net income (loss) $ 1,141,000 $ (245,000) $ 949,000 $ (638,000) $ (108,108,000)
================= ================ ================= ================ ==================
Net income (loss) per share-basic $ 0.07 $ (0.01) $ 0.06 $ (0.04)
================= ================ ================= ================
Net income (loss) per share-diluted $ 0.07 $ (0.01) $ 0.05 $ (0.04)
================= ================ ================= ================
Weighted average common
shares outstanding-basic 16,919,623 16,919,623 16,906,143 16,919,623
================= ================ ================= ================
Weighted average common
shares outstanding-diluted 17,364,746 16,919,623 17,354,411 16,919,623
================= ================ ================= ================
The accompanying notes are an integral part of these financial statements.
3
AUTOIMMUNE INC.
(A development stage company)
STATEMENT OF CASH FLOWS
Increase (Decrease) in Cash and Cash Equivalents
(Unaudited)
Period from
inception
(September 9, 1988)
Nine months ended through
September 30, September 30, September 30,
2001 2002 2002
-------------------- -------------------- ----------------------
Cash flows from operating activities:
Net income (loss) $ 949,000 $ (638,000) $ (108,108,000)
Adjustment to reconcile net loss to net cash
used by operating activities:
Interest expense related to demand notes
converted into Series A mandatorily
redeemable covertible preferred stock - - 48,000
Patent costs paid with junior convertible
preferred and common stock - - 3,000
Valuation of warrants issued in conjunction with
license revenue 192,000 - 192,000
Depreciation and amortization - - 4,464,000
Loss on sale/disposal of fixed assets - - 642,000
Decrease in capitalized patent costs - - 563,000
(Increase) decrease in prepaid expenses and other
current assets 24,000 (20,000) (62,000)
Increase (decrease) in accounts payable (17,000) (4,000) 43,000
Increase (decrease) in accrued expenses 51,000 66,000 156,000
Increase (decrease) in deferred revenue - - -
-------------------- -------------------- ----------------------
Net cash provided (used) by operating activities 1,199,000 (596,000) (102,059,000)
-------------------- -------------------- ----------------------
Cash flows from investing activities:
Purchase of available-for-sale marketable securities (14,894,000) (9,892,000) (303,253,000)
Proceeds from sale/maturity of available-for-sale
marketable securities 11,735,000 11,785,000 287,272,000
Proceeds from maturity of held-to-maturity marketable
securities - - 11,011,000
Proceeds from sale of equipment - - 306,000
Purchase of fixed assets - - (5,288,000)
Investment in Oragen (100,000) - (100,000)
Increase in patent costs - - (563,000)
Increase in other assets - - (125,000)
-------------------- -------------------- ----------------------
Net cash provided (used) by investing activities (3,259,000) 1,893,000 (10,740,000)
-------------------- -------------------- ----------------------
Cash flows from financing activities:
Proceeds from sale-leaseback of fixed assets - - 2,872,000
Payments on obligations under capital leases - - (2,872,000)
Net proceeds from issuance of mandatorily redeemable
convertible preferred stock - - 10,011,000
Proceeds from bridge notes - - 300,000
Proceeds from issuance of common stock 4,000 - 105,514,000
Proceeds from issuance of convertible notes payable - - 2,200,000
-------------------- -------------------- ----------------------
Net cash provided (used) by financing activities 4,000 - 118,025,000
-------------------- -------------------- ----------------------
Net increase (decrease) in cash and cash equivalents (2,056,000) 1,297,000 5,226,000
Cash and cash equivalents, beginning of period 4,719,000 3,929,000 -
-------------------- -------------------- ----------------------
Cash and cash equivalents, end of period $ 2,663,000 $ 5,226,000 $ 5,226,000
==================== ==================== ======================
The accompanying notes are an integral part of these financial statements.
4
AUTOIMMUNE INC.
(a development stage company)
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
1. Interim Financial Data
The interim financial data as of September 30, 2002, for the three and
nine month periods ended September 30, 2001 and 2002 and for the period
from inception (September 9, 1988) through September 30, 2002 are
unaudited, however, in the opinion of AutoImmune Inc. (the "Company"),
these interim data include all adjustments, consisting only of normal
recurring adjustments necessary for a fair presentation of the results
for these interim periods. These financial statements should be read in
conjunction with the financial statements and the notes thereto for the
year ended December 31, 2001 included in the Company's Form 10-K.
Results for interim periods are not necessarily indicative of results
for the entire year.
2. Net Loss Per Share - Basic and Diluted
Basic earnings (loss) per share is calculated based on the weighted
average number of common shares outstanding during the period. Diluted
earnings per share is calculated based on the weighted average number
of common shares and dilutive common equivalent shares assumed
outstanding during the period. Shares used to compute diluted earnings
per share for the three and nine month periods ended September 30, 2002
exclude the effect of 1,243,536 stock options outstanding at September
30, 2002, as their inclusion would be anti-dilutive.
3. Cash Equivalents and Marketable Securities
The following is a summary of cash equivalents held by the Company.
Cash equivalents are carried at fair market value, which approximated
amortized cost at December 31, 2001 and September 30, 2002:
December 31, September 30,
2001 2002
-------------------- ---------------------
Money market $ 3,894,000 $ 5,174,000
-------------------- ---------------------
$ 3,894,000 $ 5,174,000
==================== =====================
The following is a summary of available-for-sale marketable securities
held by the Company at December 31, 2001 and September 30, 2002:
Maturity Fair Unrealized Unrealized Amortized
term value gains losses cost
---------- ---------- ---------- ---------- ----------
December 31, 2001
U.S. Government
debt securities within 1 year $ 6,863,000 $ - $ - $ 6,863,000
September 30, 2002
U.S. Government
debt securities within 1 year $ 4,970,000 $ - $ - $ 4,970,000
All of the Company's marketable securities are classified as current at
September 30, 2002 as these funds are highly liquid and are available
to meet working capital needs and to fund current operations. Gross
realized gains and losses on sales of marketable securities for the
three and nine month periods ended September 30, 2001 and 2002 were not
significant.
Marketable securities which were purchased and sold in periods prior to
adoption of Statement of Financial Accounting Standards (SFAS) No. 115
on January 1, 1994, other than held-to-maturity marketable securities,
are included in the category available-for-sale marketable securities
in the "period from inception" column of the statement of cash flows.
5
AUTOIMMUNE INC.
(a development stage company)
NOTES TO THE UNAUDITED FINANCIAL STATEMENTS
4. Fixed Assets
Fixed assets with a total cost of $160,000 and a net book value of $0
were contributed to Colloral LLC in August 2002 (see Note 5). As of
September 30, 2002, there are no fixed assets in the Company.
5. Other Assets
Other assets are comprised of two investments, one in Oragen
Corporation and one in Colloral LLC.
OraGen Corporation is a private company, in which AutoImmune's interest
is less than 20%. The investment in OraGen Corporation is carried at
cost.
Colloral LLC is a joint venture created in August 2002 between
AutoImmune and Deseret Laboratories Inc., (a private company
headquartered in St. George, Utah.) to manufacture, market and sell
Colloral(R), a product for nutritional support of patients with
rheumatoid arthritis. AutoImmune's interest in Colloral LLC is greater
than 50% but, because AutoImmune does not have control, the investment
is accounted for using the equity method. AutoImmune's contribution to
Colloral LLC was the equipment used to manufacture bulk product and a
license to certain Colloral-related intellectual property. These
assets had a net book value of $0. Deseret contributed cash and is
committed to providing additional amounts, which additional amounts
are refundable if the Board determines that they are no longer needed.
AutoImmune has not committed to make additional capital commitments.
The investment was initially recorded by AutoImmune at cost $0. Profits
and losses will be allocated in accordance with the joint venture
agreement. Under equity accounting, AutoImmune will not recognize a
gain on this investment until AutoImmune's share of the profits of
Colloral LLC exceeds its share of the cumulative losses. As of
September 30, 2002, Colloral has not generated any profit; therefore,
the investment is carried at $0.
6. Accrued Expenses
Accrued expenses consist of accrued professional fees as of December
31, 2001 and September 30, 2002.
7. Comprehensive Income (Loss)
Comprehensive income (loss) for the three and nine month periods ended
September 30, 2001 and 2002 is the same as net income (loss). There was
no net unrealized gain (loss) on marketable securities for the three
and nine month periods ended September 30, 2001 and 2002.
6
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The sections of "Management's Discussion and Analysis of Financial Condition and
Results of Operations" captioned "Results of Operations" and "Liquidity and
Capital Resources" contain forward-looking statements which involve risks and
uncertainties. The Company's actual results may differ significantly from
results discussed in the forward-looking statements due to a number of important
factors, including, but not limited to the Company's extremely limited
operations, the uncertainties of clinical trial results and product development,
the Company's dependence on third parties for licensing revenue and the risks of
technological change and competition. These factors are more fully discussed in
the Company's most recent Annual Report on Form 10-K filed with the Securities
and Exchange Commission in the section "Business-Factors to be Considered." The
discussion in the Annual Report on Form 10-K is hereby incorporated by reference
into this Quarterly Report.
Results of Operations
Overview
Since its inception through September 30, 2002, the Company has incurred ongoing
losses from operations and has cumulative losses as of September 30, 2002
totaling $108,108,000. To date, the Company has not recorded any revenues from
the sale of products and accordingly, remains in the development stage. Revenues
recorded through September 30, 2002 were earned in connection with the sale of
certain patent rights, granting of certain short-term rights and contract
research. Future revenues may also include revenues earned from the sale of
products, either by the Company or from licenses of its technology.
Three and Nine Month Periods Ended September 30, 2001 and 2002
Revenue was $1,318,000 and $18,000 for the three month periods ended September
30, 2001 and 2002, respectively. Revenue was $1,333,000 and $48,000 for the nine
month periods ended September 30, 2001 and 2002, respectively. The results for
the three-month and nine-month periods ended September 30, 2001 reflect receipt
of a payment from a subsidiary of Elan Corporation plc for its purchase of
AutoImmune's rights to certain patent applications. In addition, all of these
amounts reflect monthly payments from BioMS Medical Corporation (formerly known
as Rycor Technology Investments Corp.) under a license agreement.
Research and development expenses were $155,000 and $211,000 for the three month
periods ended September 30, 2001 and 2002, respectively. Research and
development expenses were $300,000 and $329,000 for the nine month periods ended
September 30, 2001 and 2002, respectively. The change is due to the timing and
amount of contractual payments to The Brigham and Women's Hospital and
patent-related legal costs.
General and administrative expenses were $119,000 and $100,000 for the three
month periods ended September 30, 2001 and 2002, respectively. General and
administrative expenses were $465,000 and $506,000 for the nine month periods
ended September 30, 2001 and 2002, respectively. The decrease for the three
month periods is due to timing of expenses. The increase for the nine month
periods is primarily due to a rise in insurance costs.
Interest income was $97,000 and $48,000 for the three month periods ended
September 30, 2001 and 2002, respectively. Interest income was $381,000 and
$149,000 for the nine month periods ended September 30, 2001 and 2002,
respectively. The decrease is due to a lower average return on investment and a
lower average balance of cash available for investment.
7
AUTOIMMUNE INC.
Liquidity and Capital Resources
The Company's needs for funds have historically fluctuated from period to period
as it has increased or decreased the scope of its research and development
activities. Since inception, the Company has funded these needs almost entirely
through sales of its equity securities. Its current needs have been
significantly reduced as a result of the termination of research, development
and most administrative employees and other operating expenses in 1999.
The Company's working capital and capital requirements will depend on numerous
factors, including the strategic direction that the Company and its shareholders
choose, the level of resources that the Company devotes to the development of
its patented products, the extent to which it proceeds by means of collaborative
relationships with pharmaceutical or nutraceutical companies and its competitive
environment. Based upon its budget for the calendar year 2002, the Company
believes that current cash and marketable securities, and the interest earned
from the investment thereof, will be sufficient to meet the Company's operating
expenses and capital requirements for at least five years. At the appropriate
time, the Company may seek additional funding through public or private equity
or debt financing, collaborative arrangements with pharmaceutical companies or
from other sources. If additional funds are necessary but not available, the
Company will have to reduce or not pursue certain activities, which could
include areas of research, product development, manufacturing or marketing
activity, or otherwise modify its business strategy. Such a reduction would have
a material adverse effect on the Company.
In order to preserve principal and maintain liquidity, the Company's funds are
invested in U.S. Treasury obligations and money market instruments. As of
September 30, 2002, the Company's cash and cash equivalents and marketable
securities totaled $10,196,000. Current liabilities at September 30, 2002 were
$199,000.
As of September 30, 2002, there were no off-balance sheet transactions.
Critical Accounting Policies and Estimates
The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and judgments that affect the reported amount of assets, liabilities, revenues
and expenses, and related disclosure of contingent assets and liabilities.
Management bases its estimates on historical experience and on various other
assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates under different assumptions or
conditions.
The Company believes the following critical accounting policies affect its more
significant judgments and estimates used in the preparation of its financial
statements:
The Company has a $100,000 investment in Oragen. This represents an ownership
interest of 19%. The Company does not have any controlling influence over the
operations of Oragen. This investment is valued using the cost method. Future
events could cause management to conclude that impairment indicators exist. Any
resulting impairment loss would require a write-down of the value of the
investment. For a more detailed explanation of the judgements included in this
area, refer to the Company's Annual Report on Form 10-K for the year ended
December 31, 2001.
In addition, Colloral LLC, a joint venture, was created in August 2002 between
AutoImmune and Deseret Laboratories Inc., (a private company headquartered in
St. George, Utah.) to manufacture, market and sell Colloral(R), a product for
nutritional support of patients with rheumatoid arthritis. AutoImmune's interest
in Colloral LLC is greater than 50% but, because AutoImmune does not have
control, the investment is accounted for using the equity method. AutoImmune's
contribution to Colloral LLC was the equipment used to manufacture bulk product
and a license to certain Colloral-related intellectual property. These assets
had a net book value of $0. Deseret contributed cash and is committed to
providing additional amounts, which additional amounts are refundable if the
Board determines that they are no longer needed. AutoImmune has not committed to
make additional capital commitments.
The investment was initially recorded by AutoImmune at cost $0. Profits and
losses will be allocated in accordance with the joint venture agreement. Under
equity accounting, AutoImmune will not recognize a gain on this investment until
AutoImmune's share of the profits of Colloral LLC exceeds its share of the
cumulative losses. As of September 30, 2002, Colloral has not generated any
profit; therefore, the investment is carried at $0.
8
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company invests all of its cash in U.S. Treasury obligations and money
market instruments. These investments are denominated in U.S. dollars. Due to
the conservative nature of these instruments, the Company does not believe that
it has material exposure to interest rate or market risk.
ITEM 4. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
Within the 90-day period prior to the filing date of this report, the Company
carried out an evaluation of the effectiveness of the design and operation of
the Company's disclosure controls and procedures as such term is defined in Rule
13a-14(c) under the Securities Exchange Act of 1934. The evaluation of the
Company's disclosure controls and procedures was made by the Company's Chief
Executive Officer and Director of Finance and Treasurer. Based upon that review,
the Company believes that its disclosure controls and procedures are effective
and are adequately designed to ensure that the information that the Company is
required to disclose in this report has been accumulated to allow timely
decisions regarding such required disclosure.
(b) Changes in Internal Controls
The Company's Chief Executive Officer and Director of Finance and Treasurer have
concluded that there were no significant changes in the Company's internal
controls or in other factors that could significantly affect those controls
subsequent to the date of their evaluation.
9
AUTOIMMUNE INC.
PART II - OTHER INFORMATION
Item 6 - EXHIBITS AND REPORTS ON FORM 8-K
Item 6(a) - Exhibits (numbered in accordance with Item 601 of Regulation S-K)
Exhibit Number Description
-------------- ----------------------------------------------------------
10.35 Limited Liability Company Operating Agreement of Colloral LLC, dated
August 19, 2002 ++
10.36 License Agreement, dated August 19, 2002, between AutoImmune Inc. and
Colloral LLC ++
10.37 Trademark License Agreement, dated August 19, 2002, between AutoImmune Inc. and
Colloral LLC ++
99.1 Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350
99.2 Certification of the Director of Finance and Treasurer pursuant to 18 U.S.C. Section 1350
++ The Company has requested confidential treatment of the redacted portions of this
Exhibit pursuant to Rule 24b-2. under the Securities Exchange Act of 1934, as amended,
and has separately filed a complete copy of this Exhibit with the Securities
and Exchange Commission.
Item 6(b) - Reports on Form 8-K
No Form 8-K has been filed during the quarter for which this report is
filed.
10
AUTOIMMUNE INC.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
AUTOIMMUNE INC.
Date: November 14, 2002 /s/ Robert C. Bishop
------------------------------------
Robert C. Bishop
Chairman and Chief Executive Officer
/s/ Heather A. Ellerkamp
------------------------------------
Heather A. Ellerkamp
Director of Finance and Treasurer
11
CERTIFICATIONS
I, Robert C. Bishop, certify that:
1. I have reviewed this quarterly report on Form 10-Q of AutoImmune Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: November 14, 2002 /s/ Robert C. Bishop
--------------------
Name: Robert C. Bishop
Title: Chief Executive Officer
12
CERTIFICATIONS
I, Heather A Ellerkamp, certify that:
1. I have reviewed this quarterly report on Form 10-Q of AutoImmune Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly
report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
Date: November, 14, 2002 /s/ Heather A. Ellerkamp
------------------------
Name: Heather A. Ellerkamp
Title: Director of Finance and Treasurer
13