<PAGE>

                       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 June 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 July 31,
                                      2002:

Common Stock, par value $.01                      16,919,623 shares outstanding

<PAGE>

                                 AUTOIMMUNE INC.

                           QUARTER ENDED JUNE 30, 2002

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION                                                     Page Number
<S>                                                                                 <C>
Item 1 - Financial Statements

         Balance Sheet
                  December 31, 2001 and June 30, 2002 ................................  2

         Statement of Operations
                  for the three and six months ended June 30, 2001 and 2002
                  and for the period from inception (September 9, 1988)
                  through June 30, 2002 ..............................................  3

         Statement of Cash Flows
                  for the six months ended June 30, 2001 and 2002
                  and for the period from inception (September 9, 1988)
                  through June 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 ..................  8

PART II - OTHER INFORMATION

Item 4 - Submission of Matters To a Vote of Security Holders .........................  9

Item 6(a) - Exhibits ................................. ...............................  9

Item 6(b) - Reports on Form 8-K ......................................................  9

Signatures ........................................................................... 10
</TABLE>

                                        1

<PAGE>

                                 AUTOIMMUNE INC.

                          (A development stage company)
                                  BALANCE SHEET
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                   December 31,       June 30,
                                                                       2001             2002
                                                                 ---------------   --------------
<S>                                                              <C>               <C>
ASSETS
Current assets:
      Cash and cash equivalents                                  $    3,929,000    $   5,455,000
      Marketable securities                                           6,863,000        4,972,000
      Prepaid expenses and other current assets                          42,000           61,000
                                                                 ---------------   --------------
                   Total current assets                              10,834,000       10,488,000

Fixed assets, net                                                             -                -
Other assets                                                            100,000          100,000
                                                                 ---------------   --------------

                                                                 $   10,934,000    $  10,588,000
                                                                 ===============   ==============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
      Accounts payable                                           $       47,000    $     108,000
      Accrued expenses                                                   90,000           75,000
                                                                 ---------------   --------------

                   Total current liabilities                            137,000          183,000
                                                                 ---------------   --------------

Stockholders' equity:
      Common stock, $.01 par value; 25,000,000 shares
       authorized; 16,919,623 shares issued and
       outstanding at December 31, 2001 and June 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)    (107,866,000)
                                                                 ---------------   --------------

                   Total stockholders' equity                        10,797,000       10,405,000
                                                                 ---------------   --------------

                                                                 $   10,934,000    $  10,588,000
                                                                 ===============   ==============
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       2

<PAGE>

                                AUTOIMMUNE INC.
                         (A development stage company)
                            STATEMENT OF OPERATIONS
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                                                                                   Period from
                                                                                                                    inception
                                                     Three months ended               Six months ended         (September 9, 1988)
                                                June 30,           June 30,        June 30,       June 30,           through
                                                  2001              2002            2001           2002           June 30, 2002
                                           -------------      ------------  --------------    ------------      -----------------
 <S>                                       <C>                <C>           <C>               <C>               <C>
 Revenue:
   License rights                          $     8,000        $    15,000   $     15,000      $     30,000      $     5,388,000
   Option fees                                       -                  -              -                 -            2,200,000
   Research and development
     revenue under collaborative
     agreements                                      -                  -              -                 -              955,000
                                           -----------        -----------   ------------      ------------      ---------------

        Total revenues                           8,000             15,000         15,000            30,000            8,543,000
                                           -----------        -----------   ------------      ------------      ---------------

 Costs and expenses:
   Research and development:
        Related party                           15,000             15,000         30,000            30,000           19,757,000
        All other                               16,000             40,000        115,000            88,000           91,602,000
   General and administrative                  166,000            187,000        346,000           405,000           17,328,000
                                           -----------        -----------   ------------      ------------      ---------------

        Total costs and expenses               197,000            242,000        491,000           523,000          128,687,000
                                           -----------        -----------   ------------      ------------      ---------------

        Total operating loss                  (189,000)          (227,000)      (476,000)         (493,000)        (120,144,000)
                                           -----------        -----------   ------------      ------------      ---------------

 Interest income                               119,000             50,000        284,000           101,000           12,585,000
 Interest expense                                    -                  -              -                 -             (303,000)
                                           -----------        -----------   ------------      ------------      ---------------

 Net loss                                  $   (70,000)       $  (177,000)  $   (192,000)     $   (392,000)     $  (107,862,000)
                                           ===========        ===========   ============      ============      ===============


 Net loss per share-basic and diluted      $     (0.00)       $     (0.01)  $      (0.01)     $      (0.02)
                                           ===========        ===========   ============      ============

 Weighted average common
   shares outstanding-basic and diluted     16,919,623         16,919,623     16,899,292        16,919,623
                                           ===========        ===========   ============      ============
</TABLE>


   The accompanying notes are an integral part of these financial statements.

                                       3

<PAGE>

                                 AUTOIMMUNE INC.
                          (A development stage company)

                             STATEMENT OF CASH FLOWS

                Increase (Decrease) in Cash and Cash Equivalents
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                                                Period from
                                                                                                                 inception
                                                                                                            (September 9, 1988)
                                                                           Six months ended                       through
                                                                   June 30,               June 30,                June 30,
                                                                     2001                  2002                     2002
                                                              -------------------   --------------------   ----------------------
<S>                                                           <C>                   <C>                    <C>
Cash flows from operating activities:
Net loss                                                      $          (192,000)  $           (392,000)  $         (107,862,000)
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
     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                (19,000)                 (61,000)
     Increase (decrease) in accounts payable                              (60,000)                61,000                  108,000
     Increase (decrease) in accrued expenses                               38,000                (15,000)                  75,000
     Increase (decrease) in deferred revenue                                5,000                      -                        -
                                                              -------------------   --------------------   ----------------------

            Net cash provided (used) by operating activities             (185,000)              (365,000)            (101,828,000)
                                                              -------------------   --------------------   ----------------------

Cash flows from investing activities:
Purchase of available-for-sale marketable securities                   (9,664,000)            (6,923,000)            (300,284,000)
Proceeds from sale/maturity of available-for-sale marketable            6,588,000              8,814,000              284,301,000
    securities
Proceeds from maturity of held-to-maturity marketable                           -                      -               11,011,000
    securities
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           (3,176,000)             1,891,000              (10,742,000)
                                                              -------------------   --------------------   ----------------------

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                   (3,357,000)             1,526,000                5,455,000

Cash and cash equivalents, beginning of period                          4,719,000              3,929,000                        -
                                                              -------------------   --------------------   ----------------------

Cash and cash equivalents, end of period                      $         1,362,000   $          5,455,000   $            5,455,000
                                                              ===================   ====================   ======================
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                        4

<PAGE>

                                 AUTOIMMUNE INC.
                          (a development stage company)

                   NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

1.       Interim Financial Data

         The interim financial data as of June 30, 2002, for the three and six
         month periods ended June 30, 2001 and 2002 and for the period from
         inception (September 9, 1988) through June 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 six months ended June 30, 2001 and 2002
         exclude the effect of 1,176,036 and 730,036 stock options outstanding
         at June 30, 2001 and 2002, respectively, 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 June 30, 2002:

                                            December 31,          June 30,
                                                2001                2002
                                         -----------------  -----------------

         Money market                         $ 3,894,000        $ 5,411,000
                                         -----------------  -----------------

                                              $ 3,894,000        $ 5,411,000
                                         =================  =================

         The following is a summary of available-for-sale marketable securities
         held by the Company at December 31, 2001 and June 30, 2002:

<TABLE>
<CAPTION>
                                         Maturity                Fair            Unrealized         Unrealized          Amortized
                                           term                  value              gains             losses               cost
                                  ------------------------  -----------------   -----------------  ----------------  ---------------
<S>                                  <C>                        <C>               <C>                <C>              <C>
         December 31, 2001
         U.S. Government
             debt securities         within 1 year             $ 6,863,000        $       -         $        -        $ 6,863,000

        June 30, 2002
        U.S. Government
            debt securities         within 1 year              $ 4,972,000        $       -         $        -        $ 4,972,000
</TABLE>

         All of the Company's marketable securities are classified as current at
         June 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 six month periods ended June 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

<PAGE>

                                 AUTOIMMUNE INC.

                          (a development stage company)

                   NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
4.       Fixed Assets

         Fixed assets consist of the following:

                                                                   Estimated
                                                                  useful life           December 31,             June 30,
                                                                    (years)                 2001                   2002
                                                                ----------------     ---------------------  ------------------
<S>                                                                  <C>                       <C>                 <C>
         Laboratory equipment                                        2 - 5                     $ 160,000           $ 160,000
                                                                                     ---------------------  ------------------
                                                                                                 160,000             160,000
         Less - accumulated depreciation and
            amortization                                                                         160,000             160,000
                                                                                     ---------------------  ------------------

                                                                                               $       -           $       -
                                                                                     =====================  ==================
</TABLE>

5.       Other Assets

         Other assets is comprised of an investment in OraGen Corporation, a
         private company, in which AutoImmune's interest is less than 20%. This
         investment is carried at cost.

6.       Accrued Expenses

         Accrued expenses consist of accrued professional fees as of December
         31, 2001 and June 30, 2002.

7.       Comprehensive Loss

         Comprehensive loss for the three month periods ended June 30, 2001 and
         2002 was $70,000 and $177,000, respectively. Comprehensive loss for the
         six month periods ended June 30, 2001 and 2002 was $192,000 and
         $392,000, respectively. There was no net unrealized gain (loss) on
         marketable securities for the three and six month periods ended June
         30, 2001 and 2002.

                                        6

<PAGE>

                                 AUTOIMMUNE INC.



MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

Results of Operations

Overview

Since its inception through June 30, 2002, the Company has incurred ongoing
losses from operations and has cumulative losses as of June 30, 2002 totaling
$107,862,000. To date, the Company has not recorded any revenues from the sale
of products. Revenues recorded through June 30, 2002 were earned in connection
with the sale of certain patent rights, granting of certain short-term rights
and contract research.

The Company expects to remain in the development stage for the foreseeable
future and accordingly, may continue to incur losses.

The sections of "Management's Discussion and Analysis of Financial Condition and
Results of Operations" captioned "Overview" 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.

Three and Six Month Periods Ended June 30, 2001 and 2002

Revenue was $8,000 and $15,000 for the three month periods ended June 30, 2001
and 2002, respectively. Revenue was $15,000 and $30,000 for the six month
periods ended June 30, 2001 and 2002, respectively. These amounts represent
monthly license payments from BioMS Medical Corporation (formerly known as Rycor
Technology Investments Corp.)

Research and development expenses were $31,000 and $55,000 for the three month
periods ended June 30, 2001 and 2002, respectively. Research and development
expenses were $145,000 and $118,000 for the six month periods ended June 30,
2001 and 2002, respectively. The change is due to the timing of patent-related
legal costs.

General and administrative expenses were $166,000 and $187,000 for the three
month periods ended June 30, 2001 and 2002, respectively. General and
administrative expenses were $346,000 and $405,000 for the the six month periods
ended June 30, 2001 and 2002, respectively. The increase is primarily due to the
rise in insurance costs.

Interest income was $119,000 and $50,000 for the three month periods ended June
30, 2001 and 2002, respectively. Interest income was $284,000 and $101,000 for
the six month periods ended June 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.

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

                                       7

<PAGE>

                                 AUTOIMMUNE INC.


reduced as a result of the termination of research, development and
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 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 other short-term instruments. As of
June 30, 2002, the Company's cash and cash equivalents and marketable securities
totaled $10,427,000. Current liabilities at June 30, 2002 were $183,000.

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.

                                       8

<PAGE>

                                 AUTOIMMUNE INC.

PART II - OTHER INFORMATION


Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         (a)  The Annual Meeting of Stockholders was held on May 23, 2002.
         (b)  The following directors were elected to serve until the next
              Annual Meeting or until their successors are elected and
              qualified, by the following votes:

<TABLE>
<CAPTION>
              Name                    Number of Votes For      Number of Votes Withheld
              -----------------       -------------------      ------------------------
              <S>                     <C>                      <C>
              Robert C. Bishop        14,800,242               183,021
              Hugh A. D'Andrade       14,799,042               184,221
              Allan R. Ferguson       14,798,942               184,321
              R. John Fletcher        14,788,992               194,271
              Henri A. Termeer        14,799,242               184,021
</TABLE>


Item 6 - EXHIBITS AND REPORTS ON FORM 8-K

Item 6(a) -

Exhibit Number          Description
--------------          -----------
     99.1               Certification pursuant to 18 U.S.C. Section 1350

Item 6(b) -  No Form 8-K has been filed during the quarter for which this report
             is filed.

                                       9

<PAGE>

                                 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: August 9, 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

                                       10