<PAGE>

                               UNITED STATES
                  SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, DC 20549

                                 FORM 10-Q


(Mark One)
   
  / X /   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 1997

                                     OR

 /   /    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934.

For the transition period from              to
                              --------------  ----------------

Commission file number 0-18006
                       -------


                        THE IMMUNE RESPONSE CORPORATION
              (Exact Name of Registrant as Specified in its Charter)


         Delaware                              33-0255679
(State or Other Jurisdiction of    (IRS Employer Identification Number)
Incorporation or Organization)

                    5935 Darwin Court, Carlsbad, CA  92008
                   (Address of Principal Executive Offices)
                                  (Zip Code)


                          Telephone (760) 431-7080
             (Registrant's Telephone Number, 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 ___

Indicate the number of shares outstanding of each of the Issuer's classes of 
common stock, as of the latest practicable date.

As of July 31, 1997, 22,411,100 shares of common stock were outstanding.

<PAGE>

                      THE IMMUNE RESPONSE CORPORATION

                                  FORM 10-Q

                              QUARTERLY REPORT

                             TABLE OF CONTENTS

                                                                    Page


                       PART I.  FINANCIAL INFORMATION


Item 1. Financial Statements

        Condensed Consolidated Balance Sheets                         3
        Condensed Consolidated Statements of Operations               4
        Condensed Consolidated Statements of Cash Flows               5
        Notes to Condensed Consolidated Financial Statements          6

Item 2. Management's Discussion and Analysis of Financial
        Condition and Results of Operations                           7



                         PART II.  OTHER INFORMATION


Item 2. Changes in Securities                                        14

Item 4. Submission of Matters to a Vote of Security Holders          14

Item 6. Exhibits and Reports on Form 8-K                             15


Signature                                                            16




                                 2

<PAGE>

Part I. Financial Information
Item 1. Financial Statements


                        THE IMMUNE RESPONSE CORPORATION

                     CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                                       JUNE 30,
                                                                                         1997        DECEMBER 31,
ASSETS                                                                               (UNAUDITED)         1996
-------                                                                            --------------  --------------
<S>                                                                                 <C>             <C>
Current Assets:
  Cash and cash equivalents.......................................................  $    8,977,181  $    3,785,433
  Marketable securities-available-for-sale........................................      23,336,595      42,736,310
  Short-term investment...........................................................              --       1,265,000
  Notes receivable from related parties (Note 3)..................................      11,873,856              --
  Other current assets............................................................         551,855         679,847
                                                                                    --------------  --------------
    Total current assets..........................................................      44,739,487      48,466,590

Property and equipment, net.......................................................       7,097,809       5,570,378
Deposits and other assets.........................................................         271,092          49,016
                                                                                    --------------  --------------
                                                                                    $   52,108,388  $   54,085,984
                                                                                    --------------  --------------
                                                                                    --------------  --------------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts payable................................................................  $    1,999,706  $    1,870,853
  Accrued expenses................................................................         533,738         497,671
  Deferred rent obligation........................................................         384,219         413,901
                                                                                    --------------  --------------
    Total current liabilities.....................................................       2,917,663       2,782,425
Stockholders' Equity:
  Common stock, $.0025 par value, 40,000,000 share authorized, 22,392,384 and
    20,229,719 shares issued and outstanding at June 30, 1997 and December 31,
    1996, respectively............................................................          55,981          50,574
  Warrants........................................................................       2,144,143              --
  Additional paid-in capital......................................................     184,923,898     171,055,691
  Unrealized gain (loss) on marketable securities.................................         (74,507)        139,976
  Accumulated deficit.............................................................    (137,858,790)   (119,942,682)
                                                                                    --------------  --------------
    Total stockholders' equity....................................................      49,190,725      51,303,559
                                                                                    --------------  --------------
                                                                                    $   52,108,388  $   54,085,984
                                                                                    --------------  --------------
                                                                                    --------------  --------------
</TABLE>
 
See accompanying notes.



                                       3

<PAGE>

                        THE IMMUNE RESPONSE CORPORATION

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (unaudited)

<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED JUNE 30,     SIX MONTHS ENDED JUNE 30,
                                                     ----------------------------  ------------------------------
<S>                                                  <C>            <C>            <C>             <C>
                                                         1997           1996            1997            1996
                                                     -------------  -------------  --------------  --------------
Contract research revenue..........................  $         --   $         --   $    1,000,000  $          --

Expenses:
  Research and development.........................      9,549,302      7,292,218      18,147,873      12,769,285
  General and administrative.......................      1,052,518      1,018,313       2,046,107       1,786,542
                                                     -------------  -------------  --------------  --------------
                                                        10,601,820      8,310,531      20,193,980      14,555,827
Other revenue:
  Investment income................................        669,035        579,067       1,277,872       1,323,399
                                                     -------------  -------------  --------------  --------------
Net loss...........................................  $  (9,932,785) $  (7,731,464) $  (17,916,108) $  (13,232,428)
                                                     -------------  -------------  --------------  --------------
                                                     -------------  -------------  --------------  --------------
Net loss per share (Note 2)........................  $       (0.45) $       (0.45) $        (0.85) $        (0.78)
                                                     -------------  -------------  --------------  --------------
                                                     -------------  -------------  --------------  --------------
Shares used in computing net loss per 
 share (Note 2)....................................     21,990,637     17,125,990      21,130,018      16,963,239
                                                     -------------  -------------  --------------  --------------
                                                     -------------  -------------  --------------  --------------
</TABLE>

See accompanying notes.

                                       4

<PAGE>

                        THE IMMUNE RESPONSE CORPORATION

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                      SIX MONTHS ENDED JUNE 30,
                                                                                    ------------------------------
<S>                                                                                 <C>             <C>
                                                                                         1997            1996
                                                                                    --------------  --------------
Operating activities:
  Net loss........................................................................  $  (17,916,108) $  (13,232,428)
  Adjustments to reconcile net loss to net cash provided from (used by) operating
    activities:
      Depreciation and amortization...............................................         490,352         407,727
      Deferred rent expense.......................................................         (29,682)        (14,976)
      Changes in operating assets and liabilities:
        Other current assets......................................................         127,992         346,030
        Accounts payable..........................................................         128,853         669,940
        Accrued expenses..........................................................          36,067         131,169
                                                                                    --------------  --------------
          Net cash used by operating activities...................................     (17,162,526)    (11,692,538)

Investing activities:
  Liquidation of short-term investments, net......................................      20,450,232       9,531,388
  Purchase of property and equipment..............................................      (2,017,783)       (517,072)
  Deposits and other assets.......................................................        (222,076)       --
                                                                                    --------------  --------------
          Net cash provided from investing activities.............................      18,210,373       9,014,316

Financing activities:
  Net proceeds from sale of common stock and warrants (Note 3)....................      15,639,992       5,000,000
  Notes receivable from related parties (Note 3)..................................     (11,873,856)       --
  Net proceeds from exercise of stock options.....................................         377,765         510,709
                                                                                    --------------  --------------
          Net cash provided from financing activities.............................       4,143,901       5,510,709
                                                                                    --------------  --------------
Net increase in cash and cash equivalents.........................................       5,191,748       2,832,487
Cash and cash equivalents at beginning of period..................................       3,785,433       1,462,676
                                                                                    --------------  --------------
Cash and cash equivalents at end of period........................................  $    8,977,181  $    4,295,163
                                                                                    --------------  --------------
                                                                                    --------------  --------------
</TABLE>

See accompanying notes.

                                       5

<PAGE>

                 THE IMMUNE RESPONSE CORPORATION

      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                          June 30, 1997


1. Basis of Presentation
   The condensed consolidated financial statements of The Immune
   Response Corporation (the "Company") for the three and six month
   periods ended June 30, 1997 and 1996 are unaudited.  These
   financial statements reflect all adjustments, consisting of only
   normal recurring adjustments which, in the opinion of management,
   are necessary to fairly present the consolidated financial
   position as of June 30, 1997, and the consolidated results of
   operations for the three and six month periods ended June 30,
   1997 and 1996.  The results of operations for the six months
   ended June 30, 1997 are not necessarily indicative of the results
   to be expected for the year ended December 31, 1997.  For more
   complete financial information, these financial statements, and
   the notes thereto, should be read in conjunction with the
   consolidated audited financial statements for the year ended
   December 31, 1996 included in the Company's Form 10-K filed with
   the Securities and Exchange Commission.


2. Net Loss Per Share
   Net loss per share for the three and six month periods ended June
   30, 1997 and 1996 is computed using the weighted average number
   of common shares outstanding during the period.  

   In February 1997, the Financial Accounting Standards Board issued
   Statement of Financial Accounting Standards ("FAS") No. 128,
   "Earnings per Share."  The Company will be required to adopt
   these new rules effective December 15, 1997.  Management does not
   anticipate any impact resulting from the adoption of this new
   standard upon current or previously reported earnings per share.


3. Equity Transaction
   During the second quarter of 1997, the Company completed a $16
   million private placement of units consisting of common stock and
   warrants to purchase common stock of the Company.  These units
   were separately purchased at a price of $7.80 per unit by Kevin
   B. Kimberlin, a director of the Company, and Dennis J. Carlo,
   Ph.D., a director and president and chief executive officer of
   the Company.  The units sold in the private placement consisted
   of 2,051,281 shares of common stock plus warrants exercisable for
   2,051,281 shares of common stock.  The warrants have a four year
   term.  The warrants, with an exercise price of $14 per share, are
   callable by the Company if the stock trades at $28 per share or
   greater for 45 consecutive days.  The terms of the agreements
   included an initial downpayment of $4,126,136, with the remaining
   balance, covered by promissory notes to the Company, due by
   September 30, 1997.  The shares and warrants are not transferable
   until April 1998.

                                 6

<PAGE>


Item 2.   Management's Discussion and Analysis of Financial Conditions and 
          Results of Operations

Overview

The Immune Response Corporation (the "Company") is a biopharmaceutical 
company engaged in the development of proprietary products in the areas of 
HIV, autoimmune disease, gene therapy and cancer. 

This discussion contains forward-looking statements concerning the Company's 
operating results and timing of anticipated expenditures. Such statements are 
subject to risks and uncertainties which could cause actual results to differ 
materially from those projected.  For a further description of potential 
risks and uncertainties involved related to the Company, this document should 
be read in conjunction with the Company's Form 10-K filed with the Securities 
and Exchange Commission.  These forward-looking statements speak only as of 
the date hereof.  The Company undertakes no obligation to publicly release 
the result of any revisions to these forward-looking statements which may be 
made to reflect events or circumstances after the date hereof or to reflect 
the occurrence of unanticipated events.

During the second quarter of 1997, the Company completed a $16 million 
private placement of units consisting of common stock and warrants to 
purchase common stock of the Company.  These units were separately purchased 
at a price of $7.80 per unit by Kevin B. Kimberlin, a director of the 
Company, and Dennis J. Carlo, Ph.D., a director and president and chief 
executive officer of the Company. The units sold in the private placement 
consisted of 2,051,281 shares of common stock plus warrants exercisable for 
2,051,281 shares of common stock.  The warrants have a four year term.  The 
warrants, with an exercise price of $14 per share, are callable by the 
Company if the stock trades at $28 per share or greater for 45 consecutive 
days.  The terms of the agreements included an initial downpayment of 
$4,126,136, with the remaining balance, covered by promissory notes to the 
Company, due by September 30, 1997.  The shares and warrants are not 
transferable until April 1998.

The Company has not been profitable since inception and had an accumulated 
deficit of $137.9 million as of June 30, 1997.  To date, the Company has not 
recorded any revenues from the sale of products. Revenues recorded through 
June 30, 1997 were earned in connection with contract research and investment 
income.  The Company expects its operating losses to continue to increase 
over the next several years, as well as to have quarter-to-quarter 
fluctuations, some of which could be significant, due to expanded research, 
development and clinical trial activities.  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.

Results of Operations
The contract research revenue received in 1997 was received from Bayer 
Corporation related to a research collaboration for a potential therapy for 
hemophilia which began in July 1996.  The Company has not received any 
revenue from the commercial sale of products and does not expect to derive 
revenue from the sale of products for the foreseeable future.

Investment income increased to $669,000 for the quarter ended June 30, 1997, 
from $578,000 during the same period in 1996.  During the six months ended 
June 30, 1997 and 1996, investment income was $1.3 million.

Research and development expenditures of $9.5 million during the second 
quarter of 1997 exceeded such expenditures during the same period in 1996 of 
$7.3 million.  Research and development expenditures for the six months ended 
June 30, 1997 were $18.1 million compared to $12.8 million for the same 
period in 1996.  These additional expenditures in the second quarter of 1997, 
and during the six months ended June 30, 1997, over the amounts expended 
during the same periods in 1996, were due primarily to the clinical testing
of REMUNE-TM-.  Following the full recruitment of the Phase III clinical trial 
in May 1997, each participating clinical site was converted to a semi-annual 
payment schedule rather than payments based upon patient enrollment.  As a 
result, payments previously expected to be made during the third quarter were 
paid late in the second quarter. A corresponding reduction in expenses is 
expected during the second half of 1997.  In addition, research and 

                                 7

<PAGE>

development expenditures have increased due to research related to gene drug 
delivery and cancer treatments.  Research and development expenses, except 
for the clinical testing of REMUNE, are expected to continue to rise in the 
foreseeable future due to expanding preclinical and clinical testing of the 
proposed autoimmune disease, gene therapy and cancer treatments.

General and administrative expenses for the second quarter of 1997 and 1996 
were $1.1 million and $1.0 million, respectively.  General and administrative 
expenses for the six months ended June 30, 1997 were $2.0 million as compared 
to $1.8 million for the same period in 1996.  General and administrative 
expenses for the remainder of 1997 necessary to support the Company's 
expanded research and development activities are expected to remain 
consistent with first half of 1997.

For the quarter ended June 30, 1997, the Company's net loss was $9.9 million, 
or $.45 per share, as compared to a net loss of $7.7 million, or $.45 per 
share, for the same period in 1996.  For the six months ended June 30, 1997, 
the Company's net loss was $17.9 million, or $.85 per share, as compared to a 
net loss of $13.2 million, or $.78 per share for the same period in 1996.  
The primary factors causing the net loss to increase in 1997 were the 
initiation of the Phase III clinical trial with REMUNE at most clinical sites 
occurring subsequent to June 30, 1996, as well as the expansion of research 
related to cancer treatments.

Liquidity and Capital Resources
As of June 30, 1997, the Company had working capital of $41.8 million, 
including $32.3 million of cash, cash equivalents and marketable securities.  
This compares with working capital as of December 31, 1996 of $35.2 million, 
including $37.3 million of cash, cash equivalents, marketable securities and 
short-term investments. The increase in working capital was due to the $16 
million private placement of common stock and warrants which occurred in the 
second quarter of 1997.

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 the REMUNE Phase III clinical 
trial costs will be approximately $10 million per year, with an additional 
$10 million cost per year for manufacturing, research and other costs 
associated with the product for an additional two years.  The anticipated 
costs with respect to REMUNE will depend on many factors, including the time 
required for the Phase III clinical trial, the number of patients enrolled in 
the Phase III clinical 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 
arrangement and other factors not within the Company's control.  The Company 
intends to seek additional funding through public or private financings, 
arrangement with corporate collaborations or other sources.  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 the 
funds received from the sale of equity units in a private placement during 
the second quarter of 1997, will meet its anticipated requirements through 
late-1998.

CERTAIN RISK FACTORS (For a discussion of additional Risk Factors applicable 
to the Company, see the Company's Annual Report on Form 10-K for the year 
ended December 31, 1996.)

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's potential HIV, 
autoimmune disease, gene therapy and cancer products

                                 8

<PAGE>

currently under development will require significant additional research and 
development efforts and regulatory approvals prior to potential 
commercialization.

The Company's potential HIV product, REMUNE, is in a Phase III clinical trial 
designed to provide evidence of efficacy based on clinical endpoints; however 
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.  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 products and 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 shown to be safe or efficacious.  Potential products 
based on the Company's autoimmune technology 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 or efficacious.

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 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.

Lengthy Approval Process and Uncertainty of Government Regulatory 
Requirements.  Clinical testing, manufacture, promotion and sale of the 
Company's potential 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.  In general, the regulatory framework for biological drug products 
is more rigorous than that for nonbiological drug products.  The Food, Drug 
and Cosmetic Act and the Public Health Service 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

                                 9

<PAGE>

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 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.  Failure of the Company to obtain marketing approval for 
Remune or any of its other products under development on a timely basis, or 
FDA withdrawal of marketing approval once obtained, could have a material 
adverse effect on the Company's business, financial condition and results of 
operations.

The steps required before a biological drug product may be marketed in the 
United States generally include preclinical studies and the filing of an 
Investigational New Drug ("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 PLA for approval for 
marketing and commercial shipment.  Submission of a Product License 
Application ("PLA") does not assure FDA approval for marketing.  The PLA 
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 
Establishment License Application ("ELA") usually must be filed and approved 
by the FDA.

Among the other requirements for ELA approval is the requirement that 
prospective manufacturers conform to the FDA's drug Good Manufacturing 
Practices ("GMP") requirements specifically for biological drugs, as well as 
for other drugs. In complying with the FDA's drug 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.

Another requirement for many biological drug products is lot-by-lot release 
approval, which necessitates FDA approval of the release of each lot of a 
biologic drug before commercialization.  The lot-to-lot release and ELA 
requirements may be applied to some or all of the Company's potential 
immune-based therapies. The FDA amended its regulations to permit certain 
biotechnology and synthetic biological drug products to be eligible for 
approval under a biological product license that does not entail lot-to-lot 
release and establishment licensing requirements.  The Company believes that 
its potential synthetic protein autoimmune disease products will be subject 
to these new regulations.  There can be no assurance that REMUNE or any of 
the Company's other products will be eligible for approval under a biological 
drug product license or otherwise be subject to less rigorous regulation than 
traditional biological products.

The Company believes its proprietary GeneDrug-TM- and cancer treatment 
therapies will likely be regulated more like traditional biological products, 
subject to both PLA and ELA requirements.  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.

                                10

<PAGE>

A number of procedures are available to expedite approval or to allow 
expanded access to investigational drugs.  Certain investigational drugs, 
including products for the treatment of AIDS, can be distributed outside of 
traditional IND requirements on a "treatment IND" basis.  Generally, the FDA 
may permit an investigational drug, including an investigational biological 
drug, to be used under a "treatment IND" for patients outside of controlled 
clinical trials 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 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.  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 or expedited review.

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.

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 HIV, autoimmune disease, gene therapy and cancer 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 Connective Therapeutics, Inc. has filed patent applications 
related to autoimmune disease research that covers technology similar to that 
used by 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.

                                11

<PAGE>

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.

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.  
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.

Technological Change and Competition.  The biotechnology industry continues 
to undergo rapid change and competition is intense and is expected to 
increase.  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.

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 (such as the Company's 
agreement with Bayer Corporation ("Bayer")), licensors, licensees and others, 
and the Company's commercial success is dependent upon these outside parties 
performing their respective contractual responsibilities.  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 or that the Company 
will derive any revenue from such arrangements.  Although the Company has 
collaborative agreements with several universities and research institutions, 
the Company's agreement with Bayer is the only collaborative agreement that 
will provide the Company with contract revenue.  There can be no assurance 
that these collaborations will result in the development of any commercial 
products. The Company 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.

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 
potential 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 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, gene therapy and cancer 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 

                                12

<PAGE>

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.

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 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.

                                13

<PAGE>

PART II.  OTHER INFORMATION

Item 2. -- Changes in Securities

During the second quarter of 1997, the Company issued 2,051,281 units (the 
"Units"), each Unit consisting of one share of common stock and one warrant 
to purchase one share of common stock, to Kevin B. Kimberlin, a director of 
the Company, and Dennis J. Carlo, Ph.D., a director and president and chief 
executive officer of the Company, at a price of $7.80 per Unit.  The 
aggregate consideration of $16 million, consisted of $4,126,136 in cash, and 
promissory notes in the principal amount of $11,873,856, which are due 
September 30, 1997, with interest of 5.73% per annum.  The warrants have an 
exercise price of $14 per share, a four year term and are callable by the 
Company at $.05 per share if the fair market value of the Company's common 
stock is equal to or greater than $28 per share over any consecutive 45 day 
period.

The recipients of the above-described securities represented their intention 
to acquire the securities for investment only and not with a view to 
distribution thereof.  Appropriate legends were affixed to the stock 
certificates and warrants issued in such transactions.  All recipients had 
adequate access, through employment or other relationships, to information 
about the Company.

Item 4. -- Submission of Matters to a Vote of Security Holders

On May 22, 1997, the Company held its Annual Meeting of Stockholders. The 
following actions were taken at the annual meeting.  As of March 31, 1997, 
the record date, 20,288,722 shares were entitled to vote at the Annual 
Meeting.  Of these 20,288,722 shares, 894,738 shares were not voted.

  1. The following Class II Directors were elected:

     a.  Kevin B. Kimberlin.  18,463,885 shares voted in favor of the
     nominee, 930,099 shares withheld their vote;

     b.  Melvin Perelman.  18,463,635 shares voted in favor of the
     nominee, 930,349 shares withheld their vote;

     c.  John Simon.  18,463,885 shares voted in favor of the nominee,
     930,099 shares withheld their vote;

     d.  William M. Sullivan.  18,463,885 shares voted in favor of the
     nominee, 930,099 shares withheld their vote;

     e.  The following directors continue in office for their existing
     terms:

         Dennis J. Carlo
         James B. Glavin
         Gilbert S. Omenn
         Philip M. Young

  2. A proposal to amend and restate the 1989 Stock Plan of The Immune
     Response Corporation to, among other things, increase the
     aggregate number of shares of Common Stock authorized for issuance
     thereunder by 1,000,000 shares.  14,926,391 shares were voted in
     favor of the proposal, 3,728,127 shares were voted against the
     proposal, 178,948 shares abstained and 560,518 shares were not
     voted (includes broker non-votes); and

  3. The selection of Arthur Anderson LLP as the Company's independent
     auditor was ratified.  19,308,748 shares were voted in favor of
     the proposal, 37,155 shares were voted against the proposal and
     48,081 shares abstained.

                                14

<PAGE>

Item 6. -- Exhibits and Reports on Form 8-K

 a) Exhibits
 
     10.59*    Unit Purchase Agreement, dated April 15, 1997, between The
               Immune Response Corporation and Kevin B. Kimberlin,
               including Common Stock Purchase Warrant, Promissory Note
               and Stock Pledge Agreement

     10.60*    Unit Purchase Agreement, dated April 15, 1997, between The
               Immune Response Corporation and Dennis J. Carlo, Ph.D.,
               including Common Stock Purchase Warrant, Promissory Note
               and Stock Pledge Agreement

     10.61*    Amendment No. 1 to Rights Agreements (Exhibit 10.47), dated
               April 17, 1997, between The Immune Response Corporation and
               Harris Trust Company of California

     10.62     Common Stock Purchase Warrant, dated June 26, 1997, between
               The Immune Response Corporation and Kevin B. Kimberlin.

     10.63     Common Stock Purchase Warrant, dated June 26, 1997, between
               The Immune Response Corporation and Dennis J. Carlo, Ph.D.

     27        Financial Data Schedule


* Incorporated by reference to the Exhibits of the same number filed with the 
Company's March 31, 1997 Form 10-Q.

 b) Reports on Form 8-K

    Not applicable

                               15

<PAGE>

                              SIGNATURE



Pursuant to the requirements of the Securities Exchange Act of 1934, the 
registrant has duly caused this report to be signed on its behalf by the 
undersigned thereunto duly authorized.

                              THE IMMUNE RESPONSE CORPORATION






Date: August 6, 1997           s/Charles J. Cashion
     ---------------------  -------------------------------
                            Charles J. Cashion
                            Vice President, Finance
                            Secretary and Treasurer







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