<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, 1998

                                       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 August 7, 1998, 23,197,810 shares of common stock were outstanding.



<PAGE>


                         THE IMMUNE RESPONSE CORPORATION

                                    FORM 10-Q

                                QUARTERLY REPORT


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                               Page
<S>                                                                            <C>
                          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 ..........................................   8



                           PART II. OTHER INFORMATION


Item 2.    Changes in Securities ..............................................  17

Item 4.    Submission of Matters to a Vote of Security Holders ................  17

Item 6.    Exhibits and Reports on Form 8-K ...................................  18


Signature .....................................................................  19
</TABLE>





                                       2
<PAGE>


Part I.  Financial Information
Item 1.  Financial Statements



                         THE IMMUNE RESPONSE CORPORATION

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (in thousands, except share data)


<TABLE>
<CAPTION>
                                                                     June 30,
                                                                        1998       December 31,
Assets                                                               (unaudited)      1997
                                                                      ---------     ---------
<S>                                                                  <C>            <C>
Current Assets:
    Cash and cash equivalents ....................................    $   2,664     $   4,872
    Marketable securities-available-for-sale .....................       34,374        25,567
    Other current assets .........................................          388           773
                                                                      ---------     ---------
            Total current assets .................................       37,426        31,212

Property and equipment, net ......................................        5,747         5,810
Deposits and other assets ........................................          955           353
                                                                      ---------     ---------
                                                                      $  44,128     $  37,375
                                                                      ---------     ---------

Liabilities and stockholders' equity

Current liabilities:
    Accounts payable .............................................    $   2,801     $   1,356
    Other accrued expenses .......................................        1,467           917

            Total current liabilities ............................        4,268         2,273

Convertible Preferred Stock ......................................        9,207          --

Stockholders' equity:
    Preferred stock, 5,000,000 shares authorized; none issued ....         --            --
    Common stock, $.0025 par value, 40,000,000 shares authorized,
        23,160,255 and 22,815,054 shares issued and outstanding at
        June 30, 1998 and December 31, 1997, respectively ........           58            57
    Warrants .....................................................        2,144         2,144
    Additional paid-in capital ...................................      188,387       186,374
    Cumulative comprehensive income ..............................          (23)           27
    Accumulated deficit ..........................................     (159,913)     (153,500)
                                                                      ---------     ---------
            Total stockholders' equity ...........................       30,653        35,102
                                                                      ---------     ---------
                                                                      $  44,128     $  37,375
                                                                      ---------     ---------
                                                                      ---------     ---------
</TABLE>


See accompanying notes.


                                       3



<PAGE>




                THE IMMUNE RESPONSE CORPORATION

        CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
               (in thousands, except share data)
                          (unaudited)




<TABLE>
<CAPTION>
                                                    Three months ended June 30,       Six months ended June 30,
                                                    ---------------------------       -------------------------
                                                       1998            1997            1998             1997
                                                     --------        --------         --------         --------
<S>                                                  <C>             <C>              <C>              <C>     
Contract research revenue ...................        $   --          $   --           $  1,000         $  1,000
Licensed research revenue ...................          10,667            --             10,667             --
                                                     --------        --------         --------         --------
                                                       10,667               0           11,667            1,000
Expenses:
    Research and development ................           8,429           9,549           16,689           18,148
    General and administrative ..............           1,105           1,053            2,104            2,046
                                                     --------        --------         --------         --------
                                                        9,534          10,602           18,793           20,194
Other revenue:
    Investment income .......................             402             669              713            1,278
                                                     --------        --------         --------         --------
Net loss ....................................        $  1,535        $ (9,933)        $ (6,413)        $(17,916)
                                                     --------        --------         --------         --------
                                                     --------        --------         --------         --------
Earnings (loss) per share - basic and diluted        $   0.06        $  (0.45)        $  (0.28)        $  (0.85)
                                                     --------        --------         --------         --------
                                                     --------        --------         --------         --------
</TABLE>


See accompanying notes.


                                       4


<PAGE>




                         THE IMMUNE RESPONSE CORPORATION

                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)


<TABLE>
<CAPTION>
                                                                            Six months ended June 30,
                                                                              1998          1997
                                                                            --------       -------- 
<S>                                                                         <C>            <C>      
Operating activities:
    Net loss .........................................................      $ (6,413)      $(17,916)
    Adjustments to reconcile net loss to net cash provided from
       (used by) operating activities:
           Depreciation and amortization .............................           744            490
           Deferred rent expense .....................................           (44)           (29)
           Changes in operating assets and liabilities:
               Other current assets ..................................           384            128
               Accounts payable ......................................         1,445            129
               Accrued expenses ......................................           594             36
                                                                             -------       --------
                    Net cash used by operating activities ............        (3,290)       (17,162)

Investing activities:
    Purchase/sale of marketable securities, net ......................        (8,857)        20,450
    Purchase of property and equipment ...............................          (680)        (2,018)
    Deposits and other assets ........................................          (602)          (222)
                                                                            --------       -------- 
                    Net cash provided from investing activities ......       (10,139)        18,210

Financing activities:
    Net proceeds from sale of common stock
       and warrants  (Note 3) ........................................         1,333         15,640
    Notes receivable from related parties (Note 3) ...................          --          (11,874)
    Net proceeds from the sale of convertible preferred stock ........         9,160           --
    Net proceeds from exercise of stock options ......................           728            378
                                                                             -------       --------
                    Net cash provided from financing activities ......        11,221          4,144
                                                                             -------       --------
Net increase in cash and cash equivalents ............................        (2,208)         5,192
Cash and cash equivalents at beginning of period .....................         4,872          3,785
                                                                            --------       -------- 
Cash and cash equivalents at end of period ...........................      $  2,664       $  8,977
                                                                            --------       -------- 
                                                                            --------       -------- 
Supplemental disclosure of noncash investing and financing activities:
    Accretion of preferred stock .....................................      $     47       $   --
                                                                            --------       -------- 
                                                                            --------       -------- 
</TABLE>

See accompanying notes.



                                       5



<PAGE>


                         THE IMMUNE RESPONSE CORPORATION

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                  June 30, 1998

1.     Basis of Presentation

       The condensed consolidated financial statements of The Immune Response
       Corporation ("Immune Response" or the "Company") for the three and six
       month periods ended June 30, 1998 and 1997 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, 1998, and the
       consolidated results of operations for the three and six month periods
       ended June 30, 1998 and 1997. The results of operations for the six
       months ended June 30, 1998 are not necessarily indicative of the results
       to be expected for the year ended December 31, 1998. 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, 1997 included in the Company's
       Form 10-K filed with the Securities and Exchange Commission.


2.     Earnings Per Share

       For the three months ended June 30, 1997 and the six months ended June
       30, 1998 and 1997, net loss per share is computed using the weighted
       average number of common shares outstanding during those periods.
       Outstanding stock options and warrants, and the effect of conversion of
       the Series F Convertible Preferred Stock are not included in the
       calculation of net loss per share because their effect would be
       antidilutive. Therefore, there is no difference between basic and diluted
       net loss per share for those periods. Weighted average number of shares
       outstanding for the three months ended June 30, 1997, and the six months
       ended June 30, 1998 and 1997 were 21,990,637, 22,871,460 and 21,130,018,
       respectively.

       The following table sets forth the computation of basic and diluted
       earnings per share for the three months ended June 30, 1998:

<TABLE>
<S>                                                                   <C>         
Numerator:
     Net income ................................................      $  1,535,364
     Preferred stock dividends .................................          (139,726)
                                                                      ------------
     Numerator for basic earnings per share - income available
       to common stockholders ..................................         1,395,638

     Effect of dilutive securities: ............................              --
                                                                      ------------
     Numerator for diluted earnings per share - income available
       to common stockholders after assumed conversions ........      $  1,395,638
                                                                      ------------
                                                                      ------------
Denominator:
     Denominator for basic earnings per share - weighted
       average shares ..........................................        22,918,007
     Effective of dilutive securities:
       Stock option plans ......................................         2,439,648
                                                                      ------------
     Denominator for diluted earnings per share - adjusted
       weighted average shares and assumed conversions .........        25,357,655
                                                                      ------------
                                                                      ------------
Basic earnings per share .......................................      $       0.06
                                                                      ------------
                                                                      ------------
Diluted earnings per share .....................................      $       0.06
                                                                      ------------
                                                                      ------------
</TABLE>

       Options and warrants to purchase 2,244,811 shares of common stock, and
       Preferred Stock convertible into 710,732 shares of common stock were
       outstanding at June 30, 1998, but were



                                        6
<PAGE>

       not included in the computation of diluted earnings per share because the
       options' and warrant's exercise price, along with the Preferred Stock's
       conversion price, were greater than the average market price of the
       common shares for the three months ended June 30,1998, and, therefore,
       the effect would be antidilutive.

3.     Comprehensive Income

       In January 1998, the Company adopted Statement of Financial Accounting
       Standards ("FAS") No. 130, "Reporting Comprehensive Income." The
       components of comprehensive income are as follows:

<TABLE>
<CAPTION>
                               Three Months Ended June 30     Six Months Ended June 30
                                 -----------------------       -----------------------
                                   1998           1997           1998          1997
                                 --------       --------       --------       --------
<S>                              <C>            <C>            <C>            <C>      
Net income (loss) .........      $  1,535       $ (9,933)      $ (6,413)      $(17,916)
Net unrealized gain (loss)
  on marketable securities            (60)           (70)           (50)          (214)
                                 --------       --------       --------       --------
Comprehensive income (loss)      $  1,475       $(10,003)      $ (6,463)      $(18,130)
                                 --------       --------       --------       --------
                                 --------       --------       --------       --------
</TABLE>

       All prior periods have been restated to reflect the adoption of this
statement.

4.     Equity Transaction

       During the second quarter of 1998, the Company sold 200 shares of its
       Series F Convertible Preferred Stock ("Series F Stock") in return for
       gross proceeds of $10 million. The Series F Stock is convertible into
       common stock initially at a conversion price of $14.07 per share of
       common stock. If the Company's common stock does not trade at prices
       higher than $14.07 per share over a period of time, the conversion price
       will be adjusted downward on April 24, 1999 (or sooner if the Company
       issues common stock at less than $14.07 per share) and quarterly
       thereafter. The Series F Stock bears a dividend of 7.5% per annum. In
       general, the dividend is payable in shares of common stock. The Company
       has filed a registration statement with the Securities and Exchange
       Commission covering the resale of the common stock issuable upon
       conversion of the Series F Stock. Further, the Company has the option for
       one year to sell up to $10 million more of the Series F Stock if certain
       conditions are met.

       Also during the second quarter of 1998, the Company and Agouron
       Pharmaceuticals, Inc. ("Agouron") entered into a binding agreement under
       which Immune Response agreed to exclusively license REMUNE-TM-, its
       immune-based therapy under development for the treatment of HIV
       infection, to Agouron. Under terms of the agreement, Immune Response will
       manufacture commercial supplies of REMUNE and Agouron will have exclusive
       rights to market REMUNE in North America, Europe and certain other
       countries. Immune Response initially received a $10 million license fee
       and Agouron purchased 118,256 shares of newly issued Immune Response
       common stock, priced at a premium to market, for $2 million. The two
       companies will share profits on a 50/50 basis if REMUNE is successfully
       developed and commercialized.

5.     Subsequent Event

       In July 1998, the Company entered into a research collaboration and
       option agreement with Schering-Plough Corporation to develop gene therapy
       products for the treatment of hepatitis B and C, and other diseases.
       Under terms of the initial preclinical research agreement, the Company
       could receive approximately $5 million in initial fees, reimbursement of
       expenses and technical milestone payments related to the delivery of the
       interferon alpha-2b gene for the treatment of hepatitis B and C. As part
       of the agreement, Schering-Plough has the option to license Immune
       Response's gene delivery system for additional proprietary
       Schering-Plough genes. The agreement also provides for Schering-Plough to
       pay royalties on future product sales.


                                       7
<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
developing immune-based therapies to induce specific T cell responses for the
treatment of HIV, autoimmune diseases and cancer. The Company is conducting
clinical trials for its immune-based therapies for HIV, rheumatoid arthritis,
psoriasis, multiple sclerosis, colon cancer and brain cancer and preclinical
studies for prostate cancer. In addition, the Company is developing a targeted
delivery technology for gene therapy which is designed to enable the intravenous
injection of genes for delivery directly to the liver. The Company's gene
therapy program is currently focused on diseases of the liver and is in
preclinical studies for the treatment of hemophilia and hepatitis.

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 1997 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 1998, the Company sold 200 shares of its Series F
Convertible Preferred Stock ("Series F Stock") in return for gross proceeds of
$10 million. The Series F Stock is convertible into common stock initially at a
conversion price of $14.07 per share of common stock. If the Company's common
stock does not trade at prices higher than $14.07 per share over a period of
time, the conversion price will be adjusted downward on April 24, 1999 (or
sooner if the Company issues common stock at less than $14.07 per share) and
quarterly thereafter. The Series F Stock bears a dividend of 7.5% per annum. In
general, the dividend is payable in shares of common stock. The Company has
filed a registration statement with the Securities and Exchange Commission
covering the resale of the common stock issuable upon conversion of the Series F
Stock. Further, the Company has the option for one year to sell up to $10
million more of the Series F Stock if certain conditions are met.

Also during the second quarter of 1998, the Company and Agouron Pharmaceuticals,
Inc. ("Agouron") entered into a binding agreement under which Immune Response
agreed to exclusively license REMUNE-TM-, its immune-based therapy under
development for the treatment of HIV infection, to Agouron. Under terms of the
agreement, Immune Response will manufacture commercial supplies of REMUNE, and
Agouron will have exclusive rights to market REMUNE in North America, Europe and
certain other countries. Immune Response initially received a $10 million
license fee and Agouron purchased 118,256 shares of newly issued Immune Response
common stock, priced at a premium to market, for $2 million. Additionally, as
part of the collaboration, the Company may receive future contributions from
Agouron for the purchase of additional common stock, for the reimbursement of
research and development costs and for successfully achieving future milestones.
The two companies will share profits on a 50/50 basis if REMUNE is successfully
developed and commercialized.

In July 1998, the Company entered into a research collaboration and option
agreement with Schering-Plough Corporation ("Schering-Plough") to develop gene
therapy products for the treatment of hepatitis B and C, and other diseases.
Under terms of the initial preclinical research agreement, the Company could
receive approximately $5 million in initial fees, reimbursement expenses and
technical milestone payments related to the delivery of the interferon alpha-2b
gene for the treatment of hepatitis B and C. As part of the agreement,
Schering-Plough has the option to license Immune Response's gene delivery system
for additional proprietary Schering-Plough genes. The agreement also provides
for Schering-Plough to pay royalties on future product sales.

The Company has not been profitable since inception and had an accumulated
deficit of $159.9 million as of June 30, 1998. To date, the Company has not
recorded any revenues from the sale of products. Revenues recorded through June
30, 1998 were earned in connection with contract research and investment income.
The Company expects its operating losses to continue to increase over the next




                                       8
<PAGE>

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 1998 was received from Bayer
Corporation related to a research collaboration for a potential therapy for
hemophilia which began in July 1996. The licensed research revenue received in
June 1998 was received from Agouron. The Company expects to receive additional
contract research payments from Agouron over the next two years. 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 decreased to $402,000 for the quarter ended June 30, 1998,
from $669,000 during the same period in 1997. During the six months ended June
30, 1998 and 1997, investment income was $713,000 and $1.3 million,
respectively.

Research and development expenditures decreased to $8.4 million during the
second quarter of 1998 compared to such expenditures during the same period in
1997 of $9.5 million. Research and development expenditures for the six months
ended June 30, 1998 were $16.7 million compared to $18.1 million for the same
period in 1997. The decrease in research and development costs from 1997 was due
primarily to the initial costs incurred in the first half of 1997 to enroll the
final clinical trial sites related to the Phase III clinical endpoint trial for
HIV infection using REMUNE-TM-. Also,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 which would otherwise have been made during
the third quarter of 1997 were paid late in the second quarter of 1997. The
Company expects research and development expenditures to rise as it continues
its Phase IIb rheumatoid arthritis clinical trial, expected to be completed by
year-end 1998, and its Phase II psoriasis clinical trial, expected to be
completed during the third quarter of 1998. Research and development
expenditures should also continue to rise in the forseeable future due to
expanding preclinical and clinical testing of the Company's proposed gene
therapy and cancer treatments. Research and development expenses related to
advancing REMUNE are also expected to increase due to the continuance of the
Company's ongoing Phase III clinical endpoint trial with REMUNE and to increased
expenditures related to scaling up of the manufacturing process for REMUNE as
the Company approaches possible commercialization of REMUNE. There can be no
assurance that REMUNE will be successfully developed or commercialized.

General and administrative expenses for the second quarters of both 1998 and
1997 were $1.1 million. General and administrative expenses for the six months
ended June 30, 1998 were $2.1 million as compared to $2.0 million for the same
period in 1997. General and administrative expenses for the remainder of 1998
necessary to support the Company's expanded research and development activities
are expected to remain consistent with expenditures in the first half of 1998.

For the quarter ended June 30, 1998, the Company's net income was $1.5 million,
or $.06 per share, as compared to a net loss of $9.9 million, or $.45 per share,
for the same period in 1997. For the six months ended June 30, 1998, the
Company's net loss was $6.4 million, or $.28 per share, as compared to a net
loss of $17.9 million, or $.85 per share for the same period in 1997. The
primary factor causing the change from 1998 from 1997 was the licensed research
payments received from Agouron in June 1998.

Liquidity and Capital Resources

As of June 30, 1998, the Company had working capital of $33.2 million, including
$37.0 million of cash, cash equivalents and marketable securities. This compares
with working capital as of December 31, 1997 of $28.9 million, including $30.4
million of cash, cash equivalents, marketable securities and short-term
investments. The increase in working capital was primarily due to the $10
million private placement of Series F Convertible Preferred Stock and the $12
million payment received from Agouron, both of which occurred in the second
quarter of 1998.



                                       9
<PAGE>

The Company will need to raise additional funds to conduct research and
development, preclinical studies and clinical trials necessary to bring its
potential products to market and establish manufacturing and marketing
capabilities. The Company anticipates that in 1998 and 1999, the REMUNE clinical
trials will continue to represent a significant portion of the Company's overall
expenditures. The Company also anticipates that costs related to the development
of REMUNE will continue to increase as the Company approaches possible
commercialization. In particular, the Company anticipates additional capital
improvements of approximately $4 million to be made over the next twelve months
related to increasing the current capacity of its manufacturing facility. Other
anticipated costs with respect to REMUNE will depend on many factors, including
the results of interim analyses of the data from the Phase III clinical endpoint
trial, the potential for accelerated approval, the continuation of the Company's
collaboration with Agouron and certain other factors which will influence the
Company's determination of the appropriate continued investment of the Company's
financial resources in this program.

The Company's future capital requirements will depend on many factors, including
continued scientific progress in its research and development programs, the
scope and results of preclinical studies and clinical trials, the time and costs
involved in obtaining regulatory approvals, the costs involved in filing,
prosecuting and enforcing patent claims, competing technological and market
developments, the cost of manufacturing scale-up, effective commercialization
activities and arrangements and other factors not within the Company's control.
The Company intends to seek additional funding through public or private
financings, arrangements with corporate collaborators or other sources. If funds
are acquired through additional collaborations, the Company will likely be
required to relinquish some or all rights to products that the Company may have
otherwise developed itself. Adequate funds may not be available when needed or
on terms acceptable to the Company. Insufficient funds may require the Company
to scale back or eliminate some or all of its research and development programs
or license to third parties products or technologies that the Company would
otherwise seek to develop itself. The Company believes that its existing
resources, including the funds received from the sale of Series F Convertible
Preferred Stock and the funds received from Agouron, including interest thereon,
will enable the Company to maintain its current and planned operations through
the first half of 1999.

Year 2000

The Company is conducting a comprehensive review of its computer systems to
identify the systems that could be affected by the "Year 2000" issue and has
created a plan to resolve the issue. The Year 2000 problem is the result of
computer programs being written using two digits rather than four digits to
define the applicable year. Any of the Company's programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in a major system failure or
miscalculations. The Company presently believes that the Year 2000 problem will
not pose significant operational problems for the Company's computer systems.


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, 1997.)

Uncertainty of Product Development and Clinical Testing. The Company has not
completed the development of any products and there can be no assurance any
products will be successfully developed. The Company has been in existence since
1986, and to date only six of its product candidates have entered clinical
trials. The Company's potential immune-based therapies for HIV, autoimmune
disease, cancer and gene therapy products currently under development will
require significant additional research and development efforts and regulatory
approvals prior to potential commercialization. To achieve profitable
operations, the Company must successfully develop, manufacture, introduce and
market products. The Company's potential products may not prove to be safe and
effective in clinical trials, United States Food and Drug Administration ("FDA")
or other regulatory approvals may not be obtained and such products may not
achieve market acceptance.

The Company's potential HIV immune-based therapy, REMUNE, is in a Phase III
clinical endpoint trial designed to provide evidence of efficacy based on
clinical endpoints. The results of such clinical trial may not demonstrate that
REMUNE is safe and efficacious and, even if the results of the clinical trial
are considered successful by the Company, the FDA may require the Company to
conduct additional large scale clinical



                                       10
<PAGE>

trials with REMUNE before the FDA will consider approving REMUNE for commercial
sale. Failure to successfully complete the Phase III clinical endpoint trial in
a timely fashion and a failure to obtain FDA approval of REMUNE will materially
and adversely affect the Company.

The results of the Phase III trial may not be consistent with Phase II results.
Even if the results of the Phase III trial are consistent with the results of
the Phase II trial, the FDA may not approve REMUNE for marketing. In addition,
REMUNE is being tested in a Phase II clinical trial in Thailand, in a pediatric
Phase I clinical trial in the United States and in combination trials with
approved HIV therapies in the United States, Spain, Switzerland and the United
Kingdom. Failure of these trials to demonstrate the safety and effectiveness of
REMUNE could have a material adverse effect on the regulatory approval process
for this potential product.

The Company's other potential immune-based therapies and gene therapy
technologies are at a much earlier stage of development than REMUNE. The
Company's gene therapy technology and certain of its technologies for the
treatment of cancer have not yet been tested in humans and human testing of
potential products based on such technologies may not be permitted by regulatory
authorities and, even if human testing is permitted, products based on such
technologies may not be developed and shown to be safe or efficacious. Potential
immune-based therapies based on certain of the Company's autoimmune
technologies, which are in various stages of clinical testing, and certain of
its cancer technologies, which are at an early stage of clinical testing, may
not be shown to be safe, efficacious or receive regulatory approval.

The results of the Company's preclinical studies and clinical trials may not be
indicative of future clinical trial results. A commitment of substantial
resources to conduct time-consuming research, preclinical studies and clinical
trials, including the REMUNE Phase III clinical endpoint trial will be required
if the Company is to develop any products. Delays in planned patient enrollment
in the Company's current clinical trials or future clinical trials may result in
increased costs, program delays or both. None of the Company's potential
products may prove to be safe and effective in clinical trials, FDA or other
regulatory approvals may not be obtained or such products may not 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.

Unacceptable toxicities or side effects may occur at any time in the course of
human clinical trials and, 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,
disease resistance may limit the efficacy of the Company's potential products.

Additional Financing Requirements and Access to Capital. The Company will need
to raise additional funds to conduct research and development, preclinical
studies and clinical trials necessary to bring its potential products to market
and establish manufacturing and marketing capabilities. The Company anticipates
that in 1998 and 1999, the REMUNE clinical trials will continue to represent a
significant portion of the Company's overall expenditures. The Company also
anticipates that costs related to the development of REMUNE will continue to
increase as the Company approaches possible commercialization. The anticipated
costs with respect to REMUNE will depend on many factors, including the results
of interim analyses of the data from the Phase III clinical endpoint trial, the
potential for accelerated approval, the continuation of the Company's
collaboration with Agouron and certain other factors which will influence the
Company's determination of the appropriate continued investment of the Company's
financial resources in this program.

The Company's future capital requirements will depend on many factors, including
continued scientific progress in its research and development programs, the
scope and results of preclinical studies and clinical trials, the time and costs
involved in obtaining regulatory approvals, the costs involved in filing,
prosecuting and enforcing patent claims, competing technological and market
developments, the cost of manufacturing scale-up, effective commercialization
activities and arrangements and other factors not within the Company's control.
The Company intends to seek additional funding through public or private
financings, arrangements with corporate collaborators or other sources. If funds
are acquired through additional collaborations, the Company will likely be
required to relinquish some or all rights to products that the 



                                       11
<PAGE>

Company may have otherwise developed itself. Adequate funds may not be available
when needed or on terms acceptable to the Company. Insufficient funds may
require the Company to scale back or eliminate some or all of its research and
development programs or license to third parties products or technologies that
the Company would otherwise seek to develop itself. The Company believes that
its existing resources, including the funds received from the sale of Series F
Convertible Preferred Stock and the funds received from Agouron, including
interest thereon, will enable the Company to maintain its current and planned
operations through the first half of 1999.

Patents and Proprietary Technology. The Company has filed, or participated as
licensee, in the filing of a number of patent applications in the United States
and many international countries. The Company files applications as appropriate
for patents covering its products and processes. The Company has been issued
patents, or has licensed patents, covering certain aspects of its proposed
immune-based therapies for HIV, autoimmune disease, cancer and gene therapy
technologies. The Company's success may depend in part on its ability to obtain
patent protection for its products and processes. The Company is aware that a
group working with Connetics Corporation has received a United States patent
related to autoimmune disease research that covers technology similar to that
used by the Company.

The Company may not be able to negotiate any necessary cross licenses, and
failure to do so could have a negative impact on the Company. The Company's
patent applications may not issue as patents and its issued patents, or any
patent that may be issued in the future, may not 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 others may 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. Any of the Company's patents, or any
patents issued to the Company in the future, may not afford meaningful
protection against competitors. Defending any such patent could be costly to the
Company, and the patent may not be held valid by a court of competent
jurisdiction.

The Company also relies on protecting its proprietary technology in part through
confidentiality agreements with its corporate collaborators, employees,
consultants and certain contractors. These agreements may be breached, the
Company may not have adequate remedies for any breach and the Company's trade
secrets may 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, such as
the patent owned by Connetics Corporation. If any relevant claims of third-party
patents are upheld as valid and enforceable, the Company could be prevented from
practicing the subject matter claimed in such patents, or would be required to
obtain licenses or redesign its products or processes to avoid infringement.
Such licenses may not be available at all or on terms commercially reasonable to
the Company and the Company may not be able to redesign its products or
processes to avoid infringement. Litigation may be necessary to defend against
claims of infringement, to enforce patents issued to the Company or to protect
trade secrets. Such litigation could result in substantial costs and diversion
of management efforts regardless of the results of such litigation and an
adverse result could subject the Company to significant liabilities to third
parties, require disputed rights to be licensed or require the Company to cease
using such technology.

History of Operating Losses. As of June 30, 1998, the Company had an accumulated
deficit of $159.9 million. The Company has not generated revenues from the
commercialization of any products and expects to incur substantial net operating
losses over the next several years. The Company may not be able to generate
sufficient product revenue to become profitable at all or on a sustained basis.
The Company expects to have quarter-to-quarter fluctuations in expenses, some of
which could be significant, due to expanded research, development and clinical
trial activities.



                                       12
<PAGE>

Lengthy Approval Process and Uncertainty of Government Regulatory Requirements.
Clinical testing, manufacture, promotion and sale of the Company's drug products
are subject to extensive regulation by numerous governmental authorities in the
United States, principally the FDA, and corresponding state and foreign
regulatory agencies. The Company believes that REMUNE and most of its other
potential immune-based therapies will be regulated by the FDA as biological drug
products under current regulations of the FDA. Biological products must be shown
to be safe, pure and potent (i.e., effective) and are subject to the same
regulatory requirements as nonbiological products under the FDC Act, as amended
by the FDA Modernization Act, except that a biological product licensed under
the Public Health Services Act ("PHS Act") is not required to have an approved
NDA under the Federal Food, Drug and Cosmetic Act ("FDC Act"). The FDA
Modernization Act directed the FDA to take measures to minimize the differences
in the review and approval of marketing applications for biological and
nonbiological products. The FDA Modernization Act also made significant
revisions to the statutory requirements with regard to the approval of new
biological and nonbiological products. Among other things, the FDA Modernization
Act established a new statutory program for the approval of fast track drugs,
streamlined clinical research, and revised the content of product approval
applications and the FDA review process. The FDA is required to issue
regulations and guidelines in order to implement certain of these new
requirements. Until the FDA implements these regulations and guidelines, it is
impossible to predict the impact of the FDA Modernization Act on the review and
approval of any marketing applications that the Company may submit to the FDA.
The FDC Act, the PHS Act and other federal and state statutes and regulations
govern or influence the testing, manufacture, safety, effectiveness, labeling,
storage, recordkeeping, approval, advertising, distribution and promotion of
biological prescription drug products. Noncompliance with applicable
requirements can result in, among other things, fines, injunctions, seizure of
products, total or partial suspension of product marketing, failure of the
government to grant premarket approval, withdrawal of marketing approvals and
criminal prosecution.

The regulatory process for new therapeutic drug products, including the required
preclinical studies and clinical testing, is lengthy and expensive and there can
be no assurance that necessary FDA clearances will be obtained in a timely
manner, if at all. The length of the clinical trial period and the number of
patients the FDA will require to be enrolled in the clinical trials in order to
establish the safety and efficacy of the Company's products are uncertain. 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. The
Company may not 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.

The steps required before a biological drug product may be marketed in the
United States generally include preclinical studies and the filing of an IND
application with the FDA. Reports of results of preclinical studies and clinical
trials for biological drug products are submitted to the FDA in the form of a
Biologics Licensing Application ("BLA") for approval for marketing and
commercial shipment. Submission of a BLA does not assure FDA approval for
marketing. The BLA review process may take a number of years to complete,
although reviews of applications for treatments of AIDS, cancer and other
life-threatening diseases may be accelerated or expedited. Failure of the
Company to receive FDA marketing approval for REMUNE or any of its other
products under development on a timely basis could have a material adverse
effect on the Company's business, financial condition and results of operations.
In addition to obtaining approval for each biological drug product, an
Establishment LIcense Application usually must be filed and approved by the FDA.

Among the other requirements for BLA approval is the requirement that
prospective manufacturers conform to the FDA's Good Manufacturing Practices
("GMP") requirements specifically for biological drugs, as well as for other
drugs. In complying with the FDA's GMP requirements, manufacturers must continue
to expend time, money and effort in production, recordkeeping and quality
control to assure that the product meets applicable specifications and other
requirements. Failure to comply with the FDA's drug GMP



                                       13
<PAGE>

requirements subjects the manufacturer to possible FDA regulatory action. The
Company or its contract manufacturers, if any, may not be able to maintain
compliance with the FDA's drug GMP requirements on a continuing basis. Failure
to maintain such compliance could have a material adverse effect on the
Company's business, financial condition and results of operations.

The Company believes its proprietary GeneDrug and cancer treatment therapies
will likely be regulated as biological products. As with the Company's other
potential products, the gene therapy and cancer products will be subject to
extensive FDA regulation throughout the product development process, and any of
these products may not be approved for marketing by the FDA on a timely basis,
if at all.

The FDA Modernization Act also amended the FDC Act to permit expanded access to
individuals and larger groups to unapproved new therapeutic and diagnostic
products. Although the new law largely codifies existing FDA regulations in this
area, it expands access to all investigational therapies under certain
conditions. Although the FDA has granted expanded access to REMUNE for those
patients who are ineligible to enroll in the Phase III clinical endpoint trial,
the FDA has to date not designated expanded access protocols for REMUNE as
"treatment" protocols. Either expanded access or a treatment protocol
designation might permit third party reimbursement of some of the costs
associated with making REMUNE available to patients in such an expanded access
context. The FDA may not determine that REMUNE meets all of the FDA's criteria
for use of an investigational drug for treatment use and, even if the product is
allowed for treatment use, third party payers may not provide reimbursement for
the costs of treatment with REMUNE.

The FDA also has issued regulations to accelerate the approval of or to expedite
the review of new biological drug products for serious or life-threatening
illnesses that provide meaningful therapeutic benefit to patients over existing
treatments. Under the accelerated approval program, the FDA may grant marketing
approval for a biological or nonbiological drug product earlier than would
normally be the case. In addition to the accelerated approval process, the FDA
has established procedures designed to expedite the development, evaluation and
marketing of new therapies intended to treat persons with life-threatening and
severely debilitating illnesses, especially when no satisfactory alternative
therapy exists. In addition, the FDA Modernization Act established a new
statutory program for the approval of fast track drugs, including biological
products. The FDA may not consider REMUNE or any other of the Company's products
under development to be an appropriate candidate for accelerated approval,
expedited review or fast track designation.

To market any drug products outside of the United States, the Company is also
subject to numerous and varying foreign regulatory requirements, implemented by
foreign health authorities, governing the design and conduct of human clinical
trials and marketing approval. The approval procedure varies among countries and
can involve additional testing, and the time required to obtain approval may
differ from that required to obtain FDA approval. The foreign regulatory
approval process includes all of the risks associated with obtaining FDA
approval set forth above, and approval by the FDA does not ensure approval by
the health authorities of any other country.

Technological Change and Competition. The biotechnology industry continues to
undergo rapid change and competition is intense in the fields of HIV, autoimmune
disease, cancer and gene therapy, and such competition is expected to increase.
The Company will compete with fully integrated pharmaceutical companies, small
biotechnology companies, universities and research organizations. Competitors
may 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. Competitors may
develop and commercialize more effective or affordable products.

Dependence on Third Parties. The Company's strategy for the research,
development and commercialization of its products requires entering into various
arrangements with corporate collaborators, licensors, licensees



                                       14
<PAGE>

and others, and the Company's commercial success is dependent upon these outside
parties performing their respective contractual responsibilities, including the
analysis of the data generated in the Company's clinical trials. The amount and
timing of resources such third parties will devote to these activities may not
be within the control of the Company. There can be no assurance that such
parties will perform their obligations as expected and the failure of third
parties to perform their obligations would have a material adverse effect on the
Company. Although the Company has collaborative agreements with several
universities and research institutions, the Company's agreement with Bayer and
its binding Letter of Intent with Agouron Pharmaceuticals, Inc. are the only
collaborative agreements that provide the Company with contract revenue. These
collaborations may not result in the development of any commercial products.
Immune Response intends to seek additional collaborative arrangements to develop
and commercialize certain of its products. The Company may not be able to
negotiate collaborative arrangements on favorable terms, or at all, in the
future and its current or future collaborative arrangements may not 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 products.
The Company has not yet manufactured its product candidates in commercial
quantities. The Company may not 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,
cancer and gene therapy treatments in large-scale clinical or commercial
quantities. The Company has no experience in the sales, marketing and
distribution of pharmaceutical products. The Company may not be able to
establish sales, marketing and distribution capabilities or make arrangements
with its collaborators, licensees or others to perform such activities and such
efforts may not be successful. The Company's products may not be successfully
commercialized even, if they are developed and approved for commercialization.

The manufacture of the Company's products involves a number of steps and
requires compliance with stringent quality control specifications imposed by the
Company itself and by the FDA. Moreover, the Company's products can only be
manufactured in a facility that has undergone a satisfactory inspection by the
FDA. For these reasons, the Company would not be able quickly to replace its
manufacturing capacity if it were unable to use its manufacturing facilities as
a result of a fire, natural disaster (including an earthquake), equipment
failure or other difficulty, or if such facilities are deemed not in compliance
with the FDA's drug GMP requirements and the non-compliance could not be rapidly
rectified. The Company's inability or reduced capacity to manufacture its
products would have a material adverse effect on the Company's business and
results of operations.

The Company may enter into arrangements with contract manufacturing companies to
expand its own production capacity in order to meet requirements for its
products, or to attempt to improve manufacturing efficiency. If the Company
chooses to contract for manufacturing services and encounters delays or
difficulties in establishing relationships with manufacturers to produce,
package and distribute its finished products, clinical trials, market
introduction and subsequent sales of such products would be adversely affected.
Further, contract manufacturers must also operate in compliance with the FDA's
drug GMP requirements; failure to do so could result in, among other things, the
disruption of product supplies. Until recently, biologic product licenses could
not be held by any company unless it performed significant manufacturing
operations. The FDA recently amended its regulations in this regard, and the
Company believes that under these new regulations it can now hold licenses for
its biological products without performing significant manufacturing steps.
Nonetheless, the Company's potential dependence upon third parties for the
manufacture of its products may adversely affect the Company's profit margins
and its ability to develop and deliver such products on a timely and competitive
basis.

Uncertainty of Product Pricing, Reimbursement and Related Matters. The Company's
ability to earn sufficient returns on its products will depend in part on the
extent to which reimbursement for the costs of such products and related
treatments will be available from government health administration authorities,
private health coverage insurers, managed care organizations and other
organizations. Third party payors are increasingly challenging the price of
medical products and services. If purchasers or users of the Company's products
are not able to obtain adequate reimbursement for the cost of using such
products,



                                       15
<PAGE>

they may forego or reduce such use. Significant uncertainty exists as to the
reimbursement status of newly approved health care products, and adequate third
party coverage may not be available. Failure to obtain appropriate reimbursement
would have a material adverse effect on the Company.

Subordination of Common Stock to Preferred Stock. The Company's Common Stock is
expressly subordinate to the Company's Series F Convertible Preferred Stock in
the event of the liquidation, dissolution or winding up of the Company. If the
Company were to cease operations and liquidate its assets, there may not be any
remaining value available for distribution to the holders of Common Stock after
providing for the Series F Convertible Preferred Stock liquidation preference.

Volatility of Stock Price and Absence of Dividends. The market price of Immune
Response's common stock, like that of the common stock of many other
biopharmaceutical companies, has been and is likely to be highly volatile.
Factors such as the results of preclinical studies and clinical trials by the
Company, its collaborators or its competitors, other evidence of the safety or
efficacy of products of the Company or its competitors, announcements of
technological innovations or new products by the Company or its competitors,
governmental regulatory actions, changes or announcements in reimbursement
policies, developments with the Company's collaborators, developments concerning
patent or other proprietary rights of the Company or its competitors (including
litigation), concern as to the safety of the Company's products,
period-to-period fluctuations in the Company's operating results, changes in
estimates of the Company's performance by securities analysts, market conditions
for biopharmaceutical stocks in general and other factors not within the control
of the Company could have a significant adverse impact on the market price of
the common stock. The Company has never paid cash dividends on its common stock
and does not anticipate paying any cash dividends in the foreseeable future.


                                       16

<PAGE>


PART II.  OTHER INFORMATION

Item 2. -- Changes in Securities

During the second quarter of 1998, the Company sold 200 shares of its Series F
Convertible Preferred Stock ("Series F Stock") in return for gross proceeds of
$10 million. The Series F Stock is convertible into common stock initially at a
conversion price of $14.07 per share of common stock. If the Company's common
stock does not trade at prices higher than $14.07 per share over a period of
time, the conversion price will be adjusted downward on April 24, 1999 (or
sooner if the Company issues common stock at less than $14.07 per share) and
quarterly thereafter. The Series F Stock bears a dividend of 7.5% per annum. In
general, the dividend is payable in shares of common stock. The Company has
filed a registration statement with the Securities and Exchange Commission
covering the resale of the common stock issuable upon conversion of the Series F
Stock. Further, the Company has the option for one year to sell up to $10
million more of the Series F Stock if certain conditions are met. The Series F
Stock was sold under the exemption provided by Regulation D promulgated under
the Securties Act of 1933, as amended.

Also during the second quarter of 1998, the Company and Agouron Pharmaceuticals,
Inc. ("Agouron") entered into a binding Letter of Intent under which Immune
Response agreed to exclusively license REMUNE, its immune-based therapy under
development for the treatment of HIV infection, to Agouron. Under terms of the
agreement, Immune Response will manufacture commercial supplies of REMUNE, and
Agouron will have exclusive rights to market REMUNE in North America, Europe and
certain other countries. Immune Response initially received a $10 million
license fee and Agouron purchased 118,256 shares of newly issued Immune Response
common stock, priced at a premium to market, for $2 million. The two companies
will share all profits from the commercialization of REMUNE on a 50/50 basis.
The common stock was sold under the exemption provided by Section 4(2) of the
Securities Act of 1993, as amended.

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

On June 11, 1998, the Company held its Annual Meeting of Stockholders. The
following actions were taken at the annual meeting. As of April 15, 1998, the
record date, 20,833,815 shares were entitled to vote at the Annual Meeting. Of
these 20,833,815 shares, 11,330 shares were not voted.

1. The following Class II Directors were elected:

a. Dennis J. Carlo. 20,445,658 shares voted in favor of the nominee, 39,487
   shares withheld their vote;

b. Kevin B. Kimberlin. 20,435,758 shares voted in favor of the nominee, 49,387
   shares withheld their vote;

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

   James B. Glavin
   Melvin Perelman
   John Simon
   William M. Sullivan
   Philip M. Young

2. The selection of Arthur Andersen LLP as the Company's independent auditor was
   ratified. 20,397,760 shares were voted in favor of the proposal, 57,561
   shares were voted against the proposal and 29,824 shares abstained.




                                       17
<PAGE>


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

a)   Exhibits

       3(i)*  Restated Certificate of Incorporation of the Company, as amended
              by Certificate of Designations, Preferences and Rights of Series F
              Convertible Preferred Stock.

       10.1*  Securities Purchase Agreement dated as of April 24, 1998 by and
              among the Company and Investors.

       10.2*  Registration Rights Agreement dated as of April 24, 1998 by and
              among the Company and the Investors.

       10.65# Letter of Intent dated June 11, 1998 between The Immune Response
              Corporation and Agouron Pharmaceuticals, Inc.

       10.66# Common Stock Purchase Agreement dated June 11, 1998 between The
              Immune Response Corporation and Agouron Pharmaceuticals, Inc.

       27     Financial Data Schedule


   *  Incorporated by reference to exhibits of the same number filed with the
      Company's Form 8-K dated April 24, 1998 (File No. 0-18006).

   #  Confidential treatment has been requested for certain portions of this
      exhibit.


b)   Reports on Form 8-K

     A report on Form 8-K dated April 24, 1998, was filed by The Immune Response
     Corporation reporting under Item 5 that the Company had sold 200 shares of
     its Series F Convertible Preferred Stock in return for gross proceeds of
     $10 million.

                                       18

<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 12, 1998         /s/ Charles J. Cashion
     ------------------       -----------------------------------------------
                              Charles J. Cashion
                              Senior Vice President, Finance & Administration
                              Secretary and Treasurer


                                       19