Press Release

Stockholm, February 16, 2009

Diamyd Medical has received approval from the Swedish Medical Products Agency to continue to follow the children who participated in the company's Phase II study of the Diamyd^® diabetes vaccine, which started four years ago. The aim of the follow-up study is to confirm the vaccine's long-term effect.

"Clinical studies with Diamyd^® have demonstrated significant efficacy in preserving the body's own ability to produce insulin," says Elisabeth Lindner, President and CEO of Diamyd Medical. "We will now, in parallel with our ongoing large international Phase III trials, establish that the treatment also has the intended long-term effect in the patient's daily life."

It's been nearly four years since the children and adolescents were treated with the Diamyd^® vaccine, and now a three year follow-up will be offered. The children and adolescents will thus be followed for a total of seven years. The aim of the follow-up is to confirm that treatment with Diamyd^® provides long-term clinical effect. The follow-up will evaluate control of blood sugar, insulin requirement, quality of life and diabetes complications.

The main results of the Phase II study were published in the scientific journal The New England Journal of Medicine in October 2008.

Today the worldwide cost of treating diabetes and its complications exceeds USD 230 billion per year. Approximately 20 percent of all diabetes is autoimmune diabetes, where the body's own immune system destroys insulin-producing cells. Clinical studies have demonstrated that treatment with Diamyd^® halts or slows the destruction of the ability to produce insulin. The Diabetes Control and Complications Trial, a large American type 1 diabetes study, has demonstrated that a small amount of preserved endogenous insulin-producing capacity in patients with type 1 diabetes results in significantly better blood sugar control and reduces the risk of diabetes-related complications by more than 60 percent.

Type 1 diabetes is a chronic disease that can lead to serious complications involving considerable suffering for both patients and their family members. The disease means life-long treatment with insulin with several injections per day. It's important that the insulin dosage is neither too high nor too low, in order to keep blood sugar levels as normal as possible. Hyperglycemia (high blood sugar) and hypoglycemia (low blood sugar) are serious and sometimes life-threatening acute complications of insulin-treated type 1 diabetes. Late complications of diabetes, which are caused by fluctuating blood sugar levels over a long period, include cardiovascular disease, leg ulcers, retinopathy and kidney damage.

This information is disclosed in accordance with the Securities Markets Act, the Financial Instruments Trading Act or demands made in the exchange rules.