Annual Report, November 9, 2017

Dear Shareholders and Readers

In last year’s CEO comments, I highlighted the potential of our project portfolio and our focus on refining these values in the best possible way through efficient resource prioritization. I can now look back with pride on what we have achieved during the year and what it will mean for the new fiscal year.

Over the past year, we have received both preliminary and final results from four investigator-initiated clinical trials with the diabetes vaccine Diamyd®. A high safety profile has already been determined and these trials have identified the combination therapy or mode of administration that clearly enhances the clinical efficacy of Diamyd® and supported continued efforts to secure market approval. The open-label DIAGNODE-1 trial, where Diamyd® is administered directly to the lymph node in combination with oral vitamin D, has delivered both clinical and immunological preliminary results that convinced us to conduct our own follow-up trial, which will commence this autumn.

Everything has moved very fast since a decision was made last spring to focus on intralymphatic treatment with Diamyd®. The successful new share issue in May gave us the financial prerequisites to initiate and conduct a pivotal trial. At the time of writing, we are about to commence DIAGNODE-2, a follow-up, placebo-controlled trial in Sweden, Spain and the Czech Republic, in order to verify the results. In our discussions with large pharmaceutical companies, it has become clear that the decision to conduct our own larger trial has significantly increased their interest in our company.

Just over a year ago, a decision was made to focus more clearly on our other asset, GABA, to gain full control of the development and potential we see for GABA in both type 1 and type 2 diabetes and other inflammatory diseases. During the year, several significant studies on GABA were published by independent research groups, of which the most noted demonstrated that GABA treatment alone can stimulate the growth of insulin-producing cells in preclinical models of diabetes. The past year’s focus on GABA means that we now have access to our own GMP-manufactured GABA study drug Remygen®. Following a meeting with the Swedish Medical Products Agency and discussions with our partners, the first clinical trial with Remygen® is planned to commence in 2018 and, in addition to assessing safety and pharmacokinetics, the aim will be to evaluate the regeneration of insulin-producing cells in a carefully selected group of type 1 diabetes patients. We recently signed a license agreement for GABA and GABA receptor modulators with the University of California, Los Angeles (UCLA). Combined with our existing license, patent applications and Remygen®, this agreement creates a strong development platform for leveraging the full therapeutic and commercial potential of GABA.

The 2017/2018 fiscal year is now in full swing, and will be exciting and eventful. DIAGNODE-2 defines large parts of the fiscal year with a major focus on achieving efficient patient recruitment, closer contact with regulatory authorities in Europe and the US, and discussions with potential partners regarding licensing agreements for Diamyd®. Remygen® presents new opportunities for both clinical development and potential partnership agreements, alongside of our ongoing investigator-initiated trials that we expect will provide additional clinical and immunological results.

I would like to thank our employees, Board, partners and trial participants for the significant steps we made during the year, and to thank our shareholders for their continued trust and support.

Stockholm, November 9, 2017
Ulf Hannelius
President and CEO, Diamyd Medical AB (publ)

DIAGNODE-2 defines large parts of the fiscal year with a major focus on achieving efficient patient recruitment.
Ulf Hannelius, President and CEO

Annual Report

  November 9, 2017