Quarterly Report III, June 28, 2017

Dear Shareholders and Readers

The oversubscribed rights issue means Diamyd Medical has a solid base ahead of this autumn’s focus on DIAGNODE-2, a placebo-controlled trial in which the diabetes vaccine is administered into the lymph nodes of children and young adults that have recently been diagnosed with type 1 diabetes. The Swedish Medical Products Agency has approved the study, and together with TFS, our chosen Contract Research Organization, we are continuing preparations for the forthcoming enrollment of patients.

The DIAGNODE-1 trial, whereby Diamyd® is administered to the lymph nodes, is now fully enrolled and the patients will continue to be followed for 15 months. A third interim report was recently presented from the trial, in which a further three patients had been followed over six months and the disease progression continues to be positive in terms of the remaining capacity to produce insulin and the reduction of long-term blood sugar and insulin dose. These results and the upcoming start of the follow-up trial, DIAGNODE-2, aroused considerable interest among major pharmaceutical companies at our meetings during the ADA diabetes conference in San Diego. We have also noted interest from research scientists and expect additional researcher-initiated trials to start in which the diabetes vaccine Diamyd®, will be evaluated using different combinations or methods of administration.

The quarter did not comprise only positive news. The findings from one of the two researcher-initiated prevention studies, DIAPREViT-1 whereby, for preventive purposes, the diabetes vaccine is administered subcutaneously (under the skin) to children with a high risk of developing type 1 diabetes, did not show any significant difference in preventing a diagnosis. However, the treatment provided an immunological response that will be further analyzed and demonstrated very high safety during the five-year follow-up in the study. The findings are in alignment with what has been demonstrated in other studies with recently diagnosed patients, in which a few doses of subcutaneously administered Diamyd® alone do not have the effect required to demonstrate significant differences in terms of influencing the autoimmune process.

The manufacture of a GABA study drug is continuing as planned. Different formulations have been prepared and are being evaluated prior to selection of the final study drug. A smaller clinical trial with the GABA study drug is planned for the first quarter of 2018 with a primary focus on investigating the possibility of regenerating insulin-producing cells. The researcher-initiated trial at the University of Alabama at Birmingham, which combines Diamyd® and GABA, is building additional knowledge around GABA’s potential immunomodulatory and metabolic properties as well as its synergistic efficacy with the Diamyd® vaccine for recently diagnosed type 1 diabetes. Together, these trials are expected to generate valuable data and, here, we have also noted increased interest from larger pharmaceutical companies with partnership potential.

Finally, our holdings in NextCell Pharma (NCP) and Companion Medical have trended positively During the fiscal year. We invested a total of SEK 2.9 million in NCP, of which MSEK 1.9 in the company's listing issue NCP will be listed on Aktietorget in July and this will provide a more transparent value of our holding, which will be slightly less than 14%. We see good opportunities for NCP to develop a pharmaceutical based on stem cells from umbilical cord tissue. Companion Medical exhibited at the American Diabetes Association(ADA) conference in San Diego this year, and the company plans to be able to have the FDA-approved insulin pen available in the US later this year.

Stockholm, June 28, 2017
Ulf Hannelius
President and CEO, Diamyd Medical AB (publ)

The oversubscribed rights issue means Diamyd Medical has a solid base ahead of DIAGNODE-2.
Ulf Hannelius, President and CEO

Annual Report

  November 3, 2016