Quarterly Report 3, June 2016

Dear Shareholders

It was with great pride and humility that I took over the role of CEO of Diamyd Medical nearly two months ago. This has been an intense period and I recently returned from the American Diabetes Association’s (ADA) 76th Scientific Sessions in New Orleans, the world’s largest diabetes conference, with more than 16,000 delegates. The principal message for the type 1 diabetes field was clear: combination therapy and innovative studies are the key to preventing and curing the disease. Government players in the US are showing increasing commitment to curing and preventing diabetes and we have also seen at other conferences we attended earlier in the spring a clear and intensified interest in Diamyd Medical from regional pharmaceutical companies. This is extremely positive for Diamyd Medical. With six ongoing researcher-initiated phase II studies, in which the diabetes vaccine Diamyd® is combined with other substances, we are ahead of our time. During the period, we reported that the innovative open DIAGNODE study, led by Professor Johnny Ludvigsson at Linköping University, demonstrated good safety and promising immunological responses in a first preliminary interim evaluation of data from four patients in the study. It is the first study of its kind in which the concept of intralymphatic administration of an antigen is used in an autoimmune disease, a concept that has been demonstrated to be highly effective in the allergy field. We had a rewarding meeting with the Swedish Medical Products Agency regarding a potential Diamyd® and GABA study that is being planned together with Professor Per-Ola Carlsson at Uppsala University Hospital, and there is interest in further studies among researchers around the world. Discussions are also in progress regarding a possible extension of the ongoing and highly interesting Diamyd® and GABA combination study at the University of Alabama at Birmingham, USA.

Regarding Diamyd Medical’s holdings, it is positive that Cellaviva has received MSEK 8 in refinancing and that the operation is being broadened as a result of a new department being created within Cellaviva for development of stem cells for immunomodulating and regenerative medicine. Diamyd Medical’s shareholding is reduced from approximately 45% to approximately 22%. For the sake of clarity, Diamyd Medical has chosen to impair the previous value of the holding in its entirety. As far as our other holdings are concerned, at ADA I met Sean Saint who is President of Companion Medical, in which Diamyd Medical owns 8.5% of the shares. Companion is developing an insulin pen that is linked to a smartphone application, and its 510k application to the FDA is on schedule.

Recently published articles and conference abstracts on ADA strengthen GAD’s and GABA’s key roles in diabetes. In the journal Diabetes (Phelps et al.), new research shows that an immunogenic variant of GAD in type 1 diabetes accumulates in damaged or stressed beta cells, with the hypothesis that this is the cause of the autoimmune disease. An abstract by Professor Qinghua Wang of the University of Toronto and also a member of our Scientific Advisory Board, shows that in an animal model GABA increases the metabolism in fatty tissue. Earlier studies have demonstrated GABA’s anti-inflammatory effects and function as a neurotransmitter substance in the pancreas, where it promotes the production of insulin, inhibits glucagon secretion and has potentially favorable effects on beta cell survival and growth. There is continued strong interest in further development involving Diamyd Medical’s patented substances in the type 1 diabetes field and new research findings are also opening the way for GABA as a potential component in the treatment of, for example, type 2 diabetes.

I am convinced that Diamyd Medical is at the very leading edge of the type 1 diabetes field, with clinical studies that are in line with what leading experts see as the future of this area. Out-licensing is top of the agenda. We have excellent relations with large pharmaceutical companies and, as mentioned above, there is clear interest from regional pharmaceutical companies. My task as CEO is to refine the strengths and core assets of the company and capitalize on the fact that we have the wind in our sails to ensure that Diamyd Medical grows and becomes a profitable diabetes company, with clarity in how we relate to our cooperative partners and to you, our shareholders. And most important of all, we will do our utmost to prevent and cure type 1 diabetes, one of the most serious diseases that is affecting increasing numbers of children in the world.

Stockholm, June 29, 2016
Ulf Hannelius
President and CEO, Diamyd Medical AB (publ)

Diamyd Medical is at the very leading edge of the type 1 diabetes field, with clinical studies that are in line with what leading experts see as the future of this area.
Ulf Hannelius, President and CEO

Annual Report

  November 05, 2015