Quarterly Report III 14/15

September 2014 – May 2015, Diamyd Medical AB (publ), Fiscal year 2014/2015

Reporting period, March 1, 2015 – May 31, 2015

  • Net result amounted to MSEK -7.3 (-3.6)
  • Net result per share amounted to SEK -0.4 (-0.2)
  • Cash flow from operating activities amounted to MSEK -4.8 (-4.1)
  • Liquid assets and short term investments amounted at the end of the period to MSEK 34.2 (38.8)

First nine months, September 1, 2014 – May 31, 2015

  • Net result amounted to MSEK -17.2 (-12.8)
  • Result per share amounted to SEK -0.9 (-0.6)
  • Cash flow from operating activities amounted to MSEK -14.6 (-24.1)

Significant events during the reporting period

  • DIAMYD®/GABA. First patient included in US Diamyd® and GABA diabetes study
  • DiAPREV-IT 2. New study started with the diabetes vaccine Diamyd® to stop type 1 diabetes in children
  • DIABGAD. Diamyd Medical announced that immunological results from a study with Diamyd® were to be presented in April
  • Diamyd Medical received SEK 15 million in a direct issue
  • Diamyd Medical announced that the Company contributes to JDRF initiative to increase understanding of type 1 diabetes
  • DIABGAD. Immunological markers affected after six months in a first combination study with the diabetes vaccine Diamyd®
  • Diamyd Medical increased investment in stem cell activity
  • EDCR started – first patient included in new study combining the diabetes vaccine Diamyd® with etanercept
  • Diamyd Medical increased investment in Companion Medical

CEO comments
Diamyd Medical tackles autoimmune type 1 diabetes on three fronts: drug development, stem cell technology and medical devices. During the last quarter, the Company has advanced its positions in all of these areas. In addition to efforts to identify partners for the diabetes vaccine Diamyd®, the following were also noteworthy: a) three new studies with the diabetes vaccine Diamyd® (DiAPREV-IT 2 , Diamyd®/GABA, and EDCR IIa) recruited their first patients; b) Diamyd®+vitamin D+ibuprofen has been well tolerated during the first six months’ treatment as part of the DIABGAD study (immunological results); c) additional shares were acquired in the stem cell company Cellaviva, and; d) more shares were purchased in the medical devices company Companion Medical. In addition, a private placement brought in SEK 15 million to Diamyd Medical.

Diamyd Medical sees many values in using resources to try to extend the life of and improve quality of life for people with type 1 diabetes. Type 1 diabetes is a life-long autoimmune disease, where the body’s own immune system breaks down the cells in the body that produce the vital hormone insulin. Each day, the blood sugar level is checked with frequent measurements and, each day, insulin must be added through injections or a pump to sustain life. Still, these patients risk severe complications from the disease, both in the short term and the long term. Type 1 diabetes is estimated to cost around SEK 100 billion annually in the US alone and, currently, there is no approved treatment in the market that can interrupt or prevent the autoimmune process. All things considered, this makes diabetes one of the greatest opportunities of our age, from both a humanitarian and a business perspective. New products in the diabetes field that improve conditions for patients have enormous financial potential.

The diabetes vaccine Diamyd® is, to the Company’s knowledge, ”first in class” in terms of antigen-based therapeutics being developed for type 1 diabetes. Diamyd® has demonstrated a good safety profile in studies with more than 1,000 participants. In a European phase III study conducted in nine countries with 334 newly diagnosed children, Diamyd® showed an efficacy of 16 percent (p=0.10) with regard to preserving the body’s capacity to produce insulin. Even small improvements in the ability to preserve the body’s ability to produce insulin are considered significant advances in protecting against complications later in life. The Company’s strategy is now, in various smaller studies, to combine the diabetes vaccine Diamyd® with other substances and devices with market approval with the aim of identifying a treatment that synergistically strengthens the efficacy of the diabetes vaccine. Three such studies are currently ongoing in which Diamyd® is being combined with substances such as GABA, etanercept, ibuprofen and vitamin D for children recently diagnosed with type 1 diabetes. In a fourth study with adult patients, Diamyd® is administered directly into lymph nodes, again in combination with treatment with vitamin D. Furthermore, two studies are ongoing with Diamyd® to evaluate whether it can prevent or delay type 1 diabetes in children who are at high risk of developing the disease.

Stem cell technology is advancing at a rapid pace. The Company’s commitment in this area builds on the vision of a combination treatment with tolerance induction for the insulin-producing beta cells, paired with treatment with autologous differentiated stem cells to replace lost beta cell mass that could finally mean a cure for type 1 diabetes. Diamyd Medical now owns 39 percent of the stem cell company Cellaviva and is open to additional collaborative undertakings in this and other areas to win the fight against type 1 diabetes.

Thank you for your interest.

Stockholm, July 1, 2015
Anders Essen-Möller
President and CEO Diamyd Medical AB (publ)

Significant events during the reporting period

First patient included in US Diamyd® and GABA diabetes study
The first patient was randomized and dosed in a pioneering study combining the diabetes vaccine Diamyd® with GABA in children with new onset type 1 diabetes. The aim of the combination therapy is to preserve the body’s residual capacity to produce insulin.

New study started with the diabetes vaccine Diamyd® to stop type 1 diabetes in children
DiAPREV-IT 2 started. In the new study, the second of its kind, the diabetes vaccine Diamyd® is tested to prevent or delay the onset of type 1 diabetes in children at very high risk of presenting with the disease.

Immunological results from a study with Diamyd® in April
Diamyd Medical announced that immunological results from DIABGAD were to be presented at an international diabetes congress (IDS) in Munich on April 12 to 16, 2015.

Diamyd Medical received SEK 15 million in a direct issue
Diamyd Medical accepted an offer from a group of international institutional investors, previously not shareholders in Diamyd Medical, to issue 2,000,000 new B shares in a direct placement at 7.50 SEK per share. Total proceeds to the Company amounted to SEK 15 million.

Diamyd Medical announced that the Company contributes to JDRF initiative to increase understanding of type 1 diabetes
Diamyd Medical joined a research initiative aimed at increasing the understanding of the natural progression of type 1 diabetes in order to transform and accelerate drug development for the disease. Diamyd Medical will contribute data from the control (placebo) arm of its European Phase III study with the diabetes vaccine Diamyd®. The data will be made available to the research community in an open access database together with similar data from other late stage studies in type 1 diabetes.

Immunological markers affected after six months in a first combination study with the diabetes vaccine Diamyd®
A first evaluation, after six months, of immunological markers in DIABGAD was performed. Both anti-inflammatory and inflammatory immunological markers are affected by the Diamyd® treatment. The safety profile is good, with regards to the combination of Diamyd® with vitamin D and ibuprofen, as well as the combination of single or double doses of Diamyd® with vitamin D. Metabolic results, such as the treatment’s effect on the ability to produce insulin, are expected to be ready for presentation by end of 2015 when all patients have completed their 15-month follow-up.

Diamyd Medical increased investment in stem cell activity
Diamyd Medical invested an additional SEK 0.8 million in Cellaviva AB, Sweden's first commercial biobank for stem cells.

EDCR started – first patient included in new study combining the diabetes vaccine Diamyd® with etanercept
The first patient was included in a new study, EDCR, in which the diabetes vaccine Diamyd® is combined with two other approved agents, the immunosuppressive drug etanercept and vitamin D, with the aim to evaluate the safety of the combination treatment as well as its impact on the immune system in children and adolescents newly diagnosed with type 1 diabetes. With the start of EDCR a total of six clinical studies are now ongoing where alternative approaches with Diamyd® are being tested, either in combination with other agents or by administering the diabetes vaccine at an earlier stage in the disease process, prior to type 1 diabetes diagnosis.

Diamyd Medical increased investment in Companion Medical
Diamyd Medical increased its investment in Companion Medical by USD 150,000. This was done in connection with a financing transaction in which Eli Lilly invested USD 3 million in Companion.

About the diabetes vaccine Diamyd®

Type 1 diabetes is a devastating disease which requires daily treatment with insulin to sustain life. The importance of finding a cure should not be underestimated. Diamyd® is considered to be the world’s furthest developed Antigen Based Therapy (ABT) for treating the disease. Diamyd® has been used in clinical studies with more than 1,000 patients and has shown a good safety profile. In a European Phase III study Diamyd® showed good clinical effect in several subgroups, and a limited overall 16% efficacy (p=0.10) in preserving endogenous insulin secretion. To enhance the overall effect, combination treatments with Diamyd® and other approved agents are being pursued. Diamyd® is easy to administer in any clinical setting. The potential annual market is estimated to several billion dollars.

Six researcher-initiated clinical studies with Diamyd® in different treatment regimens are ongoing:

  • DIABGAD-1 – COMBINING DIAMYD® WITH IBUPROFEN AND VITAMIN D
    A placebo-controlled study, where Diamyd® is being tested in combination with ibuprofen and vitamin D. The study comprises a total of 64 patients between the ages of 10 and 18 recently diagnosed with type 1 diabetes, and will continue for a total of 30 months. The aim of the combination treatment is to preserve the body’s residual capacity to produce insulin. The study runs at nine clinics in Sweden and is led by Professor Johnny Ludvigsson at Linköping University, Sweden. 15 month results from the study are due in the fourth quarter of 2015.

  • DIAGNODE –DIAMYD® IN LYMPH GLANDS IN COMBINATION WITH VITAMIN D
    An open label study, where Diamyd® is administered directly into lymph nodes in combination with treatment with vitamin D. The study comprises five patients between the ages of 18 and 30 newly diagnosed with type 1 diabetes, and will continue for a total of 30 months. The aim of the study is to evaluate the safety of the combination treatment and the effect on the immune system and the patients’ insulin producing capacity. The study is led by Professor Johnny Ludvigsson at Linköping University, Sweden. The first patient was included in the study in February 2015.

  • DIAMYD®/GABA – COMBINING DIAMYD® WITH GABA
    A placebo-controlled study, where Diamyd® is being tested in combination with GABA. The study comprises 75 patients between the ages of 4 and 18 recently diagnosed with type 1 diabetes, and will continue for a total of 12 months. The aim of the combination treatment is to preserve the body’s residual capacity to produce insulin. The study is led by Professor Kenneth McCormick at the University of Alabama at Birmingham, USA. The first patient was included in the study in March 2015.

  • EDCR IIa – COMBINING DIAMYD® WITH ETANERCEPT AND VITAMIN D
    An open label study, where Diamyd® is combined with etanercept and vitamin D. The study comprises 20 patients between the ages of 8 and 18 who have been newly diagnosed with type 1 diabetes, and will continue for a total of 30 months. The aim of the study is to evaluate the safety of the combination treatment and the effect on the immune system and the patients’ insulin producing capacity. The study is led by Professor Johnny Ludvigsson at Linköping University, Sweden. The first patient was included in May 2015.

  • DiAPREV-IT 1– DIAMYD®
    A placebo-controlled study, where Diamyd® is being tested in children at high risk of developing type 1 diabetes, meaning that they have been found to have an ongoing autoimmune process but do not yet have any clinical symptoms of diabetes. A total of 50 participants from the age of four have been enrolled in the study, which will last for five years. The aim of the study is to evaluate whether Diamyd® can delay or prevent the participants from presenting with type 1 diabetes. The study is led by Dr. Helena Elding Larsson at Lund University, Sweden. Five year results are expected at the end of 2016.

  • DiAPREV-IT 2 – COMBINING DIAMYD® WITH VITAMIN D
    A placebo-controlled study, where Diamyd® is being tested in combination with vitamin D in children at high risk of developing type 1 diabetes, meaning that they have been found to have an ongoing autoimmune process but do not yet have any clinical symptoms of diabetes. A total of 80 participants between the ages of 4 and 18 will be enrolled in the study, which will last for five years. The aim of the study is to evaluate whether Diamyd® can delay or prevent the participants from presenting with type 1 diabetes. The study is led by Dr. Helena Elding Larsson at Lund University, Sweden. The first patient was included in March 2015



*** To read the complete report, please visit www.diamyd.com, or see attached PDF ***

.

For more information please contact:
Anders Essen-Möller, President and CEO, phone: +46 8 661 00 26

Diamyd Medical AB (publ), Kungsgatan 29, SE-111 56 Stockholm, Sweden
Phone: +46 8 661 00 26 Fax: +46 8 661 63 68 E-mail: info@diamyd.com Reg no: 556242-3797


Note: This document has been prepared in both Swedish and English. The Swedish version shall govern in case of differences between the two documents. The document contains certain statements about the Company’s operating environment and future performance. These statements should only be regarded as reflective of prevailing interpretations. No guarantees can be made that these statements are free from errors
.


Attachments:

  PDF version


GAD PRODUCTS