Dear Shareholders

The year has been characterized by a significant breakthrough in our discussions with the U.S. FDA.

A major highlight of the year was our decisive step towards an accelerated approval pathway in the United States for Diamyd^®. This strategy was bolstered by the positive outcome of our recent FDA discussions, where the Agency acknowledged that C-peptide, a marker for endogenous insulin production, could serve as a surrogate endpoint reasonably likely to predict clinical benefit. This recognition is critical as it allows us to pursue an earlier interim readout from the ongoing DIAGNODE-3 Phase 3 trial, expected around March 2026, to support a potential accelerated Biologics Licensing Application (BLA) in the U.S., the world's by far most dominant pharmaceutical market.

Another key regulatory milestone this year was securing Fast Track designation from the FDA for the treatment of individuals with Stage 3 Type 1 Diabetes, as well as for the potential use of Diamyd^® in delaying the onset of clinically diagnosed insulin requiring Type 1 Diabetes in pediatric patients with Stage 1 or Stage 2 Type 1 Diabetes. These designations underline the critical need for new treatment options across the entire spectrum of autoimmune diabetes and provide an opportunity to work closely with the FDA to expedite Diamyd^®’s development.

Moreover, the positive outcome of the futility analysis in July of the DIAGNODE-3 trial marked a pivotal milestone. The independent Data Safety Monitoring Board's recommendation to continue the trial as planned reaffirmed our confidence in the potential of Diamyd^® to address the unmet medical need in Type 1 Diabetes. The six-month data from 74 patients indicated that the trial is on track to meet its objectives, particularly regarding the preservation of endogenous insulin production.

In preparation for the BLA and the potential commercialization of Diamyd^®, our biologics manufacturing facility in Umeå plays a crucial role. The facility is currently engaged in producing technical rhGAD65 batches (recombinant human GAD65 protein, the active ingredient in Diamyd^®), as well as preparing and establishing procedures to ensure future compliance with Good Manufacturing Practice (GMP). Continued activities at the facility aim to demonstrate that we can reliably and reproducibly manufacture rhGAD65 at the quality and scale required to meet regulatory demands and future market demand for Diamyd^®. This work is being carried out in parallel with manufacturing activities for the final drug formulation, as well as clinical operations, in order to optimize timelines with the available resources ahead of a possible BLA submission. We have also strengthened the Umeå team on the business development side to assess future opportunities for external manufacturing.

Moreover, the recent warrant exercise this September strengthened our cash position, raising approximately SEK 48 million before issue costs. Additionally, we received this month a milestone payment from our existing collaboration with Breakthrough T1D (formerly JDRF), along with additional proceeds from the previous sale of Companion Medical shares, totaling SEK 17.5 million. This further supports our clinical and manufacturing operations.

Looking ahead, the planned earlier readout from the DIAGNODE-3 trial in March 2026, represents a critical step in our journey to making Diamyd^® available to patients as swiftly as possible. We remain fully committed to advancing this promising therapy through ongoing dialogue and collaboration with the FDA. With all 60 clinical sites activated in Europe and the U.S., and with 161 patients recruited to date, we are well on our way to achieve important recruitment milestones that are aligned with the planned earlier readout.

In summary. Our progress this year has been nothing short of remarkable. DIAGNODE-3 stands as the only ongoing Phase 3 trial worldwide for a disease-modifying therapy in Type 1 Diabetes, placing Diamyd Medical at the absolute forefront of innovative treatments.

Stockholm, October 9, 2024
Ulf Hannelius, President and CEO