Quarterly Report 2, March 27, 2019

Dear Shareholders and Readers

Our European phase IIb trial DIAGNODE-2, where the diabetes vaccine Diamyd® is administered three times in a superficial lymph node is close to being fully recruited. Currently, 93 out of 106 patients have been randomized and in the beginning of March we were able to give the green light to the clinic in Rotterdam in the Netherlands to start recruiting. This together with high patient retention rate ensures that we keep our timelines and will close the trial for recruitment during the spring. Results are expected in the third quarter in 2020, and as previously communicated our aim is to file for a conditional marketing authorization in Europe end of 2020.

There are certain requirements for a therapy to be aligned with conditional marketing authorization in Europe. Firstly, the positive effects need to out-weigh the risks and there should be a clear public health benefit to making the product immediately available. Secondly, the applicant should be able to provide comprehensive data following conditional authorization in order to convert it to a full marketing authorization. And finally, the product needs to address a significant unmet medical need. Given the above, there is a clear case supporting an early market introduction for Diamyd®.

Today, there are no disease-modifying therapies available for type 1 diabetes patients. Recent reports both in Europe and in the US show that treatment goals are met by only a minority of patients despite an increased use of modern assistive devices and improvements in insulin technologies. The disease is associated with a significant decrease in life-expectancy due to short- and long-term complications as well as significant health economic costs.

Diamyd® is a therapeutic that has demonstrated very good safety in trials with more than 1,000 patients and there is strong support of a positive biological effect of the therapeutic. Most importantly, recent results based on intralymphatic administration of Diamyd® support an efficacy profile that is both clinically highly relevant as well as unique, and the treatment regimen is simple and therefore aligned with high patient acceptance.

Supported by these key insights we are moving forward with confidence and we are seeing increased international visibility highlighting the work we are doing. Recently an interview by the US non-profit T1DExchange was published featuring our efforts to cure type 1 diabetes. Diamyd Medical has also been invited to present the diabetes vaccine Diamyd® at the international scientific conference Vaccines Forum in Valencia in May.

As announced yesterday, regulatory meetings in Europe and the US are planned for 2019 and 2020. We also announced that we are planning for commercial activities including pricing and market access, designing a Phase III program, as well as making sure the commercial manufacturing capacity is aligned with market launch and expansion. Existing resources will be used for finalizing DIAGNODE-2 and for regulatory meetings, while activities associated with a Phase III program and commercial manufacturing and will be financed through with future partnerships and/or institutional investors.

Based on current results and the progress we are making it seems ever more likely that we will be able to make a significant positive impact in the lives of those affected by type 1 diabetes.

Stockholm, March 27, 2019
Ulf Hannelius
President and CEO, Diamyd Medical AB (publ)

Our top strategic priority is to prepare for a marketing application for Diamyd®.
Ulf Hannelius, President and CEO