Dear Shareholders,
Diamyd Medical has now reached a defining stage in the development of retogatein as we prepare for the interim efficacy readout from our pivotal Phase 3 trial DIAGNODE-3, anticipated on March 27, 2026. Earlier this week, we achieved a major operational milestone with the completion of randomization in the study. A total of 321 patients has now been randomized across 57 clinical sites in Europe and the United States, bringing this groundbreaking precision medicine trial to full enrollment.
Importantly, and directly aligned with this milestone, we have secured significant new funding to support DIAGNODE-3 through its next phase. We recently entered into directed equity financing agreements with new U.S. sector specialist investors, raising approximately USD 25 million before transaction costs. In addition, the newly issued warrants may provide an additional USD 100 million upon full exercise. Together with the existing TO5 warrants, which can contribute approximately USD 35 million, this establishes a total potential financing capacity of around USD 160 million. Both the new warrants and the TO5 warrants can be exercised following the upcoming interim analysis, directly linking this potential additional financing to a key value-inflection point. This structure provides financial flexibility to scale investment in line with clinical outcomes, supporting completion of the Phase 3 program, preparations for potential commercialization as well as life cycle management and pipeline opportunities. The financing was executed at a pivotal moment for the program—following full enrollment and ahead of the interim analysis—and the participation of specialized U.S. healthcare investors further validates both the quality of our data and the potential of our precision medicine approach in type 1 diabetes.
The upcoming interim analysis evaluates preservation of C-peptide from baseline to month 15, reflecting the body’s own insulin production, in a genetically defined patient population representing approximately 40 percent of individuals with the disease in Europe and the United States. Should the interim analysis demonstrate statistically significant efficacy, the results may support further regulatory interactions with the FDA regarding the potential Biologics License Application (BLA) pathway in the United States. The trial continues with follow-up of all participants toward the full study readout expected in the third quarter of 2027, intended to support a potential BLA for full approval.
Scientific interest in our Phase 3 program continues to grow, and we are particularly pleased that DIAGNODE-3 has been selected for a dedicated symposium at the American Diabetes Association’s 86th Scientific Sessions in June 2026. The symposium will highlight the scientific rationale for precision medicine in type 1 diabetes and present the interim Phase 3 outcomes together with leading international experts in the field. Being selected for a dedicated scientific session at one of the world’s largest diabetes conferences underscores both the scientific relevance of our program and the increasing recognition of precision medicine approaches in autoimmune diabetes.
In parallel with the clinical progress, our manufacturing capabilities in Umeå continue to advance. During the quarter, the Swedish Medical Products Agency conducted an inspection of our biomanufacturing facility as part of the ongoing process toward Good Manufacturing Practice (GMP) certification for the production of material for clinical studies. The inspection outcome was positive, and the observations raised were limited to minor findings that are currently being addressed in dialogue with the Agency ahead of their final assessment. Importantly, we also received constructive feedback from the Agency regarding requirements for future commercial manufacturing, providing valuable guidance as we continue developing our long-term production capabilities for retogatein. In parallel, we continue to work closely with our manufacturing partners to advance process validation, analytical methods and other CMC activities required for late-stage development and future commercialization.
I am also very pleased to report that the long-term incentive program launched three years ago reached its first vesting during the quarter, with participants receiving shares after successfully meeting the program’s performance criteria, defined as a 50 percent increase in the Company’s market capitalization since its inception. This outcome reinforces the strong alignment between employees and shareholders. The team has executed in an exemplary fashion to advance both the Phase 3 program and our manufacturing capabilities in circumstances that periodically have been challenging.
As we approach the interim analysis of DIAGNODE-3, the entire organization remains focused on disciplined execution across clinical development, regulatory engagement and manufacturing readiness. Our focus now is on delivering the upcoming milestone whilst continuing to advance the program toward the full Phase 3 readout and the next stages of regulatory engagement.
I would like to extend my sincere gratitude to our employees, clinical investigators, partners and shareholders for their continued commitment and support.
Stockholm, March 25, 2026
Ulf Hannelius, President and CEO