Quarterly Report III 17/18

September 2017 – May 2018, Diamyd Medical AB (publ), Fiscal year 2017/2018

September 1, 2017 – May 31, 2018

  •  Net result amounted to MSEK -32.5 (-19.0), of which the third quarter constituted of MSEK -12,6 (-8.3). The change compared with the previous year relates to the DIAGNODE-2 trial that started this financial year.
  •  Result per share, before and after dilution, amounted to SEK -0.6 (-0.6), of which the third quarter constituted of SEK -0.2 (-0.3)
  •  Cash flow from operating activities amounted to MSEK -32.6 (-16.0) of which the third quarter constituted of MSEK -9.6 (-5.4)
  •  Liquid assets and short-term investments amounted as of May 31 to MSEK 52.8 (12.2)

Significant events during the third quarter, March 1, 2018 – May 31, 2018

  • Finalizing of Diamyd® drug substance is planned to coincide with DIAGNODE-2 results 
  • Swedish MPA approved an additional injection of Diamyd® in ongoing clinical pilot trial
  • Results supporting intralymphatic administration of Diamyd® was published in the Journal of Diabetes Research
  • Enrollment milestone 50% was reached in Diamyd Medical’s European Phase II trial
  • Results showing GABA’s relevance for diabetes were published in eBioMedicine
  • Diamyd® intranodally continued to show stronger results than when administered subcutaneously

Significant events after the reporting period

  • Remygen™ for regeneration of insulin-producing cells was approved for clinical trials

CEO comments

Dear Shareholders and Readers,

Two weeks ago, Diamyd Medical had another drug enter clinical development phase, when the Swedish Medical Products Agency approved our GABA-based Remygen™ for clinical trials. I would like to clearly highlight the importance of having two drugs — Diamyd® and Remygen™ — in clinical development phase. Both of our clinical development drugs focus on the underlying disease mechanisms in diabetes with the goal of slowing, stopping and ultimately reversing the progression of the disease. Intralymphatic administration of Diamyd® continues to show strong results in the ongoing clinical program, and Remygen™ can cite a large and growing base of research indicating the potential of GABA, the active component in Remygen™, in diabetes.

Our manufacture of GABA clinical development drug began in order to maintain control of product development and rights associated with GABA. Remygen™, which is the result of this venture and our own formulation of GABA, was approved in June for use in a clinical trial, ReGenerate-1, which will be conducted by Uppsala University Hospital. The trial will evaluate both the safety and the effects of Remygen™ in stimulating growth of insulin-producing cells in patients who have had type 1 diabetes for more than five years. In parallel with this trial, a placebo-controlled trial is ongoing at the University of Alabama at Birmingham, in the United States, in which GABA is being evaluated as a food supplement in patients with newly diagnosed type 1 diabetes. Together, ReGenerate-1 and the Alabama trial constitute great value for Diamyd Medical, providing us with the basis for decisions on how a GABA-based medical treatment can be optimized and brought to market.

Last year, through the successful rights issue, we gained the trust from our shareholders to take the intralymphatic administration of Diamyd® into clinical phase IIb. Today, one year later, the open trial DIAGNODE-1 has generated results and the placebo-controlled European DIAGNODE-2 trial is in full swing with more than 50 of the estimated 80 patients included in the trial. The immunological results from DIAGNODE-1, the investigator-initiated pilot trial that paved the way for DIAGNODE-2, were published in May. In the May-publication it is reported that patients who have been treated with intralymphatic administration show a considerably stronger immune response, and earlier it has been shown that the patients’ need of external insulin, as well as blood sugar levels are significantly improved compared with subcutaneous administration. We have the technique of administering Diamyd® intralymphatically to type 1 diabetes patent pending and our patent application also covers other antigen-specific treatments and autoimmune diseases. With the results we have today, this certainly looks like a promising technique for both type 1 diabetes and hopefully for other autoimmune diseases.

In September, 15-month clinical results from all patients in the DIAGNODE-1 pilot trial will be presented. An important milestone that gives us a complete picture of how the clinical course has evolved over the same period of time (15 months) as patients will be followed up in DIAGNODE-2.

Together with ongoing business development and clinical trials with both Diamyd® and Remygen™, we are in an intensive period. With two drugs in clinical development that complement and strengthen each other, the likelihood increases of making meaningful differences for those who live with diabetes, and I look forward to reporting further progress in the coming months.

Stockholm, June 27, 2018
Ulf Hannelius,
President and CEO

Two drugs in clinical development

Diamyd® is an antigen-specific immunotherapy for the treatment of autoimmune diabetes (type 1 diabetes).

Clinical data indicate the potential of the diabetes vaccine Diamyd® to halt or stop the autoimmune destruction of insulin-producing beta cells. The effect is achieved by antigen-specific reprogramming of immune cells by administration of low doses of Diamyd® in superficial lymph nodes.

By maintaining the endogenous insulin production, Diamyd® has the potential to significantly reduce the complications of autoimmune diabetes.

Intralymphatic treatment with Diamyd® is now being investigated in clinical phase IIb (DIAGNODE-2) for the treatment of type 1 diabetes, with the aim of confirming a previously demonstrated clinical effect from a pilot trial in type 1 diabetes patients (DIAGNODE-1).

Remygen™ is an oral regenerative and immunomodulatory therapy for the treatment of autoimmune diabetes and type 2 diabetes.

Preclinical data indicate GABA's potential to stimulate growth and function of insulin-producing beta cells. The effect is achieved primarily by increasing the levels of GABA in the blood and thus activating GABA receptors that affect the function and growth of insulin-producing cells in the pancreas.

By stimulating the growth of insulin-producing cells, Remygen™ has the potential to reverse the disease progression in autoimmune and type 2 diabetes.

Remygen™ is now being investigated in clinical phase Ib /IIa where clinical efficacy is evaluated with the aim of optimizing treatment ahead of registration-based trials.

Significant events during the third quarter

March 1, 2017 – May 31, 2018

Finalizing of Diamyd® drug substance is planned to coincide with DIAGNODE-2 results
Diamyd Medical and the Company’s manufacturer of recombinant GAD, the active component of the diabetes vaccine Diamyd®, are working on an updated plan for the new batches of GAD that the Company ordered last year for use in late clinical trials and possible early market launch, to be finalized approximately at the same time as results from the DIAGNODE-2 trial, which also optimizes the shelf life of the drug substance.

Swedish MPA approved an additional injection of Diamyd® in ongoing clinical pilot trial
The Swedish MPA approved an extension of DIAGNODE-1, an open label clinical pilot trial in which the diabetes vaccine Diamyd®is given directly into the lymph node. The extension refers to three adult patients included in the trial who will be offered a fourth injection Diamyd®.

Results supporting intralymphatic administration of Diamyd® was published in the Journal of Diabetes Research
New results with the diabetes vaccine Diamyd®, comparing the immune responses after intralymphatic administration with immune responses after administering the vaccine subcutaneously, were published in the Journal of Diabetes Research. The article, authored by researchers at Linköping University, describes that a more favorable immune response is achieved after intralymphatic treatment which may correlate with clinical effect. The results have generated patents filed by Diamyd Medical.

Enrollment milestone 50% was reached in Diamyd Medical’s European Phase II trial
The Company announced that half of the patients, 40 out of 80, had been included in the European Phase II trial DIAGNODE-2.

Results showing GABA’s relevance for diabetes were published in eBioMedicine
Diamyd Medical holds, in collaboration with Professor Bryndis Birnir at Uppsala University, patent pending new GABA results. The results, supporting GABA’s role as a therapeutic important signal substance in the insulin producing beta cells and in immune cells from healthy humans as well as from patients with type 1 and type 2 diabetes, were published in the scientific journal eBioMedicine.

Diamyd® intranodally continued to show stronger results than when administered subcutanously
A preliminary 15-month interim report from EDCR IIa, an investigator initiated pilot trial where the diabetes vaccine Diamyd®is administered subcutaneously in combination with etanercept and vitamin D showed, when all 20 patients had been followed for fifteen months, that the treatment is safe and tolerable. No serious side effects had been reported. Results pertaining to the patients’ own insulin production, HbA1c and external insulin requirements were, however, weaker in EDCR IIa than from the ongoing DIAGNODE-1 trial where the diabetes vaccine is administered directly into the lymph node.

A sixth interim report from the investigator initiated DIAGNODE-1 trial, showed a continued positive clinical course in terms the patients’ own ability to produce insulin as well as long-term blood sugar and insulin dose when nine patients had been followed for 15 months.

Significant events after the reporting period

Diamyd Medical’s Remygen™ for regeneration of insulin-producing cells was approved for clinical trials
The Swedish Medical Products Agency approved the initiation of the clinical Phase I/II trial ReGenerate-1, with Diamyd Medical's patent-pending study drug Remygen™. In addition to evaluating the safety of the study drug, the trial will investigate Remygen's ability to regenerate insulin-producing beta cells in patients with diabetes who have little or no endogenous insulin production.

Clinical trials
Type 1 diabetes is a devastating disease which requires daily treatment with insulin to sustain life. The importance of finding a drug that improves the prospects for diabetic patients is of utmost importance. The effect of intralymphatic administration of Diamyd®, an antigen-specific immunotherapy aimed at stopping the immune system's attack on insulin-producing beta cells in autoimmune diabetes, is evaluated in the phase IIb trial DIAGNODE-2. Remygen™, which aims to stimulate the growth of beta cells in patients with diabetes, will be evaluated in patients for the first time in 2018. In addition to these, Diamyd®is evaluated in various combinations and modes of administration in ongoing investigator-initiated trials.

Trials with Diamyd® intralymphatically

  • DIAGNODE -2 – DIAMYD® IN LYMPH NODES IN COMBINATION WITH VITAMIN D

DIAGNODE-2 is a follow-up double-blind randomized trial where Diamyd® is administered directly into lymph nodes in combination with treatment with vitamin D. The trial encompasses approximately 80 patients from Sweden, the Czech Republic and Spain, aged 12–24 years that have recently been diagnosed with type 1 diabetes and will continue for a total of 15 months. The trial is a follow up of DIAGNODE-1. The aim of the trial is to evaluate the patients’ remaining insulin producing capacity. Coordinating Investigator is Professor Johnny Ludvigsson at Linköping University. Diamyd Medical is the Sponsor of the trial.

  • DIAGNODE -1 – DIAMYD® IN LYMPH NODES IN COMBINATION WITH VITAMIN D

An open label trial, where Diamyd® is administered directly into lymph nodes in combination with treatment with vitamin D. The trial comprises twelve patients between the ages of 12 and 30 newly diagnosed with type 1 diabetes and will continue for a total of 30 months. The trial was fully recruited in June 2017. The aim of the trial is to evaluate the safety of the combination treatment and the effect on the immune system and the patients’ insulin producing capacity. The trial is led by Professor Johnny Ludvigsson at Linköping University, Sweden.

Trials with Remygen™ and GABA/Diamyd®

  • REGENERATE-1 – REMYGEN™

ReGenerate-1 is an open-label, investigator-initiated clinical trial with Remygen™. The trial will include patients aged 18-50 who have had type 1 diabetes for more than five years with low to non-existing insulin production. The primary aim of the trial is to in a smaller dose escalation section evaluate the safety of Remygen™. The main trial will also evaluate whether the insulin-producing cells can be regenerated using Remygen™. The trial is led by Professor Per-Ola Carlsson at Uppsala University. The trial is planned to start in 2018.

  • GABA/ DIAMYD® – COMBINING DIAMYD® WITH GABA

A placebo-controlled trial, where Diamyd®is given subcutaneously and being tested in combination with GABA. In accordance with agreement with Jansen Research & Development and JDRF the trial has expanded to comprise 95 patients between the ages of 4 and 18 recently diagnosed with type 1 diabetes. The trial 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 trial is led by Professor Kenneth McCormick at the University of Alabama at Birmingham, USA.

Other ongoing trials with Diamyd®

  • EDCR IIa – COMBINING DIAMYD® WITH ETANERCEPT AND VITAMIN D

An open label trial, where Diamyd®is given subcutaneously and being tested in combination with etanercept and vitamin D. The trial 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 trial is to evaluate the safety of the combination treatment and the effect on the immune system and the patients’ insulin producing capacity. The trial is led by Professor Johnny Ludvigsson at Linköping University, Sweden.

  • DiAPREV-IT 2 – COMBINING DIAMYD® WITH VITAMIN D

A placebo-controlled trial, where Diamyd® is given subcutaneously and 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. The trial includes 26 children. The aim of the trial is to evaluate whether Diamyd® can delay or prevent the participants from presenting with type 1 diabetes. The trial is led by Dr. Helena Elding Larsson at Lund University, Sweden.

*** The above is an excerpt from the report. To read the complete report, please visit www.diamyd.com, or see attached PDF ***

For more information, please contact:
Ulf Hannelius, President and CEO, phone: +46 736 35 42 41
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

This information is information that Diamyd Medical AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 08.15 CET on June 27, 2018.

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.


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