Quarterly Report II 10/11

Quarterly report, Stockholm, April 14, 2011
September 1, 2010 – February 28, 2011

Second quarter, December 1, 2010 – February 28, 2011

  • Group net sales for the second quarter were MSEK 114.5 (0.2)
  • Profit before tax for the second quarter was MSEK 73.7 (-26.6)
  • Earnings per share after dilution for the second quarter were SEK 2.51 (-0.2)

First half year, September 1, 2010 – February 28, 2011

  • Group net sales for the first half year was MSEK 259.0 (1.4)
  • Profit before tax for the first half year was MSEK 172.0 (-44.4)
  • The Group’s liquid assets amounted to MSEK 473.6 (200.1) as of February 28, 2011
  • Earnings per share after dilution for the first half year were SEK 5.88 (-1.7)

Significant events during the reporting period December 1, 2010 – February 28, 2011

  • Last patient completed the EU Phase III study of Diamyd® antigen based therapy for
    type 1 diabetes
  • University of Florida Research Foundation initiated court case against Diamyd Medical
  • Diamyd Medical started Phase II study in cancer pain
  • The Diamyd share moved to NASDAQ OMX Stockholm Mid Cap list

  • NASDAQ OMX Stockholm Disciplinary Committee imposed a penalty on Diamyd Medical AB
    for inadequate disclosure of information

Significant events after the reporting period  

  • Diamyd results from Phase I clinical trial in cancer pain published in Annals of Neurology


CEO COMMENTS
All eyes on Diamyd

Diamyd Medical is currently experiencing an exceptionally intensive period with extremely high expectations on the company, both internally and externally. In mid-February, the last patient made the final visit in the 15-month main trial period in the company’s European Phase III trial. Participants in the study are being treated with the antigen-based candidate drug Diamyd® or placebo to assess whether it is possible to preserve beta cell function and thus improve management of blood sugar control long term among children and adolescents with recent-onset type 1 diabetes. Extensive efforts are currently underway to compile and process all the data. This is a comprehensive and time-consuming undertaking and, as previously announced, we expect to be able to report the top line results from the study in the late spring.

This is a particularly important period; not just for Diamyd, but my immediate thoughts go to all the children and adolescents with diabetes participating in the study, as well as all the physicians and nurses performing the trial. We should also not lose sight of the great importance of the results for diabetes research worldwide. If we could show that it is possible to preserve beta cell function in recent-onset type 1 diabetes, it would represent a breakthrough that we have not seen since insulin was introduced in the 1920´s. 

Several important events have taken place in the past quarter. At year-end, Diamyd Medical (DIAM B) moved from the Small Cap list to the Mid Cap list on the NASDAQ OMX Stockholm. The interest in our company remains very high and we currently have more than 6,000 shareholders, which we are very proud of.

The pace is also quickening in the Pain business area. In January, we initiated a US Phase II trial aimed at testing the NP2 Enkephalin candidate drug’s potential to relieve cancer pain. Some 32 patients with severe cancer pain are currently being enrolled in the study. Recently the interest in Diamyd's unique method of treating pain was further confirmed with the publication of the results of our Phase I trial with NP2 Enkephalin in the medical journal Annals of Neurology. As announced earlier, we also intend to launch a clinical study with the NG2 GAD candidate drug in patients with chronic neuropathic pain in 2011.

The upcoming period will possibly be the most significant in Diamyd’s history when the results of the Phase III study are reported. We hope our results will be the main topic of conversation at the important diabetes meeting, the American Diabetes Association’s 71st Scientific Sessions, which this year takes place in San Diego at the end of June. We have an incredibly exciting and intense time ahead of us.

Stockholm, April 14, 2011

Elisabeth Lindner

President and CEO, Diamyd Medical AB


SIGNIFICANT EVENTS DURING THE REPORTING PERIOD
DECEMBER 1, 2010 – FEBRUARY 28, 2011  


Last patient completed the EU Phase III study of Diamyd® antigen based therapy for type 1 diabetes.
The last patient in the EU Diamyd Medical Phase III clinical study completed the 15-month visit in February. This important achievement in the Diamyd® Phase III program is now being followed by an intense period where the data from the more than 60 clinics throughout Europe and from the central laboratory is compiled and processed. The top line results are expected to be reported as planned, in late spring 2011.

University of Florida Research Foundation initiated court case against Diamyd Medical. The University of Florida Research Foundation (UFRF) filed a lawsuit in United States federal district court in Florida against Diamyd Medical claiming that UFRF is entitled to a percentage of the license fee paid to Diamyd Medical by Ortho-McNeil-Jansen Pharmaceuticals, Inc. (OMJPI). Diamyd Medical has licensed certain rights from UFRF, and these rights were among the rights that Diamyd Medical sublicensed to OMJPI.

Diamyd Medical started Phase II study in cancer pain. The Phase II clinical trial, with the candidate drug NP2 Enkephalin, started in January 2011 the recruitment of approximately 32 subjects with severe cancer pain. Their pain scores and concomitant pain medication usage will be followed. It is a multi-center, randomized, double-blind, placebo controlled study designed to provide a statistical evaluation of pain relief. The trial has a four week double-blind main study period and following this period, all patients will be offered up to two additional doses of active NP2 Enkephalin in an open label study extension.

The Diamyd share moved to NASDAQ OMX Stockholm Mid Cap list. NASDAQ OMX Stockholm decided to move Diamyd Medical (DIAM B) from the Small Cap list to the Mid Cap list. The change was effective as of January 3, 2011. The Mid Cap segment includes companies with a market capitalization of between EUR 150 million and EUR 1 billion.

NASDAQ OMX Stockholm Disciplinary Committee imposed a penalty on Diamyd Medical AB for inadequate disclosure of information. In a letter dated November 5, 2010 to the Disciplinary Committee of NASDAQ OMX Stockholm, NASDAQ OMX Stockholm AB requested that the Disciplinary Committee issue a decision on disciplinary action regarding Diamyd Medical AB’s disclosure of information. Diamyd Medical AB received the Disciplinary Committee’s decision on December 15, 2010, instructing Diamyd Medical AB to pay an administrative penalty of SEK 576,000, corresponding to three annual fees.


SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD

Diamyd results from Phase I clinical trial in cancer pain published in Annals of Neurology. The Phase I clinical trial results evaluating the safety and efficacy of the candidate drug NP2 Enkephalin to treat intractable cancer pain were published in the medical journal Annals of Neurology.

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


About Diamyd Medical
Diamyd Medical is a Swedish pharmaceutical company focusing on the development of pharmaceuticals for the treatment of autoimmune diabetes and pain. The Diabetes business area consists of the antigen-based candidate drug Diamyd® for the treatment and prevention of autoimmune diabetes. Phase III studies of Diamyd® are currently in progress in Europe and the US. In 2010 the Company signed an agreement with Ortho-McNeil-Janssen Pharmaceuticals, Inc., for the development and commercialization of Diamyd®. The Pain business area consists of development projects that use the Company's proprietary NTDDS (Nerve Targeting Drug Delivery System) platform to administer drugs directly to the nervous system to treat chronic pain. A Phase II study of the candidate drug NP2 Enkephalin for cancer pain is ongoing in the US.

This information is disclosed in accordance with the Swedish Securities Markets Act, the Swedish Financial Instruments Trading Act, or the requirements stated in the listing agreements.

For more information, please contact:

Elisabeth Lindner, President and CEO, + 46 8 661 0026

The document contains certain statements about the Company’s operating environment and future performance. These statements should only be seen as reflective of prevailing interpretations. No guarantees can be made that these statements are free from errors.

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About Us

Mertiva AB (former Diamyd Medical) primarily consists of holdings in liquid assets and holdings in Protein Sciences Corporation and Mercodia AB. Mertiva (former Diamyd Medical) shares are listed on Nasdaq OMX (segment Small Cap) in Stockholm (ticker: DIAM B) and on OTCQX in the US (ticker: DMYDY) administered by the Pink OTC Markets and the Bank of New York Mellon (PAL).

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