Quarterly Report I 13/14

September 2013 – November 2013
Diamyd Medical AB (publ), Fiscal year 2013/2014

Reporting period September 1, 2013 – November 30, 2013

• Net sales amounted to MSEK 0.2 (0)
• Loss before tax amounted to MSEK -4.8 ( profit 0.9)
• Liquid assets and short term investments amounted to MSEK 61 (19) as of November 30, 2013

Significant events during the reporting period

• Major owner increased holdings in Diamyd Medical

Significant events after the reporting period

• More than half of the patients treated in diabetes study with the diabetes vaccine Diamyd®
• Diamyd Medical clarified media reports on diabetes study
  
  

CEO comments
Diamyd Medical was able to start the New Year by announcing that more than half of the planned total of 60 patients in the DIABGAD-1 study had been enrolled. Children and adolescents with newly diagnosed type 1 diabetes are currently being recruited to the study at about ten pediatric diabetes clinics throughout Sweden. Enrolment of the final patients is expected to be completed by summer 2014, and presentation of the initial results from the study is expected in 2015. The study is being led by Professor Ludvigsson at Linköping University.

In the DIABGAD-1 study, our diabetes vaccine Diamyd® is being combined with the anti-inflammatory drug ibuprofen and relatively high doses of vitamin D to investigate whether the treatment can preserve the patients’ endogenous insulin production. Even a modest degree of endogenous insulin production reduces the risk of acute and long-term diabetes complications.

The Swedish researcher-initiated DiAPREV-IT study started in 2009 and aims to evaluate whether the diabetes vaccine Diamyd® can prevent or delay type 1 diabetes in children who are at high risk of developing clinical symptoms of the disease. The initial results from the DiAPREV-IT-study are also expected in 2015.

Additional researcher-initiated studies involving the diabetes vaccine Diamyd® are being discussed with various researchers groups and newly produced diabetes vaccine is now available for new studies. For example, a trial is being planned in the US in which the intention is to combine Diamyd® with GABA. The combination has shown favorable results in preclinical studies and the Company has in-licensed the rights for the use of GABA in connection with diabetes and other inflammation-related conditions. The study protocol and an agreement between Diamyd Medical and the researchers’ university must be finalized before an application can be submitted to the US Food and Drug Administration (FDA).

Professor Ludvigsson’s research group is continuing to analyze the extensive material collected in the earlier European Phase III study and an earlier Swedish Phase II study of Diamyd®. In December 2013, they published a scientific paper relating to the analysis of results from 148 Swedish children and adolescents with type 1 diabetes who participated in the earlier studies. The authors’ conclusion is that treatment with two doses of the GAD-based diabetes vaccine is safe and that, versus placebo, it preserves insulin production 30 months after treatment (GAD-treatment of children and adolescents with recent-onset Type 1 diabetes preserves residual insulin secretion after 30 months, Diabetes Metab Res Rev. 2013 Dec 3. Epub ahead of print). Such new analyses based on the substantial database with patient data that Diamyd Medical has compiled over the years, add to strengthen the interest in the diabetes vaccine and researcher-initiated studies of Diamyd®.

On the second trading day of the year, the Diamyd share rose by 30 percent during heavy trading after widespread distribution of a newspaper article about the so called TEDDY study. The article described the TEDDY study, in which researchers are closely monitoring thousands of children from birth to ascertain who will and who will not develop type 1 diabetes, with the purpose of determining what triggers type 1 diabetes. To clarify for the stock market that the diabetes vaccine Diamyd® is not being tested as part of the TEDDY study, the company published a press release, after which the share price declined again.

In December, I was in Lorne in Australia and attended the scientific IDS conference dedicated to diabetes immunology research. The conference is an ideal opportunity to hear about the latest findings and to network with leading researchers in the field. In his opening plenary lecture, Doctor Jay Skyler described how the key to successfully treating type 1 diabetes will be to attack the disease from several angels simultaneously by combining various therapeutics, and that an autoantigen-specific treatment such as Diamyd® will constitute an essential component in future combination therapies.

Stockholm, January 22, 2014

Peter Zerhouni
President and CEO Diamyd Medical AB (publ)

Significant events during the reporting period

Major owner increased holdings in Diamyd Medical
Bertil Lindkvist increased his holdings in Diamyd Medical. Bertil Lindkvist’s holdings in Diamyd Medical amounted to 2 979 286 B-shares as of September 24, 2013, which corresponds to 15.1 percent of the capital and 10.5 percent of the votes.

Significant events after the reporting period

More than half of the patients treated in diabetes study with the diabetes vaccine Diamyd®
Children and adolescents aged 10 to 18 years with newly diagnosed type 1 diabetes are now being recruited to a study with Diamyd® to investigate whether the treatment can preserve the patients’ endogenous insulin production. Of the 60 patients being recruited at about ten pediatric diabetes clinics in Sweden more than half have been treated.

Diamyd Medical clarified media reports on diabetes study
On January 2, 2014 Dagens Industri and many other Swedish media published an article that originally came from TT News Agency on the TEDDY study, which is an international, multicenter study aiming to determine the causes of type 1 diabetes. Diamyd Medical clarified in a press release on January 3, 2014, that Diamyd Medical has no direct connection to the TEDDY study that the article describes. Diamyd Medical's drug candidate Diamyd® is not being tested in the TEDDY study.

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

For more information please contact:
Peter Zerhouni, President and CEO Diamyd Medical AB (publ). Phone: +46 8 661 00 26

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

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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