Quarterly Report I 22/23

September 2022 – November 2022, Diamyd Medical AB (publ), Fiscal year 2022/2023

Precision Medicine for Autoimmune Diabetes in Pivotal Phase 3
Diamyd Medical’s B-share is traded on Nasdaq First North Growth Market under the ticker DMYD B.
Further information is available on https://www.diamyd.com

September 1, 2022 – November 30, 2022

• Net result: MSEK -33.0 (-37.8)
• Result per share: SEK -0.4 (-0.5)
• Cash flow from operating activities: MSEK -27.1 (0)
• Cash and short-term investments at November 30, 2022: MSEK 130.9 (240.7).

Significant events during the first quarter, September 1 – November 30, 2022

• The DIAGNODE-3 trial, ongoing in Europe, was approved by FDA to start also in the US

Other events during the first quarter

• All patients in the DIAGNODE-B booster trial had received an additional Diamyd^® injection
• Updated results from clinical trial with Diamyd^® in LADA patients were presented at a diabetes conference

Other events after the first quarter

• A Diamyd^® Type 1 Diabetes Precision Medicine prevention trial, “DiaPrecise”, was approved to start by the Swedish Medical Agency
• A gene-based Precision Medicine patent for prevention and treatment of autoimmune diabetes was granted in Eurasia

Comments by CEO Ulf Hannelius
Our pipeline for autoimmune diabetes is potentially game changing. It is focused on safe and specific interventions that have the promise to realize the true value of preemptive medicine. Spearheaded by Diamyd^®, an antigen-specific immunotherapy for individuals carrying a common risk gene (HLA DR3-DQ2), provides us with the opportunity to address up to 40 % of the millions of individuals at risk or diagnosed with autoimmune diabetes in the world.

Preemptive medicine aims to precisely predict the onset and progression of disease and provide therapeutic interventions as early as possible to prevent symptoms and complications. This concept will greatly influence the way autoimmune diabetes is treated. We know that by specifically and safely tackling the underlying cause of the disease and preserving remaining insulin-producing cells, there is a great opportunity to improve the lives of individuals both living with clinically diagnosed Type 1 Diabetes (so called Stage 3 Type 1 Diabetes) as well as individuals who show signs of autoimmunity but are still not insulin dependent (so called Stage 1 and 2 Type 1 Diabetes). By intervening early in the disease progression, the complications of autoimmune diabetes including cardiovascular disease, retinopathy, neuropathy and nephropathy can be significantly reduced. Here, Diamyd Medical has a broad focus on preemptive medicine through the pivotal precision medicine Phase 3 trial DIAGNODE-3 trial as well as the soon to start DiaPrecise trial.

In November we reached a major milestone announcing that the FDA had lifted the clinical hold in the US on DIAGNODE-3, with our antigen-specific immunotherapy Diamyd^®. DIAGNODE-3 is the first ever precision medicine trial in the field of Type 1 Diabetes based on a discovery that HLA genetics can therapeutically guide antigen-specific therapies such as Diamyd^®. We are excited that we can expand the trial to the US, and the additional clinics will add to the approximately 50 sites being activated in the eight European countries where the trial is already ongoing.

We reached another key milestone in December when we received the green light from the Swedish Medical Products Agency to start DiaPrecise. This is a central trial where Diamyd^® therapy is evaluated in children and adolescents at high risk of Type 1 Diabetes (Stage 1 and Stage 2) that carry the HLA DR3-DQ2 haplotype, further broadening our focus on preemptive medicine. We are also encouraged that the precision medicine patent that specifically addresses the HLA-guided treatment of autoimmune diabetes using Diamyd^® and previously approved in Europe now has been approved in Eurasia.

As we continue advancing our pipeline, we are in parallel building the commercial case for Diamyd^®, a topic that is raised ever more frequently in our discussions with potential partners as we get closer to market. We know that annual cost in the US of disease-modifying treatments for other autoimmune disorders range from $65,000 to well over $100,000 per treatment. This is in line with an updated health economic assessment of Diamyd^® focusing on the US market that shows significant opportunities in societal cost savings, translating into a potential pricing of the therapeutic that significantly exceeds our previous estimates.

As we forge ahead, we are aware of the challenges of the current world situation and financial markets that have broadly impacted the biotech industry. Despite the downturn, our meetings in January during the JP Morgan Healthcare week in San Francisco with potential partners and international investors are encouraging and there is a strong belief in the industry, our approach, and our data. By leveraging its deep foundations, a resilient company has the capabilities to emerge even stronger in challenging times. Supported by strong data, a solid scientific rational and capabilities ranging from clinical trials to data science and manufacturing, Diamyd Medical is well-equipped on this journey that promises to change the therapeutic landscape for autoimmune diabetes.

Stockholm, January 25, 2023    

Ulf Hannelius, President and CEO

Significant events during the first quarter

September 1, 2022 – November 30, 2022

DIAGNODE-3, ongoing in Europe, was approved by FDA to start in the US
Diamyd Medical announced that the U.S. Food and Drug Administration (FDA) had lifted the partial clinical hold on the confirmatory Phase III trial DIAGNODE-3, evaluating the safety and efficacy of the precision medicine and antigen-specific immunotherapy Diamyd^® in individuals recently diagnosed with type 1 diabetes. Following the decision from the FDA, DIAGNODE-3 is approved to start in the US.

Other events during the first quarter

All patients in the DIAGNODE-B booster trial had received an additional Diamyd^® injection
The last patient in the investigator-initiated clinical trial DIAGNODE-B received its additional injection (“booster”) of antigen-specific immunotherapy Diamyd^®. The trial includes 6 patients with Type 1 diabetes who earlier participated in the DIAGNODE-1 or DIAGNODE-2 trials and who carry the genetic HLA DR3-DQ2 haplotype. DIAGNODE-B (B for “booster”) assesses the safety, immunological response and clinical effect of an additional intralymphatic injection of Diamyd^®. Patients will be followed for 12 months after the booster injection and topline results are expected in the fourth quarter of 2023.

Updated results from clinical trial with Diamyd^® in LADA patients were presented at diabetes conference
Updated 12-month results from the open-label investigator-initiated Phase II clinical trial GADinLADA that assessed three intralymphatic injections of the Diamyd^® in individuals diagnosed with Latent Autoimmune Diabetes in Adults (LADA) were presented at the European Association for the Study of Diabetes (EASD) conference in Stockholm, Sweden. The updated results provide further support to the previously reported topline results that showed a positive immunological and metabolic response to Diamyd^® treatment in individuals diagnosed LADA who carries the genetic HLA DR3-DQ2 haplotype.

Other events after the first quarter

A Diamyd^® Type 1 Diabetes Precision Medicine prevention trial with Diamyd^® was approved to start
The Swedish Medical Products Agency and the Ethical Review Authority approved the start of DiaPrecise, an open-label prevention trial with the antigen-specific immunotherapy Diamyd^®. The trial will evaluate the safety, feasibility and immune response of intralymphatic injections of Diamyd^® in children at risk of Type 1 Diabetes, who also carry the genetically defined haplotype HLA DR3-DQ2. DiaPrecise is part of the ASSET program (AI for the Sustainable Prevention of Autoimmunity in Society), coordinated by Diamyd Medical and funded by Sweden’s Innovation Agency VINNOVA.

A gene-based Precision medicine patent for prevention and treatment of autoimmune diabetes was granted in Eurasia
The patent granted by the Eurasian Patent Office is valid until 2035. It primarily protects the use of a GAD autoantigen to treat or prevent autoimmune diabetes in individuals carrying the HLA DR3-DQ2 gene. GAD is the active component in the antigen-specific immunotherapy Diamyd® that is being evaluated in the confirmatory Phase III trial DIAGNODE-3.

Two drugs in clinical development

Diamyd^® is an antigen-specific immunomodulating precision medicine therapy for the treatment and prevention of autoimmune diabetes (type 1 diabetes and LADA, Latent Autoimmune Diabetes in Adults).

Clinical data indicate the potential of Diamyd^® to halt or stop the autoimmune destruction of insulin-producing beta cells in individuals that carry the HLA DR3-DQ2 haplotype. 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 make a significant difference in the daily life of patients as well as significantly reduce the complications of type 1 diabetes. Topline results from the Phase IIb trial DIAGNODE-2 demonstrated a significant treatment effect of Diamyd^® in the predefined genetic patient group. A confirming Phase III trial, DIAGNODE-3, is on-going.

Remygen^® is an oral regenerative and immunomodulatory drug candidate for the treatment of autoimmune- and type 2 diabetes. By stimulating the growth of insulin-producing cells, Remygen^® has the potential to reverse the disease progression in autoimmune- and type 2 diabetes. Based on clinical data, Remygen^® has also the potential to protect against hypoglycemia by improving the hormonal response. Remygen^® is now being investigated in a clinical Phase I/II trial (ReGenerate-1), where clinical efficacy is evaluated with the aim of optimizing the treatment regimen ahead of registration-based trials.

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 patients with diabetes is of utmost importance. The effect of intralymphatic administration of Diamyd^®, an antigen-specific precision medicine immunotherapy aimed at stopping the immune system's attack on insulin-producing beta cells in autoimmune diabetes, is evaluated in the Phase III trial DIAGNODE-3 and in the Phase I/II trial DIAGNODE-B.

Remygen^®, which aims to stimulate the growth of beta cells in patients with diabetes, is evaluated in patients in the Phase I/II trial ReGenerate-1.

Ongoing clinical trials

Trials with Diamyd® in lymph nodes

• DIAGNODE-3 – DIAMYD^® IN LYMPH NODES WITH ORAL SUPPLEMENTATION OF VITAMIN D

The placebo-controlled Phase III trial DIAGNODE-3 will include approximately 330 individuals aged 12 to 28 who have been recently diagnosed with Type 1 Diabetes and who carry the genetically defined haplotype HLA DR3-DQ2. The trial will be conducted at approximately 50 clinics, where almost half of all individuals with Type 1 Diabetes are estimated to carry the current haplotype. After an initial month in which all trial participants receive vitamin D, the individuals will be randomized 2:1, ie two out of three trial participants will receive three intralymphatic injections of Diamyd^® and one in three will receive the corresponding placebo at one month intervals, with one primary reading 24 months after trial start. The design provides, based on efficacy data from previous studies on the HLA-restricted patient population, a high probability of reaching the primary endpoints; preservation of stimulated C-peptide and lower HbA1c. The Coordinating Investigator for the trial is Professor Johnny Ludvigsson at Linköping University. The Sponsor of the trial is Diamyd Medical.

• DIAGNODE-B – ADDITIONAL INJECTION OF DIAMYD^® IN LYMPH NODES

The aim of the trial is to evaluate the safety of a booster (fourth/fifth) injection with Diamyd^® and the effect on the immune system and the endogenous insulin production. DIAGNODE-B is an open-label investigator-initiated clinical trial enrolling Type 1 Diabetes patients who carry the genetically defined haplotype HLA DR3-DQ2 and are previously treated with intralymphatic injections of Diamyd^®. The trial is planned to include approximately 6 patients who have either been treated with four injections in DIAGNODE-1, who will then receive a 5th intralymphatic injection of Diamyd^®, or patients who participated in DIAGNODE-2, who will receive a 4th intralymphatic injection of Diamyd^®, approximately 4 years after the last injection. The patients will be followed for 12 months after injection. The trial is conducted at the Clinical Research Unit at the University Hospital in Linköping. Sponsor of the trial is Linköping University with Professor Johnny Ludvigsson as Sponsor’s representative.

Trial with Remygen® (GABA)

• REGENERATE-1 – REMYGEN^® /ALPRAZOLAM

An open-label, investigator initiated clinical trial with Remygen^®. The trial includes 35 patients aged 18-50 who have had Type 1 Diabetes for more than five years with low to non-existing insulin production. Safety and initial efficacy results from the dose escalation section of the trial have paved the way to initiate the main trial and have also demonstrated a potential effect of Remygen^® to improve the hormonal response to hypoglycemia. The main trial evaluates whether the insulin-producing cells can be regenerated and if the hormonal response to hypoglycemia can be improved using Remygen^® and the combination of Remygen^® and Alprazolam. The trial is led by Professor Per-Ola Carlsson at Uppsala University, Sponsor of the trial.

Results are expected in the first quarter of 2023.

Manufacturing of GAD65 in Umeå
A new facility for manufacturing of biological products is being set up in Umeå, the Capital of Västerbotten County in Sweden, for the manufacture of recombinant GAD65, the active pharmaceutical ingredient in the antigen-specific immunotherapy Diamyd^®, currently in late-stage clinical development. The 20 000 square feet site, comprising of clean rooms, laboratory facilities, warehousing and office space, will facilitate full control, predictability and scalability of the manufacturing technology of the active ingredient. Diamyd Medical has chosen Cytiva’s configurable single-use bioprocess manufacturing platform FlexFactory for the process that is based on baculovirus-insect cell expression system. Small-scale experimental production of GAD65 is established at the manufacturing facility. Large-scale production is being set up with the aim of having the biomanufacturing facility operational during 2023. The property where the manufacturing is being established is owned by Diamyd Medical.

About Diamyd Medical
Diamyd Medical develops precision medicine therapies for Type 1 Diabetes. Diamyd^® is an antigen-specific immunotherapy for the preservation of endogenous insulin production. DIAGNODE-3, a confirmatory Phase III trial is actively recruiting patients with recent-onset Type 1 Diabetes in eight European countries. Significant results have previously been shown in a large genetically predefined patient group in a large-scale meta-analysis as well as in the Company’s European Phase IIb trial DIAGNODE-2, where the Diamyd^® was administered directly into a lymph node in children and young adults with recently diagnosed type 1 diabetes. A manufacturing facility is being set up in Umeå for the manufacture of recombinant GAD65, the active ingredient in the antigen-specific immunotherapy Diamyd^®. Diamyd Medical also develops the GABA-based investigational drug Remygen^® as a therapy for regeneration of endogenous insulin production and to improve hormonal response to hypoglycaemia. An investigator-initiated Remygen^® trial in individuals living with type 1 diabetes for more than five years is ongoing at Uppsala University Hospital. Diamyd Medical is one of the major shareholders in the stem cell company NextCell Pharma AB as well as in the artificial intelligence company MainlyAI AB.

Diamyd Medical’s B-share is traded on Nasdaq First North Growth Market under the ticker DMYD B. FNCA Sweden AB is the Company’s Certified Adviser.

*** The above is an excerpt from the report. To read the complete report, please visit https://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), Box 7349, SE-103 90 Stockholm, Sweden
Phone: +46 8 661 00 26 Fax: +46 8 661 63 68 E-mail: info@diamyd.com Reg. no: 556242-3797

The information was submitted for publication, through the agency of the contact person set out above,
at 08.15 CET on January 25, 2023.

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