Quarterly Report II 22/23

September 2022 – February 2023, 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 – February 28, 2023

• Net result: MSEK -57.9 (-46.5), second quarter: MSEK -25.0 (-9.0).
• Result per share: SEK -0.8 (-0.6), second quarter: SEK -0.3 (-0.1)
• Cash flow from operating activities: MSEK -52.4 (-18.2), second quarter: MSEK -25.4 (-18.6)
• Cash and short-term investments at February 28, 2023: MSEK 101.6 (228.4).

Other events during the second quarter, December 1, 2022 – February 28, 2023

• Patient recruitment for the pivotal Diamyd^® Phase 3 trial is progressing according to plan
• Patent protection was received in the US and Japan for the GABA formulation Remygen^®
• DiaPrecise, a Diamyd^® Type 1 Diabetes Precision Medicine prevention trial, 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

Significant events after the second quarter

• Diamyd Medical partners with JDRF to advance the DIAGNODE-3 Phase 3 trial in Type 1 Diabetes

Other events after the second quarter

• Remygen^® trial results to be presented in April
• Karin Rosén, M.D, PhD, joined Diamyd Medical’s Board of Directors

Comments by CEO Ulf Hannelius
It is with great pride and humility that we at Diamyd Medical begin a multi-year collaboration with JDRF, the leading global type 1 diabetes research and advocacy organization. Thanks to JDRF's very large network, strong brand and financial support, the collaboration significantly strengthens our preparations for market and further accelerates patient recruitment for the Phase 3 trial DIAGNODE-3. The collaboration is a clear sign of our progress in the field, and we are grateful to be part of the collective effort to advance the treatment of type 1 diabetes.

Further strengthened by this collaboration, we continue forward with our precision medicine antigen-specific immunotherapy, Diamyd^®. Our pivotal Phase 3 trial DIAGNODE-3 (www.diagnode-3.com) is advancing steadily, with the trial ongoing in eight European countries and set to commence in the US this summer. We also await with interest the results fromReGenerate-1, the investigator-initiated trial in Uppsala, Sweden, evaluating Remygen, our patent-protected GABA-based candidate that demonstrated promising clinical results in the Phase 1 part of the trial. Work is also in full swing in our biomanufacturing facility in Umeå. The facility is managed by our subsidiary Diamyd Biomanufacturing, and the primary purpose is to manufacture GAD, the active component in Diamyd^®, for future studies and commercial use.

As we prepare to launch the Phase 3 trial in the US and following our recent health economic assessment of Diamyd^® in the US, we are pleased to welcome Dr. Karin Rosén to our Board of directors. This move enhances our understanding of the US market, as Karin Rosén brings a wealth of experience in the pharmaceutical industry, with a strong background in business development, strategic planning, and commercialization. Her extensive knowledge of the US market and regulatory landscape will undoubtedly be valuable in our discussions about launching and commercializing Diamyd^® in the United States and around the world.

As a further step to establish ourselves in the US, we have become members of Nordic Innovation House in Silicon Valley (www.nordicinnovationhouse.com/siliconvalley). Nordic Innovation House is a unique collaboration between the Nordic countries to offer Nordic companies a springboard to the most interesting innovation centers in the world. As part of the membership, Diamyd Medical will have access to a physical address in Palo Alto, office and meeting space as needed, and expanded opportunities for exposure to the Silicon Valley ecosystem.

One of our holdings, the deeptech company MainlyAI, of which we are a main shareholder, is also based both in Sweden and in Silicon Valley. MainlyAI recently appointed Mikael Nordenstjerna as the new CEO and we collaborate closely with MainlyAI in the VINNOVA-funded ASSET project (www.asset.healthcare), which focuses on screening, risk prediction, and preventive treatment of TID. Artificial Intelligence is already a significant player in pharmaceutical development, and I firmly believe it will revolutionize the way we develop novel treatments in the future. Having the opportunity to monitor this field at the forefront is of great value, and we look forward to collaborating with MainlyAI on their journey to change the way companies can work more efficiently with artificial intelligence.

A notable development in the T1D field that highlights the commercial opportunities is the recent $2.9 billion acquisition of ProventionBio, the company behind the FDA-approved therapeutic TZIELD, by Sanofi. Additionally, Vertex Pharmaceuticals has been making strategic moves in the T1D space, with a very recent larger license deal with CRISPR Therapeutics, acquiring Viacyte last year and Semma Therapeutics in 2019 to focus on cell-based treatments for T1D. These acquisitions emphasize the growing recognition of the value of novel therapies and innovative technologies in the T1D field and underscore the increasing demand for solutions that address the root causes of the disease, rather than just managing its symptoms. It is also significant that all the major insulin manufacturers have recently announced price reductions close to 80% for insulin in the US. This development signals that we are entering a new era of diabetes management, and we find inspiration in these positive changes as we continue our own endeavors at Diamyd Medical.

We stand on the threshold of a new era in the T1D field, and together, we will continue to push the boundaries of what can be achieved. This needs to be done with full respect to the current challenging macro environment, balancing breakthrough innovations with financial prudence. The new partnership with JDRF is a major development for us and I want to thank you for joining us on this transformative journey, and we eagerly look forward to the milestones we will reach together in the years to come.

Stockholm, April 5, 2023
Ulf Hannelius, President and CEO

Other events during the second quarter

December 1, 2022 – February 28, 2023

Patient recruitment for the pivotal Diamyd^® Phase 3 trial is progressing according to plan
Diamyd Medical announced that patient recruitment for the single pivotal precision medicine Phase 3 trial DIAGNODE-3 is progressing according to plan. Patient recruitment is ongoing in eight European countries and is being prepared to start in the US this summer. The trial is expected to be fully enrolled during the summer of 2024.

Diamyd Medical received patent protection in the US and Japan for GABA formulation Remygen^®
The US Patent and Trademark Office (USPTO) and the Japanese Patent Office informed Diamyd Medical that they will grant the patent for the Company’s oral formulation of the GABA-based study drug Remygen^®. Remygen^® is currently in Phase 2 development through the ReGenerate-1 trial in individuals with long-term Type 1 Diabetes. Results are expected in April 2023.

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.

Significant events after the second quarter

Diamyd Medical partners with JDRF to advance the DIAGNODE-3 Phase 3 trial in Type 1 Diabetes
Diamyd Medical and JDRF, the leading global type 1 diabetes research and advocacy organization, have entered into a four-year research and development collaboration including a non-dilutive $5 million award to Diamyd Medical to support its ongoing Phase 3 trial with the precision medicine antigen-specific immunotherapy Diamyd®. The grant will be funded under JDRF’s Industry Discovery & Development Partnerships program that focuses on commercialization of therapeutics and devices for the treatment, cure, and prevention of type 1 diabetes and its complications.

Other events after the second quarter

Remygen^® trial results to be presented in April
The database for Uppsala University Hospital’s ReGenerate-1 trial, which evaluates the safety and efficacy of Diamyd Medical's study drug Remygen^® in individuals with Type 1 Diabetes, will be locked imminently whereupon the data will be sent to the contract research organization that carries out the statistical analysis. Topline results are expected to be announced in April.

Diamyd Medical brougth Karin Rosén, M.D, PhD, to its Board of Directors
Karin Rosén, M.D, Ph.D, San Francisco, joined the Board of Directors as an adjunct member, and will be proposed for election to the Board at the next General Meeting of Shareholders. Dr. Rosén has deep experience from the biotechnology industry with more than two decades of working in senior leadership positions in global clinical development and U.S. and global medical affairs across her time with Horizon Therapeutics, GSK (GlaxoSmithKline), Aimmune Therapeutics and Genentech, a member of the Roche group.

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 April 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 and is being prepared to start recruiting patients in the US this summer. 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 April 5, 2023.

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