Quarterly Report III 18/19

September 2018 – May 2019, Diamyd Medical AB (publ), Fiscal year 2018/201

DIAGNODE-2 is fully recruited. Results are expected in Q3 2020
Diamyd Medical’s B-share is traded on Nasdaq First North under the ticker DMYD B.
Further information is available on https://www.diamyd.com

Figures in parentheses relate to the corresponding period previous financial year.

September 1, 2018 – May 31, 2019

•  Net income: MSEK 1.3 (0.6), whereof third quarter MSEK 0.9 (0). The change refers to increased sales of GAD-protein for pre-clinical research.
•  Net result: MSEK -26.8 (-32.5), whereof third quarter MSEK -7.9 (-12.6)
•  Result per share: SEK -0.4 (-0.6), third quarter SEK -0.1 (-0.3)
•  Cash flow from operating activities: MSEK -28.5 (-32.6), third quarter MSEK -9.1 (-9.6)
•  Liquid assets and short-term investments as of May 31, 2019: MSEK 70.5 (52.8)

Significant events March 1, 2019 – May 31, 2019 

• Swedish MPA approved new treatment arm with Remygen®and Alprazolam in Phase I/II trial ReGenerate-1
• DIAGNODE-2, the European Phase IIb trial with the diabetes vaccine Diamyd®, was fully recruited
• Results were presented from the EDCR IIa trial with Diamyd®given subcutaneously
• Immunological findings supporting intralymphatic treatment with Diamyd®were presented at a diabetes meeting in Stockholm
• Diamyd Medical announced strategic activities for 2019 and 2020
• New publication supported Diamyd Medical’s patent rights around GABA

Significant events after the reporting period

• Diamyd Medical’s intralymphatic diabetes therapy attracts increased interest
• Diamyd Medical fully subscribed to its pro rata share in NextCell Pharma's rights issue
• New interim report at 30 months and after extra injection supported long-term effect of intralymphatic Diamyd

Comments by CEO Ulf Hannelius
This June, over 15,000 representatives from industry, health care and academia within the diabetes field, gathered in San Francisco for the 79th Scientific Sessions organized by the American Diabetes Association (ADA). The conference marked a significant step forward for the field and strengthens the case for Diamyd Medical’s mission to cure type 1 diabetes.

Prior to ADA, Diamyd Medical communicated both clinical and immunological results supporting the mechanistic rational and long-term effect of Diamyd®in newly diagnosed patients. The seven patients that had been followed for 30 months in the DIAGNODE-1 trial were in partial disease remission, with well controlled blood sugar levels and low requirements of insulin use. Three of these patients had received a fourth injection, a booster, at month 32. Intriguingly, we also saw increased endogenous insulin production between months 32 and 37 in these patients! The results have been received with great interest during partner discussions and show the potential of intralymphatic injections of Diamyd®to not only slow down but also to actually reverse the disease progression in a safe and specific manner.

With these promising results, I am very pleased to note advances in diabetes research that were presented by other organizations during ADA. Especially important for the type 1 diabetes field were results from a prevention trial presented by the research organization TrialNet, showing that a two-week immunosuppressive therapy with an anti-CD3 monoclonal antibody can delay the time to diagnosis for high risk individuals by approximately two years. Although treatment with anti-CD3 is associated with side effects and requires hospitalization, the positive findings support the notion of immunotherapy in type 1 diabetes. This in turn reflects very positively on the work Diamyd Medical is pursuing. Antigen-specific immunotherapy for type 1 diabetes is on top of mind. I am also encouraged by the fact that there was a session dedicated to autoimmune diabetes in adults (LADA) that highlighted the urgent need for disease-modifying therapies for this large and often misdiagnosed patient population. Defined by autoimmunity against the antigen GAD, autoimmune diabetes in adults represents an indication that fits very well with GAD-specific immunotherapy. Researchers are interested, Big Pharma is interested. There is great potential here for Diamyd®.

In addition to the advances made with Diamyd®, the Remygen®program is progressing well. Recently, the Swedish MPA approved an amendment to the ongoing ReGenerate-1 trial in Uppsala to add a treatment arm that combines our drug candidate Remygen®with the receptor modulating drug Alprazolam. This gives us the possibility to not only evaluate two different doses of Remygen®but also the combination with receptor modulators that preclinical studies have shown to further enhance GABA’s effect of beta cell regeneration and immunomodulation.

In May, Diamyd Medical reached a significant operational milestone when DIAGNODE-2 was reported fully enrolled. Specific regulatory activities are ongoing that prepare and build the case for potential earlier marketing approval for Diamyd®. In parallel, partner discussions are advancing well. With the positive advances we are making I feel confident in finding a partner that has the required know-how, resources and dedication to build and execute the best possible commercial strategy for Diamyd®together with us.

Stockholm, June 26, 2019
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 three 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 significantly reduce the complications of type 1 diabetes.

Intralymphatic treatment with Diamyd®is now being investigated in a clinical phase IIb trial (DIAGNODE-2), with the aim of confirming the 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. Increased GABA concentrations activate GABA-specific cell surface receptors leading to effects on the cells in the pancreas.

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

Remygen®is now being investigated in a clinical phase I/II trial (ReGenerate-1), where clinical efficacy is evaluated with the aim of optimizing treatment ahead of registration-based trials.

Significant events during the third quarter
March 1, 2019 – May 31, 2019

Swedish Medical Products Agency approved new treatment arm with Remygen® and Alprazolam in Phase I/II trial ReGenerate-1
The approval entails that ReGenerate-1, with Diamyd Medical's GABA-based investigational drug Remygen®, will be expanded from the original two treatment arms encompassing Remygen®administration, with a third treatment arm in which 12 patients receive Remygen®in combination with the GABA receptor modulator Alprazolam.

Fully recruited European Phase IIb trial with the diabetes vaccine Diamyd®
All patients in Diamyd Medical's European Phase IIb trial DIAGNODE-2, where the diabetes vaccine Diamyd®(rhGAD65/alum) is given directly into the lymph node, were randomized and the trial was fully recruited. In total, 109 of originally 106 planned patients has been included. The patients will be followed for 15 months and topline results are expected in the third quarter 2020.

Results presented from the EDCR IIa trial where Diamyd® was given subcutaneously
30-month results from EDCR IIa, an investigator initiated pilot trial in which the diabetes vaccine Diamyd®was given subcutaneously combined with etanercept and vitamin D, showed that the treatment was safe and tolerable. No serious side effects had been reported. As expected, based on previously reported 15-month results, the results at 30 months showed no clear positive effect on the clinical course of the disease.

Immunological findings supporting intralymphatic treatment with Diamyd® were presented at a diabetes meeting in Stockholm
A new analysis of results from the DIAGNODE-1 trial that supports the association between immunological and clinical response following intralymphatic administration of Diamyd®was presented on April 11 at the Scandinavian Society for Study of Diabetes meeting in Stockholm.

Diamyd Medical announced strategic activities for 2019 and 2020
The Company announced that preparations for a Conditional Marketing Authorization Application in Europe end of 2020 are underway, including regulatory, manufacturing and commercial activities as well as preparations for a Phase III clinical trial in Europe and the US, to be completed post-approval in support of an accelerated approval process.

Publication supported Diamyd Medical’s patent rights around GABA
A scientific article published in Journal of Diabetes Research supported previous findings that form the basis of patent applications that Diamyd Medical exclusively licenses from University of California, Los Angeles (UCLA). The study showed that treatment with GABA in combination with the GABA receptor modulating agent Alprazolam provides increased effect on the survival and growth of insulin-producing cells in animals.

Significant events after the reporting period

Diamyd Medical’s intralymphatic diabetes therapy attracts increased interest
Progress in immunotherapy for type 1 diabetes reported during the ADA (American Diabetes Association) meeting in San Francisco is positively interpreted for Diamyd Medical as well as for the whole field working to prevent and treat type 1 diabetes.

Diamyd Medical fully subscribed to its pro rata share in NextCell Pharma's rights issue
Diamyd Medical pro rata share corresponds to approximately SEK 3.2 million in the associated company NextCell Pharma's rights issue, meaning that Diamyd Medical's book value of the holding in NextCell Pharma after the investment increases from approximately SEK 5.3 million to approximately SEK 8.5 million.

New interim report at 30 months and after extra injection supported long-term effect of intralymphatic Diamyd®
The first seven patients that have been followed for the entire 30-month period in DIAGNODE-1 continued to show a positive clinical course and were in partial remission. Partial remission in type 1 diabetes is characterized by low external insulin requirement and near to normal long-term blood sugar levels. Three of the seven patients had also received an extra intralymphatic injection of Diamyd®after their 30-month visit. These three patients showed an increase in endogenous insulin production between the 30 and 37month visits. The treatment appeared safe and no serious side effects had been reported.

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, is now evaluated in patients in a Phase I/II trial. 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

A follow-up double-blind randomized clinical trial where Diamyd®is administered directly into a lymph node in combination with treatment with vitamin D. The trial encompasses 109 patients from Sweden, the Czech Republic, Spain and the Netherlands, aged 12–24 years that have recently been diagnosed with type 1 diabetes and will continue for a total of 15 months. Results are expected to be presented in the third quarter of 2020. 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, Sweden. Diamyd Medical is the Sponsor of the trial.

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

An open label investigator-initiated clinical trial, where Diamyd®is administered directly into a lymph node 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. 30 months results are expected to be presented in the first quarter of 2020. 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.

Trials with Remygen® and GABA/Diamyd®

• REGENERATE-1 – REMYGEN® /APRAZOLAM

An open-label, investigator-initiated clinical trial with Remygen®. The trial includes approximately 36 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 also evaluates whether the insulin-producing cells can be regenerated using Remygen®, and in the combination of Remygen®and Alprazolam. The trial is led by Professor Per-Ola Carlsson at Uppsala University.

• GABA/DIAMYD® – COMBINING DIAMYD® WITH GABA

A placebo-controlled investigator-initiated clinical 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 101 patients between the ages of 4 and 18 recently diagnosed with type 1 diabetes. The trial will continue for a total of 12 months and results are expected to be presented in the last quarter of 2019. 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 trial with Diamyd®

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

A placebo-controlled investigator-initiated clinical 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 and results are expected in the beginning of 2020. 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 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), 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 26, 2019.

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