Quarterly Report III 20/21

September 2020 – May 2021, Diamyd Medical AB (publ), Fiscal year 2020/2021

Developing precision medicine therapies for type 1 diabetes
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

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

September 1, 2020 – May 31, 2021

• Net result: MSEK 87.3 (23.2), third quarter -32.7 (-7.2). The increase compared to previous year is a one-off effect of corresponding MSEK 144.4 due to profit from divestment of shares in Companion Medical, Inc.
• Result per share: SEK 1.3 (0.3), third quarter SEK -0.5 (-0.1)
• Cash flow from operating activities: MSEK -50.4 (24.1), third quarter: MSEK -21.4 (-6.8)
• Cash and cash equivalents at May 31, 2021: MSEK 194.2 (81.5)

Significant events during the third quarter, March 1, 2021–May 31, 2021

• Diamyd^® Phase IIb trial results published in Diabetes Care
• Karin Hehenberger joined the Board of Directors
• A global CRO was contracted for a Phase III trial with the diabetes vaccine Diamyd^®
• A clinical trial in LADA with Diamyd^® was fully recruited
• A directed share issue raised proceeds of SEK 60 million
• Diamyd Medical selected Cytiva’s FlexFactory platform to make precision medicine type 1 diabetes vaccine

Significant events after the reporting period

• 24-month follow-up of Phase IIb Diamyd^® clinical trial indicated continued positive treatment effect post 15 months
• Diamyd Medical was elected to present Diamyd^® meta-analysis results on October 1 at the EASD diabetes conference

Up to half of all patients diagnosed with type 1 diabetes carry the diabetes susceptibility genes HLA DR3-DQ2.

These individuals have a high likelihood of responding to Diamyd^® treatment. Last month’s publication of the peer-reviewed article highlighting the topline clinical and immunological findings from DIAGNODE-2 in the leading diabetes journal Diabetes Care, has significantly increased the awareness and visibility for the novel precision medicine approach we are pursuing and has so far generated international coverage and further opportunities to present at scientific conferences. Most importantly, the findings and the publication in Diabetes Care strongly support the diabetes vaccine’s efficacy in preserving beta cell function in individuals carrying the DR3-DQ2 genes. 

That the antigen-specific immunotherapy Diamyd^® shows a positive and clinically relevant disease modifying effect in individuals that carry the so-called HLA haplotype DR3-DQ2, was shown 2019 in a meta-analysis comprising data from previous clinical studies using Diamyd^®. These findings were later published as a peer-reviewed article in Diabetologia. Independently, about the same time, Battaglia M, Ahmed S, Anderson MS, et al, reported that HLA is associated with the first appearing autoantibody, be it HLA DR4-DQ8 with IAA first or DR3-DQ2 with GADA first, opening up the notion that type 1 diabetes are of two different endotypes: ”proinsulin autoimmune-DR4         (PADR4 Diabetes) and “GAD autoimmune-DR3” (GADR3 Diabetes). After the announcement of the meta-analysis, we amended the then ongoing DIAGNODE-2 trial and prespecified the HLA analysis in the clinical protocol and statistical analysis plan. When the database was locked, code broken and results from DIAGNODE-2 were subsequently announced in the autumn of 2020, data confirmed what the meta-analysis had shown, the responders to Diamyd^® treatment are defined by the individual’s carrying the DR3DQ2 HLA haplotype.

We have subsequently updated the large-scale meta-analysis with data from DIAGNODE-2 and have now results based on data from more than 600 individuals that have participated in four placebo controlled double blinded clinical trials in Europe and the US. In individuals carrying the HLA DR3-DQ2 haplotype we see highly significant preservation of endogenous insulin production measured as stimulated C-peptide and significant lowering of HbA1c, a measure of blood glucose control. These data have laid the groundwork for our First in Class precision medicine approach including focusing on Accelerated Approval and Conditional Marketing Approval from FDA and EMA. We are also evaluating the possibility of receiving orphan designation in Europe for the HLA DR3-DQ2 restricted patient population to complement the orphan designation we already have in the US for the preservation of residual insulin production. These regulatory frameworks provide advantages that can accelerate the approval process for novel therapies.

In parallel, the Confirmatory Phase 3 trial that we are moving ahead with in Europe and the US has a highly robust design as we shall include only individuals carrying the DR3DQ2 HLA haplotype.  

The 24-month extension in DIAGNODE-2 that were recently announced, included 15 individuals positive for HLA DR3-DQ2 treated with intralymphatic Diamyd^®, positively indicates that the positive effect of Diamyd^® remains post 15 months. The actively treated individuals followed their expected slope with only 22% reduction in endogenous insulin production between months 15 and 24. The 8 individuals in the placebo arm carrying HLA DR3—DQ2 had lost during the same period 38%. While it is a small and non-random sample precluding any statistical testing, the data provide further comfort to our Phase 3 design that will follow all participants for 24 months in alignment with regulatory requirements.

From a scientific perspective our findings are highly relevant for how antigen-based therapies and vaccines are developed. HLA is the most polymorphic region in the human genome and is central to how we react to endogenous and exogenous antigens such as autoantigens, allergens, and viruses. This is because the HLA region codes for the proteins that bind to and present antigens to immune cells. Importantly, HLA DR3-DQ2 is one of the most common genetic risk factors for type 1 diabetes and has been associated with autoimmunity against GAD, the very same antigen that is used as the active component in the diabetes vaccine Diamyd^®.

The work with the manufacturing facility is progressing at full speed. I am impressed with all the logistics and testing and millions of other ongoing activities in Umeå to establish our own drug substance manufacturing. I would like to stress again the importance of pharmaceutical manufacturing as a top priority in these times.

Moving forward we also see a big opportunity to broaden the use of Diamyd^® into the prevention space, treating individuals that are at risk of being diagnosed with type 1 diabetes in the future. The two previous pilot trials, DiAPREV-IT-1 and 2, where subcutaneous injections of Diamyd^® were evaluated in children at high risk of type 1 diabetes, support the same notion that we see in recent onset individuals, namely that HLA DR3-DQ2 associates with a delay of overt diabetes onset, and we are currently evaluating the best path forward in the prevention space. In addition, we are pursuing the autoimmune form of type 2 diabetes, or latent autoimmune diabetes in adults (LADA), as it is also called. Like type 1 diabetes there are no disease modifying treatments for type 2 diabetes and we are expecting the first clinical and immunological results from the GADinLADA trial in the beginning of next year.

All in all - the past quarter has been fundamental in advancing the precision diabetes vaccine Diamyd^®.

Stockholm, June 23, 2021
Ulf Hannelius, President and CEO
 

Significant events during the third quarter

March 1, 2021 – May 31, 2021

Diamyd^® Phase IIb trial results published in Diabetes Care
Diabetes Care published the results of DIAGNODE-2, a Phase IIb trial that evaluated intralymphatic administration of Diamyd Medical’s lead drug candidate Diamyd^® (GAD-alum) in individuals recently diagnosed with type 1 diabetes. Results showed, in line with a published large-scale meta-analysis of clinical data, that while no treatment benefit was seen in the full patient population, three intralymphatic injections of Diamyd^® had a significant and positive effect on the preservation of insulin producing capacity in the predefined subgroup of individuals that carry the HLA DR3-DQ2 haplotype. In this subgroup of patients, more than 50% greater preservation of insulin producing capacity was observed at 15 months from baseline in those that received active treatment compared to placebo.

Karin Hehenberger joined the Board of Directors
Karin Hehenberger, MD, PhD, joined the Board of Directors of Diamyd Medical as affiliated member, to be proposed for election to the Board at its next General Meeting of Shareholders. Dr Hehenberger has a vast experience from both medical and financial executive positions within the fields of diabetes and other chronic diseases.

A global CRO was contracted for Phase III trial with the diabetes vaccine Diamyd^®
Diamyd Medical contracted the global contract research organization (CRO) ICON plc for DIAGNODE-3, a placebo-controlled Phase III precision medicine trial with the diabetes vaccine Diamyd^®. The trial is designed to confirm the efficacy and safety of Diamyd^® in individuals recently diagnosed with type 1 diabetes who carry the genetically defined haplotype HLA DR3-DQ2. The trial is expected to begin recruiting patients later this year.

A clinical trial in LADA with Diamyd^® was fully recruited
The clinical Phase II trial GADinLADA, where the diabetes vaccine Diamyd^® is administered directly into the lymph node in patients with the autoimmune form of diabetes LADA (Latent Autoimmune Diabetes in Adults), was fully recruited. The first results from the trial are planned to be announced in early 2022.

A directed share issue raised proceeds of SEK 60 million
Diamyd Medical completed a directed share issue of 2 400 000 B-shares at a price of SEK  25 per share. Through the directed share issue gross proceeds of SEK 60 million were received. The share issue was subscribed by qualified investors.

Diamyd Medical selected Cytiva’s FlexFactory platform to make precision medicine type 1 diabetes vaccine
Diamyd Medical installs a new Cytiva FlexFactory platform in Umeå, Sweden. Once up and running, the clinical stage biopharmaceutical company will begin manufacturing its precision medicine vaccine. The first of its kind, the type 1 diabetes vaccine works to reprogram immune cells to prevent the destruction of pancreatic insulin producing beta cells.

Significant events after the reporting period

24-month follow-up of Phase IIb Diamyd^® clinical trial indicated continued positive treatment effect post 15 months
50 out of the 109 individuals in DIAGNODE-2 who were included in an extension study had been followed for a total of 24 months. The actively treated individuals carrying HLA DR3-DQ2, in total 15 individuals, followed their expected trajectory from 15 to 24 month, showing no indication of diminishing treatment effect compared to their progression up to 15 months. As also expected, safety at 24 months looked good with no difference in adverse events between actively treated and placebo treated individuals.

Diamyd Medical was elected to present Diamyd^® meta-analysis results at the EASD diabetes conference
A scientific abstract detailing the latest findings from a meta-analysis based on data from more than 600 individuals with type 1 diabetes participated in clinical trials with the diabetes vaccine Diamyd^® (GAD-alum) has been elected to be presented orally on October 1 at the 57th EASD Annual Meeting (European Association for the Study of Diabetes).

Two drugs in clinical development
Diamyd^® and Remygen^® are drugs in clinical development that focus on the underlying disease mechanisms of diabetes; the dysfunction and loss of insulin-producing beta cells in the pancreas.

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

Clinical data indicate the potential of the diabetes vaccine 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 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.

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.

Ongoing 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, will be evaluated in the Phase III trial DIAGNODE-3 and is evaluated in the Phase II trial GADinLADA.

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

Trial with Diamyd® in lymph node

• GADinLADA – DIAMYD^® IN LYMPH NODES WITH ORAL SUPPLEMENTATION OF VITAMIN D

An open-label, investigator initiated clinical trial where Diamyd^® is administered directly into a lymph node with oral supplements of vitamin D. The trial, conducted in Norway and in Sweden, encompasses 15 patients aged 30-70 years diagnosed with LADA (Latent Autoimmune Diabetes in Adults) and not yet on inulin treatment. The aim with the trial is to evaluate the safety of intralymphatic treatment with Diamyd^® in LADA patients and to continuously evaluate the immunological and clinical response during a one-year period. First results from the trial are planned to be announced in early 2022. Sponsor of the trial is the Norwegian University of Science and Technology with Ingrid K Hals as sponsor representative.

Trial with Remygen® (GABA)

• REGENERATE-1 – REMYGEN^® /ALPRAZOLAM

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. 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 hypoglycaemia 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.

Upcoming clinical trial

Trial with Diamyd® in lymph node

• 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 in Europe and the United States, 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 end-points; 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.

Manufacturing of GAD65 in Umeå
A new facility for vaccine manufacturing 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 therapeutic diabetes vaccine Diamyd^® currently in late-stage clinical development. The 10 000 square feet site, comprising of clean rooms, laboratory facilities 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.

*** 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

The information was submitted for publication, through the agency of the contact person set out above, at 08.15 CET on June 23, 2021.

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