Diamyd implements fully underwritten rights issue and strengthens negotiation position

The Diamyd Medical Board of Directors has, subject to approval at the shareholder’s meeting, decided to implement a preferential rights issue of 220 MSEK. The new share issue strengthens Diamyd´s negotiation position in the ongoing process to find an industrial partner as well as secures financing of the Phase III studies. The rights issue is 100% underwritten through undertakings by existing shareholders and underwriters.

The market for treatment of newly diagnosed young type 1 diabetes patients in Europe and the US is estimated to exceed 1 billion dollars per year. Based on the recent positive results from the clinical studies and the substantial interest from international pharmaceutical companies, the new issue is implemented with a clear message. Diamyd Medical will through the offering get the means to independently run the Phase III program to results, which provides options regarding the optimal structure and timing for business transactions. – We are close to reaching the goal, says Elisabeth Lindner, President and CEO of Diamyd Medical. Our long-term study has recently shown that the diabetes vaccine Diamyd® still after four years has changed the course of the disease in a highly positive way for diabetes patients. We have business discussions with more than one big pharmaceutical company and secured financing until Phase III data strengthens our position. Diamyd Medical is conducting a global Phase III program with the diabetes vaccine Diamyd®, where in total 640 children and adolescents with newly diagnosed type 1 diabetes are included. The purpose of the study is to confirm and evaluate the potential of the Diamyd® vaccine to stop or delay the autoimmune breakdown of the body’s insulin producing cells and thereby preserve the body’s own capacity to make insulin in patients with type 1 diabetes. The study results are expected to be available during spring 2011. The Board of Directors’ conditioned decision on a rights issue will be presented for approval at an extra shareholder’s meeting Wednesday October 7, 2009, at 3 p.m. at Diamyd’s premises at Linnégatan 89B in Stockholm. The notice of the shareholder’s meeting is attached to this press release. The notice is planned to be published in Svenska Dagbladet and Post- och Inrikes Tidningar on Thursday September 17, 2009. Terms for the rights issue in short • The new issue includes up to 3 131 091 shares, whereof up to 157 267 A shares and up to 2 973 824 B shares. • The issue price is 70 SEK per share. • Every twenty-five (25) existing shares entitles to subscription of seven (7) new shares. • Preferential right in each class of shares; in addition subsidiary preferential right. Preliminary time plan for the rights issue Extra shareholder’s meeting - October 7, 2009 Last day of trading including preferential rights - October 9, 2009 Record day for participation in the rights issue - October 14, 2009 Estimated day for publication of prospectus - October 14, 2009 Subscription period - October 16 – 30, 2009 Trading with preferential rights - October 16 – 27, 2009

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