DIAMYD MEDICAL ADDS TO PREVIOUSLY REPORTED POSITIVE EFFICACY RESULTS WITH DIAMYD™ IN TYPE 1 DIABETES PATIENTS AT A EUROPEAN SCIENTIFIC DIABETES MEETING IN COPENHAGEN

Press Release, Stockholm, Sweden – September 18, 2006 – Diamyd Medical AB (SWEDEN OMXS: DIAM B; USA ADR: DMYDY)

Professor Johnny Ludvigsson, Linkoping University Hospital, Linkoping, Sweden and Principal Investigator for the Diamyd™ phase II study in 70 patients with recent onset type 1-diabetes, presented further results from the study at the European Diabetes meeting EASD in Copenhagen. Major conclusions were: · Two single administrations of Diamyd™, four weeks apart, demonstrated safety and efficacy in slowing the decline of C-peptide levels after a stimulated meal at 15 months. · Diamyd™ treated patients required less insulin than placebo patients. · Diamyd™ treated patients with a disease duration shorter than 3 months showed an improved insulin production. · Diamyd™ offers a compelling, first in class, therapeutic for beta cell preservation in type 1-diabetes, in particular due to ease of use and patient acceptance. As announced previously, the results from the Diamyd™ study demonstrated that the group of 35 recently diagnosed type 1-diabetes patients that received Diamyd™ produced approximately twice as much meal stimulated insulin, as measured by C-peptide levels (Area Under the Curve) 15 months after the first treatment as compared to the placebo group (p=0.01). As insulin and C-peptide are produced in equal amounts and C-peptide is easier to measure, meal stimulated C-peptide levels is the most important parameter to follow in a type 1-diabetes study where the aim is to preserve beta cell function. C-peptide levels in both groups experienced a decline but the decline was significantly inhibited in the Diamyd™ group. There were no significant differences in fasting C-peptide levels between the two groups · The relative insulin requirements in the Diamyd™ treated group increased less than in the placebo group compared on a percentage basis (p=0.05). · There was no difference in HbA1c levels between the Diamyd™ group and the placebo group. This is consistent with type 1-diabetes patients striving to reach normal blood glucose levels through their standard insulin treatments. · There was a tendency of increased GAD antibody levels in the Diamyd™ group compared to the placebo group indicating that the drug candidate has an immunomodulating effect. · Although subgroups were too small for statistical calculations, Diamyd™ treated patients with a disease duration of less than 3 months (n=4) showed improved C-peptide levels at 15 months, whereas placebo treated patients (n=7) showed a decline. These results provide strong support that the administration of Diamyd™ is effective in preserving islet cell function in type 1-diabetes patients. Additionally, maintenance of endogenous insulin production is important as it helps patients to better control their disease and reduce long-term complications. Finally, as in all previously reported clinical studies with Diamyd ™, the results also strongly support the safety of Diamyd™ administration. There were no serious adverse events reported that were related to the Diamyd™ treatment. The study is now in a follow up stage of 15 months. The Clinical Trial Report from this study is currently in preparation. “With these positive results in the type 1-diabetes study, the likelihood that the ongoing Phase II Clinical Trial with 160 LADA-patients will be successful has increased”, says Anders Essen-Moller, President and CEO of Diamyd Medical. Preliminary results from the LADA trial are planned to be presented in the summer 2007. For a complete version of this press release (with images), please see attached pdf.