DIAMYD STRENGTHENS POSITION FOR FUTURE FINANCING AND DEALS

Press Release, Stockholm, Sweden, March 10, 2008 – Diamyd Medical AB (www.omxgroup.com, ticker: DIAM B; www.otcqx.com, ticker DMYDY)

At today’s extra general shareholders’ meeting in Diamyd Medical AB (publ) it was decided, in agreement with the proposal from the Board of Directors, to authorize the Board to upon one or more occasions before the next annual shareholder’s meeting, with or without deviation from the shareholder’s preferential right, decide to issue a maximum of 91,000 B-shares (which together with the authorization from the annual shareholder’s meeting allow issuing of 991,000 B-shares) and warrants which will give the right to subscribe for a maximum of 991,000 B-shares.

After full execution of the authorization for the shares, the dilution effect amounts to 10 percent of the share capital. After full execution of the authorization for the warrants and if the warrants are fully exercised, the dilution of the share capital amounts to another 10 percent.

”The purpose of this authorization is to finance our communicated strategy to pursue Phase III studies in Europe and US according to plan. We are evaluating several financing alternatives, but with the current stock market climate, our primary strategy is to broaden our owner base through a direct placement to a small number of stable, capital-bearing institutions”, says Elisabeth Lindner, CEO and President of Diamyd Medical. “With this we are also continuing our partnership discussions as a Phase III company, which increases the value of our therapeutic diabetes vaccine Diamyd®.”