DIAMYD VACCINE DRUG SUBSTANCE PRODUCED – UPDATE ON DIAMYD PROGRESS

Press Release, Stockholm, Sweden, October 25, 2007 – Diamyd Medical AB (www.omxgroup.com, ticker: DIAM B; www.otcqx.com, ticker DMYDY)

Diamyd Medical announced today that sufficient amounts of GAD65, the active substance in the Diamyd® diabetes vaccine, for Phase III clinical trials have been produced at Protein Sciences, Meriden, CT, and sent for testing. Formulation and vialing is planned to take place in Europe in January 2008. The Company plans to file its IND with the US FDA in December. This means that approval to start the Phase III program can be granted during the 1st quarter 2008.

“While being a few months delayed in our preparations to start our Phase III program, we are optimistic as sufficient amounts of GAD65 now have been produced. Although testing of the substance is ongoing, our manufacturing process has during the past four runs at scale, yielded consistent and reproducible amounts. It has been a challenge to arrive at this, but now it seems done” says Anders Essen-Moller, President of Diamyd Medical.