Quarterly Report II 11/12

September 2011 – February 2012

Quarterly Report Diamyd Medical AB (publ), fiscal year 2011/2012
(www.omxgroup.com ticker: DIAM B; www.otcqx.com ticker: DMYDY)

Reporting period December 1, 2011 – February 29, 2012

  • Group net sales amounted to MSEK 0.6 (114.5)
  • Profit before tax amounted to MSEK -13.9 (73.7)
  • Earnings per share after dilution were SEK -0.46 (2.51)
  • The Group’s liquid assets and short term investments amounted to MSEK 408 (474) as of February 29, 2012

First half year, September 1, 2011 – February 29, 2012

  • Group net sales amounted to MSEK 0.6 (259.0)
  • Profit before tax amounted to MSEK -21.3 (172.0)
  • Earnings per share after dilution were SEK -0.72 (5.88)

Significant events during the reporting period December 1, 2011 – February 29, 2012

  • Prevention study with Diamyd Medical´s diabetes vaccine was fully recruited
  • Medical's Phase III study was published in the New England Journal of Medicine

 

CEO COMMENTS

It now only remains a few patients until we can announce that our US Phase II study in cancer pain with the drug candidate NP2 Enkephalin is fully enrolled and we continue our focused work to include the last patients in the study. We see that there is a large group of patients who are in need of more effective pain relief, and we assess the future market potential for NP2 Enkephalin to be very good. The main reason why the recruitment still takes long time is the difficulty of identifying patients suffering from severe cancer pain, yet not too ill to be able to, to be willing to, and to have the strength to participate in the study throughout the follow-up period. Based on previous experience, we estimate that it will take about two months after the last patient is included until we can present the first results.

In parallel with wrapping up the recruitment, we are preparing the documentation for an out-licensing process of products from the NTDDS platform. We will await the results from the Phase II study with NP2 Enkephalin before we begin to seek partners actively, although we are continuously in contact with various stakeholders. With positive study results, we also intend to start clinical trials with the NTDDS based candidate drug NG2 GAD in other types of pain. In addition, the preclinical development of the drug candidate NN1 Neurotrophin is continuing in accordance with the grant from the US National Institutes of Health. NN1 Neurotrophin is also based on our patented NTDDS technology and is being developed for prevention of nerve damage from chemotherapy. There is a significant medical need within the cancer care to be able to expand the use of chemotherapy without causing these severe side effects and we see a big market potential also in this area.

In January the fiftieth and final participant was included in the Swedish prevention study with the diabetes vaccine Diamyd® where healthy children, who are at high risk of developing type 1 diabetes, are treated as a preventative measure. It is reassuring that the safety profile continues to look good, which is also important for how we should proceed with the development of Diamyd®. There is interest among research groups, with funding from research grants, to evaluate the treatment both in larger prevention studies and in combination with other drugs. The diabetes vaccine recently received extra attention when the scientific journal The New England Journal of Medicine, published our ended European Phase III study. The paper reports on several interesting exploratory analyzes. We have also seen some effect in the few patients who were followed up for 30 months before the study was closed due to lack of efficacy, and similar immunological effects as in the previous Phase II study.

We continue to ensure that the company's cash position of about 400 million SEK is used for value-creating activities. Fixed costs are continuously being reviewed and the number of employees in Stockholm has been reduced to a minimum. Our operations in Pittsburgh, managing the development of the NTDDS platform, are prioritized and continue with preserved staffing levels.

The pending Phase II study results will provide guidance going forward and a basis for the Board in their work to establish Diamyd Medical's strategic direction. In addition, the Board is continuously evaluating new business opportunities that can create value for the company. It is with hope and confidence I look forward to the coming months.

Stockholm, April 4, 2012

Peter Zerhouni
President and CEO Diamyd Medical AB

SIGNIFICANT EVENTS DURING THE REPORTING PERIOD
DECEMBER 1, 2011 – FEBRUARY 29, 2012

Prevention study with Diamyd Medical´s diabetes vaccine was fully recruited.
A total of 50 children aged four and older with a high risk of developing type 1 diabetes have been enrolled in a researcher-initiated Phase II study, DiAPREV-IT, with Diamyd Medical’s diabetes vaccine Diamyd®. The study is thus fully recruited. The purpose of the study is to evaluate whether preventive treatment with Diamyd® can delay or halt the progression of the disease so that the children do not develop clinical symptoms of type 1 diabetes. The first results are expected to be compiled three years after the last participant is enrolled, and can thereby be presented in 2015.

Diamyd Medical's Phase III study published in the New England Journal of Medicine.
An article with the results of Diamyd Medical's European Phase III study of the antigen-based diabetes therapy Diamyd® has in February 2012 been published in the scientific journal the New England Journal of Medicine. The published results were previously presented at the American Diabetes Association's 71st Scientific Sessions in San Diego, California, USA, on June 28, 2011. The title of the article is "GAD65 Antigen Therapy in Recently Diagnosed Type 1 Diabetes Mellitus". The authors are J. Ludvigsson, D. Krisky, R. Casas, T. Battelino, L. Castaño, J. Greening, O. Kordonouri, T. Otonkoski, P. Pozzilli, J-J. Robert, H.J. Veeze and J. Palmer.

*** To read the complete report, please see attached PDF, or visit www.diamyd.com ***

For more information, please contact:
Peter Zerhouni, President and CEO Diamyd Medical AB. Phone: + 46 8 661 00 26

About Diamyd Medical
Diamyd Medical is a Swedish biotech company focusing on the development of pharmaceuticals for the treatment of pain, neuropathy and diabetes. The portfolio of development projects for the treatment of chronic pain and neuropathy uses the Company’s patented NTDDS (Nerve Targeting Drug Delivery System) platform to administer therapeutic agents directly to the nervous system. The development project within the area of diabetes consists of the protein GAD65 for the treatment and prevention of autoimmune diabetes.

Diamyd Medical has offices in Sweden and in the US. Shares are listed on Nasdaq OMX (segment Small Cap) in Stockholm (ticker: DIAM B) and on OTCQX in the US (ticker: DMYDY) administered by the Pink OTC Markets and the Bank of New York Mellon (PAL). Further information is available on the Company’s website: www.diamyd.com.  

This information is disclosed in accordance with the Swedish Securities Markets Act, the Swedish Financial Instruments Trading Act, or the requirements stated in the listing agreements.

Diamyd Medical AB (publ), Karlavägen 108, SE-115 26 Stockholm, Sweden. Phone: +46 8 661 00 26 Fax: +46 8 661 63 68. E-mail: info@diamyd.com. Reg. no: 556530-1420

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About Us

Mertiva AB (former Diamyd Medical) primarily consists of holdings in liquid assets and holdings in Protein Sciences Corporation and Mercodia AB. Mertiva (former Diamyd Medical) shares are listed on Nasdaq OMX (segment Small Cap) in Stockholm (ticker: DIAM B) and on OTCQX in the US (ticker: DMYDY) administered by the Pink OTC Markets and the Bank of New York Mellon (PAL).

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