Quarterly Report III 08/09
Quarterly report, Stockholm, July 1, 2009 Third quarter report for Diamyd Medical AB (publ), fiscal year 2008/2009 (www.omxgroup.com ticker: DIAM B; www.otcqx.com ticker: DMYDY) March 1, 2009 – May 31, 2009
• The Swedish Medical Products Agency approved a study with the Diamyd® vaccine for prevention of type 1 diabetes from manifesting in children at high risk of developing the disease • Study on Diamyd® published in Diabetologia, Europe’s leading scientific diabetes journal • Half of the patients included in European Phase III study of the Diamyd® diabetes vaccine • Diamyd Medical licensed the rights for therapeutic use of endomorphine, a substance that can be used to relieve pain, for instance diabetes pain • Subscription of shares from the exercise of subscription warrants DIAM TO 2B from March 16 to April 17, 2009, gave MSEK 28 in capital • The FDA approved the inclusion of children from age 10 in an American Phase III study with the Diamyd® diabetes vaccine (after reporting period) • The first children were vaccinated in a prevention study of Diamyd® for the prevention of type 1 diabetes (after reporting period) • Group net sales for the third quarter were kSEK 211 (128) • The net loss for the third quarter was kSEK -26,226 (-9,953) • Group liquid assets amounted to kSEK 54,430 (96,099) • Earnings per share after dilution for the third quarter were SEK -2.4 (-1.0) • Group net sales for the period amounted to kSEK 1,077 (959) • The net loss for the period was kSEK -52,031 (-43,617) • Earnings per share after dilution were SEK -4.8 (-4.3) for the period CEO COMMENTS Diamyd® in groundbreaking diabetes prevention study I hope no one has missed that the first children have now been vaccinated with Diamyd® or placebo in a prevention study approved in March by the Swedish Medical Products Agency. The study is led by Helena Elding Larsson, a pediatrician at the UMAS university hospital in Malmö. The study’s objective is to evaluate whether vaccination with Diamyd® can prevent or delay the development of type 1 diabetes in children at high risk. It is gratifying to state that if the Diamyd® vaccine is able to prevent or delay this extremely serious disease, which primarily strikes children and adolescents, we may be on the threshold of a medical breakthrough. Intensive work continues to recruit patients to our two Phase III studies in Europe and the US. The studies each contain 320 children and adolescents with recent-onset type 1 diabetes. On June 8 we announced FDA approval to lower the age to include children from age 10 in the US study as well. This allows us to accelerate patient recruitment in the US, and we’re working intensively to contract more US pediatric clinics to the study. Diabetologia, Europe's leading scientific diabetes journal published an article on April 30 that contains study results demonstrating that the Diamyd® vaccine reduces the risk that patients with LADA (Latent Autoimmune Diabetes in Adults) will require treatment with insulin even after five years. During the period Diamyd Medical acquired an exclusive license for a new endomorphine technology that is indicated for treatment of neuropathic pain that occurs in diabetes, among others. The acquisition is a strategically important contribution to our pain portfolio, and it increases our potential for successful product development in the area. Financing is high on the agenda and we’re currently working with several projects to ensure business financing. The strategy includes several alternatives, including out-licensing, structure deals and capital market transactions. The projects are dependent of each other and we will decide on and implement the projects that will best benefit Diamyd’s continued development as a diabetes company. There is a lot of enthusiasm about the Diamyd® vaccine. This was confirmed at the American Diabetes Association’s annual conference in New Orleans, where our participation was met with exceptional interest from doctors and scientists from around the world. Diamyd’s research was also mentioned by several independent leading diabetes researchers in conference lectures. I’m very satisfied with what our employees have achieved during this period, and I am confidently looking forward to fulfilling the recruitment of our registration studies in the US and Europe. Elisabeth Lindner, President and CEO, Diamyd Medical AB SIGNIFICANT EVENTS DURING THE PERIOD The Swedish Medical Products Agency approved a study with the Diamyd® vaccine to prevent type 1 diabetes. The study includes 50 children age four and up with a confirmed high risk of developing type 1 diabetes. The purpose of the study is to evaluate whether the Diamyd® vaccine can interrupt the course of the disease and prevent it from manifesting. The study is led by Helena Elding Larsson, a pediatrician at the UMAS university hospital in Malmö, Sweden. Diabetologia, Europe’s leading scientific diabetes journal, published study with Diamyd®. The article describes the company’s Phase II study of 47 LADA patients and demonstrates that the Diamyd® vaccine reduces the risk that patients will become insulin dependent, even after five years. More than half of patients included in European Phase III study of the Diamyd® diabetes vaccine. In mid-May, the company announced that 166 of a total of 320 patients in Europe have been treated with the Diamyd® diabetes vaccine or a placebo. Discussions are ongoing with the relevant regulatory agencies regarding how the brisk pace of recruitment in Europe can be utilized to promote recruitment to Diamyd’s global Phase III program. Diamyd Medical licensed the rights for therapeutic use of endomorphine, a substance that can be used to relieve pain, for instance diabetes pain. The company acquired an exclusive license for a new endomorphine technology, therefore completing its pain portfolio with products that include all three primary pain receptors. Shares from exercise of subscription warrants DIAM TO 2B from March 16 to April 17, 2009 were subscribed for. The warrants that accompanied each newly issued share from the directed placement of spring 2008 were listed for trading with the First North marketplace as of June 10, 2008, and were traded through April 8, 2009. The subscription period was from March 16 until April 17, 2009. A total of 280,902 new shares were subscribed for, resulting in MSEK 28.1 in additional capital. Diamyd Medical employees granted options in a new employee option program. The new option program adopted by the annual meeting of shareholders on December 11, 2008 means that employees in the Diamyd group were granted new employee options as of April 1, 2009. A total of 158,400 options were granted to employees. Each option grants the holder the right to subscribe for one class-B share at a specified point of time. The subscription price is SEK 66, and the estimated cost for the entire warrant program, periodized over a three-year period, is SEK 4.8 million. The expense is charged to the income statement. Social security contributions are additional and are recalculated on each balance sheet date and periodized correspondingly over a three-year period. Further information about the terms and financial effects are described in note 4. OTHER SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD The FDA approved inclusion of children from age 10 in an American Phase III study of the Diamyd® diabetes vaccine. The approval means patient recruitment in the US can be accelerated. Diamyd Medical will now increase the number of American pediatric clinics in the study as the ethics committees give their approvals in the US. The first children were vaccinated in a type 1 diabetes prevention study with Diamyd®. The study’s objective is to evaluate whether vaccination with Diamyd® can prevent or delay the development of type 1 diabetes in children at high risk. This is the first test ever of preventive vaccination with Diamyd® for this chronic disease. So far three children have been treated with two injections of Diamyd® or placebo (non-active medication). The study is led by Helena Elding Larsson, a pediatrician at the UMAS university hospital in Malmö, Sweden. -- To read the complete report, please see attached pdf, or visit www.diamyd.com --
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