UPDATE ON THE DIAMYD-NEUROLOGIX LICENSE COLLABORATION

Press Release, Stockholm, Sweden – October 20, 2006 – Diamyd Medical AB
(SWEDEN NOMX: DIAM B; U.S.A ADR: DMYDY)

In August 2006 Diamyd Medical and Neurologix entered into a licensing agreement where Diamyd out-license the GAD65 technology to Neurologix Inc., (Fort Lee, NJ, U.S.A) for the development of a GAD-based therapy to treat Parkinson’s disease.

Diamyd Medical announces today an update on the progression this program. The first ever Phase I gene therapy trial for Parkinson’s disease have been completed. Primary outcomes of the study design, safety and tolerability, were successfully met. There were no adverse events reported relating to the treatment.
The patients registered a clinical improvement of 25% on the Unified Parkinson's Disease Rating Scale (UPDRS) compared to baseline (p < 0.005). Nine of the 12 patients showed an average improvement of 37%, and five of these patients had substantial improvement of between 40% and 65%.

The study was an open label, three dose escalating, unilateral trial with 12 patients studied out to one year. The patients were more than 30 years old, with diagnosed Parkinson’s disease for more than five years and with stage III or IV on the UPDRS. Therapy was conducted through a unilateral stereotactic procedure with four subjects in each of three dose cohorts receiving 3.5, 10.5 and 35 billion AAV-GAD genomic particles. One one half of the brain was treated, leaving the other brain-half as reference. There was no change in post-surgical anti-GAD and anti-AAV antibody titers.

Further studies will be necessary to definitively determine efficacy.