STOCKHOLM, Sweden, Nov. 22, 2005 (PRIMEZONE) -- Diamyd Medical AB (OMX:DIAMB), today announced that it has agreed to acquire all of the outstanding shares in Nurel, a Pittsburgh, PA-based biotechnology company. The merger is subject to approval by the board of directors of each company and their respective shareholders. The Diamyd Medical Board of Directors plans to request shareholder approval for the merger at the Annual General Shareholders Meeting on December 12th.
The merger is expected to close in mid-December 2005, creating a global biotechnology company focusing on the treatment of diabetes and its complications including chronic pain and neuropathy.
Diamyd Medical has valued Nurel at US$1.5 million. Nurel shareholders will receive a total of 223,208 Diamyd B shares. This reflects an assumed Diamyd B share value of SEK 55, or approximately a 15% premium above the November 21, 2005 closing price. In addition, the Company will issue another additional 110,000 Diamyd shares against convertible loans used previously to finance Nurel. In total this represents a dilution of about 4% to Diamyd shareholders. This merger will create strong synergies between Diamyd Medical and Nurel, while having little effect on Diamyd's financial position and burn rate.
"Diamyd Medical and Nurel are a natural strategic fit," said Anders Essen-Moller, Diamyd president and chief executive officer. "The combination of our businesses is extremely compelling for today's global biotechnology landscape and is consistent with Diamyd's strategy to increase its U.S. presence." Anders Essen-Moller continues, "Both companies have demonstrated expertise in the area of diabetes, using the GAD protein as the focal point for developing our respective therapeutic treatments. As a combined entity, Diamyd and Nurel will have a broader disease technology portfolio, thereby reducing risk through diversification."
Michael Christini, president of Nurel added, "The combined portfolios will create a strong diabetes franchise aimed not only at treating diabetes with Diamyd's GAD 65 protein therapy but also in applying Nurel's GAD gene therapy to treat diabetes complications including peripheral nerve pain. We are enthusiastic for the synergies this merger will create and look forward to advancing the combined product portfolio through the clinic in both Europe and the U.S."
Additionally, under a long-term exclusive consulting role with Diamyd Medical, Joseph C. Glorioso, Ph.D., of the University of Pittsburgh, will draw upon decades of gene therapy and HSV delivery system experience to advise Diamyd's gene delivery program on all preclinical and clinical product development matters. Dr. Glorioso is the University of Pittsburgh, McElroy Professor and Chairman of the Department of Molecular Genetics, and Director of the Pittsburgh Molecular Medicine Institute. He is also the past President of the American Society for Gene Therapy and the founding U.S. editor of the journal Gene Therapy, a Nature Publishing Group publication.
"Having worked in the gene delivery field for more than 20 years, I am excited to become part of a company that will provide a unique understanding of the underlying biology and therapeutic potential for Nurel's GAD technologies," commented Joseph Glorioso, Ph.D. "We believe that the combined Diamyd-Nurel portfolio will have numerous applications, well beyond diabetes and pain therapies, and I personally look forward to being a very integral member of the Diamyd team."
Currently, there is a major unmet need for a drug to treat chronic pain in patients suffering from diabetic neuropathy and spinal injury pain, and cancer pain. Preclinical studies show efficacy in industry-accepted animal models, and Nurel plans to enter into Phase I clinical trials within the next 18 months.
Nurel has identified two candidate molecules for the treatment of chronic pain: (1) GAD for treatment of chronic pain due to diabetes, and spinal cord injury; and (2) Enkephalin for cancer pain. These molecules will be delivered to patients with Nurel's proprietary gene delivery system, for which an extensive intellectual property portfolio has been licensed from the University of Pittsburgh.
Nurel has previously received convertible debt funding from Pittsburgh-based investment groups including UPMC Health Ventures, a venture fund owned by UPMC, the premier health system in Western Pennsylvania, USA. Nurel has also recently received convertible debt funding from Innovation Works, an economic development organization in Western Pennsylvania and has also received extensive company assistance from the Pittsburgh Life Sciences Greenhouse, a Western Pennsylvania public/private partnership that invests in and supports the growth of life sciences companies in the areas of: bioinformatics; bionanotechnology; diagnostics; medical devices; medical robotics; therapeutics; and tools and services.
Additional funding for Nurel's product portfolio was committed by the U.S. National Institutes of Health in the form of approximately $1.4 million in Federal grants to support GMP manufacturing and Phase 1 trials for NC3, a Nurel cancer product that targets the uniformly fatal disease Glioblastoma Multiforme. The first clinical trial for NC3 will be run at UPMC under a University of Pittsburgh IND and is anticipated to begin in early 2007.
The Diamyd Medical headquarters will remain in Stockholm, Sweden. Michael Christini, current President of Nurel, and a seasoned biotechnology industry executive and former practicing attorney with the U.S. National Institutes of Health, the U.S. Federal Trade Commission, and Cooley Godward LLP, a renowned U.S. biotechnology law firm, has entered a long-term employment contract as President of the Diamyd USA office in Pittsburgh, PA.
About Nurel Therapeutics
In 2003, Michael Christini and Joseph Glorioso founded Nurel, a biotherapeutic company that has developed an innovative new gene therapy platform that can be outlicensed for delivery of therapeutic molecules for a large variety of diseases. Nurel is pursuing development of proprietary therapeutics focused on treating pain including neuropathic pain that results from nerve damage due to diabetes or spinal cord injury and cancer pain; preventing nerve damage by protecting nerve fibers from the long term affects of diabetes, and an innovative therapy to treat glioblastoma and other cancers. Nurel's business model is based on out sourcing, similar to Diamyd. Therefore, very few persons are employed at Nurel.
Nurel is a specialty biotechnology company that is developing unique products to treat and manage pain and peripheral nerve damage. The Company's products use a proprietary drug-delivery technology derived from an engineered herpes simplex virus that provides gene-based medicine in a safe and effective manner. These products are designed to deliver therapeutic proteins for months following a single local injection into the peripheral nervous system.
Nurel's lead product is a novel gene-based therapeutic to provide pain relief following a single, local injection. The Company's first products, NG2 (HSV-GAD) and NPE2 (HSV-enkephalin) deliver therapeutic proteins to the peripheral nerve cells and effectively reduces pain in industry-standard animal models. Clinical testing in humans suffering from chronic pain is scheduled to begin in 2007. Additional information regarding Nurel can be found at www.nureltx.com.
About Diamyd Medical
Diamyd Medical is registered on the Stockholm Stock Exchange O List (OMX:DIAMB) and conducts therapeutic development based on the GAD65 (glutamic acid decarboxylase) technology platform. GAD65 is an enzyme that converts the excitatory neurotransmittor glutamate to the inhibitory transmittor GABA. In this context GAD65 may have an important role in CNS-related disease states. GAD65 is also a target pancreatic beta cell autoantigen in autoimmune diabetes, such autoimmunity leading to development of insulin-dependence. Diamyd Medical's furthest developed project is Diamyd, which is currently employed in three ongoing clinical trials of both Type 2 and Type 1 diabetes.
Diamyd Medical AB (publ). Linnegatan 89 B, SE-115 23 Stockholm, Sweden. Tel: 08-661 00 26, fax: 08-661 63 68 or email: info@diamyd.com. Corp ID: 556530-1420.
This information includes statements concerning historical, present and forward-looking items and is to the "best of knowledge" of the management of Diamyd Medical and the actual status and results achieved by the Company may differ materially from these statements. The Company assumes no obligation to update these statements to reflect actual results, changes in assumptions or changes in other factors affecting such statements. The Company's Press Releases, Quarterly Reports and Annual Reports ("Information") are translations from the Swedish originals. No guarantees are made that the translation is free from errors.