Diamyd Medical plans first interim report from the study DIAGNODE-1 where the diabetes vaccine Diamyd® is administered directly into lymph nodes

Diamyd Medical (Nasdaq Stockholm First North, Ticker: DMYD B) today announced in
its first quarterly report for the fiscal year 2015/2016 that a first six month
interim report for DIAGNODE-1, a clinical pilot study where the diabetes vaccine
Diamyd® is administered directly into the lymph node, is intended to be
presented during the first quarter of 2016. The study is open labeled, meaning
not placebo-controlled. Professor Johnny Ludvigsson, Linköping University, is
principal investigator and sponsor of the study. The report also announced that
pre-clinical testing is ongoing to produce antigen presenting cells with the aim
to be used in cell therapy treatment.
Moreover, the CEO's comments in today's quarterly report reads as follows.

We take great pleasure in reporting that Diamyd Medical continues to strengthen
its position as a world leader in the development of Antigen Based Therapy for
type 1 diabetes. A positive trend for the Diamyd® therapy could be reported from
the end of the first 15-month period of the ongoing 30-month DIABGAD study.
Limited six-month findings from the EDCR study will soon be available, as well
as limited six-month findings from the DIAGNODE study. Particularly pleasing is
the growing interest shown by the pharmaceutical industry in our approach to
combining GABA with antigen-based therapy for autoimmune diseases, not limited
to type 1 diabetes, and for certain inflammatory disorders.

A complete cure for type 1 diabetes could be expected to include: A)
manipulation of the immune response to facilitate susceptibility to tolerance
induction; B) introduction of immunological tolerance to the specific antigens
exposed to the autoimmune attack, and C) increasing the functional beta cell
mass to enable sufficient endogenous insulin secretion.

A possible scenario is that, while several companies may develop A and C
components, Diamyd Medical will be first to market with a B component, and then
continue to further improve on its antigen-specific therapy.

We are very excited about being the leading company in terms of component B
development, i.e. the induction of tolerance to specific beta cell antigens.
Several clinical trials have been carried out with GAD65 as the beta cell
antigen. In a Phase III trial, the diabetes vaccine Diamyd® (GAD in alum)
demonstrated 16 percent (p=0.1) higher efficacy than a placebo in terms of the
ability to produce insulin after 15 months. Diamyd® has demonstrated a good
safety profile in trials with more than 1,000 patients.

We believe that our B medication component (the diabetes vaccine Diamyd®) can be
granted market approval as soon as the tolerance-inducing effect of the diabetes
vaccine can be enhanced, preferably through a combination with an existing and
market-aproved A component. Think cancer – a combination of medications usually
provides the best treatment outcomes.

There is a steadily growing stream of possible A and C medications that through
non-specific mechanisms could enhance the tolerance-inducing ability of antigen
-specific therapy for type 1 diabetes. Most of these could in principle be used
in combination with the diabetes vaccine Diamyd®. Examples of such molecules
include GLP-1 analogues, DPP4 inhibitors, metformin, granulocyte colony
stimulating factor (GCSF), antithymocyte globulin (ATG), abatacept, alefacept,
demethylation agents, the IL-10 cytokine, ustekinumab (Stelara) and antibodies
against T and B blood cells. We have chosen to study Diamyd® in combination with
some A components, such as ibuprofen, etanercept, vitamin D and GABA (the last
-mentioned for which, as previously reported by Diamyd Medical, interesting pre
-clinical proof of concept has been shown, see the figure below).

Although our antigen-specific drug candidate, Diamyd®, is the leader in its
class, and could be approved as a separate medication in combination with a
suitable A component, a potential Diamyd 2.0 is currently under development, in
where additional antigens such as gliadin and/or proinsulin may be introduced to
broaden the patient population, in which Diamyd®, can possibly stop the
autoimmune attack on beta cells.

We are also studying the effect of various administration methods for the
diabetes vaccine Diamyd®, such as subcutaneous injection in the arm,
subcutaneous injection in the abdomen (closer to the pancreatic draining lymph
nodes) and directly into lymph nodes. Pre-clinical testing is ongoing with the
ex-vivo co-culturing of antigens and tolerant antigen-presenting cells (APCs),
with the goal of gradually injecting them back into patients (cell therapy).

Once the autoimmune attack has been overcome, the beta cell mass must be
increased so that individuals with type 1 diabetes can produce enough insulin on
their own. There are several strategies for such C components: transplantation
of insulin-producing cells combined with immunosuppression to prevent rejection;
transplantation of insulin-producing cells that are encapsulated to avoid being
recognized as foreign tissue; autologous transplantation of stem cell-derived
beta cells, and administration of beta cell regeneration components, such as
e.g. GABA molecules.

Current development pipeline - Pre-clinical proof-of-concept

Combination therapy using GABA and antigen (GAD65) SELECTED RESULTS
GABA + GAD/alum combination therapy shows significant synergistic effects on
normoglycemia in NOD mice

[image]

REFERENCES: Tian, Jide, Hoa Dang, and Daniel L. Kaufman. "Combining Antigen
-Based Therapy with GABA Treatment Synergistically Prolongs Survival of
Transplanted ß-Cells in Diabetic NOD Mice." PLoS ONE, 2011.

Current development pipeline - Pre-clinical proof-of-concept

Combination therapy using GABA and antigen (Proinsulin) SELECTED RESULTS
GABA + Proinsulin/alum combination therapy shows significant synergistic effects
on normoglycemia in NOD mice

[image]

REFERENCES: Tian, J., H. Dang, A. V. Nguyen, Z. Chen, and D. L. Kaufman.
"Combined Therapy With GABA and Proinsulin/Alum Acts Synergistically to Restore
Long-term Normoglycemia by Modulating T-Cell Autoimmunity and Promoting -Cell
Replication in Newly Diabetic NOD Mice." Diabetes, 2014, 3128-134.

A new calendar year has begun. One thing is certain – it will be an eventful
year. We are looking forward to working hard – with the goal of generating value
for our shareholders, and for those with type 1 diabetes.

About Diamyd Medical
Diamyd Medical is dedicated to finding a cure for autoimmune diabetes through
pharmaceutical development and investments in stem cell and medical technology.

Diamyd Medical develops the diabetes vaccine Diamyd®, an Antigen Based Therapy
(ABT) based on the exclusively licensed GAD-molecule. The Company’s licensed
technologies for GABA and Gliadin have also potential to become key pieces of
the puzzle of a future solution to prevent, treat or cure autoimmune diabetes,
and also certain inflammatory diseases. At this time six clinical studies are
ongoing. Diamyd Medical is one of the major shareholders in the stem cell
company Cellaviva AB, active in private family saving of stem cells from the
umbilical cord. Stem cells can be expected to be used in Personalized
Regenerative Medicine (PRM), for example for restoration of beta cell mass in
diabetes patients where the autoimmune component of the disease has been
arrested by ABT.

Diamyd Medical’s B-share is traded on Nasdaq Stockholm First North under the
ticker DMYD B. Remium Nordic AB is the Company’s Certified Adviser.
For further information, please contact:
Anders Essen-Möller, President and CEO
Phone: +46 70 55 10 679. E-mail: anders.essen-moller@diamyd.com
Diamyd Medical AB (publ)
Kungsgatan 29, SE-111 56 Stockholm, Sweden. Phone: +46 8 661 00 26, Fax: +46 8
661 63 68
E-mail: info@diamyd.com. Reg. no.: 556242-3797. Website: www.diamyd.com.