Quarterly Report II 23/24

September 2023 – February 2024, Diamyd Medical AB (publ), Fiscal year 2023/2024

Comments by CEO Ulf Hannelius

Dear Shareholders,

The recent granting of Fast Track designation by the U.S. FDA for our flagship product Diamyd^® is a milestone that both accelerates the path to bringing our innovative treatment to patients with Type 1 Diabetes and validates the urgent need for our therapy. This status enhances our ability to work closely with the FDA to expedite the review process, bringing us closer to making a tangible impact on the lives of those diagnosed with Type 1 Diabetes.

In the wake of receiving the Fast Track designation for Diamyd^® and the very positive momentum in the field, the decision to launch a rights issue is a forward-looking move designed to harmonize with our anticipated milestones and the existing warrant structure. The rights issue of SEK 114 million is relatively small compared to our market value, it is without underwriters and associated costs, and it provides the opportunity to lay a robust foundation for long-term financial planning.

The precision medicine Phase 3 trial DIAGNODE-3 remains a cornerstone of our efforts to advance the field of Type 1 Diabetes treatment through antigen-specific immunotherapy. We are poised for an interim analysis this summer based on approximately 70 patients and their progression in C-peptide, the marker for endogenous insulin producing capacity, at 6 months. The analysis is blinded to not interfere with the pivotal nature of the trial but will provide information about the progression of the trial and thereby the likelihood of the trial meeting its endpoints. In parallel, we anticipate reaching another significant milestone with 100 patients randomized this April and associated milestone payments from our partnership with JDRF. A few days ago, the clinical team also reported that we have now screened more than 300 patients, which underlines the operational momentum in the study.

The collaboration with JDRF not only underscores our commitment to pioneering innovative treatments but also highlights the collective drive to address the complexities of Type 1 Diabetes.

Last week I had the opportunity and privilege to present new genetic data from DIAGNODE-3 as well as how they align with data from our previous trials at the Antigen Specific Immune Tolerance Summit in Boston. The presentation shed light on the nuanced relationship between genetics, age, gender, and the incidence of Type 1 Diabetes. These insights are vital, as they elucidate the heterogeneous nature of Type 1 Diabetes and the rationale behind the findings from our previous phase 3 program with Diamyd^® and why our current targeted approach has a high likelihood of success. It reinforces the imperative for a precision medicine approach, particularly with antigen-specific immunotherapy, which aims to specifically reprogram the immune system.

Furthermore, the progress at our biomanufacturing facility in Umeå is another key pillar of our strategy. In parallel to the work aiming to have the biomanufacturing facility GMP ready during this year, the team is actively working with engineering runs, technical batches that are critical before transitioning into manufacturing of clinical batches.  The expansion of our team, where several positions are currently advertised, is also central to scaling up our production capabilities, ensuring that we can meet the future demand for Diamyd^® efficiently and effectively.

The last months have been marked by noteworthy achievements and strategic decisions that pave the way for an exciting future. As CEO, I am profoundly optimistic about what lies ahead for Diamyd Medical while also humble in the face of the operational challenges. I am deeply grateful for the continued support of our shareholders, the dedication of our team, and the collaboration of our partners. Diamyd Medical stands at a pivotal juncture, marked by significant regulatory, scientific and operational advancements.

Together, we are making strides towards transforming the landscape of Type 1 Diabetes treatment.

Stockholm, March 27, 2024  
Ulf Hannelius, President and CEO

The reporting period in summary

September 1, 2023 – February 29, 2024

• Operating income: MSEK 2.1 (2.6) second quarter: MSEK 1.2 (1.6)

• Net result: MSEK -62.0 (-57.9), second quarter: MSEK -29.3 (-25.0)
• Result per share: SEK -0.7 (-0.8), second quarter: SEK -0.3 (-0.3)
• Cash flow from operating activities: MSEK -63.2 (-52.4), second quarter: MSEK -35.4 (-25.4)
• Cash and short-term investments at February 29, 2024: MSEK 137.1 (101.6)

Significant events during the second quarter, December 1, 2023 – February 29, 2024

• Diamyd Medical received FDA Fast Track designation for Diamyd^®

Other events during the second quarter

• Diamyd Medical announced presentation of new genetic data at ASIT summit in Boston, MA 
• Publication in Diabetologia highlighted AI's potential for Type 1 Diabetes screening
• In-depth analysis of Diamyd Phase II trial further supported value of preserved insulin secretion
• Diamyd Medical gained market research findings to guide U.S. commercial strategy
• Diamyd^® Phase 3 trial key interim analysis was announced to be presented in July
• Precision Medicine patent for the prevention and treatment of autoimmune diabetes was granted in South Korea

Significant events after the second quarter

• The Board resolved on a rights issue of approximately SEK 114 million

INVITATION TO PRESENTATION OF THE QUARTERLY REPORT 2 2023/2024
Diamyd Medical’s CEO Ulf Hannelius will be interviewed in connection to the Company’s second quarterly report for the financial year 2023-24, published on March 27. 

The presentation will be held in Swedish
When: Wednesday March 27 at 12:00 pm CEST

Live webcast: https://www.youtube.com/watch?v=of5wTS4ydFo.

The YouTube chat is open for questions.
The broadcast is produced by Direkt Studios, an independent part of the editorial staff of the news agency Direkt.
The presentation will also be made available on www.diamyd.com 

About Diamyd Medical
Diamyd Medical develops precision medicine therapies for the prevention and treatment of Type 1 Diabetes and LADA (Latent Autoimmune Diabetes in Adults). Diamyd^® is an antigen-specific immunomodulatory therapeutic for the preservation of endogenous insulin production that has been granted Orphan Drug Designation in the U.S. as well as Fast Track Designation (Feb-2024) by the U.S. FDA. DIAGNODE-3, a confirmatory Phase III trial is actively recruting patients with recent-onset Type 1 Diabetes in eight European countries and in the US. Significant results have previously been shown in a large genetically predefined patient group - in a large-scale meta-analysis as well as in the Company’s prospective European Phase IIb trial, where Diamyd^® was administered directly into a superficial lymph node in children and young adults with recently diagnosed Type 1 Diabetes. Injections into a superficial lymphnode can be performed in minutes and is intended to optimize the immune response. A biomanufacturing facility is under development in Umeå, Sweden, for the manufacture of recombinant GAD65 protein, the active ingredient in the antigen-specific immunotherapy Diamyd^®. Diamyd Medical also develops the GABA-based investigational drug Remygen^® as a component in the treatments of metabolic diseases. Diamyd Medical is a major shareholder in the stem cell company NextCell Pharma AB as well as in the artificial intelligence company MainlyAI AB.

.Diamyd Medical’s B-share is traded on Nasdaq First North Growth Market under the ticker DMYD B. FNCA Sweden AB is the Company’s Certified Adviser.

Further information is available on https://www.diamyd.com