STOCKHOLM, Sweden, Dec. 13, 2005 (PRIMEZONE) -- Diamyd Medical AB (OMX:DIAMB) emerged as a global biotechnology company as shareholders approved the acquisition of Nurel Therapeutics, Inc. at a General Assembly Meeting in Stockholm yesterday. The Pittsburgh, PA- based biotech adds significantly to Diamyd Medical's pipeline for diabetes which now includes both a therapeutic vaccine for autoimmune type 1 and type 2 diabetes as well as therapies for diabetic pain. The merger is expected to close on Friday, December 16.
Diamyd shareholders approved the issuance of common stock to Nurel shareholders in connection with the merger. Nurel shareholders will receive a total of about 223,208 Diamyd B shares. This reflects an assumed Diamyd B share value of SEK 55, which corresponded to a 15% premium as of the deal signature date, the 21st of November. In addition, Diamyd shareholders approved the issuance of an additional approximate 110,000 Diamyd shares against convertible loans used previously to finance Nurel, which in total represents a dilution of about 4% to Diamyd shareholders. The merger will create strong synergies between Diamyd Medical and Nurel, while having little effect on Diamyd's financial position and burn rate.
"Nurel and Diaymd Medical both work in diabetes and both have a GAD-based lead compound. We differ in that the GAD is used for two totally different and non-overlapping aspects of diabetes: (1) the treatment of the actual disease itself, and (2) the treatment of pain resulting from diabetes. The acquisition of Nurel brings a tremendous amount of synergy to the table, which makes the deal very attractive and beneficial to our shareholders," says Anders Essen-Moller, President and CEO of Diamyd Medical.
Michael Christini, president of Nurel Therapeutics noted, "This is a significant milestone for both companies. The merger creates a global biotechnology company with combined portfolios with a strong diabetes franchise aimed not only at treating diabetes but also the complications associated with the disease, including peripheral nerve pain. We are enthusiastic for the synergies this merger will create and look forward to advancing the product portfolio through the clinic in both Europe and the U.S."
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 received convertible debt funding from Innovation Works, an economic development organization in Western Pennsylvania and from the Pittsburgh Life Sciences Greenhouse, a Western Pennsylvania public/private partnership that invests in and supports the growth of life sciences companies.
"It's gratifying to see the cutting edge technologies and treatments developed at the University of Pittsburgh find their way into the mainstream," said Chuck Bogosta, Managing Director of the University of Pittsburgh Medical Center's Strategic Business Initiatives. "UPMC is pleased to have been an early investor in Nurel. The treatments developed at the university will benefit diabetes patients everywhere, and we look forward to the new venture flourishing. We are particularly happy that Diamyd has chosen to open its North American headquarters in the Pittsburgh region because we believe strongly that it is an area that has the medical and entrepreneurial resources needed to help Diamyd's enterprises continue to grow."
Diamyd Medical is focused on developing treatments for diabetes, both type 1 and type 2, via GAD protein therapy. Its lead drug candidate, Diamyd(tm), is designed to reduce the need of insulin injections and prevent the destruction of beta cells. Furthermore, it may allow for regeneration of beta cells in a non-autoimmune environment, thus setting the stage for a cure of the disease. The Company is conducting two clinical trials concurrently. The first trial is a double blind Phase IIb study in 70 children and adolescents; results will be announced in about 8 months. The second study currently underway is a Phase II/III study conducted in 160 adult type 2 diabetes patients with autoantibodies to beta cells; results will be announced 10 months thereafter. Both studies are running at 25 clinics in Sweden and all patients are included and treated. The two studies were initiated after positive results in a first double blind dose finding Phase II study in 47 type 2 diabetes patients.
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 file an IND in about 12 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 Nerve-Targeted Gene Delivery System, for which an extensive intellectual property portfolio has been licensed from the University of Pittsburgh.
In addition to the pipeline of pain products, Nurel's proprietary Nerve-Targeted Gene Delivery System for GAD may potentially be used in several other GAD-related disorders such as schizophrenia, anorexia, ALS, Parkinson's and epilepsy. This makes it possible to fully explore the potential of Diamyd Medical's exclusive license to the recombinant GAD65-molecule.
Nurel's Nerve-Targeted Gene Delivery System can also be used for targeted deliveries of third party molecules. Nurel is discussing outlicensing deals with such parties, just as Diamyd is discussing outlicensing of its GAD65 technology with Neurologix Inc for Parkinson's.
One early use for Nurel's Nerve-Targeted Gene Delivery System is in the treatment of gliablastoma, a usually fatal form of brain cancer. Funding for this project 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 multi-gene cancer product. Filing of an IND for first clinical trials for NC3 is anticipated within the next 12 months.
About Nurel Therapeutics
Nurel therapeutics has developed an innovative new Nerve-Targeted Gene Delivery System that is specifically designed for delivery of therapeutic molecules to the nerve system 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. The Company's first products, NG2 (HSV-GAD) and NPE2 (HSV-enkephalin), deliver therapeutic proteins to the peripheral nerve cells and effectively reduce 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). An application has been submitted to trade the shares in the U.S. via a Level 1 ADR Program. The Company conducts therapeutic development based on its GAD (glutamic acid decarboxylase) technology platform. GAD is an enzyme that converts the excitatory neurotransmittor glutamate to the inhibitory transmittor GABA. In this context GAD may have an important role in CNS-related disease states. GAD 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 two ongoing clinical trials of both Type 2 and Type 1 diabetes which are follow-ons of first successful dose finding Phase II trial which is now in an open follow up phase.
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.