STOCKHOLM, Sweden, Dec. 19, 2005 (PRIMEZONE) -- Diamyd Medical AB (OMX:DIAMB) today announced that is has reached an agreement with Protein Sciences Corporation, a Meriden, CT-based biopharmaceutical service company, for production of Diamyd(tm), its lead therapeutic diabetes vaccine. Under the terms of the agreement, Protein Sciences (PSC) will produce Diamyd Medical's lead therapeutic diabetes vaccine for Phase III trials, as well as prepare to file an Investigational New Drug Application (IND) with the U.S. Food & Drug Administration (FDA). Diamyd Medical also is participating in Protein Sciences' current round of financing, with a US$3 million investment.
"By submitting an IND to the FDA in 2006, Diamyd Medical can secure the necessary supply of vaccine and commence clinical Phase III studies in the U.S. during 2007. We are extremely happy with this strategy to continue to strengthen the company's presence in the States and at the same time accelerate the development of our diabetes vaccine," said Anders Essen-Moller, President and CEO of Diamyd Medical.
Diamyd(tm) is based on the beta cell antigen GAD (Glutamic Acid Decarboxylase), which is produced through a Recombinant Protein Expression System consisting of baculovirus (an insect virus) and insect cells. Protein Sciences (PSC) specializes in and is a world leader in the development of influenza vaccines and other vaccines with insect based expression systems. PSC's cell line was recently approved by the FDA for the production of recombinant vaccines produced with insect based expression systems. Hence, PSC is a logical supplier for Diamyd Medical.
During the process of negotiating this manufacturing and development agreement, Diamyd was offered the right to participate in a Protein Sciences current financing round, in which the company plans to raise US$5.5 million. The board of Diamyd Medical believes that an investment in PSC is of strategic importance since PSC is a world leader and is specialized in vaccine production using the same method as Diamyd Medical's diabetes vaccine Diamyd(tm). Therefore, Diamyd Medical has decided to participate in the PSC promissory Series F loan with a US$3.0 million investment. The promissory note has a competitive interest rate and a premium at the date of repayment. The promissory note can be converted into PSC shares anytime that PSC receives significant new investment. PSC plans to use the capital raised to develop its own business, which also will benefit Diamyd Medical.
"Our funds will last until December 2007. The total commitment to PSC, including both the production of Diamyd(tm) and the investment in the promissory note is within our current budget, with the assumption that the promissory note is paid back in 2007. If not, Diamyd Medical's funds will last until the summer of 2007 -- after the presentation of results in August 2006 from the ongoing Phase IIb study on Type 1 diabetes and after the presentation of the ongoing Phase II/III-study on Type 2 diabetes patients in June 2007. Furthermore, the financial position of Diamyd Medical may be strengthened by approximately SEK 50 million through the conversion of an outstanding warrant program into shares in August 2006," said Anders Essen-Moller.
Daniel Adams, president and CEO of Protein Sciences, added, "We have developed a very close relationship with Diamyd Medical over the years and have great respect for their people and science. We are very intrigued by the prospects for their therapeutic Diamyd(tm) vaccine for diabetes and look forward to helping Diamyd get its product to market as quickly as possible by combining our technologies and expertise. Our relationship with Diamyd is characteristic of the future direction of Protein Sciences, where we intend to get more involved in customers' products that we believe are likely to be successful."
About Protein Sciences
Protein Sciences (PSC) is a privately held biotechnology company based in Meriden, Connecticut, USA. Its business is developing and manufacturing modern protein-based vaccines, diagnostics and therapeutics using recombinant DNA technology. A recently completed Phase II/III field trial of FluBl0k showed 100% protection against circulating and drifted strains of influenza and a more than 54% reduction in influenza-like illness compared to placebo. This makes PSC the leader in modern annual influenza vaccines and vaccines against potential pandemic influenza. PSC also has a broad portfolio of patented products in development including a second influenza vaccine, recombinant neuraminidase, that has completed Phase II(b) human clinical trials and a SARS vaccine that is scheduled to enter the clinic in 2006, and several vaccines and therapeutics being developed with customers. PSC, which was founded in 1983, has approximately 40 employees and according to the management an annual turnover of approximately $5 million per year from its service business, and according to its profit and loss statement for the last year and the last quarter. Further information about the PSC may be found on the company's web site at www.proteinsciences.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 focused on diabetes and 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 on of first successful dose finding Phase II trial which is now in an open follow-up phase. Other mainstream developments include using a proprietary Nerve-Target Delivery System to deliver GAD to treat diabetes pain and neuropathy.
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.