DIAMYD VACCINE DRUG SUBSTANCE PRODUCED - UPDATE ON DIAMYD PROGRESS Press Release, Stockholm, Sweden, October 25, 2007 - Diamyd Medical AB (www.omxgroup.com, ticker: DIAM B; www.otcqx.com, ticker DMYDY) Diamyd Medical announced today that sufficient amounts of GAD65, the active substance in the Diamyd® diabetes vaccine, for Phase III clinical trials have been produced at Protein Sciences, Meriden, CT, and sent for testing. Formulation and vialing is planned to take place in Europe in January 2008. The Company plans to file its IND with the US FDA in December. This means that approval to start the Phase III program can be granted during the 1st quarter 2008. “While being a few months delayed in our preparations to start our Phase III program, we are optimistic as sufficient amounts of GAD65 now have been produced. Although testing of the substance is ongoing, our manufacturing process has during the past four runs at scale, yielded consistent and reproducible amounts. It has been a challenge to arrive at this, but now it seems done” says Anders Essen-Moller, President of Diamyd Medical. For further information, please contact: Stockholm office Anders Essen-Möller CEO and President +46 8 661 0026 investor.relations@diamyd.com Pittsburgh office Michael Christini President +1 412 770 1310 Michael.Christini@diamyd.com Diamyd Medical AB (publ). Linnégatan 89 B, SE-115 23 Stockholm, Sweden. Tel: +46 8 661 00 26, fax: +46 8 661 63 68 or E-mail: info@diamyd.com. VATno: SE556530-142001. About Diamyd Medical Diamyd Medical is a life science company developing treatments for diabetes and its complications. The company's furthest developed project is the GAD-based drug Diamyd® for autoimmune diabetes for which Phase III studies are planned. Diamyd® has demonstrated significant and positive results in Phase II clinical trials in Sweden. GAD65, a major autoantigen in autoimmune diabetes, is the active substance in Diamyd. GAD65 is also an enzyme that converts the excitatory neurotransmitter glutamate to the inhibitory transmitter GABA. In this context, GAD may have an important role not only in diabetes but also in several central nervous system-related diseases. Diamyd Medical has an exclusive worldwide license from the University of California at Los Angeles regarding the therapeutic use of the GAD65 gene. Diamyd Medical has sublicensed its UCLA GAD Composition of Matter license to Neurologix, Inc. in Fort Lee, New Jersey for treatment of Parkinson's disease with an AAV-vector. Other projects comprise drug development within therapeutic gene transfer using the exclusively licensed and patent protected Nerve Targeted Drug Delivery System (NTDDS). The company's lead NTDDS projects include using enkephalin and GAD for chronic pain, e.g., diabetes pain or cancer pain. All projects in this field are currently in preclinical phases. Diamyd Medical has offices in Stockholm, Sweden and Pittsburgh, PA. The Diamyd Medical share is quoted on the Stockholm Nordic Exchange in Sweden (NOMX ticker: DIAM B) and on the OTCQX-list in the United States (ticker: DMYDY) administered by the Pink Sheets and the Bank of New York (PAL). Further information is available at www.diamyd.com. Disclaimer: This document contains certain "statements" relating to present understandings, future events and future performance, including statements relating to the progress, timing and completion of our research, development and clinical trials; our ability to market, commercialize and achieve market acceptance for product candidates; and our current and future strategic partner relationships. These statements can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Diamyd Medical undertakes no obligation to publicly update such statements, whether because of new information, future events or otherwise, nor does Diamyd Medical give any guarantees that the statements, given or implied, are correct. This document is a translation from the Swedish original. No guarantees are made that the translation is free from errors.