Quarterly report, Stockholm, July 1, 2009
Third quarter report for Diamyd Medical AB (publ), fiscal year 2008/2009
(www.omxgroup.com ticker: DIAM B; www.otcqx.com ticker: DMYDY)
March 1, 2009 - May 31, 2009
• The Swedish Medical Products Agency approved a study with the Diamyd® vaccine
for prevention of type 1 diabetes from manifesting in children at high risk of
developing the disease
• Study on Diamyd® published in Diabetologia, Europe's leading scientific
diabetes journal
• Half of the patients included in European Phase III study of the Diamyd®
diabetes vaccine
• Diamyd Medical licensed the rights for therapeutic use of endomorphine, a
substance that can be used to relieve pain, for instance diabetes pain
• Subscription of shares from the exercise of subscription warrants DIAM TO 2B
from March 16 to April 17, 2009, gave MSEK 28 in capital
• The FDA approved the inclusion of children from age 10 in an American Phase
III study with the Diamyd® diabetes vaccine (after reporting period)
• The first children were vaccinated in a prevention study of Diamyd® for the
prevention of type 1 diabetes (after reporting period)
• Group net sales for the third quarter were kSEK 211 (128)
• The net loss for the third quarter was kSEK -26,226 (-9,953)
• Group liquid assets amounted to kSEK 54,430 (96,099)
• Earnings per share after dilution for the third quarter were SEK -2.4 (-1.0)
September 1, 2008 - May 31, 2009
• Group net sales for the period amounted to kSEK 1,077 (959)
• The net loss for the period was kSEK -52,031 (-43,617)
• Earnings per share after dilution were SEK -4.8 (-4.3) for the period
CEO COMMENTS
Diamyd® in groundbreaking diabetes prevention study
I hope no one has missed that the first children have now been vaccinated with
Diamyd® or placebo in a prevention study approved in March by the Swedish
Medical Products Agency. The study is led by Helena Elding Larsson, a
pediatrician at the UMAS university hospital in Malmö. The study's objective is
to evaluate whether vaccination with Diamyd® can prevent or delay the
development of type 1 diabetes in children at high risk. It is gratifying to
state that if the Diamyd® vaccine is able to prevent or delay this extremely
serious disease, which primarily strikes children and adolescents, we may be on
the threshold of a medical breakthrough.
Intensive work continues to recruit patients to our two Phase III studies in
Europe and the US. The studies each contain 320 children and adolescents with
recent-onset type 1 diabetes. On June 8 we announced FDA approval to lower the
age to include children from age 10 in the US study as well. This allows us to
accelerate patient recruitment in the US, and we're working intensively to
contract more US pediatric clinics to the study.
Diabetologia, Europe's leading scientific diabetes journal published an article
on April 30 that contains study results demonstrating that the Diamyd® vaccine
reduces the risk that patients with LADA (Latent Autoimmune Diabetes in Adults)
will require treatment with insulin even after five years.
During the period Diamyd Medical acquired an exclusive license for a new
endomorphine technology that is indicated for treatment of neuropathic pain
that occurs in diabetes, among others. The acquisition is a strategically
important contribution to our pain portfolio, and it increases our potential
for successful product development in the area. Financing is high on the agenda
and we're currently working with several projects to ensure business financing.
The strategy includes several alternatives, including out-licensing, structure
deals and capital market transactions. The projects are dependent of each other
and we will decide on and implement the projects that will best benefit
Diamyd's continued development as a diabetes company.
There is a lot of enthusiasm about the Diamyd® vaccine. This was confirmed at
the American Diabetes Association's annual conference in New Orleans, where our
participation was met with exceptional interest from doctors and scientists
from around the world. Diamyd's research was also mentioned by several
independent leading diabetes researchers in conference lectures.
I'm very satisfied with what our employees have achieved during this period,
and I am confidently looking forward to fulfilling the recruitment of our
registration studies in the US and Europe.
Elisabeth Lindner, President and CEO, Diamyd Medical AB
SIGNIFICANT EVENTS DURING THE PERIOD
The Swedish Medical Products Agency approved a study with the Diamyd® vaccine
to prevent type 1 diabetes. The study includes 50 children age four and up with
a confirmed high risk of developing type 1 diabetes. The purpose of the study
is to evaluate whether the Diamyd® vaccine can interrupt the course of the
disease and prevent it from manifesting. The study is led by Helena Elding
Larsson, a pediatrician at the UMAS university hospital in Malmö, Sweden.
Diabetologia, Europe's leading scientific diabetes journal, published study
with Diamyd®. The article describes the company's Phase II study of 47 LADA
patients and demonstrates that the Diamyd® vaccine reduces the risk that
patients will become insulin dependent, even after five years.
More than half of patients included in European Phase III study of the Diamyd®
diabetes vaccine. In mid-May, the company announced that 166 of a total of 320
patients in Europe have been treated with the Diamyd® diabetes vaccine or a
placebo. Discussions are ongoing with the relevant regulatory agencies
regarding how the brisk pace of recruitment in Europe can be utilized to
promote recruitment to Diamyd's global Phase III program.
Diamyd Medical licensed the rights for therapeutic use of endomorphine, a
substance that can be used to relieve pain, for instance diabetes pain. The
company acquired an exclusive license for a new endomorphine technology,
therefore completing its pain portfolio with products that include all three
primary pain receptors.
Shares from exercise of subscription warrants DIAM TO 2B from March 16 to April
17, 2009 were subscribed for. The warrants that accompanied each newly issued
share from the directed placement of spring 2008 were listed for trading with
the First North marketplace as of June 10, 2008, and were traded through April
8, 2009. The subscription period was from March 16 until April 17, 2009. A
total of 280,902 new shares were subscribed for, resulting in MSEK 28.1 in
additional capital.
Diamyd Medical employees granted options in a new employee option program. The
new option program adopted by the annual meeting of shareholders on December
11, 2008 means that employees in the Diamyd group were granted new employee
options as of April 1, 2009. A total of 158,400 options were granted to
employees. Each option grants the holder the right to subscribe for one class-B
share at a specified point of time. The subscription price is SEK 66, and the
estimated cost for the entire warrant program, periodized over a three-year
period, is SEK 4.8 million. The expense is charged to the income statement.
Social security contributions are additional and are recalculated on each
balance sheet date and periodized correspondingly over a three-year period.
Further information about the terms and financial effects are described in note
OTHER SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
The FDA approved inclusion of children from age 10 in an American Phase III
study of the Diamyd® diabetes vaccine. The approval means patient recruitment
in the US can be accelerated. Diamyd Medical will now increase the number of
American pediatric clinics in the study as the ethics committees give their
approvals in the US.
The first children were vaccinated in a type 1 diabetes prevention study with
Diamyd®. The study's objective is to evaluate whether vaccination with Diamyd®
can prevent or delay the development of type 1 diabetes in children at high
risk. This is the first test ever of preventive vaccination with Diamyd® for
this chronic disease. So far three children have been treated with two
injections of Diamyd® or placebo (non-active medication). The study is led by
Helena Elding Larsson, a pediatrician at the UMAS university hospital in Malmö,
Sweden.
