Diamyd Medical enters the stem cell field with investment in Swedish cord blood bank

Diamyd Medical has signed an agreement with a group of founding partners and
Karolinska Institutet Holding AB, by which Diamyd Medical agrees to invest SEK
11.5 million for the establishment of a commercial cord blood bank in Sweden for
private family saving of umbilical cord blood and other sources of stem cells.
The intention is also to collect and make available stem cells from umbilical
cord tissue for research purposes in order to advance the fields of stem cells
and regenerative medicine, including research within type 1 diabetes.
Stem cells from umbilical cord blood and other sources are subject to much
research for potential future use in a variety of ways across a broad range of
disorders. Private family cord blood banking has been available in the US for
more than 20 years and is available in most European countries, but still no
such service is on offer in Sweden.

“With this investment we establish a foothold in the expansive fields of stem
cells and regenerative medicine,” says Peter Zerhouni, President and CEO of
Diamyd Medical. “From a financial point of view the risk is limited given the
many examples of established private cord blood banks in other countries.”

The new company will be capitalized with SEK 14 million in total. Diamyd Medical
will receive preference shares corresponding to 46 percent of the new company
and have board representation. Head of the new venture will be Hans-Peter Ekre,
one of the founding partners, with prior experience as R&D director and
entrepreneur from KabiPharmacia, Astra and Karolinska Development.

“We have identified a demand for family cord blood banking in Sweden and think
the time is right to set up a company that can offer this service as well as
facilitating research in an area which holds much promise”, says Hans-Peter
Ekre. “We are convinced that the consortium we have formed with Diamyd Medical
and Karolinska Institutet Holding AB will strongly contribute to the success of
the project.”

Diamyd Medical is dedicated to find a cure for type 1 diabetes, which is one
example of a disease where autologous umbilical cord blood and stem cells are
being evaluated for clinical use, both to address the underlying autoimmune
process and to replace the lost insulin producing cells. A future treatment
could involve a combination of stem cell therapy and Diamyd Medical’s diabetes
vaccine Diamyd® that is under development.

“Autologous stem cells originating from cord blood may well become of important
value for the future treatment of many different kind of diseases, not only type
1 diabetes, but also other autoimmune diseases such as thyroiditis and Addison's
Disease as well as severe allergic conditions. Researchers will most certainly
be interested in that stem cells from the umbilical cord become available for
research,” says Åke Lernmark, Professor at Lund University and member of Diamyd
Medical’s Scientific Advisory Board.
For further information, please contact:
Peter Zerhouni, President and CEO Diamyd Medical AB
Phone: +46 8 661 00 26. E-mail: press@diamyd.com

Hans-Peter Ekre, Head of the Cord Blood Bank
Phone: +46 705 33 67 47. E-mail: hans.peter.ekre@gmail.com
About Diamyd Medical
Diamyd Medical is a Swedish diabetes company. The Company’s primary development
project consists of the GAD-based diabetes vaccine Diamyd®for the treatment and
prevention of autoimmune diabetes. Two Swedish researcher-initiated Phase II
studies with Diamyd®are ongoing. One study evaluates whether the diabetes
vaccine can prevent type 1 diabetes in children who are at high risk of
developing the disease, while the other study evaluates whether Diamyd®in
combination with vitamin D and ibuprofen can preserve the body's own ability to
regulate the blood sugar level in children and adolescents newly diagnosed with
type 1 diabetes.

In 2013 the Company concluded an exclusive licensing agreement with the
University of California in Los Angeles (UCLA) relating to a patent portfolio
for the therapeutic use of GABA (gamma-aminobutyric acid) and GABA receptor
agonists for the treatment and prevention of type 1 and type 2 diabetes and
other inflammation-related conditions, such as metabolic syndrome, rheumatoid
arthritis and allergies.

Diamyd Medical also has holdings in the gene therapy company Periphagen
Holdings, Inc. (US).

Diamyd Medical’s Series B share is traded on NASDAQ OMX First North under the
ticker DMYD B. Remium Nordic AB is the Company’s Certified Adviser. Further
information is available on the Company’s website: www.diamyd.com.

Diamyd Medical AB (publ)
Kungsgatan 29, SE-111 56 Stockholm, Sweden. Phone: +46 8 661 00 26, Fax: +46 8
661 63 68
E-mail: info@diamyd.com. Reg. no.: 556242-3797.