Quarterly Report II 13/14

September 2013 – February 2014, Diamyd Medical AB (publ), Fiscal year 2013/2014
Reporting period December 1, 2013 – February 28, 2014

  · Net sales amounted to MSEK 0.1 (0)
  · Loss before tax amounted to MSEK -4.4 (-5,3)
  · Liquid assets and short term investments amounted to MSEK 56 (15) as of
February 28, 2014

First half year September 1, 2013 – February 28, 2014

  · Net sales amounted to MSEK 0.3 (0)
  · Loss before tax amounted to MSEK -9.2 (-4.4)

Significant events during the reporting period

  · More than half of the patients treated in diabetes study with the diabetes
vaccine Diamyd® in combination with vitamin D and ibuprofen
  · Diamyd Medical clarified media reports on diabetes study
  · Application to double unique prevention study with Diamyd’s diabetes vaccine
submitted to the Swedish MPA

Significant events after the reporting period

  · Diamyd Medical’s former sister company Periphagen, Inc. (former Diamyd,
Inc.) secured new financing
  · Diamyd Medical entered the stem cell field with investment in Swedish cord
blood bank

CEO comments
Recent times have been eventful for Diamyd Medical and we were able to report
two items of good news in quick succession the past week. Together with a group
of founding partners and Karolinska Institutet Holding AB, we will establish
Sweden’s first commercial stem cell bank for private family saving of umbilical
cord blood and other sources of stem cells. The intention is also to collect
stem cells from umbilical cord tissue and make these available for research
purposes, not least for research into type 1 diabetes. With the new venture
Diamyd Medical enters the expansive field of stem cells. The financial risk is
considered limited given the many examples of established private cord blood
banks in other countries. Through the initiative of a research bank, we hope to
contribute to substantial progress in the future use of stem cells in various
therapies.

At birth, there is a unique opportunity to collect young stem cells from the
umbilical cord, which are otherwise discarded. Private family saving of
umbilical cord blood has been possible in the US for more than 20 years and is
offered in most European countries, although such a service is not yet available
in Sweden. I myself investigated the possibilities when my children were born a
few years ago but it was too complicated since the only way would be for me to
personally bring the equipment necessary to the delivery room, collect the blood
and subsequently send it overseas for processing, freezing and storage since
this service didn’t exist in Sweden.

Hans-Peter Ekre, who has extensive experience and a broad network in the Swedish
life science field, will lead the project. Together with the knowledgeable and
experienced group of founding partners, as well as Karolinska Institutet Holding
AB, we are looking forward to building a professional and robust activity.

Last week, we could also report that our former colleagues at Periphagen in
Pittsburgh had secured funding for the continued development of their gene
therapy platform. Periphagen was previously part of the Diamyd Group, where it
was known as Diamyd, Inc., but was bought out by the US management in autumn
2012. I was delighted to hear that a life science fund has decided to initially
invest USD 6.5 million and we congratulate the team at Periphagen! Diamyd
Medical still has financial interests in Periphagen and these are dependent on
the continued development of the platform. Diamyd Medical’s shareholding, which
amounted to 10 percent, has been reduced as a result of the investment by the
fund, but our other financial interests in Periphagen remain and the possibility
of receiving a return on these has increased.

Diamyd Medical could receive up to USD 9 million in milestone payments to be
disbursed on the achievement of certain development targets. Furthermore, Diamyd
Medical will receive 10 percent of upfront payments and other payments that
Periphagen may receive from future partners, as well as royalties on future
sales of drugs based on the gene therapy technology. Diamyd Medical also has a
claim of USD 1 million and retains certain rights to utilize Periphagen’s
technology in the field of diabetes.

Two researcher-initiated clinical studies of our diabetes vaccine Diamyd® are
currently in progress. We expect patient enrolment to DIABGAD-1, where Diamyd®
is combined with vitamin D and ibuprofen, to be concluded before the summer,
meaning that the first results can be presented in 2015. The results of the
DiAPREV-IT prevention study are also expected in 2015. DiAPREV-IT is a
relatively small study and the research team at Lund University conducting the
study is planning to expand the number of participating children with a high
risk of presenting with type 1 diabetes. This will increase the chance of being
able to demonstrate a preventive effect of the diabetes vaccine and enhance the
scientific value of the study.

Stockholm, April 9, 2014

Peter Zerhouni
President and CEO Diamyd Medical AB (publ)

*** To read the complete report, please visit www.diamyd.com, or see attached
PDF ***
For more information please contact:
Peter Zerhouni, President and CEO Diamyd Medical AB (publ). Phone: +46 8 661 00
26
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