Financial Statement 14/15

September 2014 – August 2015, Diamyd Medical AB (publ), Fiscal year 2014/2015
Reporting period, June 1, 2015 – August 31, 2015

  · Net result amounted to MSEK -4.2 (-3.3)
  · Net result per share amounted to SEK -0.2 (-0.1)
  · Cash flow from operating activities amounted to MSEK -4.1 (-3.2)
  · Liquid assets and short term investments amounted at the end of the period
to MSEK 29.7 (35.7)

Full year, September 1, 2014 – August 31, 2015

  · Net result amounted to MSEK -21.4 (-16.0)
  · Result per share amounted to SEK -1.0 (-0.8)
  · Cash flow from operating activities amounted to MSEK -18.6 (-16.7)

Significant events during the reporting period

  · New Diamyd Medical-licensed patent was issued
  · Diamyd Medical’s associated company Cellaviva launched its service for
private family saving of stem cells
  · Diamyd Medical licensed candidate drug for diabetes and gluten intolerance

CEO comments
In recent years, Diamyd Medical has undergone a transition from being one
company with one key development project into one company with several projects.
Our in-licensed technologies for GAD, GABA and Gliadin are all, both
individually and in combination, particularly relevant for driving us toward the
vision – a cure for type 1 diabetes. In passing, our patent portfolio has also
been developed to become relevant for other disorders than type 1 diabetes, such
as gluten intolerance, type 2 diabetes, metabolic syndrome and, perhaps,
autoimmune diseases in general.

It is becoming increasingly clear that GABA, best known as an inhibitory
neurotransmitter, also plays a key role vis-à-vis metabolism and hormonal
regulation. Our GABA patent portfolio, which comprises patents and patent
applications in-licensed from the University of California, Los Angeles (UCLA),
was supplemented during the year with our own preliminary GABA-related patent
applications. We were extremely pleased when a patent protecting the use of the
combination of GABA and preproinsulin or fragments thereof, in other words parts
of the insulin molecule, was approved during the year. This combination has
demonstrated substantially improved blood sugar regulation in animal models.
Similarly good results have been reached in animal models with the combination
of GABA and our in-licensed autoantigen GAD, which has also demonstrated a
significant effect in certain sub-groups of patients in a European Phase III
trial when used alone. Is the conclusion that autoimmune disorders in general
can be improved through a combination treatment that includes GABA together with
relevant autoantigens?

That GAD is one of the most important autoantigens with regard to autoimmune
diabetes has been established for a long time. Nonetheless, a new patent was
approved during the year that protects the use of GAD for, inter alia,
autoimmune diabetes until the beginning of 2032. Six different trials are
currently ongoing for the GAD-based diabetes vaccine Diamyd®. The trials should
be viewed as pilot trials. More than 1,000 patients have now participated in
various trials with the diabetes vaccine Diamyd®, which have contributed to our
important database with good safety data. GAD is required to produce GABA
through an enzymatic pathway. Our molecules are related to each other.

A third area – gluten intolerance – is also related to type 1 diabetes. The
genetic disposition at greatest risk for type 1 diabetes is also that with the
highest risk for gluten intolerance. A gluten-free diet and treatment with the
gluten protein Gliadin and Gliadin derivatives have demonstrated positive
results in animal models for diabetes and gluten intolerance. For this reason,
we recently licensed a new patent that protects the use of Gliadin to prevent or
treat type 1 diabetes, and submitted a preliminary patent application as
protection for GABA in combination with Gliadin to cure gluten intolerance.

Diamyd Medical is involved in the stem cell field, primarily through our 39
percent holding in the cord blood banking company Cellaviva. We are open to new
opportunities in the area, since we believe that stem cell technology could
become extremely important to treat genetic disorders and autoimmune diseases as
well as some congenital conditions such as spinal cord injuries, where stem
cells can replace lost tissue from the donor or close relatives, such as
siblings.

New fiscal year from September 1. Interest from Big Pharma. New investigator
-financed studies are under discussion. The results from the first pilot trial
with ibuprofen, vitamin D and GAD are expected to be available this calendar
quarter.

Thank you for your interest and support in the fight against diabetes!

Stockholm, October 14, 2015

Anders Essen-Möller, President and CEO Diamyd Medical AB (publ)

Significant events during the reporting period
June 1, 2015 – August 31, 2015

New Diamyd Medical-licensed patent issued
Diamyd Medical announced that the University of California, Los Angeles, UCLA,
had been granted a key patent for a combo treatment for type 1 diabetes with
GABA and preproinsulin or an immunogenic fragment thereof. Immunogenic fragments
include C-peptide, proinsulin and other insulin molecules. This adds to Diamyd
Medical’s patent estate of exclusively licensed intellectual property using GABA
for treatment and interception of type 1 diabetes and inflammatory diseases
including type 2 diabetes, metabolic syndrome and rheumatoid arthritis. The
Company also exclusively licenses UCLA patents for GAD65 (a major autoantigen in
type 1 diabetes) for which the last patent expires 2032.

Diamyd Medical’s associated company Cellaviva launched service for private
family saving of stem cells
Diamyd Medical’s associated company Cellaviva AB launched its service in which
expecting parents in Sweden can save stem cells from their newborn child. Stem
cells from the baby’s umbilical cord are saved and stored for at least 20 years
in Cellaviva’s biobank.

Diamyd Medical licensed candidate drug for diabetes and gluten intolerance
Diamyd Medical entered into an exclusive license agreement for using the gluten
protein Gliadin for the treatment and prevention of type 1 diabetes. Diamyd
Medical aims at evaluating combination regimens of Gliadin with compounds and
antigens, such as for example GABA and GAD, for shutting off the inflammatory
component in type 1 diabetes, gluten intolerance and other inflammatory
diseases, for which preliminary patent applications have been filed. The world
market for a successful new drug for treatment and prevention of autoimmune
diabetes and gluten intolerance (celiac disease) is considered to be several
billion US dollars.

Antigen Based Therapy (ABT) and combination trials

Type 1 diabetes is a devastating disease which requires daily treatment with
insulin to sustain life. The importance of finding a cure should not be
underestimated. The GAD-based diabetes vaccine Diamyd® is considered to be the
furthest developed Antigen Based Therapy (ABT) in the world for treating
autoimmune diabetes. Diamyd® has been used in clinical studies with more than
1,000 patients and has shown a good safety profile. In a European Phase III
trial Diamyd® showed good clinical effect in several subgroups, and a limited
overall 16% efficacy (p=0.10) in preserving endogenous insulin secretion.
Subsequent development is focused on combination trials to enhance efficacy.
Diamyd® is easy to administer in any clinical setting. The potential annual
market is estimated to several billion dollars per year.

Six researcher initiated clinical trials are ongoing combining Diamyd® with
various other immunomodulatory compounds; etanercept, ibuprofen, vitamin D and
GABA.

  · DIABGAD- 1 – COMBINING DIAMYD® WITH IBUPROFEN AND VITAMIN D

INTERVENTION TRIAL
A placebo-controlled trial, where Diamyd® is being tested in combination with
ibuprofen and vitamin D. The trial comprises a total of 64 patients between the
ages of 10 and 18, recently diagnosed with type 1 diabetes, and will continue
for a total of 30 months. The aim of the combination treatment is to preserve
the body’s own capacity to produce insulin. The trial runs at nine clinics in
Sweden and is led by Professor Johnny Ludvigsson at Linköping University,
Sweden. 15 month results from the trial are due in the fourth quarter of 2015.

  · DIAGNODE -1 –DIAMYD® IN LYMPH GLANDS IN COMBINATION WITH VITAMIN D

INTERVENTION TRIAL
An open label trial, where Diamyd® is administered directly into lymph nodes in
combination with treatment with vitamin D. The trial comprises five patients
between the ages of 18 and 30 newly diagnosed with type 1 diabetes, and will
continue for a total of 30 months. The aim of the trial is to evaluate the
safety of the combination treatment and the effect on the immune system and the
patients’ insulin producing capacity. The trial is led by Professor Johnny
Ludvigsson at Linköping University, Sweden. The first patient was included in
the trial in February 2015.

  · GABA/ DIAMYD® – COMBINING DIAMYD® WITH GABA

INTERVENTION TRIAL
A placebo-controlled trial, where Diamyd® is being tested in combination with
GABA. The trial comprises 75 patients between the ages of 4 and 18 recently
diagnosed with type 1 diabetes, and will continue for a total of 12 months. The
aim of the combination treatment is to preserve the body’s residual capacity to
produce insulin. The trial is led by Professor Kenneth McCormick at the
University of Alabama at Birmingham, USA. The first patient was included in the
trial in March 2015.

  · EDCR IIa – COMBINING DIAMYD® WITH ETANERCEPT AND VITAMIN D

INTERVENTION TRIAL
An open label trial, where Diamyd® is combined with etanercept and vitamin D.
The trial comprises 20 patients between the ages of 8 and 18 who have been newly
diagnosed with type 1 diabetes, and will continue for a total of 30 months. The
aim of the trial is to evaluate the safety of the combination treatment and the
effect on the immune system and the patients’ insulin producing capacity. The
trial is led by Professor Johnny Ludvigsson at Linköping University, Sweden. The
first patient was included in May 2015.

  · DiAPREV-IT 1– DIAMYD®

PREVENTION TRIAL
A placebo-controlled trial, where Diamyd® is being tested in children at high
risk of developing type 1 diabetes, meaning that they have been found to have an
ongoing autoimmune process but do not yet have any clinical symptoms of
diabetes. A total of 50 participants from the age of four have been enrolled in
the trial, which will last for five years. The aim of the trial is to evaluate
whether Diamyd® can delay or prevent the participants from presenting with type
1 diabetes. The trial is led by Dr. Helena Elding Larsson at Lund University,
Sweden. Five year results are expected at the end of 2016.

  · DiAPREV-IT 2 – COMBINING DIAMYD® WITH VITAMIN D

PREVENTION TRIAL
A placebo-controlled trial, where Diamyd® is being tested in combination with
vitamin D in children at high risk of developing type 1 diabetes, meaning that
they have been found to have an ongoing autoimmune process but do not yet have
any clinical symptoms of diabetes. A total of 80 participants between the ages
of 4 and 18 will be enrolled in the trial, which will last for five years. The
aim of the trial is to evaluate whether Diamyd® can delay or prevent the
participants from presenting with type 1 diabetes. The trial is led by Dr.
Helena Elding Larsson at Lund University, Sweden. The first patient was included
in March 2015.

*** To read the complete report, please see attached pdf, or visit
www.diamyd.com ***
For more information please contact:
Anders Essen-Möller, President and CEO, phone: +46 70 55 10 679
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

Note: This document has been prepared in both Swedish and English. The Swedish
version shall govern in case of differences between the two documents. The
document contains certain statements about the Company’s operating environment
and future performance. These statements should only be regarded as reflective
of prevailing interpretations. No guarantees can be made that these statements
are free from errors.