Diamyd Medical implements aggressive rights issue


Not for release, publication or distribution, directly or indirectly, in the
United States, Canada, Australia, Hong Kong, Japan, New Zealand, Singapore,
Switzerland, Singapore or South Africa.

Diamyd Medical (NASDAQ Stockholm First North, DMYD B), world leader in the
development of Antigen Based Therapy for type 1 diabetes, announced today that
its Board of Directors, with authorization from the Annual General Meeting held
on November 26, 2015, decided to offer shareholders to subscribe for new shares
at a substantial discount compared to yesterday’s market price. The offer means
that three existing shares shall entitle to subscription for one new share at
SEK 3. The subscription period is planned to commence on February 8, 2016 and
extend until February 22, 2016.
Background and reasoning
Diamyd Medical’s cash at hand is currently approximately SEK 21 million, which
with the approved budget is estimated to last until November 2016. Since the
Company is subject to a sharply increasing interest, particularly because of its
world-leading position in the Antigen Based Therapy including in combination
with GABA treatment, the Company’s Board of Directors have decided to secure
funds to accelerate development, which is expected to further strengthen the
interest of major pharmaceutical companies to enter into a license agreement
with the Company. In addition to six ongoing clinical studies with the diabetes
vaccine Diamyd®, where combinations with other substances are evaluated with the
aim of increasing the effect of the diabetes vaccine, the Company plans among
other things for a new GABA / GAD study in Sweden; preclinical studies with
different antigens and GABA in Prague; and an expansion of the ongoing DIAGNODE
study. Furthermore, a dialysis step may be added into the manufacturing process
to improve the efficacy of the diabetes vaccine in combination with GABA’s
tolerogenic nature. The Company also keeps abreast of further investments in the
stem cell company Cellaviva to promote research, including differentiating stem
cells into insulin-producing beta cells.

“We estimate that the announced offer will become beneficial for our
shareholders”, says Anders Essen-Möller, President and CEO of Diamyd Medical.
“No guarantee – this is biotech – but there are several interesting things going
on and we are delighted to offer and recommend our shareholders to participate
in this, what we consider aggressive rights issue.”

Issue terms and conditions
Holders of existing shares have preferential rights to subscribe for new shares
at a ratio determined by the number of shares owned on the record date of
February 3, 2016. Holding of Series A shares entitles to subscribe for Series A
shares and holding of Series B shares entitles to subscribe for Series B shares.
One existing share in Diamyd Medical entitles the holder to one (1) subscription
right. 3 subscription rights carries entitlement to subscription for one (1) new
share. The issue price has been set at SEK 3.00 per share. The total issue
comprises a maximum of 7 373 141 new shares, of which 319 528 Series A shares
and 7 053 613 Series B shares. The total issue proceeds at full subscription
will amount to approximately MSEK 22.1 before issue expenses. The subscription
period will extend from February 8, 2016 until February 22, 2016.

As the total issue amount is less than MEUR 2.5, no prospectus will be prepared
or registered with the Swedish Financial Supervisory Authority
(Finansinspektionen).

Shares not taken up under preferential quota (with subscription rights) will
first be offered to shareholders who have registered for subscription of shares
without preferential rights, with the shares being distributed pro rata in
relation to how many shares for which the respective shareholders have
subscribed with the support of preferential rights; further to this, the public
shall be offered to subscribe for shares without preferential rights.

Schedule for rights issue
Final day for trading in the B share with entitlement to participate in the
rights issue: February 1, 2016

First day for trading in the B share without entitlement to participate in the
rights issue: February 2, 2016

Record date for participation in the rights issue: February 3, 2016

Trading in subscription rights (for subscription of B shares): February 8 to
February 18, 2016

Trading in BTAs (interim B shares): February 8, 2016 until the issue has been
registered with the Swedish Companies Registration Office (Bolagsverket)

Subscription period for new share issue: February 8 to February 22, 2016

Important notice
In certain jurisdictions, the publication or distribution of this press release
may be subject to legal restrictions and persons in those jurisdictions where
this press release has been published or distributed should inform themselves
about and abide by such legal restrictions.

This press release may not be announced, published or distributed, directly or
indirectly, in the United States, Canada, Australia, Hong Kong, Japan, New
Zealand, Singapore, Switzerland or South Africa or any other country where such
action is wholly or partially subject to legal restrictions. Nor may the
information in this press release be forwarded, reproduced or disclosed in such
a manner that contravenes such restrictions. Failure to comply with this
instruction may result in a violation of the United States Securities Act of
1933 ("Securities Act") or laws applicable in other jurisdictions.

The subscription rights, the BTAs (interim shares) and the new shares will not
be registered in accordance with the Securities Act or any provincial act in
Canada and may not be transferred or offered for sale in the United States or
Canada or to persons resident there, or on account of such persons other than in
such exceptional cases that do not require registration in accordance with the
Securities Act or any provincial act in Canada.

About Diamyd Medical
Diamyd Medical is dedicated to finding a cure for autoimmune diabetes through
pharmaceutical development and investments in stem cell and medical technology.

Diamyd Medical develops the diabetes vaccine Diamyd®, an Antigen Based Therapy
(ABT) based on the exclusively licensed GAD-molecule. The Company’s licensed
technologies for GABA and Gliadin have also potential to become key pieces of
the puzzle of a future solution to prevent, treat or cure autoimmune diabetes,
and also certain inflammatory diseases. At this time six clinical studies are
ongoing with Diamyd®. Diamyd Medical is with its holdings of 39% one of the
major shareholders in the stem cell company Cellaviva AB. Stem cells can be
expected to be used in Personalized Regenerative Medicine (PRM), for example for
restoration of beta cell mass in diabetes patients where the autoimmune
component of the disease has been arrested. Diamyd Medical also has holdings in
the medtech company Companion Medical, Inc., San Diego, USA and in the gene
therapy company Periphagen, Inc., Pittsburgh, USA.

Diamyd Medical’s B-share is traded on Nasdaq Stockholm First North under the
ticker DMYD B. Remium Nordic AB is the Company’s Certified Adviser.
For further information, please contact:
Anders Essen-Möller, President and CEO
Phone: +46 70 55 10 679. E-mail: anders.essen-moller@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. Website: www.diamyd.com.

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