Quarterly Report III 10/11
Quarterly report, Stockholm, July 1, 2011
September 1, 2010 - May 31, 2011
Third quarter report for Diamyd Medical AB (publ.), fiscal year
2010/2011
(www.omxgroup.com ticker: DIAM B; www.otcqx.com ticker: DMYDY)
Third quarter, March 1, 2011 - May 31, 2011
· Group net sales for the third quarter were MSEK 19.5 (1.3)
· Profit before tax for the third quarter was MSEK -43.6 (-30.9)
· Earnings per share after dilution for the third quarter were SEK
-1.5 (-1.1)
Period September 1, 2010 - May 31, 2011
· Group net sales for the period was MSEK 278.5 (2.8)
· Profit before tax for the period was MSEK 128.4 (-75.3)
· The Group's liquid assets amounted to MSEK 441.5 (205.0) as of May
31, 2011
· Earnings per share after dilution for the period were SEK 4.4 (-2.8)
Significant events during the reporting period March 1, 2011 - May 31,
2011
· Diamyd results from Phase I clinical trial in cancer pain published
in Annals of Neurology
· Diamyd replaced CEO
· Diamyd reported initial results from European Phase III trial in
patients newly diagnosed with type 1 diabetes
Significant events after the reporting period
· Diamyd regained control of diabetes therapy
· Diamyd closed European Phase III study
· Diamyd initiated closure of US Phase III study
· TrialNet presented results from a study with Diamyd®
· Diamyd presented detailed results of European Phase III study
· Diamyd increased shareholding in Protein Sciences Corporation
CEO COMMENTS
Diamyd Medical suffered a very serious setback in the third quarter of
the fiscal year. Results of the Company's European Phase III study in
type 1 diabetes did not meet the expectations and the consequences were
dramatic. A very large part of the Company's value disappeared in an
instant and Diamyd's former partner, Ortho-McNeil-Janssen
Pharmaceuticals, Inc. (OMJPI), decided to return the rights to the drug
candidate.
Efforts to restructure and establish the Company's future strategy are
now under way. There are still very significant values in the Company to
protect, as well as ample opportunities for profitable new ventures. We
have substantial liquid assets thanks to the agreement with OMJPI and
several interesting candidate drugs in clinical and pre-clinical phase
that use the Company's patented NTDDS-platform to administer drugs
directly to the nervous system. These projects are independent from the
diabetes project. Results from the Phase II study of NP2 Enkephalin, our
furthest developed NTDDS-based drug candidate, are expected around year
end. The trial recruits about 32 patients with severe cancer pain. Phase
I results of NP2 Enkephalin showed substantial and sustained pain relief
and, consequently, we now hope that Phase II results will establish
“proof of principle” for this new method of treating pain. The next
NTDDS-based drug candidate in the Company's pipeline is NG2 GAD for the
treatment of diabetes pain, which is to be ready for clinical phase
during 2011.
We continuously evaluate many proposals about acquisitions or
cooperations with external projects and companies. Those who contact us
points out our financial resources, but also our experience of pursuing,
as a small company, early phase projects through late clinical phase and
outlicense on good conditions. With our business model and strict cost
control we have reached Phase III and Phase II with two separate
technological platforms at a very low cost by pharmaceutical industry
statistics. Since the Company was established in 1996, Diamyd Medical
has raised approximately SEK 700 million through various share issues,
and our cash and cash equivalents as per May 31 amounted to SEK 442
million. There is no lack of ideas, but it is important to be
restrictive to ensure a wise use of current resources.
We have acted swiftly and determinedly to minimize the costs for the
diabetes project by terminating the European Phase III study, close the
parallel US Phase III study ahead of time and put the development of the
manufacturing process on hold. All this, of course, within the framework
of what is ethically defensible and in line with regulatory guidelines.
It feels heavy to terminate skilled employees and longstanding
collaborators that have worked passionately on the program and conducted
its development with high quality. Still, many who are working in or in
other ways are familiar with the biotech industry understand that this
might happen in drug development carried out by small companies, unable
to spread the risks across many projects at once.
Earlier this week, Diamyd participated in the ADA diabetes conference in
San Diego, USA. We were met by considerable disappointment from doctors
and researchers who, like us, had expected positive results in the Phase
III study with Diamyd®. During the conference, the research organization
TrialNet also presented negative results from a similar study in the US
and Canada. In order to decide how we shall proceed with the diabetes
project, further analyses of the data from the different trials will be
required. Researchers, however, have not abandoned their belief that
Diamyd®and the active substance GAD65 could be efficacious in the
treatment of type 1 diabetes, for example earlier in the disease process
or in combination with other drugs. Researcher-initiated and externally
funded studies with Diamyd®are still being conducted. DiAPREV-IT, for
example, a Swedish prevention study intended to prevent type 1 diabetes
in children at high risk of developing the disease, is continuing
according to plan.
As earlier announced, the University of Florida filed a lawsuit against
Diamyd last quarter in the United States Federal District Court in
Florida, claiming parts of the upfront payment we received last summer
for the license agreement with OMJPI regarding Diamyd®. The proceedings
are in an early phase and, in parallel, some negotiations are being
conducted between Diamyd and the University.
After a difficult period we can start to look forward again. The
fantastic spirit of Diamyd has not been lost and our hard work in
important medical fields will hopefully yield future dividends both for
patients and our shareholders.
Stockholm, July 1, 2011
Peter Zerhouni
Acting President and CEO, Diamyd Medical AB
SIGNIFICANT EVENTS DURING THE REPORTING PERIOD
MARCH 1, 2011 - MAY 31, 2011
Diamyd results from Phase I clinical trial in cancer pain published in
Annals of Neurology. Results of the Phase I clinical trial evaluating
the safety and efficacy of the candidate drug NP2 Enkephalin to treat
intractable cancer pain were published in the medical journal Annals of
Neurology.
Diamyd replaced CEO. Elisabeth Lindner left her position as President
and CEO of Diamyd Medical AB on April 26, 2011. Executive Vice President
and the Company's former Senior Director Business Development, Peter
Zerhouni, was appointed Acting President and CEO. Peter Zerhouni was
appointed Executive Vice President on April 21, 2011.
Diamyd reported initial results of European Phase III trial with
patients recently diagnosed with type 1 diabetes. In May 2011, Diamyd
Medical reported that results of the Company's European Phase III trial
with the antigen-based therapy Diamyd® did not meet the primary efficacy
endpoint of preserving beta cell function at 15 months, as measured by
C-peptide.
SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
Diamyd regained control of diabetes therapy. Diamyd Medical regained
control of the diabetes therapy Diamyd® in June 2011 after
Ortho-McNeil-Janssen Pharmaceuticals, Inc. decided to terminate the
agreement that was signed by the companies in June 2010 to develop and
commercialize Diamyd®.
Diamyd closed European Phase III study. The company decided not to
complete the follow-up period of a European Phase III study of the
antigen-based therapy Diamyd®, of which the main results did not meet
the primary efficacy endpoint.
Diamyd initiated closure of US Phase III study. Following consultation
with the US Food and Drug Administration (FDA), Diamyd Medical decided
to suspend dosing in a US Phase III study with the antigen-based therapy
Diamyd®.
TrialNet presented results from a study with Diamyd®. The results of a
study with the Company's antigen-based diabetes therapy Diamyd®,
conducted by the research consortium Type 1 Diabetes TrialNet, did not
show a statistically significant effect of the study drug.
Diamyd presented detailed results of European Phase III study. Diamyd
reported detailed results from the Company's European Phase III study of
the antigen-based diabetes therapy Diamyd®, which, as previously
announced, did not meet the primary efficacy endpoint. Patients treated
with Diamyd® had on average 16.4 percent more remaining C-peptide at 15
months compared to those who received placebo. The p-value of the
primary endpoint was 0.10.
Diamyd increased shareholding in Protein Sciences Corporation. Diamyd
Medical announced that the Company's convertible promissory note in the
US vaccine company Protein Sciences Corporation had been converted into
shares. The promissory note was accounted for as an investment of SEK
6.4 million as of November 30, 2007. After conversion of the shares,
Diamyd Medical now holds about 8% of the Protein Sciences Corporation
shares.
*** To read the complete report, please see attached PDF, or visit
www.diamyd.com ***
