Diabetes has developed into a major global problem. The disorder is affecting younger and younger people and complications related to diabetes are currently among the most common causes of death in many countries. In conjunction with the spin-out of the new Diamyd Medical from the Parent Company in April 2013, a dedicated diabetes company was formed. The company will now be listed on NASDAQ OMX First North and the first day of trading is May 20. The company description ahead of the listing will be available in Swedish on the company's website www.diamyd.com. The company intends to implement a rights issue for a maximum of EUR 2.5 million soon after the share has commenced trading on First North.

The new Diamyd Medical AB is a diabetes company with a long history. The operation that has now been spun off from Mertiva AB and distributed to the approximately 6,400 shareholders has been working on the development of the diabetes vaccine Diamyd®and the active substance GAD to prevent, treat and cure type 1 diabetes since 1994.

Diabetes is a widespread disease that increases rapidly in the whole world. Complications related to diabetes are currently among the most common causes of death in many countries. In addition to continuing to develop the diabetes vaccine for type 1 diabetes, Diamyd also sees the potential to broaden its business in the diabetes area.

Type 1 diabetes, which primarily affects children, is an autoimmune form of the disease, meaning that the body's own immune system destroys the beta cells in the body that produce insulin and regulate blood sugar. There is currently no treatment on the market addressing the autoimmune process that causes type 1 diabetes. Type 2 diabetes is strongly linked to overweight and age, however, the occurrence of both forms is increasing and younger age groups are being affected.

"Diabetes is estimated to affect a total of 371 million people in the world and this figure is expected to rise to 552 million by 2030," says Peter Zerhouni, President and CEO of Diamyd Medical. "We will leverage our expertise and our worldwide network in diabetes to assess the potential to expand our business in terms of products in the entire diabetes area. We are examining new development projects as well as fully developed diabetes products and companies."

Combination therapies key to curing type 1 diabetes
Diamyd Medical has independently pursued the development of the diabetes vaccine Diamyd®to global Phase III trials, leading to one of Sweden's largest biotech agreements ever. The results from the first Phase III trial were not sufficiently strong, which is not unusual in drug development, but a small positive effect was observed and this will now be strengthened.

"Our intention is to test Diamyd®both in combination with other drugs to boost the beta cell preserving effect displayed by the diabetes vaccine, but also as a preventative treatment to try to stop the onset of type 1 diabetes and other autoimmune diabetes altogether," says Peter Zerhouni.

The dominating hypothesis among diabetes researchers today is that the key to curing type 1 diabetes is to simultaneously tackle the disease on several fronts by combining various therapeutics or by providing treatment before onset of the disease. Combination therapies have, for example, played a decisive role in the advances made in cancer treatment in recent years. Many leading scientists also believe that future treatment of type 1 diabetes must involve a so called autoantigen, such as GAD, which is the active substance in the diabetes vaccine, Diamyd®. Diamyd's vaccine has the advantage of being ready for clinical studies in children due to its favourable safety profile in earlier clinical trials and an established manufacturing process.

Researcher-initiated trials
The continued development of the Diamyd®diabetes vaccine is primarily taking place via researcher-initiated, externally funded studies in which Diamyd provides the vaccine. Two researcher-initiated Phase II trials of Diamyd®are currently in progress. One study evaluates whether the diabetes vaccine can prevent type 1 diabetes in children who are at high risk of developing the disease and one study evaluates whether Diamyd®in combination with relatively high doses of 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.

New patent portfolio and rights issue
Very recently, Diamyd concluded a new exclusive licensing agreement with University of California (UCLA) relating to a patent portfolio for the therapeutic use of GABA (gamma-aminobutyric acid) for the treatment of diabetes and other inflammation-related conditions. Aside from being an important neurotransmitter in the central nervous system, GABA is believed to have an anti-inflammatory effect and the ability to boost insulin sensitivity. GABA and GABA receptor agonists can thus potentially be used to treat several inflammation-related disorders, such as type 1 and type 2 diabetes, metabolic syndrome and rheumatoid arthritis.

The agreement covers, for example, one patent application for a combination therapy including GABA and GAD, which is the active substance in the company's diabetes vaccine, Diamyd®. Professors Tian and Kaufman at UCLA have shown, among other findings, that GABA in combination with GAD acts synergistically in an animal model of type 1 diabetes.

The company is capitalized at approximately MSEK 50. To secure funds for the development of these new rights without encroaching on the existing development plan for the diabetes vaccine Diamyd®, the company intends to implement a rights issue for a maximum of EUR 2.5 million soon after the share has commenced trading on First North.

For further information, please contact:
Peter Zerhouni, President and CEO Diamyd Medical AB
Phone: +46 8 661 00 26. E-mail: press@diamyd.com

About Diamyd Medical
Diamyd Medical is a Swedish diabetes company. The company was formerly called Diamyd Therapeutics and was spun off from Mertiva AB (formerly Diamyd Medical) in April 2013. The company's primary development project consists of the GAD-based diabetes vaccine Diamyd®for the treatment and prevention of autoimmune diabetes. Two researcher-initiated Phase II studies with Diamyd®are currently ongoing. One study evaluates whether the diabetes vaccine can prevent type 1 diabetes in children who are at high risk of developing the disease and one study evaluates whether Diamyd®in combination with relatively high doses of 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.

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

Diamyd Medical's shares will be traded on NASDAQ OMX First North as of May 20, 2013 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.

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