Year-End Report 21/22

September 2021 - August 2022, Diamyd Medical AB (publ), Fiscal year 2021/2022

Transformational Precision Medicine for Type 1 Diabetes
Therapeutic diabetes vaccine Diamyd^® in pivotal Phase 3 trial

Diamyd Medical's B-share is traded on Nasdaq First North Growth Market under the ticker DMYD B.
Further information is available on https://www.diamyd.com

September 1, 2021 - August 31, 2022

• Net result: MSEK -103.5 (60.0), fourth quarter: MSEK -36.7 (-27.4). The previous year includes a one-off effect of corresponding MSEK 144.4 from divestment of shares in Companion Medical, Inc.
• Result per share: SEK -1.4 (0.9), fourth quarter: SEK -0.5 (-0.4)
• Cash flow from operating activities: MSEK -93,2 (-109.5), fourth quarter: MSEK -34,6 (-59.1)
• Cash and short-term investments at August 31, 2022: MSEK 159,7 (139.4)

Significant events during the fourth quarter, June 1, 2022 - August 31, 2022

• Primary endpoints were met on safety and tolerability in an open label trial in LADA patients

Other events during the fourth quarter

• Analysis supporting treatment with Diamyd^® were published in The Journal of Clinical Endocrinology & Metabolism

Other events after the fourth quarter

• All patients i DIAGNODE-B had received an additional injection (booster) of Diamyd^®
• Updated results from clinical trial with Diamyd were presented at diabetes conference

Comments by CEO Ulf Hannelius
The year has been eventful and transformational for Diamyd Medical, with significant clinical and operational advances.

Unlike immunosuppressive candidates for type-1 diabetes - which may interfere with the immune system's ability to combat disease, Diamyd^® is an antigen-specific immunotherapy that only modulates how the immune system reacts to the autoantigen under autoimmune attack.

DIAGNODE-3, the First Ever Gene Based Precision Medicine Phase 3 Trial in Type 1 Diabetes
Following the meta-analysis published in August 2020 in Diabetologia (https://doi.org/10.1007/s00125-020-05227-z),  describing the foundational discovery on how HLA genetics influence the effects of the therapeutic vaccine Diamyd^®, the development of Diamyd^® took a groundbreaking leap forward. The findings supporting a genetic responder group, encompassing up to 40% of all type 1 diabetes patients, were replicated in the DIAGNODE-2 trial published in Diabetes Care in 2021 (https://doi.org/10.2337/dc21-0318),  firmly establishing the precision medicine approach of Diamyd^®. The follow up publications published in May 2022 in Diabetes, Obesity and Metabolism (https://doi.org/10.1111/dom.14720) and in June 2022 in the Journal of Clinical Endocrinology & Metabolism (https://doi.org/10.1210/clinem/dgac343),  showed how therapeutic preservation of endogenous insulin production clearly affects glycemic control.

These are crucial findings for the type 1 diabetes field and are aligned with how the field views HLA-genetics linked to autoimmunity and the importance of precision medicine, something that was discussed in parallel to our discovery in a widely publicized article published in January 2020 in Diabetes Care (https://doi.org/10.2337/dc19-0880).  

These discoveries are key to the ongoing confirmatory DIAGNODE-3 trial, the first ever precision medicine-based Phase 3 trial targeting individuals who have recently been diagnosed with type 1 diabetes.

Precision Prevention of   Type 1 Diabetes
In parallel with the DIAGNODE-3 trial, we are making great advances in our work to prevent the diagnosis of type 1 diabetes. The Swedish government agency VINNOVA awarded in September 2021 Diamyd Medical and collaboration partners a 5-year grant totaling SEK 40 million to support the innovation milieu ASSET (www.asset.healthcare), a program that focuses on precision prevention of type 1 diabetes and other associated autoimmune diseases. As part of this program, we are starting DiaPrecise, the first ever intralymphatic trial with Diamyd^® in individuals at risk of type 1 diabetes carrying the genetic HLA DR3DQ2 haplotype that defines our responder population. A long-term follow-up registry trial is also being conducted by Lund University to collect more data from the two previous clinical prevention trials DiaPrevIT-1 and -2. The latest findings from these trials were published in the Journal of Immunology Research in May 2022 (https://doi.org/10.1155/2022/3532685), provided exciting immunological results supporting the efficacy of  Diamyd^® treatment seemed to decrease the number of T lymphocytes in the children that had a high risk of type 1 diabetes, providing important clues on the working mechanism of the vaccine.

Clinical and Commercial Potential of Booster injections
The concept of boosters, in other words where additional injections are used to prolong or enhance the effect of a vaccine, is very valuable as it can provide both therapeutic and commercial advantages. This is of interest to our potential partners and the first proof of concept findings of Diamyd^® boosters were published in January 2022 in Acta Diabetologia (https://doi.org/10.1007/s00592-022-01852-9) where three individuals, all carrying the HLA DR3-DQ2 responder gene, who received a fourth injection more than a year after the initial three injections preserved endogenous insulin producing capacity for an additional whole year. A follow up booster trial, DIAGNODE-B, is ongoing where we just last week announced that all the individuals have received their 4^th or 5^th injections and 12-month results are expected towards the end of 2023.

Diamyd^® for LADA - A form of Autoimmune Type 2 diabetes
We recently announced the results from the first ever intralymphatic Diamyd^® trial in LADA, a form of autoimmune diabetes often misdiagnosed and treated as type 2 diabetes but resembling type 1 diabetes. Results from a 5-month follow-up were published in June 2022 in Frontiers in Endocrinology (https://doi.org/10.3389/fendo.2022.926021) and the updated 12 months results were presented at the recent EASD conference 2022 here in Stockholm. The results showed that the treatment is very safe and feasible also in individuals up to age 70, and a very exciting finding is that when endogenous insulin production was measured using a so-called glucagon stimulation test, complete preservation of endogenous insulin production was seen in our HLA-defined responder group. Compared to the mixed meal stimulation test that is commonly used in T1D and measures the insulin release over a 2- or 4-hour period, the glucagon test specifically measures the immediate insulin release following an injection of glucagon. The results add to the strong data that support the significant clinical potential of the Diamyd^® vaccine.

Focus on Patient recruitment and Manufacturing
On the operational side the year has meant a significant ramp up in our clinical and manufacturing work. In DIAGNODE-3, we currently have initiated 31 clinics in Spain, Sweden, Czech Republic, Poland, Germany, and the Netherlands, and recently also Hungary has been added as a country. The aim is to initiate a total of 53 clinics in the trial. There is a great interest from many clinics in the US to take part in the trial and we are doing our best to provide FDA with information for enabling approval to start the trial there as well.

We are also one of very few biotech companies with a proprietary manufacturing facility. We aim to have our 10,000 square feet site in Umeå Sweden up and ready for production next year, with new material ready for clinical trials and eventual commercialization. This is a significant value enhancing asset in Diamyd Medical and we look forward to the opportunities this will offer. I am also glad to say that we recently received 800,000 SEK from VINNOVA to run and evaluate crucial steps of our manufacturing process at Testa Center in Uppsala, Sweden, in parallel to preparing the Umeå facility for production. Testa Center, a collaboration between the Swedish Government and Cytiva, provides a biomanufacturing test bed including training for businesses and academia to accelerate production of biological products.

Transformational Precision Medicine for Type 1 Diabetes
The addressable market for the therapeutic diabetes vaccine Diamyd^® is huge. Both with regard to Type-1 diabetes and LADA. Importantly, we have found the key to the vaccine's effectiveness - the so called DR3-DQ2 gene haplotype that defines the responder patient group. This is a truly transformative discovery. Made by us. It paves the way for precision medicine in autoimmune diabetes where we are leaders with our ongoing pivotal phase-3 trial

Stockholm, October 5, 2022
Ulf Hannelius, President and CEO

Significant events during the fourth quarter
June 1, 2022 - August 31, 2022

Primary endpoints were met on safety and tolerability in an open label trial  in LADA patients
The primary endpoints of safety and tolerability were met in the open-label investigator-initiated Phase II clinical trial GADinLADA, in which the diabetes vaccine Diamyd^® was administered directly into the lymph node of 14 patients aged 30 to 70 years with the autoimmune form of diabetes called LADA (Latent Autoimmune Diabetes in Adults). Analyses also showed a positive immunological response to the treatment and the clinical course appears promising with all individuals remaining insulin-independent 12 months after treatment.

Other events during the fourth quarter

Analysis supporting treatment with Diamyd^® published in peer-reviewed scientific journal
An article presenting analyses of Continuous Glucose Monitoring (CGM) data from the randomized, placebo-controlled Phase 2b trial DIAGNODE-2 that assessed three intralymphatic injections of the therapeutic diabetes vaccine Diamyd^®, has been published in the peer-reviewed scientific journal The Journal of Clinical Endocrinology & Metabolism (JCEM).

Other events after the fourth quarter

All patients in DIAGNODE-B had received an additional (booster) injection of Diamyd^®
The last patient in the investigator-initiated clinical trial DIAGNODE-B received its additional injection ("booster") of the therapeutic diabetes vaccine Diamyd^®. The trial includes 6 patients with Type 1 diabetes who earlier participated in the DIAGNODE-1 or DIAGNODE-2 trials and who carry the genetic HLA DR3-DQ2 haplotype. DIAGNODE-B (B for "booster") assesses the safety, immunological response and clinical effect of an additional intralymphatic injection of Diamyd^®. Patients will be followed for 12 months after the booster injection and topline results are expected in the fourth quarter of 2023.

Updated results from clinical trial with Diamyd^® presented at diabetes conference
Updated 12-month results from the open-label investigator-initiated Phase II clinical trial GADinLADA that assessed three intralymphatic injections of the therapeutic diabetes vaccine Diamyd^® in individuals diagnosed with Latent Autoimmune Diabetes in Adults (LADA) were presented at the European Association for the Study of Diabetes (EASD) conference in Stockholm, Sweden. The updated results provide further support to the previously reported topline results that showed a positive immunological and metabolic response to Diamyd^® treatment in individuals diagnosed LADA who carries the genetic HLA DR3-DQ2 haplotype.

Two drugs in clinical development
Diamyd^® and Remygen^® are drugs in clinical development that focus on the underlying disease mechanisms of diabetes; the dysfunction and loss of insulin-producing beta cells in the pancreas.

Diamyd^® is an antigen-specific immunomodulating precision medicine diabetes vaccine for the treatment and prevention of autoimmune diabetes (type 1 diabetes and LADA, Latent Autoimmune Diabetes in Adults).

Clinical data indicate the potential of the diabetes vaccine Diamyd^® to halt or stop the autoimmune destruction of insulin-producing beta cells in individuals that carry the HLA DR3-DQ2 haplotype. The effect is achieved by antigen-specific reprogramming of immune cells by administration of low doses of Diamyd^® in superficial lymph nodes. By maintaining the endogenous insulin production, Diamyd^® has the potential to make a significant difference in the daily life of patients as well significantly reduce the complications of type 1 diabetes. Topline results from the Phase IIb trial DIAGNODE-2 demonstrated a significant treatment effect of Diamyd^® in the predefined genetic patient group. A confirming Phase III trial, DIAGNODE-3, is on-going.

Remygen^® is an oral regenerative and immunomodulatory drug candidate for the treatment of autoimmune- and type 2 diabetes. By stimulating the growth of insulin-producing cells, Remygen^® has the potential to reverse the disease progression in autoimmune- and type 2 diabetes. Based on clinical data, Remygen^® has also the potential to protect against hypoglycemia by improving the hormonal response. Remygen^® is now being investigated in a clinical Phase I/II trial (ReGenerate-1), where clinical efficacy is evaluated with the aim of optimizing the treatment regimen ahead of registration-based trials.

Clinical trials
Type 1 Diabetes is a devastating disease which requires daily treatment with insulin to sustain life. The importance of finding a drug that improves the prospects for patients with diabetes is of utmost importance. The effect of intralymphatic administration of Diamyd^®, an antigen-specific precision medicine immunotherapy aimed at stopping the immune system's attack on insulin-producing beta cells in autoimmune diabetes, are evaluated in the Phase III trial DIAGNODE-3 and in the Phase I/II trial DIAGNODE-B.

Remygen^®, which aims to stimulate the growth of beta cells in patients with diabetes, is evaluated in patients in the  Phase I/II trial ReGenerate-1.

Ongoing clinical trials

Trials with Diamyd® in lymph node

• DIAGNODE-3 - DIAMYD^® IN LYMPH NODES WITH ORAL SUPPLEMENTATION OF VITAMIN D

The placebo-controlled Phase III trial DIAGNODE-3 will include approximately 330 individuals aged 12 to 28 who have been recently diagnosed with type 1 diabetes and who carry the genetically defined haplotype HLA DR3-DQ2. The trial will be conducted at approximately 50 clinics, where almost half of all individuals with Type 1 Diabetes are estimated to carry the current haplotype. After an initial month in which all trial participants receive vitamin D, the individuals will be randomized 2:1, ie two out of three trial participants will receive three intralymphatic injections of Diamyd^® and one in three will receive the corresponding placebo at one month intervals, with one primary reading 24 months after trial start. The design provides, based on efficacy data from previous studies on the HLA-restricted patient population, a high probability of reaching the primary endpoints; preservation of stimulated C-peptide and lower HbA1c. The Coordinating Investigator for the trial is Professor Johnny Ludvigsson at Linköping University. The Sponsor of the trial is Diamyd Medical.

• DIAGNODE-B - ADDITIONAL INJECTION OF DIAMYD^®IN LYMPH NODES

The aim of the trial is to evaluate the safety of a booster (fourth/fifth) injection with Diamyd^® and the effect on the immune system and the endogenous insulin production. DIANGODE-B is an open-label investigator-initiated clinical trial enrolling Type 1 Diabetes patients who carry the genetically defined haplotype HLA DR3-DQ2 and are previously treated with intralymphatic injections of Diamyd^®. The trial is planned to include approximately 6 patients who have either been treated with four injections in DIAGNODE-1, who will then receive a 5th intralymphatic injection of Diamyd^®, or patients who participated in DIAGNODE-2, who will receive a 4th intralymphatic injection of Diamyd^®, approximately 4 years after the last injection. The patients will be followed for 12 months after injection. The trial is conducted at the Clinical Research Unit at the University Hospital in Linköping. Sponsor of the trial is Linköping University with Professor Johnny Ludvigsson as Sponsor's representative.

Trial with Remygen® (GABA)

• REGENERATE-1 - REMYGEN^® /ALPRAZOLAM

An open-label, investigator initiated clinical trial with Remygen^®. The trial includes 35 patients aged 18-50 who have had Type 1 Diabetes for more than five years with low to non-existing insulin production. Safety and initial efficacy results from the dose escalation section of the trial have paved the way to initiate the main trial and have also demonstrated a potential effect of Remygen^® to improve the hormonal response to hypoglycemia. The main trial evaluates whether the insulin-producing cells can be regenerated and if the hormonal response to hypoglycaemia can be improved using Remygen^® and the combination of Remygen^® and Alprazolam. The trial is led by Professor Per-Ola Carlsson at Uppsala University, Sponsor of the trial.

Results are expected in the first quarter of 2023.

Manufacturing of GAD65 in Umeå
A new facility for vaccine manufacturing is being set up in Umeå, the Capital of Västerbotten County in Sweden, for the manufacture of recombinant GAD65, the active pharmaceutical ingredient in the therapeutic diabetes vaccine Diamyd^® currently in late-stage clinical development. The 10 000 square feet site, comprising of clean rooms, laboratory facilities and office space, will facilitate full control, predictability and scalability of the manufacturing technology of the active ingredient. Diamyd Medical has chosen Cytiva's configurable single-use bioprocess manufacturing platform FlexFactory for the process. Small-scale experimental production of GAD65 is now established at the manufacturing facility. Large-scale production is being set up primarily using Cytiva equipment. The property where the manufacturing is being established is owned by Diamyd Medical.

*** To read the complete report, please see attached pdf, or visit www.diamyd.com ***

For more information, please contact:
Ulf Hannelius, President and CEO, phone: [phone]
Diamyd Medical AB (publ), Box 7349, SE-103 90 Stockholm, Sweden
Phone: [phone] Fax: [phone] E-mail: [e-mail] Reg. no: 556242-3797

The information was submitted for publication, through the agency of the contact person set out above,
at 08.15 CET on October 5, 2022.

https://news.cision.com/diamyd-medical-ab/r/year-end-report-21-22,c3642727

https://mb.cision.com/Main/6746/3642727/1634715.pdf

https://news.cision.com/diamyd-medical-ab/i/diamyd--vials,c3097186

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