STOCKHOLM, Sweden, April 05, 2004 (PRIMEZONE) --* 18-month data from the Phase II studies with Diamyd(TM) for the treatment of autoimmune diabetes shows that the positive effects achieved after six months remain and are increased. Furthermore, the mechanism, i.e. the underlying reason for the effect of Diamyd(TM), has been identified.
* These positive results are going to be of great importance in creating advantageous conditions in the Company's ongoing process of finalizing a licensing agreement with an industrial partner.
* To improve the Company's position even further in the ongoing discussions on licensing with a third party and to make continued development of the Company's patented GAD platform possible, on March 26, 2004 the Board decided to carry out a new share issue.
* If fully subscribed the Company will receive approximately SEK 92 million.
* The new share issue, conditional on the approval of an extraordinary general meeting on April 27, 2004, has been completely guaranteed by a consortium consisting of both existing shareholders and new institutional shareholders.
* The Board also intends to request authorization from the general meeting to accept over-subscription from the shareholders equivalent to 20% of the outstanding number of shares after the rights issue described above.
Long-term results from Diamyd Medical's Phase II study
At the IDS7 diabetes congress in Cambridge, England on March 29-31 2004, significant progress from the Company's Phase II studies with the diabetes treatment Diamyd(TM) is being presented.
Diamyd(TM) provides long-term effect An earlier six-month report from the study (Lernmark, ADA, June 2003) showed that insulin production, normalized for glucose concentration, increased significantly in diabetes patients who were treated with 20 ig Diamyd(TM) compared with a placebo (p=0.0008). The results being presented at Cambridge show both the mechanism of the treatment's function and that the increased insulin production still remains at the improved level 18 months after the treatment. This data indicates that the autoimmune attack against the patient's insulin-producing cells has either been kept in check or stopped.
Evaluation of further parameters that verify the effect of the pharmaceutical preparation Aiming to further verify the effect of the treatment, the Company has evaluated the changes in the average blood sugar levels (HbA1c). 18 months after the treatment with 20 g Diamyd(TM), the results show a statistically significant improvement compared with a placebo (p=0.009). The change between the 20 g dose group and the placebo group was about 20%, which is very positive as only a change of 5% is considered to have a significant importance for HbA1c.
The mechanism of the treatment has been identified and proved The immunological mechanism underlying Diamyd(TM) treatment has been proved. The number of regulatory T-cells, measured as the T-cell quotient CD4+CD25+/CD4+CD25-, increased after 6 months in patients treated with Diamyd(TM) who showed increased insulin production (r=0.56; p=0.001). GAD specific regulatory T-cells are considered to cause a lowering of the autoimmune inflammation in the insulin-producing cells of the pancreas.
Carl-David Agardh, professor of diabetes research at Lund University, Sweden and head physician at the University Hospital, UMAS, in Malmo, Sweden and who is in charge of the study, says:
"The 18-month results confirm and strengthen the results obtained after 6 months. This is very promising. Patients in which we succeeded in maintaining their own production of insulin are expected to experience significantly reduced complications at a later date."
Target groups for Diamyd(TM) - autoimmune diabetes
There are various types of diabetes. Type 1 diabetes, insulin-dependent diabetes, is the type that normally appears in young people and that requires daily injections of insulin. Type 1 diabetes is an autoimmune disease, i.e. the immune system attacks and kills the body's own insulin- producing beta-cells. When about 85% of all the insulin-producing cells have been destroyed the remaining beta-cells cannot produce sufficient insulin and the patient is obliged to take daily insulin injections.
With type 2 diabetes the patient normally retains the ability to produce insulin. However the insulin has lost some of its potency - the insulin sensitivity has been reduced - which results in elevated blood sugar levels. These patients are often treated with pharmaceutical preparations in the form of tablets for their insulin sensitivity.
About 10% of all diabetics have a form of the disease that, simply put, is seen to lie between type 1 and type 2 diabetes. This form of the disease is called Latent Autoimmune Diabetes in Adults, LADA, and is a slowly progressive form of autoimmune diabetes that does not often appear before adulthood. LADA patients are identified as being diabetics who do not as yet need to take insulin injections but who have antibodies against GAD. This means that these patients have an autoimmune form of diabetes that results in their beta-cells successively being destroyed and that they thereby become dependent on insulin injections within a year or two.
"The first application for Diamyd(TM) is seen to be LADA patients" says Anders Essen-Moller, CEO of Diamyd Medical. "It is this group that has participated in the Phase II study. There are several reasons for this. The patients are adults, they already have diabetes and they regularly receive medical care. It is known that their beta-cells will be destroyed so that they will become dependent on insulin injections but even so they have more remaining beta-cells than type 1 patients. The sooner the treatment is started, the greater the chance of achieving appositive result. Furthermore, the LADA group is large when seen as a market and more than justifies the development of the pharmaceutical preparation from an economic point of view."
The next application is the treatment of new onset type 1 diabetes. The aim is to stop the autoimmune process that results in the destruction of the patient's remaining beta-cells with two injections of Diamyd(TM). Our long-term objective is to vaccinate children to prevent the disease.
"With the new, positive results and the guaranteed capital issue we can now lift the Company to a new level where we can evaluate new applications for our GAD technology at the same time as we can continue negotiations for licensing with a stronger capital base."
From pharmaceutical to vaccine
The Company's first applications with Diamyd(TM) is seen, as mentioned above, to be a treatment for LADA patients and also later for new onset type 1 diabetes patients so that they can retain their own insulin production. The long-term aim, however, is to develop a vaccine for whole groups of the population. "Major screening studies are underway around the world, among them all newly born babies in the Swedish region of Skane, to try and identify those who run the risk of developing type 1 diabetes," says Ake Lernmark, Professor of Medicine at the University of Washington in Seattle, US. "Now we have found a possible mechanism for auto-gene treatment of LADA patients - we have shown that regulatory T-lymphocytes increase in patients in which the production of insulin increases - so I hope in the future to be able to treat children at risk at an early stage and to try and eliminate type 1 diabetes in children and young people.
Professor Lernmark is also Professor of Experimental Diabetes at Lund University, Department of Endocrinology at the University Hospital in Malmo. At an early stage Prof. Lernmark focused his attention on diabetes and the antigen that later proved to be GAD. He was one of the first to show the presence of antibodies against GAD in insulin- dependent diabetes. Prof. Lernmark has been a member of Diamyd Medical's Scientific and Medical Council since 1996.
Daniel Kaufman, Professor at the Department for Molecular and Medical Pharmacology at UCLA, showed in 1993 that giving GAD to mice that normally develop insulin-dependent diabetes prevented the outbreak of the disease. This research formed the basis of UCLA's patent portfolio around GAD and the fundamental patent was granted in the US as late as January 2004. The patent portfolio, for which Diamyd Medical has an exclusive license, therefore provides protection until 2021, According to Prof. Kaufman, who is a member of Diamyd Medical's Scientific and Medical Council: "The vaccine to prevent type 1 diabetes arose from experiments at UCLA with diabetes-prone mice that were protected from developing the disease by vaccinating them with a protein from the insulin producing cells called GAD. It's tremendously satisfying to see our work at UCLA go from the lab to a clinical application with the potential to help so many people"
Other applications for the Company's GAD technology platform
At present Diamyd Medical is developing the pharmaceutical based on the GAD65 (glutamic acid decarboxylase) technology platform for diabetes. The Company intends to evaluate the opportunities for R&D in the following areas:
Obesity
The GAD gene has been identified as the candidate gene for obesity. The Company intends to investigate the possibilities of developing a treatment for obesity based on GAD65.
Parkinson's Disease
GAD therapy is being investigated by another organization for treating Parkinson's disease. Diamyd Medical intends to issue a license for the GAD-based therapy for Parkinson's disease.
SMS
Antibodies against GAD have been found in patients with the rare movement inhibitory disease SMS. There is a possibility for applying for an Orphan Drug Status for the treatment of SMS. Diamyd Medical has devised a preclinical plan as a basis for carrying out small-scale clinical trials.
New Share Issue
The Board for Diamyd Medical AB (publ) has decided on a new share issue of a maximum of about SEK 92 million, equivalent to a maximum of 2,314,288 shares or the higher amount and number of shares (maximum 71,277 series B shares) that can follow because of subscription of shares supported by outstanding option rights. The issue price has been fixed at SEK 40 per share. Each even numbered share of series A and B gives the right to subscribe to a new share of series B. The rights issue decision is conditional on the approval of an extraordinary general meeting to be held on April 27, 2004 in Stockholm. In the event of the rights issue being fully subscribed, the Board also intends to request authorization from the extraordinary general meeting to carry out another new share issue of at most 1,431,327 shares, equivalent to 20% of the outstanding number of shares after the rights issue described above, at an issue price of SEK 40 per share.
The issue in its entirety has been guaranteed by a declaration of intent from a consortium consisting of both existing shareholders and a number of new institutional owners. Existing shareholders shall have preferential subscription rights.
This new share issue strengthens the Company's position as a credible and long-term partner for industrial players. At the same time the Company's position is strengthened in ongoing negotiations for the issuing of a license for Diamyd(TM). Furthermore, the emission gives the Company the possibility of further developing the Company's GAD platform within the framework of the strong patent portfolio.
The positive results from the Phase II study provide the possibility of evaluating and developing new, potential pharmaceutical candidates, not only for the treatment of diabetes but also for other metabolic and neurological diseases.
Schedule
Extraordinary general meeting April 27, 2004 Final day for share trading with right to participate April 29, 2004 in the new share issue Record day for right to participate in the new share issue May 4, 2004 Trade with subscription rights May 7 - 25, 2004 Subscription period May 7 - 28, 2004
A prospectus is expected to be available during the week starting May 3.
ABG Sundal Collier AB is advisor to the Company in the capital rights issue in question.
Stockholm March 26, 2004 Diamyd Medical AB The Board
For further information please contact:
Anders Essen-Moller CEO, tel. +46 8-661 00 26
Diamyd Medical AB (publ). Djurgardsbrunnsvagen 54, SE-11525 Stockholm, Sweden. Tel: +46 8-661 00 26, 661 12 25, fax: +46 8-661 63 68, email: info@diamyd.com, www.diamyd.com
This report is a translation from an original in Swedish. No guarantee is given or implied for the accuracy of statements concerning present or historical data, future results and prognoses. This information should be considered as based on current opinions and plans. No guarantees are given or implied that these are correct. This press release may not be published in the US and Canada.
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