Diamyd Medical AB has entered into an agreement for the sale of the U.S.
subsidiary, Diamyd, Inc., involved in drug development primarily relating to the
NTDDS platform with applications in pain and neuropathy among others. The buyer,
Periphagen Holdings, Inc., is owned by members of the management of Diamyd, Inc.
The agreement is subject to approval of an Extraordinary General Meeting of
Diamyd Medical. By reason of the divestment, Diamyd Medical will postpone its
Year End Report to October 31, 2012.
Under the agreement, in addition to the shares in Diamyd, Inc., Periphagen
Holdings, Inc. assumes the intellectual property rights to the patented Nerve
Targeting Drug Delivery System (NTDDS) technology, and all costs and revenues
related to the business from September 1, 2012. The divestment will improve
Diamyd Medical's operating profit/loss by approximately SEK 18 million during
fiscal year 2012/13 compared to if the Company would have continued financing
the development of the NTDDS platform.
During the fiscal year 2011/12, due to the transaction, impairment of intangible
assets related to the NTDDS platform will have an adverse effect of SEK 17
million on operating profit/loss. The cash flow is not affected. Other immediate
accounting effects and transaction costs attributable to the divestment are
estimated to have an adverse effect on profit/loss during 2012/13 by
approximately SEK 3 million. The impact on cash flow is minor.
The purchase price amounts to one dollar and shares in the acquiring company,
providing Diamyd Medical a holding of 10 percent in Periphagen Holdings, Inc. In
addition, Diamyd Medical may receive up to USD 10 million, primarily in
milestone payments, as well as 10 percent of upfront payments and other payments
Periphagen Holdings, Inc. may receive from future partners, and royalties on
future sales of NTDDS based drugs.
“The divestment immediately and significantly reduces Diamyd Medical’s costs,
whilst we retain the right to share in future successes of the NTDDS platform.
The development projects will receive full focus from their dedicated new
owners, which makes it a great solution for both parties as well as for the
NTDDS platform,” says Peter Zerhouni, President and CEO of Diamyd Medical.
“We remain passionate about the NTDDS technology and have been involved since
the research on nerve targeted gene delivery was initiated at the University of
Pittsburgh in the 90’s. It is a dream come true to increase our focus and run
the business as our own,” says Darren Wolfe, President of Diamyd, Inc. and
Periphagen Holdings, Inc.
The transaction is a management buyout, where the purchasing corporation is
owned by members of the management of Diamyd, Inc. The audit and consultancy
firm Grant Thornton has prepared a fairness opinion regarding the transaction,
and judge that, from a financial perspective, the terms are fair to the
shareholders of Diamyd Medical. The agreement is subject to approval from Diamyd
Medical's shareholders at an Extraordinary General Meeting to be held on October
30, 2012.
The board of directors has decided to postpone Diamyd Medical's Year End Report
for the 2011/12 fiscal year, until the Extraordinary General Meeting has
considered the transaction, as the meeting's decision will have an impact on the
information in the Year End Report. The original date for the report was October
16, 2012. The new date for the Year End Report is October 31, 2012.
For more 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 was founded in 1996 and is active in the field of pharmaceutical
development. Diamyd Medical is headquartered in Stockholm, Sweden. The Company’s
development project within the area of diabetes consists of the protein GAD65
for the treatment and prevention of autoimmune diabetes. A Swedish researcher
-initiated Phase II study is ongoing to evaluate whether GAD65 can prevent type
1 diabetes in children who are at high risk of developing the disease. The
Company’s development projects for the treatment of chronic pain and neuropathy
uses the patented NTDDS (Nerve Targeting Drug Delivery System) platform to
administer therapeutic agents directly to the nervous system. The NTDDS platform
is being divested.
Diamyd Medical also has holdings in the companies Protein Sciences Corporation
(USA) and Mercodia AB (Sweden).
Diamyd shares are listed on Nasdaq OMX (segment Small Cap) in Stockholm (ticker:
DIAM B) and on OTCQX in the US (ticker: DMYDY) administered by the Pink OTC
Markets and the Bank of New York Mellon (PAL). Further information is available
on the Company’s website: www.diamyd.com.
This information is disclosed in accordance with the Swedish Securities Markets
Act, the Swedish Financial Instruments Trading Act, or the requirements stated
in the listing agreements.
Diamyd Medical AB (publ)
Karlavägen 108, SE-115 26 Stockholm, Sweden. Phone: +46 8 661 00 26, Fax: +46 8
661 63 68
E-mail: info@diamyd.com. Reg. no: 556530-1420
