Diamyd Shifts Away from Diabetes To Cut Costs

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Diamyd Medical announced it has shifted its focus from the development of the diabetes therapy Diamyd® to the the development of drug candidates for the treatment of chronic pain.

Earlier this year the company terminated both of its Phase III studieswith the diabetes therapy Diamyd® in Europe and the US because the therapy did not demonstrate sufficient efficacy.

Diamyd expects this move will substantially decrease the company’s costs since the Phase III program with Diamyd® accounted for approximately two thirds of the company’s total costs. As part of the cut Diamyd will lay off most of the employees in Sweden, who mainly worked on the Phase III studies with Diamyd® and in related areas. Diamyd estimates these changes will produce approximately $60 million in liquid assets at the end of the calendar year.The interest in Diamyd® and the active substance GAD65 is still high among diabetes researchers. GAD65 plays an important role in type 1 diabetes and continues to have potential to be used against the disease. Important discussions are ongoing within the research field about why the studies with Diamyd® did not meet the endpoints and how lessons learned from these and other studies in type 1 diabetes can guide the future development of GAD65 towards a diabetes drug. One approach being tested is to treat earlier in the disease process, before the onset of the disease. An externally funded and researcher-initiated Phase II study with Diamyd® is ongoing since 2008 in order to prevent type 1 diabetes in children at high risk of developing the disease, and that study continues. Other potential ways forward are giving more or higher doses of Diamyd®, or combining Diamyd® treatment with other drugs.Work still remains in analyzing the large amounts of data collected in the Phase III studies with Diamyd® and new data is still being collected. To complete the safety database of the US Phase III study and in consultation with the US Food and Drug Administration (FDA), the Company has decided to follow the patients who received injections of Diamyd®, but not the ones who received placebo, for six months after the last injection. The last follow-up visit is planned to take place in December. In the European Phase III-study, all of the patient visits have been completed.

Diamyd’s pain portfolio is based on the patented technology Nerve Targeting Drug Delivery System (NTDDS). NTDDS represents a new type of treatment that delivers gene-based drugs directly to nerve cells, providing a local effect in the cells targeted by the treatment. Besides pain relief the technology has potential to be used for the treatment and prevention of diseases in the nervous system, such as neuropathy, erectile dysfunction (impotence), neurodegenerative diseases and cancer. Research and development of NTDDS is mainly being carried out by the subsidiary Diamyd, Inc. in Pittsburgh, USA.

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