Event - High hopes for Diamyd's diabetes vaccine


Diamyd Medical is approaching a critical time. The Swedish company’s vaccine aimed at slowing the progress of type 1 diabetes begins reporting phase III trial results in late spring, which will help determine whether partner Johnson & Johnson wants to follow through on its option to develop and commericialise the therapy.

Positive results will likely result in a milestone payment to Diamyd and persuade J&J to pick up the remaining development costs for the eponymous immunotherapy product (Diamyd continues winning streak with J&J deal, June 23, 2010). Expectations for the vaccine have been building since the company reported promising follow-up data on its phase II trials 18 months ago, suggesting the vaccine may represent a significant breakthrough in the treatment of the autoimmune form of diabetes.

Product Diamyd
Company Diamyd Medical
Market cap $518m
Event type Phase III results
Indication Type 1 diabetes
Date Spring 2011
Trial ID NCT00723411

Promising results

As type 1 diabetes is caused by the body’s destruction of the insulin-producing pancreatic beta cells, physicians and patients are unable to use such medicines as sulfonylureas that are reliant on insulin stimulation and must rely on human insulin or analogues to control blood sugar levels. Thus an approach to conserve the body’s own insulin producing capacity could be judged as a step forward in type 1 treatment protocols.

Diamyd’s approach aims to blunt the autoimmune activity that leads to destruction of beta cells. It does so by increasing the immune system’s tolerance to glutamic acid decarboxylase, a protein in the beta cells. Injection of an isoform of recombinant human glutamic acid decarboxylase has been shown to block the action of antigen-specific killer T cells that attack the beta cells.

A four-year follow up to phase II trials, reported in September 2009, found that children and adolescents who took the vaccine had better diabetes status than those who took placebo. Those promising results spurred investor excitement – shares have risen 50% since. Trading today at SKr128.50, the stock is not far off a record high of SKr151.50 set almost exactly a year ago.

Reporting soon

The phase III trial due to report soon is a three-arm European study of 320 diabetics between age 10 and 20, with a primary endpoint of meal-stimulated levels of C-peptide, a biomarker for type 1 diabetes. Diamyd reported in February that all the patients had completed a 15-month clinic visit, which will allow trial investigators to compile data and report results, expected in late spring.

A second trial in the US, which like the European trial was initiated in 2008, will not report results until mid-2012 because enrolees were limited to patients age 16 to 20 in its first year. That trial was not fully enrolled until 2010, 13 months after until the European trial.

As there is very little coverage of Diamyd by equity analysts at investment banks, few independent valuations exist, but this will likely change should Diamyd report out positive results.

It does, however, treat only a subset of type 1 patients, those with insulin producing capacity remaining. About 30,000 Americans are newly diagnosed every year, according to the Juvenile Diabetes Research Foundation International, giving observers an idea of the potential size of the market. So far, Diamyd is not saying that the vaccine can stop the course of the disease, so it is not clear that newly diagnosed patients taking it will be receiving treatment for life.

It is a promising approach. Physicians and patients would likely welcome a treatment that does more than replace the body’s insulin producing capacity. There clearly is expectation that this can be at least part of the answer.

Share This Article