Diamyd Medical (DMYD B) - The High-Risk, High-Reward Play in Diabetes Treatment
Hey everyone,
I'm not just excited about this as an investment; I've got relatives with type 1 diabetes, and I'm super excited about the potential for a long-term cure that Diamyd Medical might offer.
What's the Deal with Diamyd Medical?
Diamyd Medical is a Swedish biotech company focusing on immune-modifying therapies for diabetes. Their flagship product, Diamyd, uses the antigen glutamic acid decarboxylase (GAD) to potentially treat and prevent type 1 diabetes. Basically, they are developing a "vaccine" for diabetes 1 which preserves your insulin production. There is possibility that if they manage to hack the insulin preservation, there is potential for recovering treatments that allows you to actually heal lost insulin production.
Diamyd Medical AB (publ) (DMYD-B.ST) Stock Price, News, Quote & History - Yahoo Finance
Why you should be excited:
- Innovative Approach: Diamyd isn't just another diabetes drug; it's an antigen-specific immunotherapy aimed at the root cause of type 1 diabetes, which is pretty groundbreaking if it pans out. Basically this is a "vaccine for diabetes 1".
- Close to finish line: Not another empty biotech with empty promises and potential "maybe" after 10-20 years: DMYD has already been founded in 1984 and it was listed in 2013.
- Clinical Trials: They've been pushing forward with phase III clinical trials for Diamyd. Phase III is already ongoing and FDA seems very positive about it, showing green light for accelerated approval in 2026.
- 4 to B Warrants Expiring: For those looking for a leveraged position, note that the 4 to B warrants for Diamyd Medical are set to expire in early 2025. This could be an opportunity for significant leverage if you believe in the company's near-term prospects. The previous warrants have been exercised almost fully, including the owners.
- Specific Haplotype Targeting: Diamyd targets individuals with the HLA DR3-DQ2 haplotype, which is found in approximately 40% of type 1 diabetes patients. This precision approach could lead to better outcomes for a significant portion of the diabetes market.
- Cost of Treatment: Market analysis suggests that the cost of treatment could be substantial, potentially in the range of $150 000 - 200 000 per patient, given the chronic nature of the treatment and the novelty of the approach.
- Subsidiaries: Diamyd has strategic investments in NextCell Pharma AB, which focuses on stem cell therapies, and MainlyAI AB, an AI company. These could provide additional revenue streams or technological advantages.
- Orphan Drug Designation: Diamyd has received Orphan Drug status from the FDA for treating a subset of type 1 diabetes patients, which could mean market exclusivity and other benefits if approved.
- Accelerated Approval Pathway: The company has been in discussions with the FDA about an accelerated approval process based on C-peptide preservation as a surrogate endpoint, which could speed up market entry. The
- Interim Results: An interim analysis is scheduled for 2026, and positive results could lead to market approval in the same year, potentially speeding up the treatment's availability.
- Other Medicine Development: Alongside Diamyd, they're also working on Remygen, a GABA-based drug aimed at regenerating insulin production and improving hormonal responses.
- In-House Manufacturing: Diamyd has set up its own biomanufacturing facility in Umeå, Sweden, capable of meeting worldwide demand without the need for manufacturing partners, which could reduce costs and increase control over production.
- Scientific Advisory Expertise: Their scientific advisory board includes luminaries in the field of immunology and diabetes, like Lars Klareskog, enhancing the credibility of their research and development efforts.
- Patent Protection: The company holds patents for key aspects of their treatment, including the intralymphatic administration method, valid until 2035 in several key markets, providing long-term protection for their technology.
Market Approval Timeline:
- Phase III Clinical Trials: Currently ongoing. The Phase 3 trial, named DIAGNODE-3, was initiated after the FDA lifted a partial clinical hold in November 2022. This allowed the start of the trial in the United States, following its already ongoing status in eight European countries.
- Phase III Interim report: A significant interim analysis is planned to occur around March 2026. This analysis will include efficacy data from approximately 170 participants who have completed their 15-month assessment. This interim analysis is crucial as it could potentially lead to an accelerated approval pathway based on C-peptide preservation as a surrogate endpoint.
- Regulatory Submission: Assuming all goes well with the interim results, we're looking at a potential submission to regulatory bodies like the FDA in early or mid 2026.
- Market Approval: If everything aligns, we might see market approval by late 2026. But remember, this is the biotech world; delays are as common as lab coats.
Why Should You Care?
- High Stakes: If Diamyd gets approved, we're talking about a potential game-changer for diabetes treatment. This will be massive news globally and it can change the lives of millions of people.
- Stock Price Potential: While there is risk premium priced in already, Currently, the stock is trading at levels that in my personal option does not reflect nature of the company's potential. I believe they have already shown credible evidence for performance in the specific halpoidgroup and the companys willingness to fund the manufacturing and Phase 3 tells this is not "just another biotech". I think the typical "hype cycle" is long gone and investors have dulled after years of waiting. But with successful trials, we could see a significant upward revaluation.
- A major difference compared to other biotech:
- They have invested in their own manufacturing
- They are paying the Phase 3 largely themselves, instead of licencing to a big pharma
- The owners are still heavily invested after years of development, and they have exercised their warrants
- The FDA's willingness to engage in discussions about accelerated approval shows a level of regulatory confidence in the drug's potential. It implies that the agency believes the drug could be effective, based on the data provided so far.
- Sweden is the ideal location, because of the free healthcare. I think the costs of diabetes 1 to public sector justify including the treatment in public healthcare.
- Investment Caveats: This is not for the faint of heart. Biotech is notorious for burning through cash, and regulatory hurdles can be massive. Diamyd Medical is still a small-cap with all the volatility that comes with it. It is unclear whether they need another funding round or if the current assets plus upcoming 4 to B round is enough.
Technical analysis:
It has been trading in 10-20 SEK range for the past 3 years. I think it is currently about to break the 3 year resistance at 20 SEK. While the stock is very volatile, I the main (MA, MA Cross...) indicators are positive in long term, It's also been on a volatile positive trend since 2023 and I expect it to continue until 2026. Analyst price targets are on average at 40 SEK. Currently the stock is retesting the 0.236 Fibonaccy level. Previously it was rejected at this level in February and August 2024. In august 2024 there was a false breach, which resulted in 25% jump in daily high, but it turned out to be too early, probably due to the warrants expiring in September 2024 at significantly lower price. but I think third time its the charm.
Final Thoughts:
Diamyd Medical represents the kind of investment where you could either x fold your money or watch it evaporate to 1/x. But if you believe in the science behind their approach and are willing to bet on the company's management to navigate the FDA's labyrinth, this could be a thrilling ride. Keep an eye on their clinical trial updates, follow the news, and maybe, just maybe, we'll see this dark horse gallop to the front.
Disclaimer: I'm not a financial advisor, this isn't advice, just my take on a stock I find fascinating. Always do your own due diligence.
Disclosure: I've owned a couple thousand units of stock and a couple thousand unit of 4 to B warrants, and I plan to exercise them. I am considering to increase my position to over weight. I participated in the previous 3 to B round and I exercised them all at 12 SEK.
What are your thoughts on Diamyd Medical? Are you in for the ride or watching from the sidelines? Let's discuss!
TL;DR: Diamyd Medical (DMYD B) is working on a potentially revolutionary diabetes treatment aimed at a specific genetic profile. Interim results from phase III trials are expected in 2026, potentially leading to market approval in 2026. High risk, potentially high reward for those who dare, especially with the leverage from expiring warrants.