Diamyd's New Share Issue Substantially Oversubscribed

STOCKHOLM, Sweden, Nov. 5, 2009 (GLOBE NEWSWIRE) -- Diamyd Medical reports today that the Company's rights issue of just under 220MSEK has been substantially oversubscribed. Subscriptions equal to a total sum of 384 MSEK have been received.

3 109 514 shares have been subscribed and paid for with the support of subscription rights, totalling a payment of 217 665 980 SEK. This represents 99.3 percent of the total subscription rights. Those who exercised their subscription rights have received interim shares (BTA), traded on the Nasdaq OMX in Stockholm (Small Cap list) with ticker DIAM BTA 1B, until registration is processed at Bolagsverket.

Subscriptions corresponding to an additional 2 381 169 shares or 166 681 830 SEK without support of subscription rights have also been received. The Board of Directors of Diamyd Medical has decided on the allocation of the shares that have not been subscribed for with subscription rights, according to principles described in the Prospectus. Those who have received such allocation will be informed, through an assignment notice, within the next couple of days.

"The share issue got a fantastic response with an almost one hundred percent utilisation of the subscription rights," says Elisabeth Lindner, President and CEO of Diamyd Medical. "This means that we have succeeded to communicate this offer also to our many small shareholders, which is particularly gratifying," Elisabeth Lindner continues.

The additional capital is planned to last for two years with current development program and to cover with margin the costs that the Company anticipates incurring until data from the current Phase III program is expected to be available. The capital is also intended to strengthen the Company's bargaining position in current partnership negotiations.

An extra shareholders' meeting at Diamyd Medical AB (publ) held October 7, 2009, decided, in accordance with the proposal put forward by the Board of Directors, to implement a new share issue of just under 220 MSEK with preferential rights for existing shareholders. Record day was October 14, 2009, and the Subscription period was October 16 - 30, 2009. Every twenty-five (25) existing shares entitled to subscription of seven (7) new shares. The issue price was 70 SEK per share.

About Diamyd Medical

Diamyd Medical is a Swedish diabetes company focusing on the development of pharmaceuticals for the treatment of autoimmune diabetes and its complications.The company's most advanced project is the GAD-based drug Diamyd(R) for type 1 diabetes. Phase III trials for this drug are in progress in both Europe and the U.S. In addition, the company has initiated clinical studies in the U.S. in the area of chronic pain, using its Nerve Targeting Drug Delivery System (NTDDS).The company has also out-licensed the use of GAD for the treatment of Parkinson's disease. The company currently has three clinical-phase products.

Diamyd Medical has offices in Sweden and in the U.S. Shares are listed on Nasdaq OMX in Stockholm and on OTCQX in the U.S. 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.) 
 Linnegatan 89 B, SE-115 23 Stockholm, Sweden 
 Tel: +46 (0)8 6610026  
 Fax: +46 (0)8 661 63 68
 E-mail: info@diamyd.com. 
 VAT no: SE556530-142001.

CONTACT: Diamyd Medical AB (publ.)
         Elisabeth Lindner, President and CEO 
           +46 8 661 0026
         Pictures and press material contact:
         Andreas Ericsson 
           +46 8 661 0026
           andreas.ericsson@diamyd.com