Diamyd Medical: Time to look forward

After the negative results from the Phase III studies of Diamyd®, the company has decided to close the trials, and this is expected to quickly reduce costs. In our view, Diamyd Medical is now a gene therapy company whose most advanced project is NP2, for the treatment of cancer pain. Results so far have been promising, but the project still contains major risks. Critical Phase II results are expected at the end of 2011. At current share price levels, investors can view the Phase II results, but are still protected from a fall in price by a strong net cash position which we estimate will be around SEK 12 at that time.