Diamyd Medical announces today that the company has executed a settlement      

agreement with Apoteket AB regarding a clinical study in LADA patients, which
  
was invalidated in 2007. The cause of the invalidation was contradictory
data,  
which gave reason to suspect a mix-up of active drug and placebo.     
         

Diamyd contracted Apoteket AB in 2004 for handling of blinding,
randomization   
and labeling of the study drug for a clinical study with 160
LADA patients.  As 
the study was unblinded and reported during summer 2007,
the data was found to  
be inconclusive. An inspection at the pharmacy, that
had handled the study drug,
revealed insufficiencies in routines and
documentation, which made it impossible
to conclude which patients had
received active drug and which patients had      
received placebo. The study
was invalidated on these grounds.                   

Diamyd has claimed
damages from Apoteket AB for unnecessary costs related to the
invalidated
study. The settlement agreement includes a payment of SEK 11 million
to Diamyd
as compensation for the insufficiencies in Apoteket's routines and   

documentation causing Diamyd to invalidate the study.                        
  

“We have now agreed on a settlement with Apoteket AB and we are looking
forward 
to, in new LADA studies, confirm earlier positive results that have
been        
reported in this patient group after treatment with the diabetes
vaccine        
Diamyd®”, says Elisabeth Lindner, President of Diamyd Medical.
                 

                                                          
                     
For more information, please contact:                   
                       
Elisabeth Lindner, President and CEO Diamyd Medical AB
(publ.)                  
Phone: +46 8 661 0026                               
                           

For pictures and press material, please contact:
                               
Andreas Ericsson, Diamyd Medical AB (publ.)   
                                 
andreas.ericsson@diamyd.com                 
                                   
Phone: +46 8 661 0026                     
                                     


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® for type 1    
diabetes. Phase
III trials for this drug are in progress in both Europe and the 
US. In
addition, the Company has initiated clinical studies in the US 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. Diamyd Medical currently has three clinical-phase
products.

Diamyd Medical has offices in Sweden and in the US. Shares are
listed on Nasdaq 
OMX in Stockholm (ticker: DIAM B) and on OTCQX in the US
(ticker: DMYDY)        
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.)       
                                               
Linnégatan 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.