Ortho-McNeil-Janssen Pharmaceuticals , a Johnson & Johnson company, has terminated its agreement to develop and commercialise a vaccine for type 1 diabetes with Diamyd Medical.

The termination follows last month’s evaluation of results of a Phase III study, which showed that the ‘Diamyd’ vaccine did not reach its primary efficacy endpoint of beta cell function at 15 months in patients newly diagnosed with the disease.

The agreement was made in June 2010, when Diamyd Medical received a non-refundable upfront payment of $45 million and the parties began sharing the costs of the programme equally.

Following the termination, Diamyd says it has “regained control” of all rights regarding Diamyd and active substance GAD65.

Diamyd Medical CEO Peter Zerhouni said, “With all the rights to returned to us we are free to decide on how to extract the most value from GAD65 going forward.”

Meanwhile, research consortium Type 1 Diabetes TrialNet is conducting a Phase II trial with Diamyd in the US and Canada with a similar design, Diamyd Medical has said.

In addition, an ongoing parallel US Phase III study, DiaPrevent, commenced in December, and results are expected next year.