10-Q: DiaMedica Therapeutics Reports Q1 2025 Financial Results and Provides Clinical Program Updates

DiaMedica Therapeutics reports a net loss of $7.7 million for Q1 2025 and provides updates on its preeclampsia and acute ischemic stroke clinical programs.

Summary

• DiaMedica Therapeutics Inc. reported its financial results for the first quarter of 2025, showing a net loss of $7.7 million, compared to a $5.2 million loss in the same period of 2024.
• Research and development expenses increased to $5.7 million from $3.7 million year-over-year, driven by the ReMEDy2 clinical trial and manufacturing development activities.
• General and administrative expenses rose to $2.5 million from $2.1 million, primarily due to increased share-based compensation.
• The company's cash, cash equivalents, and marketable securities totaled $37.3 million as of March 31, 2025.
• DiaMedica is currently conducting a Phase 2 trial for preeclampsia (PE) and a Phase 2/3 ReMEDy2 trial for acute ischemic stroke (AIS).
• Slower than expected site activations and enrollment continue to be an issue for the ReMEDy2 trial.
• Preliminary topline results from Part 1A of the PE study are expected between the second half of June and the first half of July 2025.
• The company expects current cash resources to fund planned operations for at least the next 12 months.

Sentiment

Score: 4

Explanation: The report highlights increased losses and enrollment challenges in the ReMEDy2 trial, offset by sufficient cash for the next 12 months and progress in the preeclampsia program. The sentiment is cautiously negative.

Positives

• DiaMedica has sufficient cash resources to fund planned operations for at least the next 12 months.
• The Phase 2 preeclampsia trial is progressing, with preliminary topline results from Part 1A expected in June/July 2025.
• The company is taking steps to mitigate the slower than expected site activations and enrollment in the ReMEDy2 trial, including expanding the clinical team and bringing trial activities in-house.
• The company is expanding the ReMEDy2 trial globally, with regulatory filings being prepared for additional European countries.

Negatives

• DiaMedica reported a net loss of $7.7 million for Q1 2025, an increase from the $5.2 million loss in Q1 2024.
• The ReMEDy2 trial is experiencing slower than expected site activations and enrollment, potentially causing delays.
• Research and development expenses have increased, contributing to the larger net loss.
• The company has an accumulated deficit of $147.7 million as of March 31, 2025.

Risks

• Slower than expected site activations and enrollment in the ReMEDy2 trial could lead to delays.
• The company's future success depends on the success of its development efforts and ability to obtain regulatory approvals.
• DiaMedica may require significant additional funds earlier than expected.
• Changes in funding and staffing for the FDA, SEC and other government agencies could prevent new products from being developed, approved or commercialized in a timely manner.
• The ongoing litigation with Pharmaceutical Research Associates Group B.V. (ICON/PRA Netherlands) could have an impact on the company.

Future Outlook

DiaMedica expects to continue incurring significant expenses and operating losses for at least the next few years, with quarterly expenses expected to increase moderately as the ReMEDy2 trial continues and the DM199 clinical development program expands into preeclampsia. The company believes its current cash resources will be sufficient to fund planned operations for at least the next 12 months.

Management Comments

• Management is taking actions to mitigate the impact of factors adversely affecting the ReMEDy2 trial site activations and enrollment rate.
• Management expects that R&D expenses will moderately increase in future periods relative to recent prior periods as the ReMEDy2 trial continues, including global expansion, and the DM199 clinical development program expands into PE.

Industry Context

DiaMedica is focused on developing DM199 for preeclampsia and acute ischemic stroke, both areas with significant unmet medical needs. The company is positioning DM199 as a potential treatment option for AIS patients who are ineligible for existing therapies. In preeclampsia, DM199 is being developed as a potential treatment to lower blood pressure and improve perfusion to maternal organs and the placenta, with the goal of improving both maternal and perinatal outcomes.

Comparison to Industry Standards

• DiaMedica's approach to treating AIS by enhancing collateral blood flow and boosting neuronal survival aligns with industry efforts to address the limitations of existing thrombolytic and thrombectomy treatments, companies such as Biohaven and NoNO are also working on novel treatments for AIS.
• The company's focus on preeclampsia, a condition with limited treatment options, positions it to potentially capture a significant market share if DM199 proves effective and safe, similar to how Progenity aimed to address preeclampsia with its diagnostic tests.
• The company's reliance on clinical trials and regulatory approvals is consistent with the biopharmaceutical industry, where companies like Ionis Pharmaceuticals and Alnylam Pharmaceuticals have successfully navigated the regulatory process to bring novel therapies to market.

Management Changes

Legal Proceedings

• DiaMedica is involved in ongoing litigation with Pharmaceutical Research Associates Group B.V. (ICON/PRA Netherlands) regarding ownership of clinical study data and claims for damages.
• The NCC issued a decision to consolidate both appeals and evaluate them concurrently at a single hearing, which occurred on March 20, 2025.
• The NCC indicated that a ruling would be issued on or about June 20, 2025.

Stakeholder Impact

• Shareholders are impacted by the increased net loss and potential delays in the ReMEDy2 trial.
• Employees are impacted by the management change of Lorianne Masuoka, M.D. transitioning to part-time status.
• Patients with preeclampsia and acute ischemic stroke are impacted by the progress and potential delays in the clinical trials for DM199.

Next Steps

• Continue the Phase 2 preeclampsia trial and expect preliminary topline results from Part 1A between the second half of June and the first half of July 2025.
• Continue the Phase 2/3 ReMEDy2 trial for acute ischemic stroke, focusing on improving site activations and enrollment.
• Prepare regulatory filings and identify study sites in additional European countries for the ReMEDy2 trial.
• Monitor the results of efforts to enhance site activations and enrollment in the ReMEDy2 trial and implement additional actions if necessary.

Key Dates

Keywords

DiaMedica, DM199, preeclampsia, acute ischemic stroke, ReMEDy2, clinical trial, financial results, KLK1, pharmaceutical, biopharmaceutical