10-Q: DiaMedica Therapeutics Reports Q3 2024 Results, Provides Update on Clinical Trials

DiaMedica Therapeutics reported its Q3 2024 financial results and provided updates on its ongoing clinical trials for DM199, including expansion into preeclampsia.

Summary

• DiaMedica Therapeutics reported a net loss of $6.3 million for the three months ended September 30, 2024, and a net loss of $16.5 million for the nine months ended September 30, 2024.
• The company's research and development expenses increased to $5.0 million for the quarter and $12.6 million for the nine months, primarily due to the ongoing ReMEDy2 clinical trial and expansion of the clinical team.
• General and administrative expenses were $1.9 million for the quarter and $5.7 million for the nine months.
• As of September 30, 2024, DiaMedica had $50.2 million in cash, cash equivalents, and marketable securities.
• The company is continuing its ReMEDy2 clinical trial for acute ischemic stroke (AIS) and has initiated a Phase 2 trial for preeclampsia (PE).
• The ReMEDy2 trial is a Phase 2/3 adaptive design trial intended to enroll approximately 350 patients at up to 100 sites globally.
• The company has expanded its internal clinical team and is working to mitigate slower than expected site activations and enrollment in the ReMEDy2 trial.
• DiaMedica received regulatory approval to initiate an investigator-sponsored study of DM199 in PE in South Africa, with the first subject enrolled in the fourth quarter of 2024.
• Topline results from the PE study are expected in the first half of 2025.

Sentiment

Score: 5

Explanation: The sentiment is neutral to slightly negative. While the company is making progress in its clinical trials and has a solid cash position, it is still experiencing losses and delays in its ReMEDy2 trial. The expansion into preeclampsia is a positive development, but it also introduces new risks.

Positives

• DiaMedica has a strong cash position of $50.2 million to support ongoing clinical trials.
• The company is actively working to address challenges in the ReMEDy2 trial by expanding its internal clinical team and globally expanding the trial.
• The initiation of the Phase 2 trial for preeclampsia represents a significant expansion of the DM199 clinical development program.
• Regulatory approval for the preeclampsia study in South Africa was obtained.
• The company has made changes to the ReMEDy2 study protocol to widen the inclusion criteria and reduce the burden on participants and sites.

Negatives

• The company experienced a net loss of $6.3 million for the quarter and $16.5 million for the nine months ended September 30, 2024.
• The ReMEDy2 trial has experienced slower than expected site activations and enrollment.
• The company has incurred significant operating losses since its inception.
• The company is dependent on additional financing to fund its operations.

Risks

• The company is in the clinical stage of development and has not generated any revenue from product sales.
• The development of DM199 requires significant additional clinical testing and investment.
• The ReMEDy2 trial has experienced slower than expected site activations and enrollment, which could lead to delays.
• The company is subject to risks related to regulatory approvals and the success of clinical trials.
• The company may need to raise additional capital to fund its operations.
• The investigator-sponsored PE trial has less company control and may face additional risks.
• Data from the PE trial may adversely affect the ReMEDy2 trial.

Future Outlook

DiaMedica expects to continue to incur significant operating losses as it continues the development and clinical study of DM199. The company anticipates that its quarterly expenses will increase moderately as it expands the ReMEDy2 trial globally and expands its DM199 clinical development program into preeclampsia. The company expects its current cash resources will be sufficient to continue the ReMEDy2 trial, support the Phase 2 PE trial and otherwise fund planned operations for at least the next 12 months.

Management Comments

• Management is actively working to mitigate the slower than expected site activations and enrollment in the ReMEDy2 trial.
• Management believes that the ReMEDy2 trial has the potential to serve as a pivotal registration study of DM199 in the AIS patient population.
• Management believes DM199 has the potential to lower blood pressure, enhance endothelial health, and improve perfusion to maternal organs and the placenta in preeclampsia.

Industry Context

The development of DM199 for AIS and PE addresses significant unmet medical needs in the treatment of severe ischemic disease. The company is competing with other companies developing treatments for stroke and preeclampsia. The company is leveraging the established therapeutic modality of KLK1 in Asia.

Comparison to Industry Standards

• DiaMedica's approach to treating AIS with DM199, a recombinant form of human tissue kallikrein-1 (KLK1), is unique compared to standard treatments like tPA and mechanical thrombectomy, which are limited to a subset of patients.
• The company's focus on the ischemic penumbra and neuronal survival through vasodilation and anti-apoptotic mechanisms differentiates it from other stroke therapies.
• The expansion into preeclampsia, a condition with no approved therapeutics in the US or Europe, positions DiaMedica to address a significant unmet need, unlike companies focused solely on stroke.
• The investigator-sponsored Phase 2 PE trial is a cost-effective approach to gather initial proof-of-concept data, which is different from companies that conduct all trials internally.
• The company's financial position, with $50.2 million in cash and marketable securities, is relatively strong compared to other clinical-stage biopharmaceutical companies, but it is still dependent on additional financing.

Legal Proceedings

• DiaMedica is involved in ongoing litigation with ICON/PRA Netherlands regarding ownership of clinical study data.
• The NCC has scheduled a hearing to evaluate both appeals concurrently in March 2025.

Stakeholder Impact

• Shareholders are impacted by the company's financial performance and the progress of its clinical trials.
• Employees are impacted by the company's financial stability and the success of its development programs.
• Patients with AIS and PE are potential beneficiaries of the company's drug candidate, DM199.
• The company's suppliers and vendors are impacted by the company's financial health and its ability to pay for services.

Next Steps

• Continue the ReMEDy2 clinical trial for acute ischemic stroke.
• Support the Phase 2 investigator-sponsored study of DM199 in preeclampsia.
• Monitor the results of efforts to mitigate slower than expected site activations and enrollment in the ReMEDy2 trial.
• Prepare regulatory filings and engage study sites in Canada, Australia, and Georgia for the ReMEDy2 trial.
• Continue to work with contract research organizations and advisors to support study sites and participants.
• Monitor the results of the Phase 2 PE trial and prepare for topline data in the first half of 2025.
• Seek additional funding for operations.

Key Dates

Keywords

DM199, Acute Ischemic Stroke, Preeclampsia, Clinical Trial, ReMEDy2, Biopharmaceutical, Kallikrein-1, Regulatory Approval, Phase 2, R&D