8-K: DiaMedica Therapeutics Secures $30.1 Million Private Placement to Advance Preeclampsia and Fetal Growth Restriction Programs

DiaMedica Therapeutics Inc. announced a $30.1 million private placement of common shares with existing accredited investors to fund its preeclampsia and fetal growth restriction clinical development programs and general corporate purposes.

Summary

• DiaMedica Therapeutics Inc. entered into a Securities Purchase Agreement on July 21, 2025, for a private placement of common shares.
• The company will issue 8,606,426 common shares at a purchase price of $3.50 per share.
• The private placement is expected to generate gross proceeds of $30.1 million, before deducting fees and other offering expenses.
• The closing of the private placement is anticipated on or about July 23, 2025, subject to customary closing conditions.
• Net proceeds are intended to fund the company's operations for more than two years.
• Funds will support the preeclampsia clinical development program for DM199, including the submission of an Investigational New Drug (IND) application in the United States and a Phase 2b study.
• A Registration Rights Agreement will be entered into, requiring the company to file a resale registration statement (Form S-3) within 10 business days of closing.
• The company aims to have the resale registration statement effective within 30 calendar days (or 75 days if subject to full SEC review) and maintain its effectiveness.
• Liquidated damages will be payable to purchasers if filing or effectiveness deadlines for the registration statement are missed (1% of aggregate Subscription Amount on Event Date and monthly thereafter, up to 10% of purchase price).
• The private placement includes participation from non-management, related parties, constituting a related party transaction under Canadian securities laws, but is exempt from certain requirements due to its size relative to market capitalization.

Sentiment

Score: 8

Explanation: The successful private placement of $30.1 million provides a strong financial runway for over two years, enabling the acceleration of critical clinical development programs for DM199 in areas with high unmet medical needs. This significantly de-risks near-term funding concerns and supports strategic milestones, indicating a positive outlook despite inherent clinical trial risks.

Positives

• Successfully raised $30.1 million in gross proceeds, providing funding for operations for more than two years.
• The capital raise will accelerate clinical development efforts for DM199 in preeclampsia and fetal growth restriction, conditions with no currently approved treatment options.
• DM199 is positioned as the most advanced clinical program targeting preeclampsia and fetal growth restriction.
• The financing supports key upcoming milestones, including IND submission and a Phase 2b study for DM199 in preeclampsia and fetal growth restriction.

Negatives

• The issuance of 8,606,426 new common shares will result in dilution for existing shareholders.
• The company is subject to liquidated damages if it fails to meet specified filing and effectiveness deadlines for the resale registration statement, potentially incurring additional costs.

Risks

• Risks and uncertainties related to the clinical expansion into preeclampsia and the associated trial.
• Uncertainty regarding the timing of ReMEDy2 trial enrollment, regulatory applications, and related filing and approval timelines.
• Possibility that enrollment in the ReMEDy2 trial may not continue to increase as anticipated.
• Potential for additional future adverse events or unfavorable results from the ReMEDy2 trial.
• Risk of unfavorable results from other ongoing or future clinical trials of DM199.
• Existing preclinical and clinical data may not be predictive of the results of ongoing or later clinical trials.
• Challenges in conducting successful clinical testing of DM199 within anticipated parameters, including site activations, enrollment numbers, costs, and timeframes.
• The adaptive design of the ReMEDy2 trial and the possibility that targeted enrollment and other aspects could change based on FDA input and blinded interim analysis.
• Uncertainty regarding the perceived benefits of DM199 over existing treatment options.
• Potential direct or indirect impact of hospital and medical facility staffing shortages, increased tariffs, and worldwide global supply chain shortages on DiaMedica's business and clinical trials.
• Reliance on collaboration with third parties to conduct clinical trials.
• Ability to continue to obtain funding for operations, including funding necessary to complete current and planned clinical trials and obtain regulatory approvals for DM199.
• The company's status as a passive foreign investment company (PFIC) for U.S. federal income tax purposes for the year ended December 31, 2024, with no assurance regarding future PFIC status, which may impact U.S. shareholders.

Future Outlook

DiaMedica Therapeutics expects to use the net proceeds from the private placement to fund operations for more than two years, supporting upcoming milestones including the submission of an Investigational New Drug (IND) application in the United States for preeclampsia and fetal growth restriction, and a Phase 2b study for DM199 in both indications, pending IND approval. The company also anticipates the interim analysis on the first 200 participants in the ReMEDy2 trial for acute ischemic stroke in the first half of 2026.

Management Comments

• Rick Pauls, President and CEO of DiaMedica, stated: 'This financing allows us to rapidly accelerate our development efforts in preeclampsia and fetal growth restriction, both of which have no approved treatment options currently.'
• Rick Pauls also commented: 'We believe DM199 has the potential to be a disease-modifying therapy for these patients, and look forward to building upon what is already the most advanced clinical program targeting these conditions.'

Industry Context

This private placement by DiaMedica Therapeutics highlights the continued investor interest in the biopharmaceutical sector, particularly in companies developing novel treatments for conditions with high unmet medical needs like preeclampsia and fetal growth restriction. The substantial capital infusion positions DiaMedica to advance its lead candidate, DM199, through critical clinical development stages, potentially strengthening its competitive standing in the therapeutic areas it targets, which currently lack approved treatment options.

Comparison to Industry Standards

• NA

Corporate Governance

Related Party Transactions

• The private placement includes binding commitments from certain non-management, related parties, for the aggregate amount of $30.1 million or 8,606,426 common shares.

Stakeholder Impact

• **Shareholders**: Experience dilution from the issuance of new common shares but benefit from the strengthened financial position and accelerated clinical development, which could lead to long-term value creation.
• **Employees**: Benefit from the extended cash runway, ensuring continued operations and job security as the company advances its clinical programs.
• **Customers/Patients**: Potential future beneficiaries of DM199, as the financing accelerates the development of a potential treatment for preeclampsia, fetal growth restriction, and acute ischemic stroke, addressing significant unmet medical needs.
• **Creditors**: Improved financial stability and extended cash runway reduce immediate credit risk.

Next Steps

• Expected closing of the private placement on or about July 23, 2025.
• Submission of an Investigational New Drug (IND) application in the United States for preeclampsia and fetal growth restriction.
• Initiation of a Phase 2b study to further evaluate DM199 in preeclampsia and fetal growth restriction, pending IND approval.
• Filing of a resale registration statement (Form S-3) with the SEC within 10 business days of the private placement closing.
• Company to use commercially reasonable best efforts to cause the resale registration statement to be declared effective by the SEC within 30 calendar days (or 75 days for full review).
• Interim analysis on the first 200 participants in the ReMEDy2 trial for acute ischemic stroke in the first half of 2026.

Key Dates

Recommendation

Keywords

DiaMedica Therapeutics, DMAC, Private Placement, Capital Raise, Preeclampsia, Fetal Growth Restriction, DM199, Clinical Development, Biopharmaceutical, SEC Filing, Form 8-K, Accredited Investors, Common Shares, Registration Rights, IND Application, Phase 2b Study, Acute Ischemic Stroke, ReMEDy2 Trial, Tissue Kallikrein-1, rhKLK1