Executive Summary / Key Takeaways

• DiaMedica Therapeutics is a clinical-stage biopharmaceutical company focused on developing DM199, a recombinant form of the human tissue kallikrein-1 (KLK1) protein, for acute ischemic stroke (AIS) and preeclampsia (PE), two areas with significant unmet medical needs.
• DM199's core technological differentiation lies in its KLK1 mechanism, designed to enhance microcirculatory blood flow and tissue perfusion, offering a potential disease-modifying approach distinct from existing therapies, particularly its large molecular size which may prevent placental transfer in PE.
• Recent operational progress includes activating a critical mass of sites for the pivotal ReMEDy2 AIS trial and enrolling the first patient in the Phase 2 PE trial, signaling momentum despite prior enrollment challenges in AIS.
• Key upcoming catalysts include preliminary topline results from the Phase 2 PE trial expected between late June and early July 2025, and the interim analysis for the ReMEDy2 AIS trial anticipated in the first half of 2026.
• The company holds $37.3 million in cash, cash equivalents, and marketable securities as of March 31, 2025, providing a cash runway into Q3 2026, but future funding will be necessary to complete ongoing and planned clinical development.

A Novel Approach to Vascular Disease

DiaMedica Therapeutics is carving out a distinct path in the biopharmaceutical landscape, focusing on severe ischemic diseases with its lead product candidate, DM199 (rinvecalinase alfa). At its core, DiaMedica's strategy revolves around harnessing the therapeutic potential of the human tissue kallikrein-1 (KLK1) protein, a serine protease enzyme with established roles in regulating blood flow and tissue function. Unlike existing therapies that often target single pathways or symptoms, DM199, as a recombinant synthetic form of KLK1, is designed to address the underlying pathophysiology of conditions like acute ischemic stroke (AIS) and preeclampsia (PE) by enhancing microcirculatory blood flow and tissue perfusion.

The technological differentiation of DM199 stems from its ability to increase the production of key vasodilatory and protective molecules, including nitric oxide (NO), prostacyclin (PGI2), and endothelium-derived hyperpolarizing factor (EDHF). This multi-faceted mechanism aims to dilate arterioles, inhibit neuronal cell death (apoptosis), and promote neuronal remodeling and neoangiogenesis. For investors, this represents a potential competitive moat: a therapy that could offer benefits beyond symptom management, potentially leading to improved functional outcomes in stroke and disease modification in preeclampsia.

In the context of preeclampsia, DM199's large molecular size (26 kilodaltons) is a critical differentiator. Preclinical studies in pregnant rodents showed DM199 was detectable in maternal blood but not in fetal blood, suggesting it may not cross the placental barrier. This is a significant advantage over many small molecule antihypertensives used off-label in PE, which can readily cross the placenta and pose risks to the developing fetus. By potentially lowering maternal blood pressure and improving perfusion to maternal organs and the placenta without fetal exposure, DM199 could offer a much-needed safe and effective treatment in a field currently lacking FDA-approved therapies.

For acute ischemic stroke, DM199 is being developed for a large patient population – up to 80% of AIS patients who are ineligible for or do not respond to currently approved thrombolytic drugs or mechanical thrombectomy. The goal is to salvage brain tissue in the ischemic penumbra and improve recovery. The company's strategic decision to include thrombolytic non-responders in its pivotal ReMEDy2 trial is supported by post-hoc analysis from the prior ReMEDy1 study, which showed a 25% response rate in this subgroup compared to 0% in the placebo arm. This suggests a potentially high-responding patient population with a low placebo effect, which could significantly benefit the trial's statistical outcome and the drug's commercial potential, potentially adding a billion-dollar market opportunity in the U.S. alone if approved for this indication.

The competitive landscape for DMAC is complex. In AIS, it competes indirectly with large pharmaceutical companies like AstraZeneca (AZN), Pfizer (PFE), and Biogen (BIIB), which have established products for stroke prevention or management but lack a therapy targeting the underlying microvascular dysfunction in the acute phase for the ineligible population. Recent negative results from mechanical thrombectomy trials for medium vessel occlusions at the IST conference are seen as potentially beneficial for DMAC, as these patients are candidates for ReMEDy2 and the trial failures may free up research capacity. In preeclampsia, DMAC faces no FDA-approved competition, positioning DM199 as potentially first-in-class, although established companies like Novo Nordisk (NVO) have broad portfolios in related metabolic and renal areas. DMAC's smaller scale and pre-revenue status mean it operates with significantly higher R&D costs relative to its size and lacks the financial muscle and global distribution networks of these larger players. Its cash position, while extended by recent financing, requires careful management to fund ongoing trials, contrasting sharply with the substantial cash flows and R&D budgets of its larger competitors.

Operational Progress and Financial Health

DiaMedica's journey has been marked by the inherent challenges of clinical development. The ReMEDy2 trial for AIS, initiated following promising Phase 2 data, experienced a clinical hold and subsequent slower-than-expected site activation and enrollment. Management attributes these delays to factors including hospital staffing shortages, trial protocol complexity for discharged patients, lingering concerns from the prior clinical hold, and competition for research resources from other neurological trials.

In response, DiaMedica has taken decisive operational steps. They have significantly expanded their internal clinical team and brought key trial activities, such as site identification, qualification, activation, and monitoring, in-house. This strategic shift aims to improve efficiency and direct engagement with study sites. Furthermore, the company implemented protocol version 5.0 in late 2024, incorporating changes like allowing refrigerated storage of DM199 (simplifying logistics for patients discharged from the hospital) and expanding inclusion criteria to capture thrombolytic non-responders and patients with M2 segment and posterior artery occlusions. The trial is also undergoing global expansion into additional European countries, adding to existing sites in the U.S., Canada, and Georgia, with the goal of accelerating enrollment. As of the Q1 2025 update, enrollment for the interim analysis is between the 20th and 25th percentile, with activated sites in the mid-30s globally.

The strategic decision to increase the interim analysis sample size for ReMEDy2 from 144 to 200 participants, while delaying the interim readout, is intended to enhance the statistical power and precision of the final sample size determination. Management believes this could potentially reduce the overall trial size from the initial estimate of 364 to around 300 patients, leading to substantial cost and time savings in the long run. A recent safety review by the independent Data Safety Monitoring Board in January 2025 found no significant concerns with the new IV dosing rates, recommending the trial continue without modification, a positive signal for the program's safety profile.

Simultaneously, DiaMedica has successfully initiated its Phase 2 proof-of-concept trial for PE in South Africa. Enrollment commenced in Q4 2024, a rapid progression from protocol submission earlier in the year. This investigator-sponsored study allows DiaMedica's internal team to remain focused on ReMEDy2 while gaining crucial data in a new indication. The study design includes dose escalation (Part 1A), followed by expansion cohorts (Part 1B, Part 2, Part 3) evaluating DM199 in different PE patient populations, including those with fetal growth restriction.

Financially, DiaMedica remains in the clinical development phase, generating no product revenue. The company's operations are funded by prior equity financings, including a private placement in June 2024 that raised $11.7 million net.

As of March 31, 2025, DiaMedica held $37.3 million in cash, cash equivalents, and marketable securities, down from $44.1 million at December 31, 2024. The net loss for the three months ended March 31, 2025, was $7.7 million, compared to $5.2 million for the same period in 2024.

This increase in net loss and cash used in operations ($7.1 million in Q1 2025 vs. $6.7 million in Q1 2024) reflects the ramp-up in R&D activities, particularly the continuation and global expansion of ReMEDy2 and increased manufacturing development. General and administrative expenses saw a smaller increase, partly due to non-cash share-based compensation.

Outlook and Key Catalysts

Management anticipates that current cash resources will be sufficient to fund planned operations, including the ongoing PE and AIS trials, for at least the next 12 months from the May 13, 2025, 10-Q filing date, providing a runway into Q3 2026. However, the pace of clinical trials, particularly ReMEDy2 enrollment, could impact this timeline. The company expects R&D expenses to moderately increase in future quarters as global expansion of ReMEDy2 continues and the PE program advances. G&A expenses are projected to remain steady.

The near-term outlook is punctuated by two significant clinical catalysts. Preliminary topline results from Part 1A of the Phase 2 PE trial are expected between the second half of June and the first half of July 2025. These results are crucial for identifying a suitable dose for Part 1B and demonstrating initial proof-of-concept, including safety (particularly placental transfer), blood pressure lowering effects, and changes in uterine artery blood flow. A positive signal here could significantly de-risk the PE program and validate DM199's unique mechanism in this vulnerable population.

The next major data readout will be the interim analysis of the ReMEDy2 AIS trial, now anticipated in the first half of 2026. This analysis on the first 200 participants will determine the final sample size for the trial and could potentially lead to an early stop for futility, although the recent DSMB recommendation to continue without modification is encouraging. Successful interim results demonstrating a meaningful treatment effect would be a transformative event for the company, potentially paving the way for a smaller, faster path to potential approval.

While the company is making strides, risks remain. The pace of ReMEDy2 enrollment, despite mitigation efforts, could continue to be slower than planned, delaying the interim analysis and increasing costs. The PE trial, while promising, is early stage and dependent on investigator execution. Both programs face the inherent risks of clinical trials, including potential adverse events or failure to meet endpoints. Regulatory uncertainties, including potential impacts from changes in FDA funding and staffing, could also affect timelines. Furthermore, as a pre-revenue company, DiaMedica will require significant additional capital to complete its development programs and pursue commercialization, and there is no guarantee that financing will be available on favorable terms or at all.

Conclusion

DiaMedica Therapeutics presents a compelling, albeit high-risk, investment narrative centered on DM199's differentiated KLK1-based mechanism. The company is strategically targeting two areas of high unmet need, leveraging the potential of its recombinant protein to offer benefits beyond existing symptomatic treatments. Recent operational improvements and protocol adjustments in the ReMEDy2 trial, coupled with the successful initiation of the PE program, demonstrate management's proactive approach to advancing the pipeline.

The upcoming data readouts in PE (June/July 2025) and the ReMEDy2 interim analysis (H1 2026) represent critical inflection points that could significantly validate the investment thesis or highlight further challenges. While the company's cash position provides a runway into Q3 2026, successful clinical outcomes will be paramount for securing the necessary future funding. For investors, DMAC's story is one of potential breakthroughs in challenging vascular diseases, balanced against the operational and financial realities of a clinical-stage biotech pursuing a novel therapeutic approach in competitive markets dominated by much larger players. The ability of DM199's technology to deliver on its promise in these upcoming trials will ultimately determine the company's trajectory and potential value creation.