DiaMedica Therapeutics Inc. (DMAC) is a clinical-stage biopharmaceutical company dedicated to improving the lives of individuals suffering from severe ischemic diseases, with a primary focus on acute ischemic stroke (AIS) and preeclampsia (PE). The company's lead product candidate, DM199, is a recombinant form of the human tissue kallikrein-1 (KLK1) protein, which plays a crucial role in regulating various physiological processes.
Business Overview and History
DiaMedica was founded in 2000 and is headquartered in Minneapolis, Minnesota. The company's journey began with a vision to develop novel therapies that could address the unmet medical needs in the realm of ischemic diseases. In the early years, the company dedicated its efforts to advancing its proprietary DM199 compound through preclinical studies and laying the groundwork for its clinical development.
In 2018, DiaMedica initiated its ReMEDy1 Phase 2 clinical trial evaluating DM199 for the treatment of AIS. Although the trial did not meet its primary endpoint, it demonstrated positive trends and potential benefits for certain patient subgroups, particularly those who had received prior treatment with tissue plasminogen activator (tPA).
The company faced a significant challenge in 2022 when it announced a clinical hold on its ReMEDy2 Phase 2/3 clinical trial of DM199 for AIS. The hold was implemented due to previously reported clinically significant hypotension events. However, DiaMedica worked diligently with the FDA to address the concerns, and in June 2023, the clinical hold was lifted, allowing the ReMEDy2 trial to resume enrollment.
Despite these challenges, DiaMedica has remained committed to advancing DM199 for the benefit of patients suffering from acute ischemic stroke and preeclampsia. The company has worked to address the issues that led to the clinical hold and is now focused on executing its clinical development plans for both indications.
Financial Performance and Liquidity
As a clinical-stage biopharmaceutical company, DiaMedica has yet to generate any revenue from product sales. The company's financial performance is primarily driven by its research and development (R&D) expenses, which have been the primary focus of its capital allocation.
For the fiscal year ended December 31, 2023, DiaMedica reported a net loss of $19.38 million, with R&D expenses of $13.11 million and general and administrative (G&A) expenses of $8.16 million. The company's cash, cash equivalents, and marketable securities stood at $52.90 million as of December 31, 2023, providing a runway into the third quarter of 2026.
In June 2024, DiaMedica completed a $12 million private placement, further strengthening its financial position and extending its cash runway. The company's strong cash position allows it to continue funding its ongoing clinical trials and development efforts, as it navigates the complex landscape of ischemic disease treatment.
For the nine months ended September 30, 2024, DiaMedica reported a net loss of $16.5 million and used $15.6 million in cash for operating activities. As of September 30, 2024, the company had $50.2 million in combined cash, cash equivalents, and marketable securities, $46.5 million in working capital, and $47.9 million in shareholders' equity. Specifically, cash and cash equivalents stood at $4.13 million, while marketable securities amounted to $46.06 million.
In the third quarter of 2024, DiaMedica's net loss increased to $6.27 million from $4.47 million in the same period of 2023. This increase was primarily attributed to higher research and development expenses related to the continuation of the ReMEDy2 clinical trial, expansion of the clinical team, and increased manufacturing development activity.
The company's financial position remains stable, with a debt-to-equity ratio of 0.008, a current ratio of 11.81, and a quick ratio of 11.81. DiaMedica has no available credit lines or facilities, relying primarily on its cash reserves and potential future equity offerings to fund its operations.
Acute Ischemic Stroke (AIS) Program
DiaMedica's lead program, the Phase 2/3 ReMEDy2 clinical trial, is evaluating the efficacy and safety of DM199 in the treatment of acute ischemic stroke. The trial is designed to enroll approximately 350 participants at up to 100 sites globally, with an interim analysis planned after the first 200 participants have been enrolled.
In 2024, the company implemented several updates to the ReMEDy2 protocol and statistical analysis plan, with the goal of enhancing the probability of trial success and expediting the study's completion. The key changes include:
1. Expanding the inclusion criteria to incorporate patients who did not respond to thrombolytic therapy (tPA non-responders). This subgroup exhibited the highest response rate in the prior ReMEDy1 study, with a 0% response rate in the placebo group compared to a 25% response rate in the DM199 group. The company believes their inclusion can improve the overall response rate compared to placebo.
2. Increasing the interim analysis sample size from 144 to 200 participants, which is expected to provide greater precision in the final sample size determination and potentially lead to a smaller overall study size. DiaMedica's projections suggest the potential to reduce the total required sample size from the originally planned 364 participants to around 300 participants, potentially resulting in substantial cost savings and a shorter overall study timeline.
These protocol updates, informed by extensive discussions with DiaMedica's scientific advisory board and leading vascular neurologists, are anticipated to accelerate enrollment rates and enhance the study's probability of success. However, the interim analysis, previously expected in summer 2025, is now projected to occur in Q4 2025 due to the increased sample size.
Prior to the clinical hold that was lifted in June 2023, DiaMedica had experienced slower than expected site activations and enrollment in the ReMEDy2 trial. The company attributed this to factors such as hospital staffing shortages, protocol criteria, and competition from other stroke trials. To address these challenges, DiaMedica has expanded its internal clinical team, brought certain trial activities in-house, and made protocol amendments to widen inclusion criteria and reduce participant burden.
Preeclampsia Program
In October 2024, DiaMedica announced the regulatory approval from SAHPRA to initiate a Phase 2 investigator-sponsored study of DM199 for the treatment of preeclampsia. This represents a significant expansion of the company's clinical pipeline, as it seeks to address the significant unmet need in this life-threatening pregnancy disorder.
The open-label, single-center, single-arm trial will evaluate the safety and pharmacodynamics of DM199 in treating preeclampsia. DiaMedica anticipates enrolling up to 90 women with preeclampsia, and potentially an additional 30 subjects with fetal growth restriction, at the Tygerberg Hospital in Cape Town, South Africa.
The company expects to announce preliminary proof-of-concept results from Part 1A of the study in the first half of 2025, which will demonstrate whether DM199 is safe, lowers blood pressure, and improves uterine artery dilation in early-onset preeclampsia patients.
Competitive Landscape and Risks
The biopharmaceutical industry is highly competitive, and DiaMedica faces challenges from both established players and emerging competitors in the ischemic disease treatment landscape. The company's success will depend on its ability to differentiate DM199 and demonstrate its clinical and commercial potential in the face of competition.
Additionally, the development and regulatory approval processes for pharmaceutical products carry inherent risks, including the potential for delays, setbacks, and unfavorable results. DiaMedica's ongoing clinical trials, particularly the ReMEDy2 study, are susceptible to these risks, which could impact the company's timeline and financial resources.
Furthermore, the broader macroeconomic and geopolitical environment can also affect DiaMedica's operations, such as changes in healthcare policies, regulatory frameworks, and economic conditions that may impact the company's ability to secure funding or navigate the complex clinical trial landscape.
Industry Trends and Market Outlook
The acute ischemic stroke and preeclampsia treatment markets represent significant opportunities for DiaMedica, with substantial unmet medical needs in both areas. The global acute ischemic stroke treatment market is projected to grow at a compound annual growth rate (CAGR) of approximately 6% from 2023 to 2030. Similarly, the preeclampsia treatment market is expected to expand at a CAGR of around 5% during the same period.
These growth projections underscore the potential market opportunity for DiaMedica's DM199 product candidate, should it successfully navigate the clinical development and regulatory approval processes. The company's focus on these two indications positions it to potentially address substantial patient populations and capture a share of these growing markets.
Conclusion
DiaMedica Therapeutics is navigating the frontiers of ischemic disease treatment, with a focus on acute ischemic stroke and preeclampsia. The company's lead product candidate, DM199, has shown promising potential in preclinical and early-stage clinical studies, and the recent updates to its ReMEDy2 trial design and the expansion into preeclampsia treatment demonstrate DiaMedica's commitment to addressing significant unmet medical needs.
As the company continues to advance its clinical programs and navigate the competitive landscape, investors will closely monitor its ability to execute on its strategic initiatives, manage risks, and ultimately, deliver tangible progress in improving the lives of patients suffering from severe ischemic diseases. The upcoming interim analysis of the ReMEDy2 trial in Q4 2025 and the preliminary results from the preeclampsia study in the first half of 2025 will be critical milestones in determining the potential of DM199 and the future trajectory of DiaMedica Therapeutics.