DiaMedica Therapeutics Q4 2024 Earnings Call Transcript

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March 18, 2025
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Operator

Good morning, ladies and gentlemen, and welcome to the DiaMedica Therapeutics Full Year twenty twenty four Conference Call. An audio recording of the webcast will be available shortly after the call today on DiaMedica's website at www.diamedica.com in the investor relations section. Before DiaMedica proceeds with its remarks, please note that the company will be making forward looking statements on today's call. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these statements. More information, including factors that could cause actual results to differ from projected results, appears in the section entitled cautionary note regarding forward looking statements in the company's press release issued yesterday and under the heading Risk Factors in DiaMedica's twenty twenty four annual report on Form 10 ks filed yesterday.

Operator

DiaMedica's SEC filings are available on the SEC's website, www.sec.gov, and on its website, diamedica.com. Please also note that any comments made on today's call speak only as of today, 03/18/2025, and may no longer be accurate at the time of any replay or transcript rereading. DiaMedica disclaims any duty to update its forward looking statements. Following the prepared remarks, the phone lines will be open for questions. I would now like to turn you over to your host for today's call, Mr.

Operator

Rick Pauls, DiaMedica's President and Chief Executive Officer. Mr. Pauls?

Rick Pauls
Rick Pauls
President and Chief Executive Officer at DiaMedica Therapeutics

Thank you, operator. Hello, everyone, and welcome to our full year twenty twenty four conference call. I'm joined this morning by Scott Kellan, our Chief Financial Officer and Doctor. Lorraine Masayoka, our Chief Medical Officer. We're happy to be here today to update you on the progress of our two main clinical development programs.

Rick Pauls
Rick Pauls
President and Chief Executive Officer at DiaMedica Therapeutics

Seeing that our next expected clinical milestone is for our preeclampsia study, I'll ask Lori Anne to start with an update on our preeclampsia program and then we'll turn to our stroke study.

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

Thanks, Rick. Starting with preeclampsia, we are very pleased with our progress in this clinical program. Less than a year ago, our collaborators submitted the first draft of the protocol to the Tiger the This marks the first study of DM199 in a pregnancy related condition, a vulnerable setting where both the mother and fetus are considered patients. We believe these significant accomplishments within a short timeframe underscore DM199's potential as a treatment for this serious condition. All of this was made possible by the strong collaborations we've built with leading KOLs and trialists.

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

Our partners at the University of Melbourne and Stellenbosch University were immediately drawn to DM199 for its promising safety profile, its ability to produce nitric oxide and its potential to lower blood pressure. Most notably, DM199 is a protein of a sufficiently large molecular size that it is not expected to cross the placental barrier offering a key safety advantage for the developing fetus. In contrast, small molecule antihypertensives passively diffuse across the placental barrier and some are contraindicated in pregnancy because they cause fetal harm. We have repeatedly demonstrated that DM199 can lower blood pressure in humans and believe that this supports the hypothesis that DM199 can lower blood pressure in pregnant women. Compared to other therapeutic areas like oncology, which have advanced more rapidly in recent years, the treatment of pregnancy complications remains outdated.

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

No FDA approved treatments exist for preeclampsia despite the growing burden of this disease. To our knowledge, DM199 is the only novel agent currently being dosed in pregnant women with preeclampsia. Existing blood pressure medications used in preeclampsia do not enhance nitric oxide signaling, which is critically impaired leading to reduced blood flow to the fetus nor do they improve preeclamptic endothelial dysfunction, they merely manage symptoms. Preeclampsia is a progressive disease and these outdated treatments lose effectiveness or fail over time. By augmenting nitric oxide signaling, we hope that DM199 can not only lower blood pressure, but also improve underlying endothelial dysfunction offering benefits such as increased blood flow to the fetus and reduction of dangerously high blood pressure in the mother going beyond symptom management.

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

For context on the limitations of existing hypertension treatment, the PRESERVE-one study of early onset preeclampsia in The United States found that approximately fifty percent of women delivered within five to six days of study enrollment due to refractory or uncontrolled hypertension despite receiving maximal intervention. On average, participants delivered before thirty weeks of gestation, exposing the baby to significant risks. This highlights the aggressive and progressive nature of preeclampsia and underscores the urgent need for therapies that can successfully manage symptoms and ultimately go beyond this to target the underlying endothelial dysfunction. At these early gestational ages every additional day of prolonging pregnancy is crucial. Turning now to our investigator sponsored Phase two trial, we are currently dosing women in Part 1a, the dose escalation portion of the study.

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

Each dose cohort consists of three patients. If no safety concerns arise, we proceed to the next cohort at a higher dose. Part 1a may include up to 10 cohorts with the lowest IV dose starting at zero point one microgram per kilogram and the highest at two point five microgram per kilogram. For reference, our IV dose in the stroke program is zero point five micrograms per kilogram. Once a dose is identified in Part 1A that achieves clinically meaningful blood pressure reductions without causing hypotension, we will advance to Part 1B, an expansion cohort of 30 additional patients designed to confirm the optimal dose.

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

We are pleased to report that multiple dosing cohorts in Part 1a have been completed with DM199 appearing to be well tolerated and no serious adverse events or signs of pathological hypotension being reported. We look forward to showing results from Part 1a, which we anticipate in the second quarter. Turning to our stroke program, we are pleased to announce that we have activated 30 clinical sites, which we describe as our critical mass to generate a more steady stream of enrollments. Increasing overall activity levels and communications between sites This version of the protocol among other things allows DM199 to be stored at refrigerated temperature and expands the eligible population to include patients not responding to thrombolytic treatment. Refrigerated storage enables the study drug to be sent with the participant when they leave the hospital potentially simplifying the logistics of the participant receiving their subcutaneous injections for the entire three week treatment period.

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

And for patients who haven't improved for at least six hours after thrombolytic treatment providing the remaining enrollment criteria are met, they may be enrolled in our trial. This change in addition to increasing the number of potential patients for REMEDY two brings in a patient population that can be a good group for evaluation in our trial. In our initial stroke trial REMEDY one post hoc analysis of similar participants showed the most favorable improvement in the rate of full or nearly full recovery. The protocol also allows for enrollment of patients with occlusions of the M2 segment of the middle cerebral artery and the posterior arteries. This is a very significant change given the recent negative results of three mechanical thrombectomy of middle sized vessel occlusion studies announced at the IST conference last month.

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

I can share with you that sites are very positive about version five of the protocol. Building on this, our clinical and medical affairs teams continue to work on ensuring that once activated study sites feel comfortable and well supported by ensuring that once activated, study sites feel comfortable and well supported to enroll participants. In particular, they need to be comfortable that any participant they enroll will be able to receive treatment through the three week dosing period as the participant moves from the hospital to any intermediate care facility and ultimately home. Developing this comfort level requires a great deal of personal contact between our clinical team and the study sites. By the end of last year, we had a wide variety of resources available to provide any assistance the site might require and open lines of communication to ensure that the sites are aware of such options.

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

Complementing these efforts, our medical affairs team has been investing time meeting in person with study teams to discuss the potential benefits of DM199 and the importance of the REMEDY-two trial. This is done in a lunch and learn format to maximize the number of site personnel that can hear and engage with us on the trial. The team has also been coordinating peer to peer calls between study coordinators so that these professionals can share directly with each other thoughts and ideas on the things that work and don't work in managing participants through the study. Members of senior management have also been visiting the sites projected to be high enrollers. As we look back on the progress we've made to date, we note that even with highly interested physician investigators, it has been and is taking significantly more time to get sites through the engagement, planning and setup process.

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

We believe this is related to lower staffing levels in research units in this post COVID world. In hindsight, our expectation that restoring support for research at study sites would have been a higher priority, but in the end, we underestimated the required startup time. As I described, we've increased our level of engagement to overcome these issues. And though we're very encouraged by the uptick in enrollments in 2025, we've updated our expectations for the interim analysis to the first half of twenty twenty six. We'll provide a further update after we hit enrollment of 25%.

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

In other REMEDY two related developments, we've had a great experience at the February twenty twenty five International Stroke Conference. This was held in Los Angeles and our booth received considerable attention and we hosted a reception for our current and potential study sites, which was very well attended. At this conference results from three studies of mechanical thrombectomy and medium vessel occlusions were announced. None of the studies reported success. These results have the potential to benefit REMEDY-two enrollment in that these patients are candidates for our trial.

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

The European Stroke Conference is coming up in May and we look forward to another opportunity to build awareness of DM199 and our REMEDY-two trial. And as we announced yesterday, the scheduled safety review of the new IV dosing rates implemented upon resumption of our trial was completed in January. Our independent data safety monitoring board conducted a comprehensive review of safety data from all then enrolled participants and no significant safety concerns were identified. Their conclusion was that the REMEDY-two trial should continue without modification. Also in February, a paper providing an analysis of the mechanism of action of DM199 and its potential benefit for AIS patients appeared in a peer reviewed publication entitled Recombinant Human Tissue Calycrant one for Treating Acute Ischemic Stroke and preventing recurrence.

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

This publication is now available online and was published in the February 2025 issue of stroke. This paper provides scientific insight into DM199s mechanism for increasing collateral circulation and salvaging brain tissue at risk from infarction following an AIF. I'll now turn the call back to Rick.

Rick Pauls
Rick Pauls
President and Chief Executive Officer at DiaMedica Therapeutics

Thanks, Glorianne. I want to take a minute to thank Mr. Dan O'Connor for recently joining our Board. He is a tremendously accomplished leader in biotech and in particular in building companies. We're grateful to have his wisdom and guidance as we move DiaMedica and DM199 forward and we'll take every opportunity to learn from his past successes.

Rick Pauls
Rick Pauls
President and Chief Executive Officer at DiaMedica Therapeutics

Before I turn the call over to Scott, I'd like to add that our team really believes DM199 will be an effective treatment for both stroke and preeclampsia patients. I would also like to recognize our team's hard work and accomplishments over the past year and I look forward to continuing working with the team as we advance our clinical programs. Know that we are fully committed to moving both clinical programs forward as we have an important opportunity to provide options for patients who currently have no therapeutic treatment options today. Now, I'd like to hand the call over to Scott Kellen to review this quarter's financial results.

Scott Kellen
Scott Kellen
CFO & Secretary at DiaMedica Therapeutics

Thanks, Rick, and good morning, everyone. As the operator mentioned, we announced our full year 2024 financial results and filed our annual report on Form 10 ks yesterday. These documents are both available on either the DiaMedica or the SEC websites. As of 12/31/2024, we reported a total combined cash and investments of $44,100,000 Current liabilities of $5,400,000 and working capital of $39,200,000 This compares to a total combined cash and investments of $52,900,000 2 point 8 million dollars in current liabilities and $50,900,000 in working capital as of the December. The decreases in combined cash and investments and in working capital were due primarily to the cash used to fund our operations, partially offset by net proceeds received from the approximately $12,000,000 private placement we completed in June of twenty twenty four.

Scott Kellen
Scott Kellen
CFO & Secretary at DiaMedica Therapeutics

Net cash used in operating activities for the full year 2024 was $22,100,000 compared to $18,700,000 for the full year 2023. The increase in cash used in operating activities was driven by the combination of our increased net loss and the advance of deposit funds to vendors supporting our REMEDY two trial during 2024. These were partially offset by changes in operating assets and liabilities during 2024, particularly the increase in accrued liabilities related to our REMEDY two trial and ongoing manufacturing development activities as of 12/31/2024. We anticipate that our current cash and investments provide us a runway into Q3 of twenty twenty six. Turning to the income statement, our research and development expenses increased to $19,100,000 for the year ended 12/31/2024, up from $13,100,000 in the prior year.

Scott Kellen
Scott Kellen
CFO & Secretary at DiaMedica Therapeutics

This increase resulted primarily from cost increases driven by the continuation of the REMEDY two clinical trial, the expansion of the clinical team and increased manufacturing and development activity. Partially offsetting these increases were cost reductions related to the completion of prior clinical and non clinical trial work in 2023. We expect that R and D expenses will increase moderately relative to recent prior periods as the company expands REMEDY two globally and continues our site activation enrollment activities and as we continue to pursue our DM199 clinical development program into preeclampsia. Our general and administrative expenses were $7,600,000 for the full year of 2024, down from $8,200,000 for the full year 2023. This decrease was driven primarily by the combination of decreased legal fees incurred in connection with our lawsuit against PRA Netherlands and reductions in directors and officers liability insurance premiums.

Scott Kellen
Scott Kellen
CFO & Secretary at DiaMedica Therapeutics

These decreases were partially offset by increased personnel costs associated with expanding our team and increased non cash share based compensation costs. DiaMedica expects G and A expenses to remain steady compared to prior periods. Our net other income for the full year of 2024 was $2,300,000 compared to 1,900,000 for 2023. This increase was driven by our higher level of interest income being recognized related to higher average marketable security balances during 2024 as compared to the prior year. With that, let me ask the operator to open the lines for questions.

Operator

Thank you so much. Ladies and gentlemen, we'll now begin the question and answer session. And your first question comes from Thomas Flaten with Lake Street. Please go ahead.

Thomas Flaten
Senior Research Analyst at Lake Street Capital Markets, LLC

Good morning. I appreciate you taking the questions. Laurie Ann, a couple for you on REMEDY two. Of the 30 sites that are activated, how many of those are the 15 top sites that you've previously identified and how many of the 30 are actively enrolling versus being activated?

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

So of the 30 active or sorry, of the 30 sites that we've identified and activated, the top 15 comprise about 13 or so. So the vast majority of the top 15 are activated and many of them are currently enrolling.

Thomas Flaten
Senior Research Analyst at Lake Street Capital Markets, LLC

Got it. And then with respect to the DSMB review that you said, I believe you said took out was completed in January. How much data did they have on those patients? Was it just from the very acute phase or did they have a full treatment period to review for safety?

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

So they had the entire database, which means that all of the data that had been entered for those patients were available to the DSMB. What we do is we establish a cutoff date. And then after that cutoff date, we look at all of the data for that patient. So it's their entire experience that they have gone through up until that cutoff date.

Thomas Flaten
Senior Research Analyst at Lake Street Capital Markets, LLC

Understood. Excellent. Thank you for taking the questions. I'll get back in the queue.

Operator

Thank you. Your next question comes from Chase Knickerbocker with Craig Hallum. Please go ahead.

Chase Knickerbocker
Senior Equity Research Analyst - Healthcare at Craig-Hallum Capital Group LLC

Good morning. Thanks for taking the questions. Sorry, if I make you repeat some details here, but maybe just help us out with a couple of the assumptions to kind of get us to a first half twenty twenty six interim assessment. Just maybe relative to kind of the last kind of updates we received, I mean, what are your expectations around enrollment rates? And as we look at these 30 centers, I mean, what is kind of your ultimate expectation for trial sites activated?

Chase Knickerbocker
Senior Equity Research Analyst - Healthcare at Craig-Hallum Capital Group LLC

Thanks. Start there.

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

So we have

Rick Pauls
Rick Pauls
President and Chief Executive Officer at DiaMedica Therapeutics

go ahead, Lorraine.

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

So we have 30 sites that are currently active in The United States, but please remember that we are going to also that we also have five centers that are very active in Georgia. We are going to be opening sites in Canada in the next few weeks and we're also going to be moving into Australia and into Europe. So we'll have more than 30 sites. What we anticipate from the interim analysis is the opportunity. The reason why we increased our sample size from 144 to 200 was the opportunity to decrease the sample size that is needed overall.

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

So for example, originally we were looking at a fourteen percent improvement over placebo and with a three sixty four patient population. With the 200 interim analysis, we have the possibility if we see that same efficacy rate of having only 300 patients. So we anticipate that the interim analysis, although delayed as compared to the original interim analysis in large part due to increasing the sample size for the interim analysis, could overall save us time and money by reducing the sample size.

Chase Knickerbocker
Senior Equity Research Analyst - Healthcare at Craig-Hallum Capital Group LLC

On the overall number of sites, how high do you expect to go at this point? And then on the kind of enrollment rate, can you just kind of help us how we should think about it with kind of existing sites and kind of your experience kind of ramping these up now as far as kind of what gets us to that first half twenty twenty six interim?

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

Yes. So we're anticipating doubling the number of sites that we are going to be having enrolling. And we currently are targeting sorry, we are currently targeting sites that can enroll about one to two patients per month.

Chase Knickerbocker
Senior Equity Research Analyst - Healthcare at Craig-Hallum Capital Group LLC

And of the sites that we've enrolled so far, kind of what number of those are kind of at that kind of rate of one to two per month at this point? And kind of is there an idea of kind of how long it takes at this point to kind of get them to that rate?

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

It generally takes about six to twelve months to get a site up and running. And once they're up and running, it takes several weeks for them to start activating and enrolling because they need to get everything ready for enrollment into the trial. We're not at the moment disclosing how many of those sites are enrolling, how many patients will give you a fuller picture when we hit 25% enrollment.

Chase Knickerbocker
Senior Equity Research Analyst - Healthcare at Craig-Hallum Capital Group LLC

Great. Thank you.

Operator

Thank you so much. Your next question comes from Francois Brisebois with Oppenheimer. Please go ahead.

Analyst

Hi, this is Dan on for Frank. Thanks for taking our questions. Since the amendments from that were disclosed last time, particularly with regard to the tPA non responders, are you starting to see an improvement in the enrollment rate in this particular sub population among the activated sites? Yes. And I have one follow-up.

Rick Pauls
Rick Pauls
President and Chief Executive Officer at DiaMedica Therapeutics

Sure, Dan. Yes. So since the beginning of the year, we have seen a very encouraging increase in terms of enrollment. It's still not kind of where we wanted to be at, but definitely a significant increase that has been driven in part with this protocol amendment where we are including patients that receive tPA that do not respond M2 patients. And so keep in mind that for the protocol version five, most of the activation of those that protocol occurred at the end of twenty twenty four and then coming into early into the new year.

Analyst

Thank you. And just in regard to the recent ISD conference that you highlighted, could you give us some more color on like the KOLs feedback on DM199 in light of the other studies that were reported there at the conference?

Rick Pauls
Rick Pauls
President and Chief Executive Officer at DiaMedica Therapeutics

Sure. I mean, as Lillian mentioned in the prepared remarks is that the big takeaway was that there was a lot of excitement before the conference on mechanical thrombectomy for these Meebo study patients. So these are medium vessels, typically the M2s. And most of the physicians had thought that those studies would be very positive and would have potentially had a negative impact in terms of our trial and our patient population. The fact that three of those studies failed, one of them actually showed some safety concerns was very encouraging for our sites, our Scientific Advisory Board.

Rick Pauls
Rick Pauls
President and Chief Executive Officer at DiaMedica Therapeutics

Beyond that, there really wasn't anything exciting at the conference. And so that was really the big takeaway. And so because of this, I think there were a number of other trials that now we've heard have are not moving ahead that the mechanical turn back to me from EVO. So from a academic research perspective, I think that's going to be very positive for additional capacity for sites to be able to enroll a trial like ours, both those sites that are currently activated and those sites that are coming on board for

Rick Pauls
Rick Pauls
President and Chief Executive Officer at DiaMedica Therapeutics

our trial.

Analyst

Great. Thanks for taking our questions.

Operator

Thank you so much. Your next question comes from Matthew Caufield with H. W. Wainwright. Please go ahead.

Matthew Caufield
VP - Senior Healthcare Analyst at H.C. Wainwright & Co.

Hi, good morning guys. Thanks for the updates. For the preliminary top line in preeclampsia expected in the second quarter, is there a meaningful threshold for impacting maternal blood pressure that would offer the best read through or derisking for heading in?

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

Yes. What we're looking for is about a what we're looking for is about a 10 to 20 drop in systolic pressure. We want to get systolic pressure down to about 140, so that they're safely in a good range. And we are also anticipating that on the safety side, there won't be any evidence that DM199 passes the placental barrier. And we're also looking at dilation of the intrauterine arteries using Doppler measurements to measure something called pulsativity index, which assesses resistance to blood flow in the uterine arteries.

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

We're looking for a lower pulsativity index, which suggests that there's lower resistance and better placental perfusion. So those are the three things that we're going to be looking at, primarily in the Phase 1a trial. And if we see positive signals in those three areas, then that's a huge signal for us to move forward.

Matthew Caufield
VP - Senior Healthcare Analyst at H.C. Wainwright & Co.

Great. Very helpful. I appreciate that. And then just one final question from us. For REMEDY two, with the inclusion of the thrombolytic non responders, has the amended statistical analysis plan been finalized with the FDA at this stage?

Matthew Caufield
VP - Senior Healthcare Analyst at H.C. Wainwright & Co.

Thanks again.

Lorianne Masuoka
Lorianne Masuoka
Chief Medical Officer at DiaMedica Therapeutics

Yes, it has.

Matthew Caufield
VP - Senior Healthcare Analyst at H.C. Wainwright & Co.

Okay. Great. Thank you, guys.

Operator

Thank you so much. There are no further questions at this time. I would like to hand the call back over to Rick Pauls for closing remarks.

Rick Pauls
Rick Pauls
President and Chief Executive Officer at DiaMedica Therapeutics

Thank you, Marissa. So we'd like to thank everyone for joining us this morning and for your continued support. We are particularly excited about the momentum that we're building in both our stroke and preeclampsia programs as we advance DM199, a potentially transformative therapy for patients who do not have a treatment option today. The The dedication of our team combined with your support position us strongly for a very meaningful progress in 2025. We look forward to sharing updates with you soon.

Rick Pauls
Rick Pauls
President and Chief Executive Officer at DiaMedica Therapeutics

Thank you again. With us, this concludes our call.

Operator

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Executives
    • Rick Pauls
      Rick Pauls
      President and Chief Executive Officer
    • Lorianne Masuoka
      Lorianne Masuoka
      Chief Medical Officer
    • Scott Kellen
      Scott Kellen
      CFO & Secretary
Analysts
    • Thomas Flaten
      Senior Research Analyst at Lake Street Capital Markets, LLC
    • Chase Knickerbocker
      Senior Equity Research Analyst - Healthcare at Craig-Hallum Capital Group LLC
    • Analyst
    • Matthew Caufield
      VP - Senior Healthcare Analyst at H.C. Wainwright & Co.
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