DiaMedica Therapeutics Inc. (DMAC) Earnings Call Transcript & Summary

Thanks, Operator. Good morning, everybody, and thanks for joining our Q1 2025 earnings call. With me this morning is Scott Kellen, who serves as our Chief Financial Officer. Dr. Lorianne Masuoka is out right now on a short-term medical leave, and we're wishing her a speedy recovery. We're glad to be with you today to bring you up to speed on how things stand with our two clinical development programs. Since we last provided an update, only a brief stretch of time has passed, so my comments will be on the shorter side. Even so, I'm happy to say that meaningful headway continues to be made across both of our clinical development programs. Let me begin with news on the pre-eclampsia program. Given how much this program has achieved in such a compressed period, as we talked about back in March, we're glad to now share that we think Part 1A of the phase 2A pre-eclampsia trial, which is investigator-sponsored, is quite near to nailing down a target dose that can be carried into Part 1B. A handful of critical data points will mostly drive the dose selection, and we anticipate sharing those in our forthcoming preliminary top-line results from the proof-of-concept portion, Part 1A, of the trial. Those critical data points are: first, safety and tolerability, which includes findings from a placental transfer analysis; second, how much systolic and diastolic blood pressure levels come down; and third, shifts in uterine and placental blood flow, measured through the Doppler ultrasound assessment of the uterine artery pulsatility index. That measurement matters because a drop in the pulsatility index might point to reduced downstream resistance and better uterine and placental blood flow, which could also signal disease modification. At present, we anticipate being able to put out those preliminary top-line results somewhere between the back half of June and the front half of July. When exactly that happens will mostly hinge on the timetables at the outside labs that are running the various tests, among them the pharmacodynamic biomarkers and the assay that will tell us whether DM199 crosses the placental barrier. One more item: May marks Pre-eclampsia Awareness Month, and on May 28th at 8:00 A.M. Eastern, we'll be sponsoring a Pre-eclampsia Key Opinion Leader call. Set against other therapeutic areas such as oncology, which has moved forward faster in recent years, care for pregnancy complications is still antiquated and poorly understood. Despite this disease's expanding burden, there are no FDA-approved treatments for pre-eclampsia. As far as we know, DM199 stands alone as the only novel agent presently under study in pregnant women who have pre-eclampsia; through this KOL event, we'll keep working to inform investors, physicians, and others who are interested about pre-eclampsia as a disease and where treatment stands today. Against that backdrop, we'll also go over the design of our ongoing phase 2 trial of DM199 in pre-eclampsia. Shifting quickly to the stroke program, enrollment keeps advancing at a solid pace, and we're delighted to report that participant enrollment has now reached somewhere between the 20% and 25% mark of patients enrolled for the interim analysis. The following enrollment report we'll give once we hit the halfway point. We feel the work we've done during the last 12 months reaching out to sites, encouraging dialogue between them, and making trial procedures less burdensome has mattered a lot in producing the enrollment increase we've seen lately. So we restated our guidance that the interim analysis covering those initial 200 subjects will wrap up during the first half of 2026. Also worth pointing out, we brought on a seasoned stroke neurologist to help with site engagement while Lorianne is on leave, which should keep our enrollment momentum going in the ReMEDy2 trial. This person has more than 10 years of experience caring for stroke patients at a leading U.S. research institution, plus 5 years of recent biotech drug development work. He's done an outstanding job building ties with our sites, sustaining those relationships, and backing the enrollment momentum we've had recently. At this point, I'll turn the call over to Scott Kellen so he can go through the financial results for this quarter.

Thank you, Rick, and good morning to all of you. As the Operator said earlier, yesterday once trading had closed we released our financial results for the first quarter of 2025 and submitted our quarterly report on Form 10-Q. You can find both of those documents on the DiaMedica website or on the SEC's site. On March 31, 2025, our reported figures were $37.3 million in total combined cash and investments, $4.7 million in current liabilities, and $32.8 million in working capital; for comparison, on December 31, 2024, the totals were $44.1 million in combined cash and investments, $5.4 million in current liabilities, and $39.2 million in working capital. The declines in combined cash and investments as well as in working capital stemmed mainly from the net cash we spent funding operations. During the first quarter of 2025, net cash used in operating activities came to $7.1 million, versus $6.7 million in the first quarter of 2024. The larger amount of cash consumed by operating activities was driven principally by our higher net loss, partly offset by shifts in operating assets and liabilities that took place in the current year period. We believe our existing cash and investments give us a runway extending into Q3 of 2026. Research and development expenses rose to $5.7 million for the three months ended March 31st, 2025, compared with $3.7 million for the three months ended March 31, 2024. That growth came mainly from higher costs tied to continuing our ReMEDy2 clinical trial, such as our global expansion, greater manufacturing development activity, and the growth of our clinical team during 2024. Partially offsetting those increases were lower costs associated with in-use study work that was performed and completed in the prior year period. As we carry on with the ReMEDy2 trial, including the global expansion, and keep growing our DM199 clinical development program in pre-eclampsia, we anticipate that R&D expenses will rise moderately in future periods compared with our recent prior periods. General and administrative expenses came in at $2.5 million and $2.1 million for the three months ended March 31, 2025, and 2024, respectively. This rise was primarily attributable to additional non-cash share-based compensation expense recognized following approval of an extension of the post-termination exercise period for stock options held by a retiring member of our board of directors; we anticipate that G&A expenses will hold steady in future periods relative to recent prior periods. Net other income was $443,000 for the three months ended March 31, 2025, versus $597,000 for the three months ended March 31, 2024. That decline was caused by lower interest income recognized during the current year period, which related to reduced average marketable securities balances in the current year period compared with the prior year period. With that, I'll ask the Operator to open the lines for questions.

Morning. Thanks for letting me ask. Rick, I just want to get some clarity — those lab test results that appear to be the thing that could shift the timing of the readout between June and July, is the main one the assay for DM199 crossing the placental barrier, meaning in the umbilical cord, or is there another factor in there we ought to know about?

Yes, Thomas. Yes, definitely. That's the primary piece — it will be the placental transfer; we have an assay that is just now being finalized with respect to reaching lower limits of detection, and it's simply a matter of time until they run it; we figured we should at least provide a range today regarding when we expect those results.

That makes sense. You said you expect Part 1B to begin in Q3. What triggers part II and part III — meaning the management and fetal growth restriction arms of the trial?

Let me begin with fetal growth restriction. Should we observe dilation of the intrauterine arteries, our investigators are ready to proceed with that cohort. As for part II, we'll have more to share once we daylight the results in the coming weeks.

Understood. That's great. Thanks for fielding our questions. Appreciate it.

Thank you, Thomas.

Morning, everyone, and thanks for fielding our question. Could you discuss what read-through you expect, or any risk reduction, linking the early pre-eclampsia results to how that profile might carry over into AIS development and the ReMEDy2 trial? Thanks once more.

Absolutely. Let me begin by noting these are clearly two quite distinct indications. A favorable outcome in pre-eclampsia would simply serve as further proof that this protein is active. I'd also bring up that, as we've discussed before, two versions of this protein are already in use across Asia. One version, isolated from human urine, currently treats roughly 1 million patients annually for acute ischemic stroke. Another version, isolated from pig pancreas, is used in Japan as well as China. We've managed to locate approximately 10 publications involving that version of the protein for treating pre-eclampsia. I believe it will be quite encouraging that we have an active protein. What we're observing in certain validation efforts and the rationale behind pursuing both indications is what we refer to as the crude forms in Asia today.

Thanks a lot. Appreciate it, guys.

Thank you.

Morning. I appreciate you taking our questions. Rick, regarding stroke, it would help to receive a bit more granular information about enrollment. Perhaps we could begin with those centers that handle high volumes, or that could handle high volumes. Could you update us on how many of those high-volume accounts have reached the one to two per month pace that you're aiming for?

Let me also mention that, as we mentioned during earlier calls, our expectation was that a limited number of locations, especially within the U.S., would be responsible for driving enrollment. Now that we're gaining some traction, that's exactly what's beginning to emerge. A portion of these sites with strong enrollment are achieving one to two patients per site per month. Our focus is on continuing to build that traction, and then putting real effort into the remaining sites to grow the relationship and provide encouragement. At this point, I'd say we're ahead of our plan, and the traction that's developing gives us confidence.