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

Thanks, everyone, for being on the call today for our third-quarter 2025 earnings discussion. With me this morning are Dr. Julie Krop, who serves as our Chief Medical Officer, and Scott Kellen, our Chief Financial Officer. Since Q2, we've kept making substantial headway on both of our clinical programs, and I'm glad to walk you through what's happened recently and the milestones that lie ahead. As nearly all of you are aware, our lead product is DM199. This candidate is a recombinant version of KLK1, the human tissue protein that occurs naturally. By boosting levels of three important endothelium-derived vasodilating factors via activation of the bradykinin pathway, KLK1 improves blood flow and vascular health. Those three are nitric oxide, prostacyclin, and endothelium-derived hyperpolarizing factor; our belief is that this mechanism explains why DM199 is so well suited to better patient outcomes in preeclampsia, fetal growth restriction, and acute ischemic stroke — indications tied to vascular pathology. Beginning with the preeclampsia program, we've made meaningful headway since announcing positive interim data in July from part 1-A of the investigator-sponsored phase II trial run in South Africa; in our view, those interim results confirm DM199's biological activity and give a solid foundation for expanding this clinical study into the early onset preeclampsia and fetal growth restriction cohorts. What's more, this data — including confirmation that DM199 did not cross the placental barrier — puts DM199 in a unique spot when it comes to safety and reduced risk in this highly vulnerable patient population. We're thankful to Professor Cluver and her team, whose efforts aided us enormously as we get ready for our planned upcoming. To quickly go over the interim results, part 1-A of this study enrolled pregnant women with preeclampsia who were scheduled for delivery within 72 hours. Our view remains that these interim results show DM199 could become a first in class disease modifying treatment option for preeclampsia. Three key factors underlie our assessment. First, blood pressure data from cohort 6 through 9 showed clear dose dependent and statistically significant reductions in both systolic and diastolic blood pressure, which points to DM199's potential to control maternal hypertension associated with preeclampsia. I'd highlight how important this is given the results of one of the more recent preeclampsia trials, the PRESERVE-1 antithrombin study, where roughly half of deliveries were started because of out of control hypertension, suggesting that better control of blood pressure could have prolonged pregnancies in these patients. Two, improved placental perfusion. In part 1-A of our recent phase II results, treatment with DM199 yielded a statistically significant reduction in the uterine artery pulsatility index, a doppler- based assessment of arterial resistance suggesting improved uterine artery blood flow and enhanced placental perfusion, and three, we believe these improvements came about by improving endothelial function, which we think is an on target mechanistic response to DM199 therapy. By improving or restoring endothelial function, DM199 has the potential to reverse vascular injury caused by preeclampsia. The fact that it may help manage high blood pressure, fix endothelial dysfunction, and boost placental blood flow backs up our confidence that DM199 could become a first in class disease modifying treatment for this life threatening condition, which currently has nothing available to treat it. In Q3, Professor Cluver moved forward and finished Cohort 10 of part 1-A, dosing participants at 2.5 micrograms per kg IV along with 15 micrograms per kg subcutaneously, and also began dosing in expansion cohorts of as many as 12 more patients at the expected therapeutic dose level. We expect this expansion cohort to wrap up during the first half of 2026. Regarding parts 1-B and 2, protocol amendments are now being put in place, drawing on clinical learnings from part 1-A, in order to refine the treatment regimen. Part 1-B covers patients who will deliver within 72 hours. Part 2 is going to enroll women with early onset preeclampsia who qualify for expectant management or prolongation of pregnancy. Part 3, the fetal growth restriction cohort, involves participants who have fetal growth restriction yet do not have preeclampsia. We expect screening to begin in the coming weeks. We are also getting ready to run a phase II preeclampsia trial in the U.S. We held an in person pre-IND meeting with the FDA, which we believe was productive, and we look forward to giving an update. Once we receive the final meeting minutes, we expect the upcoming U.S. phase II trial will be carried out in early onset preeclampsia patients. For this group, the treatment is called expectant management, which represents the preeclampsia patient population facing the greatest unmet medical need. Shifting to our stroke program, let me have Julie give an update.

Rick, thanks, and good morning, everyone. We're still making consistent headway in getting our phase II-B/III ReMEDy2 stroke study up and running. As this study has moved forward, one thing has become obvious: enrollment right now is running below the figures we first estimated from past enrollment records. Our view is that this mostly stems from shifts in how stroke referrals happen, which have been brought about by uptake of tools like Viz.ai along with greater reliance on teleneurology. These days, when someone arrives at a smaller community hospital and mechanical thrombectomy isn't an option for them, the odds are higher than before that they'll stay put at that facility instead of being moved to the bigger comprehensive stroke centers, which are usually the sites conducting our research. Consequently, the number of patients matching our target profile showing up at the centers taking part has dropped compared with five or more years back. Our team keeps working out and rolling out approaches meant to counter these difficulties and to assist our clinical sites. Given all this, we just revised our ReMEDy2 enrollment projection, drawing on the real enrollment rates seen at our active clinical trial locations rather than the past rates we'd relied on at the start. Even so, the investigators remain very enthusiastic and strongly driven to identify further treatment choices for this significant unmet medical need. Enrollment keeps moving forward steadily, and as of today we're nearing 50% of the target needed for our interim futility analysis, which incorporates a sample size re-estimation; our expectation now is that the interim analysis, covering the initial 200 patients, will wrap up during the second half of 2026. Just to reiterate, following its review of safety data from the study's first 50 participants, the Independent Data Safety Monitoring Board found no safety issues and recommended unanimously that enrollment carry on with no changes.

Appreciate that, Julie. At this point I'd like to turn things over to Scott. He'll walk us through how the finances came out for the quarter.

Thank you, Rick, and hello everybody. On September 30th, 2025, we held $55.3 million in cash, cash equivalents, and short term investments. That compares with $30 million on June 30th, 2025, and $44.1 million at the close of our prior year. The cash we have now reflects the net proceeds from the private placement we completed in July; we are confident that our present cash position can support our planned clinical studies and corporate operations into the second half of 2027. Net cash used in operating activities came to $21.3 million during the nine months ended September 30th, 2025, versus $15.6 million in the same period in 2024; that rise stems mainly from a larger net loss during the first nine months of 2025 relative to the prior year period, partly offset by shifts in operating assets and liabilities in the current year period. R&D expenses totaled $6.4 million and $17.9 million for the three and nine month periods ending September 30th, 2025. That is up from $5 million and $12.6 million in the equivalent periods a year earlier. Both increases came primarily from higher costs tied to ongoing advancement of the ReMEDy2 clinical trial, including its global expansion progress with the phase II investigator sponsored trial in preeclampsia, along with growth of our clinical team during the current and prior year periods. Those increases were partly offset by lower costs tied to manufacturing process development work that was performed and finished in the prior year periods. General and administrative expenses were $2.6 million and $7.3 million for the three and nine month periods ending September 30th, 2025. Those expenses rose relative to the equivalent periods in 2024, which came in at $1.9 million and $5.7 million respectively. The higher figures in both periods stemmed mainly from greater non-cash share-based compensation and higher personnel costs associated with expanding our team. Growth in investor relations, patent and professional fees also played a part in both periods. On the whole, net losses were $8.6 million and $24.0 million for the three and nine month periods ending September 30th, 2025. Those figures exceed the $6.3 million and $16.5 million reported during the equivalent periods in 2024. I will now hand the call back to Rick.

Appreciate that, Scott. At this point we're ready to take questions from the line. Operator, would you mind bringing on our first analyst?

Hi there, and good morning. I really appreciate you letting us ask questions, and congratulations on how things are moving forward. To begin with, thinking a bit more broadly while we wait for the minutes from the pre-IND FDA meeting, could you describe the efforts your team is making alongside the preeclampsia KOL community and clinical trialists to build awareness around what has been observed so far regarding the DM199 proof of concept, particularly with respect to U.S. clinical development, and perhaps also discuss the main factors you are weighing at this time when it comes to trial sites? That is the first question. Secondly, regarding the protocol amendments, could you perhaps elaborate a bit further on what your team has in mind, and maybe say a little more about the doses and outcomes observed up to now? Just help us grasp that aspect. Many thanks.

Absolutely. Thanks, Stacy. To begin with the KOLs, we have been reaching out quite extensively to KOLs, really throughout the U.S. and essentially worldwide as well. The input we have received has been highly encouraging. There has not been a drug in development for preeclampsia for a number of years. I think initially the feedback we are receiving is the fact that the drug does not cross the placental barrier, which is simply a very critical safety profile. Just witnessing those highly encouraging and immediate drops in blood pressure and the fact that we are seeing that very consistently among pretty much every patient. I think the upside is it is also encouraging, but still early, is the signals of dilation of the intrauterine arteries. If this can consist into later stage studies, we think this is a clear sign of being disease modifying with regards to the protocol changes that we are looking at. First, for the part 1-B, what we are looking at doing is IV only and IV until delivery, with the ability of the physicians to adjust the dosing as needed. Almost being able to dial in the blood pressure to where it needs to be ahead of delivery. For the part 2, we are still working on some adjustments on that. Right now we are looking at likely using Cohort 10 from the recently completed part 1-A of the study. In part, in Cohort 10, we see very consistent and very clear drops in blood pressure as we have seen from Cohort 6 to 9.

Understood. Thank you so much.

Thanks, Stacy.

Morning, and thanks for fielding these. Rick, I want to circle back on part 1-B — you slipped in a cohort of 12 patients from part 1-A. Was the idea there to add to what part 1-B was originally meant to accomplish, which was essentially a dose expansion cohort? Given the modifications you're now considering for part 1-B, I'm trying to grasp what that group of 12 patients is actually for.

Yes, precisely. This expansion cohort sits at cohort 10, our highest dose reached so far. I'd describe it as extra work that effectively takes the place of what part 1-B had previously been set up to do. Going forward, part 1-B is going to be IV only.

Understood. When it comes to moving forward with a phase II trial in the U.S., what sets things in motion? Which results from Professor Cluver are you still anticipating before launching that U.S. trial? Is there some specific item you're holding out for?

Not really. We've been reviewing everything we've gotten so far. Dosing of additional patients will keep happening prior to kicking off that trial. Beyond the efficacy and safety information, the PK information matters a great deal too, and we've been looking at that as well. In our view, we already possess what's required to move ahead. Naturally, should any further information come in down the road, it might assist us in fine-tuning that protocol if necessary. As things stand, that phase II is expected to involve roughly 30 participants for the U.S. trial.

Excellent. Thanks, Rick.