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

Thanks, operator, and I appreciate everyone being here today. Joining me this morning are our Chief Medical Officer, Dr. Julie Krop, and our Chief Financial Officer, Scott Kellen. Since we held our previous call just 5 weeks back, we'll aim to keep our comments brief. We feel good about what we've accomplished in 2026 up to this point, as we keep moving DM199 forward in both the preeclampsia and acute ischemic stroke programs. And what matters most for our shareholders: between now and the close of 2027, we're set to hit several clinical milestones, each of which has the potential to strongly confirm the worth of DM199. We've also been considering the pluses and minuses of giving interim updates when clinically meaningful data comes in before the formal readouts; finishing the interim analysis for the stroke program is something we're especially focused on. Our work on the ReMEDy2 stroke trial has been ongoing for quite a while, and we've pushed through some major obstacles that arose from the COVID pandemic; now that enrollment is above 70%, we anticipate the interim analysis will affirm all the effort invested in this program. I'll hand things over to Julie now so she can share more specifics about the preeclampsia and stroke programs.

Thanks, Rick. In the investigator-sponsored Phase II trial, we're almost done enrolling patients into the extension cohort of the Part 1a dose escalation study, which focuses on late-onset preeclampsia patients. For late onset cases, delivery is planned to occur within 72 hours. Through this cohort, we'll be able to identify which dose or doses to take forward into the IST's upcoming cohorts, and we anticipate wrapping up this cohort and giving a data update before this quarter ends. As you might remember, the interim findings from this trial showed DM199's potential to lower blood pressure and enhance placental perfusion while not crossing the placental barrier. Even though the patient population we drew from was relatively small, the results appeared highly consistent and gave us reason for optimism. We look forward to presenting data from the extension cohort, which should provide additional backing for what we found in the interim analysis. Beyond that, insights gained during Part 1a are shaping changes to the protocols for the two remaining preeclampsia groups still to be studied. The first of those, designated Part 1b, is an expansion trial that will enroll as many as 30 additional patients with late-onset preeclampsia, each receiving DM199 by way of a continuous intravenous infusion up until delivery. Through this cohort, our goal is to gain a clearer picture of how effectively physicians can deploy DM199 to help manage blood pressure control as the disease reaches this later stage. Part 2, the second study, is going to look at as many as 30 patients who have early onset preeclampsia. We'll test three different doses, which will help us figure out dosing for a Phase III trial and identify the best dose level — one that lengthens the amount of time a mother can stay pregnant, which pushes the gestational age at delivery higher. In our investor presentations, you've seen that the medical complications for the baby are expected to fall significantly the longer a mother remains pregnant. Since DM199 may be able to help control blood pressure and increase blood flow to the placenta, we think it could become a transformative therapy for preeclampsia. We expect to kick off those 2 preeclampsia cohorts, enrolling them at the same time, once the Part 1a extension cohort currently running has finished. The IST also includes a study of women dealing with fetal growth restriction; within that group, we'll be looking at how DM199 affects fetal growth restriction in patients who do not have preeclampsia. FGR is a condition characterized by reduced fetal growth, caused by poor functioning of the placenta, the unborn child's life support system. Stillbirth is most commonly caused by FGR, and among infants who make it through an FGR pregnancy, it is associated with lasting negative health consequences throughout the child's lifespan. In this cohort, we'll assess how well DM199 might boost placental perfusion and enhance fetal development. We expect to enroll the first patient in this trial sometime in the quarter we're in right now. In addition to that investigator-sponsored trial, we're continuing to advance a global Phase II program focused on early onset preeclampsia. That program will be conducted across North America, meaning the United States and Canada, as well as the United Kingdom. Health Canada cleared us to begin this study in March 2026, and the trial sites are already selected. We're aiming to begin enrolling patients in Canada before the end of this year. In the quarter we're currently in, we expect to file a clinical trial application in the U.K. Regarding where things stand with the IND submission in the United States, as we've mentioned before, the FDA asked for an extra nonclinical 10-day modified embryo fetal development and pre- and postnatal development study using a rabbit model. Findings from a non-GLP dose-ranging study in rabbits indicate that these animals mounted an adverse immune response to DM199, which kept us from finishing the modified pre- and postnatal development study in a rabbit model that the agency had requested; we've put forward a proposal to the FDA to run this study in a second rodent model and are waiting to hear back. Having said that, I'd like to make clear to all of you that we are moving forward on the Canada study at the same time, and our plan is to add U.K. sites while we finish up whatever extra preclinical work the FDA has requested. In this trial, three dose groups of DM199 will be evaluated in patients who have early onset preeclampsia, and the goal is to further pin down safety, pharmacokinetics and pharmacodynamics in a patient population that is more ethnically diverse, before we start a registration study. Turning now to our stroke program, the continued momentum behind the ReMEDy2 trial leaves us encouraged. Enrollment has now moved beyond 70% of the number required for the interim analysis. More recently, site activations and enrollments have started in Europe as well. Beyond America, Canada, and Britain, six more nations in Europe have joined our efforts, and about seventy locations are now up and running. During April, we hosted an investigator gathering for the European arm of our research, which saw solid turnout and included numerous fruitful workshops and conversations — we consider this kind of event vital for building enthusiasm among study teams and keeping their focus on bringing patients into the trial. We're also reaffirming our intention to wrap up the interim analysis before 2026 ends. To reiterate, within the Phase II ReMEDy1 stroke trial, patients given DM199 showed improvements in functional outcomes that were clinically meaningful, specifically among the group whose characteristics align most closely with those we're enrolling in ReMEDy2. For patients who did not receive a thrombectomy, the percentage who reached favorable recovery — a modified Rankin Scale score of 0 or 1 — was 15% higher in absolute terms than with placebo. Additionally, ReMEDy2 is currently enrolling individuals presenting with moderate stroke severity, which is defined by an NIHSS score falling between 5 and 15. When examining that subgroup within the ReMEDy1 study, functional outcomes showed a 19% absolute gain relative to placebo. Deaths among patients were cut by 50%, and recurrent strokes dropped by 13.3% versus placebo; these findings shape the design and powering assumptions behind the ReMEDy2 trial now underway. The rationale for our anticipation of the interim analysis findings seems obvious to me. Rick, I'm turning it over to you again now.

Appreciate that, Julie. At this point, I want to turn things over to Scott so he can walk us through how the finances came in for the quarter.

Thanks, Rick, and hello everybody. Yesterday, once trading had ended, we put out our financial results for the first quarter of 2026 and submitted our quarterly report on Form 10-Q. At March 31, 2026, cash, cash equivalents and short-term investments totaled $51.3 million, current liabilities stood at $5.7 million, and working capital came to $46.6 million. For comparison, at December 31, 2025, cash and investments were $59.9 million, current liabilities were $5.1 million, and working capital was $55.5 million. Our expectation is that the cash and investments we hold now will be enough to support our planned clinical studies and operations through 2027. Operating activities used net cash of $9.1 million in the first quarter of '26, versus $7.1 million in the first quarter of 2025. That rise in cash consumed by operating activities came mainly from a larger net loss in the current year period, partly offset by shifts in operating assets and liabilities in the current year quarter. Now to the income statement. Research and development expenses rose to $8 million for the 3 months ended March 31, 2026, compared with $5.7 million in the same period a year earlier. This growth stems primarily from higher costs tied to continuing our ReMEDy2 clinical trial and its global expansion, enlarging our clinical team, and expenses for additional reproductive toxicity testing conducted to support our PE program in the United States. Partially offsetting those increases were net cost reductions in manufacturing development activity related to work performed and completed in the prior year period. Relative to recent prior periods, we anticipate R&D expenses will moderately increase in future periods as we carry on our ReMEDy2 trial and keep advancing our DM199 clinical development program into PE. General and administrative expenses were $2.5 million for the 3 months ended March 31, 2026, and 2025. Although minor shifts took place across several expense categories, those differences were not material either individually or in the aggregate, and the overall net changes canceled each other out. Compared to recent prior periods, we expect G&A expenses to stay relatively consistent in future periods. With that, I'll ask the operator to open the lines for questions.

Regarding the preeclampsia updates coming this quarter for the late onset group, what additional findings should we expect apart from blood pressure management? Clearly, preeclampsia may impact urine output, kidney function, liver function, platelets, and markers such as sFlt. When will you be able to report data on those measures?

Yes. Thank you, Josh. So the expansion cohort we are conducting will involve 12 more patients. We are nearly finished with it at this moment. It will be at cohort 10 from Part 1a. Thus, it will simply provide us with further clarity here, especially regarding blood pressure and dilation of the intrauterine arteries. Right now, we truly do not anticipate any shifts in certain biomarkers such as sFlt, since these patients actually received only 2 doses. We think that keeping the drug present for ideally a week, 2 weeks would be when we truly start to see improvement in those biomarkers.

All right, understood. At some stage, I believe the lead investigators proposed that edema had at least gotten better, and perhaps that could be something capable of improving over a brief window. Would that be a thing you are watching for?

Yeah, that is one of the things — if endothelial health improves — and Dr. Cathy Cluver has quite plainly observed this among certain patients, that the edema actually cleared up even inside 12 to 24 hours after receiving DM199. That is encouraging. It involves a limited group of patients, but we will be checking whether any further insight exists in that area too.

If I could, just two more brief items. What has to happen before we can begin enrolling patients in the early onset preeclampsia study? And what's the reason that won't get underway until later this year?

Sure. Julie, would you like to handle that question?

Yeah. When you say that, do you mean the IST group? Or do you mean the trial we sponsor?

Sponsored trial.

Correct. We're currently in the process of collecting our dosing information from — once more, from the IST study — prior to choosing the final doses for that protocol, and also getting sites under contract and operational, plus finishing our CRO selection process. Once all of that is done, we'll kick things off. So it's several factors coming together, but we ought to be, again, in Canada later this year.

And then, last, sorry...

Sorry — allow me to jump in here. What matters most, as we already noted, is this: we've chosen 2 locations up in Canada, and 1 of those locations is, in fact, already part of our stroke study. So we're eager to build on those ties and on the contract we currently hold, essentially doing everything within our power to speed things up and bring those locations online as quickly as possible.

Understood. Then one more thing: what's the schedule for wrapping up the second animal toxicology study, and after that, going back to the FDA for the IND?