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

Thank you. Medica Therapeutics Second Quarter 2026 Earnings Conference Call. An audio recording of this webcast will be available shortly after the call today on Diomedica's website at www.diomedica.com in the Investor Relations section. Before the company proceeds with its remarks, please note that the company will 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 materially projected results appear in the section entitled Cautionary Statements, Note Regarding Forward-Looking Statements in the company's press release issued yesterday and under the heading Risk Factors in Diomedica's most recent annual report on Form 10-K, recent quarterly report on Form 10Q. Diomedica's SEC filings are available at www.sec.gov and on its website. Please also note that any comments made on today's call speak to the committee's decision to Only as of today, August 11, 2026, and may no longer be accurate at the time of any replay or transcript rereading. Following management's remarks, we will open the phone lines for questions. I would now like to introduce your host for today's call, Rick Pauls, Diomedica. President and Chief Executive Officer. Mr. Pauls, you may begin.

Thank you, Morgan, and thank you all for joining us today. With me this morning are Dr. Julie Kropp, our Chief Medical Officer, and Scott Kellan, our Chief Financial Officer. Q2 was an important quarter for Diomedica with progress across D-19 in early onset fetal growth restriction, pre- preeclampsia and acute ischemic stroke. We advanced our pregnancy-related clinical strategy, continued preparations for our Phase 2 early-onset preeclampsia study in Canada and the U.K., and made further progress towards reaching the planned Phase 2-3 Remedy 2 interim analysis in acute ischemic stroke. There are four key updates I would like to highlight. First, With respect to the IST being conducted by Professor Kluver, enrollment has been completed in the first cohort of the Phase II Early Onset Fetal Growth Restriction Study. The cohort consists of six participants treated at the 5 microgram per kg dose level. This is important as it expands the clinical use of the of DM-19 into a second serious women's health disorder for which there are no approved therapies. We plan to host a Key Opinion Leader event in September with Professor Kathy Kluver, the study's principal investigator, and other experts to discuss the potential of DMV9 in fetal growth restriction and share top line results for the completed first cohort open label phase two trial. Second, the extension cohort from the Part 1A of the IST has been completed. This was the initial dose escalation cohort treating women with late-stage preeclampsia. The combined results from the dose escalation and extension groups were important, as noted in the earnings press release, as they provide the clinical support driving the selection of the mid-dose range for the evaluation both for early onset fetal growth restriction and early onset preeclampsia studies. Julie will review the data later in the call. And third, we continue to advance our early onset preeclampsia programs on the regulatory and operational fronts, which I will discuss in a moment. And fourth, Remedy 2, our phase 2-3 acute ischemic stroke study is approaching the 200th patient required to trigger the pre-specified interim efficacy analysis. Although enrollment slowed somewhat in July, we now have surpassed 85% of the enrollment target and we anticipate the interim analysis readout in the first quarter of 2027. As a reminder, DME9 is recombinant form of the naturally occurring human KLK1 protein. KLK1 is a serum protease that acts through the BK2 receptors present in the enthalial blood vessels to restore the body's natural ability to increase levels of nitric oxide, prostacyclin, and end-of-field drive hyperpolarizing factors. We believe that this novel mechanism improves vascular biology, makes DM-19 both unique and well suited to address the endothelial and perfusion-related dysfunction common in preeclampsia, fetal growth restriction, and acute ischemic stroke. As I mentioned, we are pleased to report today that enrollment has been completed in the first cohort of the open-labeled Fable Phase II IST Fetal Growth Restriction Study. The first cohort consisted of six participants treated at the 5 microgram per kg dose level. This study is enrolling early onset fetal growth restriction patients with or without concurrent preeclampsia. This expansion of our development program allows us to evaluate FGR, a related yet distinct clinical indication to preeclampsia. Early onset FGR is a serious complication of pregnancy associated with inadequate uteroplasental blood flow. There are currently no therapies approved to treat FTR, just early delivery, which can have very serious consequences for the babies. The study is evaluating three dose levels. With the first cohort now fully enrolled, enrollment in the second cohort at 10 micrograms per kg should begin shortly. The dose for the third cohort will be between 1 and 15 micrograms per kg and will be based on the results from the first two cohorts. Key FGR study endpoints. safety and tolerability, prolongation of gestation, flow-mediated dilation, among other measures. This is an important study. It's the first time that DM-1A9 has been used in early onset patients. We plan to host a Key Opinion Leader event in September featuring Professor Kuhler, the study's principal investigator, where rationale for DM-1A9 in treating fetal growth restriction will be discussed, along with along with top line results from the completed first cohort. We are excited about this indication because it represents an expansion of DM-109's potential reach based upon the demonstrated improvement in the pulsatility or the resistance index observed in the initial preeclampsia Part 1A study. We also anticipate the first patients to be dosed shortly in the IST early onset preeclampsia and continuous IV infusion preeclampsia studies. Based on the results of the recently completed late onset preeclampsia study, a protocol amendment was filed in July to adjust the dosing regimen to provide more flexibility on dosing at the mid-2040s. to lower level range. Dosing will start shortly after the acceptance of the protocol amendment is completed in coming weeks. Moving to the Global Phase II Early-Onset Preeclampsia Program, Health Canada authorized initiation of our open-label Phase II dose-ranging study in early-onset preeclampsia patients earlier this year. The study is also designed to enroll approximately 30 patients at three dose levels. We are working with SISIM Canada and Anticipate to Dose. the first patient in Q4 of this year. We're also working to expand the study to the United Kingdom later this year, subject to regulatory authorization and site readiness. The results of the multi-preclampsia and FGR studies will be important in defining the dosing for the Phase III registrational trial in one or both indications. Turning to expanding the early-onset preeclampsia trial into U.S. sites, as we announced in June, we believe that based on the FDA feedback, our previously completed RET reproductive toxicology study may be accessible to support a US IND application, provided that we can demonstrate sufficient evidence of DMOE9 exposure and enzymatic activity throughout the previously completed rat study, as well as the adequate pharmacologic effects in rats to support their use as an appropriate toxicology species. To address FDA's request, we are conducting a pharmacokinetic and pharmacologic activity study of DM-19 in rats. Following completion of the study, anticipated in September, and reports in October, we plan to present results to the FDA and work with the agency towards initiating clinical development in the US. Finally, turning to the Remedy 2, our ongoing Phase 2-3 Acute Ischemic Stroke Trial. Enrollment has now surpassed 85% of the 200 patients required to trigger the pre-specified interim analysis, which is expected in Q1 of 2027. We currently have approximately 70 active sites across the U.S., Canada, the UK, and six countries in Europe. Site activation in Europe are adding meaningful enrollment capacity. The interim efficacy analysis, which occurs after completion of the protocol-defined 90-day follow-up, will be conducted by the Independent Data Safety Monitoring Board, or the DSMB, and is intended to assess whether a sample size re-estimate is warranted. The final The final size may range between 300 and 728 patients or futility. Diomedica will remain blinded to data and treatment effect estimates reviewed by the independent DSMB. And I'll turn the call over to Julie to walk through the late onset preeclampsia phase two part 1A clinical update in more detail.

Thank you, Rick. As Rick notes, the Part 1A Extension cohort has been completed with the dosing of the final 12 patients at Stellenbosch University site in South Africa. The cohort enrolled women with late-stage preeclampsia who had severe hypertension and were expected to deliver within 72 hours under the current treatment protocol. The purpose of the extension cohort was to more fully characterize the highest dose of DM-199 and provide additional dose response, safety, pharmacokinetic, and pharmacodynamic information to support dose selection for subsequent studies. highest dose analysis including 15 patients, three from the initial dose escalation phase, and 12 additional patients enrolled in the extension cohort. Following DM-199 administration, we observed statistically significant and sustained reductions from baseline in both systolic and diastolic maternal blood pressure. At the pre-specified assessment five minutes after completion of the IV infusion, mean systolic blood pressure decreased by 29.1 millimeters of mercury from a baseline of 169.3 millimeters of mercury with a p-value less than 0.001. Mean diet systolic blood pressure decreased by 17 millimeters of mercury from a baseline mean of 103.7 millimeters of mercury with a p-value less than 0.01. Mean systolic blood pressure remained below 160 at all measured time points over 24 hours, an important threshold blood pressure for required delivery to reduce the risk of brain hemorrhage in the mother. These findings were consistent with the previously reported dose-responsive reductions in systolic and diastolic blood pressure. Across the dose-ranging cohorts, the most clinically meaningful pharmacodynamic effects observed in Part 1a of the study were produced in the mid-dose range cohorts 4 through 8. These participants showed clinically meaningful reductions in both maternal blood pressure and the uterine artery pulsatility index. Note that reductions in the pulsatile index are consistent with reduced uteroplacental vascular resistance, suggesting improved blood flow to the baby, which we believe is key to potentially modifying the underlying disease process in these patient populations. These findings support studying dose levels from the mid-dose range for further clinical evaluation as we move to the early onset preeclampsia and fetal growth restriction studies. The dose levels for the next studies will begin at 5 micrograms per kilogram and advance to 10 micrograms per kilogram in the second cohort. The dose level for the third cohorts will be selected based on results from the first two cohorts and will range somewhere between 1 and 15 micrograms per kilogram. This is intended flexibility to further define the optimal dose range based on the emerging data. Taken together, we believe these findings provide evidence of a mechanistically on-target pharmacodynamic response for DM-199 in preeclampsia. The study investigators plan to present the full dataset, including safety, pharmacokinetic, and pharmacodynamic analyses at an upcoming medical conference and and submit the results for publication in a peer-reviewed journal later this year.

We now turn the call back to Rick. Thanks, Julie. I'd like to now ask Scott to review the financial results for the quarter.

Thank you, Rick, and good morning, everyone. So, in walking through the financial results for the second quarter, as of June 30, 2026, our cash, cash equivalents, and short-term investments were $43.5 million. Current liabilities were $6.6 million, and working capital was $37.7 million. compared to cash and investments of $59.9 million, current liabilities of $5.1 million, and working capital of $55.5 million as of December 31, 2025. We continue to believe that our current TASH position will fund our planned clinical studies and corporate operations through 2027. Net cash used in operating activities for the six months into June 30, 2026 was $17.2 million, compared to $14.7 million for the same period in 2025. increase resulted primarily from the increased net loss in the current year. Turning to the income statement, R&D expenses were $8.2 million and $16.1 million for the three and six-month time periods ending June 30, 2026. This was an increase from $5.8 million and $11.5 million for the same time periods in the prior year. The increases are primarily due to the expansion of our clinical team, continuation of our Remedy 2 clinical trial, including its global expansion, related to additional reproductive toxicity testing being performed in support of our PE program in the United States increased manufacturing and development activities, and increases in non-cash share-based compensation. We expect that our R&D expenses will moderately increase in future periods relative to recent prior periods as we continue both our Remedy 2 trial and continue the expansion of our DM-199 clinical development program in preeclampsia. Our general and administrative expenses were $2.3 million and $4.8 million for the three- and six-month time periods ending June 30, 2026. expenses increased slightly compared to the same time periods in 2025, which were $2.2 million and $4.7 million, respectively. The increase for the three-month period was driven primarily by increased non-cash share-based compensation and professional fees, while the increase for the six-month period resulted primarily from increased personnel costs incurred in conjunction with expanding our team, partially offset by a reduction in current year legal and other professional fees. We expect G&A expenses to remain relatively consistent in future periods as compared to recent prior periods. In summary, we remain well-funded with a cash runway through 2027. This covers through our major upcoming milestones, including the Remedy 2 interim analysis, planned data readouts from our preeclampsia and fetal growth restriction programs, and continued advancement of our Phase 2 preeclampsia program in Canada and the United Kingdom. With that, let me ask the operator to open lines for.

Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star then the number 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. Your first question comes from Josh Shimmer with Cantor. Your line is open.

Great, thanks for taking the questions, two quick ones. First, just trying to understand the commentary around dosing while you're focusing on the four to eight microgram per kilogram cohorts, not the higher doses for the late onset preeclampsia program, but then you are exploring higher doses. the early onset preeclampsia program so we can kind of square that and help us understand that strategy. And then for the fetal growth restriction program, are there any inclusion criteria that you're using to try to focus on patients who you might think might be most likely to respond and or have evidence of impaired placental perfusion?.

at baseline thank you sure thanks thanks Josh yes for so what we've what we're seeing from the part 1a as we've seen in other clinical trials that there's really a sweet spot for dosing DM1 dm-199 and you believe koki one selectively improves uterine blood flow while also controlling blood pressure but what we see is happening if we go too high, we think we're still controlling blood pressure, but we think that we run into receptor desensitization, and because of that we see less of the dilation. And so this is consistent actually what we've seen in glucose studies and for type two diabetics, we've seen the same effect in kidney disease studies looking at EGFR and UACR, where we see a greater clinical effect at the 3 microgram compared to the 15. And then in addition, you know, we also have an issued patent as well on this nonlinear dose response curve. So I So I think for us it's important that we've got some flexibility here that we can adjust the dose, but really more targeting this mid-range. In regards to your second question, in terms of FGR, these are very severe patients. These are FGR between weeks 27 and 32. And they'll be patients that earn the 3% or less percentile in terms of body weight. So they're very severe. these babies typically, if they were not being treated, that they would be delivering between one and six days. And so we think, you know, extending the gestational days, dilating the intrudern arteries and other factors, you know, we think this could be very exciting. So this really is focusing on, you know, on the dilation. And then we also believe that if we do see positive signals, this will be encouraging ahead of early onset preeclampsia because there we think we can also be controlling blood pressure in addition to the dilation. So we're really excited to have this KOL event in September.

Your next question comes from Stacy Koo with TD Cowan. Your line is open.

Hi, good morning. Thanks so much for taking your questions and congratulations on all the progress. So first on the fetal growth restriction, let's say cohort one data that we're going to get in September, maybe just help us understand the importance of, of maybe that chronic dosing that we're going to see. How many doses do you think you might disclose? Again, I know very early days, so just to help us understand that, kind of that dynamic. And then as we think to maybe the growth restriction and what's maybe clinically meaningful, is it a week of extension before delivery? Is it longer than that? Just help us understand the type of dynamics or maybe even a little sneak peek for the KOL event when it comes to the unmet. So that's the first question on FGR. The second is on maybe your learnings. for early onset preeclampsia. Just remind us, what are the, I guess, ongoing thoughts around IV versus subcutaneous? administration, maybe what kind of refinements you might be applying as you think about the different cohorts. I know you just talked about the receptor desensitization, but just help us understand what's the most up-to-date thinking on the frequency of dosing, et cetera. And then the last question is a clarification. on the FDA IND submission, is it fair to assume after we finish this enzymatic study, sounds like it's going to be completed in October, that you'll be able to kind of submit the.

and to the FDA. Thanks so much. Yes, sure. So starting with the first question. So for FGR, I think what's important here is that we think we've got very encouraging data thus far with the late-onset patients, where the patient's got one dose IV and then one dose subcutaneous. But this is really going to be the first time that we've actually dosed early-onset patients. And the the patients will come in, they're getting subcutaneous dosing every three days until delivery. And as I mentioned, we think that Standard of care, which basically is really limited, we were anticipating somewhere between one and six days. So from our perspective, I mean, we had indicated earlier that if we could get another five, six days, that could have a profound impact in terms of outcomes for these babies. Hopefully we'll get a few weeks on that front. In terms of the early onset preeclampsia, One of the changes as well we've made is that we're dropping the IV infusion and focusing on subcutaneous dosing every three days, three times. until delivery. One of the cohorts coming up for preeclampsia is a continuous IV infusion, and that'll be in late onset patients. And the premise there is that we believe by adjusting the dose, we can dial in the blood pressure to the targeted range. And so if we see positive effects there, what we would then intend to do for phase three for preeclampsia is that we're dosing every three days until systolic blood pressure approaches 160 and then at what point we would switch over to continuous IV infusion that can hopefully get us even a few extra days. And it goes well with the rat study that's already been initiated, it's ongoing. We should be completing that in the early part of September. The plan would be then to submit for a US IND. When we did meet with the FDA to discuss this topic, The last comment they had indicated to us that this was the last piece that they thought we needed to open up the IMD.

Thank you so much. Your next question comes from Thomas Flaven with Lake Street. Your line is open.

Good morning. Thanks for taking the questions. Rick, just following up on the FTR, what's clinically meaningful, what's not. So you mentioned days of gestation. Is there going to be an endpoint looking at what percentile the baby grows to? I know you said these are third percentile or less. Are you trying to get the baby up to fifth, tenth percentile I don't really know what the number would be, or is this simply gestational extension, which hopefully leads to an improvement in baby weight too?.

Yes, we'll be looking for changes to that. I think the two main ones we're looking at initially is the gestational days because we do believe keeping your baby and mom longer should result in larger, healthier babies. also be looking at the dilation of interuterine arteries. Typically, if a mother is not getting a treatment, there's no effect that that dilation should be worsening with time. So if we can even see a stabilization to an improvement, that would be super encouraging. Yes, and there will be a series of other endpoints that we'll be looking at as well for the study.

And then just for the Part Ia data that you shared today, I'm assuming you did, you tracked the same endpoints that you did in prior cohorts around placental transfer, uterine dilation, intrauterine artery dilation. Will that be presented at some point or how do you think about disclosing those other endpoints?.