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

Thank you, operator, and good morning, everyone. We're glad you could join us for our third quarter earnings call; with me today are Dr. Julie Krop, our Chief Medical Officer, and Scott Kellen, our Chief Financial Officer. Since our last earnings call, we've achieved two significant clinical milestones. First, we have finished enrolling patients in the first two cohorts of the investigator-sponsored phase II study in early-onset fetal growth restriction. Second, this October we reached the 200th participant enrolled in ReMEDy2, our pivotal phase II/III trial in acute ischemic stroke. As a result, we have met the pre-specified enrollment threshold needed for the ReMEDy2 interim analysis. Altogether, those achievements bring us nearer to key clinical data readouts that may shape where DM199 goes next in fetal growth restriction, preeclampsia, and acute ischemic stroke. Preparations also continue for further preeclampsia studies, among them our company-sponsored phase II trial, and we advanced in responding to FDA comments regarding the non-clinical package required for a U.S. Investigational New Drug application in preeclampsia. I'll take you through the main updates. Julie will go deeper on the clinical objectives, and Scott will go over our financial results. Just as a reminder, DM199 — generic name rinvecalinase alfa — is a recombinant version of human tissue kallikrein 1, or KLK1. We think DM199 could potentially enhance vascular health and function—and in the end, blood flow—by activating the bradykinin B2 receptor pathway. That mechanism of action is entirely novel, and it offers a shared therapeutic rationale spanning preeclampsia, fetal growth restriction, acute ischemic stroke, and other diseases, even though the clinical goals and endpoints differ from one indication to another. I'll start with the early-onset fetal growth restriction program, or FGR. Enrollment is now complete for the first two cohorts of the phase II study that Professor Cluver is running at Tygerberg Hospital in Cape Town, South Africa. Those cohorts together comprise 12 participants: six received five micrograms per kg and six received 10 micrograms per kg. To start, this marks the initial clinical assessment of DM199 among women dealing with early-onset fetal growth restriction. Early-onset FGR is a pregnancy condition carrying substantial danger for the fetus, and it often stems from placental insufficiency, which produces compromised blood circulation that limits how much oxygen and nutrients reach the baby. As of now, there is no approved treatment for FGR. At present, physicians have just one path: watching mother and baby very closely, weighing the chance of stillbirth and fetal complications from worsening placental insufficiency against the severe neonatal dangers that come with delivering babies too early; when preeclampsia complicates a pregnancy, the mother's risk additionally covers severe hypertension and organ injury. Our ongoing early-onset FGR trial is testing DM199 given as repeated subcutaneous doses, and the goal is to find out whether DM199 can safely extend pregnancy while keeping risks to the mother and baby as low as possible. The assessments cover maternal and fetal safety, measurements of uteroplacental vascular resistance, birth weight percentile, and how long the pregnancy lasts. The dose for the third cohort will be selected based on what we learn from the first two cohorts. On Tuesday, November 24th, at 8:00 A.M. Eastern Time, we'll hold a virtual key opinion leader event focused on fetal growth restriction, and it will feature preliminary results from both of the completed cohorts. Professor Cluver is going to be joined by Professor Stephen Tong and Professor Susan Walker, who are both at The University of Melbourne, and also by Professor Andrew Shennan of King's College London. The panel will discuss the treatment landscape and the unmet need, the clinical rationale behind DM199, and the preliminary safety and clinical observations viewed against current best practices in maternal fetal medicine. Two additional preeclampsia studies are expected to begin enrolling by the end of 2026 under the investigator-sponsored trial. In one of these, as many as 30 women with early-onset preeclampsia will receive repeated subcutaneous doses of DM199 until they deliver; this is what we refer to as part 2 of the study. The second study, which we call part 1B, will enroll as many as 30 women who have late-onset or late-stage preeclampsia, are acutely hypertensive, and are expected to deliver within 72 hours. In this second study, DM199 will be given to patients by continuous intravenous infusion, and that may tell us whether IV dosing of DM199 can help bring severe hypertension under control. Our belief is that each day is important for both mom and baby. Switching to IV DM199 might let these women's pregnancies be extended longer than is possible with subcutaneous dosing. We are also continuing to advance our company-sponsored phase II program in early-onset preeclampsia. Back in September, Health Canada approved a protocol amendment for the open-label phase II dose-finding study, and we're getting ready to start enrolling patients at Canadian sites; we also plan to extend the study into the United Kingdom, pending regulatory authorization. In October, the study received conditional authorization from the European Medicines Agency, or EMA, with the possibility of full approval once country-specific ethical and site requirements are satisfied, which opens the door to future European expansion. This trial is set up to evaluate roughly 30 patients with early-onset preeclampsia across three dose levels, building on the part 1A preeclampsia experience and emerging FGR observations. Combined, those two trials are going to provide us with additional data about dosing and pharmacologic activity across various clinical settings, and that allows us to build out the dosing plan for bigger preeclampsia studies. Here in the United States, we're still focused on responding to the FDA's comments on the non-clinical reproductive toxicology package, which we need in order to support an Investigational New Drug application, or IND, for studying DM199 in preeclampsia domestically. During our last quarterly call, we went over FDA feedback suggesting that the rat reproductive toxicology work we've already finished might be sufficient to back an IND application. For the FDA to accept it, we would need to show that throughout those studies, DM199 exposure and enzymatic activity stayed at adequate levels, and that in rats DM199 creates a strong enough pharmacologic effect to warrant using them as a toxicology species. To produce that data, we started one more rat study in the third quarter. I'm glad to report that the in-life portion has now been completed, and the animals tolerated DM199 well. We expect the pharmacokinetic and pharmacologic results in the coming weeks, and once the report is finalized, we intend to submit to the FDA. We also hit another important clinical milestone lately in acute ischemic stroke: ReMEDy2 reached the number of patients required to trigger its pre-planned interim analysis. This condition occurs when a clot blocks circulation to the brain, and it may cause serious, permanent disability or death. Current reperfusion approaches—for example, clot-dissolving thrombolytic medications and mechanical thrombectomy, which aims to physically extract the clot—can perform very well in certain eligible patients, but eligibility criteria, the window for treatment, and clot location each limit how widely they can be used. Many stroke patients are unable to get these treatments, or they still end up with major disability even after treatment; that is why stroke continues to represent a substantial unmet medical need, and there is an urgent demand for further approaches that protect at-risk brain tissue and enhance functional recovery. After the mandated 90-day follow-up for the 200th participant, the Independent Data Safety Monitoring Board, or DSMB, will review the primary efficacy endpoint, which is the proportion of participants achieving a modified Rankin Scale score of 0 to 1 at day 90, a result that signals an excellent functional outcome. Under the trial’s pre-specified adaptive design, the DSMB will rely on these efficacy data to decide whether the study should go on and, if it does, whether the final sample size ought to be adjusted. Should the trial proceed, final enrollment will target somewhere between 300 and 728 participants according to the pre-specified statistical plan. DiaMedica will stay blinded to the treatment effect data that the DSMB reviews. If it succeeds, ReMEDy2 could function as a pivotal trial to support a future New Drug Application, or NDA, for DM199 in acute ischemic stroke. Patient recruitment is continuing while the follow-up period is completed and data are prepared for interim review; we anticipate that the DSMB will finish its analysis during the first quarter of 2027; with that, I’ll hand the call to Julie for a more detailed discussion of the clinical programs. Julie?

Thanks, Rick, and good morning to all of you. There are two parts of our development strategy related to pregnancy that I'd like to discuss in more detail. First, what do we hope to learn from the FGR cohorts? And second, in what ways are the initial preeclampsia findings shaping the studies that come next? Severe early-onset fetal growth restriction is a considerable challenge, since impaired placental function can sharply restrict the fetus's capacity to grow and develop. As Rick mentioned, clinical management means weighing the possible benefit of extending gestation against the maternal and fetal risks that come with continuing the pregnancy. Our focus is on determining if DM199 can produce a beneficial effect on vascular physiology—and how large that effect might be—so that vascular health and blood flow improve, which would ultimately help achieve better outcomes for both mother and baby. In the ongoing phase II FGR IST trial, we are testing repeated subcutaneous administration of DM199 in women with early-onset disease. The main assessments cover safety and tolerability, along with umbilical artery Doppler indices that show the level of resistance to blood flow from the fetus to the placenta. When Doppler results are abnormal—particularly when end-diastolic flow is absent or reversed—those findings assist in determining when delivery should occur in pregnancies affected by fetal growth restriction. Modifications to those physiological measures are going to yield key details regarding how DM199 behaves pharmacologically, and they'll assist in guiding subsequent development work. During the November 24th KOL event, we'll walk through early observations from the pair of six-participant cohorts that received subcutaneous DM199 at 5 and 10 micrograms per kilogram, respectively. Even though this is an initial open-label trial with a limited patient count, the results will provide a first chance to evaluate DM199's safety, pharmacologic activity, and possible clinical impact in women experiencing early-onset FGR. Crucially, the experts will assist in framing the open-label data by supplying benchmark information on outcomes for patients who receive the current standard of care. Part 1A of the investigator-sponsored trial focused on patients who had late-onset preeclampsia. As you may remember, those results demonstrated that maternal systolic and diastolic blood pressure fell quickly and stayed lower after treatment with DM199. We additionally saw pharmacodynamic effects, among them trends pointing to a decrease in the uterine artery pulsatility index — a resistance measure that indirectly reflects uteroplacental blood flow. All of this together backs the dose selection and gives a solid rationale for running further studies to find out whether DM199 can produce clinically meaningful benefits, especially in early-onset disease. I'd also like to call attention to the clinical rationale for DM199 in acute ischemic stroke. Thrombolytic therapies break up clots, and mechanical thrombectomy pulls them out physically—DM199 works differently. Its design goal is better collateral circulation in the ischemic penumbra: the brain tissue around the clot that is harmed yet stays viable for a while, and that faces permanent damage when blood flow isn't sufficiently restored. We think DM199, by getting more oxygen to this endangered tissue, could preserve neurologic function and, in the end, might improve how patients recover after a stroke. ReMEDy2 is a randomized, double-blind, placebo-controlled study evaluating DM199 in acute ischemic stroke patients whose treatment begins within 24 hours of symptom onset. Over a three-week period, participants get either DM199 or placebo, and functional recovery is measured at day 90. The trial concentrates on patients who aren't candidates for mechanical thrombectomy, a group with a significant unmet medical need. Through these programs, we aim to find out whether DM199's impact on vascular function and blood flow can produce meaningful clinical benefits for patients dealing with these serious conditions. Rick, over to you.

Thanks, Julie. Now I'll turn things over to Scott so he can walk us through the financial results for the third quarter. Scott?

Thanks, Rick, and good morning to everyone. At September 30, 2026, cash equivalents plus short-term investments totaled $34.9 million, versus $59.9 million on December 31, 2025. Current liabilities stood at $7.5 million, and working capital came to $28 million at quarter end, compared with $5.1 million and $55.5 million, respectively, at year-end 2025. On the basis of our present plans, we anticipate that cash equivalents and short-term investments will carry our planned clinical studies and corporate operations through into the fourth quarter of 2027. Operating activities used net cash of $26 million during the first nine months of 2026, versus $21.3 million in the first nine months of 2025. That rise mainly reflected the larger net loss, partly offset by shifts in operating assets and liabilities. Moving to the income statements, research and development expense came in at $9.2 million for the third quarter and $25.4 million for the first nine months of 2026, against $6.4 million and $17.9 million in the corresponding periods of 2025. Growth here was driven primarily by expansion of our clinical team, ongoing ReMEDy2 activities, including the trial's global expansion, startup activities for our phase II preeclampsia study in Canada and the United Kingdom, additional reproductive toxicity testing supporting our planned U.S. preeclampsia program, greater manufacturing development activity, and higher non-cash share-based compensation charges; as enrollment continues in ReMEDy2 and startup activities advance in our global phase II preeclampsia study, we expect research and development expenses to rise moderately relative to recent prior periods. General and administrative expense was $2.4 million for the third quarter and $7.2 million for the first nine months of 2026, against $2.6 million and $7.3 million, respectively, for the same periods in 2025. Those modest reductions mainly reflected lower professional fees, partly offset by increased non-cash share-based compensation in the current quarter and higher personnel costs across the nine-month period. We expect general and administrative expense to stay relatively steady compared with recent prior periods. Our net loss for the third quarter was $11.3 million, or $0.21 per share, versus $8.6 million, or $0.17 per share, in the third quarter of 2025. For the nine months ended September 30, net loss was $31.5 million, or $0.58 per share, versus $24 million, or $0.53 per share, for the same period in the prior year; with that, operator, please open the call for questions.

Hey there, good morning. Thanks for taking the questions, I appreciate it. Only two from me. Rick, if the current pace holds, can you project how many patients will be enrolled in the stroke study by the time the interim analysis reads out?

Thanks, Thomas. We haven't given specific updates, but hopefully we're getting nearer to 300 patients in total. If 300 patients turns out to be the final number, we'll hopefully need a few more months to finish enrollment.

Understood; this is somewhat of an in-the-weeds question, and I don't want to get ahead of the event in a week and a half, but you said in your prepared remarks that birth weight was going to be measured in the FGR cohorts. I'm just curious what you are benchmarking birth weight percentile against. Is it a projection at the time they start treatment, or can you just help me think that one through?

Yeah, if you could hang tight here, we will have that here in a week and a half, and we really look forward to sharing the full results at the conference, at the event.

Understood. Thank you, I appreciate it.

Thank you very much for fielding our questions, and we're eager for the KOL event in two weeks. We'll also try to get a few, let's say, early heads-up items on the FGR data, while we wait for the detailed discussion points. A few things. Perhaps you could walk us through your current thinking regarding potential dosing differences, when we consider hypertension and the patient population; then second, regarding the population you're enrolling, you've mentioned previously that they will be very severe. Do you intend to disclose what percentage have concomitant preeclampsia, or will they be FGR patients only? Julie, a question about the recordings for vascular resistance. How frequently do we pick up measurements for the uterine artery pulsatility index? I'm just trying to get a sense of how the data comes in and how we assemble it. One last thing, Rick, if you'd care to weigh in: once we have that early proof of concept for fetal growth restriction, what sort of read-through should we expect looking at the early onset preeclampsia opportunity? Those are my questions for now. Thanks so much.

All right. Thank you, Stacy. As for the FGR data, results from cohorts one and two — that is, 5 and 10 micrograms per kg — will be shared, and on that basis we'll lay out our plans for the next dose. That probably means moving up to a higher tier, and we also see room to measure at lower tiers down the road. As for severity, these patients are extremely severe. On severity—the pulsatility index is at, sorry, fetal weight sits at the third percentile or below, while the official cutoff for fetal growth is the 10th percentile; so these are very small, very severe cases. Turning to read-through for preeclampsia, a lot of preeclampsia patients likewise have fetal growth restriction. One key distinction, however, is that preeclampsia patients, especially early onset, usually show more pronounced endothelial dysfunction, which frequently leads to hypertension, elevated blood pressure. We are quite confident that blood pressure control is a clear effect of our drug. Should we demonstrate positive effects in this FGR—which concentrates more on placental blood flow and lengthening gestational days—I believe that would make us even more enthusiastic about the opportunities in preeclampsia, where we think we can additionally target the more severe endothelial dysfunction. According to earlier studies, high blood pressure is the reason roughly fifty percent of preeclampsia patients must deliver, and we believe we can address that as well. So once more, I would say this should be—provided we report some positive results—rather encouraging with respect to the read-through. Julie?

Yes, hello Stacy, and thank you for asking. Usually, in that early period, checks happen at a greater frequency, and after things settle down, measuring them in the study would generally take place once every three days.

That's really helpful. Thanks a lot. I'm looking forward to it.

Hi there, good morning. Thanks, guys. Regarding the phase II FGR interim data we're expecting, what signals might matter most, or are there any early thresholds you'd watch for pregnancy elongation, plus observations on the uterine and umbilical artery Doppler measurements? Any further thoughts on what a successful outcome might look like? Thanks.