DiaMedica Therapeutics Third Quarter 2026 Financial Results and Business Update Conference Call - DIAMEDICA THERAPEUTICS INC

Financial Performance:

• Reported cash, cash equivalents, and short-term investments of $34.9 million as of September 30, 2026, a decrease from $59.9 million at year-end 2025.
• Net loss for Q3 2026 was $11.3 million ($0.21/share), compared to $8.6 million ($0.17/share) in Q3 2025; first nine months net loss was $31.5 million ($0.58/share) vs. $24 million ($0.53/share) in 2025.
• R&D expenses rose to $9.2 million in Q3 2026 ($25.4 million YTD) from $6.4 million ($17.9 million YTD) in 2025, driven by clinical expansion and share-based compensation.
• General and administrative expenses were $2.4 million in Q3 2026 ($7.2 million YTD), down slightly from $2.6 million ($3.7 million YTD) in 2025 due to lower professional fees.
• Working capital stands at $28 million; management projects current cash reserves will fund operations and clinical studies through Q4 2027.
• Net cash used in operating activities for the first nine months of 2026 was $26 million, up from $21.3 million in the same period in 2025.

Guidance and Future Outlook:

• Anticipates key opinion leader (KOL) event on November 24, 2026, to present preliminary FGR data.
• Expects the Independent Data Safety Monitoring Board (DSMB) to complete the Remedy 2 interim analysis in Q1 2027.
• Plans to initiate additional preeclampsia studies by end of 2026 and expects first enrollment for the company-sponsored Phase II preeclampsia study in Q4 2026 or early 2027.
• Forecasts moderate increases in R&D expenses as Remedy 2 enrollment continues and global preeclampsia trial startup progresses.
• Aims to submit IND data for US preeclampsia studies in the near term pending completion of pharmacokinetic/pharmacologic rat studies.

Business Segments and Product Lines:

• Completed enrollment in the first two cohorts (12 participants) of the investigator-sponsored Phase 2 FGR study; dosing for the third cohort to be selected based on 5 a.m. ET time analysis.
• Reached 200 participants in the Remedy 2 pivotal trial for acute ischemic stroke, meeting the threshold for interim analysis.
• Advance preparations for company-sponsored Phase II preeclampsia trials in Canada (authorized by Health Canada) and potential UK/US expansion.
• Drug DM-19 (rinvacalinase alpha) is a recombinant human tissue kallikrein 1 targeting the bradykinin-2 receptor to improve vascular health across FGR, preeclampsia, and stroke indications.
• Remedy 2 adaptive design allows final enrollment target adjustment between 300 and 728 participants based on interim efficacy data.

Market and Competitive Landscape:

• FGR and severe preeclampsia remain unmet medical needs with no approved therapies; current management relies on balancing fetal risks against maternal complications and preterm delivery.
• Acute ischemic stroke treatment is limited by time windows, eligibility criteria, and clot location for existing thrombolytics and mechanical thrombectomy; Remedy 2 targets patients ineligible for these standard treatments.
• Drug mechanism (improving collateral blood flow) offers a novel approach distinct from clot-dissolving or mechanical removal therapies used in stroke.
• Market expansion opportunities identified in the UK and Europe for preeclampsia trials following EMA conditional authorization.

Risks and Challenges:

• Regulatory uncertainty regarding FDA feedback on non-clinical reproductive toxicology data for US preeclampsia IND submission.
• Potential delays in patient enrollment for the company-sponsored Phase II preeclampsia trial due to site administrative constraints.
• Clinical trial outcomes depend on statistical significance at interim analysis; lack of drug effect could lead to trial termination for futility.
• High severity of enrolled FGR patients (3rd percentile fetal weight) necessitates realistic benchmarks for efficacy and prolonged gestation.
• Forward-looking statements are subject to risks of differing from actual results due to market, regulatory, and clinical uncertainties.

Management Commentary and Tone:

• Management conveyed high confidence in the drug's mechanism of action, noting positive safety signals and pharmacological activity in early cohorts.
• Tone was optimistic regarding the read-through potential from FGR results to the preeclampsia program, particularly regarding blood pressure control and endothelial dysfunction.
• CEO Rick Pauls and CMO Dr. Julie Kropp emphasized the urgency of treating severe cases where "every day matters" for maternal and fetal outcomes.
• CFO Scott Kellan maintained a cautious financial tone, noting higher R&D spend is necessary for growth but highlighting sufficient runway into 2027.

Analyst Questions and Answers:

• Enrollment Projections: Management indicated Remedy 2 may reach ~300 patients by interim analysis readout, potentially completing final enrollment within a few months if the 300-patient scenario is chosen.
• FGR Dosing and Severity: Confirming enrollment of severe patients (≤3rd percentile) with plans to test higher doses based on current results; birth weight benchmarks will be compared to historical controls.
• Preeclampsia Read-through: Positive FGR results regarding vascular flow and gestation prolongation are expected to bolster confidence in preeclampsia trials, where the drug may also address severe hypertension affecting ~50% of delivery decisions.
• Trial Decision Tree: Remedy 2 will stop for futility if no drug effect is seen; final enrollment (300 vs. 728) depends on the magnitude of the drug effect observed at interim.
• US IND Strategy: Planned US IND for preeclampsia would likely utilize an expansion of the existing Canada/UK Phase II trial rather than a de novo study.

Other Key Points:

• Two specific preeclampsia studies are planned to begin enrollment by end of 2026: Part 2 of the investigator-sponsored trial (repeated subcutaneous dosing) and Part 1B (acute hypertensive, IV infusion).
• The IV dosing approach in Part 1B is being investigated to determine if continuous infusion can better control severe hypertension and prolong pregnancy compared to subcutaneous dosing.
• Additional rat toxicity studies initiated in Q3 2026 were well-tolerated, with PK/PD results expected soon to support the FDA IND submission.
• The Remedy 2 primary endpoint is the proportion of patients with a modified Rankin scale score of 0–1 at day 90.