DiaMedica Therapeutics Inc.

Good morning, ladies and gentlemen, and welcome to the Diametica Therapeutics Conference call to discuss the top-line results from Diametica's Remedy Phase 2 clinical study and acute ischemic stroke and first quarter results. An audio recording of the webcast and a copy of the slide presentation will be available shortly after the call today on Diametica's website at www.diametica.com in the Investors section. I would now like to hand the call over to Rick Pauls, President and CEO. Please go ahead, sir.

Thank you, Lisa, and good morning, everyone, and thank you for attending today's presentation. Before the company proceeds with our remarks, please note that the company will be making forward-looking statements on today's call. These statements are participant to risks and uncertainties that could cause actual results to differ materially from those projected in these statements. More information, including the factors that could cause actual results to differ from the projected results, appear in the section entitled Cautionary Statement. Note regarding forward-looking statements in the company's press release issued today and under the heading Risk Factors in Diametica's previously filed annual report on Form 10-K. Diametica's SEC filings are available at www.sec.gov and on our website. Please also note that any comments made on today's call speak only as of today, May 14, 2020, and may no longer be accurate at the time of any replay or transcript rereading. Diomedica disclaims any duty to update its forward-looking statements. We're very excited today to share with you the top-line results from our Remedy Phase 2 study of DM-109 in participants suffering an acute ischemic stroke, and to provide some additional color on our plans to continue moving forward with DM-189 for acute ischemic stroke. Yesterday, we issued a press release summarizing the top line results from the remedy study and also filed a copy of today's presentation with the SAC. Both of these documents can be found in the investor section of our website at www.diametica.com. I'm joined today by our Chief Medical Officer, Dr. Harry Alcorn, and Chief Financial Officer, Scott Kellen. As we've previously discussed, we are positioning DM-109, a recombinant or synthetic form of the KLK1 protein, as a treatment for several very important diseases. KLK1 is a protein which is produced primarily in the kidneys, pancreas, and salivary glands. KLK1 plays a critical role in the regulation of local blood flow and basal dilation, which relates to the widening of blood vessels and decreasing the vascular resistance in the body. It also plays an important role in managing inflammation and oxidative stress. We believe DM-189 has the potential to treat a variety of diseases where healthy function requires sufficient activity of KLK1 and its system, the caliphrine kinase system. I'd like to begin today's call by reviewing the top-line results from our remedy study. Remedy was a double-blind and placebo-controlled study in participants who have experienced an acute ischemic stroke. During this call, when we use the term stroke, we mean acute ischemic stroke. The primary endpoints were safety and tolerability, while also looking for efficacy signals consistent with the approved Calicang, the urine-derived form of KLK1 currently used to treat acute ischemic stroke in China. Turning to the slide deck on your screen, on slide three, summarizes the key takeaways that we're going to share with you today. Remedy demonstrated that DM-19 was safe and well-tolerated with no DM-109-related serious adverse events. DM-109 has now been administered to over 200 participants, building a strong base of data supporting its positive safety profile. This is very important as the FDA evaluates potential patient benefits against any treatment-related risks. Having an excellent safety profile should help the FDA's analysis and allow us to move forward with further clinical studies. We believe that This de-risks regulatory hurdles that could lengthen or delay our path forward. Secondly, in looking at efficacy signals, DM-19 significantly outperformed the placebo in stroke participants who most closely resembled the target patient population of DM-19, the approximately 90% of stroke participants that do not receive mechanical thrombectomy. In the group of 46 participants who did not receive thrombectomy, We observed that significantly more participants treated with DM-19 progressed to a full or near-full recovery than those in the placebo group. This means that people who are able to resume independent, normal daily function. This is particularly exciting in that DM-19 can be administered up to 24 hours post-stroke. The only currently approved drug in the U.S. is AlterPlace, recombinant TPA, which can only be administered in carefully selected patients within four and a half hours after a stroke. We'll also talk about DM-19 results compared to TPA and Calicang, the human urine-derived KLK1 protein approved in China for stroke. In addition, we'll review the reductions in recurrent strokes and inflammatory biomarkers C-reactive protein. And of course, because of our interest in chronic kidney disease and our ongoing Phase II kidney study, we are pleased to note that participants who had chronic kidney disease and were treated with DM-19 showed a significant improvement in kidney function. This is why we're rather excited to be sharing these top line results with you today. Turning to slide four, we have a series of charts providing a high level visual overview of the encouraging outcomes that were observed in the remedy study. In total, although these results are based on small numbers, we believe these show that DM-19 is a biologically active protein and acts in a manner consistent with its mechanism of action. To summarize quickly, starting in the top left corner, this chart shows the 22% improvement in stroke recoveries in participants that most closely resembled our target patient population, those that are excluding mechanical thrombectomy. The next chart to the right shows the lower level of recurrent strokes in the DM-189 treatment group, and note that this is based upon all participants that received at least one dose of the study drug. For the subset of participants which had chronic kidney disease based upon EGFR levels below 70 mL, DM-189 treated participants showed a significant increase in their EGFR levels after three weeks of treatment. The second row starts with C-reactive protein or CRP. This is a measure of inflammation in the body and the DM-189 treated participants showed a meaningful reduction over 90 days. The last two charts show the improvements in prostaglandin E2 and nitric oxide levels after three weeks of treatment. These are two important biomarkers, which we believe show levels of activity consistent with DM-189's mechanism of action. Moving to slide six. Real quickly, I just want to remind everyone how serious an unmet need acute ischemic stroke represents in our healthcare system. It's estimated that globally 15 million strokes occur each year. In the U.S., that number is 800,000, approximately 690,000 of which are acute ischemic strokes or AIS. The seriousness of this unmet need is due primarily to the fact that 90% of patients suffering in AIS have no direct treatment option. This is referred to as palliative care. On slide seven, we have a summary of the design for remedy. Our goal is safety assessment while searching for potential efficacy signals. In this study, DM-19 was administered to participants with the first dose of one microgram per kg IV, followed by three microgram per kg dose of DM-89, and then every third day for a total treatment period of 22 days. The primary endpoints were measured at day 90. Turning to slide eight, we present some of the baseline characteristics for study participants, ages, genders, and average severity of stroke broken down by cohort. a total of 91 participants were evenly split between the DM-109 and placebo groups. You'll note that we had a large number of participants enrolled after they had received treatment with either mechanical thrombectomy or TPA or both. I'll speak more about these participants in a moment. Moving to slide nine, we present a summary of the safety and tolerability results, our primary endpoint for remedy. The absence of any DM-109 related serious adverse events as determined by the Independent Data Safety Monitoring Board was very encouraging and consistent with our prior studies. In addition, the adverse events were pretty mild. This is very important for us as the FDA and other regulatory bodies evaluate drugs for clinical study and approval based upon the potential benefits versus risk to patients. And we believe that provides this continued and future studies DM-89 safety profile should simplify any regulatory evaluation of DM-189 and further de-risk a regulatory pathway. Turning to slide 10, before we look at the remedy results, let me walk you through the NIH stroke scoring system. Strokes cause different degrees of damage in different people and are often worse when it's a recurrent stroke. The NIHSS scale, where the higher the score is, the more impaired the patient is. The scale is used to attempt to quantify the degree of impact on the participant. Much of this assessment centers around the activities of daily living. Can a person dress by themselves? Can they feed themselves? Can they use the bathroom, et cetera? Ideally, we'd like to see all individuals achieve a post-stroke score of zero or one, which means that they have fully or near fully recovered their ability to live independently. Unfortunately, many individuals do not fully recover and a shift analysis is performed to evaluate the improvements across the entire range of impacts. The bookends, fully recovery and NIH score of zero to one on the right and on the left and then on the right, the deaths, have the least amount of subjectivity and most important, to regulatory authorities. There's more subjectivity in the scores in between. Slide 11 is just for reference to show you the improvements and full recoveries NIHSS score of 0 or 1 in the dark blue, and the reduction in patient deaths in the TPA study used for FDA approval. TPA demonstrated an 11% improvement in participants achieving a full recovery, that being an NIHSS score of 0 or 1. And I'd point out that TPA can also have some serious side effects. On slide 12, we presented the comparison of the NIHSS score for both cohorts using the 91 participants in the remedy setting. One participant is not evaluable as they withdrew before first dose, which is the requirements for inclusion in the safety analysis. At this level, we don't see a large proportion of participants in the placebo group achieving full recovery. This is due to the large number of participants receiving thrombectomy prior to enrollment in remedy. Just to remind everyone, a thrombectomy is a procedure in which a mechanical device known as a catheter, is inserted into the participant's arterial system, navigated up to the clot with the intent to immediately remove the clot. The procedure is limited to only those patients whose blockage is in the large vessel, which presents at the hospital generally within six hours, but in some cases it can be 12 or more. In addition, an experienced and skilled physician is needed to perform the procedure. Because of these limitations in the U.S. today, only about 6% of stroke victims received thrombectomy. DM-89 is not an alternative to thrombectomy. If you have a stroke caused by a large vessel occlusion and you can get to the right hospital in time, thrombectomy can immediately restore blood flow. Personally, I would want this procedure for myself or my family if any of us were in the position and eligible for this procedure. These participants were included in the study because we wanted to study a sampling of thrombectomy patients for safety, and to evaluate whether there might be a beneficial clinical effect when combined with DM-109. There was a much larger than expected thrombectomy component that was not anticipated. In China, it is our understanding that urinary KLK1 is not prescribed on top of mechanical thrombectomy. Thus, if a patient is treated with thrombectomy, they do not receive urinary KLK1. We do not plan to include thrombectomy in our target patient population. Our focus is on the 90% of stroke victims that do not receive a thrombectomy procedure. Turning to slide 13, here are the NIHS scores for remedy participants that did not receive thrombectomy prior to enrollment. This group most closely represents the target patient population that DM-109 is intended to treat, and we have a total of 46 participants in this analysis. Although a small number, visually the differences are quite compelling. In the DM-109 group, 36% of participants achieved a full or near-full recovery as compared to the 14% in the placebo group, a 22% positive difference. The p-value was less than 0.2. The results also showed a 50% reduction in the number of participants' deaths in the DM-19 group compared to the placebo group. I can't stress enough that the results occurred with DM-19 being first dose within a 24-hour treatment window, a dramatically longer therapeutic window, Thank you very much. We also see similar results with the modified Rankin score. On slide 14, we want to show you a comparison of DM-19 Phase II results and the studies for Activase, the recombinant TPA, and Calicang, the urinary KLK1, the approved form of urinary KLK1 in Asia. The key message here is that we are seeing comparable results in the Calicang and improved results compared to TPA, while offering a much longer therapeutic window and what we believe will be a much improved safety profile compared to TPA.

Slide 15, please.