DiaMedica Therapeutics Inc.

Good morning, ladies and gentlemen, and welcome to the Diamedica Therapeutics Fourth Quarter 2020 conference call. An audio recording of the webcast will be available shortly after the call today on Diamedica's website at www.diamedica.com in the Investor Relations section. Before the company proceeds with its remarks... Please note that the company will be making forward-looking statements on today's call. These statements are subject to risk and certainties 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 from projected results, appears in the including factors Thank you very much. Thank you. Again, that's www.sec.gov. Please also note that any comments made on today's call speak only as of today, March 11, 2021, and may no longer be accurate at the time of any replay. Our transcript rereading. Diametica disclaims any duty to update its forward-looking statements. Following the prepared remarks, we will open the phone line for questions. I would now like to introduce your host for today's call, Rick Pauls, Diomedica's president and chief executive officer. Mr. Pauls, you may begin.

Thank you, operator. Good morning, everyone. We hope you are all well, and we'd like to welcome you to the year-end 2020 earnings and business update call. We issued a press release with a business update and summary of our financial results for 2020 yesterday after the markets closed. At that time, we also filed our annual reports on Form 10-K. Both documents can be found in the Investor Relations section of our website at diamedica.com. I'm joined this morning by our Chief Financial Officer, Scott Kellen, and our Chief Medical Officer, Dr. Harry Alcorn. Let me begin this morning with a few comments on our Acute Ischemic Stroke Program. As you recall, we were very pleased with the FDA accepted our request for a pre-IMD meeting for our stroke and Dr. Kahn. Thank you very much. is having a positive effect that is consistent with our statistical analysis plan assumptions and allow for an adjustment in the patient size if necessary. In short, we believe that the guidance received from the FDA provides a clear path forward for our stroke program. We are currently finalizing the investigational new drug application for our proposed phase two slash three study and expect to be submitting this application later this month. In parallel with this process, We are taking steps to organize the supporting vendors to run the study. We still anticipate initiating the enrollment in the study later this summer. The results of our Remedy Phase 2 study in acute ischemic stroke will be the subject of an oral presentation at the upcoming International Stroke Conference 2021 being held virtually on March 17 to 19, 2021. As we announced, we are also very pleased to be hosting a stroke key opinion leader webinar on the treatment of acute ischemic stroke on March 19th at noon Eastern time. The webinar will feature presentations from Drs. Scott Kasner of the University of Pennsylvania and Dr. Paulo Medeiros of the University of Bristol who will discuss the current treatment landscape and unmet medical need in the treating patients with acute ischemic stroke along with their mechanism rationale and clinical data on stroke and recurrent stroke. One final related note, I'd like to point out that on DM-19 for our stroke program as it relates to reducing stroke reoccurrence. In November 2020, AstraZeneca received an approval for an expansion of its label for Berlinta, its latest generation blood thinner product. They were approved with an indication for reducing stroke reoccurrence in patients having had a mild stroke. We view AstraZeneca's label expansion as potentially opening another door for approval for DM-19 in the treatment of stroke reoccurrence. If you recall from our Remedy Phase 2 data, we observed a statistically significant reduction in reoccurrence severe strokes. This was an 86% reduction where there was one patient in the DM-109 group compared with seven in the placebo. And also to note that four of those seven reoccurrence in the placebo were fatal. These results were study-wide and we believe signal the potential of DM-19 to both improve the physical recoveries and reduce stroke reoccurrence. Stroke reoccurrence tends to be the more disabling, fatal, and costly. We believe that DM-19 has the potential to further improve the health and quality of life for stroke victims. Let us next update you on our REDUX trial studying DM-19 as a treatment for three different causes of chronic kidney disease, or CKD. REDUX is a phase two study in 13 centers with a target enrollment of 90 participants in three cohorts of 30 patients. Cohorts include IgA nephropathy, diabetic kidney disease, or DKD, and hypertensive African Americans. Participants in the REDUX-CKD study will receive DM-49 for approximately 13 weeks at two dose levels. The primary efficacy endpoint for the overall study are improvements in albinuria and EGFR. Secondary endpoints include evaluating the potential for D-19 to positive impact each of the underlying causes of CKD. Overall, our enrollment has reached 68 participants in the REDUX study. This includes the full enrollment in the DKD cohort, enrollment in our IGA nephropathy cohort has reached 70% or 21 participants, and enrollment in the African American cohort remains at 50% or 15 participants. Obviously, we're very pleased to see the rapid enrollment in the DKD cohort. This is largely due to the size of the DKD population that matches the enrollment criteria for DKD, making it far easier to recruit the 30 participants despite concerns related to COVID. Also recall that the last participant was enrolled in this cohort in mid-December. We are still very much on track to provide preliminary top line results from this cohort in the second quarter of 2021. With respect to the IGA, nephropathy, and African Americans, where enrollment has continued at a much slower than expected pace, we are pleased to report that we are seeing signs of increased activity. With the significant declines in new COVID cases and recently availability of vaccines, we now can announce that we anticipate completion of both of these cohorts in the second half of 2021. I would now like to ask Scott Kellen to take us through the financial results for 2020.

Thank you, Rick. Good morning, everyone. As Rick mentioned, we did release our full year 2020 financial results and filed our 10K yesterday afternoon. If you haven't had a chance to review these documents, they are both available on either the Diametica or SEC websites. Our net loss for the full year of 2020 was $12.3 million, or $0.78 per share. This compares to a net loss of $10.6 million, or $0.89 per share, for the prior year. Our research and development expenses were $8.3 million for the year ended December 31, 2020, and this compares to $7.9 million for the year ended December 31, 2019, an increase of $.4 million. Now, the increase was primarily due to a combination of costs incurred for our Redux Phase II CKD study, which initiated in late 2019 and, of course, driven in particular by the addition of the third cohort targeting the DKD patients which fully enrolled during the fourth quarter of 2020. We also incurred increased non-cash share-based compensation costs, and these costs were partially offset by decreases related to clinical study costs incurred for our remedy stroke study, which wound down in the first half of 2020, and the non-recurring costs of the Phase 1b CKD study, which was started and completed during 2019. Additionally, there was a year-over-year net decrease in drug manufacturing and development costs. Our general and administrative expenses were $4.4 million and $3.7 million for the years ended December 31, 2020 and 2019, respectively. This $.7 million increase was primarily due to increased non-cash share-based compensation costs, increased outside professional services, and increased directors' and officers' liability insurance. The increase in 2020 was partially offset by reduced travel and meeting costs driven by restrictions instituted as countermeasures to the COVID-19 pandemic. Our total other income net was $0.4 million for the year ended December 31, 2020. This compares to $1 million for all of 2019. This decrease was driven primarily by the reduced RNC incentives receivable from the Australian government, which are paid for qualifying research work performed by our Australian subsidiary during 2020. And this of course was related to the wind down of the remedy study during the first half of 2020. This decrease was partially offset by increased foreign currency transaction gains recognized during 2020. Turning to the balance sheet, we finished the fourth quarter of 2020 with cash, cash equivalents and marketable securities of $27.5 million. Current liabilities were $2 million and working capital was $25.9 million. This compares to $7.9 million in cash, cash equivalents and marketable securities, $1.3 million in current liabilities and $7.5 million in working capital as of the end of 2019. The increases in the company's combined cash and marketable securities and in our working capital are due to our February and August 2020 public offerings of common shares. And if you recall, in August, we completed an underwritten public offering raising gross proceeds of 23 million or net proceeds of 21.2. And in February, we completed an offering raising gross proceeds of 8.5 million or net proceeds of 7.7 million. Our current capital position should allow us to complete a number of significant milestones for Diametica, including data readouts for all three cohorts of our Redux Phase 2 CKD study, along with initiating our Phase 2-3 study in the acute ischemic stroke, and further fund our planned operations into the third quarter of 2020. Now let me turn the call back over to Rick.