DiaMedica Therapeutics Inc.

Good morning, ladies and gentlemen, and welcome to the Diametica Therapeutics Q2 2025 Earnings Conference Call. An audio recording of this webcast will be available shortly after the call today on Diametica's website at www.diametica.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 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 from projected results, appears in the section entitled Cautionary Statement 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 and most recent quarterly report on Form 10-Q. 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 only as of today, August 13, 2025, 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. Following the prepared remarks, we will open the phone lines for questions. I would now like to introduce you for your host for today's call, Rick Pauls, Diomedica's President and Chief Executive Officer. Mr. Pauls, you may begin.

Thank you all for joining us for our Q2 2025 earnings call. I am joined this morning by Scott Kellan, our Chief Financial Officer, and our new Chief Medical Officer, Dr. Julie Kropp. We truly have made significant progress since Q1, and I'm happy to be able to share that with you today. Starting with our preeclampsia program, in July, we announced very positive interim results from Part 1A, the ascending dose portion of our investigator-sponsored Phase 2 trial of DM-19 for the treatment of preeclampsia. As a reminder, DM-19 is our lead candidate and recombinant form of the KLK1 protein, which enhances blood flow and vascular health by increasing levels of three key endothelial-derived basal dilating factors through the Bradykinin pathway. These are nitric oxide, prostacyclin, and endothelial-derived hyperpolarizing factor. Preeclampsia is an ischemic condition that affects millions of women worldwide. and has no approved treatments and really no viable therapeutic options to target the underlying vascular dysfunction. We held a Key Opinion Leader webinar back in May on the unmet need in preeclampsia and on the potential of DOE-9 in this indication with professors Baha Sabai, Devin Tong, and Susan Walker. A recording of this webinar is available on Diamedic website in the Investor Relations section. Based on the interim results from the Part 1a of our Phase 2 study, we believe that DM-109 has the potential to be the first-in-class disease-modifying treatment for preeclampsia. In dosing cohort 6 to 9 of the study, DM-109 demonstrated highly statistically significant and clinically meaningful reductions in both systolic and diastolic blood pressure, highlighting its potential efficacy in managing maternal hypertension associated with the disease. DM-109 was also found to be safe and generally well-tolerated, with no evidence of placental transfer at any of the dose levels, a key safety indicator in the development of a treatment for a pregnant woman. Additionally, treatment with DM-109 led to a statistically significant reduction in the uterine artery pulsatility index, suggesting improved uterine artery blood flow and enhanced placental perfusion. Improved perfusion may be a key in reducing placental hypoxia, supporting the potential for DM-199 to be a disease-modifying treatment, as well as a treatment for fetal growth restriction. Based on the interim results and recent analysis of the pharmacokinetics, a decision was made to advance to and enroll cohort 10 in Part 1A of the ongoing Phase 2 trial. From there, we plan to finalize a dosing regimen for the Part 1b, as well as for the Part 2, preeclampsia expected management, and the Part 3, fetal growth restriction cohorts, all of which can be enrolled concurrently. For clarity, the remaining parts of the investigator-sponsored preeclampsia trial include Part 1b, an expansion cohort of 30 preeclampsia patients where the decision has been made to deliver within the next 72 hours, a patient population similar to those dosed in the Part 1a. Part two, a cohort of 30 patients evaluating DM-19 in early onset preeclampsia. In this cohort, patients will start receiving DM-19 at first diagnosis with intent to dose DM-19 until delivery and demonstrate extension of gestational days along with other key clinical and safety endpoints. Part three, a cohort of 30 patients who are experiencing fetal growth restriction or FGR. FGR is a condition in which the fetus is not growing as expected due to lack of blood flow, oxygen, and critical nutrients. The expansion to this indication, which is related to preeclampsia, is based on our recently announced interim results in which we measured a statistically significant reduction in the pulsatility index, suggesting improved dilation of intrauterine arteries and placental perfusion. In addition, We're now preparing to conduct a Phase 2B preeclampsia trial in the United States and other countries, and are currently preparing our FDA IND application. We look forward to sharing upcoming updates on these cohorts and the new preeclampsia trial. Additional details of the interim Phase 2 Part 1A results, including a replay of the investor call discussion of the results, are available on our website under the Investor Relations tab and can be found in our July 17th results press release. Following the announcements of the positive interim results from Part 1A of the preeclampsia last month, we completed a $30 million private placement of common shares, which extends our cash runway into the second half of 2027. We intend to use this capital to also fund the new Phase 2B study of DMO9 in the United States and other countries for the continued development of our ongoing stroke and preeclampsia programs. Turning to our stroke program, we had a poster presented at this year's 11th European Stroke Organization Conference held in May in Finland. The poster was presented by Dr. Jay Volpe from Houston Methodist and covered the safety and clinically relevant outcomes from a Remedy 1 Phase 2 clinical trial evaluating DM-19 in patients with acute ischemic stroke and pretreated with TPA. We'd like to remind people that in patients pretreated with TPA, DM-19 demonstrated a significant improvement in full recoveries when compared to placebo. Turning to our current Remedy 2 stroke trial, we continue to make progress as enrollment continues, and we expect the interim analysis of the first 200 patients to be completed in Q2 2026. I wanted to take a moment to clarify our communication practices for Remedy 2 enrollment milestones. We will provide updates during our quarterly conference calls when we have achieved 50% and 75% of the interim enrollment sample size, and press release when we enroll our 200th patient. At present, enrollment is now tracking well above the 25% milestone and steadily advancing towards the halfway mark. I would also note that we completed the Data Safety Monitoring Board, or DSMB, meeting to review the safety profile required after the first 50 Remedy 2 participants. The meeting is positive, meaning no safety concerns, and at the conclusion of the meeting, the DSMB unanimously concluded that Remedy 2 enrollment should continue. In other developments, Diomedica was added to the U.S. small-cap Russell 2000 and the Russell 3000 indexes, enhancing our visibility among the broader investment community, including institutional investors. Finally, Dr. Julie Kropp joined our team as Chief Medical Officer this month, She has extensive experience in the biopharma industry, working with both clinical and commercial stage organizations, and was also previously involved in the development of an orphan drug candidate for the treatment of severe preeclampsia. Dr. Kropp adds invaluable experience to our team as we advance DM-19 to address the significant unmet needs for both of our key programs. I would now like to ask Scott Kellan, our Chief Financial Officer, to review the financial results for the quarter.

Thank you, Rick, and good morning, everyone. As of June 30, 2025, our cash, cash equivalents, and short-term investments were $30 million, compared to $44.1 million as of December 31, 2024. However, including net proceeds from the July private placement, our pro forma cash position is approximately $60 million. As Rick mentioned previously, we feel confident about our current cash position and anticipate that it will fund our planned clinical studies incorporate operations into the second half of 2027. We used 14.7 million of cash in net operating activities for the six months ended June 30, 2025, compared to 11.2 million for the same period in 2024. This increase is primarily a result of the increase in net loss in the first half of 2025 compared to the prior year period. Our R&D expenses were $5.8 million and $11.5 million for the three- and six-month time periods ended June 30, 2025. This was an increase from $3.9 million and $7.6 million for the same time periods in the prior year. The increases were due primarily to cost increases resulting from the continued progress of our Remedy 2 clinical trial, including its global expansion. as well as the expansion of the clinical team during the current and prior year periods. These increases were partially offset by cost reductions related to in-use study work performed and completed in the prior year periods. Our general and administrative expenses were $2.2 million and $4.7 million for the three and six month time periods ended June 30, 2025. These expenses also increased compared to the same time periods in 2024, which were 1.7 million and 3.8 million respectively. These increases resulted primarily from additional non-cash share-based compensation and increased personnel costs, partially offset by reductions in legal fees incurred in connection with our lawsuit against PRA Netherlands. Overall, our net losses were 7.7 million and 15.4 million for the three- and six-month periods ending June 30, 2025, These are higher than the 5.1 million and the 10.3 million reported during the same periods in 2024. Now, let me turn the call back over to Rick. Thank you, Scott.

We would like to open the call for questions. Operator, if you could please introduce the first analyst.

Absolutely, I'd be happy to. Ladies and gentlemen, as a reminder, if you have a question, please press star followed by one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by two. If you're using a speakerphone, please lift the handset before pressing any keys. Your first question comes from Thomas Flayton with Lake Street. Please go ahead.

Good morning. I appreciate you guys taking the questions. Maybe, Julie, if I can start with you, I'm curious to kind of get your take on why you joined the company. particularly in light of your past experience with preeclampsia, but then perhaps even more importantly, your thoughts on the stroke program, which I know is going on in the background.

Yeah, thanks for the question. Hello, everyone. Really having worked in the space of women's health before, I really have a strong commitment to this area and really am excited by the program that I saw, the programs really that I saw at Diomedica, as well as I think the team that's in place to execute upon them. So I think preeclampsia and ischemic stroke are both areas of large unmet need. There's de-risked biology, I believe, with the known role of KLK1 protein as both a vasodilator and it's also its role in vascular repair. And I think this product really addresses the underlying pathophysiology of both conditions. and has already shown promising clinical data and really evidence even of some biologic activity. So this really excited me when I saw this. So I think for both programs, I'm really excited to be here.

Excellent. And then, Rick, I know you've got a lot of work that's going to kick off here in preeclampsia. I was wondering if you could maybe map out kind of a calendar for us, right? I'm assuming... each of the cohorts in South Africa will enroll at slightly different rates, given that they're different patients, different types of patients. And then maybe you could clarify the U.S. Phase IIb study, what exactly will be the target indication for that?

Sure. Thanks, Thomas. So in terms of what's coming up next, as I mentioned on the prepared remarks, we're moving into Cohort 10 of the Part 1b. That should be starting next week. And we want to just push the dosing a little bit higher to seeing if we can see any further improvement than what we've already seen, which would be wonderful. And then based upon that and some of the pharmacokinetics data that we have already, we'll be analyzing that to be moving into the Part 1b. And we'll be able to also be moving into the Part 2. So that'll be the expected management. And by expected management, we mean that when these patients are first diagnosed, they'll start being treated. And those will be typically early onset patients. And then the third cohort that we talked about is the fetal growth restriction. So all three of these cohorts can be dosed concurrently. And so as those studies start, we'll have more updates in terms of some of the timelines. We do know that our site in South Africa, Dr. Kluver, has just a very unique scenario that if these patients in Cape Town have preeclampsia, They basically all filter into Kathy Kluver's site, and so she gets four to five preeclampsia patients a day. So we're very encouraged on how rapidly we can get these patients dosed, but we'll have more as the study gets started. For the U.S. study, we're currently planning to file a pre-IND request to the FDA, and that will be followed immediately after with an IND, and then looking at getting that study started next year. And we're currently finalizing the protocol, and as we get more clarity and finalize, we'll be sharing that details with the market.

Excellent. I appreciate it. Thanks, Rick.

Thanks, Thomas.

Your next question comes from Chase Knickerbocker with Craig Hallam. Please go ahead.

Good morning. Thanks for taking the questions. Maybe, Rick, just to start, can you give us an update on current active sites and how enrollment rates are trending in the stroke study? And just secondly, you know, as we're now well across the 25% kind of Milestone here, how are you kind of feeling about this new expectation for 2Q26? Do you feel like it's firmed up at this point? You've got a lot more visibility or just kind of general thoughts there?

Sure. So we're currently at approximately 40 sites. We are at the point now where we're actually dropping off sites that are non-performing. I think that's important with sending the right message to the sites. And then on top of that, we are working to having sites in the UK and Europe come on board. And so I would say that, you know, coming through to, you know, last year, coming early into the new year, things were very slow with the trial. And we've definitely have seen a very encouraging uptick in the last few months. That gives us, you know, comfort here with, you know, with the guidance of Q2 of 2026.

Any thoughts around kind of current enrollment rates?

It really does vary. I mean, we haven't publicly stated, I mean, what we are seeing kind of bit of the 80-20 rule where we've got a smaller number of sites that are producing a large number of patients. And, you know, I will mention that the last quarter as well, we had a investigators meeting that was really helpful. We had maybe 80-90 participants from across the country and Canada. And I think that really helped with awareness. And I think that, you know, some of these some of these aspects that we're taking, I think, are really going to help us here with, you know, continuing the momentum that we're building.

Got it. Then just on preeclampsia, on the U.S. study, I mean, is it a fair, I think it's probably a fair assumption that this will be in expectant management, and any sort of additional detail that you would need from, you know, Part 1B and Part 2 of the South African study, you know, to to put that IND in front of FDA, or do you feel like you kind of have what you need?

Yeah, so definitely it's going to be the expected management. That's where we see the real need for this patient population. And so, no, I think the data we announced here a few weeks ago was just fantastic. I mean, we really could not have expected anything better than what we saw, so very encouraged by that. We just thought here that we've got an opportunity here to add in another cohort of So let's do it and let's see if there's any changes that may help us to tweak the dosing a little bit more. But we do feel that, you know, for this patient population, it's very severe. I mean, these are very sick mothers. They have, you know, very severe endothelial dysfunction and a lot of vasoconstrictors. So we do see some value in potentially going a little bit higher on the dose. But what we've seen already, we'd be very happy with going ahead with the dosing in cohort 6 to 9 that we recently announced for the US IND.

And just last for me, Rick, could we see something in the phase 2b where we have a primary endpoint in the study that closely reflects what a pivotal regulatory endpoint will be in a phase 3 study? you know, just kind of think about, well, how should we think about kind of the data generation in that U.S. study?

Yeah, I think give us a little bit more time here as we finalize the protocol. We want to make sure we get the right expert opinions around this, and then we'll come up with a very clear path. We feel very comfortable in terms of some recent feedback we've had from the FDA on the primary endpoint, but we want to just nail this down here before we, you know, publicly share what that endpoint will look like.

Great. Thank you, Rick.

Yep. Thank you, Chase.

There are no further questions at this time. I would like to hand the call back over to Rick Pauls for any closing remarks.

All right. Thank you all for joining us today. We greatly appreciate your interest in Diametica and hope you enjoy the rest of the day. This concludes our call. Thank you.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.