- Diabetic Kidney Disease Cohort Added to REDUX Study, Near
Fully Enrolled
- FDA Grants Meeting Request for Review of Planned Stroke
Study Program
- Completed $23M Public Offering of Common Shares
- Conference Call with Management Tomorrow, November 5, at 7am
CT
DiaMedica Therapeutics Inc. (Nasdaq: DMAC), a clinical-stage
biopharmaceutical company focused on developing novel treatments
for kidney diseases and neurological disorders, today provided a
business update and financial results for the three and nine months
ended September 30, 2020. DiaMedica will host a conference call
tomorrow, November 5, 2020, at 7:00 a.m. Central Time to discuss
its business update and third quarter financial results.
Clinical Developments
DM199 for the Treatment of Chronic Kidney Disease
Phase II Clinical Study in CKD Caused by IgA
Nephropathy and in African Americans with Hypertension – Enrollment
Continues
Initiation of Third Cohort in CKD Caused by
Type II Diabetes Mellitus
The Phase II REDUX (latin for restore) trial is a multi-center,
open-label investigation of approximately 90 evaluable participants
with chronic kidney disease (CKD), who are being enrolled in three
cohorts (30 per cohort). REDUX targets participants with CKD.
Cohort I of the study is focused on non-diabetic, hypertensive
African Americans with Stage II or III CKD and albuminuria, a group
which is at greater risk for CKD than Caucasians. African Americans
who have the APOL1 gene mutation are at an even higher risk for
CKD. The study is designed to capture the APOL1 gene mutation as an
exploratory biomarker in this cohort. Cohort II of the study is
focused on participants with IgA Nephropathy (IgAN). Cohort III, is
focused on participants with Type II diabetes mellitus,
hypertension and albuminuria. Cohort III was added based upon
additional data from DiaMedica’s recently completed ReMEDy Phase II
acute ischemic stroke study which showed significantly improved
estimated glomerular flow rates (eGFR), mean increase of
12.7mL/Min/1.732, and also reduced blood glucose levels compared to
placebo in those subjects with elevated blood glucose levels at the
time of enrollment.
As of October 30, 2020, DiaMedica had enrolled 49 subjects,
including 11 African American subjects in Cohort I, 13 subjects
with IgAN in Cohort II and 25 subjects with Type II diabetes in
Cohort III. The Company has continued to experience slower than
expected enrollment in the first two cohorts of the REDUX trial.
This is believed to be due to a combination of the reduction or
suspension of activities at clinical study sites as they address
staff and patient safety concerns and patient concerns related to
visiting clinical study sites in light of the COVID-19 pandemic.
Note that individuals eligible for the first two cohorts are
generally considered to be in the group of individuals “at-risk”
for COVID-19. To increase enrollment rates, the Company has added
two additional study sites and is working with existing sites to
resume screening activities and to reach out to surrounding clinics
for additional potential subjects. The enrollment rate for Cohort
III has been much more rapid, which is directly related to the much
larger population of potential subjects. The Company anticipates
that the COVID-19 pandemic will likely continue to adversely affect
its ability to recruit or enroll subjects, and it cannot provide
any assurance as to when clinical sites will be able to resume
enrollment in Cohorts I and II at a normal rate or any guidance at
this time as to when it will complete enrollment in the study.
DiaMedica expects enrollment in Cohort III to complete by the end
of the year with topline results available in the first half of
2021.
“While we are very pleased with the enrollment rate in Cohort
III, we remain disappointed with the COVID-19 limitations impacting
the ability of our sites to identify patients willing and eligible
to participate in Cohorts I and II. We remain in close contact with
our study sites to monitor local restrictions and explore options,”
commented Dr. Harry Alcorn, Jr., DiaMedica’s Chief Medical Officer.
“Recently, we have also added sites and will continue to evaluate
additional sites and recruitment options in order to complete
enrollment in our REDUX study.”
DM199 for the Treatment of Acute Ischemic Stroke
FDA Accepts Request for Type B Meeting
DiaMedica today announced that the US Food and Drug
Administration (FDA) has accepted the Company’s request for a Type
B meeting to review the Company’s cumulative clinical and
nonclinical development, its proposed Phase 2/3 clinical study
design and other regulatory questions regarding its planned AIS
clinical program. The FDA indicated that it would provide written
responses to the Company’s questions by December 4, 2020. Earlier
this week, the Company provided a detailed package of information
to the FDA.
$23 Million Public Offering
On August 10, 2020, the Company issued and sold an aggregate of
4,600,000 common shares in a public underwritten offering at a
public offering price of $5.00 per share, receiving gross proceeds
of $23.0 million, which includes a full exercise by the
underwriters of their option to purchase additional shares, and net
proceeds of $21.2 million, after deducting the underwriting
discount and estimated offering expenses. As previously announced,
DiaMedica is using the net proceeds from the offering to add a
third cohort to its REDUX trial to study participants with chronic
kidney disease and Type II diabetes mellitus, to continue its
clinical study of DM199 in acute ischemic stroke and for other
working capital and general corporate purposes.
Financial Results
Research and development (R&D) expenses increased to $2.2
million for the three months ended September 30, 2020, up from $1.6
million for the three months ended September 30, 2019, an increase
of $0.6 million, due primarily to costs incurred in connection with
the REDUX trial, including the launching of Cohort III. R&D
expenses decreased to $5.2 million for the nine months ended
September 30, 2020, compared to $6.1 million for the nine months
ended September 30, 2019, a decrease of $0.9 million. The decrease
for the nine-month comparison was primarily due to non-recurring
costs of approximately $1.3 million incurred for a new production
run of the DM199 drug substance during the nine-months ended
September 30, 2019 and a net decrease in year-over-year clinical
study costs. The decrease in clinical study costs was due to a
combination of the decrease in costs incurred for the ReMEDy stroke
study as it wound down and non-recurring costs of the Phase 1b CKD
study which was started and completed in the prior year period.
These decreases were partially offset by costs incurred for the
REDUX trial initiated late in 2019, increased manufacturing
development costs and increased non-cash share-based compensation
costs.
General and administrative (G&A) expenses were $1.1 million
for the three months ended September 30, 2020, up from $1.0 million
for the three months ended September 30, 2019. G&A expenses
increased to $3.2 million for the nine months ended September 30,
2020, up $0.5 million from $2.7 million for the nine months ended
September 30, 2019. The increase for the nine-month comparison was
primarily due to increased non-cash share-based compensation costs
and increased professional service costs.
Total other income decreased to $128,000 for the three months
ended September 30, 2020, down from $225,000 for the prior year
period. Total other income decreased to $359,000 for the nine
months ended September 30, 2020, compared to $683,000 for the nine
months ended September 30, 2019. The decrease for the nine-month
comparison is primarily related to reduced R&D incentives
associated with decreased ReMEDy stroke study costs during the nine
months ended September 30, 2020, partially offset by foreign
currency transaction gains recognized in the current year.
Balance Sheet and Cash Flow
The Company had cash, cash equivalents and marketable securities
of $30.6 million, current liabilities of $1.4 million and working
capital of $29.7 million as of September 30, 2020, compared 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 December 31, 2019. The increases in the Company’s combined
cash, cash equivalents and marketable securities and in its working
capital are due primarily to the Company’s February and August 2020
public offerings.
Net cash used in operating activities was $6.2 million for the
nine months ended September 30, 2020, compared to $7.2 million for
the nine months ended September 30, 2019. The net cash used in each
of these periods primarily reflects the net loss for these periods,
non-cash charges for share-based compensation and adjustments for
the net effects of changes in operating assets and liabilities.
Conference Call Information
DiaMedica Management will host a conference call to discuss its
third quarter 2020 financial results and business update on
Thursday, November 5, 2020, at 7:00 a.m. Central Time:
Date:
Thursday, November 5, 2020
Time:
7:00 AM CT / 8:00 AM ET
Web access:
https://event.on24.com/wcc/r/2623032/5A77F53289171F7E16245B392065B627
Conference ID:
4869514
Interested parties may access the conference call by dialing in
or listening to the simultaneous webcast. Listeners should log on
to the website or dial in 15 minutes prior to the call. The webcast
will remain available for play back on DiaMedica’s website, under
investor events and presentations, following the earnings call and
for 12 months thereafter. A telephonic replay of the conference
call will be available until November 12, 2020, by dialing (855)
859-2056 (US Toll Free), (404) 537-3406 (International), replay
passcode 4869514.
About DM199
DM199 is a recombinant (synthetic) form of human tissue
kallikrein-1 (KLK1). KLK1 is a serine protease (protein) that plays
an important role in the regulation of diverse physiological
processes including blood flow, inflammation, fibrosis, oxidative
stress and neurogenesis via a molecular mechanism that increases
production of nitric oxide and prostaglandin. KLK1 deficiency may
play a role in multiple vascular and fibrotic diseases such as
chronic kidney disease, retinopathy, stroke, vascular dementia, and
resistant hypertension where current treatment options are limited
or ineffective. DiaMedica is the first company to have developed a
recombinant form of the KLK1 protein. The KLK1 protein, produced
from porcine pancreas and human urine, has been used to treat
patients in Japan, China and Korea for decades. DM199 is currently
being studied in patients with chronic kidney disease and patients
with acute ischemic stroke.
About DiaMedica Therapeutics Inc.
DiaMedica Therapeutics Inc. is a clinical stage
biopharmaceutical company focused on developing novel treatments
for chronic kidney diseases and neurological disorders. DiaMedica
shares are listed on The Nasdaq Capital Market under the trading
symbol “DMAC.”
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995 and forward-looking information that are based on the beliefs
of management and reflect management’s current expectations. When
used in this press release, the words “estimate,” “believe,”
“anticipate,” “intend,” “expect,” “plan,” “continue,” “look
forward,” “will,” “may” or “should,” the negative of these words or
such variations thereon or comparable terminology and the use of
future dates are intended to identify forward-looking statements
and information. The forward-looking statements and information in
this press release include statements regarding the anticipated
clinical benefits and success of DM199, the timing and requirements
of its clinical programs, including enrollment, clinical results
and ability to achieve clinical milestones; and the anticipated use
of proceeds from its recent public offering. Such statements and
information reflect management’s current view and DiaMedica
undertakes no obligation to update or revise any of these
statements or information. By their nature, forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause actual results, performance or
achievements, or other future events, to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking statements. Applicable risks and
uncertainties include, among others, the possibility of unfavorable
results from additional clinical trials of DM199 or from subsequent
analysis of existing data from the ReMEDy study or existing or new
data received from additional ongoing and future studies of DM199;
the risk that existing preclinical and clinical data may not be
predictive of the results of ongoing or later clinical trials;
DiaMedica’s plans to develop, obtain regulatory approval for and
commercialize its DM199 product candidate for the treatment of CKD
and AIS and its expectations regarding the benefits of DM199;
DiaMedica’s ability to conduct successful clinical testing of DM199
and within its anticipated parameters, costs and timeframes; the
perceived benefits of DM199 over existing treatment options; the
potential direct or indirect impact of the COVID-19 pandemic on
DiaMedica’s business; DiaMedica’s reliance on collaboration with
third parties to conduct clinical trials; DiaMedica’s ability to
continue to obtain funding for its operations, including funding
necessary to complete planned clinical trials and obtain regulatory
approvals for DM199 for CKD and AIS, and the risks identified under
the heading “Risk Factors” in DiaMedica’s annual report on Form
10-K for the fiscal year ended December 31, 2019, and subsequent
SEC filings by DiaMedica, including its quarterly report on Form
10-Q for the quarterly period ended September 30, 2020. The
forward-looking information contained in this press release
represents the expectations of DiaMedica as of the date of this
press release and, accordingly, is subject to change after such
date. Readers should not place undue importance on forward-looking
information and should not rely upon this information as of any
other date. While DiaMedica may elect to, it does not undertake to
update this information at any particular time except as required
in accordance with applicable laws.
DiaMedica Therapeutics
Inc.
Consolidated Statements of
Operations and Comprehensive Loss
(In thousands, except share and
per share amounts)
(Unaudited)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2020
2019
2020
2019
Operating expenses:
Research and development
$
2,180
$
1,617
$
5,190
$
6,098
General and administrative
1,139
1,044
3,241
2,725
Operating loss
(3,319
)
(2,661
)
(8,431
)
(8,823
)
Other (income) expense:
Governmental assistance -
research incentives
(25
)
(263
)
(205
)
(663
)
Other (income) expense, net
(103
)
38
(154
)
(20
)
Total other income
(128
)
(225
)
(359
)
(683
)
Loss before income tax
expense
(3,191
)
(2,436
)
(8,072
)
(8,140
)
Income tax expense
2
12
20
29
Net loss
(3,193
)
(2,448
)
(8,092
)
(8,169
)
Other comprehensive income
Unrealized gain (loss) on
marketable securities
(19
)
(5
)
8
6
Net loss and comprehensive
loss
$
(3,212
)
$
(2,453
)
$
(8,084
)
$
(8,163
)
Basic and diluted net loss per
share
$
(0.19
)
$
(0.20
)
$
(0.55
)
$
(0.68
)
Weighted average shares
outstanding – basic and diluted
16,689,074
12,006,874
14,652,749
11,981,233
DiaMedica Therapeutics
Inc.
Consolidated Balance
Sheets
(In thousands, except share
amounts)
September 30, 2020
December 31, 2019
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
9,797
$
3,883
Marketable securities
20,826
3,995
Amounts receivable
335
823
Prepaid expenses and other
assets
138
47
Deposits
10
88
Total current assets
31,106
8,836
Non-current assets:
Operating lease right-of-use
asset
114
153
Property and equipment, net
50
64
Total non-current assets
164
217
Total assets
$
31,270
$
9,053
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
720
$
182
Accrued liabilities
658
1,076
Finance lease obligation
6
6
Operating lease obligation
59
54
Total current liabilities
1,443
1,318
Non-current liabilities:
Finance lease obligation,
non-current
8
13
Operating lease obligation,
non-current
61
105
Total non-current liabilities
69
118
Shareholders’ equity:
Common shares, no par value;
unlimited authorized; 18,739,074 and 12,006,874 shares issued and
outstanding, as of September 30, 2020 and December 31, 2019,
respectively
—
—
Additional paid-in capital
94,457
64,232
Accumulated other comprehensive
income
10
2
Accumulated deficit
(64,709
)
(56,617
)
Total shareholders’ equity
29,758
7,617
Total liabilities and
shareholders’ equity
$
31,270
$
9,053
DiaMedica Therapeutics
Inc.
Consolidated Statements of
Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended September
30,
2020
2019
Cash flows from operating
activities:
Net loss
$
(8,092
)
$
(8,169
)
Adjustments to reconcile net loss
to net cash used in operating activities:
Share-based compensation
1,337
763
Amortization of discount on
marketable securities
(24
)
(68
)
Non-cash lease expense
39
36
Depreciation
16
16
Changes in operating assets and
liabilities:
Amounts receivable
488
116
Prepaid expenses
(91
)
280
Deposits
78
(39
)
Accounts payable
538
(171
)
Accrued liabilities
(458
)
(1
)
Net cash used in operating
activities
(6,169
)
(7,237
)
Cash flows from investing
activities:
Purchase of marketable
securities
(25,048
)
(10,928
)
Maturities of marketable
securities
8,249
6,000
Purchase of property and
equipment
(2
)
—
Disposition of property and
equipment, net
—
12
Net cash used in investing
activities
(16,801
)
(4,916
)
Cash flows from financing
activities:
Proceeds from issuance of common
shares, net of offering costs
28,872
—
Proceeds from the exercise of
stock options
16
75
Principal payments on finance
lease obligations
(4
)
(4
)
Net cash provided by financing
activities
28,884
71
Net increase (decrease) in cash
and cash equivalents
5,914
(12,082
)
Cash and cash equivalents at
beginning of period
3,883
16,823
Cash and cash equivalents at end
of period
$
9,797
$
4,741
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201104005658/en/
Scott Kellen Chief Financial Officer Phone: (763) 496-5118
skellen@diamedica.com
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