DiaMedica Therapeutics Inc. (Nasdaq: DMAC), a clinical-stage
biopharmaceutical company focused on developing novel treatments
for kidney diseases and neurological disorders, provided a business
update and reported its financial results for the year ended
December 31, 2018.
Business Highlights"In the past
year, DiaMedica has achieved important development goals
for our two lead programs, DM199 for chronic kidney disease and
acute ischemic stroke. We expect to build upon this success in 2019
as we work toward advancing our pipeline of clinical programs,
which hold the potential to have significant impact on patients
suffering from chronic kidney disease and acute ischemic stroke,"
stated Rick Pauls, DiaMedica’s President and CEO.
"After our successful Nasdaq IPO in December, we have sufficient
capital to obtain Phase II read-outs in our two lead
programs. We are well positioned to execute on our clinical
development plans to achieve meaningful milestones in the next
year, and we look forward to sharing our progress."
U.S.
IPO, Nasdaq Uplisting and U.S. Reporting CompanyOn
December 6, 2018, DiaMedica completed an initial public offering
(“IPO”) of its common shares in the United States and uplisted to
the Nasdaq Capital Market, raising $16.4 million in gross proceeds
and $14.7 million in net proceeds. This was an important milestone
for DiaMedica that expanded its investor base, adding several U.S.
institutional investors, and strengthened its balance sheet. The
IPO also provided the capital to complete Phase II clinical trials
for DM199 in patients suffering acute ischemic strokes (“AIS”) and
chronic kidney disease (“CKD”).
License of DM199 with Ahon
Pharma, subsidiary of Fosun Pharma.In September 2018,
DiaMedica signed a license and collaboration agreement with Fosun
Pharma’s Ahon Pharma subsidiary for acute ischemic stroke in China.
Fosun is one of the largest Chinese pharmaceutical firms with an
extensive hospital sales force. The agreement provides exclusive
rights to clinically develop and commercialize DM199 solely for
acute ischemic stroke in China, Taiwan, Hong Kong and Macau. Under
the terms of the agreement, DiaMedica may receive approximately $32
million in milestone payments, plus sales-based royalties of up to
approximately 10%. In addition, DiaMedica has retained full control
over the manufacturing of DM199. Ahon Pharma is currently
preparing an application for an investigational new drug
application to the China National Medical Products Administration.
In China, a form of the KLK1 protein extracted from human urine,
known as u-KLK1 or Kailikang®, has been approved and is considered
a standard of care for AIS
patients.
Clinical
DevelopmentsDM199 for the Treatment of Chronic
Kidney Disease Enrolling Patients in Phase Ib
Clinical Study in Patients with CKD In December 2018, the United
States Food & Drug Administration (“FDA”) accepted DiaMedica’s
investigational new drug (“IND”) application to study DM199 in
patients with CKD. In February 2019, the Company began enrolling
patients in its Phase Ib clinical study, which is being conducted
at 3 sites in the U.S. and all sites are actively enrolling
patients. The open label clinical trial is evaluating three dose
levels of DM199, administered in a single subcutaneous (“SC”) dose,
in 32 patients with moderate or severe CKD. Primary endpoints
include safety, tolerability, pharmacokinetics, change in KLK1
levels, albumin to creatine ratios and kidney biomarkers measured
over a 12-day period. This study is intended to assist in
identifying dose levels for use in subsequent Phase II
trials. The Company expects a readout on the results of
the CKD study in mid-2019.Released Chronic Kidney Disease White
Paper
Today, DiaMedica also released a white
paper that further details the potential of KLK1/DM199 to
treat patients with chronic kidney disease. The paper can be
accessed at
www.diamedica.com/product-candidates/chronic-kidney-disease.DiaMedica
is currently planning a randomized Phase II study in patients with
rare forms of chronic kidney disease to be initiated in the second
half of 2019. The Company will have updates on the rare forms to be
targeted in this study and other details to follow.DM199
for the Treatment of Acute Ischemic StrokeDM199 Acute
Ischemic Stroke Phase II “REMEDY” Trial Update.In 2018, the Company
initiated treatment of patients in its Phase II randomized,
double-blind, placebo-controlled multi-center evaluation to assess
the safety, tolerability and markers of DM199 in acute ischemic
stroke patients, the REMEDY trial. With the success of its
IPO, DiaMedica raised its target enrollment in the REMEDY trial
from 60 to approximately 100 patients to provide additional data to
support the design of a robust and efficient Phase III study.
In this trial, the study drug (DM199 or placebo) is administered as
an intravenous (“IV”) infusion within 24 hours of stroke
symptom onset, followed by SC injections later that day and once
every 3 days for 21 days (8 SC doses). Multiple plasma-based
biomarkers (e.g. C-reactive protein), the Modified Rankin Scale,
National Institutes of Health Stroke Scale and the Barthel Index
will be assessed at multiple points throughout the study, including
90 days post-stroke. This study will also include multiple
tests to investigate DM199’s therapeutic potential. With the
increase in the enrollment target, the Company expects to complete
this trial in the fourth quarter of 2019 or first quarter of
2020.AIS Review Paper Supporting the Use of DM199 for AIS Published
in Peer-Reviewed JournalOn January 22, 2019, DiaMedica announced
that a manuscript titled “Human Tissue Kallikrein in the Treatment
of Acute Ischemic Stroke” was published in the peer-reviewed
medical journal “Therapeutic Advances in Neurological Disorders
(TAND).” The paper reviews the scientific literature covering the
biochemical role of KLK1 and presents the mechanistic rationale for
using KLK1 as an additional pharmacological treatment for AIS. In
addition to the biochemical mechanism of KLK1, the paper highlights
supporting results from human genetics and preclinical animal
models of brain ischemia. It also reviews published clinical
results for treatment of AIS by a form of KLK1 that is isolated
from human urine. This form has been approved for post-infarct
treatment of AIS in China and data has been published on clinical
trials involving over 4,000 patients. The paper offers a series of
testable therapeutic hypotheses for demonstrating the long-term
beneficial effect of KLK1 treatment in AIS patients and the reasons
for this action.Financial ResultsLicense revenue
for 2018 was comprised of the initial $500,000 license payment
DiaMedica received in connection with the license and collaboration
agreement with Ahon Pharma.Research and development expenses were
$4.5 million for the year ended December 31, 2018 compared to $3.2
million for the year ended December 31, 2017, an increase of $1.3
million. The increase was primarily due to the additional
preclinical testing and related costs required to support an
application for an investigational new drug application in the
United States, higher study costs for the REMEDY Phase II stroke
study as compared with the DM199 bridging study which was
substantially completed in 2017, and increased personnel and
non-cash stock-based compensation costs.General and administrative
expenses were $2.7 million for the year ended December 31, 2018
compared to $1.3 million for the year ended December 31,
2017. General and administrative costs increased due to
one-time costs incurred associated with the Company’s planned IPO
in the United States, primarily the Nasdaq listing process and
related legal and accounting fees. Higher salaries, fees and
short-term benefits due to the addition of staff and higher
share-based compensation also contributed to the increase during
2018.
Other income, net, was $1.1 million for the year
ended December 31, 2018 compared to $259,000 for 2017. The
increase resulted primarily from the recognition of the research
and development incentive from the Australia Government paid for
qualifying research work performed by DiaMedica Australia.
This increase was partially offset by increased foreign currency
transaction losses.
Balance Sheet and Cash Flow
Total cash resources were $16.8 million as of
December 31, 2018, compared to $1.4 million as of December 31,
2017. Total current assets were $18.0 million and $1.5 million as
of December 31, 2018 and December 31, 2017, respectively. These
increases resulted primarily from net proceeds of $20.6 million
received from the sale of common shares and warrants during 2018,
partially offset by the use of cash to fund operations in the
current year.Current liabilities increased to $1.3 million as of
December 31, 2018, compared to $1.0 million as of December 31,
2017. The increase in current liabilities resulted primarily from
the increase in costs accrued related to clinical trials.Net cash
used in operating activities was $5.7 million for the year ended
December 31, 2018, up from $3.9 million for the year ended December
31, 2017. The net cash used in each of these periods primarily
reflects the net loss for these periods, and was partially offset
by non-cash charges for stock-based compensation and the net
effects of changes in operating assets and liabilities.
Conference Call Information
DiaMedica management will host a conference call
to discuss these results on Wednesday, March 20, 2019, at 8:00 a.m.
Central Time:
Date: |
Wednesday, March 20, 2019 |
Time: |
8:00 AM
CT |
Web
access: |
https://edge.media-server.com/m6/p/idbwv4bq |
Dial
In: |
(866)
962-3583 (domestic) |
|
(630)
652-5857 (international) |
Conference ID: |
6773627 |
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 our 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 March 28, 2019, by dialing 1(855) 859-2056 (US Toll
Free Dial In), (404) 537-3406 (international), replay passcode
6773627.
About DM199
DM199 is a recombinant (synthetic) form of the
human serine protease, KLK1. The KLK1 protein 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 prostacyclin. 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 acute ischemic stroke and patients
with chronic kidney disease.
About DiaMedica
Therapeutics
DiaMedica Therapeutics Inc. is a clinical stage
biopharmaceutical company focused on developing novel treatments
for chronic kidney diseases and neurological disorders. DiaMedica’s
shares are listed on The Nasdaq Capital Market under the trading
symbol “DMAC.”
CAUTIONARY STATEMENT 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”,
“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
success of DM199, the timing of its clinical programs, ability to
achieve milestones and the sufficiency of its capital resources.
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 our 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, 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; the perceived benefits of
DM199 over existing treatment options; ability to obtain required
regulatory approvals; the potential size of the markets for DM199
and its ability to serve those markets; the success, cost and
timing of planned clinical trials, as well as reliance on
collaboration with third parties to conduct clinical trials; its
ability 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 final prospectus filed
with the U.S. Securities and Exchange Commission (“SEC”) pursuant
to Rule 424(b) promulgated under the U.S. Securities Act of 1933,
as amended, dated December 6, 2018, in connection with DiaMedica’s
Registration Statement on Form S-1, as amended, its annual report
on Form 10-K for the fiscal year ended December 31, 2018 which it
intends to file in the next few days, and subsequent SEC filings by
DiaMedica. 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.
Contact:
Scott KellenChief Financial OfficerPhone: (763)
496-5118 skellen@diamedica.com
Paul Papi Vice President of Business Development
Phone: (617) 899-5941 info@diamedica.com
DiaMedica Therapeutics
Inc.Consolidated Statements of Operations and
Comprehensive Loss(In thousands, except share and per
share amounts)
|
|
Year Ended December 31, |
|
|
|
|
2018 |
|
|
|
2017 |
|
|
Operating revenues: |
|
|
|
|
|
|
|
License
revenues |
|
$ |
500 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
Research
and development |
|
|
4,522 |
|
|
|
3,206 |
|
|
General
and administrative |
|
|
2,739 |
|
|
|
1,313 |
|
|
Total
operating expenses |
|
|
7,261 |
|
|
|
4,519 |
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
|
(6,761 |
) |
|
|
(4,519 |
) |
|
|
|
|
|
|
|
|
|
Other
(income) expense: |
|
|
|
|
|
|
|
Governmental assistance – research incentives |
|
|
(1,214 |
) |
|
|
(244 |
) |
|
Other
(income) expense |
|
|
68 |
|
|
|
(6 |
) |
|
Change in
fair value of warrant liability |
|
|
39 |
|
|
|
(9 |
) |
|
Total
other income |
|
|
(1,107 |
) |
|
|
(259 |
) |
|
|
|
|
|
|
|
|
|
Loss
before income tax benefit |
|
|
(5,654 |
) |
|
|
(4,260 |
) |
|
|
|
|
|
|
|
|
|
Income
tax expense |
|
|
80 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
Net loss
and comprehensive loss |
|
$ |
(5,734 |
) |
|
$ |
(4,260 |
) |
|
|
|
|
|
|
|
|
|
Basic
and diluted net loss per share |
|
$ |
(0.74 |
) |
|
$ |
(0.72 |
) |
|
Weighted
average shares outstanding—basic and diluted |
|
|
7,743,520 |
|
|
|
5,935,790 |
|
|
|
|
|
|
|
|
|
|
DiaMedica Therapeutics
Inc.Consolidated Balance Sheets(In
thousands, except share amounts)
|
|
December 31, 2018 |
|
|
December 31, 2017 |
ASSETS |
|
|
|
|
|
Current
assets: |
|
|
|
|
|
Cash |
$ |
16,823 |
|
|
$ |
1,353 |
|
Amounts
receivable |
|
780 |
|
|
|
80 |
|
Prepaid
expenses |
|
369 |
|
|
|
61 |
|
Total
current assets |
|
17,972 |
|
|
|
1,494 |
|
Deposit |
|
271 |
|
|
|
271 |
|
Property
and equipment, net |
|
96 |
|
|
|
37 |
|
Total
non-current assets |
|
367 |
|
|
|
308 |
|
|
|
|
|
|
|
Total
assets |
$ |
18,339 |
|
|
$ |
1,802 |
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts
payable and accrued liabilities |
$ |
1,291 |
|
|
$ |
919 |
|
Capital
lease obligation |
|
5 |
|
|
|
— |
|
Warrant
liability |
|
— |
|
|
|
84 |
|
Total
current liabilities |
|
1,296 |
|
|
|
1,003 |
|
|
|
|
|
|
|
Long-term liabilities: |
|
|
|
|
|
Capital
lease obligation, non-current |
|
18 |
|
|
|
— |
|
Total
long-term liabilities |
|
18 |
|
|
|
— |
|
|
|
|
|
|
|
Stockholders’ deficit: |
|
|
|
|
|
Common
shares, no par value; unlimited authorized; 11,956,874 |
|
|
|
|
|
|
|
and
6,370,664 shares issued and outstanding, as of December 31, |
|
|
|
|
|
|
|
2018 and
2017, respectively |
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
62,993 |
|
|
|
41,033 |
|
Accumulated deficit |
|
(45,968 |
) |
|
|
(40,234 |
) |
Total
stockholders’ equity |
|
17,025 |
|
|
|
799 |
|
Total
liabilities and stockholders’ deficit |
$ |
18,339 |
|
|
$ |
1,802 |
|
DiaMedica Therapeutics
Inc.Consolidated Statements of Cash
Flows
(In thousands)
|
Year Ended December 31, |
|
2018 |
|
|
2017 |
Cash flows from operating activities: |
|
|
|
|
|
|
Net
loss |
$ |
(5,734 |
) |
|
$ |
(4,260 |
) |
|
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
Share-based compensation |
|
620 |
|
|
|
409 |
|
|
Change in
fair value of warrant liability |
|
39 |
|
|
|
(9 |
) |
|
Depreciation |
|
15 |
|
|
|
4 |
|
|
Changes
in operating assets and liabilities: |
|
|
|
|
|
|
Amounts
receivable |
|
(700 |
) |
|
|
(27 |
) |
|
Prepaid
expenses |
|
(308 |
) |
|
|
6 |
|
|
Deposits |
|
— |
|
|
|
(271 |
) |
|
Accounts
payable and accrued liabilities |
|
372 |
|
|
|
248 |
|
|
Net cash
used in operating activities |
|
(5,696 |
) |
|
|
(3,900 |
) |
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
Purchase
of property and equipment |
|
(50 |
) |
|
|
(22 |
) |
|
Net cash
used in financing activities |
|
(50 |
) |
|
|
(22 |
) |
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
Proceeds
from issuance of common shares, net of offering |
|
14,726 |
|
|
|
2,917 |
|
|
costs |
|
|
|
|
|
|
|
|
Proceeds
from issuance of common shares and warrants, net offering
costs |
|
5,840 |
|
|
|
— |
|
|
Proceeds
from the exercise of common share purchase warrants |
|
607 |
|
|
|
615 |
|
|
Proceeds
from exercise of stock options |
|
43 |
|
|
|
7 |
|
|
Net cash
provided by financing activities |
|
21,216 |
|
|
|
3,539 |
|
|
|
|
|
|
|
|
|
Net
increase (decrease) in cash |
|
15,470 |
|
|
|
(383 |
) |
|
Cash at
beginning of year |
|
1,353 |
|
|
|
1,736 |
|
|
Cash at
end of year |
$ |
16,823 |
|
|
$ |
1,353 |
|
|
|
|
|
|
|
|
|
Supplemental disclosure of cash flow
information: |
|
|
|
|
|
|
Cash paid
for interest |
$ |
11 |
|
|
$ |
57 |
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash
transactions: |
|
|
|
|
|
|
Reclassification of warrant liability upon warrant exercise |
$ |
123 |
|
|
$ |
— |
|
|
Assets
acquired under capital lease |
$ |
24 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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