- DiaMedica Completes $23M Public Offering of Common
Shares
- Diabetic Kidney Disease Cohort Added to REDUX Study
- Post-Offering Cash and Investments of $32.9 Million
Providing Expected Two-Year Runway
- Conference Call with Management Tomorrow, August 12 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 six months
ended June 30, 2020. DiaMedica will host a conference call
tomorrow, August 12, 2020, at 7:00 a.m. Central Time to discuss its
business update and second quarter financial results.
Clinical Developments
DM199 for the Treatment of Chronic Kidney Disease
Phase II Clinical Study in CKD Caused by IgA
Nephropathy, 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). The study is being conducted in the United
States and a 13th site was added in July 2020.
REDUX targets participants with CKD. Cohort I of the study is
focused on non-diabetic, hypertensive African Americans with Stage
II or III CKD, 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. 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). Based upon additional data from DiaMedica’s completed
ReMEDy study showing significantly improved estimated glomerular
flow rate (eGFR) and reduced blood glucose levels, and with a
portion of the net proceeds from the recent public offering of
common shares, the Company is initiating a third cohort, Cohort
III, focused on participants with Type II diabetes mellitus,
hypertension and albuminuria.
“The addition of this diabetic cohort is timely in that it
leverages our current sites, which also have this patient
population,” commented Dr. Harry Alcorn, Jr., DiaMedica’s Chief
Medical Officer. “We look forward to this cohort expanding our
understanding of the potential of DM199 in the treatment of
diabetic patients with kidney disease.”
In a post hoc analysis of endpoints in the ReMEDy trial, a
sub-set of 25 participants with elevated blood glucose levels
(>7 mmol/l) and impaired kidney function (eGFR <90) were
observed to experience significant (mean +12.7 mL/min, p=0.03)
improvement in kidney function as measured by the estimated
glomerular filtration rate compared to placebo (mean increase 12.7
mL/min, p=0.03) and a trending reduction in blood glucose levels
(mean 2.2 mmol/l) compared to placebo (mean decrease 2.2
mmol/l).
The REDUX study will evaluate two dose levels of DM199 within
each cohort. Study participants will receive DM199 by subcutaneous
injection twice weekly for 95 days. The primary study endpoints
include safety, tolerability, blood pressure, albuminuria and
kidney function, which will be evaluated by changes from baseline
in eGFR and albuminuria, as measured by the urinary albumin to
creatinine ratio (UACR). Secondary endpoints are focused on
evaluating the potential for DM199 to positively impact the
underlying disease causing each participant’s CKD.
As of August 5, 2020, enrollment in the first two cohorts of the
REDUX study was approximately one-third complete. Due to actions
implemented to combat the novel strain of the coronavirus
(COVID-19) pandemic, the Company has experienced and continues to
experience slower than expected enrollment in the REDUX clinical
trial. The Company believes this is due to a combination of the
reduction or suspension of activities at its clinical study sites
as they address staff and patient safety concerns and patient
concerns related to visiting clinical study sites. The Company
anticipates that the COVID-19 pandemic will likely continue to
adversely affect its ability to recruit or enroll subjects and
cannot provide any assurance as to when clinical sites will be able
to resume enrollment at a normal rate or any guidance at this time
as to when it will complete enrollment in the study. The Company
added a 13th study site in July 2020 to assist with subject
enrollment and will consider additional sites if conditions
warrant. While results observed to date in the REDUX study indicate
a safety profile consistent with past studies, there is
insufficient data at this time for the Company to evaluate or
comment upon efficacy.
DM199 for the Treatment of Acute Ischemic Stroke
DM199 Acute Ischemic Stroke Phase II “ReMEDy”
Trial – Positive Top-Line Data
DiaMedica previously announced positive top-line results from
its ReMEDy trial, a Phase II study assessing the safety,
tolerability and therapeutic potential of DM199 in participants
suffering from acute ischemic stroke (AIS). Final enrollment was 92
participants. The study met primary safety and tolerability
endpoints and there were no DM199-related serious adverse events.
In addition, there was also a demonstrated therapeutic effect in
participants who received tissue plasminogen activator (tPA) prior
to enrollment, but not in participants receiving mechanical
thrombectomy prior to enrollment.
DM199 is intended to treat the approximately 90% of AIS patients
who do not receive either mechanical thrombectomy or tPA. Treatment
for these patients is limited to palliative therapies. When
participants treated with mechanical thrombectomy are excluded from
the study data set, a positive therapeutic effect was demonstrated.
As shown in the table below, participants treated with DM199 (n=25)
vs. palliative therapies and/or tPA (n=21), the results showed that
36% of participants receiving DM199 progressed to a full or nearly
full recovery at 90 days (National Institutes of Health Stroke
Score: 0-1), compared to 14% of participants in the placebo group.
This represents a 22% absolute increase in the proportion of
participants achieving a full or nearly full recovery.
Additionally, subject deaths decreased from 24% in the placebo
group to 12% in the active therapy group, a 50% relative
reduction.
DM199 vs. Palliative Therapies
and/or tPA
NIHSS Outcomes at 90
Days
0-1
2-8
≥ 9
Death
Placebo (n=21)
14%
57%
5%
24%
DM199 (n=24)
36%
36%
16%
12%
DiaMedica is currently developing the protocol for a proposed
Phase III study of DM199 in the treatment of AIS and preparing a
request for a Type B meeting with the U.S. Food and Drug
Administration (FDA). The meeting request is expected to be filed
shortly and, if the FDA agrees, this meeting would likely take
place in the fourth quarter of 2020.
With respect to the overall ReMEDy results, prior to enrollment,
44 of the 91 evaluable patients (48%) received a mechanical
thrombectomy, a catheter-based treatment indicated for those who
have a large vessel occlusion and can be treated within 6 to 24
hours of the onset of stroke symptoms. While approximately 20% of
AIS patients are believed to be eligible for a mechanical
thrombectomy, currently only about 5% to 10% receive the treatment
due to elapsed time post-stroke or unavailability of the therapy at
the hospital where they present. Due to the large volume of
participants receiving mechanical thrombectomy prior to enrollment
in ReMEDy, and a disproportionate distribution of these
participants between the active treatment and placebo groups, DM199
did not produce a therapeutic effect in the overall study
analysis.
Recent 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 $21.1 million, after deducting the underwriting
discount and estimated offering expenses.
Financial Results
Research and development (R&D) expenses decreased to $1.6
million for the three months ended June 30, 2020, down from $1.9
million for the three months ended June 30, 2019, a decrease of
$0.3 million. R&D expenses decreased to $3.0 million for the
six months ended June 30, 2020, compared to $4.5 million for the
six months ended June 30, 2019, a decrease of $1.5 million. The
decrease for the six month comparison was due primarily to
non-recurring costs of approximately $1.3 million incurred for a
new production run of the DM199 drug substance during the prior
year period, and a net decrease in year-over-year clinical study
costs. The decrease in clinical study costs was due to a
combination of the decreased ReMEDy stroke study expenses as it
winds down and Phase 1b CKD study costs which study was started and
completed in the prior year period. These decreases were partially
offset by costs incurred for the REDUX Phase II CKD study initiated
late in 2019 and increased non-cash share-based compensation
costs.
General and administrative (G&A) expenses were $1.1 million
for the three months ended June 30, 2020, up from $867,000 for the
three months ended June 30, 2019. G&A expenses increased to
$2.1 million for the six months ended June 30, 2020, up $0.4
million, from $1.7 million for the six months ended June 30, 2019.
The increase for the six-month comparison was due primarily to
increased non-cash share-based compensation costs.
Total other income decreased to $243,000 for the three months
ended June 30, 2020, down from $280,000 for the prior year period.
Total other income decreased to $231,000 for the six months ended
June 30, 2020, compared to $458,000 for the six months ended June
30, 2019. The decrease for the six-month comparison is primarily
related to reduced R&D incentives associated with decreased
ReMEDy stroke study costs during the six months ended June 30,
2019, partially offset by reduced foreign currency transaction
losses.
Balance Sheet and Cash Flow
The Company had cash, cash equivalents and marketable securities
of $11.8 million, current liabilities of $1.2 million and working
capital of $11.2 million as of June 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 February 2020 public offering of
common shares.
Net cash used in operating activities was $3.8 million for the
six months ended June 30, 2020, compared to $6.0 million for the
six months ended June 30, 2019. The net cash used in each of these
periods primarily reflects the net loss for these periods, non-cash
charges for stock-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 both
its second quarter 2020 financial results and the top-line results
from its ReMEDy study on Wednesday, August 12, 2020, at 7:00 a.m.
Central Time:
Date:
Wednesday, August 12, 2020
Time:
7:00 AM CT / 8:00 AM ET
Web access:
http://www.directeventreg.com/registration/event/7689626
Conference ID:
7689626
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. All
participants on the conference call will be provided with the dial
in instructions and a unique passcode once they register. This
information will also be sent in an email confirmation. 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 August 13, 2020, by dialing (855) 859-2056 (US
Toll Free), (404) 537-3406 (International), replay passcode
7689626.
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 safety and efficacy of
DM199, the assessment of the data from the ReMEDy study and
regulatory path forward, 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 June 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
June 30,
Six Months Ended
June 30,
2020
2019
2020
2019
Operating expenses:
Research and development
$
1,629
$
1,874
$
3,010
$
4,481
General and administrative
1,079
867
2,102
1,681
Operating loss
(2,708
)
(2,741
)
(5,112
)
(6,162
)
Other (income) expense:
Governmental assistance -
research incentives
(65
)
(226
)
(180
)
(400
)
Other income, net
(178
)
(54
)
(51
)
(58
)
Total other income
(243
)
(280
)
(231
)
(458
)
Loss before income tax
expense
(2,465
)
(2,461
)
(4,881
)
(5,704
)
Income tax expense
9
8
18
17
Net loss
(2,474
)
(2,469
)
(4,899
)
(5,721
)
Other comprehensive income
Unrealized gain (loss) on
marketable securities
(13
)
8
27
11
Net loss and comprehensive
loss
$
(2,487
)
$
(2,461
)
$
(4,872
)
$
(5,710
)
Basic and diluted net loss per
share
$
(0.17
)
$
(0.21
)
$
(0.36
)
$
(0.48
)
Weighted average shares
outstanding – basic and diluted
14,139,074
11,979,401
13,623,400
11,968,200
DiaMedica Therapeutics
Inc.
Consolidated Balance
Sheets
(In thousands, except share
amounts)
June 30, 2020
December 31, 2019
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
4,955
$
3,883
Marketable securities
6,844
3,995
Amounts receivable
319
823
Prepaid expenses and other
assets
235
47
Deposits
46
88
Total current assets
12,399
8,836
Non-current assets:
Operating lease right-of-use
asset
127
153
Property and equipment, net
55
64
Total non-current assets
182
217
Total assets
$
12,581
$
9,053
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
552
$
182
Accrued liabilities
609
1,076
Finance lease obligation
6
6
Operating lease obligation
50
54
Total current liabilities
1,217
1,318
Non-current liabilities:
Finance lease obligation,
non-current
10
13
Operating lease obligation,
non-current
82
105
Total non-current liabilities
92
118
Shareholders’ equity:
Common shares, no par value;
unlimited authorized; 14,139,074 and 12,006,874 shares issued and
outstanding, as of June 30, 2020 and December 31, 2019,
respectively
—
—
Additional paid-in capital
72,759
64,232
Accumulated other comprehensive
income
29
2
Accumulated deficit
(61,516
)
(56,617
)
Total shareholders’ equity
11,272
7,617
Total liabilities and
shareholders’ equity
$
12,581
$
9,053
DiaMedica Therapeutics
Inc.
Consolidated Statements of
Cash Flows
(In thousands)
(Unaudited)
Six Months Ended June
30,
2020
2019
Cash flows from operating
activities:
Net loss
$
(4,899
)
$
(5,721
)
Adjustments to reconcile net loss
to net cash used in operating activities:
Share-based compensation
829
312
Amortization of discount on
marketable securities
(23
)
(53
)
Non-cash lease expense
26
24
Depreciation
11
11
Changes in operating assets and
liabilities:
Amounts receivable
504
(332
)
Prepaid expenses
(188
)
171
Deposits
42
—
Accounts payable
370
(221
)
Accrued liabilities
(494
)
(196
)
Net cash used in operating
activities
(3,822
)
(6,005
)
Cash flows from investing
activities:
Purchase of marketable
securities
(8,799
)
(10,928
)
Maturities of marketable
securities
6,000
3,000
Purchase of property and
equipment
(2
)
—
Disposition of property and
equipment, net
—
12
Net cash used in investing
activities
(2,801
)
(7,916
)
Cash flows from financing
activities:
Proceeds from issuance of common
shares, net of offering costs
7,682
—
Proceeds from the exercise of
stock options
16
75
Principal payments on finance
lease obligations
(3
)
(3
)
Net cash provided by financing
activities
7,695
72
Net increase (decrease) in cash
and cash equivalents
1,072
(13,849
)
Cash and cash equivalents at
beginning of period
3,883
16,823
Cash and cash equivalents at end
of period
$
4,955
$
2,974
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200811005746/en/
Scott Kellen Chief Financial Officer Phone: (763) 496-5118
skellen@diamedica.com
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