- Company to Conduct In-Use Study to Address FDA Latest
Information Request
DiaMedica Therapeutics Inc. (Nasdaq: DMAC), a clinical-stage
biopharmaceutical company focused on developing novel treatments
for neurological disorders and kidney diseases, today provided a
business update and released financial results for the quarter
ended September 30, 2022.
Clinical Developments
DM199 for the Treatment of Acute Ischemic Stroke
On October 26, 2022, the Company announced that it received
further guidance from the U.S. Food and Drug Administration (FDA)
regarding the clinical hold on its ReMEDy2 Phase 2/3 trial. The FDA
stated it is maintaining its clinical hold at this time and that
additional non-clinical data related to the materials used by a
hospital in the intravenous (IV) infusion process is needed to
resolve the clinical hold.
In response to the FDA’s clinical hold letter in July 2022
related to three serious adverse event cases of transient acute
hypotension during intravenous infusion of DM199, the Company
previously submitted to the FDA supporting in vitro data that the
etiology (cause) is likely related to switching the type of IV bag
used in the prior ReMEDy 1 trial, where no hypotensive episodes
were reported, versus the current ReMEDy 2 trial. Hypotension is a
known response to DM199 treatment. Significant differences in
protein binding were observed between the two types of IV bags used
in the studies that the Company believes effectively altered the
total amount of drug being administered. Following review of this
data, the FDA requested an additional in-use in vitro stability
study of the IV administration of DM199 which includes the IV
tubing and mechanical infusion pump to further rule out any
etiology other than IV bag protein binding.
“Preparation for the in vitro study is already underway and we
are also preparing to request a Type A FDA meeting in the coming
weeks to obtain additional guidance towards lifting the clinical
hold and resuming the ReMEDy2 trial,” commented Rick Pauls,
DiaMedica’s Chief Executive Officer. “We will provide an update on
the timing of completion of the in-use in-vitro study and data
submission following consultation with the FDA.”
The FDA placed a clinical hold on the Company’s Phase 2/3
ReMEDy2 trial following the Company voluntarily pausing patient
enrollment in the trial to investigate three unexpected instances
of clinically significant hypotension (low blood pressure)
occurring shortly after initiation of IV dose of DM199. The
hypotension was transient and blood pressure levels of all three
patients recovered back to baseline within minutes of stopping the
infusion and the patients suffered no ongoing adverse effects.
Balance Sheet and Cash Flow
DiaMedica reported total cash, cash equivalents and investments
of $36.1 million, current liabilities of $1.5 million and working
capital of $34.9 million as of September 30, 2022, compared to
total cash, cash equivalents and investments of $45.1 million, $1.5
million in current liabilities and $43.9 million in working capital
as of December 31, 2021. The decreases in cash and investments and
in working capital were due primarily to cash used to fund
operating activities during the nine months ended September 30,
2022.
Net cash used in operating activities was $8.7 million and $9.4
million for the nine months ended September 30, 2022 and September
30, 2021, respectively. Cash used in operating activities is driven
primarily by the Company’s net loss, partially offset by non-cash
share-based compensation and the effects of the changes in
operating assets and liabilities.
Financial Results
Research and development (R&D) expenses decreased to $1.6
million for the three months ended September 30, 2022, down $0.7
million from $2.3 million for the three months ended September 30,
2021. R&D expenses decreased to $5.6 million for the nine
months ended September 30, 2022, down $1.3 million from $6.9
million for the nine months ended September 30, 2021. The decrease
for the nine-month comparison was driven primarily by reduced costs
incurred during the wrap-up of the REDUX Phase 2 CKD trial and
decreased non-clinical testing and manufacturing process
development costs which were incurred during 2021 in preparation
for initiating the Phase 2/3 ReMEDy2 trial. These decreases were
partially offset by increased costs incurred in performing the
Phase 2/3 ReMEDy2 trial, inclusive of costs incurred during the
clinical hold, and increased personnel costs associated with
expanding the Company’s R&D operations.
General and administrative (G&A) expenses were $1.5 million
for the three months ended September 30, 2022, up from $1.1 million
for the three months ended September 30, 2021. G&A expenses
were $4.5 million for the nine months ended September 30, 2022, up
from $3.5 million for the nine months ended September 30, 2021. The
increase for the nine-month comparison was primarily due to
increased directors’ and officers’ liability insurance, and
personnel and professional services costs to support our expanding
clinical programs. These increases were partially offset by a
reduction in non-cash share-based compensation.
About ReMEDy2 Trial
The ReMEDy2 trial is an adaptive design, randomized,
double-blind, placebo-controlled trial studying the use of the
Company’s product candidate, DM199, to treat acute ischemic stroke
(AIS) patients. The trial is intended to enroll approximately 350
patients at 75 sites in the United States. Patients enrolled in the
trial will be treated for three weeks with either DM199 or placebo,
beginning within 24 hours of the onset of AIS symptoms, with the
final follow-up at 90 days. The trial excludes patients treated
with tissue plasminogen activator (tPA) and/or mechanical
thrombectomy. The study population is representative of the
approximately 80% of AIS patients who do not have treatment options
today, primarily due to the limitations on treatment with tPA or
mechanical thrombectomy. DiaMedica believes that the proposed trial
has the potential to serve as a pivotal registration study of DM199
in this patient population.
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
stroke, chronic kidney disease, retinopathy, vascular dementia, and
resistant hypertension where current treatment options are limited
or ineffective. DiaMedica is the first company to have developed
and clinically studied 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 South Korea for
decades. DM199 is currently being studied in patients with AIS and
patients with chronic kidney disease. In September 2021, the FDA
granted Fast Track Designation to DM199 for the treatment of
AIS.
About DiaMedica Therapeutics Inc.
DiaMedica Therapeutics Inc. is a clinical stage
biopharmaceutical company committed to improving the lives of
people suffering from serious diseases. DiaMedica’s lead candidate
DM199 is the first pharmaceutically active recombinant (synthetic)
form of the KLK1 protein, an established therapeutic modality for
the treatment of acute ischemic stroke and chronic kidney disease.
For more information visit the Company’s website at www.diamedica.com.
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,” “potential,”
“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 Company’s
expectations regarding its ability to resolve the clinical hold
imposed by the FDA and its belief that the issues raised by the FDA
are potentially addressable, the resumption of the ReMEDy2 trial,
and the anticipated clinical benefits and success of DM199,
including being a potentially life changing drug to stroke
patients. 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 risk that the Company may not know the cause of the
hypotension events that occurred in the ReMEDy2 trial or that its
plan to resolve the issues and prevent future events may not be
successful; the risk that the Company may not be able to address
successfully the concerns identified by the FDA or may require the
Company to collect additional data or information beyond what the
FDA has currently requested and what the Company currently expects;
the Company’s ability to successfully engage with the FDA and
satisfactorily respond to requests from the FDA for further
information and data regarding the ReMEDy2 trial and the timing and
outcome of the Company’s planned interactions with the FDA
concerning the clinical hold on the ReMEDy2 trial; the risk that
the Company may not be able to lift the clinical hold or do so in a
timely manner; uncertainties relating to regulatory applications
and related filing and approval timelines, including the risk that
FDA may not remove the clinical hold on the ReMEDy2 trial; the
possibility of additional future adverse events associated with or
unfavorable results from the ReMEDy2 trial; the possibility of
unfavorable results from DiaMedica’s ongoing or future clinical
trials 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 acute ischemic stroke and chronic kidney disease and
its expectations regarding the benefits of DM199; DiaMedica’s
ability to conduct successful clinical testing of DM199 and within
its anticipated parameters, enrollment numbers, costs and
timeframes; the adaptive design of the ReMEDy2 trial and the
possibility that the targeted enrollment and other aspects of the
trial could change depending upon certain factors, including
additional input from the FDA and the blinded interim analysis; the
perceived benefits of DM199 over existing treatment options; the
potential direct or indirect impact of the COVID-19 pandemic,
hospital and medical facility staffing shortages, and worldwide
global supply chain shortages on DiaMedica’s business and clinical
trials, including its ability to meet its site activation and
enrollment goals; 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 acute ischemic stroke and chronic kidney disease, 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, 2021 and subsequent U.S. Securities and Exchange
Commission filings, including its quarterly report on Form 10-Q for
the quarterly period ended September 30, 2022. 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.
Condensed 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,
2022
2021
2022
2021
Operating expenses:
Research and development
$
1,640
$
2,332
$
5,569
$
6,894
General and administrative
1,488
1,084
4,459
3,506
Operating loss
(3,128
)
(3,416
)
(10,028
)
(10,400
)
Other income:
Other income (loss), net
76
(27
)
124
75
Loss before income tax
expense
(3,052
)
(3,443
)
(9,904
)
(10,325
)
Income tax expense
(7
)
(7
)
(21
)
(21
)
Net loss
(3,059
)
(3,450
)
(9,925
)
(10,346
)
Other comprehensive income
(loss)
Unrealized gain (loss) on
marketable securities
5
(2
)
(111
)
(3
)
Net loss and comprehensive
loss
$
(3,054
)
$
(3,452
)
$
(10,036
)
$
(10,349
)
Basic and diluted net loss per
share
$
(0.12
)
$
(0.18
)
$
(0.38
)
$
(0.55
)
Weighted average shares
outstanding – basic and diluted
26,443,067
19,035,713
26,443,067
18,863,829
DiaMedica Therapeutics
Inc.
Condensed Consolidated Balance
Sheets
(In thousands, except share
amounts)
September 30, 2022
December 31, 2021
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
2,771
$
4,707
Marketable securities
33,313
40,405
Prepaid expenses and other
assets
322
84
Amounts receivable
75
130
Deposits
9
113
Total current assets
36,490
45,439
Non-current assets:
Operating lease right-of-use
asset
441
42
Property and equipment, net
110
70
Total non-current assets
551
112
Total assets
$
37,041
$
45,551
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable
$
864
$
509
Accrued liabilities
637
966
Operating lease obligation
34
45
Financing lease obligation
7
4
Total current liabilities
1,542
1,524
Non-current liabilities:
Operating lease obligation,
non-current
415
—
Finance lease obligation,
non-current
5
3
Total non-current liabilities
420
3
Shareholders’ equity:
Common shares, no par value;
unlimited authorized; 26,443,067 shares issued and outstanding as
of September 30, 2022 and December 31, 2021
—
—
Paid-in capital
127,667
126,576
Accumulated other comprehensive
loss
(162
)
(51
)
Accumulated deficit
(92,426
)
(82,501
)
Total shareholders’ equity
35,079
44,024
Total liabilities and shareholders’ equity
$
37,041
$
45,551
DiaMedica Therapeutics
Inc.
Condensed Consolidated
Statements of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended September
30,
2022
2021
Cash flows from operating
activities:
Net loss
$
(9,925
)
$
(10,346
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Share-based compensation
1,091
1,260
Amortization of premium on marketable
securities
118
51
Non-cash lease expense
47
43
Depreciation
19
18
Changes in operating assets and
liabilities:
Prepaid expenses and other assets
(238
)
(129
)
Amounts receivable
55
236
Deposits
104
(133
)
Accounts payable
355
(400
)
Accrued liabilities
(371
)
(48
)
Net cash used in operating activities
(8,745
)
(9,448
)
Cash flows from investing
activities:
Purchase of marketable securities
(35,895
)
(47,740
)
Maturities of marketable securities
42,758
35,905
Purchases of property and equipment
(49
)
(15
)
Proceeds from disposition of property and
equipment
—
2
Net cash provided by (used in) investing
activities
6,814
(11,848
)
Cash flows from financing
activities:
Proceeds from issuance of common shares,
net of offering costs
—
29,867
Proceeds from the exercise of stock
options
—
244
Principal payments on finance lease
obligations
(5
)
(5
)
Net cash (used in) provided by financing
activities
(5
)
30,106
Net (decrease) increase in cash and cash
equivalents
(1,936
)
8,810
Cash and cash equivalents at beginning of
period
4,707
7,409
Cash and cash equivalents at end of
period
$
2,771
$
16,219
Supplemental disclosure of non-cash
transactions:
Assets acquired under operating lease
$
446
$
—
Assets acquired under financing lease
$
10
$
—
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221109005758/en/
Scott Kellen Chief Financial Officer Phone: (763) 496-5118
skellen@diamedica.com
Paul Papi Corporate Communications Phone: (508) 444-6790
ppapi@diamedica.com
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