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DiaMedica Therapeutics Inc. (NASDAQ: DMAC) has received a reiterated Buy rating and a $7.00 price target from H.C. Wainwright.
The endorsement comes as the company prepares to initiate a Phase 2 trial for its lead candidate, DM199, in the treatment of preeclampsia (PE), a serious pregnancy complication characterized by high blood pressure.
The upcoming trial, set to begin in the fourth quarter of 2024, will be conducted at Tygerberg Hospital in Cape Town, South Africa. DiaMedica has secured the necessary approval from the South African Health Products Regulatory Authority (SAHPRA), following the Health Research Ethics Committee at Stellenbosch University's approval in June 2024. Topline results from Part 1a of the trial are expected in the first half of 2025.
DM199, also known as rinvecalinase alfa, is a recombinant form of human tissue kallikrein-1 (rhKLK1). It functions as a serine protease enzyme, which is thought to improve blood flow and placental perfusion in preeclamptic patients by increasing the production of nitric oxide, prostacyclin, and endothelium-derived hyperpolarizing factors (EDHFs). The activation of bradykinin2 (BK2) receptors on endothelial cells is believed to be beneficial for the ischemic tissue caused by preeclampsia.
The clinical progress of DM199 is particularly significant given the absence of standard antihypertensive treatments for pregnant mothers with preeclampsia. Current treatments such as ACE inhibitors or angiotensin receptor blockers (ARBs) are not suitable for use during pregnancy. This unmet need presents a substantial opportunity for DM199 to demonstrate its therapeutic impact.
In other recent news, DiaMedica Therapeutics has been making significant strides in their clinical trials and financial health. The company has received regulatory approval from the South African Health Products Regulatory Authority to begin a Phase 2 clinical trial of DM199, their proprietary recombinant serine protease for preeclampsia treatment.
The trial will be conducted at Tygerberg Hospital in Cape Town, South Africa, under the leadership of Prof. Catherine Cluver, MD, PhD. DiaMedica anticipates the commencement of dosing within the fourth quarter of 2024.
H.C. Wainwright has initiated coverage of DiaMedica Therapeutics with a Buy rating based on the potential of DM199 to meet the substantial unmet need for stroke treatments. Furthermore, DiaMedica reported a healthy financial status with $54.1 million in cash and investments as of June 30, 2024. The company has seen a decrease in general and administrative expenses compared to the previous year, and an increase in other income due to higher interest from marketable securities.
DiaMedica Therapeutics is also making progress with ReMEDy2, a trial investigating DM199 for its potential in treating acute ischemic stroke and preeclampsia. Full enrollment for the trial is anticipated by the first quarter of 2025.
InvestingPro Insights
As DiaMedica Therapeutics Inc. (NASDAQ:DMAC) advances its promising DM199 candidate for preeclampsia treatment, recent financial data from InvestingPro offers additional context for investors. The company's market capitalization stands at $192.37 million, reflecting the market's current valuation of its potential.
InvestingPro Tips highlight that DiaMedica holds more cash than debt on its balance sheet, which could provide financial flexibility as it moves into the crucial Phase 2 trial. This strong cash position aligns with the company's ability to fund its upcoming clinical studies, a critical factor for biotech firms in the development stage.
Despite the positive clinical outlook, it's worth noting that analysts do not anticipate the company to be profitable this year, according to another InvestingPro Tip. This is not uncommon for biotech companies investing heavily in R&D. However, the stock has shown a strong return over the last three months, with a 50% price total return, possibly reflecting investor optimism about the upcoming trial.
For those interested in a deeper analysis, InvestingPro offers 7 additional tips that could provide further insights into DiaMedica's financial health and market performance.
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