Earnings call transcript: DiaMedica Therapeutics Q1 2025 earnings beat expectations

DiaMedica Therapeutics Inc. (DMAC) reported its earnings for the first quarter of 2025, surpassing analysts’ expectations with an earnings per share (EPS) of -0.18, compared to the forecasted -0.20. Despite the earnings beat, the company’s revenue remained at zero, aligning with forecasts. Following the earnings announcement, DiaMedica’s stock price experienced a 4.05% increase, closing at $3.98. According to InvestingPro data, the company currently maintains a market capitalization of $170.57 million, with analysts setting price targets ranging from $6 to $11 per share.

Key Takeaways

• DiaMedica’s Q1 2025 EPS beat expectations by 0.02.
• Stock price rose by 4.05% post-earnings announcement.
• Cash and investments total $37.3 million, with a cash runway projected into Q3 2026.
• R&D expenses increased significantly year-over-year.

Company Performance

DiaMedica Therapeutics demonstrated resilience in its Q1 2025 performance, primarily driven by its robust cash position and strategic focus on clinical development programs. InvestingPro analysis reveals the company holds more cash than debt on its balance sheet, with a strong current ratio of 8.28, indicating excellent short-term liquidity. The company is advancing its preeclampsia and stroke treatment initiatives, which are expected to yield significant clinical results in the coming months. The increase in research and development expenses underscores DiaMedica’s commitment to innovation, particularly in areas with unmet medical needs.

Financial Highlights

• Total cash and investments: $37.3 million as of March 31, 2025.
• Current liabilities: $4.7 million.
• Working capital: $32.8 million.
• Net cash used in operating activities: $7.1 million.
• Research and Development expenses: $5.7 million, up from $3.7 million in Q1 2024.

Earnings vs. Forecast

DiaMedica’s EPS of -0.18 surpassed the forecast of -0.20, marking a positive surprise of approximately 10%. This earnings beat, although modest, reflects the company’s effective cost management and strategic focus on its core development programs. Historically, DiaMedica has shown variability in meeting earnings expectations, making this quarter’s results a notable achievement.

Market Reaction

Following the earnings release, DiaMedica’s stock price increased by 4.05%, closing at $3.98. This rise indicates a positive investor sentiment, likely driven by the earnings beat and the company’s strong cash position. Based on InvestingPro Fair Value analysis, the stock appears slightly overvalued at current levels. The stock’s performance remains within its 52-week range, with a high of $6.818 and a low of $2.14, suggesting room for growth as clinical milestones are achieved. With a beta of 1.29, the stock shows moderate volatility compared to the broader market. InvestingPro subscribers have access to 6 additional key insights about DMAC’s financial health and growth prospects.

Outlook & Guidance

DiaMedica anticipates continued progress in its clinical trials, with preliminary results from its preeclampsia program expected between June and July 2025. The company plans to expand its study to U.S. and global markets, which could drive future growth. While InvestingPro data indicates analysts don’t expect profitability this year, the company’s strong financial health score and comprehensive research report available on InvestingPro provide valuable insights for investors monitoring this development-stage biotech company. Despite the increased R&D expenses, DiaMedica projects a steady cash runway into Q3 2026, supporting its long-term strategic goals.

Executive Commentary

CEO Rick Pauls emphasized the company’s unique position in addressing preeclampsia, stating, "No FDA-approved treatments exist for preeclampsia despite the growing burden of this disease." CFO Scott Kellen highlighted the company’s financial stability, noting, "We anticipate that our current cash and investments provide us a runway into Q3 of twenty twenty-six."

Risks and Challenges

• The absence of revenue generation remains a significant challenge.
• Increased R&D expenses could strain financial resources if clinical milestones are delayed.
• Market competition in the therapeutic space for stroke and preeclampsia.
• Regulatory hurdles in expanding clinical trials internationally.

Q&A

During the earnings call, analysts focused on the timing of clinical trial results and the potential impact of positive preeclampsia outcomes. CEO Rick Pauls noted that "a positive effect here in preeclampsia will just be another confirmation that this protein is active," highlighting the importance of upcoming results in validating the company’s therapeutic approach.

Full transcript - DiaMedica Therapeutics Inc (DMAC) Q1 2025:

Conference Call Operator: Good morning, ladies and gentlemen, and welcome to the DiaMedica Therapeutics First Quarter twenty twenty five Conference Call. An audio recording of the webcast will be available shortly after the call today on DiaMedica’s website at www.diamedica.com in the Investor Relations section. Before DiaMedica proceeds with its remarks, please note that the company will be making forward looking statements on today’s call. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these statements. More information, including factors that could cause actual results to differ from projected results, appears in the section entitled Cautionary Note Regarding Forward Looking Statements in the company’s press release issued yesterday and under the heading Risk Factors in the company’s most recent annual report on Form 10 ks and most recent quarterly report Form 10 Q.

DiaMedica’s SEC filings are available on the SEC’s website, www.sec.gov, and on its website, DiaMedica.com. Please also note that any comments made on today’s call speak only as of today, 05/14/2025, and may no longer be accurate at the time of any replay or transcript rereading. DiaMedica disclaims any duty to update its forward looking statements. Following the prepared remarks, the phone lines will be open for questions. I would now like to turn you over to your host for today’s call, Mr.

Rick Pauls, DiaMedica’s President and Chief Executive Officer. Mr. Pauls?

Rick Pauls, President and Chief Executive Officer, DiaMedica Therapeutics: Thank you, operator. Hello, everyone, and welcome to our first quarter twenty twenty five conference call. I am joined this morning by Scott Kellen, our Chief Financial Officer. Doctor. Lorianne Mascioka is currently on short term medical leave and we hope she gets well soon.

We’re happy to be here today to update you on the progress on our two clinical development programs. It has only been a short interval since our last update, thus I will keep my remarks brief. That said, I’m pleased to report that we continue to make substantial progress in both of our clinical development programs. I’ll start with an update on our preeclampsia program. Building upon the significant accomplishments of this program within a very short timeframe, as we discussed in March, we’re pleased to be able to disclose that we believe Part 1a of our Phase two investigator sponsored preclampsia trial is very close to identifying a target dose, to move forward within in Part 1b.

Dose selection will be guided primarily by a few key data points, which we expect to be sharing in our upcoming preliminary top line results from the Part 1a proof of concept portion of the trial. These key data points include: one, safety and tolerability, including results of a placental transfer analysis Two, the amount of decrease in systolic and diastolic blood pressure levels. And three, changes in uterine and placental blood flow as assessed by the Doppler ultrasound measurement of the Uterine Artery Pulcability Index. This measure is important as reductions in the pulsatility index may suggest decreased downstream resistance and improved uterine and placental blood flow, which could also be an indication of disease modifying. Currently we expect to be in a position to release those preliminary top line results between the second half of June and the July.

The final timing will be primarily dependent on the schedules at the outside laboratories running the various tests, including the pharmacodynamic biomarkers and the assay, which will be used to determine if DM199 crosses the placental barrier. One additional update. May is preeclampsia awareness month, and we will be sponsoring a preeclampsia key opinion leader call on May 28 at 8AM Eastern. Compared to other therapeutic areas like oncology, which have advanced more rapidly in recent years, the treatment of pregnancy complications remains outdated and is not well understood. No FDA approved treatments exist for preeclampsia despite the growing burden of this disease.

To our knowledge, DM199 is the only novel agent currently being studied in pregnant women with preeclampsia. With this KOL event, we will continue our work to educate investors, physicians, and other interested parties on preeclampsia as a disease and the current state of treatment. With this background, we will also discuss the design of our current Phase two trial of DM199 in preeclampsia. Turning briefly to our stroke program. Enrollment is moving ahead steadily.

We’re pleased to announce that participant enrollment now is between the twentieth and twenty fifth percentile mark of patients enrolled for the interim analysis. Our next enrollment update will be at the fiftieth percentile mark. We believe that our efforts over the past year to engage with sites to promote communications between the sites and to simplify study logistics have been important in driving the recent uptick in enrollment. Accordingly, we reiterated our guidance that the interim analysis on those first two hundred participants will be completed in the first half of twenty twenty six. I would also note for you that we have engaged an experienced stroke neurologist to support site engagement during Lori Ann’s leave in order to maintain our enrollment momentum in the REMEDY two trial.

This individual has spent over ten years treating stroke patients at a major US research center and also has five years of recent biotech drug development experience. He has been doing a tremendous job connecting with and maintaining our relationships with sites and supporting our recent enrollment momentum. Now I’d like to hand the call over to Scott Kellen to review this quarter’s financial results.

Scott Kellen, Chief Financial Officer, DiaMedica Therapeutics: Thanks Rick, and good morning everyone. As the operator mentioned, we announced our first quarter twenty twenty five financial results and filed our quarterly report on Form 10 Q yesterday after the markets closed. These documents are both available on either the DiaMedica or the SEC websites. As of 03/31/2025, we reported a total combined cash and investments of 37,300,000.0 current liabilities of $4,700,000 and working capital of $32,800,000 This compares to a total combined cash and investments of $44,100,000 5 point 4 million dollars in current liabilities and $39,200,000 in working capital as of 12/31/2024. The decreases in combined cash and investments and in working capital were due primarily to the net cash used to fund our operations.

Our net cash used in operating activities for the first quarter of twenty twenty five was $7,100,000 compared to $6,700,000 for the first quarter of twenty twenty four. The increase in cash used in operating activities resulted primarily from our increased net loss, partially offset by changes in operating assets abilities occurring during the current year period. We anticipate that our current cash and investments provides us a runway into Q3 of twenty twenty six. Our research and development expenses increased to $5,700,000 for the three months ended 03/31/2025, up from 3,700,000.0 for the three months ended 03/31/2024. The increase was due primarily to cost increases resulting from the continuation of our REMEDY two clinical trial, including our global expansion, increased manufacturing development activity, and the expansion of our clinical team during 2024.

Now these increases were partially offset by cost reductions related to in use study work performed and completed in the prior year period. We expect that our R and D expenses will moderately increase in future periods relative to our recent prior periods, as we continue our REMEDY two trial, including the global expansion and our continued expansion of our DM199 clinical development program in preeclampsia. Our general and administrative expenses were $2,500,000 and $2,100,000 for the three months ended 03/31/2025 and 2024 respectively. This increase resulted primarily from additional non cash share based compensation expense recognized as a result of the approval of an extension of the post termination exercise period for stock options held by a retiring member of our Board of Directors. We expect G and A expenses to remain steady in future periods as compared to recent prior periods.

Our net other income was $443,000 for the three months ended 03/31/2025, compared to 597,000 for the three months ended 03/31/2024. This decrease was driven by reduced interest income recognized during the current year period related to lower average marketable securities balances during the current year period as compared to the prior year period. With that, let me ask the operator to open the lines for questions.

Conference Call Operator: Thank you so much. Ladies and gentlemen, we will now begin our question and answer session. And And your first question comes from Thomas Flaten with Lake Street. Please go ahead.

Thomas Flaten, Analyst, Lake Street: Good morning. I appreciate taking the questions. Hey Rick, just to clarify, the laboratory test results that seem to be the variable in terms of readout between June and July. Is that primarily the test for DM199 crossing the placental barrier so in the umbilical cord or is there something else there that we should be aware of?

Rick Pauls, President and Chief Executive Officer, DiaMedica Therapeutics: Yes, Thomas. Yes, absolutely. So that’s the main item is going to be the placental transfer. So we have an assay that we’re just having finalized in terms of getting to lower limits of detection. And so it’s just a question of time for them to run it.

We want to at least give a range today in terms of when we anticipate the results.

Thomas Flaten, Analyst, Lake Street: Makes sense. And then I see you mentioned that you’re expecting to start Part 1b in Q3. What are the triggers for Part two and three? So the expected management and the fetal growth restriction components of the study.

Rick Pauls, President and Chief Executive Officer, DiaMedica Therapeutics: So I’ll start off with the fetal growth restriction. So if we see dilation of the intrauterine arteries, our investigators are prepared to move ahead with that cohort and then we’ll have more to talk about the part two when we daylight the results here in the coming weeks.

Thomas Flaten, Analyst, Lake Street: Got it. Excellent. I appreciate you taking the questions. Thank you.

Rick Pauls, President and Chief Executive Officer, DiaMedica Therapeutics: Thanks Thomas.

Conference Call Operator: Your next question comes from Matthew Caulfield with H. C. Wainwright. Please go ahead.

Matthew Caulfield, Analyst, H.C. Wainwright: Hi, good morning, guys. Thanks for taking our question. I was wondering if you could speak to anticipated read through or any derisking between the initial preeclampsia data and how that profile could translate to AIS development and the REMEDY two trial? Thanks again.

Rick Pauls, President and Chief Executive Officer, DiaMedica Therapeutics: Sure. I mean, I’ll start off by saying that these are definitely two very unique indications, but will add that a positive effect here in preeclampsia will just be another confirmation that this protein is active. And I would also mention around that we’ve previously talked about the fact that there are two forms of this protein in Asia that are being used. So the form of the protein isolated from human urine that today is treating close to a million patients per year for acute ischemic stroke. And then there’s also form the protein isolate from pig pancreas in both Japan and China.

And we’ve been able to track down about 10 publications with that form of the protein to treat preeclampsia. So I think it will just be very encouraged and that we have an active protein and what we’re seeing in some of the validation rationale for going into both of these indications is the, what we’ll call the crude forms in Asia today. Thanks a lot. Appreciate guys. Thank you.

Conference Call Operator: Your next question comes from Chase Knickerbocker with Craig Hallum. Please go ahead.

Matthew Caulfield, Analyst, H.C. Wainwright: Good morning. Thanks for taking the questions. Rick, just on stroke, be good to kinda get some incremental details on, on enrollment. I mean, maybe just kinda starting out with those high volume or potential high volume centers. You know, can you kinda give us an update on what percentage of kind of those high volume accounts are now, at that one to two per month that you want to see?

Rick Pauls, President and Chief Executive Officer, DiaMedica Therapeutics: I would add that as we had kind of talked on past calls, we really did think that there would be a small number of sites in particular in The U. S. That would drive enrollment. And as we’re starting to build some momentum that’s clearly what we’re starting to see. So some of these high enrolling sites are seeing the one to two patients per site per month.

And so we’re working on building momentum and then really working hard on some of those other sites to expand the relationship here to encourage. But I say currently we are above our plan here now and we’re encouraged with momentum that’s being built.

Matthew Caulfield, Analyst, H.C. Wainwright: So maybe just an update on overall centers as well as, know, again, it’s only been a couple months here, have we expanded that past 30? Then maybe on the geographic footprint of those centers, have we started to see some international enrollment come in?

Rick Pauls, President and Chief Executive Officer, DiaMedica Therapeutics: Yes. So we’re currently in mid-30s and keeping in mind that there are sites now that are not performing that we’re shutting down. And so we’re really again focusing on the high enrolling sites. We also have sites in Georgia that have been performing very well. That’s where that is the country of Georgia.

Matthew Caulfield, Analyst, H.C. Wainwright: Yeah, yeah, got it. And just kind of I guess summon all this up. First half twenty six interim analysis, I think at least implies that enrollment rates continue to pick up. And I mean, you’re seeing that trajectory in recent weeks, recent months as far as that curve continuing to steepen?

Rick Pauls, President and Chief Executive Officer, DiaMedica Therapeutics: Yes, absolutely. And from the last earnings call, we’re definitely seeing an encouraging uptick.

Matthew Caulfield, Analyst, H.C. Wainwright: Got it. That’s it for me. Thanks.

Rick Pauls, President and Chief Executive Officer, DiaMedica Therapeutics: Great. Thanks, Chase.

Conference Call Operator: Your next question comes from Thomas Flaten with Lake Street. Please go ahead.

Thomas Flaten, Analyst, Lake Street: Yes. Hey, thanks for taking another question. Just back to preeclampsia real quick. The Part two and three, those are those studies will be primarily based out of South Africa or are you thinking that there’s going to be a U. S.

Component of those which would necessitate IND filing?

Rick Pauls, President and Chief Executive Officer, DiaMedica Therapeutics: So part, the parts two and part three are still part of the same protocol. And so our collaborators will not need to go back for regulatory clearance.

Thomas Flaten, Analyst, Lake Street: And at some point will you expand the study and if so when into The U. S?

Rick Pauls, President and Chief Executive Officer, DiaMedica Therapeutics: We do plan in the future to expand this to The U. S. And global and we’ll more to share at a later date. Right now again the focus is you’re getting the Part 1a and then moving into Part 1b as well as Parts two and then three hopefully.

Thomas Flaten, Analyst, Lake Street: Got it. Appreciate it. Thank you. Yes. Thanks, Thomas.

Conference Call Operator: Thank you. There are no further questions at this time. I would like to turn the call back to Mr. Rick Puls.

Rick Pauls, President and Chief Executive Officer, DiaMedica Therapeutics: All right. In closing, we’re very encouraged by our steady progress and clear momentum across both the preeclampsia and stroke programs. We look forward to sharing upcoming key milestones including the top line results from our preeclampsia proof of concept trial and the interim analysis from our stroke program. We thank our dedicated team, investigators and importantly our patients and their families for the continued trust and commitment. Please also mark your calendars from May 28 at eight a.

M. Eastern Time for our preeclampsia KOL event. We’ll be sending out the call in details via press release early next week. As always, we appreciate the ongoing support of our shareholders and look forward to updating you further in the months ahead. Thank you again for joining our call today.

This concludes our call.

Conference Call Operator: Ladies and gentlemen, you may now disconnect.

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