Earnings call transcript: DiaMedica Therapeutics Q2 2025 shows promising trials

DiaMedica Therapeutics (DMAC), with a market capitalization of $269.82 million, reported its earnings for the second quarter of 2025, revealing a slight beat on earnings per share (EPS) expectations but no revenue figures. The company’s EPS came in at a loss of $0.18, compared to the forecasted loss of $0.19. While the stock initially fell 3.83% in premarket trading, it has since recovered to $5.22, reflecting mixed investor sentiment. The company’s ongoing clinical trials and strategic initiatives were key discussion points during the earnings call. According to InvestingPro analysis, DMAC maintains a FAIR financial health score of 2.43, suggesting stable operational fundamentals despite ongoing losses.

Key Takeaways

• DiaMedica reported a Q2 EPS loss of $0.18, slightly better than the expected loss of $0.19.
• The stock price decreased by 3.83% in premarket trading following the earnings announcement.
• The company highlighted positive interim results from its lead candidate, DM199, in a Phase 2 trial for preeclampsia.
• DiaMedica’s cash position was bolstered by a recent $30 million private placement, extending its cash runway into 2027.
• The company is expanding its clinical trials to the UK and Europe.

Company Performance

DiaMedica Therapeutics showed resilience in its financial performance despite ongoing net losses. The company reported net losses of $7.7 million for Q2 and $15.4 million year-to-date. Notably, the company maintains a strong current ratio of 7.55, indicating robust short-term liquidity. The company’s strategic moves, including a significant private placement, have strengthened its cash position, enabling it to extend its financial runway into 2027. The focus on its lead candidate, DM199, for preeclampsia and stroke, remains a pivotal part of its strategy. InvestingPro subscribers can access detailed financial health metrics and exclusive ProTips about the company’s cash management strategy.

Financial Highlights

• Cash and cash equivalents: $30 million as of June 30, 2025
• Pro forma cash position: $60 million post-July private placement
• Net operating cash used: $14.7 million for the first half of 2025
• R&D expenses: $5.8 million for Q2, $11.5 million year-to-date
• Net losses: $7.7 million for Q2, $15.4 million year-to-date

Earnings vs. Forecast

DiaMedica’s EPS for Q2 2025 was a loss of $0.18, slightly better than the forecasted loss of $0.19, resulting in a surprise of 5.26%. This minor beat contrasts with the company’s historical performance where earnings often aligned closely with forecasts. The absence of revenue figures continues to be a challenge for investors seeking comprehensive financial data.

Market Reaction

Following the earnings announcement, DiaMedica’s stock showed volatility but has demonstrated strong momentum over the past year, delivering a 45.81% return to investors. Currently trading at $5.22, the stock sits between its 52-week range of $3.19 to $6.82. This movement is notable given the company’s recent addition to the Russell 2000 and Russell 3000 indexes. While analysts maintain optimistic price targets between $11 and $14, InvestingPro analysis suggests the stock may be overvalued at current levels. For comprehensive valuation insights and access to the detailed Pro Research Report covering DMAC and 1,400+ other stocks, consider an InvestingPro subscription.

Outlook & Guidance

DiaMedica is preparing to file an FDA Investigational New Drug (IND) application for a Phase 2B trial of DM199 for preeclampsia. The company plans to start this trial in the US in 2026, with concurrent enrollment in multiple cohorts. Additionally, DiaMedica continues to progress with its REMEDY two stroke trial, expecting interim analysis of the first 200 patients in Q2 2026.

Executive Commentary

CEO Rick Pauls expressed confidence in DM199, stating, "We believe that DM199 has the potential to be the first in class disease-modifying treatment for preeclampsia." Dr. Julie Krop, the new Chief Medical Officer, highlighted the derisked biology of KLK1 protein, emphasizing its dual role as a vasodilator and in vascular repair. Pauls also noted recent positive feedback from the FDA regarding the primary endpoint for the preeclampsia trial.

Risks and Challenges

• Regulatory hurdles: Obtaining FDA approval for new trials and treatments can be challenging.
• Clinical trial risks: Unfavorable trial results could impact investor confidence and future funding.
• Market competition: The biopharmaceutical sector is highly competitive, with numerous companies vying for market share.
• Cash burn rate: Continued net losses and high R&D expenses may strain financial resources if not offset by new funding or revenue streams.
• Macroeconomic factors: Economic downturns could impact funding availability and investor sentiment.

Q&A

During the earnings call, analysts focused on the rationale behind Dr. Julie Krop joining the company, the timeline for the preeclampsia trial, and the progress of stroke trial enrollment. Discussions also touched upon the design of the potential US preeclampsia study, reflecting investor interest in DiaMedica’s strategic direction and clinical advancements.

Full transcript - DiaMedica Therapeutics Inc (DMAC) Q2 2025:

Conference Operator: Good morning, ladies and gentlemen, and welcome to the DiaMedica Therapeutics Q2 twenty twenty five Earnings Conference Call. An audio recording of this webcast will be available shortly after the call today on DiaMedica’s website at www.diamedica.com in the Investor Relations section. Before the company 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 Statement Note Regarding Forward Looking Statements in the company’s press release issued yesterday and under the heading Risk Factors in DiaMedica’s most recent annual report on Form 10 ks and most recent quarterly report on Form 10 Q.

DiaMedica’s SEC filings are available at www.sec.gov and on its website. Please also note that any comments made on today’s call speak only as of today, 08/13/2025, 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, we will open the phone lines for questions. I would now like to introduce you for your host for today’s call, Rick Pauls, DiaMedica’s President and Chief Executive Officer.

Mr. Pauls, you may begin.

Rick Pauls, President and Chief Executive Officer, DiaMedica Therapeutics: Thank you all for joining us for our Q2 twenty twenty five earnings call. I am joined this morning by Scott Kellen, our Chief Financial Officer, and our new Chief Medical Officer, Doctor. Julie Krop. We truly have made significant progress since Q1, and I’m happy to be able to share that with you today. Starting with our preeclampsia program, in July we announced very positive interim results from Part 1a, the ascending dose portion of our investigator sponsored phase two trial of DM199 for the treatment of preeclampsia.

As a reminder, DM199 is our lead candidate and recombinant form of the KLK1 protein, which enhances blood flow and vascular health by increasing levels of three key endothelial derived vasodilating factors through the bradykinin pathway. These are nitric oxide, prostacyclin, and endothelial drive hyperpolarizing factor. Preeclampsia is an ischemic condition that affects millions of women worldwide and has no approved treatments and really no viable therapeutic options to target the underlying vascular dysfunction. We held a key opinion leader webinar back in May on the unmet need in preeclampsia and on the potential of DM199 in this indication with professors Baha Sabai, Steven Tong and Susan Walker. A recording of this webinar is available on the DiaMedica website in the Investor Relations section.

Based on the interim results from the Part 1a of our Phase two study, we believe that DM199 has the potential to be the first in class disease modifying treatment for preeclampsia. In dosing cohorts six to nine of the study DM199 demonstrated highly statistically significant and clinically meaningful reductions in both systolic and diastolic blood pressure, highlighting its potential efficacy in managing maternal hypertension associated with the disease. DM199 was also found to be safe and generally well tolerated with no evidence of placental transfer at any of the dose levels. A key safety indicator in the development of a treatment for a pregnant woman. Additionally, treatment with DM199 led to a statistically significant reduction in the uterine artery pulsatility index, suggesting improved uterine artery blood flow and enhanced placental perfusion.

Improved perfusion may be a key in reducing placental hypoxia supporting the potential for DM199 to be a disease modifying treatment, as well as a treatment for fetal growth restriction. Based on the interim results and recent analysis of the pharmacokinetics, a decision was made to advance to and enroll Cohort 10 in Part 1a of the ongoing Phase two trial. From there, we plan to finalize a dosing regimen for the Part 1b, as well as for the Part two preeclampsia expected management, and the Part three fetal growth restriction cohorts, all of which can be enrolled concurrently. For clarity, the remaining parts of the investigator sponsored preeclampsia trial include Part 1B, an expansion cohort of 30 preeclampsia patients where the decision has been made to deliver within the next seventy two hours, a patient population similar to those dosed in the Part 1A. Part two, A cohort of 30 patients evaluating DM199 in early onset preeclampsia.

In this cohort patients will start receiving DM199 at first diagnosis with intent to dose DM199 until delivery and demonstrate extension of gestational days along with other key clinical and safety endpoints. Part three, a cohort of 30 patients who are experiencing fetal growth restriction or FGR. FGR is a condition in which the fetus is not growing as expected due to lack of blood flow, oxygen, and critical nutrients. The expansion to this indication, which is related to preeclampsia, is based on our recently announced interim results in which we measured a statistically significant reduction in the pulsatility index, suggesting improved dilation of inter uterine arteries and placental perfusion. In addition, we are now preparing to conduct a Phase 2B preeclampsia trial in The United States and other countries and are currently preparing our FDA IND application.

We look forward to sharing upcoming updates on these cohorts and the new preeclampsia trial. Additional details of the interim Phase II Part 1a results, including a replay of the investor call discussion of the results, are available on our website under the Investor Relations tab and can be found in our July 17 results press release. Following the announcements of the positive interim results from Part 1a of the preampsia last month, we completed a 30,000,000 private placement of common shares, which extends our cash runway into the 2027. We intend to use this capital to also fund the new Phase 2b study of DM199 in The United States and other countries for the continued development of our ongoing stroke and preeclampsia programs. Turning to our stroke program, we had a poster presented at this year’s eleventh European Stroke Organization Conference held in May in Finland.

The poster was presented by Doctor. J. Volpe from Houston Methodist and covered the safety and clinically relevant outcomes from a REMEDY one Phase two clinical trial evaluating DM199 in patients with acute ischemic stroke and pretreated with tPA. We like to remind people that in patients pretreated with TPA, DM199 demonstrated a significant improvement in full recoveries when compared to placebo. Turning to our current REMEDY two stroke trial, we continue to make progress as enrollment continues and we expect the interim analysis of the first 200 patients to be completed in Q2 twenty twenty six.

I wanted to take a moment to clarify our communication practices for REMEDY two enrollment milestones. We will provide updates during our quarterly conference calls when we have achieved 5075% of the interim enrollment sample size and press release when we enroll our two hundredth patient. At present, enrollment is now tracking well above the twenty fifth percent milestone and steadily advancing towards the halfway mark. I would also note that we completed the Data Safety Monitoring Board or DSMB meeting to review the safety profile required after the first 50 REMEDY two participants. The meeting is positive, meaning no safety concerns, and at the conclusion of the meeting, the DSMB unanimously concluded that REMEDY two enrollment should continue.

In other developments, DiaMedica was added to The US small cap Russell 2,000 and the Russell three thousand indexes, enhancing our visibility among the broader investment community, including institutional investors. Finally, Doctor. Julie Krop joined our team as Chief Medical Officer this month. She has extensive experience in the biopharma industry, working with both clinical and commercial stage organizations, and was also previously involved in the development of an orphan drug candidate for the treatment of severe preeclampsia. Doctor.

Cropp adds invaluable experience to our team as we advance DM199 to address the significant unmet needs for both of our key programs. I would now like to ask Scott Kellen, our Chief Financial Officer to review the financial results for the quarter.

Scott Kellen, Chief Financial Officer, DiaMedica Therapeutics: Thank you, Rick and good morning everyone. As of 06/30/2025, our cash, cash equivalents and short term investments were $30,000,000 compared to $44,100,000 as of 12/31/2024. However, including net proceeds from the July private placement, our pro form a cash position is approximately $60,000,000 As Rick mentioned previously, we feel confident about our current cash position and anticipate that it will fund our planned clinical studies incorporate operations into the 2027. We used $14,700,000 of cash in net operating activities for the six months ended 06/30/2025, compared to $11,200,000 for the same period in 2024. This increase is primarily a result of the increase in net loss in the 2025 compared to the prior year period.

Our R and D expenses were $5,800,000 and $11,500,000 for the three and six month time periods ended 06/30/2025. This was an increase from $3,900,000 and $7,600,000 for the same time periods in the prior year. The increases were due primarily to cost increases resulting from the continued progress of our REMEDY two clinical trial, including its global expansion, as well as the expansion of the clinical team during the current and prior year periods. These increases were partially offset by cost reductions related to in use study work performed and completed in the prior year periods. Our general and administrative expenses were $2,200,000 and $4,700,000 for the three and six month time periods ended 06/30/2025.

These expenses also increased compared to the same time periods in 2024, which were $1,700,000 and $3,800,000 respectively. These increases resulted primarily from additional non cash share based compensation and increased personnel costs, partially offset by reductions in legal fees incurred in connection with our lawsuit against PRA Netherlands. Overall, our net losses were 7,700,000.0 and 15,400,000.0 for the three and six month periods ending 06/30/2025. These are higher than the 5,100,000.0 and the 10,300,000.0 reported during the same periods in 2024. Now, let me turn the call back over to Rick.

Thank you, Scott. We would

Rick Pauls, President and Chief Executive Officer, DiaMedica Therapeutics: like to open the call for questions. Operator, if you could please introduce the first analyst.

Conference Operator: Absolutely. I’d be happy as a reminder, if you have a question, please press star followed by one on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, pre please press star followed by 2. Your first question comes from Thomas Flaten with Lake Street.

Please go ahead.

Thomas Flaten, Analyst, Lake Street: Taking the questions. Maybe Julie, if I can start with you, I’m curious to kind of get your take on why you joined the company, particularly in light of your past experience with preeclampsia, but then perhaps even more importantly, your thoughts on the stroke program, which I know was going on in the background.

Conference Operator: Yeah, thanks for the question. Hello everyone. Really having worked in the space of women’s health before, I really have a strong commitment to this area and really I’m excited by the program that I saw, the programs really that I saw at DiaMedica as well as I think the team that’s in place to execute upon them. So think preeclampsia and ischemic stroke are both areas of large unmet need. There’s derisked biology I believe with the known role of KLK1 protein as both a vasodilator and also its role in vascular repair.

And I think this product really addresses the underlying pathophysiology of both conditions. And you know, has already shown promising clinical data and really evidence even of some biologic activity.

Rick Pauls, President and Chief Executive Officer, DiaMedica Therapeutics: This

Conference Operator: really excited me when I saw this. So think for both programs, I’m really excited to be here.

Thomas Flaten, Analyst, Lake Street: Excellent. And then Rick, know you’ve got a lot of work that’s going to kick off here in preeclampsia. Was wondering if you could maybe map out kind of a calendar for us, right? I’m assuming each of the cohorts in South Africa will enroll at slightly different rates, given that there are different patients, different types of patients. And then maybe you could clarify The U.

S. Phase 2b study. What exactly will be the target indication for that?

Rick Pauls, President and Chief Executive Officer, DiaMedica Therapeutics: Sure. Thanks, Thomas. So in terms of what’s coming up next, the we’ve as I mentioned on the prepared remarks, we’re moving into cohort 10 of the Part 1B that should be starting next week. And we want to push the dosing a little bit higher to seeing if we can see any further improvement than what we’ve already seen, which would be wonderful. And then based upon that and some of the pharmacokinetics data that we have already, analyzing that to be moving into the Part 1B and we’ll be able to also be moving into the Part two.

So that’ll be the expected management and by expected management we mean that when these patients are first diagnosed they’ll start being treated and those will be typically early onset patients. And then that’s the third cohort that we talked about is the fetal growth restriction. So all three of these cohorts can be dosed concurrently. And so as we get those studies start we’ll have more updates in terms of some of the timelines. We do know that our site in South Africa with Doctor.

Kluver has just a very unique scenario that if these patients in Cape Town have preeclampsia they basically all filter into Kathy Kluwer’s site and so she gets four to five preeclampsia patients a day. So we’re very encouraged on how rapidly we can get these patients dosed but we’ll have more as the study gets started. For The U. S. Study we’re currently planning to file a pre IND request to the FDA and that will be followed immediately after with an IND and then looking at getting that study started next year.

And we’re currently finalizing the protocol and as we get more clarity and finalize, we’ll be sharing that details with the market.

Thomas Flaten, Analyst, Lake Street: Excellent. I appreciate it. Thanks, Rick.

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

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

Chase Knickerbocker, Analyst, Craig Hallum: Good morning. Thanks for taking the questions. Maybe, Rick, just to start, can you give us an update on current active sites and how enrollment rates are trending in the stroke study? And just secondly, as we’re now well across the twenty five percent kind of milestone here, how are you kind of feeling about this new expectation for 2Q twenty twenty six? Do you feel like it’s firmed up at this point?

You’ve got a lot more visibility or just kind of general thoughts there?

Rick Pauls, President and Chief Executive Officer, DiaMedica Therapeutics: Sure. So we’re currently at approximately 40 sites. We are at the point now where we’re actually dropping off sites that are non performing. I think that’s important with sending the right message to the sites. And then on top of that we are working to having sites in The UK and Europe come on board.

And so I would say that coming in through to last year coming early into the new year things were very slow with the trial and we’ve definitely have seen a very encouraging uptick in the last few months that gives us comfort here with the guidance of 2026.

Chase Knickerbocker, Analyst, Craig Hallum: Any thoughts around kind of current enrollment rates?

Rick Pauls, President and Chief Executive Officer, DiaMedica Therapeutics: It really does vary. I mean, we haven’t publicly stated. I mean, what we are seeing kind of bit of the eightytwenty role where we’ve got a smaller number of sites that are producing a large number of patients. And I will mention that last quarter as well we had a investigators meeting that was really helpful. We had maybe eighty, ninety participants from across the country in Canada.

And I think that really helped with awareness. And I think that some of these aspects that we’re taking, think are really going to help us here with continuing the momentum that we’re building.

Chase Knickerbocker, Analyst, Craig Hallum: Got it. And then just on preeclampsia, on The US study, I mean, it a fair I think it’s probably a fair assumption that this will be, in expected management and any any sort of additional detail that you would need from Part 1B and Part two of the South African study to put that IND in front of FDA or do you feel like you kind of have what you need?

Rick Pauls, President and Chief Executive Officer, DiaMedica Therapeutics: Yes, so definitely it’s going to be the expected management. That’s where we see the real need for this patient population. And so no, think we have mean the data we announced here a few weeks ago was just fantastic. I mean we really could not have expected anything better than what we saw. So very encouraged by that.

We just thought here that we’ve got an opportunity here to add in another cohort that let’s do it and let’s see if there’s any changes that may help us to tweak the dosing a little bit more. But we do feel that for this patient population it’s very severe. I mean these are very sick mothers. They have very severe endothelial dysfunction and a lot of basal constrictors. So we do see some value in potentially going a little bit higher on the dose.

But what we’ve seen already we’d be very happy with going ahead with the dosing in cohort six to nine that we’ve that we recently announced for U. S. IND.

Chase Knickerbocker, Analyst, Craig Hallum: And then just last for me Rick. Could we see something in the Phase 2b where we have a primary endpoint in the study that you know closely reflects what a pivotal regulatory endpoint will be in phase three study? Or you know just kind of think about how should we think about kind of the data generation in that U. S. Study?

Rick Pauls, President and Chief Executive Officer, DiaMedica Therapeutics: Yes. I think give us a little bit more time here as we finalize the protocol. We want to make sure we get the right expert opinions around this and then we’ll come out with a very clear path. We feel very comfortable in terms of some recent feedback we’ve had from the FDA on the primary endpoint. But we want to nail this down here before we publicly share what that endpoint will look like.

Chase Knickerbocker, Analyst, Craig Hallum: Great. Thank you, Rick.

Rick Pauls, President and Chief Executive Officer, DiaMedica Therapeutics: Yep. Thank you, Chase.

Conference Operator: There are no further questions at this time. I would like to hand the call back over to Rick Pouls for any closing remarks.

Rick Pauls, President and Chief Executive Officer, DiaMedica Therapeutics: All right. Thank you all for joining us today. We greatly appreciate your interest in DiaMedica and hope you enjoy the rest of the day. This concludes our call. Thank you.

Conference Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.