DiaMedica Therapeutics Inc. (DMAC) Q2 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals mixed elements: increased R&D and G&A expenses leading to higher net losses, but also a promising outlook on clinical trials and a strong cash position post-private placement. The Q&A highlights positive sentiment towards leadership and program potential, yet some concerns over enrollment and lack of specific guidance. These factors balance out to a neutral sentiment, with no strong catalysts for significant stock movement in either direction over the next two weeks.
Key Financial Performance
Cash, cash equivalents, and short-term investments $30 million as of June 30, 2025, compared to $44.1 million as of December 31, 2024. The decrease is due to cash used in operating activities. Including net proceeds from the July private placement, the pro forma cash position is approximately $60 million.
Cash used in net operating activities $14.7 million for the 6 months ended June 30, 2025, compared to $11.2 million for the same period in 2024. The increase is primarily due to the increased net loss in the first half of 2025 compared to the prior year period.
R&D expenses $5.8 million and $11.5 million for the 3- and 6-month periods ended June 30, 2025, compared to $3.9 million and $7.6 million for the same periods in 2024. The increase is due to the continued progress of the ReMEDy2 clinical trial, including its global expansion, and the expansion of the clinical team. These increases were partially offset by cost reductions related to end-use study work completed in prior periods.
General and administrative expenses $2.2 million and $4.7 million for the 3- and 6-month periods ended June 30, 2025, compared to $1.7 million and $3.8 million for the same periods in 2024. The increase is primarily due to additional noncash share-based compensation and increased personnel costs, partially offset by reductions in legal fees.
Net losses $7.7 million and $15.4 million for the 3- and 6-month periods ended June 30, 2025, compared to $5.1 million and $10.3 million for the same periods in 2024. The increase is due to higher R&D and administrative expenses.
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Operating Highlights
DM199 for Preeclampsia: Positive interim results from Part 1a of Phase II trial, showing significant reductions in blood pressure and improved uterine artery blood flow. Safe and well-tolerated with no placental transfer. Advanced to cohort 10 and planning further trial phases.
DM199 for Stroke: Presented positive outcomes from ReMEDy1 Phase II trial, showing significant improvement in full recoveries for stroke patients pretreated with TPA. ReMEDy2 trial progressing with interim analysis expected in Q2 2026.
Global Expansion: Preparing for a Phase IIb trial of DM199 in the U.S. and other countries for stroke and preeclampsia programs.
Index Inclusion: Added to U.S. small-cap Russell 2000 and Russell 3000 indexes, increasing visibility among institutional investors.
Financial Position: Completed $30 million private placement, extending cash runway into the second half of 2027. Pro forma cash position at $60 million.
Increased R&D and Administrative Costs: R&D expenses increased due to progress in ReMEDy2 trial and team expansion. General and administrative expenses rose due to share-based compensation and personnel costs.
Leadership Addition: Appointed Dr. Julie Krop as Chief Medical Officer, bringing expertise in preeclampsia treatment development.
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Risk or Challenges
Regulatory Risks: The company is preparing an FDA IND application for its Phase IIb pre-game trial in the United States and other countries. Regulatory approval processes can be lengthy and uncertain, posing a risk to the timeline and success of the trial.
Financial Risks: The company reported a net loss of $15.4 million for the first half of 2025, an increase from $10.3 million in the same period in 2024. While a $30 million private placement was completed, the company remains reliant on external funding to sustain operations and clinical trials through 2027.
Clinical Trial Risks: The ongoing ReMEDy2 stroke trial and preeclampsia trials are critical to the company's future. Delays in enrollment, safety concerns, or lack of efficacy in interim results could adversely impact the company's strategic objectives.
Market Risks: The company is targeting conditions like preeclampsia and acute ischemic stroke, which have significant unmet needs but also face potential competition from other emerging therapies. Success in these markets is not guaranteed.
Operational Risks: Increased R&D and administrative expenses, including global expansion of clinical trials and personnel costs, have led to higher operational costs. Managing these costs effectively while advancing clinical programs is a challenge.
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Guidance & Outlook
Preeclampsia Program: DiaMedica plans to advance to and enroll cohort 10 in Part Ia of the ongoing Phase II trial. The company will finalize a dosing regimen for Part 1b, Part 2, and Part 3 cohorts, which will be enrolled concurrently. Part 1b will include 30 preeclampsia patients, Part 2 will evaluate DM199 in early onset preeclampsia with 30 patients, and Part 3 will focus on 30 patients experiencing fetal growth restriction. Additionally, DiaMedica is preparing to conduct a Phase IIb trial in the United States and other countries, with an FDA IND application in progress.
Stroke Program: The ReMEDy2 stroke trial is progressing, with interim analysis of the first 200 patients expected in Q2 2026. Enrollment is advancing steadily, with updates to be provided at 50%, 75%, and 100% of the interim enrollment sample size. A recent DSMB meeting reviewed the safety profile of the first 50 participants and recommended continuation of the trial.
Financial Guidance: Following a $30 million private placement, DiaMedica's cash position is approximately $60 million, expected to fund planned clinical studies and operations into the second half of 2027.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:Why did Julie Krop join the company, and what are her thoughts on the stroke program?
A:Julie Krop joined the company due to her strong commitment to women's health and her excitement about the programs at DiaMedica, particularly in preeclampsia and ischemic stroke. She believes the KLK1 protein addresses the underlying pathophysiology of both conditions and has shown promising clinical data and biological activity.
Q:Can you map out the calendar for the preeclampsia program, including the U.S. Phase IIb study?
A:The company is moving into Cohort 10 of Part 1b next week, aiming to push dosing higher. Based on pharmacokinetics data, they will transition to Part 2, focusing on early-onset patients and fetal growth restriction. In South Africa, enrollment is expected to be rapid due to the high number of preeclampsia cases. For the U.S. study, a pre-IND request will be filed with the FDA, followed by an IND, with the study expected to start next year. The protocol is being finalized, and details will be shared later.
Q:What is the update on current active sites and enrollment rates for the stroke study?
A:There are approximately 40 active sites, with underperforming sites being dropped. Sites in the U.K. and Europe are being added. Enrollment was slow initially but has seen an encouraging uptick recently, supporting the Q2 2026 guidance. Enrollment rates vary, with a smaller number of sites contributing a large number of patients. An investigators meeting with 80-90 participants helped raise awareness and momentum.
Q:What additional details are needed for the U.S. IND for preeclampsia, and what is the focus of the U.S. study?
A:The U.S. study will focus on expected management, addressing the needs of very sick mothers with severe endosteal dysfunction and basal constrictor issues. The company is adding another cohort to tweak dosing but feels confident with the data from cohorts 6 to 9 for the U.S. IND.
Q:Will the Phase IIb study have a primary endpoint reflecting a pivotal regulatory endpoint for Phase III?
A:The company is finalizing the protocol and gathering expert opinions before publicly sharing the primary endpoint. They feel comfortable with recent FDA feedback but want to ensure clarity before disclosing details.
Q:Review of Unclear Management Responses
A:Management avoided providing specific enrollment rates for the stroke study, using vague language about variability and the 80-20 rule. Additionally, they did not disclose the primary endpoint for the Phase IIb study, stating they needed more time to finalize the protocol and gather expert opinions.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Capital
Chief Medical
DSMB
Dr
FTR
II trial
LLC Research
Medical Officer
Phase II
Phase IIb
Preeclampsia
Research Division
Russell
States country
TPA
United States
candidate
cash position
cohort patient
cohort preeclampsia
condition
decision
endothelial
indication
investor
meeting safety
month period
need
perfusion
period increase
placement
poster
potential
preeclampsia cohort
preeclampsia trial
restriction
website Investor
woman treatment
DMAC Transcript
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The earnings call reveals a mixed sentiment. While there is progress in clinical trials and a strong cash position due to private placement, increased expenses and net losses are concerning. The Q&A section highlights positive drug safety feedback and trial progression but lacks specifics on enrollment rates, indicating potential uncertainties. The absence of new partnerships or shareholder return plans further tempers enthusiasm. Given these factors, the stock price is likely to remain stable, suggesting a neutral sentiment.
DiaMedica Therapeutics Inc. (DMAC) Q2 2025 Earnings Call Transcript
Unknown8-13
The earnings call reveals mixed elements: increased R&D and G&A expenses leading to higher net losses, but also a promising outlook on clinical trials and a strong cash position post-private placement. The Q&A highlights positive sentiment towards leadership and program potential, yet some concerns over enrollment and lack of specific guidance. These factors balance out to a neutral sentiment, with no strong catalysts for significant stock movement in either direction over the next two weeks.
DMAC Report
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