On November 10, 2021 DiaMedica Therapeutics Inc. (Nasdaq: DMAC), a clinical-stage biopharmaceutical company focused on developing novel treatments for neurological disorders and kidney diseases, reported a business update and financial results for the quarter ended September 30, 2021 (Press release, DiaMedica, NOV 10, 2021, View Source [SID1234595239]). Management will host a conference call Thursday, November 11, 2021, at 7:00AM Central Time/8:00AM Eastern Time to discuss its business update and third quarter financial results.
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Pivotal Phase 2/3 ReMEDy Trial of DM199 for Acute Ischemic Stroke Initiated & First Patient Dosed
The Company previously announced the initiation of the first site and reported dosing of the first patient for its pivotal ReMEDy2 trial. The ReMEDy2 trial is a randomized, double-blind, placebo-controlled Phase 2/3 adaptive trial intended to enroll approximately 350 patients. Patients enrolled in the study will be treated with either DM199 or placebo within 24 hours of the onset of acute ischemic stroke (AIS) symptoms. The trial is studying AIS in a patient population for whom thrombolysis and/or a catheter-based procedure, mechanical thrombectomy, are not medically appropriate or available due to constraints of clot location, comorbidity risks or time from estimated onset of stroke, which represents approximately 80% of all AIS patients.
Also as previously announced, the U.S. Food and Drug Administration (FDA) has accepted the Company’s protocol amendment to evaluate the effects of DM119 on the rate of recurrent AIS as a second, independent, primary endpoint. The FDA’s acceptance of the amendment allows the Company to evaluate the effects of DM199 on both stroke recoveries post AIS, as measured by the well-established modified Rankin Scale (mRS), and the incidence of AIS recurrence at day 90 as two separate, independent, primary endpoints, with each statistically powered for success. Recurrent strokes represent 25% of all ischemic strokes, often occur in the first few weeks after an initial stroke, and are typically more disabling, costly, and fatal than initial strokes. The Company further notes that there are no changes in treatment, duration, or study population of the trial as part of this protocol amendment.
Secondary endpoints for the study will evaluate participant deaths, mRS shift (which shows the treatment effect on participants across the full spectrum of stroke severity) and additional standard stroke scores (NIHSS and Barthel Index scores).
Fast Track Designation Granted to DM199 for Treatment of Acute Ischemic Stroke
The FDA granted Fast Track Designation to the Company’s lead candidate DM199 for the treatment of AIS. Fast Track is a process intended to facilitate the development and expedite the review of investigational drugs for the treatment of serious or life-threatening conditions where there is a significant unmet medical need. Drugs that receive Fast Track Designation may be eligible for more frequent communications and meetings with the FDA to review the drug’s development plan, including the design of the proposed clinical trials, use of biomarkers, and the extent of data needed for approval. Drugs with Fast Track Designation may also qualify for accelerated and priority review of new drug applications if relevant criteria are met.
Additional Interim Data From REDUX Phase 2 CKD Study for IgAN Presented at the ASN Kidney Week 2021 Virtual Conference
Additional data from the Company’s Phase 2 REDUX trial of DM199 in chronic kidney disease (CKD) was presented at the American Society of Nephrology’s (ASN) annual Kidney Week meeting taking place during the first week of November 2021. In the IgA Nephropathy (IgAN) cohort, in addition to continuing to show statistically significant reductions (over 30% decrease) in albuminuria in participants with moderate to severe baseline albuminuria, also demonstrated early signals of potential disease modification with the APRIL and IgA1 biomarkers decreasing 35% and 22%, respectively.
Balance Sheet Strengthened with $30 Million Private Placement
In September 2021, the Company issued and sold in a private placement an aggregate 7,653,060 common shares at a purchase price of $3.92 per share to ten accredited investors, resulting in gross proceeds of $30.0 million and net proceeds of $29.9 million, after deducting offering expenses.
"We are pleased that our regulatory interactions have led to acceptance of the protocol with the FDA and the Fast Track Designation status which will give the continued focus that this trial deserves given the unmet medical need," said Rick Pauls, DiaMedica’s President and Chief Executive Officer. " We believe that we are well positioned to advance toward our goal of offering a treatment option for the millions of patients around the world who suffer from a stroke and need a better chance to recover and avoid recurrent strokes."
Financial Results
Research and development (R&D) expenses increased slightly to $2.3 million for the three months ended September 30, 2021, up from $2.2 million for the three months ended September 30, 2020. R&D expenses increased to $6.9 million for the nine months ended September 30, 2021, compared to $5.1 million for the nine months ended September 30, 2020, an increase of $1.8 million. The increase for the nine month comparison was primarily due to a number of factors including costs incurred for the Company’s pivotal ReMEDy2 clinical study, increased year-over-year costs related to manufacturing process development and increased personnel costs associated with adding staff to support R&D operations. These increases were partially offset by decreased costs incurred for the earlier ReMEDy Phase 2 stroke study, which completed in the prior year, and the REDUX study as the number of enrollments declined in the later stages of the study.
General and administrative (G&A) expenses were $1.1 million for the three months ended September 30, 2021, down from $1.2 million for the three months ended September 30, 2020. G&A expenses increased to $3.5 million for the nine months ended September 30, 2021, up $0.2 million from $3.3 million for the nine months ended September 30, 2020. The increase for the nine month comparison was primarily due to increased professional services costs and increased personnel costs to support the Company’s expanding clinical programs. These increases were partially offset by reduced non-cash, share based compensation costs.
Balance Sheet and Cash Flow
As of September 30, 2021, DiaMedica had cash, cash equivalents and marketable securities of $48.1 million, working capital of $46.9 million and shareholders’ equity of $47.0 million, compared to $27.5 million in cash, cash equivalents and marketable securities, $25.9 million in working capital and shareholders’ equity of $26.0 million as of December 31, 2020. The increases in combined cash, cash equivalents and marketable securities and in working capital are due primarily to the net proceeds from the Company’s September 2021 private placement offering, partially offset by operating costs incurred during the quarter.
Net cash used in operating activities for the nine months ended September 30, 2021, was $9.4 million compared to $6.2 million for the nine months ended September 30, 2020. This increase relates primarily to the increase in the net loss, partially offset by non-cash share-based compensation and the effects of the changes in operating assets and liabilities.
Conference Call and Webcast Information
DiaMedica Management will host a conference call and webcast to discuss its business update and third quarter 2021 financial results on Thursday, November 11, 2021, at 7:00AM Central Time:
Interested parties may access the conference call by dialing in or listening to the simultaneous webcast. Listeners should log on to the website or dial in 15 minutes prior to the call. The webcast will remain available for play back on DiaMedica’s website, under investor relations – events and presentations, following the earnings call and for 12 months thereafter. A telephonic replay of the conference call will be available until November 18, 2021, by dialing (800) 770-2030 (US Toll Free) and entering the replay passcode: 4814247.
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 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 acute ischemic stroke and patients with chronic kidney disease. In September 2021, the FDA granted Fast Track Designation to DM199 for the treatment of AIS.