On May 4, 2022 DiaMedica Therapeutics Inc. (Nasdaq: DMAC), a clinical-stage biopharmaceutical company focused on developing novel treatments for neurological disorders and kidney diseases, reported financial results for the quarter ended March 31, 2022 (Press release, DiaMedica, MAY 4, 2022, View Source [SID1234613526]). DiaMedica will host a conference call on Thursday, May 5, 2022, at 8:00AM Eastern Time / 7:00AM Central Time, to discuss its business update and first quarter financial results.
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Clinical Developments
DM199 for the Treatment of Acute Ischemic Stroke
DiaMedica reported that it has increased the number of activated clinical trial sites to 9, more than doubling the number of active sites reported in March 2022 and is currently on track with its site activation goals for its ReMEDy2 trial, which is an adaptive design, randomized, double-blind, placebo-controlled trial studying the use of the Company’s product candidate, DM199, to treat acute ischemic stroke (AIS). DiaMedica believes that it has experienced slower than expected site activations and enrollment in the ReMEDy2 trial due primarily to staffing shortages and overall resourcing at study sites due to the COVID-19 pandemic and challenges of the study sites managing logistics and compliance for patients discharged from the hospital to an intermediate care facility. The Company is putting resources and processes in place to address both of these issues and expects continued improvement in site activations and patient enrollment over the course of 2022, subject to new pandemic related challenges which may arise for study sites.
DM199 for the Treatment of Chronic Kidney Disease
As previously reported, patient enrollment is completed in DiaMedica’s Phase 2 REDUX trial, which is a multi-center, open-label, investigation to assess the safety and efficacy of multiple doses of DM199, administered over 90 days, in participants with chronic kidney disease (CKD) (Stage 2 or 3).
In total, 79 patients were enrolled and initiated treatment, including 21 African American patients in Cohort 1, 25 patients with IgAN in Cohort 2 and 33 patients with Type 2 diabetes in Cohort 3. The last patient visit was completed in March 2022 and DiaMedica is working to complete the study close-out and the final data analysis while evaluating next steps for the CKD program.
Balance Sheet and Cash Flow
DiaMedica reported total cash and investments of $41.0 million, consisting of cash and cash equivalents of $3.0 million and marketable securities of $38.0 million, current liabilities of $1.4 million and working capital of $40.7 million as of March 31, 2022, compared to total cash and investments of $45.1 million, $1.5 million in current liabilities and $43.9 million in working capital as of December 31, 2021. The decreases in cash and investments and in working capital were due primarily to cash used to fund operating activities during the quarter ended March 31, 2022.
Net cash used in operating activities for the three months ended March 31, 2022, was $3.9 million compared to $4.3 million for the three months ended March 31, 2021. This decrease relates primarily to reduced effects of changes in operating assets and liabilities on the net cash used in operating activities in the current year period.
Financial Results
Research and development (R&D) expenses were $2.0 million for the three months ended March 31, 2022, compared with $2.4 million for the three months ended March 31, 2021, a decrease of $0.4 million. This decrease was driven mainly by a reduction in costs related to the REDUX CKD trial and a lower level of DM199 manufacturing process development work in the current year quarter as compared to the prior year quarter. These decreases were partially offset by increased costs incurred in the ReMEDy2 AIS trial and higher personnel costs related to the expansion of the clinical team in the current year period.
General and administrative (G&A) expenses were $1.6 million for the three months ended March 31, 2022, up from $1.2 million for the three months ended March 31, 2021. This $0.4 million increase resulted from a combination of increased professional services costs, directors’ and officers’ liability insurance and personnel costs incurred in support of expanding the operations and clinical programs.
Conference Call and Webcast Information
DiaMedica Management will host a conference call and webcast to discuss its business update and first quarter 2022 financial results on Thursday, May 5, 2022, at 8:00 AM Eastern Time / 7:00 AM 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 May 12, 2022, by dialing (800) 770-2030 (US Toll Free) and entering the replay passcode: 4814247.
About ReMEDy2 Trial
The ReMEDy2 trial is an adaptive design, randomized, double-blind, placebo-controlled trial studying the use of the Company’s product candidate, DM199, to treat AIS patients. The trial is intended to enroll approximately 350 patients at 75 sites in the United States. Patients enrolled in the trial will be treated for three weeks with either DM199 or placebo beginning within 24 hours of the onset of AIS symptoms, with the final follow-up at 90 days. The trial excludes patients treated with tissue plasminogen activator (tPA) and/or mechanical thrombectomy. The study population is representative of the approximately 80% of AIS patients who do not have treatment options today, primarily due to the limitations on treatment with tPA or mechanical thrombectomy. DiaMedica believes that the proposed trial has the potential to serve as a pivotal registration study of DM199 in this patient population.
The ReMEDy2 trial has two separate, independent, primary endpoints based upon both the results observed in the first ReMEDy1 phase 2 trial and published results from the urine-derived form of KLK1 used to successfully treat AIS in China. ReMEDy2 is powered for success with either endpoint: 1) physical recovery from stroke as measured by the well-established modified Rankin Scale (mRS) at day 90, and 2) the rate of ischemic stroke recurrence through day 90. Recurrent strokes represent 25% of all ischemic strokes, often occurring in the first few weeks after an initial stroke and are typically more disabling, costly, and fatal than initial strokes.
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 U.S. Food and Drug Administration granted Fast Track Designation to DM199 for the treatment of acute ischemic stroke.