DiaMedica Therapeutics Inc. (DMAC) Q3 2026 Earnings Call Transcript

Good morning, ladies and gentlemen, and welcome to Diametica Therapeutics third quarter 2026 earnings conference call. An audio recording of today's webcast will be available following the call on Diametica's website, diametica.com, in the investor relations section. Before we begin, please note that management will be making forward-looking statements. These statements are subject to risks and uncertainty that could cause actual results to differ materially from those expressed or implied. Additional information about these risks appears in the cautionary statement in the company's earnings press release issued yesterday and in Diomedica's filings with the Security and Exchange Commission, including its most recent Form 10-K and Form 10-Q. Statements on this call speak only as of today, November 13, 2026. Following prepared remarks, we will open the call for questions. I would now like to introduce Rick Pauls, Diomedica's President and Chief Executive Officer. Rick, please go ahead.

Thank you, Operator, and good morning, everyone. Thank you for joining our third quarter earnings call. With me today are Dr. Julie Kropp, our Chief Medical Officer, and Scott Kellen, our Chief Financial Officer. Since our last earnings call, we achieved two major clinical milestones. First, enrollment was completed in the first two cohorts of the investigator-sponsored Phase II Early On-Fit Feudal Goals Restriction Study. Second, in October, we enrolled the 200th participant in Remedy 2, our pivotal Phase 2-3 trial in acute ischemic stroke. With this, we attained the pre-specified enrollment threshold required for the Remedy 2 interim analysis. Together, these milestones bring us closer to important clinical readouts that could help define the next stage of development for DM-29 in fetal growth restriction, preeclampsia, and acute ischemic stroke. We also continue to prepare for additional studies in preeclampsia, including our company-sponsored Phase II trial and made progress addressing FDA feedback on the non-clinical package needed for a U.S. investigational new drug application for preeclampsia. I will walk through the major updates, Julie will discuss the clinical objectives in more detail, and Scott will review our financial results. As a reminder, DMY9, generic name, rinbacalinase alpha, is a recombinant form of human tissue calicrine 1, or KLK1. Through activation of the bradykinin-2 receptor pathway, we believe DM-19 has the potential to improve vascular health and function, ultimately improving blood flow. This is a completely novel mechanism of action and provides a common therapeutic rationale across preeclampsia, fetal growth restriction, acute ischemic stroke, and other diseases, even though the clinical objectives and endpoints differ across these indications. Let me begin with Early Onset Fetal Growth Restriction Program, or FGR. Professor Kluver has now completed enrollment in the first two cohorts of the Phase II study being conducted at Tiger Bird Hospital in Cape Town, South Africa. Together, these cohorts include 12 participants with six treated at 5 micrograms per kg and six treated at 10 micrograms per kg. This is the first clinical evaluation of DNA in women with early onset fetal growth restriction. Early onset FGR is a pregnancy disorder associated with significant risks to the fetus, frequently resulting from placental insufficiency, creating impaired blood flow that restricts the supply of oxygen and nutrients to the baby. Currently, no therapy is approved to treat FGR. The only option today for physicians is to closely monitor both mother and baby, balancing the risk of stillbirth and fetal complications from worsening placental insufficiency against the serious neonatal risk of delivering very prematurely. In pregnancies complicated by preeclampsia, maternal risk also includes severe hypertension and organ injury. The current early-onset SGR study is evaluating repeated subcutaneous doses, assessing why the DM-19 can safely prolong pregnancy while minimizing risk to the mother and baby. Assessment of vascular resistance, birth weight, centile, and duration of pregnancy. The dose for the third cohort will be selected based on the 5 a.m. Eastern time. We will host a virtual Key Opinion Leader event focusing on fetal growth restriction, featuring preliminary results from the volume. Professor Kluver will be joined by Professor Stephen Tong and Professor Susan Walker, both from the University of Melbourne, and Professor Andrew Shannon from King's College, London. The panel will discuss the treatment landscape and unmet need, the clinical rationale for DM-29, and preliminary safety and clinical observations in the context of current maternal fetal medicine best practices. Within the investigation and response for trial, two additional preeclampsia studies are expected to begin enrollment by the end of 2026. One comprised of up to 30 women with early-onset preeclampsia, receiving repeated subcutaneous dosing of DM-29 until delivery. This is referred to as our Part 2 of the study. The second study will include up to 30 women with late-onset or late-stage preeclampsia. who are acutely hypertensive with delivery expected within 72 hours, referred to as Part 1b. In a second study, patients will receive DMV9 via continuous intravenous infusion, which may provide insight into whether IV dosing of DMV9 can help control severe hypertension. We believe every day matters for mom and baby. Switching to IV DMV9 may enable further prolongation of pregnancy for these women beyond some Q dosing. We're also advancing our company-sponsored Phase II program in early-onset preeclampsia. Health Canada authorized a protocol amendment to the open-label Phase II dose-finding study in September, and preparations continue to initiate enrollment at Canadian sites. We also plan to expand the study into the United Kingdom, subject to regulatory authorization. In October, the study received conditional authorization from the European Medicines Agency, or EMA, with consideration for full approval after country-specific ethical insight requirements, creating an opportunity for future European expansion. This trial is designed to evaluate approximately 30 patients with early-onset preeclampsia across three-dose levels, drawing on the Part 1A preeclampsia experience and emerging FGR observations. Together, both of these studies will provide further information on dosing and pharmacologic activity in different clinical settings, allowing us to develop the dosing plan for use in larger preeclampsia trials. In the United States, our focus remains on addressing FDA's feedback regarding the non-clinical reproductive toxicology data to support an investigational new drug application, or IND, to study DM-19 in preeclampsia in the United States. Last quarter, we discussed FDA feedback indicating that our completed RAT reproductive toxicology studies may be acceptable to support an IND application. FDA's acceptance would depend on our ability to demonstrate that DM-29 exposure and enzymatic activity were maintained at adequate levels throughout those studies, and that DM-29 produces a sufficient pharmacologic effect in rats to justify their use as a toxicology species. We initiated an additional rat study during the third quarter to generate this data. I'm pleased to report that the in-life portion of the study has been complete, and DM-29 was well-tolerated by the animals. We expect the pharmacokinetics and pharmacologic results in the coming weeks, and once the report is complete, we plan to submit to the FDA. Our other major recent clinical milestone was an acute ischemic stroke, where Remedy 2 reached the enrollment threshold for its pre-specified interim analysis. Acute ischemic stroke, when a blood clot blocks blood flow to the brain, can cause profound lasting disability or death. Current reprovision treatments, including thrombolytic drugs, which attempt to dissolve the clot, and mechanical thrombectomy, which attempts to physically remove the clot, can be highly effective for certain eligible patients, but their use is limited by clinical eligibility, treatment time window, and the location of the clot. Most stroke patients either cannot receive these treatments or still experience significant disability despite treatment. This is why stroke also remains a significant unmet medical need and additional approaches to preserve at-risk brain tissue and improved function recovery are urgently needed. Following the required 90-day follow-up of the 200th participant, the Independent Data Safety Monitoring Board, or DSMB, will examine the primary efficacy endpoint. The proportion of participants with a modified Rankin scale score of 0 to 1 at day 90, indicating an excellent functional outcome. As part of the trial's pre-specified adaptive design, the DSMB will use the efficacy data to determine whether the study should continue, and if so, whether the final sample size should be adjusted. If the trial continues, the final enrollment target will range from 300 to 728 participants under the pre-specified statistical plan. DiMedica will remain blinded to the treatment effect data reviewed by the DSMV. If successful, Remedy-2 has the potential to serve as a pivotal trial supporting a future new drug application, or NDA, for use of DMY-9 in acute ischemic stroke. Patient recruitment continues during the completion of the follow-up period and dated preparations for interim review. We expect the DSRMB to complete its analysis in the first quarter of 2027. With that, I will turn the call over to Julie to discuss the clinical programs in more detail. Julie?

Thank you, Rick, and good morning, everyone. I would like to expand on two aspects of our pregnancy-related development strategy. First, what are we seeking to learn from the FGR cohorts? And second, how the initial preeclampsia findings are informing the next studies? Severe early-onset fetal growth restriction presents a substantial challenge because impaired placental function can severely limit the fetus' ability to grow and develop. As Rick noted, clinical management requires balancing the potential benefit of prolonging gestation against the maternal and fetal risk of continuing the pregnancy. We are evaluating whether and to what degree DM199 can favorably affect vascular physiology to improve vascular health and blood flow and ultimately support improved outcomes for both the mother and the baby. The ongoing Phase II FGR-IST trial is evaluating repeated subcutaneous dosing of DM199 in women with early-onset disease. Key assessments include safety and tolerability and umbilical artery Doppler indices that reflect a degree of resistance to blood flow from the fetus to the placenta. Abnormal Doppler findings, particularly absent or reversed and diastolic flow, help guide the timing of delivery in pregnancies complicated by fetal growth restriction. Changes in these physiologic parameters will provide important information about the pharmacologic activity of DM199 and help inform further development. At the November 24th KOL event, we will review preliminary observations from the two six-participant cohorts tested at DM199 subcutaneous dose levels 5 and 10 micrograms per kilogram, respectively. Although this is an early open-label study involving a small number of patients, the findings will provide an initial opportunity to assess DM-199's safety, pharmacologic activity, and potential clinical effects in women with early-onset FGR, and importantly, the experts will help put the open-label data into context by providing benchmarking data on outcomes in patients receiving current standard of care treatment. In Part 1A of the investigator-sponsored trial, patients with late-onset preeclampsia were studied. If you recall, that data showed rapid and sustained reductions in maternal systolic and diastolic blood pressure following DM-199 treatment. We also observed pharmacodynamic effects, including trends suggesting reduction in the uterine artery pulsatility index, a measure of resistance, and an indirect measure of uteroplacental blood flow. Together, these observations support dose selection and provide a strong rationale for conducting additional studies to determine whether DM199 can deliver meaningful clinical benefits, particularly in early-onset disease. I would also like to highlight the clinical rationale for DM199 in acute ischemic stroke. Unlike thrombolytic therapies, which dissolve blood clots, or mechanical thrombectomy, which physically remove them, DM199 is designed to improve collateral blood flow within the ischemic penumbra, the surrounding brain tissues that are adversely impacted by the clot, and that remain viable for a period of time, but are at risk of irreversible injury if adequate blood flow is not restored. By improving oxygen delivery to this threatened tissue, we believe DM199 may help preserve neurologic function, which ultimately may lead to improved recovery following stroke. Remedy 2 is a randomized double-blind placebo-controlled study evaluating DM199 in patients with acute ischemic stroke who begin treatment within 24 hours of symptom onset. Participants received DM-199 or placebo over three weeks with functional recovery assessed at day 90. The study focuses on patients who are not candidates for mechanical thrombectomy, a population with substantial unmet medical need. Across these programs, our goal is to determine whether DM-199's effect on vascular function and blood flow can translate into meaningful clinical benefits for patients with these serious conditions. Rick, back to you.

Thanks, Julie. I will now ask Scott to review our third quarter financial results. Scott?

Thanks, Rick, and good morning, everyone. As of September 30, 2026, we had $34.9 million in cash, cash equivalents, and short-term investments, compared with $59.9 million at December 31, 2025. Current liabilities were $7.5 million, and working capital was $28 million at quarter-end, compared with $5.1 million and $55.5 million, respectively, at year-end 2025. Based upon our current plans, we expect our cash, cash equivalents, and and short-term investments to fund our planned clinical studies and corporate operations into the fourth quarter of 2027. Net cash used in operating activities for the first nine months of 2026 was $26 million, compared with $21.3 million for the first nine months of 2025. This increase primarily reflected the higher net loss, partially offset by changes in operating Assets and liabilities. Turning to the income statement, our research and development expense was $9.2 million for the third quarter and $25.4 million for the first nine months of 2026, compared with $6.4 million and $17.9 million for the corresponding periods of 2025. These increases were driven primarily by the expansion of our clinical team, ongoing Remedy 2 activities, including the trial's global expansion. Startup activities for our Phase II preeclampsia study in Canada and the United Kingdom, additional reproductive toxicity testing supporting our planned U.S. preeclampsia program, increased manufacturing development activity, and higher non-cash share-based compensation charges. We expect that research and development expenses will increase moderately relative to recent prior periods as enrollment continues in Remedy 2 and startup activities progress in their global Phase 2 pre- The modest reductions primarily reflected lower professional fees, partially offset by increased non-cash share-based compensation in the current quarter and increased personnel costs over the nine-month period. We expect general and administrative expense to remain relatively steady compared with recent prior periods. 11.3 million, or 21 cents per share, compared with 8.6 million, or 17 cents per share, in the third quarter of 2025. For the nine months ended September 30, our net loss was $0.58 per share, compared with $24 million, or $0.53 per share, for the same period in the prior year.

With that, operator, please open the call for questions.

We will now begin the question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. And your first question comes from the line of Thomas Flayton with Lake Street Capital Markets. Please go ahead.

Hey, good morning. I appreciate you taking the questions. Just two for me. Rick, assuming that current pacing is maintained, do you have a projection on how many patients will be enrolled in the stroke study by the time the interim analysis reads out?

Thanks, Thomas. We haven't provided specific updates, but, you know, hopefully we'll be getting closer to the 300th patient in total. So if 300 patients is a final amount, we'd hopefully only need a few more months to complete enrollment. Got it.

And then this is a bit of in the weeds question, and I don't want to get ahead of the event in a week and a half, but you mentioned in your prepared remarks that birth weight was going to be measured in the FGR cohorts. I'm just curious what you're benchmarking birth weight percentile against. Is it a projection at the time they start treatment, or can you just help me think that one through?

Yeah, if you could hang tight here, we'll have that here in a week and a half, and we really look forward to sharing the full results at the conference, at the event.

Got it. Appreciate it. Thank you.

Your next question comes from the line of Stacy Koo with TD Cowan. Please go ahead.

Thanks so much for taking your questions, and we are looking forward to the KOL event in two weeks. So we're also going to try to get a couple of, I would say, heads up for the FGR data as we await Um, kind of the detailed discussion points. A few things. We can talk through your current thinking on the potential differences in dosing as we think about hypotension and the patient population. And then, two, as we think about the patient population that you're enrolling, you've seen in the past they're going to be very severe. So, are you planning to disclose what percent have concomitant preeclampsia, or are they going to be FGR patients kind of purely? And then, Julie, a question on kind of the recordings for vascular resistance. How frequently are we recording the updates for Pulse Fidelity Index? So just trying to understand when we get the data, how we kind of put it all together. And then last question, Rick, if you're willing to comment, as we get the early proof of concept for fetal growth restriction, what kind of read-through would you expect as we think about the early onset preeclampsia opportunity? Those are my key questions. Thank you so much.

All right. Thanks, Stacey. Yeah, for the FGR data, I mean, we're going to be sharing results from the cohorts 1 and 2, so 5 and 10 micrograms per kg. And then based upon that, we'll share our plans in terms of the next dose that we'll likely be looking at going at a higher level, while we also do believe there's a potential to, in the future, measure at lower levels as well. In terms of severity, so these are very severe patients, so the severity, the pulsatility index is in the, sorry, the fetal weight is in the third percentile or less, whereas the official definition for fetal growth is a tenth percentile. So these are very small, very severe severity. And then in terms of read-through with regards to preeclampsia, you know, many preeclampsia patients also have fetal growth restriction, but one of the main differences, though, is that preeclampsia patients, in particular early onset, have typically more severe endothelial dysfunction that often results in hypertension, high blood pressure. And so one of the things that we feel very clearly that our drug does is control blood pressure. So if we control positive effects in this FGR, which is focusing more on blood flow to the placenta and extending gestational days, I think that will have us feeling even more excited about the prospects. For preeclampsia, where we think we can also address the more severe endothelial dysfunction and from past studies, about half of preeclampsia patients, the reason they have to deliver is high blood pressure, which we think we can also address. So again, I think this should, you know, assuming we share some positive results, this should be very encouraging in terms of the read-through. And then Julie?

Yeah. Hi, Stacey. Thanks for the question. So, early on, they're checked more often, and then if they stabilize every three days is typically when we would measure them in the study.

Super helpful. Thank you so much. Looking forward to it.

Your next question comes from the line of Matthew Caulfield with H.C. Wainwright. Please go ahead.

Hi. Good morning. Thank you, guys. Looking towards the Phase II FGR interim data, what could be key signals or any initial thresholds for pregnancy elongation and observations for the uterine and umbilical artery Doppler measurements? Any additional thoughts there on what success could look like? Thanks.

Yeah, thanks, Matt. So what we'll be sharing during the call is the prolongation days, and we will compare that to historical controls. And so it will also depend on severity. So if we're targeting the more severe patients, there'll be less prolongation expected from historical, whereas if they're less severe, they'll be longer. And so we'll share some historical data that I think will help to support a difference in terms of outcomes with what we're seeing thus far.

And then any thoughts on the Doppler measurements?

Yeah, historically, you're looking at seeing more, you know, these patients typically only worsen. So what we believe is that even a stabilization would be good, whereas if we can see an absolute reduction, that would be great. Again, compared to historical controls, they're typically more stable to worsening, which would be increasing.

So, and I guess in terms of the Doppler findings, you know, if you start to, obviously, you know, sustained reverse blood flow would be a signal for immediate delivery. And so, we're looking at those signals as well and looking at absence, we're looking at reversal, we're looking at, you know, forward flow. And all those things contribute along with the pulsatility index and how the baby is doing to when, you know, when delivery is needed. So, as Rick mentioned, there are benchmarks about, you know, how those parameters affect when gestation, you know, when to end gestation and deliver the baby.

Excellent. Thank you, guys. Looking forward to it.

Your next question comes from the line of Chase Knickerbocker with Craig Hellen. Please go ahead.

Good morning. Thanks for taking the questions. Rick, I know we've talked about this in the past, but I wanted to get your thoughts, you know, again, as we approach the interim resampling and stroke. Can you just give us a sense for how you're thinking about a decision tree around the trial and resample size? So, you know, really asking, is there a threshold of resample size? At the high end of the range or continuing, you know, does it make practical sense in your mind or a threshold at which there's a go, no-go decision? Just trying to get your thoughts on there ahead of that. Thanks.

Sure. Yeah, so right now, so the interim analysis, if we're not seeing a drug effect, you know, we will stop the study for futility. Otherwise, you know, if we see, you know, a drug effect, a lot of it depends on the statistical analysis plan, but if we see it's a drug effect that's comparable to what we saw in our phase two, we'd be looking at closer to 300 patients. If we see a drug effect closer to, you know, 6%, we would be looking at the high end of 728. So I think that'll give us a very good indication in terms of, you know, where the drug effect is coming in.

Okay, got it. Maybe just on the company-sponsored phase two, I think you previously expected that first enrollment in Q4. Can you just give us a little bit of a sense or a little bit more detail just on the kind of status there, what might be causing some delays? And then you also noted that it's going to be informed by preliminary FGF results. So can you just give us your kind of thoughts there on kind of what that means for that company-sponsored phase two? Thanks.

Yeah, so we're doing everything we can to expedite the process. So we've been providing customized contracts and budgets to simplify the process with the sites. Ultimately, we're subject to some of the constraints of the administration and process of each site. So we would still like to see enrollment this year, but worst case, it should be early in 2027. That study will be quite comparable to the phase two early onset in South Africa, so also looking at three different dose levels. We're looking at six patients per dose level, and then we'll select one of those three doses and have an additional 12 patients. So we'll be very comfortable, again, to the South African study. That should be starting here in the next few weeks.

And then just last for me, if we think about, you know, potential IND approval in the U.S., assuming satisfactory data here shortly. Should we think about it as expanding enrollment from that current company-sponsored phase two, or is there other program plans in the U.S.? Just your thoughts there. Interesting question.

Yep, that's the current plan, is that it would be an expansion of the existing study that will be starting off in Canada and the U.K., and we're also already looking at what that next larger clinical trial will look like for early onset preeclampsia.

Thanks, Rick.

That concludes today's question-and-answer session. I will turn the call back to Rick Pauls for closing remarks.

All right. Thank you, Operator, and thank you, everyone, for joining us this morning. Looking ahead, our next major milestones are for the November 24th Feudal Growth Restriction KOL event and the expected completion of the REVMD2 Data Safety Monitoring Board interim analysis in the first quarter of 2027. At the same time, we're preparing to initiate our additional pre-cranpsia studies and advancing our U.S. regulatory efforts. Together, these activities will help inform the next stages of DMR9's clinical development. Thank you to all your continued interest in Diametica. We look forward to updating you as these programs progress. Operator, you may now conclude the call.

This concludes today's Diametica Therapeutics Earnings Conference Call. Thank you for participating. You may now disconnect.