DiaMedica (DMAC) Q1 2026 Earnings Transcript

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DATE

Thursday, May 7, 2026 at 8 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Dietrich Pauls
• Chief Medical Officer — Dr. Julie Krop
• Chief Financial Officer — Scott Kellen

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TAKEAWAYS

• Cash, Cash Equivalents, and Short-Term Investments -- $51.3 million as of March 31, 2026, down from $59.9 million at December 31, 2025; management stated this is sufficient to fund planned clinical studies and operations through 2027.
• Net Cash Used in Operating Activities -- $9.1 million for the quarter, up from $7.1 million in Q1 2025, due primarily to increased net loss, partially offset by working capital changes.
• Research and Development Expenses -- $8 million for the quarter, an increase from $5.7 million in the prior-year period, attributed to continuation and global expansion of the ReMEDy2 clinical trial, clinical team expansion, and added reproductive toxicity testing for the U.S. preeclampsia program; this was partially offset by lower manufacturing development costs.
• Enrollment Progress: ReMEDy2 Stroke Trial -- Over 70% of targeted enrollment achieved, with active enrollment at approximately 70 sites across the United States, Canada, the U.K., and 6 additional European countries; interim analysis expected by end of 2026.
• Preeclampsia Program Status -- Phase II investigator-sponsored trial near completion of Part 1a extension cohort in late-onset preeclampsia; data update expected later in the quarter, with protocol amendments guided by findings, and two further cohorts (Part 1b and Part 2) planned to commence after extension data readout.
• Early-Onset Preeclampsia Global Phase II -- Health Canada approval received; Canadian enrollment planned by year-end 2026, with U.K. application to be filed, and U.S. IND pending FDA response to a proposed preclinical rat study.
• Preeclampsia/Fetal Growth Restriction Study Expansion -- Enrollment for a DM199 study in fetal growth restriction patients without preeclampsia is expected to begin in the current quarter.
• ReMEDy1 Data Informing Current Stroke Trial -- In moderate stroke patients (NIHSS 5-15), a 19% absolute functional outcome improvement, a 15% absolute favorable recovery increase, a 50% reduction in deaths, and a 13.3% reduction in recurrent strokes were observed versus placebo in prior Phase II, influencing ReMEDy2 design assumptions.
• General and Administrative Expenses -- $2.5 million for the quarter, consistent with prior-year period, with expectation of similar levels in future quarters.
• Guidance on Future R&D Spending -- Management expects research and development expenses to rise moderately, with Scott Kellen stating, "I wouldn't expect it to go up more than 10% a quarter."
• Interim Analysis for Stroke Program -- Futility analysis will determine continuation; "Otherwise, there'll be a resample size," between 300 and 700 patients, with final enrollment timing dependent on these results.

SUMMARY

DiaMedica Therapeutics (NASDAQ:DMAC) reported strong clinical momentum in its two primary programs, with ReMEDy2 stroke trial enrollment surpassing 70% and broadening to six new European countries, and the preeclampsia program nearing key data milestones. Regulatory progress included Health Canada trial initiation approval for early-onset preeclampsia and a pending U.S. IND reliant on FDA agreement to a proposed rat study, as well as intentions to expand to the U.K. DiaMedica Therapeutics management indicated current cash reserves support operations and trials through 2027, with anticipated moderate R&D spending increases tied to trial enrollments, and geographic expansion.

• Interim results from late-onset preeclampsia cohort are scheduled for update within the current quarter, with subsequent study arms prepared to begin upon completion, accelerating the preeclampsia clinical development timeline.
• Enrollment in the fetal growth restriction cohort, targeting patients without preeclampsia, is expected to commence imminently, further diversifying the clinical pipeline.
• ReMEDy2's interim analysis is designed to include futility and sample size reassessment, with "completing the enrollment the following quarter" if sufficient efficacy is observed.
• Pauls stated that, during the four months required for primary endpoint data and interim analysis after dosing patient 200, trial enrollment will continue, drawing the study closer to the upper threshold of the potential sample size adjustment.
• Specific site activation gains and relationships, especially at Canadian locations already participating in other DiaMedica Therapeutics trials, are intended to streamline startup timelines for new studies.

INDUSTRY GLOSSARY

• NIHSS: National Institutes of Health Stroke Scale, a clinical tool used to quantify the severity of strokes.
• FGR: Fetal Growth Restriction, a condition characterized by suboptimal growth of a fetus during pregnancy, often linked to placental insufficiency.
• IST: Investigator-Sponsored Trial, a study initiated and managed by non-company investigators, but often supported by company-provided drug and funding.

Full Conference Call Transcript

Dietrich Pauls: Thank you, operator, and thank you all for joining us today. With me this morning are Dr. Julie Krop, our Chief Medical Officer; and Scott Kellen, our Chief Financial Officer. Given that our last call was only 5 weeks ago, we'll try to keep our remarks short. We are pleased with the progress we've made so far in 2026 as we continue to advance DM199 across both our preeclampsia and acute ischemic stroke programs. Most importantly, for our shareholders, we're poised to deliver multiple clinical milestones between now and the end of 2027, all of which could provide significant validation of the value of DM199.

We also weigh the risks and advantages of providing interim updates as clinically meaningful data emerges ahead of formal readouts. We're particularly interested in completing the interim analysis for our stroke program. We've been working diligently on the ReMEDy2 stroke trial for a long time, battling through some significant challenges emanating from the COVID pandemic. With enrollment having surpassed 70%, we expect that the interim analysis will validate all of the hard work that has gone into the program. I now turn the call over to Julie to provide additional detail on our preeclampsia and stroke programs.

Julie Krop: Thank you, Rick. In the Phase II investigator-sponsored trial, enrollment is near completion in the extension cohort for the Part 1a dose escalation study in late-onset preeclampsia patients. Late onset patients are planned to deliver within 72 hours. This cohort will allow us to detect the dose or doses we plan to use for the upcoming cohorts of the IST. We expect to complete this cohort and provide a data update later this quarter. As you may recall, the interim results from this study demonstrated DM199's potential to reduce blood pressure and improve placental perfusion without crossing the placental barrier.

While we only have data in a relatively small number of patients, the results we observed were highly consistent and encouraging. We look forward to sharing the data from the extension cohort to further support the interim results. Additionally, learnings from Part 1a are guiding protocol amendments for the 2 remaining preeclampsia study groups. The first group referred to as Part 1b is an expansion study with up to 30 additional late-onset preeclampsia patients who will receive DM199 as a continuous IV infusion until delivery. In this cohort, we hope to learn more about the ability of doctors to use DM199 to effectively support blood pressure control management at this late stage of the disease.

The second part referred to as Part 2 will study up to 30 early onset preeclampsia patients. Three doses will be evaluated to support dosing for a Phase III trial and an optimal dose level to extend the time mom is able to carry the baby, increasing the gestational age at the delivery. As you've seen in our investor presentations, the medical complications for the baby are expected to decrease significantly the longer mom carries the baby. With the potential for DM199 to help manage blood pressure and improve blood flow to the placenta, we believe DM199 has a chance to be a transformative therapy for preeclampsia.

Initiation of these 2 preeclampsia cohorts which will recruit concurrently, is expected to begin after the completion of the ongoing Part 1a extension cohort. The IST also includes a study in women experiencing fetal growth restriction. In this group, we will be evaluating the effects of DM199 on fetal growth restriction in patients without preeclampsia. FGR is a condition with diminished fetal growth due to a poorly functioning placenta, the life support system of the unborn child. FGR is the leading cause of stillbirth and for infants that survive the FGR pregnancy, it is associated with enduring adverse health effects over the child's lifespan.

In this cohort, we will evaluate the potential for DM199 to increase placental perfusion and improve fetal development. Enrollment of the first patient for this study is expected in the current quarter. In parallel with the IST, we are advancing our global Phase II study in early onset preeclampsia. We intend to conduct this study in North America, both the United States and Canada and the United Kingdom. In March 2026, we received approval from Health Canada to initiate this study and study sites have been selected. We are working to initiate enrollment in Canada by the end of this year. We expect to file a clinical trial application in the U.K. in the current quarter.

With respect to the status of the IND submission in the United States, as we discussed previously, the FDA requested an additional nonclinical 10-day modified embryo fetal development and pre- and postnatal development study in a rabbit model. Results of a non-GLP dose-ranging study in rabbit suggest that the animals developed an adverse immune response to DM199, preventing us from completing the requested modified pre- and postnatal development study in a rabbit model. We have proposed to the FDA performing this study in a second rodent model and are awaiting their response.

That said, I would highlight for everyone that we are moving forward in parallel with the study in Canada and are planning to add U.K. sites while we complete any additional preclinical work requested by the FDA. This study will evaluate 3 dose groups of DM199 in patients with early onset preeclampsia to further establish safety, pharmacokinetics and pharmacodynamics in a more ethnically diverse patient group prior to initiating a registration study. Turning now to our stroke program. We are encouraged by the continued progress on the ReMEDy2 trial. Enrollment has now surpassed 70% of the target required for the interim analysis. Site activations and enrollments have recently commenced in Europe as well.

In addition to the United States, Canada and the U.K., we've added 6 additional European countries and now have approximately 70 sites activated. In April, we sponsored an investigator meeting for our European study team that was well attended and had many productive sessions and discussions, which we believe are the key to getting the study teams excited about and focused on patient enrollment. And we are reiterating our intention to complete the interim analysis by the end of 2026. As a reminder, in the Phase II ReMEDy1 stroke study, treatment with DM199 was associated with clinically meaningful improvements in functional outcomes for the patient group that most closely resembles the patients enrolling in our ReMEDy2 trial.

In the subset of patients that did not undergo a thrombectomy, we observed a 15% absolute increase over placebo in the proportion of patients achieving favorable recovery as measured by a score of 0 or 1 on the modified Rankin Scale. Furthermore, ReMEDy2 is enrolling patients presenting with moderate stroke severity defined as an NIHSS score between 5 and 15. Looking at that subgroup in the ReMEDy1 study, there was a 19% absolute improvement over placebo in functional outcomes. There was also a 50% reduction in the number of patient deaths and a 13.3% reduction in recurrent strokes compared to placebo. These data inform the design and powering assumptions for the ongoing ReMEDy2 trial.

I think you can understand why we are eagerly awaiting the results of the interim analysis. Let me now turn the call back to Rick.

Dietrich Pauls: Thanks, Julie. I'd like to now ask Scott to review the financial results for the quarter.

Scott Kellen: Thank you, Rick, and good morning, everyone. We announced our first quarter 2026 financial results and filed our quarterly report on Form 10-Q yesterday after the markets closed. As of March 31, 2026, our cash, cash equivalents and short-term investments were $51.3 million, current liabilities were $5.7 million and working capital was $46.6 million compared to cash and investments of $59.9 million, current liabilities of $5.1 million and working capital of $55.5 million as of December 31, 2025. We anticipate that our current cash and investments will be sufficient to fund our planned clinical studies and operations through 2027.

Net cash used in operating activities for the first quarter of '26 was $9.1 million compared to $7.1 million for the first quarter of 2025. The increase in cash used in operating activities resulted primarily from the increased net loss for the current year period, partially offset by changes in operating assets and liabilities during the current year quarter. Turning to the income statement. Our research and development expenses increased to $8 million for the 3 months ended March 31, 2026, up from $5.7 million for the same period in the prior year.

The increase is due primarily to the increased costs resulting from the continuation of our ReMEDy2 clinical trial and its global expansion, the expansion of our clinical team and costs related to additional reproductive toxicity testing being performed in support of our PE program in the United States. These increases were partially offset by net cost reductions in manufacturing development activity related to work performed and completed in the prior year period. We expect that our R&D expenses will moderately increase in future periods relative to recent prior periods as we continue our ReMEDy2 trial and continue to advance our DM199 clinical development program into PE.

Our general and administrative expenses were $2.5 million for the 3 months ended March 31, 2026, and 2025. While small changes occurred within a number of expense categories, the differences were not material individually or in the aggregate and the overall net changes offset each other. We expect G&A expenses to remain relatively consistent in future periods as compared to recent prior periods. With that, let me ask the operator to open the lines for questions.

Operator: Your first question is from the line of Josh Schimmer with Cantor.

Joshua Schimmer: The preeclampsia data updates that we'll get this quarter for the late onset cohort, what incremental observations should we be looking for beyond blood pressure control? Obviously, preeclampsia can affect urine output, kidney function, liver function platelets and biomarkers like sFlt. At what point will you have data to share on those parameters?

Dietrich Pauls: Yes. Thanks, Josh. So the expansion cohort that we're running is going to be 12 additional patients. We're almost completing that right now. It's going to be at the cohort 10 from the Part 1a. And so it's really just going to give us additional clarification here, particularly on blood pressure, dilation of the intrauterine arteries. At this point, we're really not expecting any changes in some of the biomarkers like sFlt because these patients really only got 2 doses. It's really we believe that having the drug on board for ideally a week, 2 weeks that we really would see some of those biomarkers improve.

Joshua Schimmer: Okay. Got it. So I think at one point, the lead investigators suggested that there was an improvement in edema at the very least maybe might be something that can improve within a short period of time. Is that something you're looking for?

Dietrich Pauls: Yes, that's something that if there is an improvement in endothelial health, and it is something that Dr. Cathy Cluver very clearly seen in some of these patients that the edema did resolve even within 12 to 24 hours of getting DM199, which is encouraging. It's a small number of patients, but we'll be looking to see maybe there's some additional insight there as well.

Joshua Schimmer: Just a couple of other quick questions, if I may. What are the steps to start initiating enrollment in the early onset preeclampsia study? Why is that not going to occur until later this year?

Dietrich Pauls: Yes. Julie, do you want to take that one?

Julie Krop: Yes. Are you referring to the IST cohort? Or are you referring to the -- to our sponsored trial?

Joshua Schimmer: Sponsored trial.

Julie Krop: Yes. We are in the midst of getting our dosing data from -- again, from the IST study before we select our final doses for that protocol as well as getting sites contracted up and running and our CRO selection process, all of that completed and then we'll be initiating. So it's a combination of factors, but we should be again in Canada later this year.

Joshua Schimmer: And then last sorry...

Dietrich Pauls: Sorry, if I can add. And so importantly, as we mentioned, so we have selected the 2 sites in Canada and one site in particular, is already in our stroke trial. So we're looking forward to leveraging the relationships, the existing contract that we have to basically doing what we can to expedite and get those sites activated as soon as we can.

Joshua Schimmer: Got it. And then last question, timelines for completing the second animal toxicology study and then ultimately reengaging with the FDA for IND.

Dietrich Pauls: Yes. So it will really depend on the feedback that we get from the FDA. And so it is a rat study that we proposed. And if they agree to that, that's a matter of a few months, probably 3 to 4 months to complete. And so again, while that's all happening, we'll be running the Phase II in Canada and then expanding to the U.K.

Operator: Your next question is from the line of Stacy Ku with TD Cowen.

Stacy Ku: So we have a couple of questions. So I guess, first, follow-ups. When could you expect to hear from the FDA on the mouse study? And is there a possibility the FDA could ask for another animal model? And how are you looking to prepare for all these different scenarios? It sounds like the rat study is pretty straightforward, but just help us understand how you view the next 2 necessary steps. And again, just to clarify, it sounds like you are expecting a potential study initiation of the global Phase II by year-end. Just want to make sure you're reiterating that time line. And then we're looking forward to the updated preeclampsia results in Q2.

But as we think about the early onset preeclampsia or fetal growth restriction subgroups of the IST, could we think about any potential for low-dose updates by year-end for either of these groups? And then, Julie, just a clarification again, what is the timing of potentially starting the early onset preeclampsia IST? And then last, just a reminder, what's the go and no-go decisions on the interim results for stroke? I can repeat some of these questions.

Dietrich Pauls: Okay. Great. So we'll try to take those. I'll start off here. Maybe Julie, you can help me out here. So in terms of the -- we did our submission to the FDA over a month ago. And so we're just waiting to hear the feedback. So as soon as we get clarity from the FDA, we'll provide an update. We have looked at alternative kind of backup plans in case they want something different. But we think we've got a very strong rationale for the proposed rat study. And I think it's encouraged that the Health Canada has already approved us to start the trial in Canada.

With the PE trial in terms of, yes, potential that we could get some data as soon as we have a cohort that's completed and we see some compelling data, we would look at potentially press releasing or getting that at a late-breaking conference. And the last question that you had with regards to the outcomes of the interim analysis for the stroke program. First, we'll do a futility analysis. So if there's not a drug effect, we'll terminate. Otherwise, there'll be a resample size. And the resample size will be between 300 and 700 patients.

And we believe if we see a drug effect comparable to what we see from our Phase II, which is comparable to the data we've seen with the data with the human urinary form in China, and there's about 1 million patients either being treated with that form. We would look at completing the enrollment in the following quarter.

Operator: Your next question is from the line of Thomas Flaten with Lake Street.

Thomas Flaten: Rick, just following up on that last response, just to clarify, given that you've got 70-plus sites and 70% enrolled, if you -- when you said we're going to complete enrollment in the following quarter, do you mean the first quarter of '27 or the -- which quarter were you referring to on the full enrollment?

Dietrich Pauls: Yes. So assuming that we have the interim analysis at the end of this year, then we would anticipate completing the enrollment the following quarter, so the Q1 of next year.

Thomas Flaten: And does that assume an upsize in the total population? Because it seems to me it's only May. And by year-end, when the interim analysis reads out, you should be pretty close to full enrollment on the original study size, right?

Dietrich Pauls: We will be. So that after patient 200 is dosed, there'll be a 30 -- sorry, a 90-day window here for the primary endpoint and then another approximately 4 weeks for the interim analysis to occur. And during that approximately 4 months, we'll be continuing to enroll. So we'll be getting closer to the 300 patient number during that period of time.

Thomas Flaten: Got it. And then just to clarify a prior response. So once you get the Part 1a expansion data out this quarter, there's -- is it reasonable to assume that you would start Part 1b and Part 2 in the third quarter? Or should we expect maybe a fourth quarter start on that?

Dietrich Pauls: No, those should be starting here this summer. And so we're just -- we finalized the dosing that will be going into those cohorts. So we'll be doing 3 doses at 5, 10 and 15 micrograms per kg subcutaneous every 3 days until delivery. So those cohorts should be starting very soon. We had some -- we've now got our sites, Cape Town South Africa has had some challenges with some staffing and they've added some new staff. And so they've been very active recently in the Part 1a expansion study. So we feel very good that, that study will be enrolling soon.

Operator: Your next question is from the line of Jason (sic) [ Chase ] Knickerbocker with Craig-Hallum Capital Group.

Chase Knickerbocker: One for Scott. I appreciate your comments on forward R&D, but maybe just a little bit more color there. You said kind of modest increase. I would imagine kind of enrollment is still picking up on an absolute number for stroke. And then can you just give us an idea kind of what the magnitude of that increase you expect sequentially in stroke and then kind of the incremental costs you expect for PE through the year.

Scott Kellen: Sure. Thanks, Chase. Yes, with respect to the stroke, modest increases. I mean the -- and you're correct, it's all going to be driven by the enrollment rates. And to some extent, it depends on whether those patients are enrolled in the U.S. or Europe. U.S. is probably the most expensive followed by U.K., Canada and Europe. And then with respect to the incremental cost for PE, there'll be -- well, we're still working on the estimates for the Phase II trial. The financial support we provide for the IST is very modest. It's an incredible bargain. So again, moderate -- modest to moderate increases, nothing order of magnitude change-wise.

Chase Knickerbocker: Could you just define modest or moderate for us, if you don't mind? And then just one for Rick. Just as we think about the resample, should we kind of just expect to receive the number on the resample or anything else at that point that we'll be able to provide?

Dietrich Pauls: Sure. For the interim analysis, we'll be providing an update on the expected timelines to complete the enrollments.

Scott Kellen: Chase, it's hard to give a specific number because there's movement inside all the different expense categories. I mean I wouldn't expect it to go up more than 10% a quarter.

Operator: I will now hand today's call over to Rick Pauls for any closing remarks.

Dietrich Pauls: All right. Well, thank you all for joining us today. We greatly appreciate your interest in DiaMedica and hope that you enjoy the rest of the day. This concludes our call today. Thank you.

Operator: Thank you for joining. You may now disconnect your lines.

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