DMAC

Business Context and Reporting Period

Company: DiaMedica Therapeutics Inc. (DMAC)
Filing Type: Form 10-Q (Quarterly Report)
Period Ended: March 31, 2026
Business Overview: DiaMedica is a clinical-stage biopharmaceutical company developing DM199, a recombinant human tissue kallikrein-1 (KLK1) protein, for the treatment of preeclampsia (PE), fetal growth restriction (FGR), and acute ischemic stroke (AIS). The company has no commercial product revenue and relies on equity financing and interest income.

Key Financial Metrics

Note: Q1 2025 cash balance shown above is end-of-period cash only; total liquid assets for Q1 2025 were not explicitly aggregated in the same format as Q1 2026 in the source text, though Q1 2026 total liquid assets are $51.3 million.

Material Changes vs. Prior Period

• Increased Operating Loss: Net loss increased by approximately $2.3 million (30%) compared to Q1 2025, driven primarily by higher Research and Development (R&D) expenses.
• R&D Expense Growth: R&D expenses rose to $7.99 million from $5.66 million. This increase is attributed to the continuation and global expansion of the ReMEDy2 clinical trial for AIS, expansion of the internal clinical team, and costs for reproductive toxicity testing for the PE program.
• Cash Position: Cash and cash equivalents decreased from $15.6 million to $4.9 million, while marketable securities increased slightly to $46.5 million. Total liquid resources (cash + marketable securities) decreased from approximately $59.9 million (Dec 31, 2025) to $51.3 million (March 31, 2026).
• Share Count: Outstanding shares increased to 53,883,345 from 53,742,370 due to stock option exercises and RSU vesting.

Guidance, Outlook, and Risks

Outlook and Guidance

• Liquidity: Management expects current cash resources ($51.3 million) to fund planned operations for at least the next 12 months from the filing date.
• Expense Trajectory: The company anticipates a moderate increase in quarterly expenses as it advances the DM199 clinical development program, specifically the global Phase 2 PE trial and the ReMEDy2 AIS trial.
• Capital Needs: Substantial additional capital will be required to complete clinical studies and regulatory activities. The company may seek additional funding earlier than expected if market conditions are favorable.

Key Risks and Contingencies

• Clinical Trial Delays (ReMEDy2): The Phase 2/3 ReMEDy2 trial for AIS is experiencing slower-than-expected site activations and enrollment. Causes include hospital staffing shortages, protocol logistics, and competition for subjects. The interim analysis is now estimated for Q4 2026.
• Regulatory Hurdles (PE Program): The FDA requested an additional non-clinical embryo-fetal development study in a rabbit model for the US Phase 2 PE trial. Preliminary results showed an antibody response in rabbits, preventing completion of the study in that model. The company is proposing an alternative approach.
• Foreign Data Acceptance: Data from the investigator-sponsored PE trial in South Africa may not be accepted by the FDA, potentially requiring costly additional US-based trials.
• Financing Risk: As a pre-revenue company with an accumulated deficit of $182.8 million, future success depends on the ability to raise additional capital, which is not guaranteed.

Investor Verification Checklist

• Cash Runway: Verify the sufficiency of the $51.3 million liquid asset base against the projected burn rate of ~$9 million per quarter.
• ReMEDy2 Enrollment: Monitor upcoming updates on the ReMEDy2 trial enrollment rates and the impact of the expanded internal clinical team on site activation.
• PE Regulatory Path: Confirm the FDA's response to the proposed alternative to the rabbit embryo-fetal development study and the timeline for the US Phase 2 PE trial initiation.
• Capital Markets: Assess the company's ability to access capital markets given the current liquidity position and the need for future funding to reach commercialization.
• South African Trial Data: Review the final results of the South African PE trial and any FDA feedback regarding the acceptance of this foreign data.