Prepared remarks
Good morning, ladies and gentlemen, and welcome to the DiaMedica Therapeutics Second Quarter 2026 Earnings Conference Call. An audio recording of this webcast will be available shortly after the call today on DiaMedica's website at www.diamedica.com in the Investor Relations section. Before the company proceeds with its remarks, please note that the company will be making forward-looking statements on today's call. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these statements. More information, including factors that could cause actual results to differ from projected results appear in the section entitled Cautionary Statements Note regarding Forward-Looking Statements in the company's press release issued yesterday and under the heading Risk Factors in DiaMedica's most recent annual report on Form 10-K and most recent quarterly report on Form 10-Q. DiaMedica's SEC filings are available at www.sec.gov and on its website. Please also note that any comments made on today's call speak only as of today, August 11, 2026, and may no longer be accurate at the time of any replay or transcript reading. Following management's remarks, we will open the phone lines for questions. I would now like to introduce your host for today's call, Rick Pauls, DiaMedica's President and Chief Executive Officer. Mr. Pauls, you may begin.
Thank you, Morgan, 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. Q2 was an important quarter for DiaMedica with progress across DM199 in early onset fetal growth restriction, preeclampsia and acute ischemic stroke. We advanced our pregnancy-related clinical strategy, continued preparations for our Phase II early onset preeclampsia study in Canada and the U.K. and made further progress towards reaching the planned Phase II/III ReMEDy2 interim analysis in acute ischemic stroke. There are four key updates I would like to highlight. First, with respect to the IST being conducted by Professor Cluver, enrollment has been completed in the first cohort of the Phase II early onset fetal growth restriction study. The cohort consists of six participants treated at the 5 microgram per kg dose level. This is important as it expands the clinical use of DM199 into a second serious women's health disorder for which there are no approved therapies. We plan to host a key opinion leader event in September with Professor Cathy Cluver, the study's principal investigator and other experts to discuss the potential of DM199 in fetal growth restriction and share top line results for the completed first cohort open-label Phase II trial. Second, the extension cohort from the Part 1a of the IST has been completed. This was the initial dose escalation cohort treating women with late-stage preeclampsia. The combined results from the dose escalation and extension groups were important as noted in our earnings press release as they provide the clinical support, driving the selection of the mid-dose range for the evaluation both for early onset fetal growth restriction and early onset preeclampsia studies. Julie will review the data later in the call. And third, we continue to advance our early onset preeclampsia programs on the regulatory and operational fronts, which I'll discuss in a moment. And fourth, ReMEDy2, our Phase II/III acute ischemic stroke study is approaching the 200th patients required to trigger the prespecified interim efficacy analysis. Although enrollment slowed somewhat in July, we now have surpassed 85% of the enrollment target, and we anticipate the interim analysis readout in the first quarter of 2027. As a reminder, DM199 is a recombinant form of the naturally occurring human KLK1 protein. KLK1 is a serine protease that acts through the BK2 receptors present in endothelial blood vessels to restore the body's natural ability to increase levels of nitric oxide, prostacyclin and endothelial-derived hyperpolarizing factors. We believe that this novel mechanism that improves vascular biology makes DM199 both unique and well-suited to address the endothelial and perfusion-related dysfunction common in preeclampsia, fetal growth restriction and acute ischemic stroke. As I mentioned, we are pleased to report today that enrollment has been completed in the first cohort of the open-label Phase II IST fetal growth restriction study. The first cohort consisted of six participants treated at the 5 microgram per kg dose level. This study is enrolling early onset fetal growth restriction patients with or without concurrent preeclampsia. This expansion of our development program allows us to evaluate fetal growth restriction, a related yet distinct clinical indication to preeclampsia. Early onset fetal growth restriction is a serious complication of pregnancy associated with inadequate uterine placental blood flow. There are currently no therapies approved to treat fetal growth restriction, just early delivery, which can have very serious consequences for the babies. This study is evaluating three dose levels. With the first cohort now fully enrolled, enrollment in the second cohort at 10 microgram per kg should begin shortly. The dose for the third cohort will be between 1 and 15 micrograms per kg and will be based on the results from the first two cohorts. Key fetal growth restriction study endpoints include safety and tolerability, prolongation of gestation, flow-mediated dilation, among other measures. This is an important study. It's the first time that DM199 has been used in early onset patients. We plan to host a key opinion leader event in September, featuring Professor Cluver, the study's principal investigator, where rationale for DM199 in treating fetal growth restriction will be discussed along with top line results from the completed first cohort. We are excited about this indication because it represents an expansion of DM199's potential reach based upon the demonstrated improvement in the pulsatility or the resistance index observed in the initial preeclampsia Part 1a study. We also anticipate the first patients to be dosed shortly in the IST early onset preeclampsia and continuous IV infusion preeclampsia studies. Based on the results of the recently completed late onset preeclampsia study, a protocol amendment was filed in July to adjust the dosing regimen to provide more flexibility on dosing at the mid- to lower level range. Dosing will start shortly after the acceptance of the protocol amendment is completed in coming weeks. Moving to the global Phase II early onset preeclampsia program. Health Canada authorized initiation of our open-label Phase II dose-ranging study in early onset preeclampsia patients earlier this year. The study is also designed to enroll approximately 30 patients at three dose levels. We are working with sites in Canada and anticipate dosing the first patient in Q4 of this year. We're also working to expand the study to the United Kingdom later this year, subject to regulatory authorization and site readiness. The results of the multi-preeclampsia and fetal growth restriction studies will be important in defining the dosing for the Phase III registrational trial in one or both indications. Turning to expanding the early onset preeclampsia trial into U.S. sites. As we announced in June, we believe that based on the FDA feedback, our previously completed rat reproductive toxicology study may be acceptable to support a U.S. IND application provided that we can demonstrate sufficient evidence of DM199 exposure and enzymatic activity throughout the previously completed rat study as well as adequate pharmacologic effects in rats to support their use as an appropriate toxicology species. To address FDA's request, we are conducting a pharmacokinetic and pharmacologic activity study of DM199 in rats. Following completion of the study anticipated in September and reports in October, we plan to present results to the FDA and work with the agency towards initiating clinical development in the U.S. Finally, turning to ReMEDy2, our ongoing Phase II/III acute ischemic stroke trial. Enrollment has now surpassed 85% of the 200 patients required to trigger the prespecified interim analysis, which is expected in Q1 of 2027. We currently have approximately 70 active sites across the U.S., Canada, the U.K. and six countries in Europe. Site activation in Europe is adding meaningful enrollment capacity. The interim efficacy analysis, which occurs after completion of the protocol-defined 90-day follow-up will be conducted by the Independent Data Safety Monitoring Board, the DSMB, and is intended to assess whether a sample size reestimate is warranted. The final size may range between 300 and 728 patients or futility. DiaMedica will remain blinded to data and treatment effect estimates reviewed by the independent DSMB. I'll now turn the call over to Julie to walk through the late-onset preeclampsia Phase II Part 1a clinical update in more detail.
Thank you, Rick. As Rick noted, the Part 1a extension cohort has been completed with the dosing of the final 12 patients at Stellenbosch University site in South Africa. The cohort enrolled women with late-stage preeclampsia who had severe hypertension and were expected to deliver within 72 hours under the current treatment protocol. The purpose of the extension cohort was to more fully characterize the highest dose of DM199 and provide additional dose response, safety, pharmacokinetic and pharmacodynamic information to support dose selection for subsequent studies. The highest dose analysis included 15 patients, three from the initial dose escalation phase and 12 additional patients enrolled in the extension cohort. Following DM199 administration, we observed statistically significant and sustained reductions from baseline in both systolic and diastolic maternal blood pressure. At the prespecified assessment five minutes after completion of the IV infusion, mean systolic blood pressure decreased by 29.1 millimeters of mercury from a baseline of 169.3 millimeters of mercury with a p-value less than 0.001. Mean diastolic blood pressure decreased by 17 millimeters of mercury from a baseline mean of 103.7 millimeters of mercury with a p-value less than 0.01. Mean systolic blood pressure remained below 160 at all measured time points over 24 hours, an important threshold systolic blood pressure for required delivery to reduce the risk of brain hemorrhage in the mother. These findings were consistent with the previously reported dose responsive reductions in systolic and diastolic blood pressure. Across the dose-ranging cohorts, the most clinically meaningful pharmacodynamic effects observed in Part 1a of the study were produced in the mid-dose range cohorts four through eight. These participants showed clinically meaningful reductions in both maternal blood pressure and the uterine artery pulsatility index. Note that reductions in the pulsatility index are consistent with reduced uterine placental vascular resistance, suggesting improved blood flow to the baby, which we believe is key to potentially modifying the underlying disease process in these patient populations. These findings support setting dose levels from the mid-dose range for further clinical evaluation as we move to the early onset preeclampsia and fetal growth restriction studies. The dose levels for the next studies will begin at 5 micrograms per kilogram and advance to 10 micrograms per kilogram in the second cohort. The dose level for the third cohort will be selected based on results from the first two cohorts and will range somewhere between 1 and 15 micrograms per kilogram. This is intended to provide flexibility to further define the optimal dose range based on the emerging data. Taken together, we believe these findings provide evidence of a mechanistically on-target pharmacodynamic response for DM199 in preeclampsia. The study investigators plan to present the full data set, including safety, pharmacokinetic and pharmacodynamic analyses at an upcoming medical conference and submit the results for publication in a peer-reviewed journal later this year. Let me now turn the call back to Rick.
Thanks, Julie. I'd like to now ask Scott to review the financial results for the quarter.
Thank you, Rick, and good morning, everyone. So in walking through the financial results for the second quarter, as of June 30, 2026, our cash, cash equivalents and short-term investments were $43.5 million. Current liabilities were $6.6 million and working capital was $37.7 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 continue to believe that our current cash position will fund our planned clinical studies and corporate operations through 2027. Net cash used in operating activities for the six months ended June 30, 2026, was $17.2 million compared to $14.7 million for the same period in 2025. The increase resulted primarily from the increased net loss in the current year. Turning to the income statement. Research and development expenses were $8.2 million and $16.1 million for the three- and six-month time periods ending June 30, 2026. This was an increase from $5.8 million and $11.5 million for the same time periods in the prior year. The increases are primarily due to the expansion of our clinical team, continuation of our ReMEDy2 clinical trial, including its global expansion, costs related to additional reproductive toxicity testing being performed in support of our preeclampsia program in the United States, increased manufacturing and development activities and increases in noncash share-based compensation. We expect that our R&D expenses will moderately increase in future periods relative to recent prior periods as we continue both our ReMEDy2 trial and the expansion of our DM199 clinical development program in preeclampsia. Our general and administrative expenses were $2.3 million and $4.8 million for the three- and six-month time periods ending June 30, 2026. These expenses increased slightly compared to the same time periods in 2025, which were $2.2 million and $4.7 million, respectively. The increase for the three-month period was driven primarily by increased noncash share-based compensation and professional fees, while the increase for the six-month period resulted primarily from increased personnel costs incurred in conjunction with expanding our team, partially offset by a reduction in current year legal and other professional fees. We expect G&A expenses to remain relatively consistent in future periods as compared to recent prior periods. In summary, we remain well funded with a cash runway through 2027. This covers through our major upcoming milestones, including the ReMEDy2 interim analysis, planned data readouts from our preeclampsia and fetal growth restriction programs and continued advancement of our Phase II preeclampsia program in Canada and the United Kingdom. With that, let me ask the operator to open lines for questions.
Questions and answers
The operator provided instructions on how to ask questions. Your first question comes from Josh Schimmer with Cantor.
Great. Two quick ones. First, just trying to understand the commentary around dosing — why you're focusing on the 4 to 8 microgram per kilogram cohort and not the higher doses for the late onset preeclampsia program, but then you are exploring higher doses for the early onset preeclampsia program. So maybe you can kind of square that and help us understand that strategy. And then for the fetal growth restriction program, are there any inclusion criteria that you're using to try to focus on patients who you might think might be most likely to respond and/or have evidence of impaired placental perfusion at baseline?
Sure. Thanks, Josh. Yes, for what we're seeing from the Part 1a, as we've seen in other clinical trials, there's really a sweet spot for dosing DM199. We believe KLK1 selectively improves uterine blood flow while also controlling blood pressure. However, if we go too high, we believe we still control blood pressure, but we run into receptor desensitization, and because of that, we see less of the dilation effect. This is consistent with what we've seen in glucose studies for type 2 diabetes and in kidney disease studies looking at eGFR and UACR where we observed a greater clinical effect at the 3 microgram dose compared to the 15 microgram dose. In addition, we also have a issued patent on this nonlinear dose response curve. So we want flexibility, but we are more focused on that midrange. In regard to your second question on fetal growth restriction, these are very severe patients — FGR between weeks 27 and 32 — and there will be patients that are in the third percentile or less in terms of body weight. They are very severe cases. We think that these babies, if not treated, would typically be delivered between one and six days. We believe extending gestational days, dilating the arteries and other factors could have a profound impact on outcomes for these babies. This study is really focusing on dilation, and if we do see positive signals, it will be encouraging ahead of early onset preeclampsia because in that condition we think we can also control blood pressure in addition to dilation. We're excited to have the KOL event in September.
Your next question comes from Stacy Ku with TD Cowen.
Congratulations on all the progress. So first, on the fetal growth restriction, let's say Cohort 1 data that we're going to get in September, maybe just help us understand the importance of that chronic dosing that we're going to see. How many doses do you think you might disclose? Again, I know very early days, but just help us understand that dynamic. And then as we think to maybe the growth restriction and what's clinically meaningful, is it a week of extension before delivery? Is it longer than that? Just help us understand the type of dynamics or maybe even a little sneak peek for the KOL event when it comes to the unmet need. So that's the first question on FGR. The second is on maybe your learnings for early onset preeclampsia. Just remind us what are the ongoing thoughts around IV versus subcutaneous administration? Maybe what kind of refinements you might be applying as you think about the different cohorts? I know you just talked about the receptor desensitization, but just help us understand what's the most up-to-date thinking on the frequency of dosing, et cetera. And then the last question is a clarification on the FDA IND submission. Is it fair to assume after we finish this enzymatic study, it sounds like it's going to be completed in October that you'll be able to kind of submit the IND to the FDA?
Yes, sure. For fetal growth restriction, I think it's important that we've had encouraging data thus far with the late onset patients where patients got one IV dose and then one subcutaneous dose. This will be the first time we've dosed early onset patients. In the fetal growth restriction study, patients will receive subcutaneous dosing every three days until delivery. We had indicated earlier that if we could get another five or six days, that could have a profound impact on outcomes for these babies; hopefully we might get a few weeks in some cases. In terms of early onset preeclampsia, one of the changes we've made is dropping the IV infusion and focusing on subcutaneous dosing every three days until delivery. One of the cohorts coming up for preeclampsia is a continuous IV infusion, and that will be in late onset patients. The premise there is that by adjusting the dose we can dial in blood pressure to the targeted range. If we see positive effects there, we would anticipate for Phase III for preeclampsia dosing every three days until systolic blood pressure approaches 160. At that point, we could switch over to continuous IV infusion to hopefully get a few extra days. Regarding the IND, yes — assuming all goes well with the rat study that's already been initiated and ongoing, it should complete in the early part of September. The plan would be to then present the results to the FDA and submit for a U.S. IND. When we met with the FDA previously, they indicated this was the last piece they thought we needed to open an IND.
Your next question comes from Thomas Flaten with Lake Street.
Rick, just following up on the fetal growth restriction, what's clinically meaningful, what's not. So you mentioned days of gestation. Is there going to be an endpoint looking at what percentile the baby grows to? I know you said these are third percentile or less. Are you trying to get the baby up to fifth or tenth percentile? Or is this simply gestational extension, which hopefully leads to an improvement in baby weight too?
Yes. We'll be looking for changes to that. The two main endpoints initially are gestational days, because we do believe keeping the baby in the mother longer should result in larger, healthier babies, and dilation of intrauterine arteries. Typically, without treatment, that dilation worsens over time. If we can see stabilization or improvement, that would be very encouraging. There will be a series of other endpoints that we'll be looking at as well for the study.
And then just for the Part 1a data that you shared today, I'm assuming you did track the same endpoints that you did in prior cohorts around placental transfer, uterine dilation and intrauterine artery dilation. Will that be presented at some point? Or how are you thinking about disclosing those other endpoints?
Yes. Our collaborators are preparing to submit for publication in a peer-reviewed journal and will share the full data set there.
Got it. And then one final one on ReMEDy2 assuming enrollment pace picks up from July, once you hit the 200 and get past the endpoint for the data to get to the DSMB, how close will you be to that initial target of total enrollment do you think at that point when you do the interim analysis readout?
Yes. So after patient 200 is dosed, there will be a 90-day follow-up for the primary endpoint. Then there will be another four to six weeks for data analysis, at which point we'll provide a public update. During that period, we will continue dosing patients. Hopefully we'll be getting closer to 300 patients, which we think would be the potential base case in terms of the study.
Your next question comes from Matthew Caufield with H.C. Wainwright.
On the interim dataset for the Phase II/III ReMEDy2 trial, the interim analysis looks like it's slightly shifted from fourth quarter to early 2027. You've noted the 85% enrolled towards the interim analysis. Have there been any nuances for the recruitment process to date or how that could possibly translate to the ease of real-world patient selection in the future?
Yes. This trial has been interesting. We'll get one month where enrollment is significant and then the following month it can drop substantially — it's somewhat variable. In terms of real-world use, the big benefit of this drug is the safety profile, so we believe it will be usable in community hospitals. Because of that, we are excited about the prospects of completing this trial and getting this drug to patients.
Your next question comes from Chase Knickerbocker with Craig-Hallum.
This is Jake on for Chase. I was wondering, for the company-sponsored Phase II, can you just walk us through the timelines to be in the clinic in both the U.K. and the U.S.?
Yes. For the company-sponsored trial for early onset preeclampsia, we're targeting later this year to start dosing. For the U.K., we're going through the regulatory process and hope for a similar timing, perhaps into early 2027. We've identified three sites in the U.K. and two in Canada, so in total we have five sites and are targeting 30 patients. The protocol is very similar to the IST that's also running concurrently.
That concludes our Q&A session. I will now turn the conference back over to Rick Pauls for any closing remarks.
All right. Thank you, operator. Before we close today's call, please keep an eye out for a press release announcing the date of our KOL event focusing on early onset fetal growth restriction. At that event, we look forward to sharing scientific rationale for using DM199 to treat fetal growth restriction along with top line results from the first patient cohort in our open-label Phase II trial. We believe DM199 represents an important opportunity in treating pregnant mothers with fetal growth restriction, and we're really excited to share more details with you soon. Thank you again for joining us today and for your continued interest and support. We look forward to updating you on the progress in the coming months. Operator, you may now close the call.
This concludes today's call. Thank you for attending. You may now disconnect, and have a wonderful rest of your day.