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DMA.V: Partnership will Accelerate the Development of DM199

By Grant Zeng, CFA


Partnership will Accelerate the Development of DM199

DiaMedica (TSX:DMA.V) has been pursuing commercialization partnerships and other strategic initiatives to accelerate the development of DM199. 

The company has received several licensing term sheets from Asian pharmaceutical companies for potential regional licensing rights and the Company is continuing discussions for potential licensing and/or joint venture opportunities. 

Recently, DiaMedica entered into a non-binding term sheet with a large China-based pharmaceutical company for potential licensing rights in China. The Company is continuing ongoing discussions with potential partners in Asia. Specifically, DiaMedica intends to partner with pharmaceutical and biotechnology companies to conduct Phase III trials, file the appropriate NDA and ultimately market the drug products. 

If the Company executes on a definitive agreement it would provide additional non-dilutive funding and further validate its product and the approved crude forms in China and Japan.

We believe a partnership in China/Asia offers great opportunity for DM199 to potentially replace the current KLK1 therapy with an improved recombinant form. A partnership will also help the approval of DM199 in the Asian market. Such a partnership will also boost the company’s balance sheet and reduce the capital requirements to conduct Phase III trials. 

The company recently announced the appointment of Dr. Robert Stanton to its Scientific Advisory Board to support the upcoming clinical trial for chronic kidney disease. Dr. Stanton is Chief of the Kidney and Hypertension Section at Joslin Diabetes Center at Harvard Medical School. The Company is now preparing for upcoming clinical trial in patients with chronic kidney disease (CKD) caused by Type 1 diabetes.

Update on REMEDY Phase II Trial of DM199 in Patients with Acute Ischemic Stroke

In September 2017, DiaMedica announced the initiation of its Phase II REMEDY clinical trial of DM199 (recombinant human KLK1) in patients suffering from acute ischemic stroke (AIS).

On November 22, 2017, the company further announced that it had received approval from the ethics committee in Australia to initiate the first clinical site for the REMEDY trial. 

The Phase II REMEDY trial is a multi-center, double-blind, randomized, placebo-controlled clinical trial which will assess the efficacy and safety of DM199 in patients with a moderate to moderately severe acute ischemic stroke (AIS). DiaMedica intends to enroll approximately 60 patients with AIS. The patients will be randomized to two groups receiving either DM199 or placebo, which will be administered intravenously (within 24 hours of stroke symptom onset) followed by subcutaneous injections for 21 days. 

Safety and tolerability are the primary end points. Secondary endpoints include drug exposure monitoring and a few tests including plasma-based biomarkers and standard functional stroke measures assessed at 90 days assess DM199’s other therapeutic potential. 

Our Takeaways

The initiation and approval from the ethics committee of the Phase II Remedy trial is a significant step for the development of DM199 for the treatment of AIS. 

As we indicated in our previous reports, DiaMedica intends to seek worldwide approval of DM199 as a novel therapy for acute ischemic stroke (AIS). The company will also position DM199 in China as an improved product over the urine-sourced KLK1 protein currently used there. With the potential that effective treatment can be initiated up to 48 hours after the first sign of symptoms, DM199 may fill a large unmet need for stroke patients who cannot receive tPA, benefiting millions of people around the world who currently have limited treatment options.

Positive DM199 Phase Ib Data Reported and Published 

In March 2017, DiaMedica reported positive results from its Phase Ib bridging trial. The study was designed to compare the profile of DM199 to the approved urinary KLK1 product (trade name Kailikang®) on the market in Asia for acute ischemic stroke (AIS). The reference drug (Kailikang®) is administered intravenously and has a very short half-life. 

In early November 2017, DiaMedica announce that the positive data were published in a peer-reviewed journal “International Journal of Clinical Trials”. 

Background of the Phase Ib Trial  

The goal of the Phase I bridge clinical study of DM199 was to determine the safety, optimal dose & delivery. 

The Phase I controlled trial was an open-label single ascending study, where healthy volunteers received one of four single doses of DM199 (n=36), administered as a 30-minute intravenous (IV) or a single subcutaneous (SQ) infusion. Plasma DM199 concentration, biomarker concentrations, and other safety and pharmacokinetic parameters were measured in the trial.

In December 2016, the company reported positive results from intravenous (IV) part of the clinical trial. The study results demonstrated the dose dependent levels of DM199 and identified a dose of DM199 via intravenous (IV) administration that produced pharmacokinetic and pharmacodynamic activity that were comparable to those produced by the reference drug, human urinary KLK1 (trade name Kailikang®) approved in Asia. 

This clinical study also provided clinically relevant safety data via intravenous delivery of DM199 for the first time at dose levels comparable to the currently approved human urinary KLK1 product. 

No treatment limiting adverse events were reported in any dose group. A few patients experienced mild orthostatic hypotension which is consistent with the mechanism of action and demonstrated drug activity. The Company plans to publish the full results of the study in a peer reviewed journal.

The Updated Result from the SC Part of the Phase Ib Trial

The Company has reported an improved subcutaneous (SC) dose of DM199 producing sustained plasma levels superior to the reference drug. 

The DM199 SC delivery provides sustained levels of the KLK1 protein, offering a potentially superior profile to the reference drug, which has a very short exposure window. The dosing of DM199 will be significantly more convenient and potentially provide improved efficacy to the short half-life of the reference drug. DM199 has the same amino acid sequence as the reference drug, identical biochemical activity, and demonstrated similar physiological effects.

No treatment-limiting adverse events were reported in any dose group. The Company plans to publish the full results of the study in a peer reviewed journal.

The Implications

More frequent delivery could improve efficacy:
• Kailikang® has very short half-life potentially limiting efficacy;
• Administered 1 times/day 50-minute slow infusion;
• KLK1 levels decline quickly after infusion;
• 1 times/day IV dosing may not be enough KLK1 in system for optimal efficacy;
• 1 vs. 3 times/day dosing IV urinary KLK1 clinical trial study recently initiated;

IV DM199 delivery
• DM199’s very low manufacturing cost will support economics of increased dosing frequency

SQ DM199 delivery
• Significantly longer half-life vs. IV Kailikang®
• Promote elevated KLK1 levels throughout the day, not just after infusion
• Support full 21-day treatment regimen at home – delivery every 1 to 3 days
• Today, many patients in China do not come back to hospital for daily 50-minute slow infusion affecting efficacy and sales. 

The Phase Ib trial has identified the optimal dosing of DM199, both IV and SQ compared to the Kailikang® (urinary KLK1).  Kailikang® is administered via IV for 50 minutes daily for 21 days. The challenge is that within minutes of stopping the slow infusion, KLK1 drops right off. A single SQ dose of DM199 maintains KLK1 levels for 3 days thus supporting less frequent dosing and more importantly anticipated increased efficacy by having KLK1 levels elevated for the full day instead of just during the infusion period and minutes after stopping the infusion with Kailikang®.  

The company is also leveraging the existing efficacy and understanding of Kailikang® by over 400,000 patients who have received treatment to date.  Thus, efficacy can be improved by using the company’s long acting SQ delivery, targeting patients with greatest likelihood to respond, targeting patients with lower KLK1 levels and shortening the treatment window from the 48 hours approved by Kailikang® while still capturing more stroke patients.

Update on Third Quarter Financials  

The Company had no revenue for the third quarter ended September 30, 2017, compared to no revenue for the same period of 2016. 

R&D expenses for the third quarter of 2017 were $0.49 million, compared to $0.97 million for the third quarter of 2016. 

G&A expenses for 3Q17 were $0.23 million, compared to $0.29 million for the 3Q16. 

Net loss for 3Q17 was $0.9 million ($0.01 per share), compared to net loss of $1.2 million ($0.01 per share). 

In late October 2017, DiaMedica received approximately USD$605,263 in gross proceeds from the early exercise of 2,631,579 April 2017 warrants at USD$0.23 (CAD$0.31) per share.

As of September 30, 2017, DiaMedica had cash $0.86 million. Current cash will be able to fund the company’s operations into 1Q2018. 

The $605,263 early warrant exercise and the callable warrants in the money and February 2018 warrants in the money should further extend the cash out date.


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