MINNEAPOLIS - DiaMedica Therapeutics Inc. (NASDAQ:DMAC), a biopharmaceutical firm focusing on ischemic diseases treatments, has announced a private placement of common shares expected to generate $11.8 million. The company will issue 4,720,000 shares priced at $2.50 each, with the closing anticipated around June 28, 2024, pending customary conditions.
The funds are earmarked for advancing clinical and product development, notably the Phase 2/3 ReMEDy2 trial of DM199 for acute ischemic stroke and expansion into preeclampsia studies. DiaMedica anticipates the financing will extend its cash runway into the third quarter of 2026.
DM199 (rinvecalinase alfa) is a recombinant form of human tissue kallikrein-1, currently in trials for acute ischemic stroke and preeclampsia, a pregnancy-related hypertensive disorder lacking FDA-approved treatments. DiaMedica's expansion into preeclampsia trials was also announced earlier today.
The private placement includes a $6.0 million commitment from non-management related parties for 2,400,000 shares, qualifying as a related party transaction under Canadian regulations, but exempt from certain valuation and minority shareholder approval requirements.
The sale of these securities has not been registered under the U.S. Securities Act of 1933 or any state securities laws, and is therefore restricted to registered or exempt transactions. DiaMedica has committed to registering the resale of the issued shares with the U.S. Securities and Exchange Commission.
This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities in any jurisdiction where such an offer, solicitation, or sale would be unlawful before registration or qualification under the securities laws of that jurisdiction.
Readers are reminded that the information presented is based on a press release statement.
In other recent news, DiaMedica Therapeutics has provided an update on its Q1 progress and challenges during an earnings call. The company reported a strong cash position of $46.5 million in combined cash and investments as of March 31, 2024, and plans for continued trial expansion. General and administrative expenses have increased to $2.1 million due to the expansion of the team.
DiaMedica is actively working on its ReMEDy2 trial and treated 1 million patients with Kailikang in China, indicating the safety of KLK1 therapy. Despite delays due to the COVID-19 pandemic, the company plans to appeal a recent judgment in their lawsuit against PRA.
The interim enrollment for the ReMEDy2 trial is expected to complete by the end of Q1 2025, with data readout for the interim analysis expected in Q3 2025. These are some of the recent developments surrounding DiaMedica Therapeutics.
InvestingPro Insights
As DiaMedica Therapeutics Inc. (NASDAQ:DMAC) progresses with its private placement strategy to fund clinical advancements, real-time data from InvestingPro provides a financial snapshot of the company's current status.
With a market capitalization of approximately $85.8 million, DiaMedica is a modest player in the biopharmaceutical space. The company's Price to Earnings (P/E) ratio stands at -4.25, reflecting its current lack of profitability. This is further evidenced by the adjusted P/E ratio for the last twelve months as of Q1 2024, which slightly decreased to -4.45.
InvestingPro Tips highlight that DiaMedica holds more cash than debt on its balance sheet, which is a positive sign for investors considering the company's financial stability. Moreover, the stock's Relative Strength Index (RSI) suggests it is currently in oversold territory. This could indicate a potential buying opportunity for investors who believe in the company's long-term prospects, despite the stock experiencing significant volatility and a poor performance over the last month, with a price total return of -21.53%.
For investors seeking a deeper analysis, there are additional InvestingPro Tips available, which can be accessed by visiting https://www.investing.com/pro/DMAC. Interested parties can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With these insights, investors can better assess whether DiaMedica's efforts in advancing its clinical trials are likely to pay off in the long run.
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