On Thursday, Oppenheimer adjusted its outlook on DiaMedica Therapeutics Inc. (NASDAQ:DMAC), reducing the price target to $6 from the previous $7 while maintaining an Outperform rating. The firm acknowledged DiaMedica's fourth quarter 2023 earnings per share (EPS) of ($0.12), which surpassed both Oppenheimer's estimate and the consensus on Wall Street of ($0.14)E.
DiaMedica's progress with the Phase 2/3 ReMEDy2 trial for acute ischemic stroke (AIS) was noted as positive, with expectations to have most U.S. sites operational by the third quarter of 2024 to boost patient enrollment.
The company has made trial amendments, now focusing solely on moderate anterior circulation AIS with National Institutes of Health Stroke Scale (NIHSS) scores between 5 and 15, and excluding posterior circulation cases. These changes are seen as potentially reducing risk.
Despite these optimistic developments, the analyst expressed a cautious stance due to the historical difficulties in enrolling patients for stroke trials. The revised timeline anticipates full enrollment for an interim analysis by the first quarter of 2025, a postponement from the previously expected date in 2024. This delay is considered to introduce additional risk to DiaMedica's operational forecast.
The firm's reiteration of the Outperform rating indicates a belief in the potential success of DiaMedica's ongoing trial, despite the challenges and delays. The price target adjustment to $6 reflects the firm's recalibrated expectations in light of the enrollment delay and its associated risks.
DiaMedica Therapeutics is actively working towards advancing its ReMEDy2 trial, which is critical for the company's future growth and success in the treatment of AIS.
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