Matthew Caufield, I'm a senior biotech analyst here at H.C. Wainwright. Our next company is DiaMedica Therapeutics. I'm joined by David Wambeke, Chief Business Officer. Thank you to DiaMedica for being here. Thanks for having us, Matt. We really appreciate it. Absolutely. So maybe to start things off at a high level, DiaMedica has a platform focused on ischemic diseases with biologic asset DM199. Can you talk to us about its clinical development, maybe focusing on the current pre-eclampsia progress? Sure. Today, we're a late-stage biotech company. We're in a pivotal phase II/III for ischemic stroke. We're also simultaneously using the same asset, conducting a phase II in pre-eclampsia. The next key milestone for our company is in the next 60 days, we'll be reporting out data from our pre-eclampsia study, the initial proof of concept. Very exciting. Maybe you could kind of give us just a high-level overview of pre-eclampsia for those that may not be as familiar with it. Yep. Yep. Pre-eclampsia is a hypertensive disorder of pregnancy. It's really a harrowing condition. I mean, one where the mom has to choose at times between the life of her fetus and that of her own. It develops around 20 weeks into gestational age. It's characterized by new onset hypertension. These are patients who have blood pressures of 140 over 90. They also have some form of end-organ dysfunction. Oftentimes, it's proteinuria, but it could be elevated liver function enzymes, etc. Today, there are actually no treatments for pre-eclampsia whatsoever. There's no FDA-approved therapies. Unlike other therapeutic areas like cancer, where it's moving at breakneck speeds, I mean, truly the unmet need is large, and it's kind of in the dark ages. That's very helpful. So thinking about DM199 and its mechanism, it acts as a recombinant human tissue kallikrein-1, or KLK1, serine protease enzyme. Can you describe how this mechanism could facilitate perfusion? Yes. Yep. Just like you mentioned, we've made a recombinant form of an endogenous protein called tissue kallikrein- 1. Very challenging protein to manufacture with enzymatic activity. That's been the basis of our intellectual property. We've tested it to date in over 300 humans. What it does, and just the biologic mechanism of it, is it produces a peptide called bradykinin. This peptide will bind to a receptor on the surface of endothelial cells. You can think of the endothelial cells as the inner lining of the blood vessels. Once that receptor is activated, it'll produce three vasoactive signaling molecules: nitric oxide and its secondary messenger cGMP, prostacyclin, its secondary messenger cAMP, and then a grab bag of factors called, hyper—sorry, endothelial-derived hyperpolarizing factors. This could be potassium, calcium, hydrogen peroxide, and other mediators that cause the smooth muscle cell to hyperpolarize. The peptide produced, it activates that receptor on the surface of the endothelium. Those signaling molecules will traverse through the blood vessel wall. That is what causes relaxation of the smooth muscle cells in the artery and triggers vasodilation and increases perfusion to key organs. Very helpful. And kind of along those lines, could you talk about early onset pre-eclampsia or the most severe, one of the more severe subtypes, and how that plays into sort of the trial design? Yep. Early onset pre-eclampsia is the most severe type of pre-eclampsia. It is bifurcated by early and late. The stage early is everything before 34 weeks of gestational age, and late is everything after 34 weeks of gestational age. The disease itself in the early setting, in early onset, is more severe. It is also the most acute need because if you are at 37 weeks of gestational age, let's say, the cure for pre-eclampsia currently is to give birth. If you give birth and you deliver the placenta, it is a placental disease, so you largely can cure the disease by delivery. At 37 weeks, in today's medical standards, this baby is going to be doing well in the NICU, or if he even has to go to the NICU, this baby will be well. If you're at 28 weeks of gestational age, the same can't be said. That's where every day of prolonging pregnancy can matter between dramatic events to the developing fetus. Early onset is less than 30,000 patients. Early onset is less than 34 weeks. Late onset is above 34 weeks. Very helpful. Considering present therapies that are at least out there, including blood pressure management, anticonvulsives to prevent seizures, corticosteroids, can you tell us a little bit about the market opportunity and prospective adoption for DM199? Do you feel that this would be readily available and/or acceptable for patients and their treating physicians? Yeah, we actually anticipate commercially a very high penetration rate, and I'll tell you why. Initially, we're going to be looking at the early onset pre-eclampsia patients. Today, that's up to 1% of all pregnancies in the United States are early onset, and there's about 4 million live births. We estimate the market opportunity at about 30,000 patients. These women are hospitalized. It's a severe form of the disease. Again, you're trying to prolong the pregnancy to gain much-needed in utero time. Today, the current treatment options are really antiquated and not effective. What you have are blood pressure medications, but the key asterisk here is that you can't give the best blood pressure meds. You cannot give ACE inhibitor. You cannot give ARBs. Thiazide diuretic is very rarely prescribed. The reason is that these are small molecules. They'll pass through the placental barrier. They passively diffuse, and they can harm the fetus. The biggest advantage of our drug, we've shown very conclusively historically that we can lower blood pressure. We do so through the endothelial nitric oxide pathway, which we think confers a number of other endothelial protective benefits. The biggest thing about our drug is it's a large molecule. It's a large enzyme. There's no known active transport mechanism for a serine protease enzyme like ours. We don't believe it'll cross the placental barrier, which really eliminates a lot of risk to developing fetus. Today, the current medications that are used for antihypertensive treatment are labetalol and nifedipine. These are alpha beta blockers and calcium channel blockers. They can manage symptoms, usually temporarily, but eventually, it's a progressive disease, and it gets worse, and ultimately, those will stop working. If you look at the last study that was conducted in early onset pre-eclampsia, which is called the PRESERVE-1 study, it looked at recombinant antithrombin. Half of the mothers in that study delivered early within five days of being randomized. They delivered early because they were refractory to existing hypertensive meds despite maximal intervention. These women were giving birth at less than 30 weeks. They were only able to carry for five days. These blood pressure medications, again, they do not manage the disease. They will transiently treat the symptoms, but at least in half the cases, they wear off. That is where we hope we can bring in a therapy that sits on top of standard of care, labetalol and nifedipine, that is actually potentially disease-modifying, that is endothelial protective, as well as lowering blood pressure because you really need to treat the underlying endothelial dysfunction in order to really prolong pregnancy. Understood. One question that comes up that I wanted to ask you is that the investigator-sponsored phase II, currently underway for pre-eclampsia, is being conducted in South Africa. Why was that site selected at this stage of development? Yeah, so it's really been a privilege and a pleasure to work with the team down in Cape Town, South Africa. Cape Town has a population of around 5 million people, and the rates of pre-eclampsia are quite high. Professor Cathy Cluver leads the research unit in pre-eclampsia in Cape Town. She's run three consecutive studies. She's arguably the world's leading trialist in the world. She's run three consecutive studies. She's a battle-tested investigator. There's not as many of these studies that are going on in the United States. She has access to patients, and she can just conduct very thorough and rigorous clinical trials. They had actually been looking for a molecule that could increase nitric oxide but not cross the placental barrier. It was a bit of a match made in heaven. Again, she's been able to recruit patients very quickly. We just started our clinical trial in November. We've said most recently that we'll have our part 1A results. This is a first in pregnancy, not a first in man, but a first in pregnancy study. We're looking to get up to 30 patients. It's just a really good fit overall. Great. In terms of the trial parts for the pre-eclampsia patients, can you differentiate the part one versus part two? I know you talked about part 1A, that's sort of the near-term catalyst. Yep. Yeah. Part 1A will be reading out, we gave guidance at the second half of June to the first half of July. This is a really important distinction. Part 1A is actually going—and I'll tell you a little more—part 1A is actually not in the setting which is called expectant management. Expectant management today is where you're trying to prolong the pregnancy. You want to gain every precious day of gestation that you can. The current patients in part one are not in expectant management. The clinical determination for birth has been made. Mom is giving birth within the next 24 hours. If it's a vaginal delivery, it could be longer, depending on the labor process. Mom is giving birth. We're not in this setting trying to prolong the pregnancy. Why we're doing it in this setting is we'll give the first dose of our drug by IV, and then we'll treat them two hours later with a subcutaneous injection. Why we're doing it in this setting is that the only way to definitively know if your drug crosses the placental barrier is to get access to the placenta. The only humane way to get access to the placenta is birth. We do not want to be treating in the expectant management setting for two weeks, call it, if our drug was crossing the placental barrier all the while because then we would be giving more exposure to the fetus. We would be shocked if it occurs, but that's what science is for. We have to run the test, and you cannot cut any corners in pregnancy. I mean, how it's described to me by investigators, they keep it simple. They say, "David, it's like you or I trying to walk through a wall." Physics will not matter. Just the size of your molecule, it's 26 kDA, and only 500 Da will pass passively. They do not think it will. Again, we cannot cut any corners. That is the key endpoint that we are going to be looking at first from a safety standpoint: does our drug cross the placental barrier? If so, in what concentrations? I mean, if there is a small amount that passes, it is probably okay because this is an endogenous protein. This is not something that is a small molecule that will accumulate in the tissues. It has an on-target effect. We really want to show that our drug is not passing or passing in very low concentrations. In that same part of the study, our preliminary efficacy signals that we're going to be wanting to look at are: does our drug lower blood pressure? These women are not going to be well managed. They're going to have systolic above 150, again, being on maximal labetalol and nifedipine standard of care. We'll also be looking to see if we can dilate intrauterine arteries. The sum total of all of those endpoints, we think we'll be able to show, "Hey, we're lowering, but if positive, does our drug lower blood pressure?" If it does, it's through the nitric oxide pathway, which we think confers additional endothelial protective effects. Two, does our drug cross the placental barrier? If it doesn't, that's an enormous safety advantage that no small molecule can claim. Three, are we dilating the intrauterine arteries? These are the big, large branch that supplies the placenta. If so, that could indicate that we're increasing perfusion. We think it's proof of concept with depth and weight. From there, from part one, part 1A will be a dose-ascending study. We start very low and work our way up. Part 1B will be an expansion cohort of 30 patients at the exact same dose just to confirm it. Part one—long-winded explanation, I'm sorry—part two will be in the expectant management setting. This is the commercial setting. This is the setting where we're trying to prolong gestation. That'll be our part two. Part one, again, we need to confirm safety and then these pharmacodynamic markers that we think are very, very important for our therapy. Great. That first cut of the pre-eclampsia data will be, you said, late June, early July, folks. Yep. Second half of June to the first half of July. Very exciting. Then one other topic was thinking about China. When we consider the stroke KLK1 program and analogs within the Chinese market, have any such KLK analogs been tested in pre-eclampsia, providing similar clinical or commercial validation? Yeah, that's a good question. Just for the audience, what's unique about our story is there are two forms of this protein today that we've made a recombinant version of that are used in China. One is derived from human urine. You might ask why human urine. The reason is, in large part, the KLK1 enzyme is synthesized in the distal nephron of the kidney. A small amount does get excreted into the urine. That form is being used exclusively today to treat ischemic stroke. We think that has kind of given us a playbook: which patients should we target, the urinary form, which patients should we target, how long should we treat them, which patients should we exclude, what severity. A lot of things that biotechs have to find out the hard way, we've almost been given a playbook. That's very, what, there's hundreds of papers using urinary KLK1 in China. It's approved. They're treating over 500,000 patients annually. It has national government reimbursement. That's the urinary form. There's also another form of the protein derived from pig pancreas. This is, again, it's not what we produce naturally. It's 67% homologous, and it's used for hypertension and certain other vascular diseases, the porcine form. It's highly genericized. We have been able to track down at least 10 publications using the porcine form of the KLK1 protein. Again, there isn't as big of a breadth of clinical research using it, but we have found these 10 publications. A, it shows it's safe, which is, again, the first and foremost important thing in pregnancy. B, it shows, this is globally across these papers, that it's lowering blood pressure. It also shows us dilating the intrauterine arteries, so. Yeah, that tells me—oh, go ahead. No, I just say that's encouraging. We don't tout them too loudly. I mean, there are only 10 papers, so we had to have them translated. We much prefer that these papers exist than they didn't. We look to try to validate it with our own data here in the near term. Yeah. No, that is helpful for the KLK1 mechanism. I know our focus is on pre-eclampsia, but I did want to give a little bit of a spotlight to the acute stroke program as well. You have, as you mentioned, the phase II/III development for DM199 in acute ischemic stroke. Can you tell us a little bit about the ReMEDy2 trial and its current progress? Yep. Yeah. ReMEDy 2 is a potential pivotal study that has the potential for registration on a single study. Again, I've been informed—we've been informed a lot by the clinical use in contemporary practice in China. It's going to effectively, today, there are two good treatment options for stroke. Mechanical thrombectomy, it's an endovascular procedure where they run a catheter up into the brain, and they extract the thrombus or the emboli. That's very effective. One of the challenges is it's indicated for a large vessel. If you get into smaller distal arteries, you can't use mechanical thrombectomy. You just can't get the catheter in. That's about 20%-30% of strokes are eligible for mechanical thrombectomy. The other is TPA, which is a clot buster. It intends to dissolve the clot and recanalize the artery, reopen the artery through dissolving the clot. Those therapies both enhance blood flow, which is a proven modality versus other therapies in strokes, neuroprotectants, which have not been able—have not had any success. They have been tried extensively. These blood flow enhancing modalities work. Our drug, what we believe is, again, it is a perfusion-based modality that we can improve collateral circulation. The patients that we are targeting in this phase II/III study are not eligible for thrombectomy, or they did not receive TPA, or they were refractory to TPA. Effectively, TPA did not work. In half of instances, TPA recanalizes the artery, opens it up, but in the other half, it does not do its job. We are targeting those patients today who really have no treatment option. That is a very, very large market opportunity. Like I said, mechanical thrombectomy, I think the last estimates I saw treated 70,000 patients. TPA, probably similarly, and there are 700,000 ischemic strokes. We are going after those patients who today do not have a great treatment option. We are in a pivotal phase II/III study. We are targeting moderate stroke severity. You need much larger sample size if you go into mild patients. We think moderate is the goldilocks zone for us. We treat them for three weeks with our drug. The endpoint is the modified Rankin score of 0-1 at 90- days, which is a dichotomous endpoint. The FDA approves stroke drugs on two endpoints. It is either that one or the dichotomized MRS of 0-2 at 90- days. Got it. I mean, another key point is the timeframe. Like the normal conventional stroke treatments need to be provided within the first couple of hours. Thank you. Whereas DM199, I mean, I think you're looking at upwards of the 24-hour window, which would be kind of a game changer for stroke. Yeah. Yeah. Thank you. So that's exactly it. TPA, it has a four-and-a-half-hour window. It's actually most effective in the first hour. Then out to three hours, it's effective, and its efficacy wanes over time. The biggest limitation is a lot of patients just do not arrive to the hospital. That is where our drug comes out. It has a 24-hour treatment window. In the United States, based on our market research, at least 90% of patients can make it to the emergency department within a 24-hour treatment window. That is, again, where we think we'll be able to capture a large amount of these patients just with that more generous window. Yeah. No, I think that'd be huge for patients. In our last minute or two here, I wanted to ask you about read-through or potential read-through for DM199 between pre-eclampsia and sort of relevance in acute ischemic stroke. Obviously, there are different indications. We've spoken about this before in the past. Just for our listeners, do you feel that there is some sort of validation there from pre-eclampsia to start looking at the broader pipeline? I think there is some read-through because if we're increasing, for instance, in pre-eclampsia, I mean, if we're dilating these intrauterine arteries, that's increasing microvascular blood flow for lowering blood pressure. We're increasing microvascular blood flow. That's exactly what we hope to be doing in our stroke study is increasing microvascular blood flow, but specifically in the penumbra. I can't go into the mechanism of how, but we believe we're able to focally vasodilate specifically in the penumbra through the upregulation of a key receptor. I do think there is some read-through, and I do think that it'll help too in stroke if we can validate some of these papers in China with porcine form, and maybe people will start to look more favorably on the hundreds of papers we have with the urinary form, so. Right. That'd be great. Maybe just in our last moment then, do you feel there are aspects of the platform that are underappreciated currently by investors or by the market? Yeah. I think the biggest thing is the de-risk nature of what we see in our programs. I mean, given all the literature that we've had and with the urinary, with the crude forms. With our pre-eclampsia study, I mean, it's interesting. I mean, we've shown very, very conclusively that we can lower blood pressure, I mean, time and time again. The number one reason, as I mentioned earlier, these moms give birth prematurely is because they can't manage their blood pressure. Half of them in that study, the PRESERVE- 1, give them the best meds they can, and in five days, they deliver. Five days is inadequate, especially if you're looking at a 23-weeker or a 24-weeker. The chances of a baby surviving at 23 weeks are 50%. Days are precious. Yeah. No, absolutely. Lastly, I wanted to highlight your upcoming KOL event later this month. Yeah. We're excited to host a KOL event to talk through. It's on May 28th, 8:00 A.M. Eastern Time. We'll be having two of our partners in Melbourne, University of Melbourne, Professor Stephen Tong and Professor Sue Walker, as well as a U.S. KOL, Professor Baha Sibai down at the University of Texas, Houston Memorial Hermann. They'll talk about the disease, the unmet need, the current treatment landscape, and the inadequacy thereof. We'll also go into our trial design and talk through the endpoints to help to educate people. What does it mean to dilate the intrauterine arteries and things of that nature and kind of what to expect for the upcoming readout? Great. We look forward to that. With that, David, I want to thank you. Thank you. DiaMedica Therapeutics. Thank you very much for participating, and thank you everyone.