DiaMedica Therapeutics Raises $16.4 Million in IPO to Advance DM199 for Neurological and Kidney Diseases

Recently, VCBeat (WeChat ID: vcbeat) learned that North American biotechnology company DiaMedica Therapeutics raised $16.4 million through an initial public offering (IPO).

The Plymouth-based company priced its initial public offering at the low end of the expected range, at $4 to $5 per share. In trading last Friday afternoon, its stock fell about 9%, to $3.63. (The broader market also performed poorly that day: the Dow Jones Industrial Average, the S&P 500, the Russell 2000, and the Nasdaq Composite all declined by 2% or more in afternoon trading.)

DiaMedica filed for an initial public offering in late November, aiming to raise approximately $15 million. The Minneapolis-based investment firm Craig-Hallum Capital Group served as the underwriter for the offering.

DiaMedica’s stock is traded on the Nasdaq Stock Market under the ticker symbol DMAC. The Company’s common shares are also listed on the TSX Venture Exchange in Canada under the ticker symbol DMA, and trade over-the-counter in the United States on the OTCQB Venture Market under the ticker symbol DMCAD.

DiaMedica is a clinical-stage biopharmaceutical company dedicated to developing novel therapies for neurological and renal diseases. The company has 11 employees, no products for sale, and no revenue from operations. It reported a net loss of $4.3 million last year and $2.4 million in the first half of this year.

In fact, DiaMedica has incurred annual losses since its inception, primarily funding its operations through public and private equity sales, warrants, stock options, interest income from invested funds, government grants, and tax credits.

DiaMedica will use the proceeds from this public offering to further advance the clinical development of its lead compound, DM199. Currently undergoing Phase II clinical trials for acute ischemic stroke, DM199 is a recombinant human tissue kallikrein (rh-KLK1). The company plans to conduct clinical trials of DM199 in patients with chronic kidney disease.

Tissue kallikrein KLK1 activates the kallikrein-kinin system (KKS) to release kinins, exerting beneficial effects for stroke treatment, including vasodilation, anti-inflammatory action, cellular repair, and reduction of apoptosis. KLK1 is a synthetic protein; in overseas markets, KLK1 extracted from human urine is used to treat conditions such as stroke and hypertension.

Currently, DiaMedica has made significant progress in utilizing DM199 for the treatment of stroke and kidney disease. In September this year, the company also entered into a collaboration with Aohong Pharmaceutical, a subsidiary of Fosun Pharma, granting Aohong exclusive rights to import registration, clinical development, and commercialization of the DM199 formulation in Mainland China, as well as the Hong Kong, Macao, and Taiwan regions. Under the agreement, Aohong Pharmaceutical will pay DiaMedica up to $32.5 million in licensing fees and sales milestone payments.

DiaMedica, founded in 2000, is a clinical-stage biopharmaceutical company dedicated to developing novel therapies for neurological and renal diseases, with the ambition of becoming a leader in the research, development, and commercialization of innovative recombinant proteins for the treatment of these conditions.

The company primarily focuses on acute ischemic stroke (“AIS”) and chronic kidney disease (“CKD”), and plans to develop the commercial potential of its candidate drug, DM199, for the treatment of AIS and CKD through clinical trials.

Craig-Hallum Capital Group, founded in 1997 and headquartered in Minneapolis, is a creativity-driven research, trading, and investment banking firm. The company emphasizes strategic research and operates under the philosophy of “delivering reliable, differentiated advice and services to add value to clients’ businesses.”

Aohong Pharmaceutical is a high-tech biopharmaceutical company dedicated to the research and development of drugs for the treatment of cardiovascular and cerebrovascular diseases, central nervous system disorders, and tumors. Established in 1999, Aohong Pharmaceutical joined Fosun Pharma in 2011 and is one of the member companies within Fosun Pharma’s pharmaceutical segment.

Aohong Pharmaceutical’s core product, Aodejin, is primarily used to improve neurological deficits caused by cerebral circulatory disorders and nutritional deficiency diseases, holding a distinct market advantage in the niche segment of cerebrovascular and peripheral vascular therapeutic agents.

Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (“Fosun Pharma”; stock codes: 600196.SH, 02196.HK), established in 1994, is a leading healthcare industry group in China. Fosun Pharma’s business spans the entire healthcare value chain, primarily comprising pharmaceutical manufacturing and R&D, medical services, medical devices and medical diagnostics, as well as pharmaceutical distribution and retail.

Currently, Fosun Pharma has products that hold leading positions in their respective niche markets across therapeutic areas including hematology, the central nervous system (CNS), metabolism and digestion, anti-infectives, cardiovascular diseases, and oncology.