Q1 2022 DiaMedica Therapeutics Inc Earnings Call

Hospital sites activated, meaning able to recruit and enroll patients.

Today, we have nine sites activated and are on target to have approximately 17 sites activated by June which is aligned with our corporate targets.

Equally as important is recognizing that many hospitals have not been able to restore their research teams to pre pandemic levels.

In a situation where the study team is running below the staffing capacity. They understand we have concerns over the adequacy of their staff and their ability to manage the study patients after the patient leaves the hospital.

This may result in further uncertainty over the patient being able to receive before three week study treatment and.

It can be a barrier to decided enrolling a patient that they would otherwise normally recruit.

To address this.

We've recently brought on a nationally recognized clinical support service firm to assist us in engaging with those study sites that could benefit from us providing supplemental staff resources to support both the recruitment of patients in the management of the patients participation in the study as they transition from a hospital to an intermediate.

Care facility and ultimately into their homes.

From the many discussions we've had with study sites, our advisers and others. We understand that staffing had the study side number one issue reported I didn't have any research.

In providing assistance this additional staff, we intend to minimize the administrative burden on the physician the study site coordinators and the rest of the study team.

Yeah.

Thank you Kirsten and so we're very pleased to be getting into a rhythm of bringing hospitals on board and with the clinical team proactively developing creative solutions to drive enrollment in our stroke trial, even us clinical sites continue to deal with the staffing issues as we discussed in our last call. We are prioritizing clinical study site.

<unk> that have the highest enrollment potential ideally those that can enroll one patient per month.

I'm very interested to see if our staffing and solution can help sites achieve this type of enrollment rates.

So we are deeply committed to advancing <unk> nine the first pharmaceutical active synthetic form of <unk> protein in patients.

Nine represents a new therapeutic mechanism of action with the potential to offer stroke patients the prospect of improving recoveries and reducing the risk of recurrence and I want to stress that the urine drive form of the <unk> protein. It proved in Asia has been on the market.

Whereas treated several hundred thousand patients since 2005 the results from our first study remedy one were consistent with the reported results of the urinary <unk>. One. This is why we're so bullish on DM 189.

So let me reiterate that the patient treatment periods and our remedy to trial is quite short relative to other trials patients are treated for three weeks and the final follow up is at 90 days for a stroke patient. We continue to expect that we will that will complete the interim analysis for remedy to during 2023.

We'll provide more guidance on exactly when we get closer.

Turning briefly to our clinics as our CK D oar, our chronic kidney disease program. We're strongly believe in the unique ability of <unk> nine to both improve kidney function in patients with COPD and in controlling blood pressure in hypertensive patients by restoring low levels of <unk> one.

As we mentioned on our last call. We are focused on collecting final data and preparing next steps, including selection of lead cause of CK D that could bring a much needed therapy to patients.

We expect the final analysis of the full dataset will continue to demonstrate strong signals for the Iga nephropathy and in the Hypertensive African American population, while stroke is our main focus right. Now we are developing a plan to move forward with the <unk> program.

I would like to now provide a review of our financials, we announced our first quarter financial results and filed our quarterly report on Form 10-Q yesterday. After the market closed. These documents are available on either <unk> or SEC websites. Let me start with the balance sheet as of March 31, 2022, our combined cash and investments totaled.

41 million down $4 1 million from $45 1 million at December 31, 2021.

With this strengthened our balance sheet, we believe our cash balance will support the clinical development of <unk> nine and our operations into early 2024.

Research and development expenses for the first three months of 2022 were $2 million compared with $2 4 million for the first three months of 2021, a decrease of $400000. This decrease was driven mainly by a reduction in costs related to the <unk> trial, which completed patient enrollment.

In December 2021.

And a lower level of <unk> nine manufacturing process development work in the current year quarter as compared to the prior year quarter.

These decreases were only partially offset by increased costs incurred in a remedy to stroke trial and higher personnel costs related to the expansion of our clinical team in the current year period.

General and administration expenses were $1 6 million for the first three months of 2022 up from $1 2 million for the first three months of 2021. This 400.

The increase resulted from a combination of increased professional service costs directors and directors and officers liability insurance and personnel costs incurred in support of expanding our operations and clinical programs. As you can see we have made very productive first quarter, we continued to make significant progress in our <unk>.

Lead program, we brought on two key members to our management team and continue to expand the sites able to enroll patients in the remedy to trial.

Finally, our balance sheet remains strong and we believe we are well positioned to execute on the plans.

We reviewed for you today with that wed like to open the calls to questions. Operator, if you could please introduce the first analyst.

Thank you. Your first question comes from Thomas Flaten with Lake Street Capital markets. Please go ahead.

Thanks, Good morning, guys.

With from the sites that you already have activated and enrolling do you have some sense of what enrollment rates look like there or anything you can comment on there just to give us a sense of how productive these sites can be.

Yes, Tom it's still it's still a little bit early and we're just getting through getting these sites up.

Our target has been for our projections to the interim analysis next year is to get to a 0.25 enrollment rate per site per month. So basically one patient per site every four months.

So it's still a little bit early but I think over the coming months, we should be able to get more clarity on that enrollment rates and as part of our prepared remarks.

Mentioned that as well, we're really targeting here those sites that we think that have the ability to achieve one plus site per month.

And then just to clarify on the interim analysis I know in the prepared remarks, you said in 2023 and I think you just said in early 'twenty. Three is it is it still the goal to have first half of 'twenty three.

Yes, so our guidance for 2023, and we're still hoping that that will be the first half of the year.

Got it and then just one more quick question with respect to the cash runway what does that contemplate with respect to <unk> development is there any <unk> investment and that cash runway projection.

Very little our cash and our internal focus is really on this on the stroke trial.

Great I appreciate it thanks guys.

Thanks, Tom.

And your next question comes from Alex Nowak from Craig Hallum Capital Group. Please go ahead.

Great. Good morning, everyone. Just curious when did the support service will live for the.

With the stroke study and then what's the incremental cost in the study for adding that firm up.

So it's really just been the last few weeks getting getting things up and started so that expense really start kicking in here.

Over the next few months.

And.

It will be several hundred thousand dollars.

But nothing that will this is part of <unk>.

Into our current budget and in terms of our.

Expected cash outs stone to early 2024.

Okay. That's good and then the pickup in sight.

Active sites that are enrolling now with this really just a function of you've been partnering these sites for a couple months now and with Covid kind of waning here Theyre just actively pursuing more studies, maybe it's a little more detail on the conversation youre, having with the sites.

Yes, I think it's a combination of both.

Get us to get our study setup can easily take six to nine months, depending if it's an academic or or.

A smaller hospital. So I think it's really is a combination of the work that we've been doing over the last six to nine months and then clearly I think with the reduction in Covid cases, and hospitals, having beds available and a little more resources.

We think that this is also contributing to the uptick in <unk>.

Insights.

Understood and then you've made some very good personnel investments.

We're adding to support services and how should we think about additional investment that needs to be made to get ready for stroke.

Trial enrollment standpoint, or getting ready for eventual commercialization here.

Yes, so we will continue to looking to expand our team, but we don't we don't see.

A huge increase in terms of the staff.

We have this all kind of built into our current budget. So for us in particular for our clinical team is really most important right now.

The balance in terms of the staffing that we have internally.

With the with the CRO that we're using to help with the study.

In terms of the commercial.

And then in terms of the commercial part I mean in January this year, we brought on <unk>, our new Chief commercial officer, and really just helping to lay out what are those key things that we need to be thinking about a couple of years ahead of a product launch. So that's all going forward and it's really it's a balance in terms of the amount of cash we commit to that now.

Now versus.

As we get closer to the potential launch.

Excellent I appreciate the update thank you.

Thanks Al.

Your next question comes from Hasan <unk> from Oppenheimer. Please go ahead.

Alright, Thanks for taking the question just so I was just wondering just to reiterate I'm sorry. If you mentioned this but is the total target total number of sites still expected to be around 75 or has that changed.

Yes, so our plan is up to 75.

And what we're really focusing on near term with Theres a lot of activity happening right now and so it's really focusing on those sites in the near term that we think can be higher and rollers.

And then throughout the remaining of the year will continue to be adding on sites.

Gilead.

At a nice pace.

So that we can get to that interim analysis next year and then hopefully then be able to complete the study after.

In the interim is that still supposed to be around 140 patients.

Yes.

Okay, and then last quarter, you had mentioned about 10 sites I believe they were under contract and greater than 70% that we're engaged in startup phase.

Is this.

<unk> is still on track here or just to just to really make sure that these.

The issues related to the pandemic and the staffing is not delayed things.

Yes.

Yes, the two key variables here are the first one is.

Site activation and so from the time of contracting two youre getting the site activators that can still be another six weeks or so.

And so important in our lives con call seven weeks ago now.

We're at four sites that were active for at nine today and our internal target is to be at <unk> in June .

And then continuing at this pace here until the end of the year and then the second component is the enrollment rates of the patient right that's coming in per patient per month that 0.25.

And there's always upside here, so if that rig can come in higher that would be great. But importantly, our clinical team has been very active in understanding the challenges.

Clinical trial today in particular.

And with the staffing challenges.

That we're having at the hospital and bringing in.

<unk>.

A a consulting company to help us to provide those additional resources. When these hospitals needed as I think is really going to help in terms of getting sites on board and having these sites recruiting new patients for us.

Okay, Great and then lastly did you mentioned that maybe a few months from now we would start we would have a better idea of how that 25 patients per site per month enrollment is going and maybe even color on the sites that you are focusing to do one patient per month.

Yes, I think over the coming months, we shouldn't we should get some better color here in terms of the enrollment rate and then as part of that is the additional work specifically with having this home nursing company, helping us.

With support so we should hopefully in the coming months get more clarity.

Okay.

Alright, Thank you alright, thank you.

Thanks Frank.

Your next question comes from LMR Perez from Roth Capital Partners. Please go ahead.

Yes, good morning, Rick I think I know the answer to this question, but I would like to ask Greg.

Do you see any competing programs at the sites that you identified that may actually.

Interfere with your enrollment.

No we're really not I think more of the studies that are ongoing today that we're that we're seeing are companies that are doing mechanical thrombectomy.

And then there is also some studies for connected players, which is really more targeting.

Four five hour window, but really for this treatment window.

That has not seem to be.

To be an issue.

Okay. Okay. Thank you.

The kidney programs, which one do you think.

Considering the current landscape.

Most promising okay as a partnering candidates.

Yes, so we still we see an opportunity for both of our Iga nephropathy and also in our Hypertensive African American patients if we look at our phase.

Our basket study.

The data we have today, we look at the drops in.

And Alvin urea in the Hypertensive African Americans.

<unk>, 60% over three months.

We look at the very large drops in blood pressure.

We feel that that patient population, maybe more specifically.

Patients that one of the things we're looking at is hypertensive nephrosclerosis. So these are patients that are often salt sensitive, which we think is a key part of our mechanism. So.

While we're very focused you are on the stroke program.

Quietly behind the scenes here, where we're getting some additional feedback on on which cause of CK two to move forward.

But clearly we see there is a real need for patients with kidney disease.

And we think that the key aspect here is that these kidney patients have levels of <unk>. So if we can restore the levels.

We think we could potentially have a real treatment option.

For these patients in great need today.

Thank you very much Rick.

Thank you Amit.

Okay.

And there are no further question at this time I will turn the call back over to the presenters for closing remarks.

Alright, again, we'd like to thank everyone for joining us. This morning. We appreciate your interest in diabetics and your continued support and with that this concludes our call today.

This concludes today's conference call you may now disconnect. Thank you.

Yes.