DiaMedica Inc.

DiaMedica Inc.

November 22, 2007 10:55 ET

DiaMedica Announces Formation of European Subsidiary

WINNIPEG, MANITOBA--(Marketwire - Nov. 22, 2007) - DiaMedica Inc. (TSX VENTURE:DMA), a drug discovery and development company focused on novel treatments for type 2 diabetes today announces the formation of DiaMedica Europe Ltd. in the United Kingdom. DiaMedica Europe Ltd. was formed to facilitate the performance of clinical studies in the European Union and is a wholly owned subsidiary of DiaMedica Inc.

"As we prepare for the next stage of human clinical development with DM-71, it is our goal to complete proof-of-concept phase II human studies with DM-83 and DM-99 as expeditiously as possible, beginning with DM-83," stated Dr. Karl-Gunnar Hidinger, President of DiaMedica Inc. "The European Union is recognized as an excellent environment for conducting clinical studies, and our European entity has been established as part of our strategy to move products into the clinic rapidly."

In early October, DiaMedica announced the preliminary results of its phase II human study with DM-71, which demonstrated the ability of DM-71 to reduce HbA1c when compared to baseline, as well as demonstrating safety and tolerability of the drug. In September, the Company announced that pre-clinical studies had demonstrated the ability of DM-83 to restore insulin sensitivity to pre-diabetic levels.

"The compelling phase II clinical trial results achieved with our lead product DM-71, combined with positive pre-clinical studies with DM-83 continues to build support for our science and we are excited to move DM-83 into phase II human studies in the European Union," stated Dr. Wayne Lautt, Chief Scientific Officer of DiaMedica Inc.

About DM-83

DM-83 is a novel combination of two drugs with well established safety profiles that are used to treat other unrelated human conditions. Pre-clinical studies have shown that DM-83 is effective at restoring insulin sensitivity to pre-diabetic levels and restoring the dysfunctional nerve signal which we recognize as critical in the development of type 2 diabetes.

About DiaMedica

DiaMedica is developing novel treatments for various stages of type 2 diabetes. Its lead product, DM-71, recently completed a successful phase II clinical trial and is preparing for the next stage of human studies. The Company has two other drugs in its clinical pipeline, DM-83 and DM-99, which are both progressing toward phase II human clinical studies.

Caution Regarding Forward-Looking Information

Certain statements contained in this press release constitute forward-looking information within the meaning of applicable Canadian provincial securities legislation (collectively, "forward-looking statements"). These forward-looking statements relate to, among other things, our objectives, goals, targets, strategies, intentions, plans, beliefs, estimates and outlook, including, without limitation, our anticipated future operating results, and can, in some cases, be identified by the use of words such as "believe," "anticipate," "expect," "intend," "plan," "will," "may" and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements.

These statements reflect management's current beliefs and are based on information currently available to management. Certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. Important factors that could cause actual results to differ materially from these expectations include, among other things: DiaMedica's early stage of development, lack of product revenues and history of operating losses, uncertainties related to clinical trials and product development, rapid technological change, uncertainties related to forecasts, competition, potential product liability, additional financing requirements and access to capital, unproven markets, supply of raw materials, income tax matters, management of growth, partnerships for development and commercialization of technology, effects of insurers' willingness to pay for products, system failures, dependence on key personnel, foreign currency risk, risks related to regulatory matters and risks related to intellectual property and other risks detailed from time to time in DiaMedica's filings with Canadian securities regulatory authorities, as well as DiaMedica's ability to anticipate and manage the risks associated with the foregoing. Additional information about these factors and about the material factors or assumptions underlying such forward-looking statements may be found in the body of this news release, as well as under the heading "Risk Factors" contained in DiaMedica's final long-form prospectus dated March 12, 2007. DiaMedica cautions that the foregoing list of important factors that may affect future results is not exhaustive. When relying on DiaMedica's forward-looking statements to make decisions with respect to DiaMedica, investors and others should carefully consider the foregoing factors and other uncertainties and potential events.

These risks and uncertainties should be considered carefully and prospective investors should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, DiaMedica cannot provide assurance that actual results will be consistent with these forward-looking statements. DiaMedica undertakes no obligation to update or revise any forward-looking statement.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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