DiaMedica Inc.

DiaMedica Inc.

March 22, 2007 09:48 ET

DiaMedica Announces Closing of Its Initial Public Offering and Listing on TSX Venture Exchange as "DMA"

WINNIPEG, MANITOBA--(CCNMatthews - March 22, 2007) -


DiaMedica Inc. (TSX VENTURE:DMA), a clinical stage biotechnology company developing novel treatments for various stages of type 2 diabetes, is pleased to announce that it has successfully completed its initial public offering of common shares. DiaMedica's shares will begin trading on the TSX Venture Exchange today under the symbol "DMA".

Due to high demand, the offer was increased to accommodate a portion of the additional volume. The initial distribution, intended to be a minimum of 3,000,000 and a maximum of 5,000,000 shares, was increased to 5,500,000 shares at a price of $1.00 per share.

The Company intends to use the net proceeds of the offering, expected to be approximately $5.0 million, for research and development, general and administrative expenses, as well as to fund the costs associated with additional clinical trials for its pipeline of products. Enrollment is well underway in a phase IIa clinical trial for the Company's lead product, DM-71.

"We have reached another important milestone in the Company's development", stated Dr. Karl-Gunnar Hidinger, President of DiaMedica Inc. "We will now have the resources to continue development of DM-71, as well as initiate one or more phase II trials for other products in our development pipeline."

Dundee Securities Corporation and Research Capital Corporation were the underwriters of the offering. In connection with the offering, the agents received broker warrants exercisable in an amount equal to 4% of the number of common shares sold under the offering, as well as 9% of the gross proceeds from the offering in cash compensation.

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

About DiaMedica

DiaMedica is developing novel treatments for various stages of type 2 diabetes based on a mechanism involving nerve signaling to the liver. Rather than treating the symptoms, DiaMedica addresses the cause of type 2 diabetes with multiple points of intervention. Its lead product, DM-71, is currently in a phase II clinical trial. The Company has two other products in its clinical pipeline, DM-83 and DM-99.

Except for historical information, this press release may contain forward-looking statements which reflect the Company's current expectation regarding future events. These forward-looking statements involve risks and uncertainties, which may cause but are not limited to, changing market conditions, the successful and timely completion of clinical studies, the establishment of corporate alliances, the impact of competitive products and pricing, new product development, uncertainties related to the regulatory approval process and other risks detailed from time to time in the Company's ongoing quarterly and annual reporting.

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

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