DiaMedica Cancels Proposed Financing

MINNEAPOLIS, MINNESOTA--(Marketwired - Nov. 5, 2014) -

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DiaMedica Inc. (TSX VENTURE:DMA), a clinical stage biopharmaceutical company primarily focused on the development of novel, first-in-class treatments for diabetes and kidney disease, today announced that it has cancelled its previously announced public offering for the issuance of up to 24 million units at a price of $0.25 per unit. As a result of such cancellation, no shares will be sold pursuant to the proposed offering.

The financing, originally announced on October 22, 2014, had been expected to close on or about November 11, 2014. However, the Company's randomized, placebo-controlled, double-blinded Phase II clinical trial of DM199 in patients with type 2 diabetes mellitus was recently completed and it now expects to receive the results of the study from the clinical research organization in mid-November. As a result, the Company elected to cancel the financing.

"After careful consideration, we made the difficult decision to cancel the proposed public offering," said Rick Pauls, DiaMedica President & CEO. "Ultimately, we concluded it would be in the best interest of all DiaMedica shareholders to report the results of the Phase II study before completing a prospectus financing. The completion of this Phase II study represents another significant milestone for DiaMedica and we look forward to sharing the results."

A total of 37 patients were enrolled with 35 completing the entire one-month study. The primary endpoints of the study are to evaluate the safety, tolerability and pharmacokinetics of two dose levels of DM199. Secondary endpoints include evaluating the effects of DM199 on diabetes biomarkers including: fasting glucose, insulin and C-peptide; meal tolerance test; HOMA2-IR; HbA1c; lipids and other metabolic markers. Prior to the study, the patients complete a one-month wash out of their diabetes mediations and then are sequestered for the month-long study.

About DiaMedica

DiaMedica is a publicly traded (TSX VENTURE:DMA) clinical stage biopharmaceutical company focused on the discovery and development of novel therapies to treat diabetes and kidney disease. DiaMedica's lead clinical product, DM199, is a recombinant human protein known as rhKLK1 that represents a novel approach to treating diabetes and kidney disease. DiaMedica is also developing a monoclonal antibody, DM204, for the treatment of Type 2 diabetes, which is in preclinical development. DiaMedica's common shares are listed on the TSX Venture Exchange in Canada under the trading symbol 'DMA'.

FORWARD-LOOKING STATEMENTS

The statements made in this press release that are not historical facts contain forward-looking information that involves risk and uncertainties. All statements, other than statements of historical facts, which address DiaMedica's expectations, should be considered forward-looking statements. Such statements are based on management's exercise of business judgment as well as assumptions made by and information currently available to management. When used in this document, the words "may", "will", "anticipate", "believe", "estimate", "expect", "intend" and words of similar import, are intended to identify any forward-looking statements. You should not place undue reliance on these forward-looking statements. Forward looking statements in this news release include, but are not limited to, the size and price of the Offering, the Company's objectives, goals, future plans and statements regarding the Offering and the use of proceeds therefrom, the expected closing date of the Offering and obtaining Exchange approval for the Offering. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to: the need to satisfy regulatory and legal requirements with respect to the proposed Offering; uncertainties associated with satisfying all remaining contractual obligations of the Phase II study and DM199 in patients with type 2 diabetes; uncertainties associated with the Offering size and price of Units; uncertainties in obtaining listing approval of the Common Shares from the Exchange; changes in equity markets and inflation; and the additional risk factors described in detail in the Prospectus and DiaMedica's other filings with the Canadian securities regulators, all of which are available on SEDAR (www.sedar.com). Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results could differ materially from those anticipated in these forward-looking statements. DiaMedica undertakes no obligation, and does not intend, to update, revise or otherwise publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of any unanticipated events, unless required by law. Although management believes that expectations are based on reasonable assumptions, no assurance can be given that these expectations will materialize.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of the contents of this press release.