DiaMedica Inc.
TSX VENTURE : DMA

DiaMedica Inc.

November 29, 2007 11:11 ET

DiaMedica Completes Data Analysis of DM-71 Phase II Trial and Updates Development Plan

WINNIPEG, MANITOBA--(Marketwire - Nov. 29, 2007) - DiaMedica Inc. (TSX VENTURE:DMA), a drug discovery and development company focused on novel treatments for type 2 diabetes is pleased to report on the final data conclusions from its 12 week, Phase II proof-of-concept study with DM-71, including previously unreported data related to fructosamine and safety markers, and outlines its continued development program for DM-71.

HbA1c

Final analysis of the study data confirmed the findings reported from the preliminary analysis announced October 1, 2007. In the 12 week study, DM-71 had an absolute reduction of 0.32% (p equals 0.0066) from baseline of mean HbA1c in the evaluable population, and an absolute reduction of 0.55% (p equals 0.0063) from baseline in a pre-specified subgroup of patients with moderate and higher elevated HbA1c (greater than or equal to 8.0%).

"From a clinical standpoint, a drug for type 2 diabetes has to control an individual's blood sugar, as measured by HbA1c (glycated hemoglobin), the gold standard for diabetes drug approvals," stated Dr. Daniel Porte, Past-President, American Diabetes Association; Professor of Medicine at the University of California, San Diego; and member of the DiaMedica Scientific Advisory Board. "A placebo subtracted HbA1c reduction of 0.6% is generally regarded as a benchmark for an FDA approvable drug."

"Clinical trials for type 2 diabetes drugs typically run for up to 30 weeks as it can take this long to see the full effect on HbA1c," added Dr. Wayne Lautt, Chief Scientific Officer of DiaMedica Inc. "The fact that we achieved a statistically relevant drop in HbA1c in just a 12 week period, roughly half the duration of most diabetes trials, is very compelling and encouraging."

Fructosamine

An early indicator of blood glucose is the change in fructosamine level. Fructosamine (glycated albumin) measures short term control of blood sugar for the past 1-3 weeks. Final analysis of the study data showed a significant decrease in fasting fructosamine (-21.75 µmol/L, p equals 0.0469), while no changes were observed in the placebo group (-2.20 µmol/L, p equals 0.6847). Fructosamine levels declined steadily through to the final visit in the 12 week study.

"The observed continuous decline in fructosamine levels is an indication that the effect of DM-71 has not plateaued through the 12 week study and we expect to see a greater clinical effect over a longer treatment period," stated Dr. Alan D. Cherrington, Past-President, American Diabetes Association; Holder of the Turner Chair in Diabetes Research, Vanderbilt University Medical Center; and member of the DiaMedica Scientific Advisory Board.

Weight Loss

Consistent with the October 1, 2007 announcement, treatment with DM-71 showed statistically significant absolute weight reduction of 1.38 kg from baseline of mean weight per patient (p equals 0.0005). Additionally, mean Body Mass Index (BMI) was found to decrease significantly in the DM-71 treatment group of the evaluable population (-0.51 kg/m2, p equals 0.0004), while no change was observed in the placebo group (-0.16 kg/m2, p equals 0.3091).

"In contrast to some current type 2 therapies, which result in undesired weight gain, our science predicted that weight loss was an expected result in our trial," commented Dr. Lautt. "The observed weight loss in our study is very exciting and an even longer duration of therapy is predicted to continue the weight loss."

Safety

The results of the study confirmed the safety and tolerability of DM-71 as there were no unexpected adverse events. Of particular importance, there were no serious adverse events in the study.

The study results also demonstrated a decrease from baseline in the mean values of ALT and AST at each of the visits in the DM-71 group. ALT and AST are enzymes commonly used to test for toxicity. An increase in the levels of these enzymes could indicate damage to body organs.

"DM-71 is a combination of drugs with a long history of use and well-established safety profiles. The reductions in ALT and AST enzymes underscore the safety of DM-71," commented Dr. Lautt.

Conclusions

"Based on these results we will pursue further study of DM-71 in a large scale Phase IIb study measuring HbA1c over 24-30 weeks as expeditiously as possible," stated Dr. Karl-Gunnar Hidinger, President of DiaMedica Inc. "The design of the upcoming Phase IIb study will benefit greatly from our completed Phase II proof-of-concept study and recent studies in the area of type 2 diabetes."

The Company plans to confer with the US Food and Drug Administration in Q1 2008 with the intention to initiate the next stage of human study in 2008. The upcoming study will also be expected to further elucidate the observed weight loss in the proof-of-concept study and demonstrate that longer duration results in further weight loss.

"To be truly successful in the market, a type 2 diabetes drug must demonstrate efficacy in terms of HbA1c and be safe and well tolerated with a low risk of adverse side effects," continued Dr. Hidinger. "The results of our Phase II proof-of-concept study clearly indicate that DM-71 is on target to meet these requirements."

About DM-71

DM-71 is a novel combination of two drugs and DiaMedica recently completed a Phase II human study demonstrating its ability to lower HbA1c levels in man. Pre-clinical studies have shown that DM-71 is effective at restoring insulin sensitivity and restoring the dysfunctional nerve signal which the Company recognizes as critical in the development of type 2 diabetes. DM-71 is a combination of bethanechol and N-acetyl cysteine, two drugs with well established safety profiles that are used to treat unrelated human conditions.

About DiaMedica

DiaMedica is developing novel treatments for various stages of type 2 diabetes. The Company recently completed a phase II clinical trial with its lead product DM-71 which demonstrated the ability to reduce HbA1c levels in man. The Company has two other drugs in its clinical pipeline, DM-83 and DM-99, which are progressing toward 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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