DiaMedica Inc.

DiaMedica Inc.

October 16, 2008 15:04 ET

DiaMedica Grants Options to Board Members

WINNIPEG, MANITOBA--(Marketwire - Oct. 16, 2008) - DiaMedica Inc. (TSX VENTURE:DMA), a drug discovery and development company focused on a novel approach to treating Type 2 diabetes has announced that it has granted 75,000 incentive options to certain officers or directors of the Company priced at $0.70. The options are set to expire five years from the date of grant and are subject to the approval of the TSX Venture Exchange.

About DiaMedica

DiaMedica is developing novel treatments for various stages of Type 2 diabetes. The Company has completed a phase II clinical trial with its lead product, DM-71, which demonstrated the ability to reduce HbA1c levels and weight in man. The Company recently completed a phase II clinical trial with DM-83 that resulted in a reduction in the amount of peak insulin required to process glucose, which could indicate that DM-83 may prolong the insulin producing ability of the pancreas. DiaMedica's third drug in clinical development, DM-99, has been shown, in pre-clinical studies, to cause muscle to increase the removal of glucose from the blood into the muscle by over 40%. Based on its newly discovered mechanism, the Company has been issued two U.S. patents and currently has 35 pending patents worldwide for a broad range of diabetes and related metabolic disorders including obesity and hypertension.

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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