Participants

Lorianne Masuoka; Chief Medical Officer; DiaMedica Therapeutics Inc

Rick Pauls; President, Chief Executive Officer, Director; DiaMedica Therapeutics Inc

Scott Kellen; Chief Financial Officer, Company Secretary; DiaMedica Therapeutics Inc

Thomas Flaten; Analyst; Lake Street

Chase Knickerbocker; Analyst; Craig-Hallum

Matthew Caufield; Analyst; H.C. Wainright.

Presentation

Lorianne Masuoka

(Technical difficulty)
That thrombolytics have a very short half-life, approximately 24 minutes and are therefore cleared from the body rapidly. These agents undergo seven half lives in less than three hours and are effectively cleared from the patient's system three hours after dosing. So, if a patient is presenting with persistent moderate to severe stroke severity, several hours after TPA is cleared from the system, it indicates that thrombolytics didn't meaningfully correct the neurological deficit.
We colloquially refer to this type of patient as the TPA or thrombolytic non responder. We want to capture this type of patient because we anticipate they will have a low placebo response rate and there is potential for a significant treatment effect when compared with the DM199 therapy.
On the right side of the slide, you can see the data from our remedy one study in participants treated with TPA prior to enrollment. As you can see in the placebo group, the response rate was zero, which we believe affirms that these participants were TPA non responders. Conversely in the DM199 arm, the response rate was 25%. This 25% improvement versus placebo was actually the highest performance improvement among all subgroups studied in the remedy one trial.
I also want to note that the primary reason we didn't initially include TPA non responders in the remedy two study initially was to the significant difference in outcomes based upon how soon after a stroke, the patient receives TPA, those receiving TPA at one hour, post stroke have been shown to do much better than those receiving TPA four hours post stroke.
At the time, DiaMedica didn't want to introduce this potential variability into the study and the clinical risk of an imbalance of TPA patients in favor of the placebo arm. However, upon considering the remedy, one results, if we properly define the thrombolytic non responder, I believe that we can eliminate this variability. Risk.
Turning to slide four, here are the details of the inclusion criteria related to TPA non responders. We've spent countless hours with our scientific advisory board and leading vascular neurologists who consult for DiaMedica to properly define the inclusion criteria which are listed on this slide.
After discussions with our scientific advisory board and stroke neurologists in our trial, we believe the best time to assess when a patient is a non-responder is six hours after thrombolytics have been administered. If you intervene earlier. For example, at four hours, there is a greater risk that the patient is a delayed responder. If you wait until hour 12, there is a risk of more brain tissue dying from the impaired blood flow. We think six hours strikes the right balance and recall in our prior remedy one study; DM199 was administered on average 13.5 hours after TPA. If we can actually get to patients more quickly, we have the potential to improve upon the treatment effects we already saw in the remedy one trial.
The second point that I want to emphasize is that at or after that six-hour mark, the patient must be reevaluated. The neurological deficit must be persistent and fall within the same stroke severity range as non TPA patients, meaning an NIHSS score between 5 and 15. And when we say persistent neurological deficit, we mean that the patient cannot have experienced a four point or better improvement in their NIHSS score following thrombolytic treatment, we do not want patients to still fall within the NIHSS range but are on a trajectory to recover.
And finally, the patient must be re scanned to rule out worsening as a result of any hemorrhagic transformation that may have been caused by the TPA. And the patient must meet all other criteria as non TPA patients. For example, being treated within the same 24-hour window from stroke symptom onset.
With this new criterion we think we've struck the right balance to include a patient population with a significant unmet need and that we anticipate we will respond favorably to M199.
Turning to slide 5. The other key update relates to the size of the interim analysis. Over the past 20 years, I've worked extensively with several leaders in statistical analysis for my studies whom I've had review our statistical analysis plan based upon the feedback and the potential reduction in the overall trial sample size. We made the decision to perform the interim analysis after enrolling 200 patients, an increase from the previously planned 144 participants.
Here on slide 6 is a very potent demonstration of why we don't want to be undersized at the interim analysis. This is an actual simulation from the model comparing final sample size estimates based upon enrolling 144 and 200 patients at interim. For trial integrity purposes, we can't disclose the actual treatment response and placebo response. But in the example, provided the values are identical and the only difference is the interim sample size.
As you can see in this scenario at 144 participants, the sample size re-estimate is 485 participants. Whereas at 200 it is 339 participants. I want to reiterate this is an actual simulation in the model driving our statistical analysis plan. From a cost standpoint this kind of difference could translate into a savings for DiaMedica of $10 million or more. We believe this change has the potential to accelerate completion of the overall study, even though it will delay receipt of our interim analysis results.
The effects on timing of our interim analysis will hopefully be partially offset by expanding our inclusion criteria and including thrombolytic non responder patients. Previously, we were anticipating, our interim analysis would be available in the summer of 2025 and now we expect it quarter 4, 2025. We believe that we are adequately financed through the interim analysis.
Turning to slide 6, I would reiterate that we firmly believe that the protocol updates will accelerate enrollment rates with the addition of a subgroup of stroke patients that have the potential to be high responders to DM199 therapy as well as improving the potential commercial value of DM199. Further that with the new statistical analysis plan, we have the best potential for clinical success with the smallest possible studies.
I will now turn the call back over to Greg.

Rick Pauls

Thank you, Anne. Our focus with respect to the remedy two trial remains centered on continuing to build momentum with high quality research Institutions. Wave update as of today, we have the majority of our 15 priority study sites have been activated.
Now, I'd like to hand the call over to Scott Kellen to review this quarter's financial results.

Scott Kellen

Thanks, Rick, and good morning, everyone, and thank you for joining us on today's call. Starting with our financial position, our September 30, 2024, combined cash, cash equivalents and investments balance is $50.2 million down from $52.9 million as of December 31, 2023.
Net cash used in operating activities for the 9 months ended September 30, 2024, was $15.6 million compared to $14.9 million in the same period of the prior year. The increase in cash used in operating activities resulted primarily from the combination of our increased net loss and the advance of deposit funds to vendors supporting the ReMEDy2 clinical trial during the current year period.
These increases were partially offset by changes in operating assets and liabilities during the current year period and we believe that our current cash and investments provides us a runway to Q3 of 2026. Our research and development expenses increased to $5 million for the 3 months ended September 30, 2024, up from $3.3 million in the prior year period. R&D expenses increased to $12.6 million for the 9 months ended September 30, 2024, compared to $9.4 million for the 9 months ended September 30, 2023.
These increases are due primarily to cost increases resulting from the continuation of our ReMEDy2 clinical trial, the expansion of our clinical team and increased manufacturing development activity. These increases were partially offset by cost reductions related to clinical trial work completed in 2023, including our Phase Ic and REDUX trials, and the completion in 2023 of the in-use study work performed to address the prior clinical hold on the ReMEDy2 trial. We expect R&D expenses to increase moderately relative to recent prior periods, as we globally expand the ReMEDy2 trial site activations and participant enrollments continue.
Our general and administrative expenses were $1.9 million for each of the 3 months ended September 30, 2024, and 2023. G&A expenses were $5.7 million for the 9 months ended September 30, 2024, down from $6 million for the 9 months ended September 30, 2023. The decrease for the 9-month comparison resulted from the combination of reductions in the cost of directors' and officers' liability insurance premiums and decreased legal fees incurred in connection with our lawsuit against PRA Netherlands.
These decreases were partially offset by increased personnel costs incurred in conjunction with expanding our team and increased noncash share-based compensation costs. We expect G&A expenses to remain steady as compared to recent prior periods. Other income net was $616,000 and $1.7 million for the 3 and 9 months ended September 30, 2024, respectively, compared to $693,000 and $1.2 million for the 3 and 9 month periods ended September 30, 2023, respectively.
The increase for the 9-month comparison was driven by increased interest income recognized during the current year period, related to higher marketable securities balances during the current year period as compared to the same period in the prior year.
With that, let me ask the operator to open the lines for questions.

Question and Answer Session

Operator

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session.(Operator instruction). Your first question comes from Thomas Flaten with Lake Street.

Thomas Flaten

Good morning. I appreciate you taking the questions, Marian. Just sticking with remedy two. What was the original prompt for, for reevaluating the protocol and statistical analysis plan? Was it, was it just to see higher enrollment rates or was there some other prompt for that entire discussion that led to these changes?

Lorianne Masuoka

It was really a combination of wanting to simulate enrollment but also extensive discussions that we had with our SAB and our KOL experts that we've been working with. They really were very excited to see what would happen with the patients who had received thrombolytic therapy but were non-responders. We worked with statistical experts who said that they thought that it would be important to have at least half of the patients enrolled before doing a high quality basian sample size adjustment. So we made the adjustment there based on a lot of statistical input.

Thomas Flaten

Got it. And then just a, I guess a somewhat technical question at what point will patients now be randomized? Particularly those that are TPA failures because you want to balance those patients across the two arms and you won't really know if they're failures, if you randomize them prior to getting TPA. So, could you walk us through kind of the nitty gritty on that?

Lorianne Masuoka

Yeah. So, if patients are randomized, they won't receive TPA, they'll be randomized into our study. If they receive TPA prior to randomizing into our study, then we'll have to wait six hours before we know if they're a non-responder and can come into our study.

Thomas Flaten

Got it. And then one final one, if I may in the original plan that you guys laid out 144 patients was intended to be the interim cohort for 364 patient study. And I know you just showed us an example of the simulation you did, but that was I think 350 patients at 200 is the interim analysis. So was the 360 is the 364 still a viable number or how should we think about that? Because those seem to be at odds with one another.

Rick Pauls

So based on 200 patients at the interim analysis and if we had the same drug effect as previous at 144 we would anticipate a lower total number of patients. So below the 364.

Thomas Flaten

Okay. Got it. Appreciate you taking the question.

Operator

Your next question comes from Chase Knickerbocker at Craig-Hallum.

Chase Knickerbocker

Good morning. Thanks for taking the questions. So just to start off a little bit to make sure I understand it. So can you help me with a bit more color around kind of the assumptions to get to a quicker final readout, you know, with these changes from a, you know, get a higher patient number at the interim, I think you might have just answered part of it, but it's just with, kind of greater, certainty around that, effect you're seeing and that allows you to resample smaller or is it kind of around the increased enrollment rate that you would expect for allowing TP a non-responders? Thanks.

Lorianne Masuoka

Yes. So basically, the way the Bayesian analysis works is that the more patients that you have in the interim analysis, the more precision that you can make around the sample size assessment. So as an example, if we have a 14% excellent outcome rate, which is what we originally had calculated when we had the 364 patients, we could potentially bring that down to 300 with an interim analysis of 200. And obviously, that would save us a lot of money and would save us a lot of time in enrollment.
So basically, by going to 200 it gives us the opportunity to significantly shave off time of the trial and to be much more efficient in terms of how much money we spend on the trial.

Chase Knickerbocker

Got it. You may have answered this. I'm jumping around a couple calls, apologies. But was there anything that you kind of saw on enrollment rates or kind of overall patient care baseline characteristics that kind of drove these changes or was it mainly just around the latter point that you just made? Thanks.

Lorianne Masuoka

Yeah, it's not that what we saw in the actual ongoing study. It was really in consultation with our statistical experts that we made these changes as we were finalizing the report for the Bayesian analysis that's going along with the SAP for submission to the FDA. So, it was really based on expert opinion.

Rick Pauls

And chase I can add. So, part of the of our analysis we conducted with these TPA patients that did not respond from our phase two trial, there was a very low placebo response rate, so zero, whereas we had a 25% improvement with our drug. And so, if we carry that into our current trial that should greatly help the statistical analysis plan. So, if we have a large number of patients that have a very low placebo, but a strong drug effect, it should be very beneficial for our statistical analysis plan.

Chase Knickerbocker

What was the end on the TP a non responders in your previous study? How many patients was there?

Rick Pauls

A total of 20. And then I'll also add part of our analysis included a pretty deep analysis of the human urinary form use in China today. So there's been about a half a dozen clinical studies showing an incremental effect of urinary KLK one on top of TPA. And that's also consistent with the discussions we've had with a number of different groups in China, with people that are treating patients there today.

Chase Knickerbocker

Got it. And just last one for me, does this have a, should we think of this as having a material impact to DM 199 commercial opportunity? Kind of what, what does it kind of expand the, you know, would you expect, I guess, would you expect a potential label to, you know, also include, you know, those that, you know, wouldn't respond to TP A and, and what could that mean kind of for the overall patient opportunity?

Rick Pauls

Yes, we do. And we think it will be of greater interest as well for potential partners. So as we see about a half of patients who get TPA, do not respond and So if we're looking at about 10% of patients that have a stroke get TPA so 80,000 patients and I mean, if we were able to expand our label and having another 40,000 patients a year, I mean, there's greater than a billion dollars in additional revenue in the US just for that expansion alone.

Chase Knickerbocker

Great. Thanks for taking the questions.

Operator

Your next question comes from Francois Brisebois with Oppenheimer.

Hi, this is Dan Albert Frank. Thanks for taking my question. Just a quick one. With regards to timeline here previously, with the interim enrollment of 144 you had targeted for first quarter 25. Now with the 200 any guidance in terms of when we should be expecting the enrollment to complete?

Rick Pauls

Yes. So, with the intended plan to have the interim analysis in Q4, we would be looking at some time next summer.

Great. Thanks for taking my question.

Operator

Your next question comes from Matthew Caufield with H.C. Wainright.

Matthew Caufield

Thanak you for taking question. So, for preeclampsia, there was mention of the frozen versus refrigerated vials. With the dosing now commenced, will there be any patients that would have received one versus the other? And are there any complicating factors to consider there?

Lorianne Masuoka

So initially, the patients will receive the frozen product, but it's really not an issue with this particular site. Primarily they're going to be using the refrigerated product.

Matthew Caufield

Understood. And obviously, there's no anticipation of any distinction between one versus the other.

Lorianne Masuoka

No, they're absolutely identical.

Matthew Caufield

Okay. Got it. Thank you. And then also for ReMEDy2, there was mention of the no FDA comments received to date and obviously, proceeding. Do you feel there's any risk the agency provides subsequent feedback at this point? Necessitating trial modification once the changes are now up and running? Thanks again.

Lorianne Masuoka

Yeah. So traditionally the FDA response within 30 days after submission of any protocol amendment or supplemental information, we're well past the 30-day mark. So, the chances of additional FDA feedback become less and less over time. So right now, I would say our chances of receiving substantive FDA feedback is relatively low.

Matthew Caufield

Got you. Okay, great. I guess no answer is a good answer from in that case. So, I appreciate it. That's right from the FDA. That.

Lorianne Masuoka

that's right.

Matthew Caufield

Great. Thank you guys.

Operator

Thank you. There are no further questions at this time. I would now turn the call back to Mr Rick Puls.

Rick Pauls

Great. So, we'd like to thank everyone for joining us this morning and for your continued support. We look forward to a very exciting 2025 and to our next update. This concludes your call today. Thank you.

Operator

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.