A Plymouth biopharmaceutical company, DiaMedica Therapeutics Inc., is proposing a stock offering to raise $15 million for the development and commercialization of a new drug to treat neurological and kidney diseases.
The company filed an initial registration statement for a stock offering with the Securities and Exchange Commission on Friday. The filing did not specify how many shares the company would offer or the price per share.
Proceeds of the offering would be used to fund further development and testing of DM199, a synthetic version of a human protein produced in the kidneys, pancreas and salivary glands.
The protein, kallikrein-1 (KLK1), plays a role in managing inflammation in the body and is thought to be beneficial to patients suffering from a lack of blood flow to the brain and kidneys.
"We have made significant progress in positioning DM199 to treat patients with stroke and kidney diseases," said Rick Pauls, DiaMedica's president and chief executive in a statement. "This year, we have initiated a Phase II clinical study in patients who have suffered from an acute ischemic stroke, and we are about to initiate a clinical study in patients with chronic kidney disease.
"With the anticipated upcoming clinical and other milestones, we have determined that it is the right time for our company to apply for a U.S. Nasdaq listing."
Since its inception, the company has funded its operations from the public and private sales of equity, the exercise of warrants and stock options. As part of the new stock offering, DiaMedica is implementing a consolidation of its outstanding common shares that was approved by existing shareholders earlier this month.
Existing common shares of the company trade in Canada on the TSX Venture Exchange under the symbol DMA and in the United States on the over-the-counter OTCQB marketplace as DMCAF.
The company has yet to generate any revenue. For the year ended Dec. 31, 2017, it lost $4.3 million, but as of June 30 had about $11 million worth of cash and working capital.
Forms of KLK1 that are derived from human urine and swine pancreas are sold in Japan, China and Korea, according to the company's filing. DiaMedica said at least five companies have tried to create a synthetic version of KLK1, but it claims it will be the first company to successfully complete the process.
DiaMedica said in its filing that tests done internally and externally verify that DM199, its synthetic version of the protein, is structurally and functionally equivalent to KLK1. Since DM199 is not derived from human urine it would open up additional markets in the United States and Europe.
The company is running drug trials to gauge DM199's effectiveness in treating acute ischemic stroke (AIS), chronic kidney disease (CKD) and vascular dementia.
The company is filing for the offering under the Jumpstart Our Business Startups (JOBS) Act of 2012 that gives emerging-growth companies exemptions from certain disclosures and other requirements of larger public companies.
The company was started in Canada in 2000 as Diabex Inc. and changed its name to DiaMedica Inc. in 2001 and to DiaMedica Therapeutics Inc. in 2016.
The company is registered in Kelowna, British Columbia, but its principal executive offices and its U.S. subsidiary are based in Plymouth.
The company has 11 full-time employees and has been led by Pauls since 2010. Pauls is a former co-founder of a life sciences venture-capital fund that made early investments in DiaMedica.