DiaMedica Lands $4M Strategic Partnership With Asian Investors
Asian investors have entered into a two-part, $4 million investment deal with DiaMedica Inc. over an experimental drug it produces to treat acute ischemic strokes.
Hermed Capital Healthcare Fund, which is comprised of Shanghai Fosun Pharmaceutical Group and SK Group (a Fortune Global 100 Company from South Korea), agreed to buy 20 million DiaMedica shares for 20 cents each.
Plymouth-based DiaMedica will receive $1 million immediately and another $3 million next month. Both cash infusions are subject to customary closing conditions.
“We are delighted to have Hermed Capital provide a strategic investment to further validate the potential of DM199 in China and for worldwide use,” said DiaMedica CEO Rick Pauls in prepared remarks.
The funding will primarily fuel the next set of clinical trials involving the company’s DM199 drug.
According to DiaMedica’s chief scientific officer Todd Verdoorn, DM199 will be placed in competition with a similar drug manufactured and sold in China. Both products use a protein known as killikrein to improve blood flow within the area of the brain that is experiencing a stroke. The severity of the stroke, which is caused by a blocked artery and lack of oxygen and nutrients to the brain, is then diminished and, in some cases, the killikrein protein has been found to foster the re-growth of blood vessels into brain tissue.
The principal difference between DiaMedica’s DM199 and its Chinese counterpart is the Chinese version is extracted from urine while DiaMedica’s is a synthetic product made in a lab. To that effect, Pauls believes DiaMedica’s drug is comparatively less expensive and safer than the urine-based formula.
The other aim of the newly funded trials is to expand the time in which patients can receive a drug like DM199. Today’s standard procedure does not allow acute ischemic stroke patients to receive the drug after 4.5 hours from the moment the stroke occurred.
“We intend to run the clinical trials for taking anyone within 48 hours,” Verdoorn said. “That’s next on the horizon.”
Although China has embraced the 48-hour administration timeline, the U.S. and Europe have not.
If DM199 is accepted on a worldwide scale, DiaMedica will then tackle other clinical trial endeavors, such as proving the usefulness of the drug in treating other neurological and kidney diseases.