On Thursday, DiaMedica Therapeutics Inc. (NASDAQ:DMAC) saw its share price target lowered to $8.00 from the previous $11.00, while the firm maintained a Buy rating. The revision follows an announcement regarding delays in the company's ReMEDy2 phase 2/3 study, which focuses on a specific therapeutic area.
The company's fourth-quarter call revealed that the timeline for the ReMEDy2 study had been extended by a quarter, with the first patient yet to receive a dosage. The study, which was relaunched in December, currently has six enrollment sites operational, in contrast to the 90 sites DiaMedica aims to establish.
This is an increase from an earlier target of 70 sites, with additional locations planned in the U.S. and Eastern Europe.
DiaMedica anticipates that the majority of its U.S. sites will be ready by the third quarter of 2024, with Canadian sites following the same timeline, and Australian sites expected to be active by the fourth quarter of 2024. Presently, 18 more sites are in the contracting phase. The company's goal is to enroll patients at a rate of one per site every four months.
Management has adjusted its guidance for completing enrollment for the interim analysis to the first quarter of 2025, a shift from the previous target of the end of 2024. Considering the 90-day duration of the study post-dosage and the subsequent two months required for data assembly and analysis, the interim data release is projected for mid-2025.
Still, the analyst expressed concern that this timeline may be overly optimistic, as the first patient has not yet been dosed by the end of the first quarter of 2024.
The timeline from site activation to first enrollment is estimated to take 3-5 months, with a similar duration expected for the transition from site contracting to activation. To meet the interim analysis deadline, rapid enrollment rates would be necessary towards the end of 2024 and into the first quarter of 2025. The analyst cautioned that there is a risk of further delays.
DiaMedica reported having $53 million in cash reserves, which are forecasted to last until the fourth quarter of 2025, aligning with the company's guidance that funds will suffice into 2026. Nonetheless, it is anticipated that a capital raise will be necessary immediately following the interim analysis. Any additional delays could potentially require further capital before data becomes available.
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