DM-99 Shown to Improve Glucose Metabolism in Pre-Clinical Study, DiaMedica Seeking Regulatory Clearance for Phase II Human Trial

WINNIPEG, MANITOBA , a clinical stage biotechnology company developing novel treatments for various stages of type 2 diabetes, is pleased to announce positive pre-clinical data for DM-99, its third clinical drug candidate. Results demonstrated, with statistical significance, greater glucose metabolism in normal animals treated with DM-99 when compared to untreated animals.

The study was conducted in the Wasserman Laboratory at the Diabetes Research and Training Center at Vanderbilt University in Nashville, Tennessee. In the study, the amount of glucose being metabolized was measured using the well established hyperinsulinemic euglycemic clamp model. Specifically, animals treated with DM-99 were able to use 41% more glucose than an untreated animal (p less than 0.04) during the first sixty minutes of the study.

"The study results suggest that DM-99 may hasten the onset of insulin action. It is particularly significant that it does so at a physiologically relevant insulin level, similar to concentrations observed after a meal or after a therapeutic dose in diabetics", commented Dr. David Wasserman, Professor and Ron Santo Chair, Department of Molecular Physiology and Biophysics, Vanderbilt University. "This is an important proof of principle supporting the value of DM-99 in the treatment of diabetes."

"The treated animals displayed increased glucose utilization when compared to control animals. These interesting results clearly show that DM-99 is having a positive impact on glucose metabolism, a desirable effect for diabetic patients", stated Dr. Alan Cherrington, Professor and Turner Chair in Diabetes Research, Department of Molecular Physiology and Biophysics, Vanderbilt University and Past-President of the American Diabetes Association. "Further study of DM-99 is encouraged."

"Based upon the collective results of our pre-clinical studies, we have already initiated the regulatory clearance process for a Phase II human study with DM-99 and expect to receive feedback in the near term," stated Dr. Karl-Gunnar Hidinger, President of DiaMedica Inc. "We plan to test DM-99 as a stand-alone therapy in a meal-tolerance model. Past studies with DM-99 have demonstrated its ability to improve the activity of GLP-1, and we believe its performance with GLP-1, and alone, will serve to make the eventual product even more marketable."

Diabetes is a widespread and rapidly growing disease, affecting 177 million people world wide. Over 90% of diabetics are of the Type 2 form. Global sales of oral diabetes drugs total $6 billion today and are expected to climb to $11 billion by 2011.

About DM-99

DM-99 has demonstrated the ability to positively impact glucose metabolism in a type 2 diabetes animal model. The product is a novel use of an existing product, with a well established safety profile, used to treat an unrelated human condition.

About DiaMedica

DiaMedica is developing novel treatments for various stages of type 2 diabetes. The Company recently completed a phase II clinical trial with its lead product DM-71 which demonstrated the ability to reduce HbA1c levels in man. The Company has two other drugs in its clinical pipeline, DM-83 and DM-99, which are progressing toward clinical studies.

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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.

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Contacts: DiaMedica Inc. Kevin Richardson, Ph.D. [phone] [phone] (FAX) Email: [e-mail] Website: www.diamedica.com