DiaMedica Announces Positive Final Results in Type 1 Diabetes Study

DiaMedica Inc., (TSX VENTURE:DMA) is pleased to announce positive final results
from its previously announced type 1 diabetes study.


The study was designed to observe the potential protective and/or regenerative
effects on beta cells (cells from the pancreas that produce insulin) in a widely
accepted type 1 diabetes animal model. DiaMedica, in consultation with Dr.
Maureen Gannon at Vanderbilt University, has confirmed that DM-99 can increase
new beta cells by 1,277% (p less than 0.01) when administered to diseased
animals compared to untreated diseased animals. Beta cell proliferation induced
by DM-99 trended to be even greater than replication in non-diseased, untreated
control animals. 


The increased beta cell proliferation led to physiologically important
improvements in the diabetic state. Improvements included the restoration of
peak levels of plasma insulin to near normal levels (p less than 0.05) with
positive trends of increase in the levels of both pancreatic and plasma insulin,
which led to improved blood glucose clearance in a oral glucose tolerance test
with DM-99 treatment. On July 8th, DiaMedica reported initial results of the
study that included a 68% reduction in fasting blood glucose (p less than 0.05)
with DM-99.


"These results are very provocative and would indicate that this compound offers
both a level of protection of beta cells in a type 1 diabetes animal model as
well as induces their proliferation," stated Dr. Maureen Gannon, Associate
professor of Medicine at Vanderbilt University, Division of Diabetes,
Endocrinology and Metabolism. "Having a therapeutic compound that can either
protect or proliferate beta cells is a key requirement for finding a cure for
type 1 diabetes so that therapies involved in replacing or regenerating these
cells can work long-term. DM-99 appears to be able to perform both of these
functions." 


"The ability of DM-99 to significantly increase beta cell replication combined
with our earlier data showing the ability of DM-99 to protect against a variety
of autoimmune attacks may result in a first in class treatment for type I
diabetes", stated Mr. Rick Pauls, President and CEO of DiaMedica. "We are
currently developing DM-199, a novel recombinant and humanized form of DM-99 for
commercialization."


About DiaMedica 

DiaMedica is a biopharmaceutical company focused on developing drugs with the
potential to be broadly applicable in treating large unmet diseases including
diabetes, autoimmune disorders and neurological diseases by protecting and
proliferating a variety of cells. Two of DiaMedica's products have demonstrated
human efficacy in lowering blood sugar levels in people diagnosed with Type 2
diabetes with an excellent safety profile. DiaMedica is listed on the TSX
Venture Exchange under the trading symbol "DMA".


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Certain statements contained in this press release constitute forward-looking
information within the meaning of applicable Canadian provincial securities
legislation (collectively, the "forward-looking statements"). These
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forward-looking statements regarding matters such as, but not limited to, the
anticipated use of proceeds from the Offering, management's assessment of
DiaMedica's future plans, information with respect to the advancement of
DiaMedica's research and development programs, and DiaMedica's other estimates
and expectations. These statements reflect management's current beliefs and are
based on information currently available to management. Certain material factors
or assumptions are applied in making forward-looking statements, and actual
results may differ materially from those expressed or implied in such
statements. Important factors that could cause actual results to differ
materially from these expectations include, among other things: uncertainties
and risks related to our research and development programs, the availability of
additional financing, risks and uncertainties relating to the anticipated use of
proceeds, changes in debt and equity markets, uncertainties related to clinical
trials and product development, rapid technological change, uncertainties
related to forecasts, competition, potential product liability, additional
financing requirements and access to capital, unproven markets, the cost and
supply of raw materials, management of growth, effects of insurers' willingness
to pay for products, risks related to regulatory matters and risks related to
intellectual property matters.


Additional information about these factors and about the material factors or
assumptions underlying such forward-looking statements may be found in the body
of this news release, as well as under the heading "Risk Factors" contained in
DiaMedica's 2009 annual information form. DiaMedica cautions that the foregoing
list of important factors that may affect future results is not exhaustive. When
relying on DiaMedica's forward-looking statements to make decisions with respect
to DiaMedica, investors and others should carefully consider the foregoing
factors and other uncertainties and potential events. Such forward-looking
statements are based on a number of estimates and assumptions, which may prove
to be incorrect, including, but not limited to, assumptions regarding the
availability of additional financing for research and development companies, and
general business and economic conditions. These risks and uncertainties should
be considered carefully and investors and others 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.