DiaMedica Announces an Evaluation Agreement With the U.S. National Institute of Allergy and Infectious Disease Against a Bioweap

   DiaMedica (TSX VENTURE: DMA) is pleased to announce the company's entry into an evaluation agreement with the National Institute of Allergy and Infectious Diseases (NIAID), a component of the U.S. National Institutes of Health (NIH), to further evaluate its monoclonal antibody (mAb), in a pre-clinical model, for the treatment of tularemia, a serious infectious disease caused by the Francisella tularensis bacteria. F. tularensis is classified as a Class A bioweapon due to being highly infectious when in aerosol form. The US Center for Disease Control (CDC) examined the total base cost to society of a tularemia airborne attack to be $5.4 billion for every 100,000 exposed. F. tularensis is ranked as one of the pathogens most likely to be used as a biological warfare or bioterrorism agent and there is currently no effective treatment (Advanced Drug Delivery Reviews 57 (2005) 1403- 1414).

"The Company has previously described that the mAb inhibits a key host protein, glycogen synthase kinase 3 beta (GSK3B). Inhibition of GSK3B has previously been shown to suppress the lethal inflammatory response to Francisella infection and protects against tularemia in rats. If DiaMedica's mAb leads to GSK3b inhibition in this model, we would expect it to prevent tularemia lethality. A successful experiment would further validate the mechanism of our mAb in yet another model supporting the prospect that it may find broader application in other unmet diseases," stated Dr. Mark Williams, Vice President of Research.

The upcoming animal study is being conducted under a screening program offered by NIAID's Division of Microbiology and Infectious Diseases. The study, to be conducted by the University of New Mexico, will focus on providing key efficacy data that would, if successful, support the filing of an Investigational New Drug (IND) application to treat tularemia with this novel mAb.

In other news, the Company issued 110,000 stock options to a director with a strike price of $1.20 and a term of five years.

About DiaMedica

DiaMedica is a biopharmaceutical company that develops novel therapeutic products designed to improve the lives of people with Type 1 diabetes, Type 2 diabetes and other large, medically-unmet diseases. DiaMedica's lead drug, DM-199, has been shown to significantly improve glucose metabolism and protect and proliferate beta cells.

The Company is listed on the TSX Venture Exchange under the trading symbol "DMA".

FORWARD-LOOKING STATEMENTS

The statements made in this press release that are not historical facts contain forward-looking information that involves risk and uncertainties. All statements, other than statements of historical facts, which address DiaMedica's expectations, should be considered forward-looking statements. Such statements are based on management's exercise of business judgment as well as assumptions made by and information currently available to management. When used in this document, the words "may", "will", "anticipate", "believe", "estimate", "expect", "intend" and words of similar import, are intended to identify any forward-looking statements. You should not place undue reliance on these forward-looking statements. These statements reflect a current view of future events and are subject to certain risks and uncertainties as contained in the Corporation's filings with Canadian securities regulatory authorities. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results could differ materially from those anticipated in these forward-looking statements. The Corporation undertakes no obligation, and does not intend, to update, revise or otherwise publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of any unanticipated events. Although management believes that expectations are based on reasonable assumptions, no assurance can be given that these expectations will materialize.

Contacts: DiaMedica Inc. Rick Pauls President & CEO 204.477.7590 204.453.3745 (FAX) [e-mail]