DiaMedica Initiates Type 1 Diabetes Study; Announces Preliminary Results

DiaMedica Inc., (TSX VENTURE:DMA) today announces that it has initiated a Type 1
diabetes program. The recently announced Sanomune acquisition allows DiaMedica
to expand into Type 1 diabetes. The initiation of this program is based on
encouraging preclinical results with DM-99, a naturally occurring protein that
the company has previously shown to have clinical efficacy for Type 2 diabetes.


In the study, animals were injected with streptozotocin, a naturally occurring
compound known to be toxic to beta cells, to mimic the disease. A week after
this streptozotocin treatment, animals were injected twice daily with DM-99 for
a period of 21 days at which time fasting blood glucose measurements were taken.
Animals treated with DM-99 had a statistically significant 68% (p=0.05)
reduction in fasting blood glucose compared to untreated animals. Furthermore,
the DM-99 treatment resulted in a positive reduction in total glucose as
measured by an oral glucose tolerance test.


"Initial results from this study show that DM-99 was able to reduce fasting
blood glucose, an indication that new beta cells may be created or that existing
beta cells are being protected from the streptozotocin insult," stated Rick
Pauls, President and CEO of DiaMedica. "The final results and analysis of DM-99
on the direct effects upon the pancreas (insulin production and beta cell
proliferation) is expected during the summer of 2010." 


About Type 1 Diabetes

According to the Juvenile Diabetes Research Foundation, as many as 3 million
Americans may have Type 1diabetes, an autoimmune disease that strikes children
and adults suddenly and can be fatal. In Type 1 diabetes, the host's own immune
system destroys beta cells in the pancreas that normally control blood sugar
level by producing insulin. Currently, patients with Type 1 diabetes have to
test their blood sugar and give themselves insulin injections multiple times
each day, or use a pump daily to control blood sugar levels. Even with intensive
care, insulin is not a cure for diabetes, nor does it completely prevent the
eventual and devastating complications of diabetes, which may include kidney
failure, blindness, heart disease, stroke, and amputation.


About DiaMedica

DiaMedica is a biopharmaceutical company focused on developing novel treatments
for diabetes and neurological disorders. The Company's Type 2 diabetes program
is based on a critical liver nerve signaling mechanism involved in enhancing
insulin sensitivity after meal consumption. Two of DiaMedica's products have
previously demonstrated human efficacy in lowering blood sugar levels in people
diagnosed with Type 2 diabetes based on this novel nerve signaling mechanism.


DiaMedica has expanded its DM-199 recombinant protein program into neurological
and autoimmune disorders. The Company has demonstrated that DM-99, the naturally
occurring form of DM-199, confers neural protection (protects brain cells) and
triggers neural stem cell proliferation (creates brain cells) for the treatment
of numerous neurological disorders including Alzheimer's disease. DiaMedica is
listed on the TSX Venture Exchange under the trading symbol "DMA".


For further information please visit www.diamedica.com.

Caution Regarding Forward-Looking Information

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
forward-looking statements relate to, among other things, DiaMedica's
objectives, goals, targets, strategies, intentions, plans, beliefs, estimates
and outlook, and can, in some cases, be identified by the use of words such as
"believe," "anticipate," "expect," "intend," "plan," "will," "may" and other
similar expressions. In addition, any statements that refer to expectations,
projections or other characterizations of future events or circumstances are
forward-looking statements. Specifically, this press release contains
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. Additional risk factors, factors which
could cause actual results to differ materially from expectations, and
assumptions relating specifically to our acquisition of Sanomune may be found in
our press releases dated February 18, 2010 and April 20, 2010.