DiaMedica Inc. Announces Autoimmune Program With Positive Rheumatoid Arthritis Results

WINNIPEG, MANITOBA--(Marketwire - July 28, 2010) - DiaMedica Inc., (TSX VENTURE: DMA) today announces the initiation of the Company's autoimmune program with the success of DM-99 for the treatment of rheumatoid arthritis and other autoimmune diseases.

DM-99 was found to reduce joint swelling by up to 90% (p less than 0.001) in a collagen induced animal model of rheumatoid arthritis (RA) during the peak of the disease. A single dose of the protein DM-99 administered at the first signs of RA symptoms delayed the onset and severity of the disease. Furthermore, treatment given every forth day appears to have halted the autoimmune attack altogether.

"We believe that DM-99 is able to activate or increase the number of regulatory T cells (Tregs), which plays a vital role in suppressing the autoimmune attack in a wide range of autoimmune diseases," commented Dr. Mark Williams, DiaMedica's Vice President Research.

In a delayed hypersensitivity model, skin inflammation was reduced by 67% (p less than 0.05) and could be prevented for up to 14 days following a single administration of DM-99. DM-99 also delayed skin graft rejection by several days (p less than 0.05).

"Based on the ability of DM-99 to modulate the autoimmune attack in several autoimmune diseases, we will be starting a study shortly to determine if our more active form of DM-99, DM-199, can halt or slow the autoimmune attack in type I diabetes. DM-199, may be the only compound that both proliferates beta cells and protects them against the autoimmune attack in type I diabetes," stated Rick Pauls, President and CEO of DiaMedica.

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, DM-71 and DM-99, 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".

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.

DiaMedica Inc.
Kevin Richardson, Ph.D
204.453.3745 (FAX)

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