DiaMedica Inc.'s DM-199 Validated by Significantly Increasing Insulin Sensitivity by 122%

WINNIPEG, MANITOBA--(Marketwire - October 27, 2010) - DiaMedica (TSX VENTURE: DMA) today announces that DM-199 has been validated by demonstrating significantly increased insulin sensitivity in animals using the hyperinsulemic euglycemic clamp model. Type 2 diabetes is a severely debilitating condition characterized by high blood sugar primarily due to a decrease in insulin sensitivity, which results in a number health problems including cardiovascular disease.

The amount of glucose being processed in an animal model of type 2 diabetes with DM-199 was measured using the hyperinsulinemic euglycemic clamp, the gold standard method for characterizing the actions of insulin. Animals treated with a single dose of DM-199 had a 122% increase in maximal glucose infusion rate. This enabled animals to process 77% more total glucose compared to untreated animals. In a second study, DM-199 also had a pronounced anti-hypertensive effect on systolic blood pressure. This is important as approximately 70% of type 2 diabetes patients take multiple medications to treat high blood pressure.

"The clamp study clearly shows that treatment with DM-199 results in a major increase in insulin sensitivity in an animal model of type 2 diabetes. It is notable that the results of these studies actually provide an underestimate of the true effectiveness of DM-199. This is because the potency of DM-199 was so great that it was difficult to maintain the euglycemic clamp." stated Dr. David Wasserman, Ron Santo Chair in Diabetes Research & Professor molecular physiology and biophysics at Vanderbilt University. "I very much look forward to seeing the future development of DM-199."

"The results from both studies provide further validation of DM-199, our next generation form of DM-99, as a potential treatment for type 1 diabetes, type 2 diabetes and other diseases," said Mr. Rick Pauls, CEO of DiaMedica. "This DM-199 data builds on compelling earlier animal and human proof of concept data with DM-99, and gives us confidence in moving forward with this very promising recombinant protein," continued Mr. Pauls. "The dual benefits shown by DM-199 to increase the body's ability to metabolize glucose and its positive effect on lowering systolic blood pressure may ultimately alleviate the need for diabetics to take multiple drugs for diabetes and hypertension."

About DiaMedica

DiaMedica is a biopharmaceutical company focused on developing novel treatments for type 1 diabetes, type 2 diabetes and other disorders. DiaMedica has completed two successful proof-of-concept Phase II studies with DM-71 and DM-99, which demonstrated human efficacy in lowering blood glucose levels in patients with type 2 diabetes.

DiaMedica's lead product DM-199 is a novel recombinant next generation form of DM-99, which has shown the potential to increase insulin sensitivity, reduce the autoimmune attack and trigger proliferation of pancreatic beta cells, neural stem cells and bone marrow cells. 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.

DiaMedica Inc.
Rick Pauls
204.453.3745 (FAX)

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