DiaMedica Inc. Announces New Data With Its Novel Monoclonal Antibody Program

WINNIPEG, MANITOBA--(Marketwire - January 17, 2011) - DiaMedica (TSX VENTURE: DMA) today announces data from its monoclonal antibody (mAb) program targeting glycogen synthase kinase 3 beta (GSK3B), a key cell signaling enzyme implicated in diabetes, as well as cancer and viral infections.

In work conducted at Charles River Laboratories, the mAb potently inhibited GSK3B leading to the killing of prostate, pancreatic, stomach and mixed lineage leukemia cancer cells in in vitro studies. Importantly, only the cancer cell lines that are dependent on GSK3B activity for survival were killed by the mAb, and not the non-GSK3B dependent cell lines tested. Demonstrating the potent and targeted activity of the mAb. Our leading cancer target was found to be prostate cancer, the most common form of cancer in men. The mAb was able to kill a highly metastatic androgen refractory prostate cancer cell line at an EC50 value within one log of cisplatin, a highly toxic chemotherapy treatment for cancer.

“DiaMedica’s approach to blocking GSK3B is unique and highly differentiated from, to our knowledge, all other drugs in development to this target which are small molecule inhibitors. Our antibody causes activation of a critical signaling pathway, which we believe results in a specific and profound downstream inhibition of GSK3B. This may lead to superior activity and safety of our mAb as compared to small molecule GSK3B inhibitors”, commented Dr. Mark Williams, VP Research of DiaMedica.

“While the primary focus of DiaMedica’s mAb program is diabetes, these additional studies support the potentially broad utility of our GSK3B inhibiting antibody in several indications, including cancer. DiaMedica anticipates reporting data on diabetes and other diseases in the coming months”, stated Rick Pauls, Chairman and CEO of DiaMedica. “We expect that results from these studies will provide opportunities to partner our exceptional mAb program for numerous diseases while still maintaining our company focus on diabetes.

About DiaMedica

DiaMedica is a biopharmaceutical company developing novel treatments for diabetes and other disorders. Two of DiaMedica’s products, DM-71 and DM-99 have demonstrated phase II human efficacy in lowering blood glucose levels in people diagnosed with type 2 diabetes.

DiaMedica’s lead product DM-199 is an improved, recombinant form of the naturally-occurring DM-99 to treat diabetes while also demonstrating activity in neurological and autoimmune disorders. The Company has shown 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.

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.