DMA Diamedica Therapeutics

DiaMedica Inc. (TSX VENTURE: DMA), a drug discovery and clinical development company focused on a novel approach to treating type 2 diabetes, today announces last patient out in the phase IIa proof of concept clinical trial of DM-99.

The 40 patient single-blinded clinical trial was conducted in the European Union. It was designed to demonstrate DM-99's effectiveness at changing blood glucose levels in patients diagnosed with type 2 diabetes, after they consumed a standardized meal. Change in insulin and/or blood glucose levels was the study's primary endpoint. Each patient was tested for both the effects of treatment with DM-99 and a placebo, and therefore served as their own control in this cross over study.

Pre-clinical animal studies on DM-99 were performed by Dr. David Wasserman, Professor of Molecular Physiology and Biophysics and Ron Santo Chair in Diabetes at the Diabetes Research and Training Center at Vanderbilt University in Nashville, Tennessee. The amount of glucose being metabolized was measured using the hyperinsulinemic euglycemic clamp model, the gold standard method for quantifying insulin resistance. Specifically, healthy animals treated with DM-99 were able to metabolize 41% more glucose than untreated healthy animals (p less than 0.04) within the first sixty minutes of the drug being administered. The drug was also shown to have a very good safety profile.

"We believe that DM-99 may both insulin sensitize and hasten the onset of insulin action", commented Mr. Reginald Bowerman, DiaMedica's President and CEO. "We look forward to the outcome of this phase II trial in light of the compelling pre-clinical research results."

Diabetes is a widespread and rapidly growing disease, affecting over 180 million people world wide with over 90% of people with diabetes being diagnosed with the type 2 form. According to the World Health Organization, this number is expected to double during the next 15 years while the American Diabetes Association has estimated the annual economic cost in 2007 to the United States to be $174 billion with over 8% of the population having this disease. Global sales of drugs for type 2 diabetes currently total $8 billion per year and are expected to climb to $12 billion per year by 2011.

About DM-99

Pre-clinical results from the Diabetes Research and Training Center at Vanderbilt University have shown that DM-99 is able to cause tissue to increase the uptake of glucose from the blood by over 40% (p less than 0.04) within 60 minutes of being injected. DM-199, a 40x more biologically active version of DM-99, has been created and will soon undergo pre-clinical testing.

About DiaMedica

DiaMedica is developing novel treatments for type 2 diabetes based on a discovery that a dysfunctional nerve signal to the liver is a key factor leading to insulin resistance, the hallmark of type 2 diabetes. The Company has completed a phase II proof of concept clinical trial with its lead product, DM-71, which demonstrated the ability to reduce HbA1c (blood sugar) levels and weight in man. DM-71 will be entering another phase II clinical trial designed to optimize drug dosage and improve patient compliance. The Company has also completed a proof of concept phase II clinical trial with DM-83 that showed a reduction in the amount of peak insulin required to process glucose. This indicates that DM-83 may prolong the insulin producing ability of the pancreas. DiaMedica's third drug, DM-99, is about to complete a phase II proof of concept clinical trial. DM-199, a 40x more biologically active version of DM-99, has been created and will soon undergo pre-clinical testing.

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, "forward-looking statements"). These forward-looking statements relate to, among other things, our objectives, goals, targets, strategies, intentions, plans, beliefs, estimates and outlook, including, without limitation, our anticipated future operating results, 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.

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: DiaMedica's early stage of development, lack of product revenues and history of operating losses, 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, supply of raw materials, income tax matters, management of growth, partnerships for development and commercialization of technology, effects of insurers' willingness to pay for products, system failures, dependence on key personnel, foreign currency risk, risks related to regulatory matters and risks related to intellectual property and other risks detailed from time to time in DiaMedica's filings with Canadian securities regulatory authorities, as well as DiaMedica's ability to anticipate and manage the risks associated with the foregoing. 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 final long-form prospectus dated March 12, 2007. 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.

These risks and uncertainties should be considered carefully and prospective investors 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.

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Contacts: DiaMedica Inc. Kevin Richardson, Ph.D. (204) 478-5605 (204) 453-3745 (FAX) Email: krichardson@diamedica.com Website: www.diamedica.com