WINNIPEG, Manitoba – DiaMedica Inc. (TSX-V:DMA), a clinical stage biotechnology company developing novel treatments for various stages of type 2 diabetes, is pleased to announce that it has admitted the 80th and final patient and completed enrollment in its phase II study evaluating DM-71 in the treatment of type 2 diabetes. The Company expects to announce the results of the study in the second half of 2007.

The DM-71 study is a single dose, single-blinded, placebo controlled, 12 week trial being conducted at twelve sites across Canada. The primary endpoint is change in glycated hemoglobin (HbA1c) between placebo and treatment groups. The study is also evaluating effects on metabolic and liver function markers, such as cholesterol (HDL/LDL), fasting glucose, fasting insulin, free fatty acids and body mass index, as secondary endpoints.

“DM-71 is unlike any other treatment and has potential as a first in class therapy for the multibillion dollar diabetes market. This is based on the Company’s unique understanding of the mechanism underlying the disease”, stated Dr. Karl-Gunnar Hidinger, President of DiaMedica. “We have now screened sufficient patient numbers for appropriate statistical analysis and we look forward to both the results of this study and DM-71 continued progress.”

The trial was designed in collaboration with the Company’s scientific advisors Dr. Alan Cherrington, Charles H. Best Professor of Diabetes Research, Vanderbilt University Medical Center, and Dr. Daniel Porte, Emeritus Professor of Medicine, University of California San Diego. Both advisors are past Presidents of the American Diabetes Association. Dr. Philip Hardin of the West Edmonton Diabetes Centre is the Principal Investigator of the trial.

DiaMedica recently completed its initial public offering and listing on the TSX Venture Exchange. DM-71 is the lead product in the Company’s growing pipeline of therapeutics.

About DM-71

DM-71 has demonstrated the ability to restore insulin sensitivity in a type 2 diabetes animal model. The product is a novel combination of two known drugs with well established safety profiles that are used to treat other unrelated human conditions. These two molecules act synergistically to address a new target in the treatment of diabetes. As both components of DM-71 have been approved for human use, the Company has been able to advance the product directly into a phase II clinical trial.

About DiaMedica

DiaMedica is developing novel treatments for various stages of type 2 diabetes based on a mechanism involving nerve signaling to the liver. Rather than treating the symptoms, DiaMedica addresses the cause of type 2 diabetes with multiple points of intervention. Its lead product, DM-71, is currently in a phase II clinical trial. The Company has two other products in its clinical pipeline, DM-83 and DM-99.

For more information, please contact:

Mathew Sheedy DiaMedica Inc. 
Phone : 204.478.5603 
Fax: 204.453.374
ir@diamedica.com
www.diamedica.com

Dr. Karl-Gunnar Hidinger
President, DiaMedica Inc.
info@diamedica.com

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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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.