Omeros Corporation

Good afternoon and welcome to today's earnings call for Omeras Corporation. At this time, all participants are in a listen-only mode. After the company's remarks, we will conduct a question and answer session. Please be advised that this call is being recorded at the company's request and a replay will be available on today's company's website for one week from today. I'll turn the call over to Jennifer Williams, Investor Relations for Omeras.

Good afternoon and thank you for joining the call today. I'd like to remind you that some of the statements that will be made on the call today will be forward-looking. These statements are based on management's beliefs and expectations as of today only and are subject to change. All forward-looking statements involve risks and uncertainties that could cause the company's actual results to differ materially. Please refer to the special note regarding forward-looking statements and the risk factor section in the company's quarterly report on Form 10-Q. which was filed today with the SEC, and the risk factor section of the company's 2020 annual report on Form 10-K for a discussion of these risks and uncertainties. Now, I would like to turn the call over to Dr. Greg Dimopoulos, OMERIS's chairman and CEO.

Greg Dimopoulos Thank you, Jennifer, and good afternoon, everyone. We appreciate you joining us for today's call. We'll go through a corporate update and our second quarter financial results, And we'll be joined by both Nadia Dak, our Chief Commercial Officer, and Mike Jacobson, our Chief Accounting Officer. Following the prepared comments, we have some time reserved for questions. We'll begin today with an update on narsoplumab, our fully human monoclonal antibody targeting MASP2. MASP2 is the effector enzyme of the lectin pathway of complement. Our biologics license application, or BLA, for the treatment of hematopoietic stem cell transplant associated thrombotic microangiopathy, or TATMA, is under priority review by FDA. Our PDUFA date for the BLA is October 17th, following FDA's extension of the review period. We continue working closely with FDA and look forward to the agency completing its review. We continue to share the data from the TATMA Pivotal Trial publicly across a variety of scientific and medical venues, most recently in June during a podium presentation at the 2021 Annual Congress of the European Hematology Association. In addition, two manuscripts authored by international leaders in both stem cell transplantation and in complement science have been submitted for publication to peer-reviewed journals, the first detailing the findings from the pivotal trial, and the second elucidating the role of the lectin pathway in MASP2, specifically in TATMA. Narsoplimab is also being evaluated in three other indications, immunoglobulin A or IgA nephropathy, atypical hemolytic uremic syndrome, or AHUS, and COVID-19. Our Phase III Artemis IGAN trial has approximately 130 sites activated worldwide, and given the prevalence of IgA nephropathy in China, we are adding a number of Chinese investigational sites. A presentation focused on the pharmacology, pharmacokinetics, and pharmacodynamics of lectin pathway inhibition binar supplement will be part of the 16th International Symposium on IgA Nephropathy next month in Prague. Our AHUS Phase III trial is also ongoing. With the recent resurgence in COVID-19 cases due primarily to the Delta variant and additional variants being identified, it appears that the COVID-19 pandemic will be with us all throughout the foreseeable future and might well become endemic. The most recent data show about 100,000 new COVID cases daily in the U.S. With infections rising in both unvaccinated and vaccinated individuals, the need for an effective therapeutic, particularly one that can prevent death and speed recovery in the sickest of COVID-19 patients, is beyond dispute. Narsoplimab continues to be evaluated as part of the nationwide iSpy COVID-19 trial that is sponsored by Quantum Leap Healthcare Collaborative and funded in part by BARDA. Narsoplimab is the only complement inhibitor selected for inclusion in the trial, and dosing in patients with severe COVID-19 began in March. The trial is run by Quantum, and other than providing drug, Omeros has no involvement in the trial. We are told that enrollment is progressing, and we await the trial's results. No previously studied drug has demonstrated sufficient efficacy to graduate from the trial, and we are optimistic that narsoplumab will be the first. In May, we announced results from the second cohort of COVID-19 patients treated in Bergamo, Italy. The ten patients in this cohort were even sicker than those in the initial cohort of COVID-19 patients. Like the patients in the first cohort, all had comorbidities and or risk factors for poor outcomes, and all were on mechanical ventilation. In fact, nine of the ten were intubated prior to initiation of narsoplimab treatment. All had failed other treatments, including steroids. Despite these patients being so severely ill, 8 of the 10 recovered, survived, and were discharged. The two deaths were a 76-year-old who died from complications of his pre-existing cardiomyopathy and a 68-year-old who began narsoplumab dosing after being intubated for 13 days. As was done with the results from the first cohort of Bergamo patients, we plan to publish the data from the second cohort in a peer-reviewed journal. We also are continuing our work at our laboratories at the University of Cambridge, the O'Meara's Cambridge Center for Complement and Inflammation Research, or OC3IR. The data coming from OC3IR uniformly support what we and others leading the COVID research field worldwide have shown that the lectin pathway and specifically MASP2 play an early and central role in the pathophysiology of COVID-19. A manuscript detailing the rationale for inhibiting MASP2 and the lectin pathway in severe COVID-19 was published last month in the peer-reviewed journal Frontiers in Immunology. Additional work is underway, including identification of the cause of the increased incidence of concomitant bacterial, viral, and fungal infections often seen with COVID-19 and narsoplamab's potential role in preventing them. We also plan to explore the role of MASP2 in the lectin pathway in the post-acute sequelae of SARS-CoV-2 or PASC. All of the clinical and non-clinical data generated around narsoplumab and COVID-19 are further helpful in our ongoing discussions with U.S. and international governments regarding funding and manufacturing support for narsoplumab. Let's look now at our second quarter financial results. Net revenues from sales of Omidri in the second quarter were $28.8 million. a $7.8 million increase compared to last quarter's revenues. This represents 37% quarter-over-quarter revenue growth. Our net loss for the second quarter was $28.6 million, or 46 cents per share, of which $3.9 million, or 6 cents per share, were non-cash charges. As of June 30th, we had $73.7 million in cash, cash equivalents, and short-term investments. We also have a $50 million line of credit based on our accounts receivable, which has not yet been used, and an additional $150 million available through and at the market facility. Revenues have continued to grow, largely as a result of the determination last December. by the Centers for Medicare and Medicaid Services or CMS that Omidria qualifies for separate payment when used in ambulatory surgery centers or ASCs. CMS made this determination under its policy to reimburse separately for non-opioid pain management surgical drugs. Q2 2021 was the first full quarter that the Medicare administrative contractors had the appropriate CMS reimbursement posted for Omidria, allowing our customers to be confident that separate payment had been restored for Omidria. As a result, we saw corresponding growth in Omidria sales throughout the second quarter, and we expect that momentum to continue. Last month, CMS issued the calendar year 2022 proposed rule for its outpatient prospective payment system or OPPS. Here again, CMS confirmed its December decision that OMIDRIA qualifies for separate payment under the agency's policy regarding non-opioid pain management surgical drugs. Given this endorsement by CMS and the tenure of the policy, which has been in effect since 2019, we anticipate no change in this policy in CMS's final OPPS rule to be issued later this year. In short, our expectation is that Omidria will continue to receive separate payment reimbursement by CMS when used in ASCs throughout 2022 and likely beyond. Legislatively, The Non-Opioids Prevent Addiction in the Nation, or the No Pain Act, continues to make headway in both chambers of Congress. Now with 30 senators and 46 representatives co-sponsoring the bill, rosters that continue to grow, the No Pain Act has strong bipartisan and bicameral support, including leadership and key members on the committees of jurisdiction in both the House and the Senate. Importantly, the bill is also endorsed by major medical societies and public health organizations, including, to name a few, the American Medical Association, the American Society of Anesthesiologists, the American College of Surgeons, the American Association of Colleges of Nurses, the Ambulatory Surgery Center Association, the Advanced Medical Technology Association, or ADVMED, and the National Safety Council. The No Pain Act, when and if passed, would provide separate payment for non-opioid pain management drugs like Omidrea, not only in ASCs, but also in hospital outpatient departments. With that, Nadia Dak, our Chief Commercial Officer, will now provide an update on commercial activities for both Omidrea and Narsoplimab. Nadia?