Omeros Corporation

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Good afternoon, and welcome to today's earning call for Omeros Corporation. At this time, all participants are in 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 the company's website for one week from today. I'll now turn the call over to Jennifer Williams, Investor Relations for Omeros.

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 2021 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, Chairman and CEO of Omeros.

Greg Dimopoulos Thank you, Jennifer, and good afternoon, everyone. We appreciate you joining us for today's call. We'll start with a corporate update and an overview of our first quarter 2022 financial results, followed by a more detailed financial summary. Joining me on the call today are Mike Jacobson, Nadia Dock, Kathy Melfi, and Steve Whitaker, our respective heads of finance, commercial, regulatory, and clinical. Let's begin with our MASP2 program and specifically narsoplimab in stem cell transplant associated thrombotic microangiopathy or TATMA. In February, we had a type A post-action meeting with FDA. following receipt of our complete response letter. In our briefing package and during the meeting, we addressed all of FDA's stated concerns. FDA was delayed in providing their final meeting minutes to us. When we finally received them, there were no new requests, yet we found that the division had repeated a number of critiques that we feel had not only been adequately addressed, but also some that we view as demonstrably inaccurate based on FDA's own minutes and other official communications. After close review and discussions with our legal and regulatory advisors, we began drafting a dispute resolution request, an official FDA pathway that allows the sponsor to appeal a decision by an FDA division to a higher deciding authority in the agency, in this case, the Office of New Drugs. With the assistance of our legal and regulatory advisors, including recent former FDA office and division directors, we are now completing the draft request. We believe that it lays out a very strong case across all components. Our data, the documented regulatory history, not only FDA precedent, but precedent established by our specific division and the literature. Now that the document is drafted and we have assessed the strength of both our position and the document, our path forward is clear. Based on the strength of our case and on the input and recommendation of our legal and regulatory advisors, we are foregoing negotiation with the division and proceeding directly to dispute resolution. We believe that this is the most expeditious route to approval. Dispute resolution by design is rapid. Our request is clear, and that is regular approval based on the data in our existing VLA. With respect to timing, we're incorporating comments from our advisors and have begun the process of regulatory publishing required prior to submission. We expect to submit within the next couple of weeks. We are requesting a meeting with the Office of New Drugs. That meeting, according to FDA's PDUFA commitments, should be held within 30 days of the request. A decision is then to be rendered within 30 days following the meeting. Although public statistics indicate that most appeals are denied, those statistics are misleading. In the collective experience of our advisors at both Covington and Burling and Hyman Phelps McNamara, the good majority of their appeals, even if formally denied, result in a favorable outcome for the sponsor. We are confident in our data and in our submission. We believe that narsoplimab should have been approved last fall, and we are committed to getting it approved as quickly as possible. In the meantime, transplanters continue requesting narsoplumab under our compassionate use program for their patients with TATMA, and we make every attempt to provide it, especially for children. Two recent examples include two seven-year-old little girls, one in Italy and the other in Australia, one who had failed defibrotide, and the other had failed both defibrotide and eculizumab. With narsoplumab treatment, both children have recovered and have been able to return home. The results from our narsoplumab pivotal trial and TATMA were recently published in the Journal of Clinical Oncology, or JCO, one of the premier medical journals and the flagship publication of the American Society of Clinical Oncology. Authored by a group of leading international transplanters, the manuscript was published online by JCO a few days prior to the start of Tandem 2022. Held this year in Salt Lake City, the Tandem conferences comprise the joint annual meetings of the American Society for Transplantation and Cellular Therapy, or ASTCT, and the Center for International Blood and Marrow Transplant Research. As part of the conference, Omeros received an award from the president of ASTCT crediting Omeros for our work in raising awareness of TATMA and advancing the medical and scientific understanding in the field. The keen interest in narsoplimab was palpable among physicians, pharmacists, nurses, and patient advocacy groups in attendance at the meeting. Underscored by the number of times our newly published manuscript was downloaded from the JCO website. More than 2,000 times during the first week of availability, and more than 3,000 times only two short weeks since the tandem conference. In March at the European Society for Blood and Marrow Transplantation, or EBMT, important aspects of TATMA and narsoplimab were presented. One presentation reported on a rigorous literature review of the natural history of high-risk TATMA, which is the same patient population enrolled in the narsoplimab pivotal trial. In the literature review, patients who received only supportive measures had just a 23 percent response rate, even though the definition of response for the literature review was less stringent than that used in the narsoplumab pivotal trial. Just to refresh your memory, in that pivotal trial, Omeros found a 61% response rate to narsoplumab. Another EBMT presentation was a case report on a nine-month-old girl at Emory University who had failed treatment with eculizumab, whose life, the investigator believes, was saved by narsoplumab. All of us at OMEROS along with the community of physicians, patients, and caregivers searching for an effective therapy for TATMA look forward to wider availability of narsoplumab following regulatory approval. And we expect that we will get there. Our narsoplumab IgA nephropathy program also has made good progress. Enrollment in our Phase III Artemis IGAM trial has accelerated, and we continue to target reading out nine-month data on proteinuria in the first half of next year. The trial is assessing both an overall population of IGAM patients with baseline proteinuria greater than or equal to one gram per day, and a population of patients with more severe disease, whose baseline proteinuria is at least two grams per of proteinuria per day. The trial is designed so that either population can support accelerated or regular approval. Our IGAN efforts in China are also proving successful. Our investigational new drug application for narsoplumab and IGAN was approved in China, and we look forward to completing the few remaining regulatory requirements and initiating enrollment there as soon as possible. Our Phase III Narsoplimab trial in patients with AHUS also is ongoing, although as previously reported, this program has been deprioritized relative to our other MASP II and MASP III programs. Narsoplimab is also being evaluated for the treatment of hospitalized COVID-19 patients in the iSpy platform trial sponsored by Quantum Leaf Healthcare Collaborative. The trial has evaluated multiple drugs as potential COVID-19 therapeutics and to date, none have been publicly reported to show a benefit relative to the background therapy in the trial. We are limited in what we can say about the trial per our agreement with Quantum. We can confirm, though, that in the latter part of last year, Concurrent with stopping enrollment in the narsoplumab treatment arm, quantum initiated discussions regarding additional clinical work focused on narsoplumab. For various reasons, that study did not go forward. We would very much like to report the data to date and are working collaboratively with quantum to finalize analyses. As soon as we can, we all look forward to sharing the outcome of the trial. Meanwhile, work at the O'Meara's Cambridge Center for Complement and Inflammation Research, or OC3IR, continues to provide important contributions to the field's understanding of the mechanism of SARS-CoV-2 and the pathophysiology of COVID-19. A manuscript by Ali et al. published last month in Frontiers in Immunology detailed the secondary infection in COVID-19. a significant cause of morbidity and mortality in COVID, is driven by complement hyperactivation, most likely lectin pathway hyperactivation. A second manuscript delayed to include additional new data has now been submitted for publication and demonstrates that, in fact, it is hyperactivation of the lectin pathway that causes complement dysfunction in acute severe COVID-19 and that narsoplumab rapidly normalizes complement function, restoring the body's infection-fighting ability. As more and more research from groups around the world is published demonstrating the importance of complement in COVID-19 and specifically the central role of the lectin pathway, interest continues to increase in narsoplimab as a treatment for acute severe COVID-19 and also potentially as prevention or treatment of long COVID or PASC. This has resulted in receptive discussions with Biden administration COVID-19 advisors and principals at NIH. Our team continues to advance research in both acute severe and long COVID-19. With respect to lifecycle management for our MASP2 program, OMS1029, our long-acting second-generation MASP2 antibody, is advancing quickly. Having successfully completed non-clinical toxicology studies without a safety signal of concern, the phase one trial is planned to begin this summer. With expected dosing in humans of once monthly to even once quarterly, OMS 1029 allows us to pursue a range of indications complementary to those of Narsoplimab. We've also made good progress on our small molecule MASP2 inhibitors designed for oral administration, and we're driving to advance a lead oral candidate to the clinic as soon as possible. Let's now turn to Omidria. As we discussed on our year-end earnings call, Omidria completed the strategic divestiture to Raynor Surgical last December. The transaction with Raynor required us to classify all historical Omidria revenue and expenses into discontinued operations, as well as to record the royalties we earned as a reduction of the Omidria contract royalty asset on our balance sheet. Our royalty rate for U.S. net sales of Omidria is 50%. Given the required reclassification of Omidria revenues and expenses, our revenues for the first quarter were reported as zero, and our net loss from continuing operations recorded as $35 million compared to $45.3 million in the prior year quarter. Our overall loss for the current quarter was $33 million or 53 cents per share compared to $35.1 million or 57 cents per share in the first quarter of last year. Our non-cash expenses were $4.2 million or 7 cents per share compared to the same quarter last year of $4.1 million and 7 cents per share. In total, our change in cash and investments from year end was a decrease of $15 million. Raynor reported Omidria net sales of $27.8 million for the first quarter. This represents an approximately 31% increase over the $21.1 million of sales for the first quarter of 2021. As I mentioned, we earn royalties at 50% of Rainer net sales, which translates to $13.8 million. As discussed in prior calls, when considering the royalty we receive and the reduction in our operating costs, we retain approximately 70% of the Omidria operating profit when royalties are at 50% of Omidria net sales. During the quarter, we worked closely with Raynor to help ensure a smooth transition of the product, the teams, and all operations with minimal disruption to customers. By all indications, the transition has gone very well. The first quarter typically is the lowest quarter for cataract procedure volume, and as a consequence, has historically been the weakest for Omidria sales. And we expect Omidria revenues to continue to grow. As of March 31, 2022, we had $142.2 million of cash and investments on hand available to support ongoing operation. As previously noted, this is a decrease of 15 million from December 31, 2021. We also have 16.3 million of receivables, primarily Omidria royalties related to the first quarter, which will be collected this month. Going forward, OMIDRIA royalties will be paid monthly within 60 days of being earned. In addition, we have a $150 million at the market sales agreement, which we have not used. Also, under the terms of the Raynor transaction, OMEROS is eligible to receive a $200 million milestone if, before 2025, separate payment for OMIDRIA is secured for a continuous period of at least four years. One vehicle through which the $200 million milestone could be achieved is the enactment of the No Pain Act, which has been introduced in both Chambers of Commerce and would provide separate payment for a renewable period of five years. for non-opioid pain management drugs like Omidrea in ambulatory surgery centers or ASCs as well as in hospital outpatient departments or HOPDs. Currently, CMS pays separately for Omidrea in the ASCs only, so the enactment of no pain would expand separate payment to HOPDs as well. Efforts to advance the No Pain Act are being led nationally by voices for non-opioid choices, and the legislation has been endorsed by more than 80 major medical societies, patient advocacy groups, and prevention and recovery organizations across the country. The legislation is good policy and enjoys strong bipartisan and bicameral support in Congress, with sponsors and co-sponsors now numbering 48 senators and 99 representatives. Most recently, the 98-member New Democrat Coalition, one of the largest and most influential caucuses in the House of Representatives, has endorsed the No-Pain Act, making it a key part of the coalition's legislative agenda for this summer. So wrapping up, with the divestiture of Omidria, we have a passive but substantial funding source to help finance Omeros' biotech portfolio, which is focused on immunology, including what many believe is the premier complement franchise in the industry, and our novel immuno-oncology programs, and on addictions. Having already discussed narsoplumab and our MASP2 program, let's move now to OMS906, our antibody targeting MASP3. MASP3 is the key activator of the alternative pathway of complement. After having received scientific advice from the UK's Health Authority MHRA, we submitted our clinical trial application and remain on schedule to initiate a Phase 1b trial this summer. The trial will evaluate OMS906 in patients with paroxysmal nocturnal hemoglobinuria, or PNH, who have an unsatisfactory response to the C5 inhibitor, raviolizumab. We previously completed a Phase 1 study in healthy subjects, and results showed high-level suppression of alternative pathway activity. favorable pharmacokinetics, and a good safety profile. While there can be no guarantees based on well-documented mechanism of action, animal data, and our Phase I results, we expect that OMS906 will be effective in PNH, addressing both intravascular and extravascular hemolysis. We and others in the industry regard MAS3 as the premier drug target in the alternative pathway and expect that OMS906 will have significant advantages over other agents on the market or in development to treat PNH. Those potential advantages include, one, efficacy. Unlike C5 inhibitors, OMS906 is expected to inhibit intravascular and to prevent extravascular red blood cell destruction. Two, safety. Unlike other agents on the market for PNH, OMS906 has been shown to leave intact the infection-fighting ability of the adaptive immune response. Three, dosing. Unlike factor B and C3 inhibitors, which are currently dosed twice daily or twice weekly, OMS906 is planned for once-monthly to once quarterly administration. And finally, other drugs in the complement systems alternative pathway are what are referred to as acute phase reactants, meaning that the blood's concentration of those targets fluctuate substantially with inflammation. This can make dosing drugs that interact with those targets challenging, leading to under or overdosing. To the best of our knowledge, MASP3 is not an acute phase reactant, meaning that the dosing of OMS906 can be more precise. We look forward to beginning dosing in PNH patients soon. Turning now to OMS527. Given resource constraints, we've prioritized our complement clinical programs over those of our phosphodiesterase 7 or PD7 inhibitor program. We previously successfully completed a phase one study of the lead molecule in this program. Discussions are underway regarding securing third party funding for continued development of OMS527. We're also exploring the potential of our PD7 inhibitors to improve dyskinesias and Parkinson's disease. More than 50% of Parkinson's patients develop L-DOPA induced dyskinesias. following prolonged L-DOPA treatment. In collaboration with Emory University, we're evaluating our compounds in relevant primate Parkinson's disease models. We've previously shown that the PDE7 inhibitors improve outcomes in models of Parkinson's through modulation of the dopaminergic system, and we've established a broad intellectual property estate covering the use of PDE7 inhibitors for not only the treatment of addiction and compulsive disorders, but for the treatment of motor disorders, including Parkinson's disease. Finally, let's turn now to our immuno-oncology programs. We've continued to focus on methods to improve the effectiveness of current cancer therapies. GPR-174 is one of the 54 orphan G-protein coupled receptors, or GPCRs. that we have unlocked in our GPCR platform. And we continue to explore modulators of the GPR174 receptor as a means of significantly improving the tumor-killing effects of current therapies, including adenosine pathway inhibitors and checkpoint inhibitors. Additionally, we're advancing research on technology that may improve the potency and durability of adoptive T-cell therapies We validated our novel approach which enforces memory phenotypes and cultured T cells through a previously unexplored pathway. In an aggressive mouse tumor model and we're building a broad and exclusive intellectual property position around our platform. We believe that our novel approach has the potential to improve response rates for patients receiving either engineered or native T cell therapies for liquid or solid tumors and are continuing to explore the application of this technology to human CAR T and adoptive T cell therapy systems. With that, I'll turn the call over to Mike Jacobson, our Chief Accounting Officer, for a more detailed discussion of our first quarter financial results. Mike?

Thanks, Greg. As Greg briefly discussed, on December 23rd, Raynor acquired Omidria in the associated business operations. The sale required us to restate our financial statements for all periods in two components, one continuing operations and the second discontinued operations. This means that all historical immediate revenue and operating expenses are shown in a single line in our income statement as discontinued operations. All of our other activities are included in continuing operations. The immediate transaction includes royalties on worldwide sales, Omeros will continue to receive royalties of 50% of net sales of Omedria in the U.S. until earlier of January 1st, 2025, or the payment of the $200 million milestone. Thereafter, we'll receive a 30% royalty on U.S. net sales for the duration of the relevant patent terms, which extends to at least 2033. We will also receive a 15% royalty on any non-U.S. net sales of Amidria over the life of the relevant patents. From an overall standpoint, considering U.S. royalties and our reduction in operating expenses, we will receive approximately 70% of the U.S. operating profit when royalties are at 50%, and over 40% when the royalty is 30%. Turning to our actual results, our net loss for the first quarter was $33 million, or 53 cents per share. This compares to $35.1 million loss, or 57 cents per share in the prior year first quarter. Our non-cash expenses for this quarter were $4.2 million, or 7 cents per share, compared to 4.1 million and 7 cents per share in the prior year quarter. As of March 31st, 2022, we had $142 million of cash and investments available for general operations. This is a $15 million decrease from the December 31st balance. We also have $16 million in royalty and trade receivables that we will collect this quarter. In addition, we have an at-the-market sales agreement that allows us to sell from time to time up to $150 million of our common stock. Continuing operating costs and expenses for the first quarter were $35 million. This is a decrease of $10 million from the first quarter last year after reclassifying first quarter 2021 amid operating expenses of $6.4 million to discontinued operations. The decrease in continuing continuing operating costs was primarily due to reduced narsopimab manufacturing activities and reduced narsopimab prelaunch marketing activities. We continue to gate our narsopimab sales and marketing spend until the timing of the FDA approval is clear. Additionally, we continue to expense any narsopimab manufacturing costs until timing of approval in the U.S. is certain. Interest expense for the first quarter was $5 million and consistent with the previous year quarter. Now let's look at discontinued operations. As you may recall from our year-end earnings call, upon the closing of the Rainer transaction, we recorded a $185 million Omidria contract royalty asset, which represents the minimum expected net present value of future U.S. royalty payments. These minimum expected future royalties are quite conservative as the amount is a net present value computation using a double-digit discount rate. The assessment includes a 24.5 percent income tax rate, most of which we expect to avoid through the use of our historic net operating losses and tax credits. And the computed amount is intended to ensure that no downward adjustment whatsoever to the Omidria contract royalty asset would need to be made in the future. In the first quarter, the actual royalties earned from Omidria sales was $13.8 million. This amount was recorded as a reduction in the Omidria contract royalty asset on our balance sheet. Additionally, we recorded $7 million of income in discontinued operations in our income statement, recognizing, for accounting purposes, the interest earned on the immediate contract royalty asset and re-measurement adjustments. Now let's take a look at our expected second quarter results. We expect overall operating costs from continuing operations in the second quarter to increase modestly from those of the first quarter due to the timing of planned research and development activities and the timing of certain employee-related costs. Interest expense for the second quarter should be consistent with the first quarter at approximately $5 million. Income from discontinued operations should be similar to the $6 million we recognized in the first quarter. With that, I'll turn the call back over to Greg.

Hey, Greg. Thanks, Mike. Let's open the call to questions, operator. Thank you.

Thank you. To ask a question, you'll need to press star 1 on your telephone. To withdraw your question, press the pound key. Again, if you would like to ask a question, press star 1. Our first question comes from Eric Joseph with J.P. Morgan. Your line is open.

Hi. Good morning. Good evening. Thanks for taking the questions, Mike. Just a couple from us, but first on the supplement, there aren't a lot of dispute resolutions that we can refer to here. So I'm curious to get a sense of what really the rosiest outcome could be from the dispute process. Is it an automatic approval, full approval, if CEDAR's decision were to be overturned? And I wonder whether there's a middle ground that you might be arguing for, perhaps like an accelerated approval or conditional approval. as a compromise. Oh, and then I'll second question as a follow-up.

Okay, sure. Let me address it and then I'll hand it off to regulatory as well. You know, look, what we are requesting is regular approval based on the information, the data that are in our existing BLF. What is the Optimal outcome the optimal outcome would be agreement with that which we think is quite clear and well supported and that would then lead to label discussions and and We're off to the races your question about is there some mid ground? As I mentioned, I think in the prepared comments Covington and Burling and Hyman Phelps McNamara have substantial experience in these. And collectively, the outcomes on those that they have worked with are that it is favorable for the company. How that would play out for us, we just need to see. But frankly, I think that when you look at our data, which are published, when you look at what we have said publicly about the regulatory history and I can just assure you that those comments are absolutely accurate. If you look at the precedent of this division with similarly situated drugs in similar indications, meaning life-threatening indications, and then you look at the literature, you put all of that together, we believe, and I think that that is the royal we, and I would extend that to our advisors, believe that, you know, look, we have a very strong case here. For whatever reason, what is coming back is sort of this uninterpretability of the results. And we just don't see it that way. And frankly, either do the experts who do these procedures. And it was quite disappointing, frankly. I mean, when we came out of the Type A meeting, we felt that that had been a constructive meeting. In fact, a quite constructive meeting. We had addressed every one of the concerns that were raised either in the briefing package or in the meeting itself. And we thought we had made really good headway and that we were being very collaborative about what we were trying to do. That's why the meeting minutes that came back were surprising and frankly I think sort of triggered a reassessment of what our next step would be and which path would be the most expeditious. And that's how we've come to this. We believe we will be successful. and we believe that this path provides us success in the shortest amount of time. But let me see if, Kathy, if you agree, disagree with any of my statements or want to add something additional.

Kathy Bates- Sure. Thanks, Greg. Really, all I have to add is kind of procedurally speaking in terms of getting a favorable outcome from this formal dispute resolution, if the Office of New Drugs agrees with us that the information in the BLA supports approval. Procedurally speaking, we would have to then put a submission back into the division and then they would classify that as a class one resubmission because it wouldn't have new data or new analysis in it. And so procedurally, FDA then has two months from our submission to reach their final decision. And it's during those two months that, as Greg mentioned, we'd be talking about final label language. And hopefully they wouldn't even take the two months. But again, just procedurally speaking, that's basically how it works. But again, I think Greg did a nice summary of kind of where we are and the discussion we had at the post-action meeting.

Okay, great. Actually, yeah, the added detail is quite helpful. Maybe just a follow-up, if I could, on Omidria, and as it relates to the commercial milestone, you alluded to the No Pain Act, and it's possible passing legislation as a trigger. I just wonder whether there are any other routes in which you might be able to kind of have secure separate Part B payment for that four-year period. I mean, you know, as we think about the – my sense of the review cycle is that typically separate payment is reviewed on an annual basis. Is there any chance that the review cycle might kind of extend beyond more than a year? Sure. or for multiple years?

Yep. Understood. The answer is that, in fact, Omidria's separate payment under the non-opioid exclusion does not come up automatically every year. CMS's decision on it was a going forward decision. meaning one that does not need to be renewed every year. CMS made the decision that Omidrea qualifies under the non-opioid exclusion for separate payment full stop. So, you know, again, we follow the OPPS rules that come out annually. We look carefully at those. But this policy has been in place with CMS since 2019. So we expect, particularly given the opioid pandemic that's currently underway, that this is not something that CMS is going to meaningfully change. And again, the data that are published, OMIDRIA meets all of the criteria for separate payment. So it's not an annual renewal.

Okay. Okay. Thanks for the call and thanks for taking the questions.

Thank you. Our next question comes from Greg Harrison with Bank of America. Your line is open.

Good afternoon. Thanks for taking our questions. So after the Type A meeting, What were the critiques that you referenced in your press release and in your remarks that were repeated by the agency, and how had you addressed those critiques, and what about your responses to them did the agency disagree with?

Yeah, hi, Greg. Thanks for the question. Look, we aren't going to litigate or discuss the specifics of this publicly. I don't think that's going to be helpful to us. But I can say that there were specific critiques that were laid out by the division in the CRO. And we painstakingly addressed every single one of those critiques. And in a number of cases, that wasn't the first time frankly that we had seen or responded to those same critiques. And I think that they were, our responses were on point and that the responses were quite clear. And so it is surprising to us that some of that came back as a refrain. And I think that We have addressed those, and we think that those responses that we've provided are abundantly clear. And this is why, I mean, this was not an easy decision for us as to what we were going to do. We were surprised by the minutes coming back. And we really needed to draft, as I said earlier, the request and evaluate that. objectively, and not only internally, but with our outside experts to look at that and to look at our case overall. And I think given the strength of the case and the strength of our responses, that document, and other documents, that we feel really, you know, look, it's kind of time to just move on and get this thing fixed, and that's what we're trying to do. Again, let me see if, Kathy, you've got any comments.

Sure. Thanks, Greg. I think we said before that FDA's critiques involved difficulty interpreting treatment response, and at the Type A meeting, we were able to address these. As Greg said, we felt it was a constructive meeting in that Again, it was a teleconference as required by FDA, but we felt that we had made good progress toward approval. And so, again, to get the minutes back and not even on time and to feel like some of the same critiques, the difficulty interpreting the data, were still there. Again, after reviewing what we pulled together, speaking to a lot of experts, including ex-FDA people, we feel that this process that FDA has in place specifically for this purpose is the best way to move forward. And so that's the route that we're taking.

Got it. Understood. And then on the dispute resolution pathway, Greg, you mentioned some, you know, that you have a database of examples of companies that have gone through this pathway. Do you have any information on how many of them were successful the first time around, as is your goal? And what gives you the confidence that, you know, that that's, you know, I think in your view, likely to happen potentially, and that the FDA would essentially, you know, overrule itself at that point?

Yeah. As I said, if you look at Covington and Burling and Hyman Phelps McNamara, both groups that we use, uh, frankly, both for legal and regulatory advice, how the collective experience there has been, uh, that, and let me back up a moment and just kind of put this in context, Greg, you know, if you go to the published statistics, the statistics will say that, uh, you know, well less than half of these are successful. But success is defined as whether the specific application is granted. And what ends up happening, at least in our understanding with these two firms that do certainly a large amount of these relative to other firms, is that in the good majority of these cases that the outcome is favorable for the company. So obviously we're betting, and I think on appropriate data and based on our own BLA, that we're going to be successful here. So, you know, again, all of these things have been factored in, which is, why it took us a bit to get to this decision. But at some point, kind of going back and forth and discussing the same specific sets of critiques, responding to those critiques, and then having them come back again, every time, that takes time, right? You're going through type A or type B meetings, and those take time. And our position was just look, for whatever reason, there's a difficulty interpreting the data within the division. And you know, it is a complex indication and it is a complex complication of a complex disease set, right? We're talking about stem cell transplantation and a complication of stem cell transplantation. So, you know, the complexity is a factorial issue. But we believe that the data are abundantly clear. And, you know, I would frankly love to get into the details of that. I don't think that's going to be productive here. I can just tell you that our position is that we should carry the day. So we're confident. Is that a guarantee? Of course it's not a guarantee. But I and our team are confident in the outcome and also in the approach. And so when you look at that success, that Covington and Hyman Phelps have had, I think we're making the right bet.

Got it. Well, thanks again for taking the question.

Thank you. Our next question comes from Brandon Foulkes with Cantor Fitzgerald. Your line is open.

Hi, thanks for taking the questions and thank you for all the updates. Greg, I hear your confidence in you know, prevailing in this dispute resolution process. But can you just maybe help us think through the other scenario? If you don't prevail, could you provide, you know, any color in terms of maybe what the FDA is asking for or what the path forward may be here? I mean, are you committed to an additional trial? Obviously, you have a tremendously deep pipeline. You know, just taking the other side of the coin, but grant your confidence. Thank you.

Sure, Brendan. Thanks. Well, no, look, I think that certainly we have considered what the other side of that coin would look like. But remember that we are the ones that propose to FDA what we would do. FDA has requested additional information as we have explained previously. We believe that we have met not just met but exceeded the threshold for substantial evidence of effectiveness with this drug. And so our position here is that, look, we've done it. And for whatever reason, we're not communicating on this point. So let's go to another group and let's get this effectively adjudicated. So, you know, the result of not being successful on that, I think, you know, look, as I said, the majority of these come back with something favorable for the company. What would that mean? I can't speak to that right now. But again, I think that our position is that we will be successful. We warrant a successful outcome. The BLA warrants a successful outcome. And we are looking forward to getting this process ongoing and then behind us and having this drug approved. I mean, again, Kathy, Steve, any additional comments?

None for me. Thanks.

The data is strong, Greg, and I agree with you completely. In my view, there's certainly substantial evidence of effectiveness when you compare it to drugs. historical precedent. There's certainly strong evidence here.

And I think Steve raises a good point. I know I mentioned it earlier, but I just want to underscore it. There's substantial precedent, not just within FDA, but within this specific division. And those precedents are certainly, when compared to what we have produced, we think, again, put our BLA in a substantially favorable light. And I think that, again, when you look at the data, as Steve said, when you look at the precedent, when you look at the literature, and when you look at the regulatory history, you put all that together, it is just very hard for us to understand, frankly, why we were not approved in in October of last year, but how someone looking at this truly objectively could come to some other outcome. Of course, that can always happen, but we've tried very hard to look at this as critically as we can. Where are the shortcomings? Where can we strengthen? But I've got to tell you, our collective view is this BLA warranted approval and certainly continues to warrant approval, and we expect to be successful.

Okay, I'm showing no further questions at this time. I'd like to turn the call back to Dr. Damopoulos for closing remarks.

Well, thank you again, everyone, for joining the call today. We look forward, as I said, to completing the dispute resolution process quickly and bringing narsoplimab over the finish line. In parallel, our other programs continue pushing forward Near-term value driving milestones are coming up throughout 2022. We'll continue to keep you updated on our progress, as always. We appreciate your continued support, and we hope you all have a good evening. Take care.

This concludes today's conference call. Thank you for participating. You may now disconnect, everyone. Have a great day.