Omeros Corporation

Good afternoon and welcome to today's earnings call for Ameros 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. 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 Ameros.

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 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 most recent 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 Zimopoulos, Chairman and CEO of Omero.

Thank you, Jennifer, and good afternoon, everyone. I'm joined on today's call by Mike Jacobson, Nadia Dock, Andreas Grauer, Kathy Melfi, and Steve Whitaker. collectively representing our finance, commercial, clinical, and regulatory functions. I'll start today with an overview and discussion of our first quarter 2024 financial results, followed by an update on our ongoing development programs. Mike will then provide a more detailed financial summary before we open the call to questions. Let's now look at our financial results for the first quarter. Our net loss for the first quarter of 2024 was $37.2 million or 63 cents per share compared to a net loss of $9.1 million or 15 cents per share in the fourth quarter of last year. The difference is driven by two factors. In the fourth quarter of last year, we had a re-measurement adjustment of $26.2 million to our Omidria contract royalty asset as a result of our Omidria royalty sale to DRI Healthcare. And a $4.1 million gain on early retirement of a portion of our 2026 convertible notes following the fourth quarter open market repurchase of a notional amount of $9.1 million of those notes at a cost of $4.9 million, or 54% of par value. Excluding these two transactions, our fourth quarter 2023 net loss would have been similar to that of the current quarter. As of March 31, 2024, we had $230.3 million of cash and investments on hand available to support ongoing operations and debt service, an amount that we expect will be sufficient to fund operations and debt service into 2026. In addition, one of our two negotiated milestone payments of up to $27.5 million based on sales milestones of OMIDRIA, if met, becomes payable to OMEROS in January 2026, with the second $27.5 million milestone similarly payable in January 2028. Let's now review our development programs. We provided a comprehensive update on these programs during our earnings call just last month, so today's update will be somewhat brief. We'll start with narsoplimab, our MASK2 inhibitor targeting the lectin pathway of complement. As described last month, discussions are ongoing with FDA regarding the resubmission of our biologic license application, or BLA, or narsoplumab in hematopoietic stem cell transplant-associated thrombotic microangiopathy, or TATMA. Given the prescribed timelines and rules regarding meetings with FDA, we do not at this time have a firm date for BLA resubmission or the related decision date for approval. As I noted last month, when we do have that information, we'll provide you with an update. We remain optimistic in the approval of Narsoplimab. In the meantime, we continue supplying Narsoplimab under our expanded access program to TATMA patients and their physicians, although Given the program's financial burden on OMEROS, we are assessing how much longer we'll be able to maintain that program. Support for narsoplumab within the transplant community is strong and continues to grow. In addition to the recent publications discussed in our last earnings call, a manuscript directed to the outcome of narsoplumab treatment in 20 real-world adult and pediatric patients 19 of whom had high-risk characteristics, is expected to be published soon in Nature's Bone Marrow Transplantation. Let's now turn to OMS906, our MASC-3 inhibitor targeting the alternative pathway of complement. OMS906 is advancing well through multiple ongoing Phase II studies in two rare disease indications. paroxysmal nocturnal hemoglobinuria, or PNH, a life-threatening hematologic disorder, and complement 3 glomerulopathy, or C3G, a debilitating and potentially life-threatening kidney disease. Across all of our clinical studies to date, OMS 906 continues to perform extremely well. On last month's call, I went through a detailed review of the substantial value being built in our OMS 906 program, value which we believe remains largely under recognized by the investment community. To summarize, we believe that OMS 906 has several distinct and substantial benefits which make us confident that OMS 906 will favorably differentiate compared to other alternative pathway inhibitors currently available or in development. Adding to our confidence demonstrated efficacy with other alternative pathway inhibitors such as the factor B inhibitor of tacopan further de-risk our OMS 906 programs by clinically validating alternative pathway inhibition across a list of disease indications including PNH, IgA nephropathy, and most recently, C3G. While we are targeting Iptacopan as our benchmark to be, and we expect that we should, Iptacopan continues to build a roadmap for us to follow with phase three trials designed to highlight the potential advantages of OMS-906 over other alternative pathway inhibitors. We've detailed on previous calls what we see as the major differentiators between MAS-3 and OMS-906 versus other alternative pathway targets and therapeutics either approved or in development. These include that, one, Masp3 inhibition, unlike C3 and C5 inhibitors, leave entirely intact the infection-fighting lytic arm of the classical pathway of complement, an advantage that could well translate to better safety. Two, unlike C3, C5, and Factor B, Masp3, when examined, has been shown not to be an acute phase reactant, which is thought to be an important advantage in maintaining adequate and consistent dosing to prevent breakthrough of the underlying disease. And three, with once every two months to once quarterly dosing, OMS 906 is expected to provide superior patient convenience and compliance. Market research to date has demonstrated a consistently favorable response to OMS-906 among physicians, driven by the drug's database expected efficacy and low treatment burden. Interestingly, physicians have also shown a preference for both the once every two months and the once quarterly intravenous dosing of OMS-906 over the twice daily oral dosing. This is because the dosing regimens of OMS-906 coincide with the usual physician follow-up schedule for PNH patients and would allow physicians to oversee drug administration, ensuring patient compliance. From the patient's perspective, the extended interval dosing regimens of OMS-906 should allow them to live a more normal life without the daily oral medication reminder that they are sick. Our three trials in our OMS 906 Phase II clinical program in PNH are progressing well. The first evaluating OMS 906 in PNH patients who have not previously been treated with a complement inhibitor, in other words, complement inhibitor naive, has fully enrolled and is in the dose finding stage, assessing administration every eight or every 12 weeks. The second trial has a switchover design, enrolling PNH patients who have a suboptimal response to the C5 inhibitor rabulizumab. OMS906 is initially administered to these patients in combination with Ravulizumab for 24 weeks. And then, in those patients who demonstrate a hemoglobin response with the combination therapy, OMS906 is delivered as monotherapy. The switchover study is also fully enrolled, and we're currently collecting OMS906 monotherapy data. A third phase two PNH trial, an extension trial, is enrolling patients who have completed either of the other two OMS906 PNH studies and is generating long-term efficacy and safety data for our program. Results from the combination stage of the phase two switchover trial have been selected for podium presentation at the annual Congress of the European Hematology Association next month. Dr. Morag Griffin, an internationally recognized expert in PNH from the St. James Teaching Hospital in Leeds, England, will deliver the presentation. The presentation reports the results in PNH patients with two different doses of OMS-906. All patients in the high dose group achieved clinical response which is defined as an increase in hemoglobin of at least two grams. And six of seven patients in the low dose group also achieved the same level of clinical response. No patients in either dose group required transfusions following initiation of OMS 906. The drug was well tolerated without any safety signal of concern. There will also be two poster presentations at EHA directed to the pharmacokinetics and mechanism of action of OMS 906. Given the rapid progress and impressive performance of OMS 906 in PNH, we remain on track to initiate our OMS 906 phase three PNH program in the fourth quarter of this year. Our phase two clinical trial Evaluating OMS 906 in C3G is enrolling. Here again, we remain on track and expect to begin a Phase III program in C3G in the first quarter of 2025. In preparation for both the P&H and C3G OMS 906 Phase III programs, discussions are ongoing with both U.S. and European regulators. So, in conclusion, around OMS-906, based on data to date, we believe that OMS-906 has a high likelihood of success, both with respect to patients' lives and to market impact. Let's now discuss OMS-1029, our long-acting inhibitor of MASK2 targeting the lectin pathway. OMS 1029 successfully completed a phase one single ascending dose study supporting once quarterly dosing administered either subcutaneously or intravenously. The second half of that phase one program, a multiple ascending dose study of OMS 1029 is expected to read out data to our team later this quarter. As previously disclosed, we are evaluating several chronic large value indicators and indications for potential development of OMS1029. Among these is neovascular age-related macular degeneration, also known as wet AMD. MASK2 inhibition was previously demonstrated to be effective in a preclinical murine model of wet AMD. To further qualify the opportunity, we've initiated evaluation of OMS 1029 in a primate model of wet AMD. Notably, all approved treatments for wet AMD, such as Lucentis and ILEA, require intravitreal injections, meaning injections into the posterior chamber of the eye. These injections are required as frequently as every four weeks, and obviously are not ideal for patient comfort. Since MASP2 is produced exclusively in the liver, systemic administration alone could block MASP2, providing therapeutic benefit without the need for intravitreal injection. Simply put, intravenous or subcutaneous administration of OMS 1029 could allow patients to maintain their sight and avoid painful injections in their eyes, a potential game changer in a very large market for both patients and their physicians. We continue to target next quarter to select a phase two indication for OMS 1029. With less resource intensive, Work our ongoing efforts with narsoplamab in both severe acute and long COVID or PASC, as well as in acute respiratory distress or ARDS, including H1N1 and H5N1, could add meaningful shareholder value in the near term. The international literature, some of that novel work continuing to be generated by our team, increasingly support the central role of the lectin pathway in these diseases. As part of our efforts, we've developed an assay that can differentiate based on lectin pathway activation between those patients with mild COVID and those with severe ARDS-related COVID requiring hospitalization. The assay also has potential applicability to patients with other forms of ARDS and to patients with long COVID as well. In addition to our MASK2 and MASK3 antibody inhibitors and our soplumab OMS906 and OMS1029, our complement franchise includes our developing small molecule orally available MASK2 and MASK3 inhibitor programs, both of which are advancing rapidly. Our oral MASK2 inhibitor is further ahead, and we are considering well-suited indications for clinical trials. Our oral MASK3 inhibitor program is quickly driving toward a drug development candidate, leveraging in good part all that we learned throughout our MASK2 small molecule program. Turning to OMS 527, our PD7 inhibitor program aimed at treating addictions, compulsions, and movement disorders. At the directed request of the National Institute on Drug Abuse, or NIDA, we are developing OMS 527 as a potential treatment for cocaine use disorder. The program is funded by NIDA through a $6.7 million grant. We anticipate receiving results later this year from a preclinical toxicology study of primates exposed to both cocaine and OMS 527. Assuming positive results in the toxicology study, we plan to initiate next year a randomized double-blind inpatient clinical trial evaluating OMS 527 in individuals with cocaine use disorder. Also, as referenced in last month's call, we're exploring the potential use of OMS 527 in movement disorders, specifically levodopa-induced dyskinesias or LID. This is a major problem in patients treated with levodopa, and levodopa being the most common therapeutic used in Parkinson's disease. As such, LID represents a large and effectively untapped commercial market. Our set of cellular and biologic immuno-oncology platforms also have the potential to generate near-term shareholder value. Following the recent generation of a large volume of exciting in vivo data, our primary focus is on signaling-driven immunomodulators antigen-driven immunomodulators that function both as therapeutics and vaccines, oncotoxins, and adoptive T cell therapy, which we believe could supersede CAR T. These platforms represent novel approaches to cancer treatment designed to target both cell surface and intracellular cancer targets for broad cancer applicability. to increase both CD4 and CD8 levels to mitigate loss of treatment effect seen with other therapies like checkpoint inhibitors, to eliminate the need for costly and time-intensive cellular modification or engineering, and to create immune memory against future relapse. We continue building out a broad intellectual property position and expect to share more of our data later this year. I'll now turn the call over to Mike Jacobson, our Chief Accounting Officer, to go through a more detailed discussion of our financial results. Mike?