Omeros Corporation

Good afternoon and welcome to today's conference call for O'Mears 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. To ask a question during this session, you will need to press star 11 on your telephone. You will then hear an automated message advising you your hand is raised. To withdraw your question, please press star 11 again. Please be advised that this call is being recorded at the company's request and the replay will be available on the company's website for one week from today. I will now turn the call 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 factors section of the company's most recent annual report on Form 10-K and its subsequently filed quarterly reports 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 Lomero's.

Thank you, Jennifer, and good afternoon, everyone. I'm joined on today's call by our Chief Accounting Officer, David Borges, Nadia Dock, our Chief Commercial Officer, Andreas Grauer, our Chief Medical Officer, our Chief Regulatory Officer, Kathy Melfi, and our Vice President of Clinical, Steve Whitaker. We'll start today with an overview and discussion of our third quarter 2024 financial results. followed by an update on our ongoing development programs. David will then provide a more detailed financial summary before we open the call to questions. Now let's look at our financial results for the third quarter. Our net loss for the third quarter of 2024 were $32.2 million, or 56 cents per share, compared to a net loss of $56 million or 97 cents per share in the second quarter of this year. The $23.8 million quarter over quarter decrease in the net loss was primarily driven by $17.6 million of narsoplamab drug substance recorded as an expense in the second quarter. As of September 30, 2024, we had $123.2 million of cash and investments on hand, a decrease of $35.8 million from June 30, 2024. In addition, as relayed in earlier calls, our recent sale of Omidrio royalties to DRI Healthcare carries with it two sales contingent milestones payable by DRI to Omeros, each up to $27.5 million with payment dates in January 2026 and January 2028. Earlier this year, the Centers for Medicare and Medicaid Services issued their outpatient prospective payment system final rule confirming ongoing separate payment for OMIDRA in ambulatory surgery centers and for the first time beginning on January 1, 2025, expanding separate payment to hospital outpatient departments or HOPDs. The initiation of HOPD sales in January is expected to grow OMIDRIA sales meaningfully in the US. Ex-US sales should also begin next year with OMEROS receiving 15% of those net revenues. Additionally, our term loan agreement from June 2024 includes a commitment by the lenders to fund a $25 million delayed draw facility upon our request prior to June 3, 2025, contingent on receipt of FDA approval of narsoplimab and TATMA within 30 days of the funding request. The additional term loan commitment provides OMEROS with a ready source of capital to fuel the early commercialization of Narsoplimab. With that, let's move on to an update on our development program, starting with our complement franchise and Narsoplimab, our first-in-class MASP2 inhibitor targeting the effector enzyme of the lectin pathway of complement. As described in previous updates, we have been working closely with FDA regarding the anticipated resubmission of our biologics license application, or BLA, for narsoplimab in hematopoietic stem cell transplant-associated thrombotic microangiopathy, or TATMA. Over the last several quarters, we have had a series of interactions with the agency focused on our proposed plan for resubmission. In September, we held a pre-submission meeting with FDA. The meeting was collaborative, and as part of the meeting, we received additional minor feedback on our proposed statistical analysis plan for the primary endpoint that being patient survival in our pivotal narsoplumab trial compared to that in an external registry of patients with TATMA. FDA had previously reviewed the plan and all FDA comments had been incorporated. The additional feedback was limited to requesting a few more sensitivity analyses. We quickly incorporated additional sensitivity analyses into the plan and sent it back to the agency. We are awaiting FDA's reply and expect it to arrive imminently. We have no other pending information requests and are not aware of any other impediments to resubmitting our narsoplimab BLA. Once FDA's response is in hand and assuming general alignment on the revised analysis plan, our independent external statistics group will conduct the pre-specified analyses directed to the primary endpoint. In addition to the primary analyses, the external statistics group will perform supplementary analyses on the Narsoplimab Expanded Access Program, or EAP, together with sensitivity analyses and descriptive statistics on both the narsoplimab pivotal trial results and the narsoplimab EAP data. The key statistical programs for these analyses are already written, so results from the analyses should be available in a matter of days after their initiation. Following completion of the analyses, we look forward to sharing the results publicly. To accelerate the timeline to resubmission, preparations including drafting and revising sections of the resubmission began months ago. Assuming overall favorable analysis results, we will dedicate the necessary internal and external resources to resubmit the BLA as quickly as possible. Our recent interactions with FDA are occurring against a backdrop of heightened awareness and focus within both the agency and Congress on the need for expanding treatments for rare diseases, including increasing regulatory flexibility in FDA's review and approval process for these treatments. This is evidenced by public statements and congressional testimony by FDA leadership, the Congressional Rare Disease Caucus's communications with FDA, as well as published editorials authored by the caucus's bipartisan chairs and significant stakeholder engagement among highly credible rare disease community organizations. Perhaps most impactful and widely noted is FDA's recent and well-received establishment of its Rare Disease Innovation Hub. The hub, co-led by the directors of FDA's Centers for Drug and for Biologics Evaluation and Research, is designed to provide drug sponsors and other stakeholders in the rare disease community with a single point of connection and engagement within the FDA. The objective is to ensure greater consistency in the review process and to overcome and mitigate the unique challenges associated with developing therapeutics for rare diseases. Separate from our interactions with FDA, we are preparing a European Marketing Authorization Application, or MAA, for narsoplimab in TATMA. which we expect to submit in the first half of 2025. In parallel with our efforts to submit both the Narsoplimab BLA and MAA, panels of international experts are preparing two manuscripts for publication in top-tier peer-reviewed journals. The first, in keeping with our primary endpoint for regulatory approval, will compare survival of patients in our pivotal TATMA trial with the same rigorous external control used for our BLA resubmission. The second details the survival data in nearly 140 narsoplimab-treated adult and pediatric patients from our global expanded access program. As we have moved closer to resolving the status and direction of our Narsoplimab program in TATMA, we have, in parallel, continued to advance rapidly toward the initiation of Phase III clinical programs for Zoltenibar, also known as OMS906, our first-in-class MASP3 inhibitor targeting the key activator of the alternative pathway of complement. Let's turn now to an update on our progress across our Zoltanabart development programs. Omeros's focus for Zoltanabart has been on multiple phase two studies assessing the drug as a potential treatment for two chronic rare disease indications, paroxysmal nocturnal hemoglobinuria, or PNH, a life-threatening hematologic disorder, and C3 glomerulopathy, or C3G, a debilitating and potentially life-threatening kidney disease. Let's first discuss our PNH program, which continues advancing rapidly and generating compelling data. Our Phase II switchover study evaluated zeltenibard in PNH patients with a suboptimal response to rabulizumab. As planned and on schedule, all patients have now completed the trial with the last patient visit having occurred in October. These completed study patients have rolled into the long-term open-label extension study, further building our safety database to be included in the planned BLA for Zaltanabard in PNH. Patients in the switchover study began by receiving both Zoltenibart and Ravulizumab, a C5 inhibitor, with those patients demonstrating a response to the combination therapy, then switching to Zoltenibart monotherapy. The trial evaluated two Zoltenibart dose levels. Results from the adjunctive therapy portion of the trial were presented in June at the annual Congress of the European Hematology Association. Patients receiving Ravulizumab and Zoltenibart combination therapy demonstrated a statistically significant improvement both in mean hemoglobin compared to baseline and in absolute reticulocyte count. Now, data from the Zoltenibart monotherapy stage of the trial will be presented next month in San Diego at the Annual Congress of the American Society of Hematology. We are pleased with the results. Zeltenabart monotherapy prevented intravascular as well as extravascular hemolysis and showed sustained and clinically meaningful improvements in both hemoglobin levels and absolute reticulocyte counts. Zeltenabart also continues to demonstrate a favorable safety profile with no observed safety signal of concern. The second PNH study is ongoing, this one evaluating Zoltenibart in PNH patients who have not been previously treated with a complement inhibitor. As discussed during last quarter's earnings call, we amended this study's protocol to allow Zoltenibart concentrations in patients to decrease until breakthrough hemolysis occurred. generating additional data on the level of MAS3 inhibition and the correlating plasma concentrations of Zoltenabart required to inhibit that breakthrough hemolysis. Based on our analyses of these and other data generated from our Zoltenabart clinical program, and having agreed with both FDA and European regulators on our dose-finding methodology, we've now selected the Zoltenibart dose for our Phase III clinical trials. Both Zoltenibart studies in PNH, the switchover trial and the trial in treatment-naive patients, have resulted in impressive efficacy and safety data. These data support our expectation that Zaltanabart will be a successful competitor in the market of alternative pathway therapeutics. And our phase three program design is well aligned with that of our already successful phase two program. Specifically, our Phase III program consists of two trials, one switchover trial in patients with an inadequate response to C5 inhibitors, and the other trial in patients who are not receiving complement inhibitor treatment. The endpoint measures are the same as those used by Novartis in its pivotal trials for And the results of our already conducted Zaltanabart PNH trials show robust efficacy against those measures. So we're pleased to say that Zaltanabart Phase III program in PNH is underway. Earlier this quarter, we completed successful end of Phase II meetings with both FDA and European regulators. Both agencies agreed with the designs of our studies. FDA had a few comments which we incorporated and the revised protocols will be returned to FDA within the next few weeks. Based on our discussions with both FDA and European regulators, we now have a clear path to opening enrollment which, given the upcoming December holidays, we expect in early 2025. In preparation for commercialization, we also held a successful meeting with the German Federal Joint Committee or GBA. the decision-making body in the German healthcare system that specifies which medical treatments are reimbursed by the statutory health insurance funds. The GBA provided us with productive feedback on the patient-reported outcome measures that we plan to incorporate in our trials. We also continue to solicit input from physicians and patients through market research and advisory boards to define the data that will meaningfully differentiate CELTENABART from other complement inhibitors. We are collecting these data in our phase three trials and other non-trial activities. Based on the insights collected to date, CELTENABART's clinical profile together with its low treatment burden of only four to six times per year, is clearly differentiated from treatment options on the market or in development. The market size for PNH is large and growing, reported to be $3.9 billion in 2023 and projected at over $10 billion in 2032. We expect that after approval, Zoltenabart will command a substantial portion of that market given its differentiated profile that resonates well with prescribers and patients. Let's turn now to Zoltenabart and C3 glomerulopathy or C3G, an ultra-rare kidney disease commonly affecting children. Late last month, we announced that FDA had awarded Zaltenibar with a rare pediatric disease designation for the treatment of C3G. Companies holding a drug with this designation receive a rare pediatric disease priority review voucher from FDA. When the designated drug's first approval is for the associated indication in the pediatric population. The voucher allows the recipient company to obtain FDA priority review of either a BLA or a new drug application for a different product or indication. This priority review is commercially valuable in that it reduces the review time and can accelerate any subsequent market entry by at least four months. The voucher may be used by the original recipient or can be sold to another company for use. Our Zaltanabar Phase 2 C3G study is enrolling and assuming positive data. A Phase 3 program in C3G is planned for initiation in the first half of 2025. As discussed at our last quarterly call, All Zoltenibar drug product needed for our Phase III programs has been manufactured and is ready and waiting for the start of enrollment in the Phase III PNH and C3G trials. As noted earlier, Omeros will have a sizable presence at the annual meeting of the American Society of Hematology next month, including Zoltana Bard abstract presentations, advisory board and medical affairs activities, and meetings with experts and corporate groups across the relevant therapeutic areas for alternative pathway inhibition. Where do we go next with Zoltenibart? Well, we continue to follow closely the clinical trial results of other alternative pathway inhibitors to identify additional indications where we believe Zoltenibart would have substantial advantages over other agents. We also are exploring diseases for which the pathology might well be primarily MASK3 driven. All this is to say that we remain keenly focused on the wide applicability of mass pre-inhibition and the significant advantages that Celtenabart could hold over other alternative pathway targeting therapeutics on the market or in development. Specifically, more consistent efficacy better safety, and superior dosing compliance and convenience with significantly lower treatment burden, particularly when compared to twice or thrice daily oral medications that are often difficult for patients to remember to take. Closing out our discussion on Omeros' franchise of complement therapeutics, let's look at OMS 1029. our next generation long acting MASP2 inhibitor. Having successfully completed both the single and multiple ascending dose phase one studies of OMS1029, we are confident that the drug can effectively ablate MASP2 concentrations in humans with once quarterly low volume dosing, whether administered subcutaneously or intravenously. We also believe that the safety profile of OMS-1029 is compelling, having seen no safety concerns with OMS-1029, nor across any of the clinical trials with its shorter acting relative, the MASK2 inhibitor, narsoplumab. We continue our assessment of attractive indications for OMS 1029, as well as of additional indications for narsoplumab, dependent, of course, on resource availability. We also are continuing our work with narsoplimab and MASK2 inhibition in both severe acute and long COVID, as well as in acute respiratory distress syndrome, or ARDS, including H1N1 and H5N1. Here again, manuscripts detailing the study results are being prepared for submission to top-tier peer-reviewed journals. In addition to our complement antibodies, narsoplimab, zoltenibar, and OMS 1029, we continue making headway on our small molecule orally available MASP2 and MASP3 inhibitor programs for use in large market chronic indications. Let's turn briefly now to OMS 527, our PDE7 inhibitor program aimed at treating addictions, compulsions, as well as movement disorders. Our ongoing work to develop OMS 527 as the first treatment for cocaine use disorder remains fully funded by the National Institute on Drug Abuse, or NIDA. We continue to expect results later this year from our toxicology study in primates and rodents exposed to both cocaine and OMS 527 to assess potential drug-drug interactions. Assuming satisfactory results, the next step is to begin in 2025 enrolling a randomized double-blind inpatient clinical trial evaluating OMS 527 in individuals with cocaine use disorder. This clinical trial will also be fully funded by NIDA. Also, as previously discussed, we are exploring the potential use of OMS 527 in movement disorders, specifically levodopa-induced dyskinesias, or LID. This is a profound and highly prevalent problem in patients with Parkinson's disease, caused not by the disease, but rather by its treatment. We are pursuing substantial external funding for the further development of OMS 527 and LID, a large and essentially unaddressed market. Finally, we'll conclude today's program review with our first-in-class therapeutic platform of molecular and cellular programs targeting a wide range of therapeutic areas, including cancer. Building on our understanding of immunity, both innate or complement mediated and adaptive, meaning B cells as well as CD4 and CD8 T cells, our objective is to move beyond existing targeted biologics, such as antibody drug conjugates and radio ligands, and also beyond immunotherapies like checkpoint inhibitors and CAR T. To achieve this, we are developing a portfolio of signaling-driven immunomodulators, oncotoxins, and an adoptive T-cell technology combined with an immunostimulator. The T-cell therapy and immunostimulator combination, unlike other cellular therapy approaches, requires no cellular engineering, reduces manufacturing costs and timelines and maintains an enhanced anti-cancer immune response by means of simple and repetitive therapeutic administrations. Our growing volume of in vitro and in vivo data support the potential to deliver broadly effective and safe cancer therapies that can overcome the shortcomings of currently marketed therapeutics by treating both hematological and solid tumors, targeting both cell surface and intracellular cancer antigens, and increasing levels of CD4 and CD8 cancer antigen-specific effector and memory cells. We are rapidly advancing our oncology programs and stealth development while we continue to expand our intellectual property position. Over the past several months, we have sought the input and guidance of therapeutic area experts and advisors under confidentiality with uniformly positive response. Over the past few days, we began raising the visibility of these programs at international congresses, holding non-confidential discussions with academic experts and corporate groups in Houston at the annual meeting of the Society of Immunotherapy of Cancer. As previously mentioned, our team will also be attending the upcoming meeting of the American Society of Hematology. We plan to share further information on these programs publicly in the coming months. I'll now turn the call over to David Borges, our Chief Accounting Officer, to go through a more detailed discussion of our financial results. David? Thanks, Greg.