Omeros Corporation

And ladies and gentlemen, please stand by.

Your call will begin shortly. Again, please stand by. Your call will begin shortly.

Good afternoon, and welcome to today's conference call from Omeris Corporation. At this time, all participants are on the listen-only mode. After the speaker's presentation, after the company's remarks, we will conduct a question and answer session. Please be advised that today's call is being recorded at the company's request, and replay will be available on the company's website for one week today. I'll turn the call over to Peter Cancel Ken Silmo, General Counsel of OMERIS, you can begin.

Good afternoon, and thanks 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 risk factors section of the company's annual report on Form 10-K, which was filed with the SEC today, for discussion of these risks and uncertainties. Now I'd like to turn the call over to Dr. Greg Dimopoulos, O'Meara's chairman and CEO.

All right, thank you, Peter, and good afternoon, everyone. I'm joined on today's call by our Chief Accounting Officer, Mike Jacobson, and our Chief Commercial Officer, Nadia Dock, our Chief Medical Officer, Andreas Grau, our Chief Regulatory Officer, Cassie Melfi, and our Clinical Vice President, Steve Whitaker. Our discussion today will include a brief overview of our financial results for the fourth quarter ended December 31, 2023, as well as a corporate update. Mike will then provide a summary of financial results for the full year and further details on the fourth quarter of 2023. The question and answer period will follow Mike's remarks. For those of you that frequently join our calls, you will find that today's call will be longer than usual. And that's because there are a lot of exciting things happening at the company and we want to take the time to share them with you. In our third quarter earnings call, I identified four corporate priorities that represent significant drivers of near to mid-term value in our stock price. Those four priorities are one, Extending our cash runway into 2026 without diluting shareholders. Two, obtaining FDA approval of narsoplumab, our MAS-2 inhibitor in hematopoietic stem cell transplant-associated thrombotic microangiopathy, or TATMA, and successfully launching the drug to market. Three, driving our MAS-3 inhibitor, OMS-906, into a Phase III clinical program as soon as possible. both in paroxysmal nocturnal hemoglobin urea, or PNH, and in C3 glomerulopathy. And four, moving OMS1029, our long-acting MAST2 inhibitor, into Phase II clinical trials in a large value indication. We'll take these one at a time. First, extending cash runway without dilution. This was accomplished in February through an additional royalty deal with DRI Healthcare, extending our runway into 2026. That transaction brought in $116 million of non-dilutive capital with the opportunity to earn an additional total of $55 million in two more sales-related milestone payments. All of this is on top of one the 125 million dollar upfront payment plus retained receivables from Raynor Surgical to whom we sold Omidria in 2021 to another 125 million dollars in late 2022 when we sold a portion of our future Omidria royalty stream to DRI Healthcare and three 200 million more received early in 2023 in a milestone payment from Rainer tied to achieving long-term reimbursement for Omidria. In addition to this string of payments, Omeros retains the 15% royalty on any ex-US Omidria sales, and then beginning on January 1 of 2032, all Omidria royalties from sales anywhere in the world will accrue to Omeros. Since its sale to Raynor in December of 2021, a little over two years ago, Omidria has provided Omeros with nearly $700 million of non-dilutive financing. This inflow of non-dilutive capital has helped to secure Omeros a strong financial position. Now let's look at our financial results for both the fourth quarter. and the year our net loss for the fourth quarter and part of reflection of the revaluation of our omidria contract royalty asset was 9.1 million dollars or 15 cents per share compared to a net loss of 37.8 million dollars or 60 cents per share in the third quarter of 2023 and a net income of 128.7 million dollars or $2.05 per share for the fourth quarter of 2022. The results of the prior year fourth quarter were driven by the $200 million on mid-term milestone earned by securing for the drug long-term separate payment. Based only on continuing operations, our net loss for the fourth quarter of 2023 was $39.3 million, or 63 cents per share. compared to a net loss of $51.7 million or 82 cents per share. In the third quarter and a net loss of 46 million or 73 cents per share for the fourth quarter of 2022. These represent improvements of 12.4 million and $6.7 million, respectively. For the full year 2023, our net loss was $117.8 million, or $1.88 per share, compared to net income of $47.4 million, or $0.76 per share in 2022. Here again, the primary difference between the two years is the $200 million Omidria milestone earned in 2022 and received in February 2023. Our 2023 full year net loss from continuing operations was $175 million or $2.79 per share, compared to a loss of $182 million or $2.90 per share for 2022. So, in summary, cash provided for operations, meaning positive cash flow into the company, for the year ended December 31, 2023, was $74.7 million, which includes receipt of the 200 million milestone in February, 2023. Our change in cash and investments for the fourth quarter of 2023 was significantly affected by three events. First, $95 million used to pay off our outstanding 2023 convertible notes of maturity. Second, $4.9 million used to repurchase $9.1 million principal amount of our 2026 convertible notes at 54% of par value. And third, $4.7 million used to repurchase 1.8 million shares of our common stock. Our quarter cash used in operations, which does not include these three events, was 34%. As of December 31, 2023, we had $172 million of cash and investments. With the additional $116 million royalty purchase payment from DRI in February of this year, our total expected cash and investments at March 31, 2024, is approximately $230 million. This should be sufficient to fund operations and debt service into 2026. We have not done a dilutive financing transaction at O'Meara since August of 2020. And consistent with this effort to protect our shareholders, the most recent DRI deal further extends our runway without dilution. In fact, since announcing a share repurchase program in November 2023, we've reduced the number of shares outstanding through the repurchase of approximately 5 million shares, representing an 8% reduction in our outstanding share count. In the fourth quarter, as previously noted, we also were able to repurchase $9.1 million of 2026 convertible notes at 54% of PAR. Let's now turn to our next corporate priority, obtaining FDA approval of our MAS-2 inhibitor, narsoplamab, in TATMA. As previously discussed, we've worked with FDA since receiving a complete response letter on our biologics license application, or BLA, for narsoplamab in TATMA. The late 2022 decision from FDA's Office of New Drugs followed our formal dispute resolution, and that identified potential paths for resubmission of the BLA. Consistent with that decision and with subsequent interactions with FDA's review division, we developed and submitted for FDA's review in the fourth quarter of last year. a formal analysis plan comparing survival data from our pivotal TMA trial to survival data from an external control. FDA responded with questions to which we provided detailed answers, and the dialogue continues with FDA regarding recommended elements for a successful resubmission of our BLA. Each round of interactions with FDA is governed by formal meeting rules, including those directed to review duration. So at this point, I don't have a firm date for our BLA resubmission or the related decision date for approval. When we do, we will provide you with an update. While waiting, we've completed most of the sections of our BLA. We're also making good progress on our marketing authorization application for submission to the European Medicines Agency for narsoplumab in TATMA. As the regulatory process for narsoplumab in TATMA advances in both the U.S. and in Europe, patients with TATMA and their physicians continue to confront an unpredictable and often fatal condition without an approval, or many experts believe, without even a truly satisfactory off-label treatment option. We continue to receive an increasing volume of requests for narsoplumab under our expanded access or compassionate use program from physicians treating both adult and pediatric TATMA patients. We remain committed to trying to supply narsoplumab all over the world to help these patients. Often these are children who have endured the assault of cancer, followed by the hope of a cure through a stem cell transplant, only to have that cure taken from them and their families by TMA. We've treated over 130 TA TMA patients in our SOCLA MAP expanded access program. Total of 53 of these adults and pediatric patients had previously failed or stop treatment regimens with one or more other agents, specifically eculizumab, rabulizumab, defibrotide, and or Pancetococlin. So most of them, by the time narsoplumab was requested, would be expected to have a poor outcome. Yet after receiving narsoplumab treatment, about half of them, those patients who had been previously treated, achieved one-year survival from date of TMA. And using the other common metric from date of transplant, about two-thirds achieved one-year survival. Survival rates are even higher in both adult and pediatric expanded access patients whose initial and only treatment was narsopalimab. So it certainly appears that narsopalimab is saving the lives of both children and adults. A group of international transplant experts have begun work preparing a manuscript for peer-reviewed publication directed to the benefits of narsoplumab in the over 130 adult and pediatric TMA patients globally who were able to access narsoplumab under compassionate use. Results from our expanded access program have been reported in a growing body of publications in peer-reviewed journals and at international congresses. In a recent journal article from Emory University published in Transplantation and Cellular Therapy, two infants, a 10-year-old, and two adolescents with severe and worsening TATMA, all with multi-organ involvement, had failed treatment with eculizumab. Survival in these patients is reported to be less than 20%. These five children who had failed eculizumab were then treated with narsoplumab, 60% responded. Investigators at Memorial Sloan Kettering Cancer Center published a report in bone marrow transplantation describing for the first time narsoplumab's ability to achieve a complete response while allowing the physicians to maintain the use of calcineurin inhibitors and mTOR inhibitors in a high-risk TA-TMA patient. Calcineurin and mTOR inhibitors are known to potentiate TA-TMA, are known to cause or further TA-TMA. And their withdrawal has historically been considered the first step in managing TA-TMA. The downside of withdrawing these agents though is that they are used in stem cell transplants to prevent life-threatening graft versus host disease or GVHD. So their withdrawal increases the risk of mortality. We're aware of other transplanters who now similarly use narsopalimab with good results to treat TATMA while maintaining the calcineurin and mTOR inhibitors to prevent potentially lethal GVHD. The ability of narsopalimab to allow physicians to treat TATMA without withdrawing these GVHD preventing agents would represent a further significant advance of the drug in the management of TATMA. In February, a poster presented at the 2024 tandem meetings of the American Society for Transplantation and Cellular Therapy and the Center for International Blood and Marrow Transplant Research reported that six of nine adult TATMA patients demonstrated a complete and durable response to narsopalimab treatment. The other three patients achieved a partial response. Median duration of treatment across the patients was six weeks. The report was authored by an external group of US investigators from Vanderbilt, Sarah Cannon Research Institute, the University of Arkansas, and Indiana Blood and Marrow Transplantation. Most recently, an abstract published in the American Journal of Kidney Diseases describes a 24-year-old man who underwent allogeneic stem cell transplantation. for aplastic anemia. He subsequently developed high-risk TATMA. Eculizumab was initiated on hospital day two. On day 18, the patient developed the severe lung disorder, diffuse alveolar hemorrhage. And on day 30, hemodialysis was started for septic acute tubular necrosis, a severe kidney disorder. Narsopalimab was initiated 31 days later on day 61. Despite the late start of narsopalimab treatment, this patient with multi-organ disease who was refractory to eculizumab, so an estimated mortality of 70 to 80% responded to narsopalimab. So the evidence continues to mount, and I think the conclusion that we are certainly drawing is that narsoplumab is showing good results in TATI patients. Turning now to the third of our key priorities, we continue to advance OMS 906, our MASC-3 inhibitor, targeting the alternative pathway of complement through multiple ongoing phase two studies in two rare disease indications, paroxysmal nocturnal hemoglobin area, or PNH, a life-threatening disease of the blood and complement 3 glomerulopathy, or C3G, a debilitating and potentially life-threatening kidney disease. In contrast to our NAR supplement program for TATMA, which by its nature required the development of novel clinical endpoints for a drug with a novel mechanism and a disease for which no drug has been approved, Our OMS 906 program has the advantages of following other alternative pathway inhibitors into development and affording patients and physicians meaningful potential benefits not shared by those other therapies. This is important for several reasons. First, the mechanism of alternative pathway inhibition has already been clinically validated by other agents for the treatment of a number of diseases. thereby already demonstrating the potential therapeutic value of OMS 906. Second, in designing our phase three clinical trials, we will be able to follow the clinical roadmap established through the development of other alternative pathway targeting agents. And third, we're designing our clinical trials to demonstrate the potential advantages over other complement inhibitors on the market or in development. Beyond PNH and C3G, in which we have ongoing clinical programs, alternative pathway inhibition has also been clinically validated by other alternative pathway inhibitors in geographic atrophy and in IgA nephropathy. We previously have detailed what we see as the major differentiators between MATH3 and OMS906 versus other alternative pathway targets and therapeutics, either approved or in development. Briefly, number one, unlike C3 and C5 inhibitors, MATH3 inhibitors maintain the body's infection fighting ability. Number two, unlike factor B, C3 and C5, MAST3, when examined, has been shown not to be an acute phase reactant and has very low native circulating levels relative to other alternative pathway targets. As a result, OMS906 should maintain more consistent inhibition of MAST3 than drugs targeting factor B, C3, or C5, providing better protection against potentially life-threatening breakthrough of a patient's underlying disease. And number three, OMS 906 should deliver better patient convenience and, as a result, compliance than the competitors by allowing up to once quarterly intravenous and subcutaneous administration. In response to advice from key opinion leaders, we're exploring two treatment regimens, every eight weeks and every 12 weeks, providing patients and physicians a set of options to fit their preferences and local standards, an advantage offered by no other alternative pathway inhibitor on the market or in development. Just today, denicopan, a factor D inhibitor, was approved by FDA for the treatment of PNH in combination with a C5 inhibitor. Clinical trials, the addition of denicopan was shown to significantly improve efficacy. over C5 inhibition alone. OMS906 inhibits MAS3, and MAS3 is the enzyme that activates factor D, the nicopan's target. This should remove any question of the likely efficacy of OMS906. The nicopan is an oral medication that needs to be taken three times every day, and in the required combination with a C5 inhibitor, That means a three times daily pill on top of a frequent or less frequent IV or subcutaneous infusion. This dosing regimen represents a substantial patient burden and a potential significant risk of noncompliance and breakthrough of extravascular hemolysis. In comparison, OMS906 is a monotherapy expected to have every eight-week or every 12-week dosing. Notably, Jeffrey's research group issued a report just today estimating the nicopin's worldwide annual peak sales at $750 million. This, again, on top of the cost of the required companion C5 inhibitors like eculizumab and rabulizumab. This projection and the fact that OMS-906 is being developed as single drug therapy with more convenient dosing should further validate the value of our OMS 906 asset. Our clinical program evaluating OMS 906 for the treatment of PNH is proceeding well. We convened an advisory board last week comprised of international experts and PNH to discuss details of our PNH program, including our phase three protocol design. the advisors' interest in and enthusiasm for OMS 906 are uniformly high. And we look forward to their ongoing guidance as we move into and through our phase three program. Currently, we have two ongoing phase two studies, both of which are fully enrolled, and both of which now have reported positive interim analysis data. Data from these studies in PNH patients and from our ongoing higher dose PKPD study in healthy subjects should provide the information necessary to determine our final phase three dosing. Our newest data come from our phase two clinical trial evaluating OMS906 in PNH patients who have had an unsatisfactory response to the C5 inhibitor raviolizumab. The study has a switchover design and enrolled patients receiving rabulizumab, added OMS-906 to provide combination therapy with rabulizumab for 24 weeks, and then provided OMS-906 monotherapy in patients who demonstrated a hemoglobin response with combination therapy. The trial is fully enrolled with a total of 13 patients. Data from the pre-specified interim analysis of the trial's combination therapy portion show rapid response to OMS-906 with statistically significant and clinically meaningful improvements in both mean hemoglobin levels and absolute reticulocyte counts by week four of combination therapy. Response was sustained for week 24, which is the latest assessment prior to the interim analysis cutoff. These interim analysis data demonstrate that in patients experiencing substantial extravascular hemolysis while on Ravulizumab monotherapy, the alternative pathway inhibitor OMS906 prevents extravascular hemolysis as expected. The addition of OMS906 was well tolerated with a good safety profile. Full details from the interim analysis have been submitted for presentation at the Congress of the European Hematology Association, or EHA, which will occur in June. As with almost all international congresses, details of the submissions are embargoed by EHA until accepted presentations are published online, and that will occur in mid-May. Interim analysis data from the monotherapy portion of our switchover trial are expected to be available later this year. In December, new and updated interim analysis data from our other phase two clinical trial evaluating OMS906, this one in naive TNH patients or those who have not previously been treated with a complement inhibitor were featured as an oral presentation at the annual Congress of the American Society of Hematology, or ASH. Clinically meaningful and beneficial effects of OMS906 on hemoglobin, LVH, and red blood cell clone size in PNH patients were reported. In this latest analysis, all 11 enrolled patients achieved increases in hemoglobin of at least two grams per deciliter. Notably, all nine patients who did not have myelodysplastic syndrome, a condition causing bone marrow failure, all nine of those achieved an absolute hemoglobin greater than 12 grams per deciliter, a level cited as normal by others working in the field. Consistent benefits were also observed in mean changes from baseline in hemoglobin, LDH, and absolute reticulocyte count. All of these patients were treated with OMS906 at a dose of five milligrams per kilogram, subcutaneously, once every four weeks. After observing efficacy in this study, we amended the protocol to focus on identifying the OMS906 doses that provide protection from breakthrough hemolysis for both eight-week and 12-week durations. To support the future submission of a BLA for OMS906 and PNH, we began enrolling in extension study to collect long-term efficacy and safety data in PNH patients. Patients roll from either the phase two switchover trial or from the phase two naive patient trial directly into the extension study without a break in OMS906 treatment. Dosing in the extension study is already underway. In February, we met with FDA to discuss our development program for OMS 906 in PNH. We presented clinical and non-clinical data and requested input on expectations for phase three studies and for BLA submission. FDA confirmed that the scope of our non-clinical program is sufficient to support phase three studies and provided input on dosing and design of the proposed phase three studies to support a BLA in PNH. We will meet again with FDA later this year to discuss further phase three trial design details and the approach to our BLA submission. As part of our European strategy for OMS 906 and PNH, we've requested a meeting with European regulators at which we will present available clinical and non-clinical data and discuss Phase III development. Moving on to our Phase II clinical trial, evaluating OMS 906 in C3G. Sites are now open in multiple countries and patients are being screened. As previously discussed, we chose to amend the C3G protocol, changing the dose based on information learned in our PNH program. This choice resulted in a delay in study initiation, but should provide a better estimate of treatment effect for the design of the Phase III program. We anticipate Phase III initiation in the first part of 2025. Notably, the relevance of the alternative pathway in C3G was validated by Novartis in a press release reporting a positive Phase 3 study with Atacapent, Novartis' alternative pathway inhibitor targeting factor B. We expect to begin enrollment in our Phase 2 C3G trial this month. So we've spent a good amount of time in our update today on OMS 906 and all the ongoing Phase II and upcoming Phase III trials. The purpose was to provide you with a better understanding of the substantial value that continues to accrue in this program, value that we believe has been under-recognized by the investment community. In short, the data from our ongoing Phase II P&H studies have been consistently positive. Alternative pathway inhibition has been clinically validated across a number of diseases. And we are proceeding through an established clinical development pathway with what we believe is a well-differentiated drug that presents multiple potential advantages over alternative pathway inhibitors on the market or in development. For these reasons, we believe that OMS906 could become the first-line standard of care for the treatment of PNH and a host of other alternative pathway diseases. Now I'll turn back to our family of agents targeting MASK2 and the lectin pathway to discuss briefly our findings in the Phase III IgA necropathy trial and the last of the key priorities identified at the outset of today's call, OMS1029. As announced last October, we discontinued our narsopalimab phase three Artemis IGAN trial on IgA nephropathy following a disappointing outcome from a pre-specified interim analysis. During our last earnings call, we discussed the trial's unexpected substantial placebo effect. Top line results show that narsopalimab did not reach statistical significance over placebo on the primary endpoint of proteinuria reduction at 36 weeks in IgA nephropathy patients with baseline proteinuria greater than 2 grams per day. Together with external experts, we further reviewed the trial data. PKPV analyses indicate that many patients in the Phase III trials did not achieve adequate and sustained plasma concentrations of narsoplamab. and consequently did not achieve meaningful and sustained levels of elective pathway inhibition. This in part appears to be due to episodic dosing in the trial. Once quarterly dosing with our MASK2 inhibitor, OMS1029, should we decide to evaluate it in IgA nephropathy or in any other chronic renal disease, would be expected to avoid this problem. Work continues to identify one or more bioarchers that we would expect to enable enrichment of any renal study population with patients whose disease specifically is driven by lectin pathway hyperactivation. In parallel and consistent with our corporate priority, we're evaluating for OMS 1029 a series of chronic large value indications in which the lectin pathway has been implicated in the pathogenesis of the disease. OMS 1029 has 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 recently completed dosing and is expected to read out data later this quarter. One of the large market indications for OMS-729 that we are considering is neovascular age-related macular degeneration, also known as wet AMD. We've previously reported that preclinical studies demonstrated efficacy in a well-established mirroring model. To further de-risk a clinical program, we are moving quickly to evaluate MAST2 inhibition 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 back chamber of the eye. These injections are required as frequently as every four weeks. Since MAST2 is only produced in the liver, systemic administration could provide therapeutic benefit without the need for intravitreal injections. In other words, an intravenous infusion or subcutaneous injection may allow patients to both maintain sight and avoid injections in their eyes, a potential game changer for both patients and their physicians. We're targeting next quarter to select a phase two indication for OMS 1029. So of our four corporate priorities, extending cash runway non-dilutably into 2026 and our SOPLiMAP approval, accelerating OMS 906 into phase three trials and initiating an OMS 1029 phase two program, one has already been achieved and the others we are well on our way to achieving this year. Development is also advancing across a series of other programs that we believe, through relatively modest investment, could meaningfully add shareholder value. For narsopalimab and COVID-19 and acute respiratory distress syndrome, or ARDS, numerous research groups, including ours, have published a growing volume of journal articles demonstrating the role of complement and or the lectin pathway in ARDS. Another manuscript is being finalized for submission, this one showing the therapeutic benefits of MASK2 inhibition in an animal model of severe haemophilus influenza infection. Narsoplimab is particularly well-suited for diseases like ARDS, acute indication requiring hospitalization. There's also mounting evidence that MASK2 and the lectin pathway might well be important drivers of long COVID. The challenges in assessing a therapeutic in long COVID are the lack of standardized diagnostic criteria and clinical endpoints. And we're making headway in identifying approaches to address these. In parallel, we've developed an assay platform that can identify and discriminate between mild COVID-19 patients and those who have moderate or severe COVID-19-related ARDS requiring hospitalization. The assay also has the potential for use in long COVID, as well as other disease-related ARDS. The assay's core measurement is the MASK2C1 inhibitor complex, a proprietary highly sensitive and specific marker of lectin pathway hyperactivation. There's a recognized need for such an assay, and we are evaluating our options for completing its development and commercialization. Turning to our orally administered MAS2 inhibitor program, we continue to advance testing to enable the filing of an investigational new drug application. The complete franchise of intravenous narsopalimab, our long-acting subcutaneous inhibitor OMS1029, and our oral MASK2 blocker, we expect will enable Omeros to control first-line therapy for both acute and chronic lectin pathway-related diseases. Let's now move on to OMS 527, our PDE7 inhibitor program, targeting addictions and compulsions, as well as movement disorders. With predictive and well-established animal models showing efficacy across opioids, cocaine, nicotine, alcohol, and binge eating, the National Institute on Drug Abuse, or NIDA, requested and is funding our development of OMS 527 as the first treatment for cocaine use disorder. Toxicity data in primates receiving both cocaine and OMS 527, a standard toxicology study to support human studies of treatment for cocaine addiction. Far expected late this year and assuming success, a randomized double-blind inpatient clinical trial is slated to begin next year. For OMS 527 and levodopa-induced dyskinesias or LID, often crippling involuntary movements that ultimately occur in nearly all of the millions of Parkinson's patients treated with L-DOPA. Primate studies were performed at Emory University and with the investigators. Further development has been mapped out. To wrap up the corporate review, I'll touch briefly on our five proprietary immuno-oncology platforms. Adoptive T-cell therapy, CAR T, signaling-driven immunomodulators, antigen-driven immunomodulators, that function both as therapeutics and vaccines and oncotoxins. I described these five platforms in our August and November 2023 earnings calls, so would refer you there for more detailed information. To date, in vitro, ex vivo, and animal studies using human cellular components have been positive with strong response rates. The data indicate a number of potential advantages of our immuno-oncology franchise, and those again were elucidated in our August and November earnings calls. So we continue to confirm our results and to generate new data across our IO franchise. Assuming that our progress continues to advance on pace, we expect to be able to share much of these data in the second half of 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?

Thanks, Greg. Our net loss for the fourth quarter was $9.1 million, or 15 cents per share, compared to a net loss of $37.8 million, or 60 cents per share, in the third quarter of this year. If we look at just the continuing operations, our net loss for the fourth quarter was $39.3 million, or 63 cents per share, compared to a net loss of $51.7 million, or 82 cents per share in the third quarter. This is an improvement of $12.4 million. The improvement was primarily due to an $8.4 million reduction in operating costs and the $4.1 million gain on the early retirement of a portion of our 2026 notes. As of December 31st, we had $172 million of cash and investments on hand. This is after extinguishing the $95 million outstanding on our 2023 convertible notes on their November due date. using $4.9 million to retire $9.1 million of our outstanding 2026 convertible notes and $4.6 million to repurchase 1.8 million shares of our outstanding common stock. Our cash used for operations in the fourth quarter, which does not include these payments, was $34.8 million. With the additional $116 million payment we received from DRI in February, our total cash and investments at March 31st, 2024 are estimated to be approximately $230 million. This is after repurchasing an additional 3.2 million shares of our outstanding common stock for $11.9 million in the first quarter of 2024. And as Greg said, it should be sufficient to fund operations and debt service into 2026. Cost and expenses from continuing operations for the fourth quarter was $39.3 million, which was a decrease of $12.4 million from the third quarter. The decrease was primarily due to the timing of employee compensation costs, the payment of a development milestone under a technology license in the third quarter, and the $4.1 million gain on the early retirement of a portion of our 2026 notes. Interest expense for the fourth quarter was $7.1 million compared to $7.9 million in the third quarter. The decrease was primarily due to the retiring of the $95 million outstanding on the 2023 convertible notes in November at their maturity date. Interest and other income for the fourth quarter was $3.4 million compared to $4.4 million in the third quarter of this year. The decrease was driven by lower cash balances after retiring the $95 million of the 23 convertible notes. During the fourth quarter, we repurchased $9.1 million of our 2026 convertible notes on the open market for $4.9 million. This represents 54% of the par value of the notes. We recognize the $4.1 million savings as a gain on early extinguishment of debt in our statement of operations. Income from discontinued operations in the fourth quarter of this year was $30.2 million and includes two primary components. $26.2 million of remeasurement adjustments to the amid-reg contract royalty asset and $3.8 million of interest earned on the Amidria contract royalty asset. As I've mentioned previously, royalties earned are recorded as a reduction of the Amidria contract royalty asset on our balance sheet. Amidria royalties for the fourth quarter were $10.7 million on Amidria net sales of $35.7 million. This is a $2.4 million increase in net sales over Q3. As Greg mentioned, in February of this year, we entered into an amended agreement with DRI where they acquired the right to receive all remaining U.S. and Mid-Rail royalties payable by Raynor through December 31st, 2031. After December 31st of 2031, all U.S. royalty payments will accrue to OMEROS. The U.S. royalty rate is generally 30% of net sales, and extends for the duration of the relevant patent terms, which we expect to be at least through 2035. We're also entitled, now and going forward, to any non-U.S. royalties paid, which are generally at the rate of 15% of net sales. In the first quarter of 2024, we will record the $116 million we received from DRI as incremental immediate royalty obligation on the balance sheet, consistent with the accounting for the initial transaction with DRI. During the fourth quarter, we repurchased 1.8 million shares of our common stock for $4.7 million under a stock repurchase program. The average price we paid per share repurchased was $2.54. Now let's look at our expected first quarter results. We expect overall operating costs from continuing operations in the first quarter to be slightly lower than from the fourth quarter of 2023, driven by lower IGAN trial costs as we complete the wind down of clinical operations on that program. Interest income should be nearly $3 million after factoring in the $116 million we received from DRI. Interest expense should be approximately $8 million, taking into account the mid-November retirement of the 2023 convertible notes and the $116 million we received in February from DRI, which for GAAP accounting is considered debt. Income from discontinuity operations should be in the $7 to $8 million range. Taking all this into account, we expect our first quarter net loss to be in the $34 to $37 million range, or 58 to 63 cents per share. Additionally, we expect our cash and investment balance at March 31st to be approximately $230 million, which we expect will fund our operations and debt service into 2026. With that, I'll turn the call back over to Greg.

Thanks, Mike. Let's open the call to questions. Operator?

And thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

And one moment for our first question. And our first question comes from Olivia Breyer from Cantor Fitzgerald.

Your line is now open.

Hey, good afternoon, guys. Thank you for the questions. Now that we've seen interim data in-house from the 906 switch study, what are you looking to see from the monotherapy portion of the trial, both in terms of efficacy measures, but also number of patients and length of time on treatment? And then have a quick follow-up.

Sure. Sure. And you're talking about the Phase 3 program?

No, the Phase 2 906 switch study in T- PNH, right? Don't you guys have the, what is it, 48 to 52-week monotherapy switch portion of the trial that's coming later?

You're talking about the switchover trial.

Yeah, exactly.

Okay, great. Thanks, Olivia. Let me turn that over to Steve.

Sure, Greg. Thanks. That trial is our PNH001 study, and you're correct that it is a switchover trial. The patients receive adjunctive rabalizumab for six months and then the responders move on to monotherapy. We are looking at hemoglobin, we're looking at LDA absolute reticulocyte counts, clone sizes, your standard efficacy measures as well as safety in that study. We'll have 13 patients, if I remember, who are enrolled in that trial, and we anticipate to see data from the monotherapy aspects of that or the monetary part of that trial in late 24. Patients are already advancing from the adjunctive treatment to the monotherapy treatment.

Okay, understood. And then on the narsopamab BLA, what innings are you in in terms of reaching an agreement with FDA? I guess what I'm trying to figure out, Greg, is how much engagement you've had with them so far this year, and how close you are to having a more concrete update from them.

Yeah, we've had, I would characterize it as substantial interaction with them. And with respect to when do we expect to be able to say more, as I said in the prepared comments, Olivia, first, we really don't discuss the back and forth with FDA, but also just given TIMELINES FOR MEETINGS AND THE RULES ASSOCIATED WITH THOSE MEETINGS AND TYPE A VERSUS TYPE B, I THINK IT'S GOING TO BE DIFFICULT. AND IN FACT, WE'RE NOT GOING TO BE ABLE TO GIVE YOU RIGHT NOW A TIMELINE FOR WHEN WE WOULD BE RESUBMITTING THE BLM. YOU KNOW, OBVIOUSLY, WE THINK WE'VE DONE THE WORK REQUIRED UNDER THE OND'S RULING FOLLOWING our appeal and the appeal on the complete response letter. So I think we believe we're in good shape, but I think with respect to timing, I think that that's something that we're just going to have to hold on discussing right now. You know, Kathy, do you want to add anything specific to that?

No, I think you covered it, Greg, but the interactions are ongoing, but we feel good about the commission.

Okay, that's helpful. Thank you, guys.

And thank you. And one moment for our next question. And our next question comes from Steve Brozak from WBB Securities. Your line is now open.

Hey, good afternoon, and thanks for taking the questions. With the, as you mentioned earlier, of Tapicon approval, how does this affect 906, and how does it change it, if at all? Can you be as detailed as possible, please?

Sorry, how does it change what, Steve?

How does it change how you look at 906 going forward, if at all?

Yeah, thanks for the question. You know, I think this is going to be a bit repetitive of what I've said in the comments, but I think the distillate of the Dinecopan approval really is all positive as we see it for OMS906. Number one, it certainly validates inhibition of MASK3 as an alternative pathway inhibitor and as an effective alternative pathway inhibitor. Remember that MAS3 is one step proximal in the pathway to Factor D. So it's MAS3 that actually converts Profactor D to Factor D. The advantage of inhibiting MAS3 over Factor D is that Factor D turns over very, very quickly. 50% of Factor D turns over in circulation every hour. And that makes it an obviously more difficult target to drug in. And the result of that is likely the three-time daily oral dosing of the nicotine. So I think when we look at it, we see wonderful. I mean, what they've done is validate the alternative pathway, validate the proximal part of the alternative pathway, of which we are the most proximate. And then when you look at their need to be in conjunction with C5 inhibitors, and we are coming with a monotherapy that addresses both intravascular and extravascular hemolysis, can do that with every eight week or every 12 week dosing. When you start to look at these advantages, we think all of this really inures to the benefit of OMS 906 and certainly underscores the value of the program. But let me stop, and I'm going to look both to Andreas and Steve and to Nadia as well and see if they have other thoughts or other comments.

Yeah, thanks, Greg. Denicapan addresses a gap in the AZ and the Alexion portfolio. However, it doesn't address the patient needs of reducing their treatment burden with something like a novel efficacy that's dosed as infrequently as four times a year. You know, each time the patient has to take a pill three times a day with Denicapan or even twice a day with Iptacopan, the patient, as we've learned from market research, has to think about their sickness versus living their lives. You know, physicians tell us that they're additionally concerned about the risk of noncompliance with the orals, resulting in the risk for breakthrough disease, and a novel upstream treatment like OMS 906 represents a patient-friendly option that really puts the efficacy into the doctor's hands and the subsequent confidence. So, you know, we think it's addressing some small unmet needs, but the opportunity for 906 really is significant.

Thanks, Melia. I can just add medically that we only see this as validation, the upstream target, and if you look at the data that we've disclosed so far, we're gonna have more coming out at EHA where we still remain very excited about the medical potential for treating these patients with OMS 906 as a monotherapy.

Yeah, so I think, Steve, Andreas, any?

Well, I think the ultimate learning from this is also that, you know, the big market of the currently available C5 inhibitors is not meeting the needs of the PNH patients. They need something to take care of the extravascular hemolysis, and we think OMS 906 will do that better.

Thank you. And Steve, I think also, you know, point To underscore, I touched on it briefly, but just to come back and make sure we emphasize it one more time, it was Jefferies, the research group, that came out just on the heels of the announcement of the approval, pointing to peak annual sales of the Nicopan at $750 million. And remember that that is going to be on top of C5 inhibitors. So it's going to be the cost of the nicopam plus the cost of eculizumab and or rabulizumab. And that's going to be a difficult hill to climb. I think certainly when we come with a monotherapy and dosing every eight to every 12 weeks, that addresses all of the issues that frankly the C5 inhibitors and the nicropan together are intended to address, I think will fare quite well.

Got it. Thank you for making sure you provided that clarity. I very much appreciate it. Let me hop back into the queue. Thanks.

And thank you.

And one moment for our next question. And our next question comes from Serge Bellinger from Needham.

Your line is now open.

Hey, good afternoon, and thanks for taking my questions. Greg, just wanted to go back to Nersiplumab and HSCT-TMA. Just curious if there's been a change in FDA stance here given the around the path of resubmission, just given that the last time you spoke about this back in November, five months ago, this seemed to be close to the finish line, and now there's obviously been some additional delays, but just curious if this is an FDA change or just the slow FDA process. Thanks.

Yeah, I think the way that we can answer that is but I think what we outlined, which was we submitted our SAP. FDA came back with detailed questions. We responded with detailed answers, and the dialogue continues. I mean, certainly, our expectation is that we have satisfied what we need to satisfy per the for the Office of New Drugs direction to both us and the division, which again was to, one of the pathways was to look at survival. And we've done that. And I would say that the data we have now collectively are stronger than where we were with the initial VLA submission. I think meaningfully stronger with respect to our survival. We will need to continue those discussions. We're optimistic about where we end up with this. I know that what everyone is wondering is when, when, when? And we'd love to answer that with a specific date. We don't have one right now. As soon as we do, we'll let you know. But I think when you look again at the data that we have, I think it is, one would be hard-pressed to make the case that the drug is not working in TNH patients. That's my view. I think it's the view shared by the rest of our team. In fact, I'm quite confident it is. I think these discussions will continue, and hopefully that resolution will be soon. Great.

Thanks. Thank you.

And that completes the Q&A part of the call. I'd like to turn the call back over to Dr. Dimopoulos for closing remarks.

All right. Thank you, operator. And again, thank you all for joining this afternoon. As always, we appreciate your continued support. Have a good afternoon or a good evening.

This concludes today's conference call. Thank you for participating. You may now disconnect.