Q3 2020 Omeros Corp Earnings Call
Ladies and gentlemen, todays conference is scheduled to begin shortly please continue to stand by thank you for your patience again, ladies and gentlemen, todays conference is scheduled to begin shortly please continue to standby. Thank you for your patience.
[music].
Good afternoon, and welcome to todays earnings 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.
Today, I'll turn over the call to Jennifer Williams Investor Relations for all members.
Good afternoon, and thank you for joining the call today, Dr., Greg Demopolis, Chairman and CEO bone marrow will take you through a corporate update and then Mike Jacobsen, Our Chief Accounting Officer will provide an overview of our third quarter financial results.
Have some time reserved for questions after the financial overview I'd.
I'd like to remind you that some of the statements that will be made on the call today will be forward looking.
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 companys actual results to differ materially. Please.
Please refer to the special note regarding forward looking statements and the risk factor section and the Companys quarterly report on form 10-Q, which was filed today with the FCC and the risk factors section of the company's annual report on form 10-K, and quarterly report on form 10-Q for a discussion of these risks and uncertainties.
Today's call will include a discussion of certain non-GAAP financial measures. A reconciliation of these non-GAAP to GAAP measures is included with the merits of the earnings press release issued earlier today now I would like to turn the call over to Dr. Demopolis. Thank you Jennifer and good afternoon, everyone. We appreciate you joining us for today's.
That.
I'll start today's call with a discussion of our supplement our fully human antibody targeting MASP two oh.
Which is the effector enzyme of the lectin pathway of complement.
Let's first focus on our program in hematopoietic stem cell transplant associated thrombotic microangiopathy or T.H.T.M. <unk>.
Well with respect to our rolling Biologics license application or B.L.A.O. for in our supplement in the treatment of T.H.T.M. <unk>.
The nonclinical on C.M.C. sections of the B L. I have already been submitted.
And all clinical sections are complete.
This includes all detailed narrative on all study patients and on compassionate use patients.
The narratives include patient historical data Oh that were obtained at the clinical sites and that predate enrollment in the pivotal clinical trial.
These narratives were requested by F.D. as part of our agreement to convert our phase two clinical trial too.
To a pivotal trial.
We are submitting them as part of the be all Oh, which we expect will streamline up years overall review process.
The last component of the B.L.A., the clinical sections and the narratives.
We'll be submitted next week.
A few weeks ago. The final clinical data included in the B.L.A. were presented by Professor Alessandro Baldoni of.
The University of Milan, and head of hematology and bone marrow transplantation.
Papa Giovanni 23 hospital and by Dr., Mcgill Perala chief of the adult bone marrow transplant surplus at Memorial Sloan Kettering Cancer Center.
The final complete response rate the primary efficacy endpoint.
It was even higher than the preliminary data reported earlier this year.
This was a very strict population with multiple co morbidities.
Compared to the agreed efficacy threshold for the primary endpoint of 15%.
61% of all patients who received at least one dose of in our supplement.
And 74% of patients receiving the protocol specified in our supplement treatment for at least four weeks working.
Were complete responders.
The secondary endpoints were similarly impressive well.
100 day survival expected to be no more than 20% again was multiples of that.
68% in patients receiving at least one dose 83% in the per protocol treated group and 94% incomplete responders.
Median estimated overall survival was 274 days in all patients through.
361 days and those receiving at least four weeks of dosing.
And could not be estimated and the responder group because.
Given the clinical response to in our supplement more than half the patients were still alive out to as long as roughly four years following treatment.
As a reminder, in our supplement has received up to use breakthrough therapy designation and orphan drug designation from both the F.D.A. Andy I may for.
For the treatment of T.H.T.M. <unk>.
We have requested and expect that our B.L.A. will receive priority review.
As we look forward to F.D.A. approval of in our supplement for the first of what we expect will be a series of approved indications our launch readiness continued to progress throughout the third quarter.
We expanded our commercial and medical affairs infrastructure.
Identified the final candidates of our sales leadership team.
Expanded our medical science liaison team developed field and payer training modules hired our field market development managers and expanded our advocacy initiatives with key organizations throughout the transplant community.
Accomplishments in Q3 included the filing and presentation for our international classification of diseases or I C. D 10 coding applications for in our supplement and for T.A.T.M. <unk>.
This enables straightforward reimbursement of the drug.
In September and a process hosted by CMS.
We requested an I.C.D. 10 procedure code for administration of in our supplement.
At that meeting CMS made a preliminary recommendation to accept the code and.
And we are awaiting the final decision in early 2021.
We also requested an I.C.D. 10 diagnostic code for T.A.T.M. may from the centers for disease control and prevention or CDC.
The creation of a diagnostic code would help clinicians payers and others accurately track the incidence and severity of the illness and would likely increase the number of patients who are accurately diagnose hearing.
Here again, CDC as prolific preliminarily indicated its support for a T.H.T.M.A. diagnosis codes.
As we continue to advance toward both procedure and diagnostic I see 10 codes, we have closely collaborated with.
And appreciate the strong support from key transplant societies and organizations. These.
These include the center for International Blood and marrow transplant research the American society of transplant and cellular therapy, The American society of hematology.
Pediatric transplantations and cellular therapy consortium bid.
B the match National bone marrow donor program, the European Society for blood and marrow transplantation and the T.A.T.M.A. guidelines working group consisting of some of the most respected transplant physicians across the U.S. and Europe.
We are executing on a comprehensive publication strategy and a long list of manuscripts, highlighting the biology and clinical benefits of in our supplement T. ATM may have begun appearing in peer reviewed journals.
A manuscript by researchers at Weill Cornell Medical College led by Professor Jeffrey large was recently published in the peer reviewed journal clinical and experimental immunology.
And next month Ameris will have a significant presence in a presentation at the annual meeting of the American Society of Hematology.
In summary, the.
The regulatory and commercial efforts around our Sop Lamar been T.A.T.M. <unk> are moving ahead nicely.
We expect that F.D.A. will grant us a priority review.
And we look forward to bringing this much needed therapy to patients as soon as possible.
Our work in T.A.T.M. and under endothelial injuries syndromes allowed us in collaboration with Professor Alessandro Baldoni to recognize the pathophysiological similarities between T. ATM AG and co bid 19.
Both are in the field injuries syndromes and involve as an early and central component MASP, two and the lectin pathway of complement.
I won't on this call go into detail about how the mechanism of in our supplement the pathophysiology of COVID-19 dovetail.
Almost perfectly.
Instead, I'll refer you to our Investor Relations website, where you'll find a presentation clearly laying out that information.
Suffice to say that numerous leading research groups around the world.
Including Omeros has complement labs at the University of Cambridge have demonstrated the COVID-19 has caused by overactive basin of the innate immune response and as mediated by three major components.
Lectin pathway driven complement activation inflow.
Inflammation and coagulation.
We believe that in our supplement is the only drug that effectively blocks all three.
And the dramatic clinical outcomes, specifically survival that we've seen in treating critically ill COVID-19 patients with in our supplement are consistent with those seen with the drug in T.A.T.M. <unk>.
Underscoring the shared pathophysiology between these two disorders.
In August we announced that six COVID-19 patients and Bergamo, Italy, all with high risk factors and deteriorating respiratory stratus requiring mechanical ventilation.
Were treated with nor supplement under compassionate use.
All six patients clinically recovered.
Survived and were discharged from the hospital lab.
Laboratory values, specifically circulating endothelial cell counts aisle six aisle H C reactive protein L.D.A. J S. T N D dimer all normalized.
Retrospective control groups with similar baseline characteristics and disease severity had mortality rates of 32 and 53%.
The results of the study were published in the peer reviewed journal Immunobiology.
It's now become clear and multiple groups internationally have reported on this that COVID-19 is not a one and done disease instead.
Instead, as many as 70% or more patients who have reportedly recovered from the initial bout of COVID-19 suffer serious longer term avex.
Cognitive impairment and other CNS problems as well as cardiac pulmonary and multiorgan sequentially.
The social healthcare burden and associated costs of these longstanding disease affects could be staggering.
So we evaluated our Bergamo patients five to six months after their last treatment with our supplement remarkably all patients were doing well.
And none were found to have any clinical laboratory evidence of COVID-19 related sequentially.
All of their clinical assessments on laboratory values, including D dimer levels, a marker of hyper coagulation.
We're entirely normal.
As the surgeon COVID-19 cases increases.
We have continued to creep critically ill patients both in the U.S. and in Italy under compassionate use.
To our knowledge no treatment for severe severely ill COVID-19 patients rationally addresses the biology of the disease.
Nor has shown the same remarkable clinical outcomes as has been our supplement.
The need to make in our supplement widely and rapidly available was advocated by a panel of experts in September.
The Demi Colton public service webcast and in a recent article featured in the American Council on Science and Health and subsequently published in real clear markets.
The articles author Dr. Henry Miller Senior Research fellow at the Pacific Research Institute, former Robert Wesson Fellow at Stanford Hoover Institution and had an impressive 15 year career at ft yet.
Our discussions have progressed with leadership across BARDA, NIAD and cat and NIH regarding our supplement for the treatment of critically old COVID-19 patients.
With cobot, 19, surging or Glenn globally.
And other therapeutics with really greater fanfare, having failed to show benefit in critically ill COVID-19 patients.
The decision makers in these government agencies are increasingly focused on their supplement.
This awareness of and interest in nor supplement extends to a future Biden administration as well.
We also have received request to include in our supplement platform trials for COVID-19, and those discussions are advancing.
In addition to our work with in our supplement been COVID-19, and completing the rolling BLA submission and T. ATM may our other phase three programs for in our supplement continued to progress in the third quarter.
Our phase three trials in atypical hemolytic uremic syndrome, or A.H.U.S. and in immunoglobulin, a or gain a prophecy are ongoing.
Our focus remains on Nigeria, and a prophecy and on our phase three artemus I again trial, which has now nearly a 120 sites activated worldwide.
Interestingly data from multiple research groups now indicate that the to be low interstitial disease component in Nigeria in a prophecy involves lectin pathway activation on the surface of damaged tubular sales caused by proteinuria, Andorra ischemia re profusion and.
Carry associated with for example, acute kidney injury leading.
Leading to two below interstitial inflammation and fibrosis.
This evidenced further underscores the role of the lectin pathway.
Great.
And our supplemental appears to be the only drug with the FDA breakthrough therapy designation for Jane a property and the only drug that can obtain full approval on proteinuria data alone.
Potentially shortening the full approval process by years.
And not needing to show improvement in EG fr.
We think that there are good reasons for these singular distinctions afforded in our supplement.
And we look forward to seeing and sharing the data.
We view in our supplement as not just a drug but as a platform therapeutic and we continue to expand the scope of indications that we're targeting for in our supplement and our other MASP two inhibitor programs beyond endothelial injury syndromes and proteinuria renal diseases.
Mast two in the lectin pathway play a central role in the innate inflammatory response and there are important in driving a long list of diseases and disorders is becoming increasingly recognized and understood.
Our long acting MASP two antibody on mass 10, 29 is expected to be in the clinic in early 2022 and to allow once monthly or even less frequent subcutaneous dosing.
We're hoping to follow that up quickly with our orally available MASP two inhibitor.
Before moving onto Omidria and other programs in our pipeline I'll bring you up to date on our other complement program RMS nine or six our MASP three inhibitor mass.
Mastery is responsible for the conversion of pro factor D to factor D and is thought to be the key activator and premier drug target in the alternative pathway.
In September we began dosing human subjects in a placebo controlled double blind single ascending dose and multiple ascending dose phase one clinical trial.
The trial is running on schedule.
Our first cohort has already completed dosing the second cohort is being dose now and the third and fourth cohort are enrolling.
Initial data readout is expected in the coming year.
Data from our August nine or six program were presented last month at the fourth complement based drug development summit.
And the presentation can be found on our Investor Relations website.
As with our MASP two program. We're also moving ahead with the development of orally available small molecules that inhibit MASP three.
Almost 96 is a long acting antibody achieved in part by modifications to its FC region.
To avoid primarily any potential encumbrance to the late stage clinical or commercial manufacturing of RMS nine or six at its current manufacturing facility. We recently entered into a licensing agreement with Xencor as have a good number of other companies with antibody therapeutics that have.
Long half lives.
We expect that this will entail the payment of modest milestone fees and low to mid single digit royalties well then course patents remain extent in the jurisdiction of sales.
In parallel with our MASP, two and mass preclinical work a great deal of complement research is being done both in our Seattle facilities and in our labs at the University of Cambridge.
Our work has previously resulted in redefining the biology of the complement system.
Examples include the seaport bypass mechanism by which mass to directly activate seat three and the role of mastery and activation of the alternative pathway.
Our team continues to redefine complement biology, and we plan to publish these new discoveries once we have securely established the corresponding patent positions.
So, let's turn now to Omidria, our commercial a foul make drug product.
Net revenues from Omidria in the third quarter were $26.1 million. After deducting out 8.7 million dollar return reserve associated with the October Onest expiration of pass through for Omidria.
Had we not booked this return reserve.
Our Q3 revenues would have been.
In all time record high.
This was despite the headwinds of COVID-19, which because of the additional safety precautions required in the operating room continue to affect overall cataract surgery volumes by restricting throughput of cases in the surgical facilities.
Our net loss for the quarter was $38.5 million or 66 cents per share of which $13.6 million or 23 cents per share were non cash charges.
Our non-GAAP adjusted net loss for the quarter was $19.9 million or 34 cents per share.
This non-GAAP adjusted net loss also conservatively includes the 8.7 million dollar or 15 cents per share deduction from our third quarter revenues for the return reserve.
If an when reinstatement of separate payment for Omidria occurs we expect to recover the $8.7 million reserve.
As of September 32020.
We had $153.5 million of cash and investments available for general operations.
This includes the receipt of net proceeds from our third quarter financing activities.
Specifically $93.7 million from the issuance of 6.9 million shares of stock and an additional $76.9 million from issuing new unsecured convertible debt after repurchasing $150 million of unsecured debt that was previously out.
Standing.
We also purchased a capped call on the new debt that effectively increases the initial conversion price of $18.49 per share to $26.10 per share this substantially reduces dilution or cash expense in the event of a conversion.
We saw some encouraging trends in omidria sales in the third quarter as well.
Despite reportedly longer surgical turnover times and reduce cataract surgery procedural throughput due to cobot protocols in surgical facilities per facility utilization of Omidria in Q3 increased over pre cobot levels.
Also overall units sold progressively increased throughout the quarter.
We expect that this momentum will be restored and continue to grow if and when omidria is granted separate payment.
As previously discussed our extension of pass through reimbursement for Omidria expired on October Onest.
The result of that is that Omidria when used for Medicare part B beneficiaries is now reimbursed as part of the ambulatory payment classification for cataract surgery.
We have had multiple meetings with CMS and HHS and have made a compelling case based on regulatory law.
Thats CMS must pay separately for.
For Omidria as a non opioid alternative use during surgery in the ASV setting now that the drugs pass through status has ended and it is packaged under CMS is outpatient prospective payment system.
The criteria for separate payment are strictly objective.
And Omidria meets the mall.
We are optimistic that CMS will comply with its own regulation.
And provide separate payment for omidria in the JSC during the fourth quarter of 2020 and throughout calendar year 2021, which subsequently could be further extended.
In parallel a broad coalition led by voices for non opioid choices and supported by over 50 bipartisan House Representatives on over 20 bipartisan Senators continues to advocate for the no pain Act.
This bill would extend separate payment in the ASEAN and in the hospital outpatient surgery departments for a period of at least five years for Omidria and other non opioid alternatives used during surgery.
In addition to strong support from surgical and nursing societies trade organizations as well as patient advocacy groups and individual practitioners.
Two.
Large and influential societies, the American Medical Association and the American Society of Anesthesiologists have recently endorsed the no pain Act.
An opportunity for enactment of this bill could come during the lame duck session of Congress.
You might recall that a peer reviewed publication in the journal of cataract and refractive surgery showed that omidria significantly reduced the need for inter operative fentanyl, a highly addictive opioid while also reducing patient pain.
Another manuscript demonstrating that Omidria is opioid sparing was recently published in the peer reviewed journal current medical research and opinion the.
The study demonstrates that patients who received omidria during cataract surgery were prescribed fewer post operative opioid pills than patients who did not receive omidria disk.
Despite.
The Omidria treated group, having a greater incidence of pre operative co morbidities and higher risk for surgical complexity.
To continue to build validation of the opioid sparing benefits of Omidria within the published literature, we have partnered with the cataract surgery pain study group.
The cataract surgery pain study group is led by Dr., Terry Kim President of the American Society of cataract, and refractive surgery, and professor of Ophthalmology and head of the cornea and refractive surgery services at Duke University.
Together with other cataract surgery thought leaders from across the nation.
The group's mission is to examine the role of non opioid alternatives like omidria in cataract surgery.
Based on the group's research multiple publications will likely be generated adding to the body of literature supporting the role of Omidria in reducing the need for intra operative and post operative opioids in cataract surgery.
Pain study groups research and publications should further strengthen the case for the separate payment of Omidria by CMS.
In the meantime, our commercial team is focusing its omidria efforts on driving utilization in hospitals across commercially insured patients and in VA facilities.
The advocacy and relationships we have in the ophthalmology community remains strong.
We have multiple avenues to secure separate payment for omidria.
And we will let them play out.
While we are planning for success. We also have established alternative sales strategies. If needed. These can be implemented quickly to ensure that omidria will be available for the long term and providing value to both patients and our shareholders.
Moving onto our phosphodiesterase seven or PD seven inhibitor program almost five to seven targets addiction.
Our phase one clinical trial was successful both with respect to safety and achieving daily oral dosing.
While our current clinical focus remains on expanding indications for our MASP two and MASP three complement franchise, we plan to advance RMS five to seven phase two program pending resource availability.
We also continue to see a unique opportunity in targeting GPR 174 for cancer immunotherapy.
GPR 174 is an immunosuppressive G protein coupled receptor whose activity is intimately linked to the tumor micro environment.
Our recent data with mouse tumor models further validate GPR 174, as an important and novel target for enhancing a T cells capacity for killing cancer cells.
We have found the GPR 174 deficiency and tumor specific CDH positive cytotoxic T cells increases their activation.
Resulting in anti tumor immune responses that markedly reduce tumor growth.
Similar to GPR 174, the adenosine GPC ours, a two way in a to B are also activated by products of the tumor micro environment with all three receptors GPR 174, a two way and day to be using the same cyclical and PS signaling pathway.
Our ongoing in vitro signaling experiments continue to reveal that inhibition of all three receptors synergistically enhances T cell activity.
So we believe that new and more effective cancer immunotherapy approaches will involve GPR 174 inhibitors alone or in combination.
With adenosine receptor inhibitors.
Motivated by this understanding.
We are aggressively developing both small molecule and antibody inhibitors of GPR 174.
Our team continues to make discoveries around the GPR 174 program and we plan to make those public after filing a.
Additional patent protection with.
With that I will turn the call over to Mike for an overview of our third quarter financial results Mike.
Thanks, Greg.
As Greg noted imagery and total revenues for the third quarter were $26.1 million, our net loss for the quarter was $38.5 million or 66.
66 cents per share.
Which does include it technology access fee of $5 million or nine cents per share and non cash expenses of $13.6 million or 23 cents per share.
And then the non cash expenses $6.4 million or 11 cents per share were directly associated with the closing of our recent debt financing.
Adjusting for these items, our adjusted net loss on a non-GAAP basis was $19.9 million or 34 cents per share.
Both the GAAP net loss and adjusted net loss also included a reduction of $8.7 million or 15 cents per share from total revenues in the third quarter for a omidria return reserve related to the October onest expiration of pass through.
PON reinstatement as separate payment for Omidria, we expect to recover the $8.7 million reserve.
As of September Thirtyth, 2020, we had $153.5 million of cash cash equivalents and short term investments available for general operations.
The increase in the second quarter is due to two factors the first being $93.7 million in net proceeds received from the sale of the 6.9 million shares for common stock.
Underwritten public offering.
In addition, during the third quarter, we issued $225 million of 5.25% unsecured senior convertible debt and repurchased a 115 million of our outstanding 6.25% unsecured senior convertible debt.
The new notes are callable after three years and are due in February of 2026.
In conjunction with the issuance of the new convertible notes, we did purchase a capped call that offsets the dilutive impact or potential cash expenditure associated with the conversion of the new notes, while the market price of our stock trades between the initial conversion price of $18.49 per share.
Fair and the cap price of $26.10 per share.
As I previously stated our imagery revenue for the third quarter includes the deduction of $8.7 million or 15 cents per share should return reserves.
As you may recall from our from some previous calls upon the expiration of pass through reimbursement Weve recorded return reserve for any product that's at our wholesalers that might not be sold to a season hospitals should separate payment not be reinstated and for any unused inventory.
He asked the season hospitals that may be returned to us.
In the event that separate payment is reinstated in the near term.
The inventory should be used and we would reverse the return reserve accrual, resulting in incremental omidria revenue.
Research and development expenses were 31.3 million for the third quarter, an increase of 7.2 million over the second quarter.
The increase was primarily related to the 5 million technology license agreement for all I Miss nine of six or mass three product candidate moving any potential encumbrance to the late stage clinical or commercial manufacturing of Olin mess nine of six at its current facility.
With respect to our manufacturing activities for Sop a map.
Six additional batches of drug substance are underway at Lonza.
And next month, we will begin we will be making additional drug product that better.
All of the drug substance and drug product being made at Lonza and better are expected to be available for commercial sale. Following the anticipated approval in our supplement in T.A. Tammy for use in treating critically or for use in treating critically ill call. The 19 patients.
As you May recall manufacturing costs are generally expense to R&D if incurred prior to the first approval in the us or Europe.
After approval these manufacturing costs will be capitalized as inventory on the balance sheet.
Selling general and administrative expenses were $19.8 million, an increase of $2.9 million from the prior quarter.
The increase was primarily due to sales and marketing activities in connection with the U.S. launch of our supplement.
Interest expense for the current quarter was $6.9 million the $900000 increase in the second quarter primary primarily reflects the $110 million in net new borrowings.
In connection with the repurchase of a portion of our previously outstanding convertible debt, we incurred a non cash loss of $13.4 million related primarily to the unamortized discounts that remained on the retired debt.
The debt transaction also triggered the recognition of the $7.9 million tax benefit for the third quarter.
Now, let's take a look ahead to the fourth quarter.
As we've discussed pass through reimbursement expired on October Onest.
We believe we have multiple avenues to obtain separate payment from CMS for Medicare part B patients receiving omidria, but we cannot guarantee if and when we will be successful.
Therefore, we cannot predict future omidria product sales at this time.
Our R&D expenses for the fourth quarter should be slightly higher than the third quarter of 2020.
This is due to the additional commercial drug substance lots being made at Lonza.
We should be ready for delivery in the fourth quarter of this year and in the first quarter of next year.
We're also making additional commercial drug product that better during the.
Fourth quarter.
As mentioned earlier these costs are generally expensed to R&D and Tilman Safa Mab is approved by the F.D.A.
SGN a cost are expected to increase slightly in Q4 as we continue to prepare for the U.S. lunch and learns supplement for T.A. Tammy.
Interest costs for the fourth quarter should be approximately $8 million.
Approximately half of which is non cash.
With that I'll turn the call back over to Greg Greg.
Thanks, Mike and with that we'll open the call to questions operator.
Thank you, Sir ladies and gentlemen, if you have a question at this time. Please press. The Star then the number one key on your Touchtone telephone. If your question has been answered or you wish to remove yourself from the queue. Please press the pound key.
Your first question is from Jeff Jeff Welcome from Bank of America. Your line is open.
Good afternoon. Thank you so much for taking my call and congratulations on the quarter. This is Jason calling in for Jeff.
Just a couple of quick questions. If you will we think about the.
Pierre May submission.
Turning to slide nor soften that.
In terms of.
How it could be potentially differentiated versus other complement inhibitors being study if you could talk a little bit to that point.
Especially with.
Marius.
Moving ahead in that indication.
And then when thinking about the COVID-19 program.
He status regarding kind of what's your projection for government funding.
If we think about the treatments of severe patients now with the new administration and potentially the.
The vaccine kind of taking care of a lot of.
Maybe less severe patients.
Where do you see that that going and how might evolve. Thank you.
Sure. Thanks, Jason.
It went in response to your first question about how.
MASP, two inhibition or specifically in our supplement.
Is differentiated from other complement inhibitors in T.A. Tms.
It's really a line.
A few fronts first is the role of the lectin pathway in specifically MASP two.
And endothelial injury right, we know that T. ATM may is caused by endothelial injury.
And that endothelial injury, specifically activates the lectin pathway MASP two being the effector enzyme of the lectin pathway.
We also know that mask to at least to the best of our knowledge.
Is the only.
Complement.
Factor or complement enzyme.
That has.
Coagulation activity outside of the lectin pathway. So MASP two directly acts on the coagulation system.
And that function is independent of its role in the complement system.
And now our supplement by inhibiting.
MASP, two specifically blocks that.
Mast two mediated coagulation activity, which is specifically the conversion of prothrombin to thrombus and the conversion of factor 12, a factor 12 to 12 days. So the activation of factor 12, those activities are blocked by in our supplement we don't know.
Of another.
Complement.
Enzyme or that is involved in that and by extension. We don't know of a nother complement inhibitor that has those same effects on the coagulation Cascade and when you look at stem cell T I may.
Just as in Cove. It obviously, there is a significant component, which is driven by the coagulation cash.
Cascade or the hyper coagulate ability, which is why you see a thrombotic in the.
In the thrombotic microangiopathy, which is t. ATM.
An additional difference and I think we've hit on this several times before.
Is that these are patients who are very sick.
And MASP two by inhibiting or in our supplement by inhibiting MASP two leaves intact.
The effector.
Function.
Of the adaptive immune response.
And that's very different than for example, a C or C inhibitor.
Which blocks the effector function of the adapter adaptive immune response, which which is important.
Kind of critically important in fighting infection.
And that's why some have reported that in adults.
With.
With use of C.
C five inhibitors in T. ATM may.
That these survival rates are actually decreased.
Very different than what we're seeing in.
And so.
Stem cell T I may with.
No our supplement treatment.
So let me stop there and see if that answers. Your first question about the about the differentiation.
It does it.
It sounds like you think that there's going to be enough differentiation that you could we see the difference at some level.
In terms of kind of the tissue damage and.
Hemorrhagic output versus another more traditional complement inhibitor.
Yes.
I think the simple answer to that is yes, yes, we do and a traditional complement inhibitor.
Yeah.
I guess, you're referring to a cfive inhibitor in that sense.
You know traditional because there are a number of groups targeting C. Remember that we are the only group that really can target MASP two because of the intellectual property position, we hold around it. So while we may seem unique and targeting MASP two I don't think thats driven by.
The biology around the target or the biology around the lectin pathway I think it's frankly.
It's frankly mandated by the intellectual property position, we control around MASP, two and the inhibition of the lectin pathway and lectin pathway associated disorders.
So let me jump to your second question.
Which is around our work in in Bergamo on COVID-19 patient.
We are continuing to treat under compassionate use patients both in the U.S.
And in Bergamo.
With our supplement and what we are seeing is similar striking results.
To those which we saw in the first six patients and Bergamo, our discussions with the government agencies are progressing and I think progressing well you had a specific question with respect to funding.
We're not going to predict at this point, if or when we would receive funding simply to point out that clearly.
That is our objective and those discussions.
With respect to timing.
Again, I think best not to speak to that now but to say look it's pretty clear that.
There is no other drug that would that we know of that as shown the results in really critically ill COVID-19 patients.
That in our supplement has shown we.
We think that in our supplement.
Has a role to play in fighting this disease I mean, I think today the news that Johnson and Johnson put up tremendous news I'm in a very exciting and imagine if if we can I'm, sorry that Pfizer put up.
That term.
Tremendous news I mean, we may all be able to get back to work at some point than our children can go back to school that'd be great I.
I think despite that there's always going to be.
A need.
For the treatment of critically ill cobot patients assuming those vaccine data continue to show.
The same the same efficacy long term.
But I think that clearly I think there's a focus on our supplement as the surge.
In COVID-19 cases increases.
And I think we're well positioned for that.
Perfect. Thank you so much for the color really appreciate it.
Thanks, Jason.
Your next question is from Steve Brozak from WBB. Your line is open.
Yes, Hi, Greg and thanks for taking the questions I've got two and I'll jump back in the queue.
The first one is on Omidria can you tell us or differentiate why.
In this particular case, it's different with CMS today as it was vis-a-vis, let's say one year ago, when Youre looking for a ruling from them and then I'll ask one more question. Please.
Sure. There is there is a significant difference between this year and last last year as you know Omidria was separately paid.
And so we did not qualify under the criteria laid out by CMS for separate payment other than under pass through which is what we have.
The criteria that CMS has laid out are are not discretionary and they do not depend for example on some subjective determination of the efficacy.
Of the drug.
But rather it's really the objective characteristics of the drug so.
To be clear about that let me just specify to qualify a drag it must be a non opioid drug.
It has to be used in pain management. It has to be employed in the AMC setting has to be policy package and has to function as a supply in a surgical procedure you know it really each of these is binary each of these is objective and each applies to omidria now.
Now because it is no longer under pass through that pass through status has expired, which means that we are now functioning as a supply in a surgical procedure and we are policy package.
So it's not that CMS in any way needs to reverse itself from a year ago.
That's not the situation at all.
It is just simply that the the situation this change.
And now that it has changed Omidria clearly qualifies and that's why we believe the case is quite compelling and we believe certainly we're confident of.
That CMS will comply with its own regulation and provide us with that separate payment.
Okay. Thank you.
That is a that is obviously something we're all going to be waiting for.
Second the second question and I'll hop back in the queue can you give us any kind of details as far as in our supplement goes with Bergamo any any additional information coming back anything that you can tell us and again, thank you I'll hop back into queue.
Well as I said earlier look the results that we're seeing in Bergamo and the additional patients that were treating under compassionate use a really very similar to what we saw in the initial six patients on whom we've already reported.
Weve publicly spoken about one patient.
One of those new patients I believe was a 76 year old fellow a diabetic.
Obese.
Long history of smoking a long history of.
C O PD.
Status post surgical treatment for prostate cancer.
And this patient was rapidly deteriorating right. It came in was admitted put on nasal can elect quickly moved to mass quickly moved to see path and from there to intubation.
And we.
We.
We're given that patient after.
He had already been Intubated and was deteriorating.
Very quickly the patient began to recover we've made public in fact I believe on our web site are the laboratory valve.
Values.
The.
Longitudinal laboratory values on this patient, which show that those laboratory values Progressive Lee.
Improved and quickly improve as did the patients clinical status I believe now the patient has been discharged.
So these are patients who.
Certainly wouldn't expect very many of them to survive.
And yet.
We're showing.
Very strong survival with us with the use of in our supplement.
Okay again, thank you for taking the questions.
I'll hop back in the queue. Thanks again.
Your next question is from Ram Selvaraju from H.C. Wainwright. Your line is open.
Good afternoon, gentlemen, thank you for taking the questions.
Any new restrictions on Omidria, because it will be 19 for surgeon.
I'm, sorry, I think I heard the question are we are we seeing any new restrictions on omidria because of COVID-19.
Yes, that's the question yes.
Yes.
You mean restrictions specific.
Imagery or more just changes in practice because of good practice level.
Yeah, well I'll actually answer both first with respect to the general practice around cataract surgery, what we are seeing is low.
Longer turnover times between cases, and that's to increase the.
The focus on cleaning and making sure that all protocols for cleaning the the O. ours are followed so the result of that is I believe and I think our commercial team has seen.
A reduction in the throughput of cataract surgery cases at any effectively at any given facility right. If you're if your turnover time between cases is lengthened. The number of cases, you can do in any given amount of time will be less so certainly we've seen we've.
Seeing that I think surgeons are trying to get as many cases as they can done. So those surgeons are working longer hours. They may be increasing there are days to be able to accommodate the number of patients that need cataract surgery with respect specific.
Secondly to Omidria.
No we haven't seen any additional restrictions.
Placed on Omidria in fact, I would think we're seeing quite the opposite I mean, I think the heightened sense of safety in this period of co that.
All of the things that I, just talked about being tied to safety I think have really put a a focus or a spotlight on on omidria because of its safety mean relative to really what is.
Potential alternative and really quite an inferior alternative of compounded products I think that this this sense of and need for safety has really.
Increased probably the utilization and I think thats consistent with what I mentioned in the prepared remarks, which was that we are seeing a per facility increase in the utilization of omidria too and that's compared to pre coded levels.
So now I don't want to be adding two into and getting 22, but certainly I think the.
Those those two.
Findings.
Seem to support each other.
Very encouraging.
On a different go and how many doses of your thought on that do you expect to have manufactured by mid 2021.
We have I don't know if we've given the specific number although what we have done is we've run now two separate sets.
Of manufacturing runs so I think Weve previously reported that in in January of this year that we had manufactured a number of lots of of in our supplement and that those were successful both with respect to drug supply.
Stones, and drug product and that those alone were sufficient to support the launch of our supplement for T. ATM may.
What we've also mentioned and I think Mike spoke to it and in his comments, we again our manufacturer.
And are in the process of manufacturing another set.
Set of runs of in our supplement and I think Mike may have even given the specific number which is another six another six fronts. So clearly we're looking at it as we have.
Yes.
Substantial and certainly.
What we expect would be more than enough for our launch and I think what we're really looking at as well as.
In the setting of critically ill COVID-19 patients having drug available to to at least initially start treating those patients.
Thank you and just lastly, very quickly.
Well developed an impact do you expect to pursue in regard to Newpark will not include 19, and what if anything do you expect to benchmark it again.
No. It's a good question.
We are as I said previously we're in discussions with government agencies.
We also have been approached around.
Whether we would be willing the request has come for us to include in our supplement platform trials. So we're considering specifically.
Specifically that option.
It is one that we really can't discuss in detail given the confidentially confidentiality requirements.
Around those clinical trials or.
The confidentiality requirements bought by those running.
Those clinical trials, but certainly worth we're considering that you know look from our perspective, we believe we have a drug that works.
Well I think the data.
Clearly showed that works well in critically ill COVID-19 patients we're confident in that.
We think that there is a significant need.
For a therapeutic in that setting.
Well when we look at the overall benefit risk balance of in our supplement.
It is heavily heavily weighted toward the benefit and this is not just in COVID-19, but if you look across all of the indications in which in our supplement has been used.
So Tim.
T M TMR T. ATM may.
H.U.S.J. nephropathy and in Cove it itself.
What we have seen or maybe better stated what we haven't seen it.
Is a.
Is a safety signal of concern.
So when you weigh the benefits of the drug.
Versus any potential risk and you're looking at patients who have no treatment and who are.
Hi.
With.
Severe cold at 19.
Cards, or a rds acute respiratory distress syndrome.
It becomes I think.
Difficult to deny these patients.
A drug that appears to be appears to be working.
We're increasing the number of patients that were treating.
But again I think it's important to look at it from the other end of the telescope.
This isn't endothelial injury, meaning COVID-19 as his t. ATM.
The pathophysiology appears to be very similar between those two disorders.
So when you look at it it's not that we have only treated small numbers of patients with COVID-19, we've treated pretty good numbers of patients.
With endothelial injuries syndrome of which T.A. TDMA and COVID-19.
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Our counted among among that group.
And so you know our objective would be to make it available as quickly as possible and and those are the objectives of our discussions.
Wonderful. Thank you so much for your time thank.
Thank you.
Your next question is from Brandon Folkes from Cantor Fitzgerald. Your line is open.
Hi, Thanks for taking my questions and congratulations on the quarter.
Maybe first on major reimbursement.
Do you regain reinvestment period between 21 offs that quickly or delay reimbursement potentially through the night Pain Act.
Secondly, yes, how do you think about the commercial footprints, both DNA and compete yes, you did call out that you had a higher number of crash, we go but compared to where you want to get too and then lost the apologies if I missed this but did you give more granular timing on the phase three data for the yen.
And I have comp thank you.
Okay first.
First with respect to your question on Omidria.
The administrative.
Avenue that we're taking with CMS and HHS is entirely independent of the no pay now so.
So.
Assuming that CMS grants us separate payment in the ambulatory surgery, setting, which is what we're requesting and what we are confident is intact.
In accordance with.
Yes.
Regulation and regulatory law, then certainly.
That is not independent of what could happen or would happen with enactment of the no pain.
So no pain Act as you know.
It would provide separate payment not only in the AOCI setting, but in the assay and in the H.O.P.D. settings.
And the duration of that is currently written that five years renewable on a five year basis thereafter, so really no no.
No overlap or no restriction that one approach places on the other they are truly independent.
Your other question about.
I believe it was timing on I.G., a first and then I'll hand, you over to Dan Kirby our head of commercial to address the specific commercial question you had but we are continuing to push with the GA trial.
Enrollment.
Was initially slowed due to COVID-19 as with many drugs, but our objective there is to is to get that completed.
And at least have data out of the Proteinuria group again, the target remains next year.
Yeah.
Sure. So the commercial footprint. Your question was regarding the commercial footprint built on an adjacent property or was it about our commercial activities regarding HSC TTM may I, just wanted to clarify that to make sure I answer correctly.
Brandon.
Okay, well, what I heard over there you heard during the call about our commercial footprint that we're building out before HSC TTM may things are progressing according to the plan Greg talked about our coating activities. We also.
Our pursuing an entity we have filed for that we'll have a meeting later on this quarter, but things are progressing exactly as we planned along with the filings to ensure that we'd be ready to not only launch, but successfully launch and capitalize the market.
From an hygiene property standpoint, we.
We currently are from a marketing perspective going through market scoping exercise as a market research looking specifically at the nurse Allomap target profile up against other alternatives in regard to advocacy initiatives. We are engaging actively with the advocacy groups, both patient and physician across that follow to community and then from a medical affairs standpoint, we are building on our.
But print on medical education, there in 2021, we plan on expanding those activities.
Looking at product positioning as well as looking at building out more of the medical information standpoint, as we get closer to reaching a point, where we're ready to file for.
Property.
Thank you.
Thanks, Dan.
Brandon I don't know if you're still there if that answered your question David are you on or somehow if you drop.
Okay.
Well are.
Are there any other questions operator.
Im showing no further questions at this time I would like to turn the conference back to Dr., Jim Mcclure thing.
Thank you very much. So thank you again, everyone for taking the time to listen it are these.
These are unprecedented times and I'm proud of the work that our team has done a.
These have been challenging times for everyone and you see the progress that the team has made with the progress on our supplement specifically.
We look forward to it becoming our second commercial drug and we expect the therapeutic indications for in our supplement.
To be broad and that from our.
Our pipeline a long line of important drugs will follow in our supplement into the market.
With that again, we wish you and your families. Good health and all of US at Omeros. Appreciate your continued support thank you and have a good afternoon or evening.
Ladies and gentlemen. This concludes today's conference. Thank you for your participation have a wonderful day you may all disconnect.
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