Q4 2023 Omeros Corp Earnings Call
And ladies and gentlemen, please stand by your call will begin shortly again, please stand by your call will begin shortly.
[music].
Okay.
Good afternoon, and welcome to today's conference call from Old Meredith Corporation. At this time, all participants are in a listen only mode.
The speakers 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 can sell can similar journey.
General counsel of AUM errors, 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.
Differ materially please refer to the risk factors section of the company's annual report on Form 10-K.
I have with the SEC today for a discussion of these risks and uncertainties.
Now I'd like to turn the call over to Dr. Greg Demopoulos America Omeara.
Chairman and CEO.
Gregory A. Demopulos: Alright, Thank you Peter and good afternoon, everyone I'm joined on today's call by our Chief Accounting Officer, Mike Jacobsen, Our Chief commercial officer.
Gregory A. Demopulos: <unk>, our Chief Medical Officer Andreas Grauer.
Our chief regulatory officer.
Our political vice President.
Gregory A. Demopulos: Sure.
Our discussion today will include a brief overview of our financial results for the fourth quarter ended December 31, 20 <unk>.
Gregory A. Demopulos: As well as a corporate update and Mike will then provide a summary of financial results for the full year and further details on the fourth quarter.
When it occurs.
A question and answer period will follow my remarks.
Gregory A. Demopulos: For those of you that frequently enjoying 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 wanted to take the time to share them with you.
And our third quarter earnings call I identified or 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 and our software lab, our math two inhibitor is not a poetic stem cell transplant associated thrombotic microangiopathy or Ta TMA.
Successfully launching the drug to market.
Driving our math Korea inhibitor all M. S 906 into a phase III clinical program as soon as possible.
In paroxysmal nocturnal hemoglobinuria, or Purion, H and M Schaefer able to marry a lot with it.
Before moving Oems 10, 29, our long acting math two inhibitor into phase two clinical trial and a large value indication.
Well take these one at a time.
Our first extended cash runway without dilution. This was accomplished in February through an additional royalty deal with DRA healthcare.
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 into more sales related milestone payments.
All of this is on top of.
One the $125 million upfront payment plus return receivables from radar surgical.
Gregory A. Demopulos: We sold Omidria in 2020 one.
Sure.
Gregory A. Demopulos: Another $125 million in late 2022, when we sold a portion of our future Omidria royalty stream to DRA healthcare and three.
Gregory A. Demopulos: $200 million more received early in 2023, and a milestone payment from renter tied to achieving long term reimbursement for omidria.
In addition to this string of payments <unk>, a 15% royalty on ex U S. Omidria sales and then beginning on January one of 2032.
Omidria royalties from sales anywhere in the world will accrue to our mirrors.
Since its sale to Rainer in December of 2021, a little over two years ago.
Andrea has provided <unk> with nearly $700 million of non dilutive financing.
This inflow of non dilutive capital has helped to secure <unk> 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 in part a reflection of the revaluation of our Omidria contract royalty asset was $9 $1 million or <unk> 15 per share compared to a net loss of 37 $8 million or <unk> 60 per share in the third quarter of 2023.
And the net income of 128 $7 million or $2 <unk> per share for the fourth quarter of 2022.
Gregory A. Demopulos: The results of the prior year fourth quarter were driven by the $200 million Omidria milestone earned by securing further drug long term separate payment.
Based only on continuing operations, our net loss for the fourth quarter of 2023 was $39 3 million or <unk> 63 per share compared to a net loss of 51 7 million or <unk> 82 per share.
In the third quarter, and a net loss of 46 million or <unk> 73 per share for the quarter.
Gregory A. Demopulos: 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.
$47 4 million $4 76 per share in 2022.
Again, the primary difference between the two years is the $200 million Omidria milestone earned in 2022 and received in February 2020.
Our 2023 of 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 2020 convertible notes at maturity.
Second for $90 million used to repurchase $9 1 million principal amount of our 2026 convertible notes and 54% of par value.
And third $4 $7 million used to repurchase one 8 million shares of our common stock.
Our fourth quarter cash used in operations, which does not include these three events was 34 8 million.
As of December 31, 2023, we had $172 million of cash and investments with the additional $116 million royalty purchase payment from <unk> in February of this year, our total expected cash and investments at March.
31, 'twenty 'twenty four.
Gregory A. Demopulos: <unk> $230 million.
This shouldnt be sufficient to fund operations and debt service and the <unk>.
2026.
We have not done a dilutive financing transaction Adam merits.
In August of 2020.
And consistent with this effort to protect our shareholders. The most recent deer IPL further extends our runway without dilution.
Gregory A. Demopulos: 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 mast two inhibitor and our software map MTA chairman.
As previously discussed we have worked with FDA since receiving a complete response letter on our biologics license application or BLA for in our supplement.
Okay.
Gregory A. Demopulos: The late 2022 decision.
From Fda's office of new drugs, followed our formal dispute resolution.
And that identified potential path or a resubmission of the BLA.
Consistent with that decision and with subsequent interactions with FDA is reviewing division.
We developed and submitted for FDA review in the fourth quarter of last year.
A formal analysis planned comparing survival data from our pivotal TMA trial.
Survival data from an external control.
Gregory A. Demopulos: FDA responded with questions to which we have provided detailed answers.
And the dialog continues with FDA regarding recommended elements for a successful resubmission of our BLA.
Each round of interactions with FDA is covered 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.
I'll start making good progress on our marketing authorization application for submission to the European Medicines agency on our software Mab and Ta tiara.
Many experts believe without even a truly satisfactory off label treatment option.
We continue to receive an increasing volume of requests for in our supplement under our expanded access or compassionate use program from physicians treating both adult and pediatric Ta TMA patients.
We remain committed to trying to supply our <unk> all over the world to help these patients up and these are children.
Who have endured solve their cancer, followed by the hope of a cure through a stem cell transplant or.
To have that carrier taken it from them and their families.
Hi.
We've treated over 130 Ta TMA patients in our software <unk> expanded access program total of 53 of these adults and pediatric patients had previously failed or stopped treatment regimens.
Or more other agents, specifically X Elisa map Raviolettis a map.
February type and our thanks Sudhakar.
Coal plant.
So most of them by the timing of our software that was requested would be expected to have a quarter outcome, yet after receiving our stock will nab treatment about half of them.
Those patients who had been previously treated.
Achieved one year survival from data of TMA.
Using the other common metric from data 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 thoughtful now.
So it certainly appears.
In our supplement is saving the lives of both children and adults.
International transplant experts have begun work preparing a manuscript for peer reviewed publication directed to the benefits of our stock will map and the over 130 adult and pediatric tier TMA patients globally, who are able to access and our stock will now under compassionate.
Eight years.
Results from our expanded access program have been reported and a growing body of publications in peer reviewed journals and in international Congresses.
In a recent journal article per memory University published in transplantation and cellular therapy to entrance.
A 10 year old and two adolescents with severe and worsening Ta TMA all with multi organ involvement.
Failed treatment with <unk> map.
Survival in these patients is reported to be less than 20%.
These five children, who had failed Elisa Mab were then treated with in our supplement.
60% responded.
Investigators at Memorial Sloan Kettering Cancer Center published a report in bone marrow transplantation, describing for the first time.
<unk> ability to achieve a complete response, while allowing the physician to maintain the use of <unk> inhibitors, and <unk> inhibitors, and a high risk Ta TMA patients.
<unk> and EMCORE inhibitors are known to potentiate Ta TMA are known to cause.
Further.
Ta TMA and their withdrawal has historically been considered the first step in managing Ta TMA.
The downside of withdrawing these agents so that they are used in stem cell transplants to prevent life threatening graft versus host disease or gvhd, so therewith draw increases the risk of mortality.
We're aware of other transponders, who now similarly, using our soft momentum with good results to treat ta TMA, while maintaining the accounts of neuro and an M Tor inhibitors to prevent potentially lethal gvhd.
Ability in our supplement to allow physicians to treat ta TMA without withdrawing these gvhd preventing agents would represent a further significant advance.
Of the drug and the management of Ta TMA.
In February a poster presented at the 2024 and the 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 Ta TMA patients demonstrated a complete and durable response during our soft we'll map treatment group.
Burnt patients achieved a partial response.
Median duration of treatment across the patients was six weeks.
The report was offered by an external group of U S investigators from Vanderbilt.
Sarah Cannon Research Institute at University of Arkansas, and Indiana blood and marrow transplantation.
Most recently in abstract published in the American Journal of kidney diseases described a 24 year old man, who underwent allogeneic stem cell transplantation for aplastic anemia.
Subsequently develop high risk Ta TMA.
<unk> was initiated on hospital day too.
On day 18, the patients develop the severe line disorder diffuse Avi.
Bill or hemorrhage and on day 30, hemodialysis was started or aseptic acute tubular necrosis, a severe kidney disorder <unk>.
<unk> was initiated 31 days later on day 61.
Despite the late start up and our software Mab treatment. This patient with multi organ disease, who was refractory <unk>. So an estimated mortality of 70% to 80%.
Bonded two in our supplement.
So the evidence continues to Mount.
The conclusion that we are certainly drawn is that nurse thoughtful of map.
Good results.
100 patients.
Turning now to the third of our key priorities. We continue to advance on that 906, our mask re inhibitor targeting the alternative pathway of complement through multiple ongoing phase III studies in two rare disease indications paroxysmal nocturnal hemoglobinuria or <unk>.
A life threatening diseases of the blood and complementary preliminary allopathy or C. III G a debilitating and potentially.
Threatening kidney disease.
In contrast to our in our supplement program for Ta TMA, 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.
<unk> 906 program has the advantages of following other alternative pathway inhibitors into development.
Reporting patients and physicians for meaningful potential benefits not shared by those other therapies.
Gregory A. Demopulos: 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 <unk> 96.
Second in designing our phase III clinical trials, we will be able to follow the clinical roadmap established through the development of other alternative pathway targeting agents.
Third we're designing our clinical trials to demonstrate the potential advantages over other complement inhibitors on the market or in development.
Beyond DNA Genesee three Jan 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 in detail, what we see as the major differentiators between mapped 30 906 versus other alternative pathway targets and therapeutics either approved or in development.
Briefly.
Number one unlike C and.
<unk> inhibitors <unk> inhibitors maintained the body's infection fighting ability.
Number two unlike factor B C three and <unk> five.
<unk> 30, when examine has been shown not to be an acute phase reactive and has very low native circulating levels relative to other alternative pathway targets.
As a result, <unk> 906 should maintain more consistent inhibition of mastery than drugs targeting factor B C three or five providing better protection against potentially life threatening breakthrough of Ah patients underlying disease.
And number three nine.
906 should deliver better patient convenience and as a result compliance none of the competitors by allowing up to once quarterly intravenous and subcutaneous administration.
In response to advise 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 and advantage offered by no other alter.
Our innovative pathway inhibitor on the market or in development.
Just today.
Nick a pan of factor D inhibitor was approved by FDA for the treatment of <unk> in combination with a C five inhibitor.
Clinical trials. The addition of the <unk> was shown to significantly improve efficacy oversee five inhibition alone.
<unk> 906 inhibits match three and mask III is the enzyme that activates factor D <unk> past target.
This should remove any question.
Likely efficacy of <unk>.
And then Japan is an oral medication that needs to be taken three times every day and in the required combination with a C. Five 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 extra vascular hemolysis.
In comparison elements 906 is.
Mono therapy expected to have every eight week or every 12 week dosing, notably Jefferies Research group issued a report just today.
Gregory A. Demopulos: Estimating <unk> worldwide annual peak sales at $750 million.
This again on top of their cost of their required companion C. Five inhibitors like <unk> and <unk>.
Gregory A. Demopulos: This projection and the fact that LMS diagnostics. It is being developed as a single drug therapy with more convenient dosing should further validate the value of our <unk> 906 asset.
Our clinical program evaluating <unk> for the treatment of DNA, which is proceeding well.
We convened an advisory board last week comprised of international experts in Pn edge to discuss details of our <unk> program, including our phase three protocol designs.
The advisors interest and enthusiasm for <unk> 900, <unk> are uniformly hot and.
And we look forward to their ongoing guidance as we move into and through our phase III program.
Currently we have two ongoing phase III studies, both of which are fully enrolled and both of which now have reported positive interim analysis data.
Data from these studies in <unk> patients from our ongoing higher dose PK PD study in healthy subjects should provide the information necessary to determine our final phase III dosing.
Our newest data come from our phase II clinical trial evaluating <unk> 906, <unk> patients who have had an unsatisfactory response to the C. Five inhibitor raviolis map.
The study has a switchover design and enrolled patients receiving our Si Raviolis mab.
Added Oems 906 to provide combination therapy with <unk> for 24 weeks and then provided Oems 906 monotherapy in patients who demonstrated a hemoglobin response with combination therapy.
The trial fully enrolled with a total of 13 patients.
Data from the Prespecified interim analysis of the trials combination therapy portion show rapid response to almost 90%.
With statistically significant and clinically meaningful improvements in both mean hemoglobin levels and absolute ridiculous I count five week core of combination therapy.
Response was sustained through week 24, which is the latest assessment prior to the interim analysis color.
These interim analysis data demonstrate that in patients experiencing substantial extra vascular hemolysis, while on <unk> monotherapy. The alternative pathway inhibitor RMS 906 prevents extravascular hemolysis is.
Expected.
The addition of <unk> 906 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 EHS.
Which will occur in June.
As with almost all international Congress of the details of the submissions are embargoed by EHS until accepted presentations are published online and that will occur in mid may.
Gregory A. Demopulos: 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 II clinical trial evaluating <unk> 900, <unk>. This one in naive teenage patients or those who have not previously been treated with a complement inhibitor were featured as an oral presentation at <unk>.
Annual Congress of the American Society of hematology or Ash.
Clinically meaningful and beneficial effects of almost 906 on hemoglobin LDH and red blood cell phone size in <unk> patients were reported.
And 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.
Condition, causing bone marrow failure.
All nine of those achieved in absolute hemoglobin greater than 12 grams per deciliter.
Level side. It is normal now by others working in the field.
Consistent benefits were also observed in name changes from baseline in hemoglobin, LDH and absolute ridiculous I would count on.
All of these patients were treated with <unk> at a dose.
Five milligrams per kilogram subcutaneously once every four weeks.
After observing efficacy in this study.
We amended the protocol to focus on identifying beyond 906 doses that provide protection from breakthrough hemolysis for both eight week and 12 week durations.
To support the future submission of a BLA for <unk> 960, <unk>, we began enrolling an extension study.
To collect long term efficacy and safety data on PSNH patients.
<unk> rall from either the phase two switchover trial or from the phase II naive patient trial directly into the extension study without a break and RMS 906 treatment.
Dosing in the extension study is already underway.
In February we met with FDA to discuss our development program for <unk> nine or six <unk> edge.
We presented clinical and non clinical data and a requested input on expectations for phase III studies and for BLA submission.
FDA confirmed that the scope of our non clinical program is sufficient to support phase III studies and provided input on dosing and design of the proposed phase III studies to support a BLA <unk> edge.
We will meet again with FDA later this year to discuss further phase III trial design details and the approach to our BLA submission.
As part of our European strategy for <unk> 900, <unk>, we have requested a meeting with European regulators at which we will present available clinical and non clinical data and.
And discuss phase III development.
Moving on to our phase II clinical trial evaluating all in Thats 906, and the C. III G sites are now open in multiple countries and patients are being screened.
As previously discussed we chose to amend the see through gene protocol changing the dose based on information learn and our <unk> program.
This choice resulted in a delay in the study initiation.
But it should provide a better estimate of treatment effect or 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 secret Jay was validated by Novartis in a press release reporting our positive phase III study with the Pakistan Novartis as alternative pathway inhibitor targeting factor D.
Gregory A. Demopulos: We expect to begin enrollment in our phase III <unk> trial this month.
So we've spent a good amount of time and our update today on RMS mannose, six and all of the ongoing phase II, an 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 and short the data from our ongoing phase III <unk> 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.
Yes.
Well differentiated drug that prevents presents multiple potential advantages over alternative pathway inhibitors on the market or in development.
For these reasons, we believe that almost 906 could become the first line standard of care for the treatment of damage.
A host of other alternative pathway diseases.
Now I'll turn it back to our family of agents targeting <unk>, two and the lectin pathway to discuss briefly our findings in the phase III Iga nephropathy trial and the last of the key priorities identified at the outset of today's call.
<unk>.
<unk> 29.
As announced last October we discontinued our <unk> phase III Artemis <unk> trial in Iga nephropathy, following a disappointing outcome from a pre specified interim analysis.
During our last earnings call, we discussed the trial unexpectedly substantial placebo at that.
Topline results showed that <unk> 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 two grams per day.
Together with external experts, we further review the trial data.
PD analysis indicate that many patients in the phase III trial did not achieve adequate and sustained plasma concentrations of our supplement and consequently did not achieve meaningful and sustained levels of elected pathway inhibition.
Gregory A. Demopulos: This in part appears to be due to episodic dosing in the trial.
Once quarterly dosing with our mass <unk> inhibitor <unk> hundred 29 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 biomarkers that we would.
Expect to enable enrichment of any renal study population, where patients whose disease, specifically is driven by electric pathway hyperactivity.
In parallel and consistent with our fourth corporate priority, we're evaluating for LMS $10 29, a series of product large value indications in which the lectin pathway has been implicated in the pathogenesis of the disease.
<unk> 10, 29 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 on multiple sending dose study of <unk> 10, 29 recently completed dosing and is expected to read out data later this quarter.
One of the large market indications for Oh, I'm going to 779 that we are considering this neovascular age related macular degeneration also known as wet AMD.
We have previously reported that preclinical studies demonstrated efficacy in a well established nearing model.
To further de risk our clinical program, we are moving quickly to evaluate mass <unk> inhibition and <unk>.
Gregory A. Demopulos: Primate model of wet AMD.
Gregory A. Demopulos: Notably all approved treatments for wet AMD, such as Lucentis and Eylea require <unk> trio injections, meaning injections into the back chamber of the eye.
These injections are required as frequently as every four weeks.
Since masked two is only produced in the liver systemic administration could provide therapeutic benefit without the need for interim editorial injections in other words, an intravenous infusion of subsequent to initiate or subcutaneous injection may allow patients to both maintain site.
And avoid injections in their eyes.
Potential game changer for both patients.
And their physicians.
We're targeting next quarter to select a phase II indications or Oems and 29.
So our core corporate priorities extending cash runway non dilutive late into 2026 in our soft <unk> approval.
Accelerating on S 906 into phase III trials, and initiating an RMS 10, 29 phase III program. One has already been achieved and the others. We are well on our way to achieving this year's.
Development is also advancing across a series of other programs that we believe through relatively modest investment could meaningfully add shareholder value.
We're in our supplement and COVID-19, and acute respiratory distress syndrome Rds numerous research groups, including ARPA published a growing volume of journal articles demonstrating the role of complement <unk>, the lectin pathway and a rvs.
Another manuscript is being finalized for submission. This one showing the therapeutic benefits of mast two inhibition in an animal model of severe Ah Marc Lewis and influenza infection.
And our thoughtful of map is particularly well suited for diseases like <unk> acute indications requiring hospitalization.
There is also a mounting evidence that masked two and the lectin pathway might well be important drivers of long COVID-19.
The challenges in assessing a therapeutic and launch cohort or the lack of standardized diagnostic criteria.
Clinical endpoints and we're making headway in identifying approaches to address these.
In parallel we've developed an assay platform that's in identifying discriminate between mild COVID-19 patients and those who have moderate or severe COVID-19 related rds requiring hospitalization.
Gregory A. Demopulos: <unk> also has the potential for use in lung COVID-19.
As well as other disease related <unk> <unk>.
The assay score measurement as the mask to the C. One inhibitor complex.
A proprietary highly sensitive and specific marker of lectin pathway hyperactivity.
There is a recognized need for such an assay and we are evaluating our options for completing its development and commercialization.
Turning to our orally administered <unk> two inhibitor program, we continue to advance testing to enable the filing of an investigational new drug application.
The complete franchise of intravenous and our soft format of our long acting subcutaneous inhibitor, RMS 10, 29, and our oral masked two blocker, we expect will enable <unk> to control first line therapy, or both acute and chronic lectin pathway related diseases.
Let's now move onto all of them as five to seven or <unk>, seven inhibitor program targeting addictions, and compulsions as well as movement disorders.
With predictive in well established animal model showing efficacy across opioids cocaine nicotine alcohol in binge eating.
National Institute on drug abuse, or neither requested and this funding our development of all of that $5 37, as the first treatment for cocaine use disorder.
Toxicity data in primates, receiving both cocaine and our RMS 5% to seven a standard toxicology study to support human studies of treatment for cocaine addiction.
Our expected late this year and assuming success or randomized double blind inpatient clinical trial is slated to begin next year.
Gregory A. Demopulos: For all in that five to seven in levodopa induced dyskinesia or often crippling involuntary movements that ultimately occur in nearly all of the millions of Parkinson's patients treated with L. Dopa.
<unk> studies were performed at Emory University and once the investigators.
Their development has been mapped out.
Gregory A. Demopulos: To wrap up the cart Burger view I'll touch briefly on our five proprietary immuno oncology platforms adoptive T cell therapy car T signaling driven immuno modulators antigen, driven immuno modulator that function, both as therapeutics and vaccines.
<unk>.
I'll describe these five platforms and our August and November 2023 earnings calls so would refer you there or more detailed information.
To date in vitro ex vivo in 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.
Elucidated in our August and November earnings call.
So we continue to confirm our results and to generate new data across our I O 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 will now turn the call over to Mike Jacobsen, 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 <unk> 15 per share compared to a net loss of $37 8 million or <unk> 60 per share.
Michael A. Jacobsen: 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 <unk> 63 per share compared to a net loss of $51 7 million or 82 per share in the third quarter.
This is an improvement of $12 $4 million.
The improvement was primarily due to an eight $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 31.
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 nine $1 million of our outstanding 2026 convertible notes.
And $4 $6 million to repurchase one 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 DRA in February.
Total cash and investments at March 31, 2024 are estimated to be approximately $230 million.
This is after repurchasing an additional three 2 million shares of our outstanding common stock for $11 9 million in the first quarter.
2024.
Michael A. Jacobsen: And as Greg said, it should be sufficient to fund operations and debt service into 'twenty.
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.
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.
Michael A. Jacobsen: Of our 'twenty 'twenty six notes.
Michael A. Jacobsen: Interest expense for the fourth quarter was $7 1 million compared to $7 9 million in the third quarter the.
The decrease was primarily due to the retiring of the $95 million outstanding on the 2023 convertible notes.
Michael A. Jacobsen: 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 recognized a $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 amendment contract royalty asset.
And $3 $8 million of interest earned on the imager contract royalty asset.
As I've mentioned previously royalties earned are recorded as a reduction of the imagery of contract royalty asset on our balance sheet.
<unk> royalties for the fourth quarter were $10 $7 million.
<unk> net sales of $35 7 million.
This was a $2 $4 million increase in net sales over Q3.
As Greg mentioned in February.
Michael A. Jacobsen: This year, we entered into an amended agreement with DRA, where they acquired the right to receive all remaining U S. Omidria royalties payable by Rainer through December 31, 2031.
After December 31, 2031, all U S royalty payments will accrue to <unk>.
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.
Also entitled now and going forward, so 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 Dr. Ray as incremental omidria royalty obligation on the balance sheet.
System with the accounting for the initial transaction with DRA.
Michael A. Jacobsen: During the fourth quarter, we repurchased one 8 million shares of our common stock for $4 $7 million under our stock repurchase program.
The average price we paid per share repurchase was $2 54.
Now, let's look at our expected first quarter results.
We expect overall operating costs from continuing operations in the fiscal first quarter, the slightly lower than from the fourth quarter of 'twenty 2023.
Driven by lower <unk> trial costs as we complete the wind down of clinical operations on that program.
Interestingly should be nearly $3 million after factoring in the $116 million, we received from Cri.
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 D. R.
Which for GAAP accounting is considered debt.
Income from discontinued operations should be in the $7 million to $8 million range.
Taking all this into account, we expect our first quarter net loss to be in the $34 million to $37 million range or 58% to 63.
Per share.
Additionally, we expect our cash and investment balance at March 31 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.
Greg: Thanks, Mike, Let's open the call to questions operator.
And thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw your question. Please press star one again.
One moment for our first question.
And our first question comes from Olivia Brayer from Cantor Fitzgerald. Your line is now open.
Hey, good afternoon, guys. Thank you for the questions now, but we've seen interim data in house from the line of six switch study.
Are you looking at steel from the monotherapy portion of the trial both in terms of efficacy measures, but also a number of patients on the line.
Time on treatment and then I have a quick follow up.
Sure sure and you're talking about the phase III program.
The phase two nine or six switch study in.
PMA trial that you guys have.
Greg: What is it 48 to 52 week monotherapy switch portion of the trial that's not occurring.
Youre talking about the switchover trial, yes.
Oh, Hey, great. Thanks Olivia.
Let me turn that over.
Steve.
Sure Greg Thanks.
That trial is our P&A 001 study and you're correct that it is a switchover trial.
<unk>.
Steve: Patients receive that junk of <unk> for six months and then the responders move on to monotherapy. We are looking at hemoglobin and we're looking at LDA chefs loot reticulocyte counts.
<unk>.
Colm sizes.
<unk> standard efficacy measures as well as safety in that study we will have.
13 patients if I remember.
Who were enrolled in that trial, and we anticipate to see data from the monotherapy aspects of that are the monetary could part of that trial in late 'twenty four patients are already advancing from the adjunct to treatment to the monotherapy treatment.
Okay understood and then on the 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.
Yes, we've had I would characterize it as substantial.
Steve: Interaction with them.
And with respect to when do we expect to be able to say more as I've 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 in the rules associated with both meetings in Taipei versus typing.
I think it's going to be different home and in fact, we're not trying to be able to give you right now a timeline.
Or when we would be reached submitting the BLA.
Yes.
But we think we've done the work required.
Our required under <unk>.
Oh entities.
Ruling.
All the way.
Our our.
Clear.
Steve: And Phil on the complete response letter.
So I think.
We believe.
We're in good shape.
I think with respect to timing I think that's something.
We're just find out don't go on discussing right now.
Steve: Dave you want to add anything specific to that.
No I think <unk> got very glad the interactions are ongoing but we felt good about it.
Fashion.
Okay. That's helpful. Thank you guys.
And thank you.
And one moment our next question.
And our next question comes from Steve Brozak from <unk> Securities. Your line is now open.
Hey, good afternoon, and thanks for taking the questions.
With as you mentioned earlier, a telecom approval, how does that took effect.
906, and how does it change at all can you be as detailed as possible. Please.
Stephen Gilbertpaul Brozak: Alright, how does it change what Steve.
How does it change how you look at 906 going forward.
Keep it up.
Yes, thanks for the question.
Thanks.
This was going to be a bit repetitive of what I've said in the comments, but I think.
The distillate.
<unk> approval.
Really is all positive as we see it or LMS and items number one is certainly validates.
Inhibition of mass period, as an alternative pathway inhibitor and as an effective alternative pathway inhibitor remember.
<unk> III is one step proximal in the pathway to factor. These sites, it's masked pre that AG summary, converts pro factor factored the advantage of inhibiting mast three over factor D is the factor D. In turns over very very politically sensitive.
Scent of factor D in terms over circulation every hour.
And.
And that makes it an obvious where it's more difficult.
Target to drive and the result of that is likely that a three times daily oral dosing of the deck.
So.
When we looked at it we see a 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 proximal.
And then when you look at.
There need to be in conjunction with <unk> inhibitors.
And we are coming with a monotherapy that addresses both intra vascular and extra vascular hemolysis can do that with every eight week or 12 week dosing.
When you start to look at these advantages we think all of this really in years to the benefit of almost 906, and certainly underscores the value of the program, but let me stop there.
Both Andreas and Steve and two not yet as well and see if they have other thoughts or other comments.
Okay.
Yes.
Greg.
Pan addresses a gap in the <unk>.
And the lastly on portfolio. However, it doesn't address the patient needs of reducing their treatment paradigm.
With something like a novel efficacy that Derek and frequently it's four times a year and each time the patient has to take a pill for your time today with tunica Pan or even twice a day is let's attack a pan the patient as we've learned from market research has to think about their sickness versus living their lives physicians tell us that.
Stephen Gilbertpaul Brozak: Additionally, concerned about the risk of noncompliance with the oral share, resulting in the risk for breakthrough disease, and and novel upstream treatment like LMS 96 represents a patient friendly option that really puts the efficacy into the doctor's hands and the subsequent confidence though.
Stephen Gilbertpaul Brozak: We think it's addressing some small unmet needs, but the opportunity for 906 really is significant.
Thanks.
I can just.
And medically that we only see this validation the upstream target and if you look at the data that we've disclosed so far and we're going to have more coming out of DHA.
We still remain very excited about the medical potential of treating for treating these patients with almost 906 as a monotherapy.
None: Yes, so I think Steve addressed.
Deep team ultimate.
Learning from this also.
Big market of the currently available.
None: <unk> inhibitors is not meeting the needs of <unk> patients they need something.
To take care of brakes.
The extravascular hemolysis and we.
We think when they sign a cyclical do that better.
Thank you Ron and Steve I think also appointment.
Your score or touched on it briefly but just to come back and make sure we.
We emphasize it one more time.
Yes.
It was Jefferies. The research group that came out just on the heels of the announcement of the approval.
Aim to peak annual sales of the.
$750 million.
Remember that that is going to be on top of C. Five inhibitor. So it's going to be the cost of the <unk> plus <unk> plus.
Plus the cost of actually listen Mab and order revenue listen.
These are.
That's going to be a difficult hill decline.
I think certainly when we were on monotherapy and dosing every every 12 weeks that addresses all of the issues that frankly, the C. Five inhibitors and then their capanne together.
Our are intended to address I think we'll fare quite well.
None: Got it. Thank you for making sure you provided the clarity I appreciate it let me hop back into the queue. Thanks.
And thank you.
Okay.
And one moment our next question.
And our next question comes from Serge Belanger from Needham. Your line is now open.
Hey, good afternoon, thanks for taking my questions.
Greg just wanted to go back to Cipla Mab in Hs.
HFC TMA.
Just curious if theres been a change in FDA stance here given the.
Around the path of Resubmission, just given that the last time, we spoke about this back in November five months ago.
Does it seem to be close to the finish line.
And now there's obviously been some some additional delays, but just curious assistance.
And FDA change.
Or just.
The slow FDA process. Thanks.
Yes.
I think the way then we can answer that is but I think what we what we outlined.
<unk> was we submitted our SAP.
FDA came back with detailed questions. We responded with detailed answers in the dialogue continues.
Certainly.
Our expectation is.
Is that we have satisfied with what we need to satisfy her.
<unk>.
For the office of new drugs direction to both us and the division, which again was two one of the pathways wants to look at survival and we've done that.
I would say that the data we have now collectively.
Our stronger.
Then where we were with the initial BLA submission I think meaningfully stronger.
None: With respect to our survival.
So we.
None: We will need to continue those discussions.
We're optimistic about where we ended up with us I know that whatever anyone is wondering is.
Win win win.
And we love their answer that with a specific date, we don't have one right as soon as we do we'll let you know.
But.
I think when you look again at <unk>.
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 and teenage patients. That's my that's my view.
None: I think its the view shared by the rest of our team and in fact I'm quite confident additives.
I think these discussions will will continue.
And hopefully that resolution will be soon.
Okay. Thanks.
Operator.
Thank you.
And that completes the Q&A part of the call I would like to turn the call back over to the Doctor Demopoulos for closing remarks.
No.
Alright, Thank you operator and again.
Thank you all for joining this afternoon as always we appreciate your continued support.
Have a good afternoon or good evening.
This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
None: [music].
None: Okay.
[music].
Okay.
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