Q1 2025 Omeros Corp Earnings Call
Operator: Good afternoon, and welcome to today's earnings call for Omeros Corporation. At this time, all participants are in a listen-only mode. After the company's remarks, we will conduct a question and answer session. 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 from today.
Good afternoon, and welcome to todays earnings call for <unk> Corporation.
At this time all participants are in a listen only mode.
After the company's remarks, we will conduct a question and answer session.
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 from today.
Jennifer Williams: I'll turn the call over to Jennifer Williams, Investor Relations for Omeros. Good afternoon, and thank you for joining the call today. I'd like to remind you that some of the statements that will be made on the call today will be forward-looking. These statements are based on management's beliefs and expectations as of today only and are subject to change. All forward-looking statements involve risks and uncertainties that could cause the company's actual results to differ materially.
Speaker Change: I'll turn the call over to Jennifer Williams Investor Relations firm arrows.
Speaker Change: Good afternoon, and thank you for joining the call today I'd like to remind you that some of the statements that will be made on the call today will be forward looking these statements.
Speaker Change: Statements are based on management's beliefs and expectations as of today, only and are subject to change.
Speaker Change: All forward looking statements involve risks and uncertainties that could cause the company's actual results to differ materially. Please refer to the special notes and the risk factors section regarding the forward looking statement in the company's quarterly report on Form 10-Q, which was filed today with the SEC and the risk factors section of the company's most recent annual report on form.
Jennifer Williams: Please refer to the special notes in the risk factor section regarding forward-looking statements in the company's quarterly report on Form 10-Q, which was filed today with the SEC, and the risk factor section of the company's most recent annual report on Form 10-K for a discussion of these risks and uncertainties.
Speaker Change: 10-K for a discussion of these risks and uncertainties.
Gregory Demopulos: Now I would like to turn the call over to Dr. Greg Demopulos, Chairman and CEO of Omeros. Thank you, Jennifer, and good afternoon, everyone.
Speaker Change: Now I would like to turn the call over to Dr. Greg Mark Lewis, Chairman and CEO of bone marrow.
Speaker Change: Thank you Jennifer and good afternoon, everyone I'm joined on today's call by David <unk>, Our Chief Accounting officer, not adopt our chief commercial officer, Andreas Grauer, Our Chief Medical Officer, Cathy Melfi, our Chief regulatory officer, and Steven Whittaker, Our Vice President political.
Gregory Demopulos: I'm joined on today's call by David Borges, our Chief Accounting Officer, Nadia Dac, our Chief Commercial Officer, Andreas Grauer, our Chief Medical Officer, Catherine Melfi, our Chief Regulatory Officer, and Steve Whitaker, our Vice President of Clinical Today, I'll start with an overview of our first quarter financial results and provide updates across our development programs. David will then go through our financials in more detail and will open the call for questions. Now let's look at our financial results for the first quarter. Our net loss was $33.5 million or $0.58 per share compared to a net loss of $31.4 million or $0.54 per share in the fourth quarter of last year.
Speaker Change: Today I'll start with an overview of our first quarter financial results and provide updates across our development programs. David will then go through our financials in more detail and we'll open the call for questions.
Speaker Change: Now, let's look at our financial results for the first quarter.
Speaker Change: Net loss was $33 $5 million or <unk> 58 cents per share compared to a net loss of $31 4 million or 54 cents per share in the fourth quarter of last year as of March 31, 2025, we had $52 $5 million of cash and.
Gregory Demopulos: As of March 31, 2025, we had $52.5 million of cash and investments on hand.
Gregory Demopulos: I'd like to start with how we are strengthening our balance sheet and addressing our liquidity position and the options available to us for raising capital. While we've been focused on achieving significant milestones across our development programs, which I'll discuss shortly, we've also been actively pursuing ways to strengthen our balance sheet and manage our debt maturities. Earlier this week, we announced an exchange agreement with certain holders of our 2026 convertible notes, exchanging about $71 million in principal for new 9.5% convertible senior notes due out in 2029. We also reached an agreement with two affiliated holders to convert $10 million of their 2026 notes into equity over a period of 90 to 120 days, with the entire amount to be converted by September of this year.
Speaker Change: Just months on hand.
Speaker Change: To start with how we are strengthening our balance sheet and addressing our liquidity position and the options available to us for raising capital.
Speaker Change: Well, we've been focused on achieving significant milestones across our development programs, which I'll discuss shortly.
Speaker Change: Also been actively pursuing ways to strengthen our balance sheet and manage our debt maturities earlier. This week, we announced an exchange agreement with certain holders of our 2026 convertible notes exchanging about $71 million in principal for a new nine 5% convertible senior notes.
Speaker Change: Due out in 'twenty 'twenty nine.
Speaker Change: We also reached an agreement with two affiliated holders to convert $10 million of their 2026 notes into equity over a period of 90 to 120 days.
Speaker Change: The entire amount to be converted by September of this year.
Gregory Demopulos: As a result, the outstanding balance on the 2026 notes will be reduced to approximately $17 million, eliminating the need to make a $20 million mandatory prepayment of our existing term loan by November 1 to avoid triggering an accelerated maturity of the term loan balance. Overall, this will reduce our total debt by $10 million and lower our near-term repayment obligations by over $100 million, producing it from approximately $118 million to $17 million. The debt extension moves maturity out to 2029 and removes a major overhang for all routes of securing near-term capital.
Speaker Change: As a result, the outstanding balance on the 'twenty to 'twenty six notes will be reduced to approximately $17 million, eliminating the need to make a $20 million mandatory prepayments of our existing term loan by November one to avoid triggering an accelerated <unk>.
Speaker Change: Surety of the term loan balance overall, this will reduce our total debt by $10 million and lower our near term repayment obligations by over $100 million.
Speaker Change: Producing from approximately 118 million to $17 million.
Speaker Change: But that extension moves maturity out to 2029 and removes a major overhang or all routes of securing near term capital.
Gregory Demopulos: We also have an active at the market facility in place with the capacity to raise up to 150 million in aggregate, providing meaningful flexibility to access additional capital when needed. With the debt exchange now having been completed, we're in the process of securing additional capital to support our operations through the anticipated approval and launch of NARSOPLIMENT, including active discussions around partnerships, which would bring non-dilutive funding. As we assess capital-raising alternatives, we're also keeping a close eye on costs across the organization. We've taken meaningful steps to lower expenses while continuing to advance key initiatives and position the company for long-term growth.
Speaker Change: We also have an active at the market facility in place with the capacity to raise up to $150 million in aggregate, providing meaningful flexibility to access additional capital when needed.
Speaker Change: With the debt exchange now having been completed.
Speaker Change: In the process of securing additional capital to us.
Speaker Change: Support our operations through the anticipated approval and launch of our supplement including active discussions around partnerships.
Speaker Change: Which would bring non dilutive funding.
Speaker Change: As we assess capital raising alternatives. We're also keeping a close eye on costs across the organization, we've taken meaningful steps to lower expenses, while continuing to advance key initiatives and position the company for <unk>.
Gregory Demopulos: We've made good progress, but we know it's critical to remain disciplined. We are carefully managing our cash and liquidity to ensure we have the flexibility to deliver on our priorities and are committed to using our resources wisely, focusing investment on the areas that matter most to our shareholders and for near-term success of the company.
Speaker Change: Long term growth we've.
Speaker Change: We've made good progress, but we know it's critical to remain disciplined.
Speaker Change: We are carefully managing our cash and liquidity to ensure we have the flexibility to deliver on our priorities and are committed to using our resources wisely.
Speaker Change: Focusing investment on the areas that matter most to our shareholders and for near term success of the company.
Gregory Demopulos: This means that certain activities and programs have been suspended or paused in order to prioritize the allocation of our currently available capital to the development of commercial infrastructure and capacities needed to ensure the successful launch of Narsopilamab for the treatment of hematopoietic stem cell transplant-associated thrombotic microangiopathy, or TATMA, following the anticipated approval by FDA of our resubmitted biologics license application, and to the completion of our ongoing Xaltenabar clinical trials with enrolled patients.
Speaker Change: This means that certain activities and programs have been suspended or paused in order to prioritize the allocation of our currently available capital to the development of commercial infrastructure in capacities needed to ensure the successful launch of our sample amounts for the treatment of hematopoietic stem cells.
Speaker Change: Transplant associated thrombotic microangiopathy or Ta TMA following the anticipated approval by FDA of our.
Speaker Change: <unk> submitted a biologics license application.
Speaker Change: So the completion of our ongoing <unk> clinical trials with enrolled patients.
Gregory Demopulos: has recently announced FDA has accepted our resubmitted BLA for Narsopilumab and TATMA and has assigned a target date for FDA action of September 25th. We have received and are responding to information requests as part of the process. Our primary analysis results show a hazard ratio of 0.32, with a p-value of less than 0.00001, meaning that narsoplimab resulted in a statistically significant three-fold greater improvement in survival compared to the well-matched control group.
Speaker Change: As recently announced FDA has accepted our resubmitted the BLA for <unk> in Ta TMA and has assigned a target date for FDA action.
Speaker Change: September 25.
Speaker Change: We have received and are responding to information requests as.
Speaker Change: Part of the process.
Speaker Change: Our primary analysis results show a hazard ratio of <unk> two.
Speaker Change: With a P value of less than 0.00001.
Speaker Change: Meaning that in our supplement resulted in a statistically significant three fold greater improvement in survival compared to the well matched control group.
Gregory Demopulos: All sensitivity analyses, including the analyses directed to our Expanding Access Program, or EAP, are strikingly consistent and strong, and we look forward to working closely with FDA to bring Narsoplimab to market as the first approved treatment for TATMA.
Speaker Change: All sensitivity analyses, including the analyses directed to our expanded access.
Speaker Change: <unk> program.
Speaker Change: Or EAP.
Speaker Change: Our strikingly consistent and strong and we look forward to working closely with FDA to bring <unk> to market.
Speaker Change: The first approved treatment for Ta TMA.
Gregory Demopulos: Additionally, the ICD-10 codes established through our collaborative efforts with transplant experts and professional societies will create reimbursement hurdles for off-label treatments since narsoclomab will be the only approved treatment for TATMA.
Speaker Change: Additionally, the ICD 10 codes established through our collaborative efforts with transplant experts and professional societies.
Speaker Change: We'll create reimbursement hurdles for off label treatments since <unk> will be the only approved treatment for Ta TMA.
Gregory Demopulos: We're also moving forward to complete and submit a Marketing Authorization Application, or MAA, to the European Medicines Authority for Narsoplimab in TATMA. We're targeting to complete that submission later this quarter.
Speaker Change: We're also moving forward to complete and submit a marketing authorization application or MAA to the European medicines authority for in our supplement.
Speaker Change: And Ta TMA, we're targeting to complete that submission later this quarter.
Gregory Demopulos: Although pre-launch commercialization activities within our NARSOPLOMED program will continue, we are suspending our expanded access program for NARSOPLOMED, also known as Compassionate Use. Physician requests for access to narsoplomab under this program continue and we are mindful that the TATMA patients who lack an approved treatment for this often fatal condition will be most affected by cessation of access to narsoplomab prior to approval. Nevertheless, suspension of the program is necessary to eliminate direct costs associated with supplying the drug and the external management of the EAP. We remain committed to support patients who are currently being treated under the EAP.
Speaker Change: Okay.
Speaker Change: Although prelaunch commercialization activities within our no supplement program will continue.
Speaker Change: We are suspending our expanded access program for <unk> also known as compassionate use.
Speaker Change: Physician requests for access to our supplement under this program continue.
Speaker Change: And we are mindful that the Ta TMA patients.
Speaker Change: <unk>, who lack an approved treatment for this half and payroll condition will be most affected by the cessation of access Qunar sokolow mab prior to approval.
Speaker Change: Nevertheless suspension of the program is necessary to eliminate direct cost associated with supplying the drug and the external management of EAP.
Speaker Change: We remain committed to support patients who are currently being treated under the EAP.
Gregory Demopulos: This discontinuation of the program will not affect these currently treated patients.
Speaker Change: This discontinuation of the program will not affect these currently treated patients.
Gregory Demopulos: Additionally, our ongoing study of narsoplamab in pediatric patients with PATMA will continue. A manuscript detailing the data related to the primary analysis authored by an international group of leaders in the transplant field has been submitted for publication in a top-tier journal. A second manuscript directed to the EAP results, again authored by international transplant leaders, is planned for submission early next week.
Speaker Change: Additionally, our ongoing study of <unk> in pediatric patients with Ta TMA will continue.
Speaker Change: A manuscript detailing the data related to the primary analysis authored by an international group of leaders in the transplant field has been submitted for publication in a top tier journal.
Speaker Change: A second manuscript directed to the EAP results again third by international transplant leaders as <unk>.
Speaker Change: Planned for submission early next week.
Gregory Demopulos: A manuscript from Weill Cornell describing the role of MASK2 and the lectin pathway in Lyme COVID is also under review in a major peer-reviewed journal. We expect that Narsoplimab will be the first approved therapy in TATMA, a nearly $1 billion annual market opportunity. Narsoplimab is positioned to become a cornerstone asset for transplant experts with label expansion opportunity in other transplant complications and to other disease fields. Our focus remains bringing Narsoplimab to market as quickly as possible. transplanters and their patients globally are waiting for.
Speaker Change: A manuscript from wild Cornell describing the role of mast two and the lectin pathway and like Covid is also under review in a major peer review journal.
Speaker Change: We expect that <unk> will be the first approved therapy in Ta TMA and nearly $1 billion annual market opportunity.
Speaker Change: And our thoughtful of map is positioned to become a cornerstone asset for transplant experts with label expansion opportunity in other transplant complications and two other disease field.
Speaker Change: Our focus remains bringing our <unk> to market as quickly as possible.
Speaker Change: Planners and their patients globally are waiting for it.
Gregory Demopulos: Our other prioritized program is the development of Zoltenibart, our lead antibody targeting mask 3, the most proximal and key inhibitor of the alternative pathway of complement. The initial indication for Zoltenibart is paroxysmal nocturnal hemoglobinuria, or PNH. The global market for PNH, including multiple treatment modalities, is estimated to grow about 11% annually to over $10 billion in 2032. There remains significant unmet need for PNH patients and the complement inhibitor market specifically is expected to more than double from about $2.2 billion today to $4.7 billion in that same time frame. We expect Saltanah Bart to carve out a significant share of that growing market.
Speaker Change: Okay.
Speaker Change: Our other prioritized program is the development of <unk>, our lead antibody targeting masked.
Speaker Change: The most proximal and key inhibitor of the alternative pathway of complement.
Speaker Change: The initial indication for the tenant Bard as paroxysmal nocturnal hemoglobinuria or <unk>.
Speaker Change: Global market for PNM, including multiple treatment modalities.
Speaker Change: Estimated to grow about 11% annually to over $10 billion and $20 32.
Speaker Change: There remains significant unmet need for <unk> patients and the complement inhibitor market specific.
Speaker Change: It is expected to more than doubled from about $2 $2 billion today.
Speaker Change: $4 7 billion in that same timeframe.
Speaker Change: We expect solid tenant Bart to carve out a significant share of that growing market.
Gregory Demopulos: Our ongoing clinical trial evaluating Zaltanabart for the treatment of PNH in treatment-naive patients will continue. Also continuing is the extension study, which enrolls PNH patients treated with Zaltanabart who have completed any of our prior Zaltanabart studies in this indication. Our Phase 2 study in C3G will also remain ongoing.
Speaker Change: Our ongoing clinical trial evaluating <unk> for the treatment of <unk> in treatment naive patients will continue.
Speaker Change: Also continuing as the extension study, which enrolled <unk> patients treated with <unk>, who have completed any of our prior zone <unk> studies in this indication.
Speaker Change: Our phase II study and see three G will also remain ongoing.
Gregory Demopulos: Our Phase 3 Zoltenobar program in PNH began initiating clinical trial sites last quarter, and based on capital considerations, the anticipated ramp-up in spending as well on those trials, we are pausing our Phase 3 PNH program temporarily and are working with our vendors and investigators to ensure that the program is ready to restart with as little disruption to the timeline as possible after securing capital. Market research confirms that Veltenabart's target profile is differentiated from the evolving PNH landscape. Reference drivers for Zalpenabard include A compelling efficacy and safety profile with low treatment burden. four to six times per year dosing, which minimizes how often patients have to think about their disease, and infrequent IV administration, which minimizes both the risk of non-compliance and subsequent breakthrough disease while aligning with the existing economic and treatment model of physicians' practices in PNA2.
Speaker Change: Phase III is all 10 of our program and PSNH began initiating clinical trial sites last quarter.
Speaker Change: And based on capital considerations, the anticipated ramp up in spending as well on those trials. We are pausing our phase III <unk> program temporarily and are working with our vendors and investigators to ensure that the program is ready to restart.
Speaker Change: With as little disruption to the timeline as possible after securing capital.
Speaker Change: Market research confirms that some kind of March target profile is differentiated from the evolving <unk> landscape.
Speaker Change: Reference drivers for us all tenant BARDA include.
Speaker Change: A compelling efficacy and safety profile with low treatment burden.
Speaker Change: Four to six times per year dosing.
Speaker Change: Which minimizes how often patients have to think about their disease and infrequent IV administration, which minimizes both the risk of noncompliance and subsequent breakthrough disease, while aligning with the existing economic and treatment model of physicians practices.
Speaker Change: MTN edge.
Gregory Demopulos: Development spending on our long-acting, next-generation MASK-2 inhibitor, OMS-1029, remains limited. That asset is Phase 2 ready, with drug product needed to support Phase 2 trials having already been manufactured and stored, pending the selection of the first indication and the resources to initiate Phase 2 studies. We've also reduced spending in our other areas of complement franchise, including our Small Molecule Mass 2 and Mass 3 programs as part of our effort to focus resources on core development priorities.
Speaker Change: Development spending on our long acting next generation mass two inhibitor one that's $10 29 remains limited.
Speaker Change: Outside is phase II ready with drug product needed to support phase III trials, having already been manufactured and stored pending the selection of the first indication and the resources to initiate phase III studies.
Speaker Change: We've also reduced spending in our other areas of complement franchise, including our small molecule mask to unmask three programs as part of our effort to focus resources on core development priorities.
Gregory Demopulos: Apart from our complement programs, our PD-7 inhibitor program evaluating OMS-527 for cocaine use disorder or CUD will continue moving forward, funded entirely by a grant from the National Institute on Drug Abuse or NIDA. work on an upcoming inpatient clinical trial evaluating safety and preliminary efficacy of OMS 527 in patients with CUD is ongoing with readout of those clinical data expected late this year or early next.
Speaker Change: Apart from our complement programs are <unk> seven inhibitor program evaluating <unk> five to seven for cocaine use disorder or CBD will continue moving forward funded entirely by a grant from the National Institute on drug abuse or neither.
Speaker Change: Work on an upcoming in patient clinical trial evaluating safety and preliminary efficacy of <unk> five to seven in patients with COPD is ongoing with readout of those clinical data expected late this year or early next.
Gregory Demopulos: In addition, we continue on a limited basis preclinical studies in our novel oncology platform, including IND-enabling studies in our Oncotox program. Oncotox is designed to target and kill only dividing cancer cells. Treatment of acute myeloid leukemia, or AML, is the lead indication. Our Oncotox AML therapeutic has consistently demonstrated superior efficacy to current AML standard of care treatments, both in vitro and in vivo with human cell lines. Oncotox AML shows broad application across AML regardless of genetic mutations, including TP53, NPM1, KMT2A, and FLT3. This broad application certainly appears to be unique.
Speaker Change: In addition, we continue on a limited basis preclinical studies in our novel oncology platform, including IND, enabling studies in our <unk> program <unk> is designed to target and kill only dividing cancer cells.
Treatment of acute myeloid leukemia, or AML as the lead indication.
Speaker Change: <unk> AML therapeutic has consistently demonstrated superior efficacy to current AML standard of care treatments, both in vitro and in vivo with human cell lines.
<unk> AML shows broad application across AML, regardless of genetic mutations, including <unk> hundred 53, NPM, one Kmt two way and flit three.
Speaker Change: This broad application certainly appears to be unique.
Gregory Demopulos: Well-tolerated in preliminary tolerability studies, IND-enabling work is ongoing, and we expect to be in the clinic in 18 to 24 months. This work, as well as clinical trials, will be aided and guided by our distinguished Clinical Steering Committee, all of whom lead AML treatment and research at their respective premier cancer centers. Based on positive feedback from stealth unveiling of our Oncotox data last month at the American Association of Cancer Research with prospective partners, we believe that this program has potential to drive substantial value at an early stage of development, meaning in the near term.
Speaker Change: Well tolerated and preliminary Tolerability studies IND, enabling work is ongoing and we expect to be in the clinic in 2018 to 24 months.
Speaker Change: This work as well as clinical trials will be aided and guided by our distinguished clinical steering committee all of whom.
Speaker Change: Lead AML treatment and research at their respective Premier cancer centers.
Speaker Change: Based on positive feedback from stealth unveiling of our Oncotype <unk> data last month at the American Association of cancer Research with perspective partners.
Speaker Change: We believe that this program has potential to drive substantial value at an early stage of development, meaning in the near term.
David Borges: I'll now turn the call over to David, our Chief Accounting Officer, to go through a more detailed discussion of our financial results. David? Thanks, Craig. Our net loss for the first quarter of 2025 was $33.5 million, or $0.58 per share, compared to a net loss of $31.4 million, or $0.54 per share, in the fourth quarter of last year. As of March 31st, 2025, we had $52.4 million of cash and investments on hand.
Speaker Change: I'll now turn the call over to David Our Chief Accounting Officer to go through a more detailed discussion of our financial results David Thanks, Craig.
David: Net loss for the first quarter of 2025 was $33 $5 million or <unk> 58 per share compared to a net loss of 31 4 million or <unk> 54 per share in the fourth quarter of last year.
David: As of March 31, 2025, we had $52 4 billion of cash and investments on hand.
David Borges: As Greg just mentioned, earlier this week, we entered into an exchange agreement with certain holders of our 2026 convertible notes. We exchanged $70.8 million, an aggregate principal amount of the 2026 convertible notes, for newly issued 9.5% convertible senior notes due in June 2029 on a one-for-one basis. In addition, we reached an agreement with one holder to convert 10 million of the 2026 notes into shares of the company stock in three separate tranches over the next 90 to 120 days, with the conversion to be finalized by September 2025. Following these transactions, the outstanding principal balance of the 2026 notes will be reduced to approximately $17.1 million.
Speaker Change: As Greg just mentioned earlier this week, we entered into an exchange agreement with certain holders of our 2026 convertible notes, we exchanged $78 million in aggregate principal amount of the 2026 convertible notes for newly issued nine 5% convertible senior notes due in June.
David: 2029 on a one for one basis.
David: In addition, we reached an agreement with one holder to convert $10 million of the 2026 notes into shares of the company's stock in three separate tranches over the next 90 to 120 days with the conversion to be finalized by September 2025.
David: Following these transactions the outstanding principal balance of the 2026 notes will be reduced to approximately $17 $1 million.
David Borges: Most importantly, this reduction in principal of the 2026 convertible notes enables the company to avoid making a $20 million mandatory prepayment under our term loan agreement, which otherwise would have been required on or before November 1, 2025, to avoid an accelerated maturity of the term loan. As a result, our total outstanding debt will be reduced by $10 million, and our potential debt repayments over the next 12 months would be lowered by over $100 million, from $117.9 million to $17.1 million. These actions improve our financial flexibility, strengthen our balance sheet, and position the company to better execute on its long-term plan.
David: Most importantly, this reduction in principle of the 2026 convertible notes enables the company to avoid making a $20 million mandatory prepayments under our term loan agreement, which otherwise would have been required on or before November one 2025 to avoid an accelerated maturity of the term loan.
David: As a result, our total outstanding debt will be reduced by $10 million and our potential debt repayments over the next 12 months would be lowered by over $100 million from $117 9 million to $17 1 million <unk>.
David: These actions improve our financial flexibility and strengthen our balance sheet and positioned the company to better execute on its long term plans.
David Borges: Costs and expenses from continuing operations for the first quarter before interest and other income were $35 million, which was a decrease of $691,000 from the fourth quarter of last year. Research and development expenses in the first quarter were heavily focused on Nursoplimab and Xaltanavart. Interest expense for the first quarter was $3.7 million, which reflects a $477,000 increase as compared to the fourth quarter of last year. The primary components of interest expense are the 2026 notes, the DRI immediate royalty obligation, and the secured term loan. In the first quarter, we recorded a $3.4 million non-cash remeasurement adjustment to interest expense related to changes made to the EMIDRIA royalty obligation.
Constant expenses from continuing operations for the first quarter before interest and other income were $35 million, which was a decrease of 691000 from the fourth quarter of last year.
David: Research and development expenses in the first quarter were heavily focused on our supplemental and all 10 of our <unk>.
David: Interest expense for the first quarter was $3 $7 million, which reflects a $477000 increase as compared to the fourth quarter of last year.
David: The primary components of interest expense are the 22026 notes.
David: Mydriatic royalty obligation and the secured term loan and.
David: In the first quarter, we recorded a $3 4 million noncash remeasurement adjustment to interest expense related to changes made to the omidria royalty obligation.
David Borges: This credit was $700,000 lower than a similar adjustment recorded in the fourth quarter of last year and is a primary driver of the increase in interest expense for the first quarter. Interest and other income totaled $1.1 million in the first quarter of 2025 compared to $2.3 million in the fourth quarter of last year. The decrease is primarily attributable to lower interest income and NIDA grant reimbursement revenue from completion of our animal studies on addiction.
David: This credit was $700000 lower than a similar adjustment recorded in the fourth quarter of last year and is a primary driver of the increase in interest expense for the first quarter.
David: Interest and other income totaled $1 1 million in the first quarter of 2025 compared to $2 3 million in the fourth quarter of last year.
David: The decrease is primarily attributable to lower interest income and NATO grant reimbursement revenue from completion of our animal studies on addiction.
David Borges: Income from discontinued operations in the first quarter was $4.1 million, down $1.1 million from the fourth quarter. The first quarter total includes two primary components. $3.9 million of interest earned on the Amidrea contract royalty asset and $166,000 remeasurement adjustment to the contract asset.
David: Income from discontinued operations in the first quarter was $4 $1 million.
David: Down $1 1 million from the fourth quarter.
The first quarter total includes two primary components three.
David: $3 9 million of interest earned on the Omidria contract royalty asset and $166000 re measuring the remeasurement adjustment to the contract asset.
David Borges: As previously discussed... Royalties earned are recorded as a reduction of the EMIDRIA contact royalty asset on our balance sheet, rather than recognized in our income statement. EMIDRIA royalties for the first quarter totaled $6.7 million, based on EMIDRIA net sales of $22.3 million. This compares to royalties of $10.1 million on fourth quarter net sales of $33.6 million, representing a decrease of $3.4 million in royalties and a reduction of $11.3 million in net sales quarter over quarter. And compared to the first quarter of 2024, first quarter 2025 and midway royalties decreased by $2.7 million, corresponding to an $8.9 million decline in net sales.
David: Yeah.
David: As previously discussed royalties earned are recorded as a reduction of omidria contact royalty asset on our balance sheet rather than recognized in our income statement imagery of royalties for the first quarter totaled $6 7 million based on Omidria net sales of $22 3 million.
David: This compares to royalties of $10 1 million on fourth quarter net sales of $33 6 million, representing a decrease of $3 4 million in royalties and a reduction of $11 3 million in net sales quarter over quarter.
David: And compared to the first quarter of 2020 for first quarter 2025, Omidria royalties decreased by $2 7 million corresponding to an $8 $9 million decline in net sales.
David Borges: And as a reminder, in February 2024, landed into an amended agreement with DRI under which they acquired the right to receive all U.S. emigre royalties payable by Rainier through December 31st, 2031. Omeros retains all royalty rights to ex-U.S. sales of Emydria and we're entitled to receive all U.S. royalties on Emydria sales from and after January 1, 2032. In other words, all global royalty payments will accrue to Omeros beginning January 1, 2032.
David: And as a reminder, in February 2024, we entered into an amended agreement with <unk> under which they acquired the right to receive our U S imagery of royalties payable by Rainer through December 31, 2031.
David: <unk> retains all royalty rights to ex U S sales of Omidria and were entitled to receive all U S royalties on Omidria sales from and after January one 2032.
David: In other words, all global royalty payments will accrue to <unk> beginning January one 2032.
David Borges: Now let's take a look at our expected second quarter 2025 results. We anticipate that overall operating expenses from continuing operations in the second quarter of 2025 will be lower compared to the first quarter of 2025 as we begin to pause on clinical development of Zoltanobart and other programs. Interest and other income for the second quarter is expected to be approximately $625,000. An interest expense excluding any non-cash adjustments related to the EMIDRIA royalty obligation should be around $7.6 million. This represents a non-cash increase of $3.3 million from the first quarter, primarily reflecting the absence of significant non-cash adjustment tied to the EMIDRIA royalty obligation and incremental interest expense of about $370,000 associated with the newly issued 2029 convertible note.
David: Now, let's take a look at our expected second quarter 2025 results.
David: We anticipate that overall operating expenses from continuing operations in the second quarter of 2025 will be lower compared to the first quarter of 'twenty five as we begin to pause on clinical development of <unk> and other programs.
David: Interest and other income for the second quarter is expected to be approximately $625000.
David: And interest expense, including excuse me, excluding any noncash adjustments related to the omidria royalty obligation should be around $7 6 million. This represents a noncash increase of $3 3 million from the first quarter, primarily reflecting the absence of significant noncash adjustment tied to the <unk>.
David: <unk> royalty obligation and incremental interest expense of about $370000 associated with the newly issued 2029 convertible notes.
David Borges: The senior term loan transaction we closed in June 2024 included a $29.8 million gain, resulting from repurchasing a portion of our 2026 convertible notes. Under GAAP, we were unable to recognize that gain immediately. The $29.8 million gain is deferred and amortized as a premium over the term of the senior loan, reducing interest expense. Inclusive of the deferred gain, we calculate the annual effective interest rate to be 1.4%. We expect to incur $600,000 in interest expense on the Senior Term Loan for the second quarter of 2025.
David: The senior term the senior term loan transaction. We closed in June 2024 included a $29 8 million gain resulting from repurchasing a portion of our 2026 convertible notes under GAAP. We are unable to recognize that gain immediately at $29 $8 million gain is deferred and amortized as.
David: Premium over the term of the senior loan reducing interest expense.
David: Inclusive of the deferred gain we calculate the annual effective interest rate to be one 4%.
David: We expect to incur 6000 up $600000 in interest expense on our senior term loan for the second quarter of 2025.
David Borges: And finally, income from discontinued operations is expected to be in the $6 to $7 million range, excluding any non-cash remeasurement adjustments to the MIDREA contract asset.
David: And finally income from discontinued operations is expected to be in the $6 million to $7 million range, excluding any noncash remeasurement adjustments to the media contract asset.
Gregory Demopulos: With that, I'll turn it back over to Greg. Thanks, David.
Greg: With that I'll turn it back over to Greg.
Operator: Operator, now let's please open the call to questions. If you would like to ask a question at this time, please press star 1 1 on your touch tone phone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.
Greg: Thanks, David.
Speaker Change: Operator now, let's please open the call to questions.
Speaker Change: If you'd like to ask a question at this time. Please press star one one on your Touchtone phone and wait for your name to be announced.
Your question. Please press star one again.
Speaker Change: Please standby, while we compile the Q&A roster.
Stephen Brozak: Our first question comes from Steve Brozak with WBBC. Hey, thanks for taking the questions. I do have one.
Steve Brozak: Our first question comes from Steve Brozak with W. BB Securities.
Steve Brozak: Hey, Thanks for taking the questions I do have one and since everything is pretty much being driven to the launch.
Gregory Demopulos: And since everything is pretty much being driven to the launch, can you give us as much detail as you can on not just launch plans, but how you are prepared for the launch itself? And what does this mean as far as patient access, and anything else you want to add. Thanks, and I'll hop back in. Yeah, thanks, Steve. Look, we're well prepared for the launch. Our commercial team has done a lot of work. And I think, you know, we are expecting, again, assuming approval, which we do, that the launch will be very successful.
Steve Brozak: Can you give us as much detail as you can on not just launch plans, but how you are prepared for the launch itself and what does this mean as far as.
Steve Brozak: Patient access and anything else you want to add thanks, and I'll hop back in the queue.
Steve Brozak: Yes, Thanks, Steve.
Speaker Change: Look we're well prepared for the launch our commercial team.
Steve Brozak: Has done a lot of work.
Speaker Change: And I think we are expecting.
Speaker Change: Again, assuming.
Speaker Change: Approval, which we do that the launch will be very successful let.
Nadia Dac: Let me turn that over, though, to Nadia, for more detail. Thanks, Greg. Yeah, we have a small but mighty team that has been extremely focused in this area. And, you know, the good news is that the consolidated prescriber base, we know where the transplant centers are, we understand the allogeneic volume by center. And so our team has been focused on what we call the top 40 centers that are responsible for driving just about 60% of the allogeneic transplant volume. With time, we've actually gone a little deeper to the next 40 that gets us to about 80% of that volume.
Speaker Change: Let me turn that over though to Nadia for more detail.
Nadia: Thanks, Craig.
Nadia: Have a small but mighty team that's been extremely focused in this area and the good news is that the consolidated prescriber base, we know where the transplant centers are we understand the alginate volume by center and so our team has been focused on what we call. The top 40 centers that are.
Nadia: Responsible for driving just about 60% of the allogeneic transplant volume.
Nadia: With time, we've actually gone a little deeper to the next 40 that gets us to about 80% of that volume. So we've cultivated but we're calling SaaS start accounts and we understand.
Nadia Dac: So we've cultivated what we're calling fast start accounts, and we understand the decision making in these accounts, we know who the transplant champion is. And not only that, these are centers that are actively and proactively monitoring for TATMA signs and symptoms. So they understand this complication of allogeneic transplants. And then we also know the transition from inpatient to outpatient because with profiled narsoplamab, we believe its efficacy plus safety profile lends itself to be infused both in inpatient as well as outpatient settings based on those experts' preferences. And we've also been engaging with payers. The exciting news is after we resubmitted our BLA, we've had several payers reach out for what we call product information exchanges.
Nadia: The decision, making in these accounts, we know who the transplant Champagne is and not only that these are centers that are actively and proactively monitoring for ta TMA signs and symptoms. So they understand this complication of allogeneic transplants.
Nadia: And then we also know the transition from inpatient to outpatient because with profiles and our thoughtful Nab, we believe its efficacy or safety profile lends itself to be infused both an inpatient as well as outpatient settings based on those efforts preference.
Nadia: And we've also been engaging with payers.
Nadia: The exciting news is to after we submitted our BLA.
Had several payers reach out for what we call <unk>.
Nadia Dac: In fact, we've got one set up next week and several immediately after, and we expect that we'll have even more requests for those as we approach our PDUFA date. This is important because for economic plans, they've got to evaluate what's on the horizon, and having a significant value driver for a complication where nothing is currently approved is important to them. And they do view the fact that narsopramat being the only potential product indicated for TATMA is a significant value driver. So the disease education continues, the identification of accounts, knowing all of the stakeholders, not just the transplant position, puts us in a really successful position.
Nadia: Thanks information exchanges and.
Nadia: In fact, we've got one set up next week and several immediately after and we expect that we'll have even more requests for those as we approach. Our <unk> date. This is important because for economic plans they've got to evaluate what's on the horizon and having a significant value driver.
Nadia: For a complication where nothing is currently accrued is important to them and they do view. The fact that our thoughts on that being the only potential product indicated for Ta TMA is a significant value driver.
Nadia: So the disease education continues the identification of accounts, knowing all of the stakeholders not just the transplant position puts us in a really successful position.
Gregory Demopulos: Plus the data is just so compelling with a significant value proposition for all of those stakeholders involved. So we are excited for that approval to come in. Thank you, Nadia.
Nadia: The data is just so compelling with a significant value proposition for all of the stakeholders involved.
Nadia: We are excited for that approvals come in.
Nadia: Thank you.
Stephen Brozak: Did that answer your question, Steve? Yeah, yeah, it did, but it also raised two more. So I will throw them in the equation as well. On the first one, obviously, you know, there's something that has to be, I guess, detailed more. These are extremely sick patients. So as far as that goes, if you can provide any color on the patients we're talking about, because obviously this is a life-threatening situation for which there's just no other reasonable therapy that works. Can you talk more about those patients and how they got there? The additional question along that, and this time I do promise to hop back in the queue, a great deal of money has been spent on these patients.
Steve Brozak: Did that answer your question, Steve Yes, yes, it did but it also raised two more.
Nadia: Okay.
Nadia: So I will I will I will throw them in the equation as well on the first one obviously.
Nadia: There is something that has to be I guess details more these are extremely sick patients.
Nadia: As far as that goes if you can provide any color on those on the patients. We're talking about because obviously this is a life threatening threatening situations for which there is.
Nadia: No other reasonable therapy that works can you talk about more about those patients and how they got there and.
Nadia: The additional question a long run and at this time I do promise to hop back in the queue.
Nadia: A great deal of money has been spent on these patients they've had stem cell transplants and these are not easy procedures, but they are also extremely laborious in terms of health care costs.
Gregory Demopulos: They've had stem cell transplants, and these are not easy procedures, but they're also extremely laborious in terms of health care costs. Can you go into any detail about that, and the whole purpose there is to talk about this You know support of these patients by Narsupplumab and what it means, and I leave it to you as to how much detail you can give us on that. Thank you again. Sure. Let me just make sure we understand the first question. It was how did those patients get there? And I just want to make sure we're answering that question.
Nadia: Can you go into any detail about that in.
Nadia: The whole purpose there is to talk about this.
In support of these patients buying our supplement and what it means and I leave it to you as to how much detail you can give us on that thank you again.
Nadia: Sure. Let me just let me just make sure we understand the first question. It was how did those patients to get there and I just want to make sure. We're answering that question what.
Gregory Demopulos: What specifically are you referencing when you say how did they get there? These are hematological oncology patients who've wound up through medical intervention that are there. So can you detail some of that? Because that's the part that people automatically assume on stem cell TATMA. Yeah, sure. Look, TATMA is, is a complication of stem cell transplant, but it's really wholly unpredictable. So patients, their families, their loved ones go through the transplant process, which, as you can imagine, is stressful, is costly, as you've already identified. And there's obviously a tremendous amount of hope that that stem cell transplant is going to extend the life of or cure the patient.
Nadia: What specifically are you referencing when you say sure how you get there. These are these are our hematological oncology patients who've who've wound up through.
Nadia: Medical intervention that are there. So can you detail some of that because that's the part that people automatically assume okay.
Nadia: Okay.
Nadia: Yes sure look.
Nadia: Ta TMA is as a complication of stem cell transplant, but it's really wholly unpredictable.
Nadia: So patients their families.
Nadia: Their loved ones go through the transplant process, which as you can imagine.
Nadia: As as stressful as costly as you've already identified.
Nadia: And there is there is obviously a tremendous amount of hope there.
Nadia: That stem cell transplant is going to extend the life of or cure the patient.
Gregory Demopulos: and all of a sudden, out of left field, without any warning. comms, TATMS. And this is not a disease that has a long and lingering span. This is a disease that comes hard, it can come fast, and it can result in death not in months and months, but really, you know, days, days to week. And you can imagine the to the patient, to the family, to all of those concerned about that patient, when things are looking great and all of a sudden things turned really south really quickly. So, you know, the idea here is that is what we're facing.
Nadia: And all of a sudden out of left field without any warning.
Nadia: Tom's Ta TMA.
Nadia: And this is not a disease.
Speaker Change: That has a long and lingering spend this is a disease that comes hard at it can come fast and it can result in death not in months and months, but really.
Nadia: Days days to weeks.
Speaker Change: And you can imagine.
Nadia: <unk>.
Nadia: The hit to the patient to the family.
Nadia: To all of those concerned about that patient when things are looking great in all of the sudden things turn really.
Nadia: Really quick.
Nadia: So.
Nadia: The idea here is that is what we're facing.
Gregory Demopulos: There is no approved treatment. There are off-label treatments, which really have mixed results. There are reports of some efficacy. There are also reports of actually increased safety risk. And, you know, we are working hard and expect that narsoplamab will be the first drug approved for TATMA.
Nadia: There is no approved treatment there are off label treatments, which really have mixed results.
Nadia: There are reports of some efficacy. There are also reports of actually increased safety risks.
Nadia: And we are working hard and expect that <unk> will be the first drug approved for Ta TMA.
Nadia Dac: With respect to your second question about the costs, you know, let me turn that over to Nadia and then I'll see if anyone wants to additionally comment on what I've just relayed in response to your first question. Yes, Steve, you are spot on in terms of the cost associated with an untreated patient, whether it's ICU or inpatient, those are the significant cost drivers. And so, in terms of the economic value that we're looking at and how we're building that story for Narsoplamat, when you have a treatment that's the only one indicated for TATMA with the kind of survival benefit that we've demonstrated in our data, when you compare that versus the cost of a patient developing end organ damage, kidneys failing, dialysis, transplant, potentially of organs, or death, there is no comparison, right?
Nadia: With respect to your second question about the costs, let me turn that over to <unk> and then I'll see if anyone wants to additionally comment on what what Ive just related.
Nadia: In response to your first question.
Speaker Change: Yes, Steve you're spot on in terms of the cost associated with untreated patient, whether it's ICU or in patient those are the significant cost drivers and so.
Terms of the economic value that we're looking at and how we are building that story from our thoughtful map.
Speaker Change: When you have a treatment that is the only one indicator for Ta TMA with the survival benefit that we have demonstrated in our data when you compare that versus the cost of the patient.
Speaker Change: Eloping end organ damage kidneys, failing dialysis transplant potentially.
Speaker Change: Again or death.
Speaker Change: Yes.
Nadia Dac: And preserving preserving that patient and reducing the cost, of course, and so that is how we're looking at this and this is also how other stakeholders are taking that to consideration. The other aspect of that that I will highlight is the ability of a drug to be used outpatient is also a significant value driver because it is less expensive to dose a patient outpatient. So, with this kind of efficacy, the goal is to get the patient as quickly as possible from ICU to inpatient, from inpatient to outpatient. And that's the goal with the why I say the entire profile is efficacy plus safety.
Speaker Change: There is no comparison.
Preserving preserving that patient and reducing the cost of course, and so that is how we're looking at this and this is also how other stakeholders are taking that into consideration.
Speaker Change: The other aspect of that that I will highlight is the ability of the drug to be used outpatient is also a significant value driver because it is less expensive to dose a patient outpatient so with this kind of efficacy. The goal is to get the patient as quickly as possible for ICU to inpatient from E&P.
Speaker Change: Outpatient and that's the goal.
Speaker Change: Why I say the entire profile of efficacy safety, because we know in this space in the transplant space. Some treatments that are exclusively in patients dosed and Thats quite limited, but we don't see the same concerns with <unk> potentially.
Stephen Brozak: Because we know in this space, in the transplant space, there's some treatments that are exclusively inpatient dosed and that's quite limiting where we don't see the same concerns with Narsoplamat potentially. Got it. Thanks for the color and the detail. Let me hop back in. Thanks to Again, that is star 1-1 to ask a question. All right, operator, it appears no other questions.
Speaker Change: Okay.
Speaker Change: Got it thanks for the color and the detail, let me hop back in the queue.
Speaker Change: Thanks, David.
Speaker Change: Again that is star one to ask a question.
Speaker Change: Alright, operator appear.
Speaker Change: Appears.
Speaker Change: No other questions.
Gregory Demopulos: So with that, I'd like to thank everyone for joining us today. We appreciate the continued support and confidence of our investors and lenders. We remain focused on executing with discipline and securing the capital resources necessary to bring us through to the anticipated approval of NARSOPLIMAP, a successful commercial launch, and the development of our pipeline. We expect all of those things to occur, and we look forward to providing updates over the near term. All of us at Omeros appreciate your continued support.
Speaker Change: So with that I'd like to thank everyone for joining us today.
Speaker Change: I appreciate the continued support and confidence of our investors and lenders.
Speaker Change: We remain focused on executing.
Speaker Change: With discipline and securing the capital resources necessary to bring us through to the anticipated approval of <unk>.
Successful commercial launch.
Speaker Change: And the development of our pipeline.
Speaker Change: We expect all of those things to occur and we look forward to providing updates.
Speaker Change: Over the near term all of us at <unk>. Appreciate your continued support.
Gregory Demopulos: Have a good evening, and we look forward to speaking with you again.
Speaker Change: Have a good evening and we look forward to speaking with you again.
Operator: This concludes today's conference call. Thank you for participating.
Speaker Change: This concludes today's conference call. Thank you for participating.
Operator: You may now disconnect.
Speaker Change: May now disconnect.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.