On March 1, 2022 Omeros Corporation (Nasdaq: OMER), a clinical-stage biopharmaceutical company committed to discovering, developing and commercializing small-molecule and protein therapeutics for large-market as well as orphan indications targeting inflammation and immunologic diseases, including complement-mediated diseases and cancers, reported recent highlights and developments as well as financial results for the fourth quarter and year ended December 31, 2021, which include (Press release, Omeros, MAR 1, 2022, View Source [SID1234609294]):
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On December 23, 2021, Omeros completed the sale of its commercial ophthalmic product OMIDRIA (phenylephrine and ketorolac intraocular solution) 1%/0.3% and certain related assets and liabilities to Rayner Surgical Inc. ("Rayner"). As a result of the transaction, the company reclassified all revenues and expenses related to OMIDRIA to discontinued operations for the fiscal years 2021, 2020 and 2019 in its financial statements.
Net income in the fourth quarter of 2021 was $280.6 million, or $4.48 per share, which included cash proceeds of $126.0 million from the sale of OMIDRIA. Non-cash items included a gain of $184.6 million, or $2.95 per share related to capitalizing the discounted future royalty stream for OMIDRIA and non-cash expenses of $6.3 million, $0.10 per share. This compares to a net loss of $22.7 million, or $0.36 per share, which included non-cash expenses of $6.4 million, or $0.10 per share, for the previous quarter.
After adjustment to exclude the accounting impact of the OMIDRIA divestiture, net sales of OMIDRIA for the fourth quarter of 2021 were $32.9 million, an increase of $2.9 million, or 10 percent, compared to the previously reported third quarter results. Similarly, net loss for the fourth quarter 2021, adjusted to exclude the impact of the divestiture, would have been $23.0 million or $0.37 per share of which $6.3 million or $0.10 per share are non-cash expenses. This compares with the previously reported third quarter net loss of $22.7 million or $0.36 per share of which $6.4 million or $0.10 per share are non-cash expenses.
On a GAAP basis, Omeros’ net revenues from OMIDRIA sales for the fourth quarter of 2021 were $31.9 million, comprising (i) net sales of OMIDRIA of $30.8 million prior to the closing of the Rayner transaction and (ii) recognition of royalties of $1.0 million attributable to post-closing sales of OMIDRIA.
For the year ended December 31, 2021, net income was $194.2 million or $3.12 per share compared to a net loss of $138.1 million or $2.41 net loss per share in the prior year.
At December 31, 2021, Omeros had $157.3 million of cash, cash equivalents and short-term investments available for operations and $38.2 million in accounts receivable, all of which is expected to be collected this quarter.
On October 18, 2021, Omeros announced the receipt of a Complete Response Letter from the U.S. FDA regarding the Company’s biologics license application (BLA) for narsoplimab in the treatment of hematopoietic stem cell transplant-associated thrombotic microangiopathy (TA-TMA). In the CRL, FDA expressed difficulty in estimating the treatment effect of narsoplimab in TA-TMA and asserted that additional information would be needed to support regulatory approval. In February 2022, Omeros held a Type A meeting with FDA to discuss the CRL, including each of the review issues that FDA identified as presenting difficulties interpreting the treatment response in the pivotal trial. The company is currently awaiting FDA’s response to its rebuttals to each of those review issues. Omeros believes that the BLA, as submitted, merits approval and that the data meet or exceed the threshold for substantial evidence of effectiveness.
The narsoplimab treatment arm of the I-SPY COVID-19 trial has now concluded. Once available, the data will be analyzed and the outcome shared publicly. The nationwide I-SPY COVID-19 platform trial is evaluating multiple therapeutics for the treatment of severe COVID-19. The trial is sponsored by Quantum Leap Healthcare Collaborative and is funded in part by Biomedical Advanced Research and Development Authority (BARDA). Narsoplimab is the only complement inhibitor selected for inclusion in trial.
"The OMIDRIA transaction with Rayner was the right deal for both parties," said Gregory A. Demopulos, M.D., Omeros’ chairman and chief executive officer. "Rayner acquired a great ophthalmic product and an outstanding sales force. For Omeros, in addition to the immediate and substantial infusion of capital, we are retaining the bulk of the downstream operating profits while transferring all OMIDRIA-related costs to Rayner. Rayner is proving to be a strong partner and, we expect, will continue to grow OMIDRIA sales both in the U.S. and internationally. The transaction also enables us to focus our resources and attention on our core biotechnology programs, including our complement and immuno-oncology franchises. Our Type A meeting with FDA for our MASP-2 inhibitor narsoplimab in TA-TMA was constructive, and we await further feedback from the Agency. Enrollment in the narsoplimab Phase 3 IgA nephropathy trial has accelerated, and we look forward to seeing the data from the I-SPY COVID-19 study. OMS906, our MASP-3 inhibitor, has completed dosing in healthy subjects without any safety concern and is slated to begin enrollment in a study of PNH patients this summer, with a competitively favorable dosing regimen. Also, this summer, our long-acting MASP-2 inhibitor OMS1029 is expected to enter the clinic with once-monthly to once-quarterly dosing. Our novel-target immuno-oncology therapeutics and CAR T-cell and adoptive T-cell programs are generating impressive preclinical data, and we look forward to their clinical entry. 2022 holds a good number of milestones for Omeros, and we like the way that they are lining up."
Fourth Quarter and Recent Developments
Recent developments regarding OMIDRIA include the following:
On December 23, 2021 Omeros completed the sale of OMIDRIA and associated business operations to Rayner. Omeros received $126.0 million in cash at closing. In addition, the company retained and is expected to collect this quarter an additional $38.2 million, representing all outstanding accounts receivable as of December 31, 2021. Rayner will pay Omeros royalties on both U.S. and ex-U.S. net sales of OMIDRIA. In the U.S., the royalty will be 50 percent of U.S. net sales until the earlier of either January 1, 2025 or payment of the $200.0 million commercial milestone, after which Omeros will receive royalties of 30 percent of U.S. net sales for the life of OMIDRIA’s U.S. patent estate. Outside the U.S., Omeros will receive a 15 percent royalty on OMIDRIA net sales throughout the applicable patent life on a country-by-country basis. The $200.0 million U.S. commercial milestone payment will become payable if, before January 1, 2025, separate payment for OMIDRIA under Medicare Part B is secured for a continuous period of at least four years.
Recent developments regarding narsoplimab, Omeros’ lead monoclonal antibody targeting mannan-binding lectin-associated serine protease-2 (MASP-2) in advanced clinical programs for the treatment of TA-TMA, immunoglobulin A (IgA) nephropathy, atypical hemolytic uremic syndrome (aHUS) and severely ill COVID-19 patients, include the following:
In December 2021, a manuscript focused on the role of the lectin pathway of complement in TA-TMA was published in the peer-reviewed journal Experimental Hematology & Oncology. The manuscript elucidates the role of the lectin pathway and MASP-2 in stem cell transplantation-associated endothelial injury and thrombotic microangiopathy.
In November, an abstract detailing the successful treatment with narsoplimab of a 60-year-old with TA-TMA following stem-cell transplantation was published in Blood.
The manuscript detailing the findings from the narsoplimab pivotal trial in TA-TMA and authored by a consortium of the trial’s investigators is in the final stage of review by a peer-reviewed journal.
The Annual Meeting of the European Society for Blood and Marrow Transplantation to be held later this month features three presentations relevant to narsoplimab in TA-TMA. The first details the efforts of an international working group of experts in stem cell transplantation directed to establishing the first broad-based diagnostic criteria for TA-TMA. The second describes a systematic literature review of the natural history of TA-TMA in adults and provides context for the beneficial effects seen with narsoplimab when compared to the expected outcomes in untreated patients. The third details the resolution of severe TA-TMA with narsoplimab treatment in a nine-month-old girl at Emory University who had failed treatment with eculizumab.
Two presentations focused on treatment of IgA nephropathy with narsoplimab were included in the World Congress of Nephrology meeting held in Kuala Lumpur, Malaysia in February 2022. The first featured data also presented at the Annual Meeting of the American Society of Nephrology in November 2021 describing the nearly three years of follow-up on the narsoplimab Phase 2 IgA nephropathy patients. The second detailed the design of ARTEMIS-IGAN, Omeros’ Phase 3 trial evaluating narsoplimab in IgA nephropathy patients.
Two manuscripts from Omeros’ laboratories at the University of Cambridge have been submitted for peer-reviewed publication. The first describes the discovery of a profile of complement markers of broad complement dysfunction seen in all patients examined during the acute phase of severe COVID-19. This dysfunction appears to be driven by hyperactivation of the lectin pathway and restored by narsoplimab while, in patients not treated with narsoplimab, complement dysfunction persists throughout hospitalization or until death. The second manuscript, under final review at another peer-reviewed journal, demonstrates that the complement dysfunction in severe COVID-19 patients results in impairment of the adaptive immune response necessary to fight infection, leading to an increased risk of life-threatening secondary infection. Treatment with narsoplimab normalizes the adaptive immune response, which should restore the body’s ability to prevent or fight secondary infection and reduce COVID-19 mortality.
Recent developments regarding OMS906, Omeros’ lead clinical monoclonal antibody targeting MASP-3, the key activator of the alternative pathway, and OMS1029, the company’s long-acting MASP-2 inhibitor, include the following:
Dosing in the single-ascending-dose study of OMS906 in healthy subjects is completed. There were no safety signals of concern, and pharmacokinetic/pharmacodynamic (PK/PD) data support once-monthly or less frequent subcutaneous and once-every-other-month or less frequent intravenous dosing.
A successful meeting was held between Omeros and the Medicines and Healthcare products Regulatory Agency (MHRA) to discuss the design and conduct of the OMS906 Phase 1b trial in patients with paroxysmal nocturnal hemoglobinuria (PNH), and enrollment is expected to begin this summer.
OMS1029 completed its first-in-human-enabling toxicology studies without any safety signal of concern. Based on PK/PD data to date, dosing in humans is expected to be once-monthly to once-quarterly by subcutaneous or intravenous administration.
Financial Results
The sale of OMIDRIA has been accounted for as the sale of an asset. Accordingly, Omeros has reclassified all revenues and expenses related to OMIDRIA to discontinued operations for the fiscal years 2021, 2020 and 2019 in its financial statements.
Overall sales of OMIDRIA in the fourth quarter were $32.9 million, an increase of $2.9 million or 10 percent from the third quarter. Omeros recognized $30.8 million of the OMIDRIA sales as product revenue prior to the closing of the Rayner transaction and $1.0 million as its 50 percent share of royalties paid by Rayner on post-closing sales of OMIDRIA. Both of these amounts are included on the income statement as a component of net income from discontinued operations.
Total costs and expenses for the fourth quarter of 2021 were $42.9 million compared to $39.8 million for the preceding quarter. The increase was primarily due to incremental research and development costs related to narsoplimab clinical trials.
Net income in the fourth quarter was $280.6 million, or $4.48 per share. This includes a non-cash gain of $184.6 million, or $2.95 per share, related to recognizing the after-tax minimum discounted future royalty stream, discounted to net-present value and absent any milestone payment, for OMIDRIA upon closing. Excluding the sale of OMIDRIA, net loss for the fourth quarter of 2021 would have been $23.0 million or $0.37 cents per share. Fourth quarter non-cash expenses were $6.3 million, or $0.10 per share. On a similar basis, this compares to a net loss in the previous quarter of $22.7 million, or $0.36 per share, which included non-cash expenses of $6.4 million, or $0.10 per share.
As of December 31, 2021, the company had $157.3 million of cash, cash equivalents and short-term investments and $38.2 million in accounts receivable, all of which is expected to be collected during the first quarter of 2022.
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