Good afternoon, and welcome to today’s conference 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. I’ll turn the call over to Mark Metcalf from Omeros.

Good afternoon, and thank you for joining the call today. I’d like to remind you that some of the statements will be made on the call today will be forward-looking. These statements are based on management’s beliefs and expectations as of today only and are subject to change. All forward-looking statements involve risks and uncertainties that could cause the company’s actual results to differ materially. Please refer Risk Factors section of the company’s quarterly report on Form 10-Q, which was filed today with the SEC, for a discussion of these risks and uncertainties. Dr. Greg Demopulos, Chairman and CEO of Omeros, will take you through a corporate update; and then Mike Jacobsen, our Chief Accounting Officer, will provide an overview of our first quarter financial results. We have some time reserved for questions after the financial overview. Now I’d like to turn the call over to Dr. Demopulos.

Thank you, Mark and good afternoon everyone. We appreciate all of you taking the time to join us. We have important updates on OMS721 and today we’ll start there. OMS721 inhibits MASP-2 the effector enzyme of the lectin pathway. The lectin pathway is part of the complement system, a key component of the immune response. For OMS721 we continue to advance our three Phase 3 clinical programs in hematopoietic stem cell transplant-associated thrombotic microangiopathy, or stem cell TMA, immunoglobulin A or IgA nephropathy and in atypical hemolytic uremic syndrome or aHUS. We also have two ongoing OMS721 Phase 2 clinical trials, one in stem cell TMA and the other in renal diseases currently focused on patients with IgA nephropathy. Let’s begin our OMS721 update with our stem cell TMA program. To date, a total of 21 stem cell TMA patients have been treated with OMS721, 20 in the ongoing study and one patient under a compassionate use protocol. In the first quarter, we reported results for the first 19 of these stem cell TMA patients. The estimated median survival for OMS721 treated patients was an order of magnitude greater than that for a matched historical control with a P value of less than 0.0001. When sufficient follow-up duration for these patients was reach to perform 100 mortality assessment the analysis was conducted. 100 day mortality is a commonly used endpoint in conditions like stem cell TMA in which patients have a high mortality rate with death occurring rapidly. That analysis similarly show that OMS721 treated patients had significantly improved 100 days survival relative to the historical control. 53% versus 10% with a P value of 0.0002. Biomarkers of disease including platelet count, lactate dehydrogenase and haptoglobin demonstrated statistically significant improvement. Study patients also showed substantial reduction in red blood cell…

Thanks, Greg. As Greg noted, OMIDRIA total revenues for the first quarter was $1.6 million. Our net loss was $30.1 million or $0.62 per share. This includes non-cash expenses of $4.3 million or $0.09 per share. Our overall decrease in cash, cash equivalents and short-term investments for the quarter was $10.9 million. Here are some specifics regarding the first quarter results. As expected, our reported revenue for the first quarter was significantly impacted by the loss of pass through reimbursement on January 1, 2018. With the substantial majority of our customers currently waiting for pass through reimbursements to be reinstated on October 1, and only using OMIDRIA on a very selective basis. Sell through volume has substantially declined from peak sales in November. We expect this generally to continue during the second quarter, except for the increase in revenues that may result from sales to the VA, which Greg discussed earlier. From our reported revenue perspective, as we discussed in our last quarterly call, we have not yet recognized a large portion of the inventory purchase by our wholesalers in December of last year. We expect to recognize this revenue in the third and fourth quarters of this year as the ASC and the hospital demand are reestablished. Costs and expenses for the current quarter were $29.3 million, a $1.4 million increase from the fourth quarter of 2017. The increase was primarily due to manufacturing scale up activities for OMS721 and higher third-party development costs incurred on OMS721 and our other product candidates. These increases were partial offset by a reduction in SG&A costs due to reduced legal fees incurred defending our OMIDRIA patents, due to the settlement of the patent litigation in October 2017, and reduced sales and marketing costs. Interest expense was $2.8 million for the current quarter,…

Thanks, Mike. Operator, let’s open the call to questions.

Yes, sir. [Operator Instructions] And our first question comes from the line of Jason McCarthy from Maxim Group. You may begin.

Hi, there. Thanks for getting my question. So I was just wondering, with the pass-through reinstated for an additional two years, it looks like you’d get a bit more detail on what steps you take it to reach the permanent reimbursement status, and any progress so far on that?

Hi, Jason. Yes, I think the best way to answer that is we have been working on that specific issue for a couple of years now. The initial result was, I think, what you saw with respect to the extension of pass-through in March. With respect to the administrative approach, to obtain permanent separate payment from CMS, those are ongoing discussion. And again, as I said, I think we remain optimistic that CMS understands the issues, understands well, well-intentioned, understands that the package payment policy is less than optimal, and does not adequately serve the needs of the Medicare beneficiaries. And for that reason, we expect and we certainly hope that CMS will find its way clear to correct that and do the right thing to ensure access for Medicare beneficiaries to drugs like OMIDRIA that are used during surgical procedure.

Okay. Thank you for that. And then just one more question on 721 in TMA, so far Europe, I know that you are scheduling meetings. Do you have any idea on when we’ll be able to get an update on any possibility of conditional marketing authorization in Europe?

We will inform you of that as we have information. But I think for right now, I think what we have said publicly is that we are scheduling those meetings. We will be providing the data that we have to the European regulators, and we hope also here that they will see the importance [Audio Dip] and recognize the data for what they are, which is – it seems pretty clear that patients are surviving with the use of OMS721. So I think with that – let me stop there and again, we’ll provide further updates in the future.

All right. Thank you very much.

And our next question comes from the line of Ram Selvaraju with H.C. Wainwright.

Hi, thanks very much for taking my question. Can you hear me?

Can hear you, yes. Hi, Ram, how are you?

Very good, thanks. So just on 721, a couple of quick things. Given that – from my understanding, there are no specific additional clinical trial requirements ahead of filing the BLA in HSCT TMA. Can you maybe describe for us what the pre-commercial preparations are that you expect to be making, and what a potential commercial organization could look like within the context of this indication, if OMS721 were to receive an approval? And if you could elaborate on whether there would potentially be a rationale for development of an alternative formulation or significantly different dosing regimen, or route of administration for 721 in disease indication like IgA nephropathy. And then, if you could perhaps, elaborate for us, on what kinds of the small molecules you have in the MASP-2 pathway modulation if you could perhaps, give us a sense of how tractable those look, if they’re all likely to be amenable to oral administration, if they look like peptidomimetic or if they look like something else? That would be helpful.

All right. I’ll just start working through those, Ram. First, I want to make clear that we are in ongoing discussions with FDA regarding stem cell TMA. And as you know, obviously, the information we need to provide the FDA is going to need to satisfy FDA. And so I think it’s premature to discuss at this point what else will be required to achieve accelerated approval in stem cell TMA. As we have said, we’re working closely with FDA, and we have initiated [Audio Dip] which I think as you would expect, would be the smart thing for us to do. With respect to the pre-commercialization activities, at this point, we – the standard pre-commercialization activities that you would expect, we’re looking at markets sizes, we’re assessing costs of management of these patients [Audio Dip] to manage a severe or high-risk stem cell transplant TMA patient is about $3 million a year, and those are rough numbers, but it’s an extensive amount of effort that’s required and costs associated with that. With respect to your next question, if I’m recalling, the next question is around IgA, and we’d be expecting a different formulation. Certainly, we’re initially evaluating an IV formulation, but as you know, we also have a subcu formulation, already in clinical trials. So the current plan is to take the IV formulation through initially, and then follow that with a subcu formulation. With respect to the MASP-2 small molecule inhibitors that we’ve developed, yes, a number of those do appear tractable, and we’re very pleased with the compound that we have. These efforts are assisted and have been assisted by our ability to create co-crystals, and that I think, has helped us significantly. These are highly selective, highly potent MASP-2 inhibitors. And we’re very pleased with these inhibitors really as a group, and I think we’ll be speaking more about those in the future. I think that, that covered the questions.

Yes, indeed. Thank you very much. Really, appreciate it.

And our next question comes from the line of Steve Brozak from WBB. You may begin.

Hi, guys. Thanks for taking the questions. Greg, you [Audio Dip] describing what some of the standard of care realities are. Can you go back over just with the three possible indications that you’re looking at, how would you look at what the current costs are in standard of care because – I’m not saying that I would want to use you as a model, whatever is going to come out at the end of the day, but just to get an understanding of what we’re currently looking at is a competitive landscape? And then a follow-up question, please.

I think, first, let’s just turn to aHUS, and I think the standard of care there is Solaris, which I think everyone understands the costs associated with the treatment of aHUS with Solaris. IgA, these are – as you know, there are no approved treatments for IgA. The treatment is standard is really RAS blockade, or renin-angiotensin system blockade, so ACE inhibitors and arms. And ultimately, a good portion of these patients develop and stay – developed in stage renal disease, which requires dialysis. So [Audio Dip ] I would be the costs of long-term dialysis for these patients. With respect to stem cell TMA, those costs are, I think, as I said, highly-intensive. These are patients who become very sick very quickly. Their conditions deteriorate very quickly. And almost always, death comes to these patients, at least the ones that we have treated, these high-risk patients, with greater than 90% certainty comes rapidly. But the costs associated with that are intensive, and the care and the costs of managing patients with these high-risk stem cell TMAs, as I said, is approximately $3 million, or certainly, in the order of several million dollars for these patients. So it is clearly a burden to the medical system, but also – these patients really have no other options.

Okay. Again, most questions have been asked and answered, and you gave some detailed answers on OMIDRIA. Just one last question on OMIDRIA. By comparison to the original launch, and obviously, you’re ramping up everything right now, as I would expect. How would you describe the – how much you compare what you are doing now preparing for October and obviously before and do you have current sales. How would you compare it in terms of what you learned on the – when you did the original launch, in terms of what you’re looking for, and what you think we could guide, get guidance on? I’ll turn back in the queue. Thank you.

That’s an interesting and it’s a good question. I think, certainly, we are much smarter today about how to relaunch the product than we were when we initially launched the product. I think it also helps clearly that we have well-identified benchmarks. I mean, we know how we were selling the product in 2017. We know what got us there, we know the demand from the physicians, we understand how to streamline the utilization of the product within the facilities. So that really – as I’ve said, several times, the distal here is always how can we increase patient access to this important drug? And I think we know how to do that well. Certainly, it was a learning curve throughout the first three years of pass-through, but I think certainly, we have more to learn and more to refine but our ability to get there is I think well documented as well. So I think we’ll be able, as I said, to quickly ramp back up to a level similar to our sales in 2017, and my hope is that we continue to grow those sales. I don’t see any reason why that should not occur. If you look at the clinical data that has been published and the multiple studies that continue to be presented at annual meetings, it’s just uniformly positive. The benefits of OMIDRIA, I really think are not in question. And I think the one other thing, Steve, that certainly we’re going to focus on is expanding the payer base. We’re seeing the effects here, of having the payments in the CMS population stop. And I think we need to focus. And we are now focusing on Medicare Advantage and on third-party payers, to make sure that those patients also can have equal access to the drug. We, by no means, are seeing all patients must have it, but certainly, I think it’s appropriate that all patients have the option to have it. And for CMS to provide that option, for the VA to provide that option, but for Medicare Advantage programs and third-party private payers not to provide that option seems questionable at best.

Great. Again, thanks for taking the question.

Thanks, Steve.

[Operator Instructions] And our next question comes from the line of Serge Belanger from Needham and Company. You may begin.

Hi. Good afternoon. A couple of questions on 721. First, on HSCT-TMA. Greg, you talked a little bit about the accelerated time for approval. I just wanted to get some clarifications if the FDA has signed off on that, or they’re still evaluating some data to make that evaluation. And then what would a confirmatory trial look for HSCT-TMA?

Sure. First, an answer to your initial question, Serge, we remain in discussions. What we thought was important here was to update our investor base on our recent discussions with FDA. We thought most were material and that those needed to be shared. As I’ve said, discussions are ongoing with FDA and we’ll see what else needs to be provided and/or submitted to FDA to satisfy the requirements for accelerated approval. But certainly, we are optimistic that we’re well on the path to getting there. With respect to the design of the confirmatory trial, I think it may be a bit early to discuss that. As I said, we’d like to look at likely different dosing regimens, simply because we have largely used one dosing regimen in the TMA patients treated today. And they’ve done well. But the question is, could they do better? And we want to make sure that we assess that. And the confirmatory trial, assuming that we can work our way clear to an accelerated approval in the near-term, would allow us in parallel, to assess that, that dosing regimen and other dosing regimens, so that we know that we’re treating patients as best as we can. This is a very serious disorder and one where every patient that we save is a very important thing, and we’re focused on that.

Okay. And then on IgA nephropathy. Can you just talk about the Phase 2 trial that you expect to report results for in around mid-year? I don’t think it’s on clinicaltrials.gov, so maybe the patient population, the number of patients and the endpoints.

Yes. I believe it is on clinicaltrials.gov, Serge, but I can run through it with you as well. The first cohort of these are 12 patients, U.S.-based, six patients on 721, six placebo patients – very similar to the last study, other than the fact that these patients are not on steroids and the endpoints again effectively the same. We’re looking at 24-hour protein, urine protein levels. And these patients can be retreated, we’re following them. We expect that this will give us some additional information as we advance through the Phase 3 program.

Okay. Thank you.

Thanks, Serge.

Thank you. And that completes the Q&A part of the call. I’d like to turn the call back to Dr. Demopulos for closing remarks.

So that wraps up our call for today. Thanks, again everyone for joining us. 2018 is shaping up to be an exacting year for Omeros and for our shareholders. And as I said earlier, we’ll continue to keep you updated periodically on our progress. As always, we appreciate your continued interest and support. Everyone, have a good afternoon.