Good afternoon, and welcome to today's conference call. 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 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. Please refer to the 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 the Company’s third quarter financial results. We have some time reserved for questions after the financial overview. Now I would like to turn the call over to Dr. Demopulos.

Thank you, Jennifer, and good morning, everyone. We appreciate all of you taking the time to join us today. I'd like to first update all of you on our recently announced convertible debt deal. Under this debt deal, we will receive gross proceeds of $210 million in exchange for wholly unsecured convertible notes. The initial purchasers will have a 30-day option to purchase $40 million of additional notes. The deal was spurred by a reverse inquiry. We're pleased with the quality of the purchasers and appreciate their confidence in the Company. We've introduced to our story, new blue chip, highest quality credit and equity crossover investors from both the U.S. and Europe. The proceeds will be used primarily to retire our secured debt facility with CRG and to provide additional working capital while OMIDRIA revenues continue to ramp up to sufficient levels to support fully our research and development and other operating costs. We believe that this was a good move for the Company and that the timing is right. Here's why? As unsecured debt, the Company now has removed all covenants as well as all security interests, including all pledges against our intellectual property and has greater freedom to run our operations. It reduces our interest rate to nearly half from 12.25% to 6.25% and meaningfully extends our maturity date to late 2023. The structure of this debt allows us to control at our sole discretion how the conversion or repayment is fulfilled. We’ve purchased a call spread, which effectively raises the conversion price to approximately $29. Our overall objective is to minimize or avoid dilution, so we plan to repay this debt in cash. This convertible debt transaction is scheduled to close next Thursday. Now, let's turn to our commercial product, OMIDRIA. As previously announced, pass-through reimbursement status…

Thanks, Greg and good morning everyone. As Greg noted, OMIDRIA and total revenues for the third quarter were $4.6 million, and our net loss was $39.5 million or $0.81 per share. This includes noncash expenses of $5 million or $0.10 per share. Here are some specifics regarding the third quarter results. Our reported revenue for the third quarter increased $3 million from the second quarter, but continued to be significantly impacted by the loss of pass-through reimbursement on January 1 of this year. As expected, we did see increased wholesale or purchasing activity during the last two weeks of September. As wholesalers increased the OMIDRIA on-hand inventory and preparation for Medicare reimbursement resuming October 1, cost and expenses for the quarter were $40.1 million, a $7.8 million increase from the second quarter of this year. The increase was primarily due to additional manufacturing scale-up activities for OMS721, including the purchase of $2.3 million in raw materials which will be used for multiple OMS721 manufacturing runs over approximately the next two years. In addition, increased activities associated with the reintroduction of OMIDRIA and early prelaunch commercialization activities for OMS721 contributed to the overall increase in expenses. Interest expense was $4.6 million for the current quarter, which is in line with our expectations. As of September 30, 2018, we had $55.2 million of cash, cash equivalents and short-term investments available for general operations and $5.8 million of restricted cash in support of our CRG loan agreement and our building lease. Following closing of the convertible debt and the expected receipt of additional proceeds from the sue. We will have $61.5 million of additional cash available for operations. Now let's take a look ahead. Our fourth quarter reported revenues will show a significant increase over the third quarter due to the October 1 reinstatement of pass-through. During October as mentioned earlier, our sell-through to ASCs and hospitals was approximately 17,500 units. This represents 81% of the sell-through amount for October 2017, which was our highest single month of OMIDRIA sell-through today. During the fourth quarter of 2018, the majority of our research and development expenses are planned to be related to OMS721, with OMS527, OMS906 and our GPCR program contributing lesser amounts. We expect research and development costs will likely increase in the fourth quarter of this year given our ongoing 721 Phase 3 clinical programs and manufacturing scale-up activities. Selling, general and administrative expenses for the fourth quarter of 2018 could also slightly increase from those in the third quarter, primarily due to incremental OMIDRIA sales and marketing activities associated with the reintroduction of OMIDRIA in early pre-commercialization activities for OMS721. Interest expense for the fourth quarter should be approximately $4.3 million. With that, I'd like to turn the call back over to Greg.

Thanks Mike. Let's open the call to questions.

Thank you. [Operator Instructions] And our first question will come from Steve Brozak with WBB. Please proceed.

Congratulations Greg. Obviously the external news that you're reporting on OMIDRIA is what you would look for and expect. But I do have a question. Can you give us any internal observations, anecdotes, or details if possible, on what you're seeing within your company, within your system on OMIDRIA? And I've got one follow-up after that place.

Thanks Steve. Well, we're very pleased with what we're seeing as the rapid reuptake of OMIDRIA with its reintroduction really just a month ago. I mean, again, as we've made pretty clear, October sell-through, which is the number of vials sold to our customers by our wholesalers. I'll say again, was 81% of our highest monthly number ever, which was October of last year. But, it's interesting that even though those numbers look good, we're still coming out of the gate in a lot of ways. I mean, there are a number of facilities that are still testing reimbursement from CMS, meaning they know and they understand or they believe they understand that CMS is reimbursing once again for OMIDRIA. But they're testing that. So some are waiting for other facilities across town to try and see whether they get reimbursed. Others are submitting claims for only a few vials that have been used to confirm that they get reimbursed before really diving in again with OMIDRIA. But despite all that, the uptake is what you see. In fact, it's interesting that we seem to be outstripping our consignment vendor’s ability to place the dispensing units within the facilities. So there are a number of facilities, who are trying to come on board and have not yet been able to, because they don't yet have the dispensers available. So I think that really, when we look at all of the indicators, I don't think we could have expected anything better than what we're seeing with the reintroduction of OMIDRIA. We expect that utilization will continue to grow, supported by all of the things we talked about in the prepared comments. I think the data that continue to come out just further underscore that there really is no alternative. There's no alternative from an efficacy perspective. There certainly is no alternative from a safety perspective. So with that, I hope that answers your question.

Yes, no, no, obviously I do appreciate the detail that you're providing, which leads me to the last question. I'll hop back in the queue. Obviously OMIDRIA is selling again and it's meeting your expectations. How should we – going to 721 because these are two different types of products, in so many different ways. How should we look at Omeros into the future given OMIDRIA and 721? What type of franchise should we think OMIDRIA, I'm sorry, Omeros should be what would you envision us thinking about it? Looking at it into the future, it's a general question, but given what just took place, I'd like your thoughts on that and I'll hop back in the queue. Thank you.

I understand – I think I understand, what's driving the questions, so maybe I'll address that directly. We understand that some can view a Omeros’ having really to somewhat disparate components, one is spec pharma ophthalmic product and the other is sort of a cutting-edge, deep biotech pipeline, that may on the surface appear, again, somewhat incongruous. I think that we see it quite differently. We see it as really a wonderful blend of a front-end revenue generating engine in OMIDRIA, which drives a very deep, a very high potential biotech pipeline. And I think what we just did with restructuring our debt, really underscores that. I mean, we've cleaned the cap table or certainly restructured the cap table. And we're looking at the growth of OMIDRIA to really fund that pipeline. And while there are no guarantees, we certainly are pleased with all indications that we have right now regarding OMIDRIA. And so my personal expectation is that, that will occur and in the not too distant future so I think that, this is all about how do we fund all of the programs that we're running. And how do we fund them in a non-dilutive or a minimally dilutive way. That's been the approach, that's been the objective. I think we're executing on it well, I mean, clearly by the number of outstanding shares we have to-date, we've executed on it. I would say quite well. So I think, that's how we think about it. The franchise continues to move forward. We continue to look for additional opportunities for the ophthalmic space. It makes sense to put something else in the bags of our dedicated sales reps, but something that fits, something that matches what we're doing. Something with the same call pattern, there are a number of opportunities we look for those. But all of this makes sense. And I think certainly from our perspective, it all works well together. Again, don't know if that directly answered your question. I hope so.

No, it hit the nail right on the head. Look, congrats again. Let me hop back in the queue. Thank you.

Okay, thanks, Steve.

Thank you. And our next question comes from Jason McCarthy with Maxim Group. Please proceed.

Hi, thanks for taking my question and congratulations on the progress.

Thanks, Jason.

Could you help us understand the path forward for OMS721 relating to the IgA data, which honestly we viewed as positive considering the magnitude of the proteinuria decline in patients during the follow-up. But then I’d like to see how does that compare to relevant benchmarks and if you could talk about the implications for the ongoing P3 trial, which if I recall, does allow for subsequent treatments after the first course of treatment?

Yes. Thank you. Let me answer those questions. I believe in the order in which you stated them. The plan for the IgA program is to do just what we've been planning to do, which is move forward with the Phase 3 program as quickly as possible. The Phase 2, the second cohort, Phase 2 data that we just put out, from our perspective. And again, we seem to invoke here, the experts in IgA. But I'll do it again. The experts and we believe that the data from the second cohort as well as the data from the first cohort really increased the probability of technical success for the Phase 3 program. The Phase 3 program is structured in such a way that there is both accelerated and full approval pathways. So remember that we have a large population or the overriding population is one that has proteinuria, a 24 hour urine proteins of gram per day. There we have the opportunity for accelerated approval at a level of proteinuria reduction that's substantially less than what we've already demonstrated in the Phase 1 and Phase 2 cohorts. And the opportunity for full approval on proteinuria, based on something that we would expect would be similar to what we've already shown. Our ability to achieve, full approval on proteinuria alone and our unique ability to do that, what we believe is the exclusive ability to do that is really important. Because what that means is you've turned GFR into a safety endpoint and you've shaved off several years of your clinical trial. So that becomes important. There's a subset of patients that we're also evaluating and based on our discussions with FDA, we believe that they have a keen interest in high protein spillers. So those patients who are demonstrating…

No, that definitely helps put everything in context. And then just one quick follow-up if you have the time, as you guys prepare to file in the EU and U.S. for stem cell TMA. Could you talk a little bit about the market sizes for both IgA nephropathy and TMA and the possible launch strategy in TMA?

Sure. Sure, again, we're working to finalize with FDA, agreement around the proposed protocol for our – chart review based historical control. We are preparing, as we noted to submit both BLA and MAA. The markets for stem cell TMA, let's address that one first. There are 20,000 stem cell transplants in the U.S., about 40,000 in Europe, about 40% of allogeneic transplants, we'll have a TMA. And, if you look at the published data, as much as 80% of those will have some marker or some aspect of high risk disease. So when we kind of distill all this down, you're sort of across U.S. and Europe, you're talking about an ultra-orphan indication but a reasonably sized ultra-orphan indication of somewhere between 6,000 and 9,000 patients. And again, these are our best guesses. These are very difficult numbers. There aren't – there's no repository of these data. But that's where we're generally coming out. Again, I reserve the right please to revise that estimate at anytime, but I'm telling you what are best guesses are now. The interesting thing is that the cost of management of a TMA patient is high. So there are a couple of sites that of which we've been told that have demonstrated that those numbers are about 3 million to treat a stem cell patient. When you think about that, the cost for that kind of management and when I say treat, I should actually use the word management because, there is no treatment for stem cell TMA. We simply manage the process now. So obviously, we think that there's a significant opportunity for a drug that can take these patients who have severe or high risk TMA. And in that setting have a very high likelihood of death. And we get them through…

Alright, thank you. Is definitely a large opportunity there. All right. Thank you for taking my questions and best of luck with everything going forward.

Thanks Jason. Thank you very much.

Thank you. And our next question comes from Serge Belanger with Needham and Company. Please proceed.

Good morning. Just a couple of questions for me, Greg. First, I think you expressed a high confidence in extending the pass-through reimbursement of OMIDRIA through, one of the two CMS rules that was issued on Friday. Can you just talk about the process and in getting there, does it involve an application of J-code and is that something that could play out over 2019?

Yeah, I want to, I want to thank you Serge. Let me, just first clarify. We referenced two different pathways. One is a set pathway in the 2019 rule, which is the non-opioid provision. The other is something that FDA referenced that they are considering for future rule making. So that is not part or has not been the OPPS rule. The approach is to continue our interactions with CMS, and with HHS to achieve the end-point that we're looking for, which is permanent or long-term separate payment for OMIDRIA. We expect that we're going to have that, as I said, because we believe that we've already met those criteria except for the fact that we are separately paid and CMS made it very clear that they're looking at 2019, those drugs that will be packaged, clearly we're not packaged in 2019 because of the success we had in extending pass-through and we now have separate payment through October 1 of 2020. But so the process is pretty clear. It's kind of just what we've been doing and expecting that we meet it, continue the discussions and go from there. But we're not sitting on our hands. We continue to create additional data or generate data through investigator sponsored or initiated studies. We continued the discussions with CMS. We continue to show the value of OMIDRIA and I think the value is pretty clear. Right? And I think what CMS is also very concerned about and appropriately so is access. This is all about access and I think it's pretty clear that when there is no separate payment for OMIDRIA, access is denied, and that's, I think CMS again, clearly recognizes that that's a problem. You've got patients who have compounded products then as their only alternative and when you look at the recent problems that have been associated with compounded products, I mean 68 patients blind in Dallas alone due to compounded products used in cataract surgery. I think, the alternative of compounding because there really is no other alternative to OMIDRIA. That alternative really is not acceptable. And I think all of that plays into it. You asked specifically about a J-code, we will at some point obtain a J-code. We expect, but remember, we don't need one. Certainly not now. We have a C-code and C-code is 9447 and we are reimbursed by it, as an example, EXPAREL does not have J-code. So clearly, it's not a requirement, but it's something that we're looking at.

Okay. And then, on 71 can you just give us an update on where you are in the Phase 3 trials for aHUS IGAN in-terms of enrollment and whether enrollment has advanced enough where you can start talking about timeline for timelines for reading out these trials.

Yeah. Our clinical group has not yet given those updates. So I should not be giving those here as you understand. So, I won't comment on that now other than to say that, that they are enrolling and ongoing.

Got it. Thank you.

Thanks. Serge.

And our next question comes from Raghuram Selvaraju with H.C. Wainwright. Please proceed.

Hi. Thanks very much for taking my questions and congratulations on all the progress. I'll try to make this as swift as possible. Firstly, a couple of quick things on OMIDRIA. I wanted to know if you could provide us with some more epidemiological details around Floppy Iris Syndrome and what is likely to be the potential pass-forward for OMIDRIA there in terms of getting a formal label, and looking to extend its utilization into that area as applicable. And secondly, if you could comment on the status of the OMIDRIA European commercialization situation, and then with respect to 721, just three very quick points. Firstly, I wanted to know if you could on the likelihood of enrollment of nephrotic patients in the ARTEMIS-IGAN study within that more severe patient population that you previously referred to during your prepared remarks. Secondly, if you could comment on the nature of the timing of the filing of those sections of the rolling BLA submission, that you're currently preparing for. And then finally, strategically, maybe just give us some frame of reference regarding how you look at the potential commercial innovation of OMS721 from Omeros standpoint. Would that be a combination of go it alone and partnership? Would it be go a little alone in the U.S. partner outside the U.S. or some other kind of mix as it were that we should be contemplating here. Thank you.

I'll try to hit all of those. I think, I've got them in my head, but let me run through them. Your first question was around IFIS are Intraoperative Floppy Iris Syndrome and what impact that could have a. We were very pleased to see the results of this study, by Dr. Silverstein. This was a study that he put together. He ran, it was double-masked, in ophthalmology they don't like to say double-blind. They say double-masked. So this was a prospective randomized double-masked controlled study. And the data were outstanding. What it clearly showed was that use of a OMIDRIA prevents IFIS. Why is that important? Well, IFIS is a real problem. IFIS is a growing problem as well within, cataract surgery, what IFIS is a, it's a symptomatic, a constellation of events that occurred during surgery where the Iris, all of the sudden they remember the Isis is that, that colored part of the eye surrounding the pupil. And that needs to be as large as possible. All of the sudden that becomes unstable and it becomes, it starts to billow, it becomes like a flag and it starts to wave and move in all different directions, it makes the operation very difficult. It makes the operation more dangerous. And the problem with it is you can't predict it. So, it is, it is linked to patients who have had or have received Alpha antagonists. So, Flomax for example, so drugs that improve urinary outflow with BPH have been, are associated with IFIF for example. The interesting thing about the Alpha antagonist used though is you don't need to be on it at the time. A single exposure to an alpha antagonist, has been, is believed to be enough to cause IFIS when you have cataract surgery. So,…

No, that was very comprehensive and very helpful. Thank you.

Thanks Ram.

Thank you. And at this time I am showing no further questions in queue. I'd like to turn the call back over to Dr. Greg Demopulos for closing remarks.

Well that wraps up our call for today. Thanks again everyone for joining us. As you can hear, and I think as you understand, things are coming together nicely for OMIDRIA for OMS721 and the rest of our pipeline. We will keep you posted periodically on our progress. As always, we appreciate your continued interest and support and have a good day. Thanks. Thanks to everyone.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect. Everyone have a great day.