00:10 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. 00:30 I’ll turn over the call to Jennifer Williams, Investor Relations for Omeros.

00:36 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. 00:56 Please refer to the special note regarding forward-looking statements and the risk factor section in the company’s annual report on Form 10-K, which was filed today with the SEC, for a discussion of these risks and uncertainties. 01:08 Today’s call will include a discussion of certain non-GAAP financial measures, a reconciliation of these non-GAAP measures to the corresponding GAAP measures is included with Omeros’ earnings plus press release issued earlier today, which is available on the investor relations page of our website and has been furnished with the Form 8-K we filed with the SEC earlier today. 01:30 Now, I would like to turn the call over to Dr. Greg Demopulos, Omeros’ Chairman and CEO.

01:36 Thank you, Jennifer, and good afternoon everyone. We’ll start with a corporate update and a high level overview of our fourth quarter and year-end 2021 financial results followed by a more detailed financial summary. With me today here are Mike Jacobsen, Nadia Dac, Cathy Melfi, and Steve Whitaker; our respective heads of Finance, Commercial, Regulatory, and Clinical. 02:02 As publicly announced on December 23, 2021, Omeros completed the strategic divestiture of its commercial ophthalmic product OMIDRIA to Rayner Surgical. Rayner has a long heritage and ophthalmology and markets a portfolio of complementary ophthalmology products across more than 80 countries. At the transactions closing, Omeros received $126 million in cash. 02:33 In addition, during this first quarter of 2022, Omeros is collecting all accounts receivable outstanding at the closing date bringing the effective total cash received by Omeros to $165 million. With cash on hand at year-end, this brings our effective cash and accounts receivable at December 31, 2021 to $195 million. 03:03 Omeros will also receive a milestone payment of 200 million if before 2025, separate payment for OMIDRIA is secured for a continuous period of at least four years. The immediate capital infusion of 165 million together with the ongoing royalty stream, should provide sufficient capital for Omeros to run through late 2023. The $200 million milestone if achieved will substantially extend that [run rate] [ph]. 03:41 Beyond the upfront payment in milestone, Omeros retains significant upside in the future growth of OMIDRIA, through royalties on both U.S. and ex-U.S. net sales of OMIDRIA. In the U.S. Omeros receives 50% of net sales, approximately 70% of the operating profit from the closing date, until the earlier of either January 1, 2025 or the payment of the $200 million milestone. 04:15 Thereafter, Omeros will receive 30% of U.S. net…

27:05 Yes. Thanks, Greg. As Greg briefly discussed on December 23, Rayner acquired OMIDRIA and the associated business operations, including the OMIDRIA commercial and sales teams devoted to the product. The sale was accounted for as an asset sale, which required us to restate our financial statements into two components. 27:28 The first being continuing operations and the second being discontinued operations for all of the historical periods presented. This means that all OMIDRIA revenue, operating expenses and the $306 million gain related to the sale of OMIDRIA are shown in a single-line on our income statement as discontinued operations. 27:54 All of our other activities are included in continuing operations. I will provide more detail in a few minutes. Also, our Form 10-K provides additional details regarding the sale, and I suggest you look there if you have any additional questions on the accounting treatment, following our call today. 28:16 I would like to now summarize the deal and why we believe it is positive for Omeros. We received an upfront payment of $126 million in December and retained all of our outstanding OMIDRIA related accounts receivable, which amounted to $39 million as of December 23 closing. We also have the opportunity achieve an additional $200 million milestone payment tied to the achievement of long-term separate payment from CMS. 28:49 The OMIDRIA transaction includes royalties on all sales worldwide. Omeros will continue to receive 50% of the net sales in the U.S., until the early of either January 1 of 2025 or the payment of the $200 million milestone. 29:09 Thereafter, we received 30% royalty on U.S. net sales for the duration of the relevant patent terms, which will or which extend to at least 2033. We will also receive a 15% royalty on non-U.S. net sales from OMIDRIA…

36:30 Thanks, Mike. Okay. Operator, let's please open the call to questions.

36:37 Thank you. [Operator Instructions] Our first question comes from Eric Joseph with JP Morgan. Your line is open.

36:57 Good evening. Thanks for taking the questions. Appreciating that you're still awaiting feedback or the minutes from FDA, but nevertheless, I'm wondering if you could just kind of walk us through some of the alternative scenarios going forward in TA-TMA with narsoplimab, would you be able to resubmit the BLA with the additional responses, discuss the Type A meeting or if additional clinical data are needed, would you look to conduct an additional study? How do you prioritize that versus focusing on the ongoing programs? Thanks.

37:37 Yeah. Hi, Eric. Thank you. Well, let me take a first answer to that, and then I'll probably ask others to answer as well. But again, I think it's obviously difficult for us to assess what we expect we’ll need to do in the absence of the feedback from the last meeting. As I said, the last meeting we had with FDA we felt was constructive. And we really went through each of FDA's stated issues. And I think responded quite strongly to those and all really database. 38:24 With respect to where we go and what we do, I think we really need to see what comes back from FDA, until then, I would be guessing and I'm sure that's not what you want me to do, but let me see. I'll turn the question over to Cathy Melfi our Head of Regulatory and see – Cathy, do you want to add anything to that?

38:52 Again, just to reiterate that the meeting we had with FDA was constructive. We're waiting for their feedback and so really can't speculate on what that might be, but again, just to reiterate that the data for narsoplimab and TA-TMA are strong and we feel that the BLA has submitted merits approval, but right now we're still in this waiting game.

39:19 So, thanks. Yes. I mean, I think again, summing up, we think that we should be able to resubmit with the data we have. But we really need – we need feedback and we need guidance and right now, we're waiting for that as I'm sure you are.

39:40 Okay, great. Thanks for taking the questions and for the color.

39:43 Thanks Eric.

39:46 Thank you. Our next question comes from Greg Harrison with Bank of America. Your line is open.

39:52 Hey, good afternoon. Thanks for taking the question.

39:56 Hi, Greg.

39:57 Hey. Are you able to provide any other details as to the additional information that was requested? And maybe whether your response to the CRL contained any additional data or if it was more explaining your take on the data that you provided in the initial BLA? And then if you have any description you could provide of FDA's receptive to your arguments during that meeting?

40:34 Sure. Well, first, I would say that a lot of our responses to these stated concerns from FDA, I would characterize really as clarification of existing data and perhaps representation of existing data to address those issues. With respect to FDA's response as you know, that's often very tough to read. And I wouldn't want to speak for FDA at this point other than to say, we await their responses to what we think was a very strong package and a very strong set of responses to those issues. But again, let me ask, Steve Whitaker, our Head of Clinical or again Cathy Melfi please feel free to add anything you'd like here.

41:42 Greg, I agree with you. It's hard to read FDA and we don't comment on FDA interactions anyway, but the data that we have are strong. We had strong responses to each of the points they raised and we addressed every point that was raised in the CRL. And in my view that the BLA does deserve approval on the deserved approval first round and certainly now with our responses that should clarify things for FDA in my view.

42:22 Yes. And again, I would just reiterate as we said when we received the CRL that there were questions that really got into the – or characterize the complexity of the disease and the patient population, so it was important for us to provide some clarification. And so as Greg said, a lot of it was really reclarification of some of the data and we feel that our responses were strong. And again, the meeting was constructive.

42:56 Great. Thanks. If I could sneak one more in on another topic, what are the steps going forward now that the narsoplimab arm is completed within the I-SPY trial? Is there anything you can imply as to the efficacy we could see or just the results in general, just considering the length of time that narsoplimab was included in the trial?

43:22 Yeah Steve, would you like to?

43:24 Sure. I doubt if this will be a very satisfactory answer, but this is, as you know the I-Spy group is very hands off with the providers of the drugs that are included in that trial. Right now, we're just looking forward to the – getting the data set. So, the full data set and we can then, at that point, all the analyses can be done and we can have a – and then we will publicly disclose the results. I've never even talked to these people. So…

44:03 Got it. Well, thanks for answering the question.

44:05 Sure.

44:08 Thank you. Our next question comes from Ram Selvaraju with H.C. Wainwright. Your line is open.

44:15 Thanks very much for taking my questions. I was wondering if you could elaborate on specifically what you expect the usage pattern of narsoplimab to be in TA-TMA if it is approved and to what extent you anticipate if you might succeed the deployment of eculizumab?

44:38 Well, let me take – I'll answer that maybe at the back and move forward. With the approval of narsoplimab, that will be the only drug approved in stem cell TMA. So, I think that that would make the use of really any off label drug for TA-TMA difficult at best. So, I think that that becomes pretty clear. With respect to usage pattern, I guess, I will look to Steve and to Nadia to answer that from clinical and perhaps a commercial perspective?

45:29 Sure. I'll take the first Greg from a clinical perspective. The population we studied, I think, as you all know was a high risk population. That high risk population was actually a large population. And these patients can deteriorate quickly. And so, I think that with approval, narsoplimab would be used in a substantial percentage of these patients because they do have so many of them have these risk factors. I think two-thirds had [indiscernible], I'm going off the top of my head now, and this date has been presented, 80% had infection something like that. 46:06 So, a very large number have these risk factors of the entire TA-TMA population and I think that because patients do poorly and can deteriorate so quickly physicians with an approved drug would want to use this pretty aggressively.

46:22 And the only thing I'll add is just a reminder that the diagnostic code was also approved back in October. And so prior to this, we haven't had that for TA-TMA, which may make it even more difficult for an off label use into narsoplimab if approved would be the only one approved for TA-TMA.

46:43 So, Ram, I think what you're hearing is, we think the pattern of utilization would be strong. That narsoplimab would be the only FDA approved product in that space. And the data, I think are pretty clear. The one thing I would add is, I think I mentioned the work that's being done by the expert group of transplanters who are looking through their data and identifying really criteria for diagnosis of TA-TMA. And I think that's going to be helpful when that ultimately is solidified and published, I think that that would likely increase the number of diagnosis or the frequency of diagnosis in TA-TMA. 47:46 Remember, this is still largely a condition that is used where physicians use a number of different sets of criteria. And I think that makes it a little more difficult, unified, consistent set of diagnostic criteria, I think will only serve to increase that base and I think by extension utilization of narsoplimab.

48:24 Great. I was just wondering also if you had any further clarity regarding the timing of potential top line data release from the ARTEMIS-IGAN trial, given the commentary that enrollment has accelerated? And if you think it might still be possible for us to see that data before the end of this year?

48:44 No, I think realistically, that's going to be into, as I said, the first part of next year. The team is working very hard to do it. We are hospital based and so enrollment is a function of being able to access those hospitals. And in the setting of COVID that can be quite a challenge. So, we're pretty pleased with the progression of enrollment that we've seen as I said, when we look, we've even seen acceleration, but I think realistically, Ram, I would rather guide you into 2023 for those data. 49:31 We're excited to see them. I think that the Phase II long-term 3-year data or nearly 3-year data really demonstrate an unprecedented picture of an effect, not only on proteinuria, but on estimated glomerular filtration rate or EGFR. And I think what we're seeing with narsoplimab, I know, I just called that unprecedented, but I want to underscore it, hasn't been seen with any other drug. 50:07 So, we are excited to see the data. The renal experts are excited to see the data. Believe me, we're pushing as hard as we can to get those out.

50:20 Thank you very much. And then last question is, if you have any additional thoughts or perspectives on the positioning of narsoplimab in COVID-19, given the rise not only of the Omicron variant, but sub-variants in that lineage and the fact that multiple therapeutic antibodies that were originally approved for use against SARS-CoV-2 do not appear to have retained significant binding activity versus Omicron? And what potential opportunities this may create for narsoplimab as a novel non-SARS-CoV-2 binding antibody therapeutic within COVID-19?

51:02 Well, yes. And I think Ram, what you're pointing out was not unexpected to you or to many. I mean when you are targeting the spike protein or other parts of the virus and what we know is that this virus mutates like other viruses do, but this virus seems to have a very elegant escape mechanism for mutation largely driven by the spike protein. So, the advantage that we see here with narsoplimab is that the effect, the beneficial effect of narsoplimab would be downstream from that specific virus or the spike protein, the end protein, any of that? The focus of narsoplimab is not on the virus. 51:57 The focus of narsoplimab is on the damage that the [virus reached] [ph] and that's the endothelial damage. So, really narsoplimab is not subject, would not be subject to the same limitations that the antivirals are. And to be more specific, isn't affected or shouldn't be affected by the mutational changes in the virus. 52:30 All of those virus mutations that you have noted, all affect the endothelial in the same way. And then create the disease and that's where narsoplimab works. Now, I mentioned some of the data and really I should underscore some of the discoveries that have come out of our collective group here at Omeros and in our labs at Cambridge. And those I expect will be published soon. They're already submitted, but what those studies show, I think we'll be [illuminating] [ph] for many. 53:22 And I think our focus, which is part of your question, you know, we are looking at treatment, but we're looking beyond treatment. We're also looking at PASC or the post-acute sequelae of SARS-CoV-2 PASC or long haul disease or long-COVID, however you want to refer to it. We think that based on what we're seeing in our, again, primarily in our Cambridge Labs that the lectin pathway may very well be a driver of long-COVID. 54:07 We have to do more work to have that borne out, but early on, I think that looks pretty promising. So, we're not just focused on treatment. We're looking at how we – meaning treatment of the acute disease, we're focused as well on how we can treat the long-COVID or PASC.

54:35 Thank you.

54:37 Thanks Ram.

54:40 Thank you. Our next question comes from Brandon Folkes with Cantor Fitzgerald. Your line is open.

54:47 Thanks for taking my questions and congratulations on the progress. Maybe just a quick one from me, just coming back to narsoplimab in stem cell TMA, just given your interaction at the Type-A meeting, if the agency did come back and say, we agree with your [indiscernible] resubmit, do you expect an AdCom to evaluate that data or do you expect just a stake review following, should you not do – have to do additional clinical work? Thank you.

55:16 Hi, Brandon. I think, again, we have no basis on which to make any statement about a potential AdCom other than to say that we have discussed AdCom more than once with FDA during the review process. And the response was that an AdCom would not be necessary, but other than that, I have no basis to make any statement or guide you in any way with respect to an AdCom.

55:59 And if, I mean, Greg would you be able to maybe just elaborate if you feel an AdCom could actually be beneficial in such a situation, just given the rarity of this disease, I think it's not the first company we've seen where the company feels, the FDA may have not fully understood the disease in terms of making the decision? Are you prepared to comment whether you think in AdCom if it would happen would actually be favorable?

56:27 Well, Brandon, are you trying to talk me into an AdCom?

56:32 I was thinking it could be favorable, it could be a positive, so I would like to hear your position?

56:38 I can tell you what happened when we lay the data out in front of expert transplanters. Okay. And that is a uniform evaluation and then determination that what we have identified as responders are responders. And again, I'll just underscore the uniformity of that response or that assessment to date. So, do I think that experts understand the data? 57:19 Yes, I do. And that's not surprising. This is a complex disease and TA-TMA is a complicated disorder on top of a complex disease. And so, it's not surprising that the experts will be able to interpret data that other very skilled people may have more difficulty sorting out. 57:54 So, I guess, let me stop my answer there, but you know, we know how the data are viewed, you see it yourselves. I mean, you're going to see it at EBMT again. I mean, why are we getting the request for compassionate use? So, let me stop there and see if you've got a new follow-up question.

58:22 No, that's fantastic. I appreciate the follow-up.

58:25 Okay, thanks Brandon.

58:27 Thanks Greg.

58:30 Thank you and we have a question from Serge Belanger with Needham. Your line is open.

58:37 Hi, this is Rohit on for Serge. Thanks for taking my question. In terms of narsoplimab, is there any scenario where you don't move forward with it and in that scenario what becomes the next focus in your pipeline?

58:53 Well one, I think and how are you doing, so sorry. Thanks. But one, I think look, it is entirely premature to address any thought that we would not move forward with narsoplimab. The data for narsoplimab that we see and that the experts see are pretty clear. And as I think Cathy mentioned earlier, and as I mentioned in our prepared comments, we believe and this is a shared belief. 59:32 We believe that narsoplimab merits approval that it meets or exceeds the threshold for substantial evidence of effectiveness and all of the components we believe are there. So, for us to abandon that is really not even in our thought process or lexicon at this point. We think that the drug warrants approval. We think that we will get there with FDA and we're hoping we get there soon. But again, I can't comment other than to say we're awaiting a response. But with respect to what other things we have in the pipeline. 60:25 In addition to TA-TMA and narsoplimab for TA-TMA, you know, obviously, we're focused on IgA nephropathy and there's a list of other indications on our whiteboard that we are targeting not only with narsoplimab, but with OMS1029 as our long acting MASP-2 inhibitor, and as I said, we really see a set of indications for narsoplimab and we see a complementary set of indications for a long acting subcutaneously delivered or IV delivered OMS1029. 61:06 And then we have another set of indications, all tied to OMS906, which targets MASP-3, which we believe and others believe is the key activator of the alternative pathway and the premier target in the alternative pathway. And we're moving fast and hard on that as well. As I said, we plan to be enrolling in PNH patients this summer with OMS906. So, the franchise around complement for Omeros is broad and it is deep. And we see TA-TMA as the first step there, certainly not the last.

61:58 Thank you.

62:00 Thanks.

62:04 Thank you. And I'm showing no further questions in the queue. I'd like to turn the call back to Dr. Demopulos for closing remarks.

62:12 Thank you, operator, and thanks again everyone for joining us today. As we've discussed, we're confident in our financial position and in the strength in value across our programs. 62:25 With narsoplimab, we hope to bring our second product to market soon, and we look forward to what 2022 holds for the rest of our pipeline. As always, we appreciate your continued support and have a good evening. Thank you.

62:43 Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.