Good afternoon, and welcome to today's earnings call for Omeros Corporation. [Operator Instructions] 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 1 week from today. I'll now 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 special note regarding forward-looking statements 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 10-K for a discussion of these risks and uncertainties. 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. I'm joined on today's call by Mike Jacobsen, Nadia Dac, Andreas Grauer, Cathy Melfi and Steve Whitaker, collectively representing our finance, commercial, clinical, and regulatory functions. I'll start today with an overview and discussion of our first quarter 2024 financial results, followed by an update on our ongoing development programs. Mike will then provide a more detailed financial summary before we open the call to questions. Let's now look at our financial results for the first quarter. Our net loss for the first quarter of 2024 was $37.2 million or $0.63 per share, compared to a net loss of $9.1 million or $0.15 per share in the fourth quarter of last year. The difference is driven by two factors. In the fourth quarter of last year, we had a remeasurement adjustment of $26.2 million to our OMIDRIA contract royalty asset, as a result of our OMIDRIA royalty sale to DRI Healthcare. And a $4.1 million gain on early retirement of a portion of our 2026 convertible notes, following the fourth quarter open market repurchase of a notional amount of $9.1 million of those notes, at a cost of $4.9 million or 54% of par value. Excluding these two transactions, our fourth quarter 2023 net loss would have been similar to that of the current quarter. As of March 31, 2024, we had $230.3 million of cash and investments on hand, available to support ongoing operations and debt service, an amount that we expect will be sufficient to fund operations and debt service into 2026. In addition, one of our two negotiated milestone payments of up to $27.5 million based on sales milestones of OMIDRIA, if met, becomes payable to Omeros in January 2026, with the second $27.5 million milestone, similarly payable in January…

Thanks, Greg. Our net loss for the first quarter of 2024 was $37.2 million or $0.63 per share, compared to a net loss of $9.1 million or $0.15 per share in last year's fourth quarter. As Greg mentioned, in the fourth quarter of last year, we had a remeasurement adjustment of $26.2 million to OMIDRIA contract royalty assets, due to the OMIDRIA royalty sale to DRI healthcare, and also a $4.1 million being on the early extinguishment of a portion of our 2026 notes. Looking only at continuing operations. Our net loss for the current quarter was $43.9 million or $0.75 per share, compared with $39.3 million or $0.63 per share in the prior year quarter. The prior year fourth quarter benefited from the $4.1 million gain on the early extinguishment of the portion of the '26 notes. Without this the extinguishment transaction, our loss from continuing operations for Q4 and Q1 would have been within $450,000 of each note. As of March 31, we had $230 million of cash and investments on hand, an increase of $58 million from year-end. Of the 2 first quarter transaction significantly affected our Q1 ending cash balance, both on a positive basis for the DRI deal, which brought in $115 million of non-diluted capital, with the opportunity to earn up to an additional total of $55 million and 2 more sales-related milestone payments of $27.5 million each. And then secondly, the repurchase of the 3.2 million shares of our common stock for an aggregate purchase price of $11.9 million decreased our cash balance. Combined with our common stock purchases in the fourth quarter of '23, our total common stock repurchases to date are 5 million shares or 8% of our outstanding common stock. For an aggregate purchase price of $16.5 million or $3.30…

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

[Operator Instructions] Our first question comes from the line of Steve Brozak from WBB Securities.

Just one question. On 906, you were pretty extensive in how you describe the therapeutic window and how it would work. But tell me something, what are the KOLs giving you in terms of information on what they see and how important this will be? And then I've got one follow-up after that.

Well, let me first take that and then I think I'll hand it off to clinical and commercial as well. But I think as we've said in the prepared comments that the response with the market research done to date, which has included physicians and within that physician group key opinion leaders has been consistently positive. And as I mentioned, that's really been driven by two primary factors. One is the data to date. And based on the data to date, the expected efficacy, the anticipated efficacy of OMS906 in patients. And the second is its dosing ability, meaning every other month to once quarterly dosing, that represents a significant reduction in patient burden. It coincides with how physicians follow their patients, so that physicians can then administer the drug. And the importance of that is physicians then are comfortable. They're confident. They know that the patients are, in fact, complying with treatment. They know it because they're administering the treatment. So those are all seen as, I think, very positive attributes. I think that certainly also when you think about how patients would view this, taking some sort of infusion, whether it's subcu, whether it's IV, once every other month, once quarterly, they're not consistently and repeatedly reminded that they're sick. Instead, they go and have the infusion, they walk away, they live their lives as they otherwise would live. And taking an oral medication once daily, certainly twice daily is a constant reminder, I think, to patients that, gee, there's a problem here with which I have to deal for my whole life. And we think the response also from physicians has been -- that's a positive. But let me stop there. And I think, first, let me ask clinical and then follow up with commercial. Andreas, what, do you have anything to add? Or Steve, anything to add to that?

I think the consideration, you mentioned the twice oral treatment, that is obviously great. It's convenient for many, but I think you have gastrointestinal upset, you have diarrhea, you travel different time zones, their complications that make this simple -- supposedly simple regimen, not quite as simple. So taking something every other month or every quarter and not having to worry about it in the meantime is attractive or a significant number of patients and physicians because they will know that they have given it.

Do you have anything to add from clinical on that?

I think everything has been well said. I haven't encountered anything but enthusiasm when talking to KOLs, when talking to physicians who treat these patients. Potential clinical sites are seeing no problems with this regimen and think it will be attractive to trial participants.

Nadia?

What I'll add is that we are in the middle of extensive market research, and it's so exciting to hear the reactions to the product profile for 906. Bottom line, the doctors are telling their patients need options. And they're very encouraged by what they're seeing, both efficacy but delivered with a low treatment burden, essentially moving to only 4x a year. So we're also excited about the opportunity to meet with patients in the market research capacity later this month and continue this work.

So Steve, I think you said you had a follow-up, but I don't know we may have answered that already for you, but let us know.

You actually did, asked and answered, but I appreciate the detail and the depth that you went into.

And our next question comes from the line of Olivia Brayer from Cantor Fitzgerald.

For the OMS906 update coming, I wanted to clarify that the data we'll see at EHA is just through week 24 and that final switchover portion of the trial is later in the year. Is that right? And then maybe just help frame what level of efficacy you're looking to see later in the year from that monotherapy portion specifically?

Sure. First, in answer to your initial question, yes, it's through the first 24 weeks. So it's through the combination therapy portion of the clinical trial. We are still collecting monotherapy data, and we expect to have those data later in the year. With respect to what specifically we're targeting on the monotherapy side. I think that, yes, and again, I'll turn this to clinical, but I can tell you what our -- my target there is that certainly, what we're seeing is a meaningful improvement in hemoglobin in these patients on monotherapy, over what they were receiving on ravulizumab. But let me look to clinical and see if they have other things to add to that.

I think that we are looking for data that are at least comparable to those of other switch studies that have been reported. The EHA abstract, I'm sure you know is now available online. I think it came out yesterday or the day before, it was made public. And in that abstract, we note that the -- in our high dose group in that study, we looked at two different dose groups, dose escalation study. But in the high-dose group, all of the patients treated at the high dose achieve clinical response of -- that's 100%. That's a 2-gram per deciliter increase in hemoglobin, which was one of the primary or co-primary endpoints, the iptacopan [indiscernible], and that certainly compares favorably to other switch studies.

Even in the low dose, I think 6 of 7 achieved that, right? So no, we're quite happy with how the data are looking with how 906 is looking generally. We're -- we think the data are impressive. They continue to be impressive. And we're just looking forward to initiating Phase III, and frankly, completing our Phase III program and bringing OMS906 to market.

And our next question comes from the line of John Gionco from Needham & Company.

I'm on for Serge today. First, regarding the OMS906 trials, can you provide any color on what we can expect after the data is released and particularly whether we can expect meetings with the FDA, ahead of the Phase III initiation? And then second, regarding the narsoplimab BLA resubmission. Obviously, you mentioned updates are soon to come. Can you give any context to progress made with the FDA since you last received an update in April? Where kind of if the ball is in their hands at this time?

Yes. So an answer to your first question, discussions, interactions are ongoing with both U.S. and European regulators as we prepare for the Phase III trial, or Phase III program. So let me just turn to Cathy, and see, Cathy, can you add more color to that?

Yes. I mean it really is fairly standard, and we are making sure that we are keeping the communication lines open in both the U.S. and Europe and trying to harmonize those as much as we can so that we have a very efficient Phase IIl program.

Okay, thank you. And an answer to your second question, we really are not, and have not, do not provide sort of running commentary on our interactions with regulators. So there's not much that I have to say there other than we clearly are comfortable, confident in the data that we have. We believe the drug certainly warrants approval, and that is our objective. When you look at the utilization of the drug across the compassionate use or what is more formally called the expanded access program. The data are really very clear. And we're eager to get the drug approved. There is no drug approved for this indication. We think it compares very favorably to other agents that are currently being used off-label in this indication. And we're hearing similar things quite widely from physicians, both in the U.S. and international. So, yes, it's been a long time. We recognize that. But our expectation, certainly our strong hope and expectation is that we will get this approved, it certainly warrants it.

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to Dr. Demopulos for any further remarks.

Thank you, operator, and again, thank you all for joining this afternoon. We're pleased with our first quarter progress across our programs and believe that we are well positioned for continued success throughout the remainder of 2024 and beyond. So we look forward to bringing you future updates. And as always, we appreciate your continued support. Have a good afternoon.

Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.