SEATTLE / Apr 01, 2024 / Business Wire / Omeros Corporation (Nasdaq: OMER), a clinical-stage biopharmaceutical company committed to discovering, developing and commercializing small-molecule and protein therapeutics for large-market and orphan indications targeting immunologic disorders including complement-mediated diseases, cancers, and addictive and compulsive disorders, today announced recent highlights and developments as well as financial results for the fourth quarter and year ended December 31, 2023, which include:
“We continue pursuing diligently four major corporate priorities – those that we believe will drive substantial near-term shareholder value,” said Gregory A. Demopulos, M.D., Omeros’ chairman and chief executive officer. “The first, extending our cash runway non-dilutively into 2026, was successfully achieved through the OMIDRIA partial royalty sale to DRI Healthcare earlier this year, securing an upfront payment of $116 million and creating the opportunity to earn an additional $55 million in OMIDRIA sales-based milestones. In parallel, we reduced our outstanding common share count by 8 percent through stock repurchases. With high survival rates in our pivotal trial and in over 130 adult and pediatric patients who accessed the narsoplimab compassionate use program, together with the growing number of publications and international congress presentations detailing narsoplimab’s survival benefits in treatment-naïve TA-TMA patients as well as in those who previously failed other complement inhibitor regimens, we are continuing discussions with FDA to achieve our second corporate priority – regulatory approval of narsoplimab in TA-TMA. Success on our third and fourth corporate priorities – the initiation of well-designed and de-risked OMS906 Phase 3 and OMS1029 Phase 2 programs – appears likely. Beyond these four priorities, the team is working hard to unlock the value in our other clinical and preclinical assets. We expect those committed efforts and focus to continue driving shareholder value for our investors now and in the months ahead.”
Fourth Quarter and Recent Clinical Developments
Financial Results
Net loss for the fourth quarter of 2023 was $9.1 million, or $0.15 per share, compared to a net loss in the prior quarter of $37.8 million, or $0.60 per share. Net loss from continuing operations was $39.3 million in the current quarter compared to a net loss of $51.7 million in the prior quarter. The current quarter net loss from continuing operations included a $4.1 million gain on the early extinguishment of $9.1 million par value of our 2026 convertible notes.
For the full year ended December 31, 2023, our net loss was $117.8 million, or $1.88 per share, compared to net income of $47.4 million, or $0.76 per share, in the prior year period. The primary difference between the periods was the achievement of the $200.0 million OMIDRIA milestone event in the fourth quarter of 2022, which is reported as a component of discontinued operations.
Net loss from continuing operations for the full year ended December 31, 2023, was $174.9 million compared to a loss of $182.0 million in the prior year.
Cash provided for operations for the year ended December 31, 2023 was $74.7 million, which includes receipt of the $200.0 million milestone payment in February 2023. This compares to cash used in operations of $86.5 million for the prior year.
For the fourth quarter of 2023, we earned OMIDRIA royalties of $10.7 million on Rayner’s U.S. net sales of $35.7 million. This compares to earned OMIDRIA royalties of $10.0 million during the third quarter on U.S. net sales of $33.3 million.
For the year ended December 31, 2023, we earned OMIDRIA royalties of $40.6 million on Rayner’s U.S. net sales of $135.3 million. This compares to earned OMIDRIA royalties of $65.4 million on U.S. net sales of $130.9 million during the year ended December 31, 2022. The difference in earned royalties reflects the decrease from 50 percent to 30 percent in the base royalty rate applicable to U.S. net sales of OMIDRIA, which occurred in December 2022 upon achievement of the $200.0 million milestone event.
In February 2024, Omeros and DRI entered into an amended and restated royalty purchase agreement under which Omeros sold to DRI an expanded interest in royalties payable by Rayner based on U.S. net sales of OMIDRIA. Omeros received $115.5 million in cash for the expanded royalty interest and is also eligible to receive two future milestone payments, each up to $27.5 million, based on achievement of certain thresholds for U.S. net sales of OMIDRIA. The amendment eliminated the annual caps on payments to which DRI's purchased royalty interest was previously subject and provides that DRI will now receive all royalties on U.S. net sales of OMIDRIA payable between January 1, 2024 and December 31, 2031. Omeros retains the right to receive all royalties on any net sales of OMIDRIA outside the U.S. and, after December 31, 2031, to all royalties on OMIDRIA net sales globally.
Total operating expenses for the fourth quarter of 2023 were $39.8 million compared to $48.2 million for the third quarter of 2023. The decrease was primarily due to the timing of employee compensation costs and payment of a development milestone under a technology license in the third quarter of 2023.
Interest expense during the fourth quarter of 2023 was $7.1 million compared to $7.9 million during the prior quarter. The decrease was primarily due to retiring $95.0 million of our 2023 convertible notes upon maturity in November 2023.
During the fourth quarter of 2023, we earned $3.4 million in interest and other income compared to $4.4 million in the third quarter. The decrease was due to lower average balances available to invest due to the retirement of the 2023 convertible notes.
Net income from discontinued operations, net of tax, was $30.2 million, or $0.48 per share, in the fourth quarter of 2023 compared to $13.9 million, or $0.22 per share, in the third quarter of 2023. The difference was primarily attributable to a $16.1 million increase in remeasurement adjustments on the OMIDRIA contract royalty asset in the current quarter.
At December 31, 2023, we had $171.8 million of cash and short-term investments available for operations and debt service. In addition, we received the $115.5 million from DRI in February 2024. Our cash used in operations for the fourth quarter was $34.8 million. We also used cash to retire the $95.0 million outstanding on our 2023 convertible notes at maturity, $4.9 million to repurchase $9.1 million par value of our 2026 convertible notes and $4.7 million to repurchase 1.8 million shares of our common stock.
We expect our first quarter net loss to be $34.0 to $37.0 million or $0.58 to $0.63 loss per share. As of March 31, 2024, we expect our cash and investments balance available for operations and debt service to be approximately $230.0 million after repurchasing 3.2 million shares of our outstanding common stock for $11.9 million during the first quarter. Our total common stock outstanding at March 31, 2024 is 57,942,695.
Conference Call Details
Omeros’ management will host a conference call and webcast to discuss the financial results and to provide an update on business activities. The call will be held today at 1:30 p.m. Pacific Time; 4:30 p.m. Eastern Time.
For online access to the live webcast of the conference call, go to Omeros’ website at https://investor.omeros.com/upcoming-events.
To access the live conference call via phone, participants must register at this link to receive a unique PIN. Once registered, you will have two options: (1) Dial in to the conference line provided at the registration site using the PIN provided to you, or (2) choose the “Call Me” option, which will instantly dial the phone number you provide. Should you lose your PIN or registration confirmation email, simply re-register to receive a new PIN.
A replay of the call will be made accessible online at https://investor.omeros.com/archived-events.
About Omeros Corporation
Omeros is an innovative biopharmaceutical company committed to discovering, developing and commercializing small-molecule and protein therapeutics for large-market and orphan indications targeting immunologic disorders including complement-mediated diseases, cancers, and addictive and compulsive disorders. Omeros’ lead MASP-2 inhibitor narsoplimab targets the lectin pathway of complement and is the subject of a biologics license application pending before FDA for the treatment of hematopoietic stem cell transplant-associated thrombotic microangiopathy. Omeros’ long-acting MASP-2 inhibitor OMS1029 is currently in a Phase 1 multi-ascending-dose clinical trial. OMS906, Omeros’ inhibitor of MASP-3, the key activator of the alternative pathway of complement, is advancing in clinical programs for paroxysmal nocturnal hemoglobinuria and complement 3 glomerulopathy. Funded by the National Institute on Drug Abuse, Omeros’ lead phosphodiesterase 7 inhibitor OMS527 is in clinical development for the treatment of cocaine use disorder and, in addition, is being developed as a therapeutic for other addictions as well as for a major complication of treatment for movement disorders. Omeros also is advancing a broad portfolio of novel immuno-oncology programs comprised of two cellular and three molecular platforms. For more information about Omeros and its programs, visit www.omeros.com
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, which are subject to the “safe harbor” created by those sections for such statements. All statements other than statements of historical fact are forward-looking statements, which are often indicated by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “goal,” “intend,” “likely,” “look forward to,” “may,” “objective,” “plan,” “potential,” “predict,” “project,” “should,” “slate,” “target,” “will,” “would” and similar expressions and variations thereof. Forward-looking statements, including statements regarding the anticipated next steps in relation to the biologics license application for narsoplimab, the timing of regulatory events, the availability of clinical trial data, the prospects for obtaining FDA approval of narsoplimab in any indication, expectations regarding the initiation or continuation of clinical trials evaluating Omeros’ drug candidates and the anticipated availability of data therefrom, and expectations regarding the sufficiency of our capital resources to fund operations, are based on management’s beliefs and assumptions and on information available to management only as of the date of this press release. Omeros’ actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including, without limitation, unanticipated or unexpected outcomes of regulatory processes in relevant jurisdictions, unproven preclinical and clinical development activities, our financial condition and results of operations, regulatory processes and oversight, challenges associated with manufacture or supply of our investigational or clinical products, changes in reimbursement and payment policies by government and commercial payers or the application of such policies, intellectual property claims, competitive developments, litigation, and the risks, uncertainties and other factors described under the heading “Risk Factors” in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on April 1, 2024. Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements, and we assume no obligation to update these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
OMEROS CORPORATION | ||||||||||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||
(In thousands, except share and per share data) | ||||||||||||||||
|
| Three Months Ended |
| Year Ended | ||||||||||||
|
| December 31, |
| December 31, | ||||||||||||
|
| 2023 |
| 2022 |
| 2023 |
| 2022 | ||||||||
|
| |
| |
| |
| | ||||||||
Costs and expenses: |
| |
|
|
|
| |
|
|
| ||||||
Research and development |
| $ | 28,890 |
|
| $ | 26,550 |
|
| $ | 114,870 |
|
| $ | 112,721 |
|
Selling, general and administrative |
|
| 10,875 |
|
|
| 13,589 |
|
|
| 49,660 |
|
|
| 50,668 |
|
Total costs and expenses |
|
| 39,765 |
|
|
| 40,139 |
|
|
| 164,530 |
|
|
| 163,389 |
|
Loss from operations |
|
| (39,765 | ) |
|
| (40,139 | ) |
|
| (164,530 | ) |
|
| (163,389 | ) |
Interest expense |
|
| (7,063 | ) |
|
| (7,902 | ) |
|
| (30,844 | ) |
|
| (22,702 | ) |
Interest and other income |
|
| 3,429 |
|
|
| 1,993 |
|
|
| 16,342 |
|
|
| 4,062 |
|
Gain on early extinguishment of convertible senior notes |
|
| 4,112 |
|
|
| — |
|
|
| 4,112 |
|
|
| — |
|
Net loss from continuing operations |
|
| (39,287 | ) |
|
| (46,048 | ) |
|
| (174,920 | ) |
|
| (182,029 | ) |
Net income from discontinued operations, net of tax |
|
| 30,219 |
|
|
| 174,781 |
|
|
| 57,107 |
|
|
| 229,446 |
|
Net income (loss) |
| $ | (9,068 | ) |
| $ | 128,733 |
|
| $ | (117,813 | ) |
| $ | 47,417 |
|
|
| |
| |
| |
| | ||||||||
Basic and diluted net income (loss) per share: |
| |
| |
| |
| | ||||||||
Net loss from continuing operations |
| $ | (0.63 | ) |
| $ | (0.73 | ) |
| $ | (2.79 | ) |
| $ | (2.90 | ) |
Net income from discontinued operations |
|
| 0.48 |
|
|
| 2.78 |
|
|
| 0.91 |
|
|
| 3.66 |
|
Net income (loss) |
| $ | (0.15 | ) |
| $ | 2.05 |
|
| $ | (1.88 | ) |
| $ | 0.76 |
|
|
| |
| |
| |
| | ||||||||
Weighted-average shares used to compute basic and diluted net income (loss) per share |
|
| 62,440,772 |
|
|
| 62,762,932 |
|
|
| 62,739,227 |
|
|
| 62,737,091 |
|
OMEROS CORPORATION | ||||||||
UNAUDITED CONSOLIDATED BALANCE SHEET | ||||||||
(In thousands) | ||||||||
|
| December 31, |
| December 31, | ||||
|
| 2023 |
| 2022 | ||||
Assets |
| |
| | ||||
Current assets: |
| |
| | ||||
Cash and cash equivalents |
| $ | 7,105 |
|
| $ | 11,009 |
|
Short-term investments |
|
| 164,743 |
|
|
| 183,909 |
|
OMIDRIA contract royalty asset, short-term |
|
| 29,373 |
|
|
| 28,797 |
|
Receivables |
|
| 8,096 |
|
|
| 213,221 |
|
Prepaid expense and other assets |
|
| 8,581 |
|
|
| 6,300 |
|
Total current assets |
|
| 217,898 |
|
|
| 443,236 |
|
OMIDRIA contract royalty asset |
|
| 138,736 |
|
|
| 123,425 |
|
Right of use assets |
|
| 18,631 |
|
|
| 21,762 |
|
Property and equipment, net |
|
| 1,950 |
|
|
| 1,492 |
|
Restricted investments |
|
| 1,054 |
|
|
| 1,054 |
|
Total assets |
| $ | 378,269 |
|
| $ | 590,969 |
|
|
| |
| | ||||
Liabilities and shareholders’ equity (deficit) |
|
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
|
| ||
Accounts payable |
| $ | 7,712 |
|
| $ | 5,989 |
|
Accrued expenses |
|
| 31,868 |
|
|
| 30,551 |
|
Current portion of convertible senior notes, net |
|
| — |
|
|
| 94,381 |
|
Current portion of OMIDRIA royalty obligation |
|
| 8,576 |
|
|
| 1,152 |
|
Current portion of lease liabilities |
|
| 5,160 |
|
|
| 4,310 |
|
Total current liabilities |
|
| 53,316 |
|
|
| 136,383 |
|
Convertible senior notes, net |
|
| 213,155 |
|
|
| 220,906 |
|
OMIDRIA royalty obligation |
|
| 116,550 |
|
|
| 125,126 |
|
Lease liabilities, non-current |
|
| 18,143 |
|
|
| 22,426 |
|
Other accrued liabilities, non-current |
|
| 2,088 |
|
|
| 444 |
|
Shareholders’ equity (deficit): |
|
|
|
|
|
| ||
Common stock and additional paid-in capital |
|
| 728,547 |
|
|
| 721,401 |
|
Accumulated deficit |
|
| (753,530 | ) |
|
| (635,717 | ) |
Total shareholders’ equity (deficit) |
|
| (24,983 | ) |
|
| 85,684 |
|
Total liabilities and shareholders’ equity (deficit) |
| $ | 378,269 |
|
| $ | 590,969 |
|
Last Trade: | US$10.31 |
Daily Change: | 0.07 0.68 |
Daily Volume: | 2,418,216 |
Market Cap: | US$597.460M |
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