omer20240630

omer20240630_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-34475

OMEROS CORPORATION

(Exact name of registrant as specified in its charter)

Washington	91-1663741
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

201 Elliott Avenue West Seattle, Washington	98119
(Address of principal executive offices)	(Zip Code)
(206) 676-5000 (Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:
(Title of each class)	(Trading symbol)	(Name of each exchange on which registered)
Common Stock, par value $0.01 per share	OMER	The Nasdaq Stock Market LLC

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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 1, 2024, the number of outstanding shares of the registrant’s common stock, par value $0.01 per share, was 57,946,859.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”), which are subject to the “safe harbor” created by those sections for such statements. Forward-looking statements are based on our management’s beliefs and assumptions and on currently available information. All statements other than statements of historical fact are “forward-looking statements.” Terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “goal,” “intend,” “likely,” “may,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would,” and similar expressions and variations thereof are intended to identify forward-looking statements, but these terms are not the exclusive means of identifying such statements. Examples of these statements include, but are not limited to, statements regarding:

● our estimates of future operating expenses and projections regarding how long our existing cash, cash equivalents and short-term investments will fund our anticipated operating expenses, capital expenditures and debt service obligations;

● our ability to raise additional capital through the capital markets or one or more future equity offerings, debt financings, industry collaborations, licensing arrangements, asset sales or other means;

● our ability to comply with the terms of our secured credit facility and our expectations regarding the effect on our operations of compliance with the restrictive covenants and other obligations applicable under our secured credit facility;

● our expectations regarding amounts potentially payable to us based on sales of our former commercial ophthalmology product OMIDRIA^®;

● our expectations regarding clinical plans and anticipated or potential paths to regulatory approval of narsoplimab by the U.S. Food and Drug Administration (“FDA”) and the European Medicines Agency (“EMA”) in hematopoietic stem cell transplant-associated thrombotic microangiopathy (“TA-TMA”), COVID-19 or any other indication;

● whether and when our biologics license application (“BLA”) for narsoplimab in TA-TMA may be resubmitted to FDA, whether and when a marketing authorization application (“MAA”) may be submitted to the EMA for narsoplimab in any indication, and whether and when FDA, the EMA or any other regulatory authority will grant approval for narsoplimab in any indication;

● our plans for the commercial launch of narsoplimab following any regulatory approval and our estimates and expectations regarding coverage and reimbursement for any approved products;

● our expectation that our contract manufacturer will manufacture narsoplimab when needed to support any regulatory filing and, if approved, to support commercial sale;

● our expectations regarding the clinical, therapeutic and competitive benefits and importance of our drug candidates, including narsoplimab and zaltenibart;

● our ability to design, initiate and/or successfully complete clinical trials and other studies for our drug candidates and our plans and expectations regarding our ongoing or planned clinical trials;

● our expectations regarding: our ability to recruit and enroll patients in any ongoing or planned clinical trial; whether we can capitalize on the financial and regulatory incentives provided by orphan drug designations granted by FDA, the European Commission (“EC”), or the EMA; and whether we can utilize the opportunities for expedited development and review that may be provided by fast-track or breakthrough therapy designations granted by FDA;

● our expectations about the commercial competition that our drug candidates, if commercialized, face or may face;

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● our involvement in existing or potential claims, legal proceedings and administrative actions, and the merits, potential outcomes and effects of both existing and potential claims, legal proceedings and administrative actions, as well as regulatory determinations, on our business, prospects, financial condition and results of operations;

● the extent of protection that our patents provide and that our pending patent applications will provide, if patents are issued from such applications, for our technologies, programs, and drug candidates;

● the factors on which we base our estimates for accounting purposes and our expectations regarding the effect of changes in accounting guidance or standards on our operating results; and

● our expected financial position, performance, revenues, growth, costs and expenses, magnitude of net losses and the availability of resources.

Our actual results could differ materially from those anticipated in these forward-looking statements for many reasons, including the risks, uncertainties and other factors described in this Quarterly Report on Form 10-Q under the headings “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in our other filings with the U.S. Securities and Exchange Commission (the “SEC”). Given these risks, uncertainties and other factors, actual results or anticipated developments may not be realized or, even if substantially realized, may not have the expected consequences to or effects on our company, business or operations. Accordingly, you should not place undue reliance on these forward-looking statements, which represent our estimates and assumptions only as of the date of the filing of this Quarterly Report on Form 10-Q. You should read this Quarterly Report on Form 10-Q completely and with the understanding that our actual results in subsequent periods may differ materially from current expectations. Except as required by applicable law, we assume no obligation to update or revise any forward-looking statements contained herein, whether as a result of any new information, future events or otherwise.

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OMEROS CORPORATION

FORM 10-Q FOR THE QUARTER ENDED June 30, 2024

INDEX

		Page
Part I — Financial Information		5
Item 1.	Financial Statements (unaudited)	5
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations and Comprehensive Loss	6
	Condensed Consolidated Statements of Stockholders’ Equity (Deficit)	7
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25
Part II — Other Information		26
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Default Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	27
Signatures		28

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PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

OMEROS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(unaudited)

	June 30,			December 31,
	2024			2023
Assets
Current assets:
Cash and cash equivalents	$	2,120		$	7,105
Short-term investments		156,792			164,743
OMIDRIA contract royalty asset, current		29,665			29,373
Receivables		8,080			8,096
Prepaid expense and other assets		6,273			8,581
Total current assets		202,930			217,898
OMIDRIA contract royalty asset, non-current		133,428			138,736
Right of use assets		16,868			18,631
Property and equipment, net		2,034			1,950
Restricted investments		1,054			1,054
Total assets	$	356,314		$	378,269

Liabilities and shareholders’ equity (deficit)
Current liabilities:
Accounts payable	$	6,502		$	7,712
Accrued expenses		27,966			31,868
OMIDRIA royalty obligation, current		19,434			8,576
Lease liabilities, current		5,573			5,160
Total current liabilities		59,475			53,316
Convertible senior notes, net		96,888			213,155
Long-term debt, net		94,506			—
OMIDRIA royalty obligation, non-current		212,323			116,550
Lease liabilities, non-current		15,632			18,143
Other accrued liabilities, non-current		2,088			2,088
Commitments and contingencies (Note 10)
Shareholders’ equity (deficit):
Preferred stock, par value $0.01 per share, 20,000,000 shares authorized; none issued and outstanding at June 30, 2024 and December 31, 2023.		—			—
Common stock, par value $0.01 per share, 150,000,000 shares authorized at June 30, 2024 and December 31, 2023; 57,944,159 and 61,128,597 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively.		579			611
Additional paid-in capital		721,578			727,936
Accumulated deficit		(846,755	)		(753,530	)
Total shareholders’ deficit		(124,598	)		(24,983	)
Total liabilities and shareholders’ equity (deficit)	$	356,314		$	378,269

See accompanying Notes to Condensed Consolidated Financial Statements

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OMEROS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)

(unaudited)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023

Costs and expenses:
Research and development	$	45,349		$	29,639		$	72,119		$	54,249
Selling, general and administrative		13,808			11,260			26,072			22,363
Total costs and expenses		59,157			40,899			98,191			76,612
Loss from operations		(59,157	)		(40,899	)		(98,191	)		(76,612	)
Interest expense		(9,215	)		(7,932	)		(17,446	)		(15,865	)
Interest and other income		3,247			4,537			6,662			8,500
Net loss from continuing operations		(65,125	)		(44,294	)		(108,975	)		(83,977	)
Net income from discontinued operations, net of tax		9,084			7,000			15,750			12,982
Net loss	$	(56,041	)	$	(37,294	)	$	(93,225	)	$	(70,995	)

Basic and diluted net income (loss) per share:
Net loss from continuing operations	$	(1.12	)	$	(0.70	)	$	(1.87	)	$	(1.34	)
Net income from discontinued operations		0.15			0.11			0.27			0.21
Net loss	$	(0.97	)	$	(0.59	)	$	(1.60	)	$	(1.13	)

Weighted-average shares used to compute basic and diluted net income (loss) per share		57,944,016			62,837,125			58,374,716			62,832,991

See accompanying Notes to Condensed Consolidated Financial Statements

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OMEROS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

(In thousands, except share data)

(unaudited)

							Additional
	Common Stock						Paid-In			Accumulated
	Shares			Amount			Capital			Deficit			Total
Balance at January 1, 2024		61,128,597		$	611		$	727,936		$	(753,530	)	$	(24,983	)
Issuance of common stock upon exercise of stock options		9,339			—			32			—			32
Repurchases of common stock		(3,195,241	)		(32	)		(11,819	)		—			(11,851	)
Stock-based compensation expense		—			—			2,658			—			2,658
Net loss		—			—			—			(37,184	)		(37,184	)
Balance at March 31, 2024		57,942,695			579			718,807			(790,714	)		(71,328	)
Issuance of common stock upon exercise of stock options		1,464			—			3			—			3
Stock-based compensation expense		—			—			2,768			—			2,768
Net loss		—			—			—			(56,041	)		(56,041	)
Balance at June 30, 2024		57,944,159		$	579		$	721,578		$	(846,755	)	$	(124,598	)

Balance at January 1, 2023		62,828,765		$	628		$	720,773		$	(635,717	)	$	85,684
Stock-based compensation expense		—			—			2,953			—			2,953
Net loss		—			—			—			(33,701	)		(33,701	)
Balance at March 31, 2023		62,828,765			628			723,726			(669,418	)		54,936
Issuance of common stock upon exercise of stock options		19,556			—			97			—			97
Stock-based compensation expense		—			—			2,771			—			2,771
Net loss		—			—			—			(37,294	)		(37,294	)
Balance at June 30, 2023		62,848,321		$	628		$	726,594		$	(706,712	)	$	20,510

See accompanying Notes to Condensed Consolidated Financial Statements

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OMEROS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

	Six Months Ended June 30,
	2024			2023
Operating activities:
Net loss	$	(93,225	)	$	(