Full Press Release Details
Omeros Corporation Reports Fourth Quarter and Year-End 2021 Financial Results
- Conference Call Today at 4:30 p.m. ET -
SEATTLE, WA - March 1, 2022 - Omeros Corporation (Nasdaq: OMER), a clinical-stage biopharmaceutical company committed to discovering, developing and commercializing small-molecule and protein therapeutics for large-market as well as orphan indications targeting inflammation and immunologic diseases, including complement-mediated diseases and cancers, today announced recent highlights and developments as well as financial results for the fourth quarter and year ended December 31, 2021, which include:
"The OMIDRIA transaction with Rayner was the right deal for both parties," said Gregory A. Demopulos, M.D., Omeros' chairman and chief executive officer. "Rayner acquired a great ophthalmic product and an outstanding sales force. For Omeros, in addition to the immediate and substantial infusion of capital, we are retaining the bulk of the downstream operating profits while transferring all OMIDRIA-related costs to Rayner. Rayner is proving to be a strong partner and, we expect, will continue to grow OMIDRIA sales both in the U.S. and internationally. The transaction also enables us to focus our resources and attention on our core biotechnology programs, including our complement and immuno-oncology franchises. Our Type A meeting with FDA for our MASP-2 inhibitor narsoplimab in TA-TMA was constructive, and we await further feedback from the Agency. Enrollment in the narsoplimab Phase 3 IgA nephropathy trial has accelerated, and we look forward to seeing the data from the I-SPY COVID-19 study. OMS906, our MASP-3 inhibitor, has completed dosing in healthy subjects without any safety concern and is slated to begin enrollment in a study of PNH patients this summer, with a competitively favorable dosing regimen. Also, this summer, our long-acting MASP-2 inhibitor OMS1029 is expected to enter the clinic with once-monthly to once-quarterly dosing. Our novel-target immuno-oncology therapeutics and CAR T-cell and adoptive T-cell programs are generating impressive preclinical data, and we look forward to their clinical entry. 2022 holds a good number of milestones for Omeros, and we like the way that they are lining up."
Fourth Quarter and Recent Developments
The sale of OMIDRIA has been accounted for as the sale of an asset. Accordingly, Omeros has reclassified all revenues and expenses related to OMIDRIA to discontinued operations for the fiscal years 2021, 2020 and 2019 in its financial statements.
Overall sales of OMIDRIA in the fourth quarter were $32.9 million, an increase of $2.9 million or 10 percent from the third quarter. Omeros recognized $30.8 million of the OMIDRIA sales as product revenue prior to the closing of the Rayner transaction and $1.0 million as its 50 percent share of royalties paid by Rayner on post-closing sales of OMIDRIA. Both of these amounts are included on the income statement as a component of net income from discontinued operations.
Total costs and expenses for the fourth quarter of 2021 were $42.9 million compared to $39.8 million for the preceding quarter. The increase was primarily due to incremental research and development costs related to narsoplimab clinical trials.
Net income in the fourth quarter was $280.6 million, or $4.48 per share. This includes a non-cash gain of $184.6 million, or $2.95 per share, related to recognizing the after-tax minimum discounted future royalty stream, discounted to net-present value and absent any milestone payment, for OMIDRIA upon closing. Excluding the sale of OMIDRIA, net loss for the fourth quarter of 2021 would have been $23.0 million or $0.37 cents per share. Fourth quarter non-cash expenses were $6.3 million, or $0.10 per share. On a similar basis, this compares to a net loss in the previous quarter of $22.7 million, or $0.36 per share, which included non-cash expenses of $6.4 million, or $0.10 per share.
As of December 31, 2021, the company had $157.3 million of cash, cash equivalents and short-term investments and $38.2 million in accounts receivable, all of which is expected to be collected during the first quarter of 2022.
Conference Call Details
To access the live conference call via phone, please dial 844.831.4029 from the United States and Canada or 920.663.6278 internationally. The participant passcode is 2686968. A telephone replay will be available for one week following the call and may be accessed by dialing 855.859.2056 from the United States and Canada or 404.537.3406 internationally. The replay passcode is 2686968.
To access the live or subsequently archived webcast of the conference call on the internet, go to the company's website at https://investor.omeros.com/upcoming-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 diseases, including complement-mediated diseases and cancers related to dysfunction of the immune system, as well as 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. Narsoplimab is also in multiple late-stage clinical development programs focused on other complement-mediated disorders, including IgA nephropathy, atypical hemolytic uremic syndrome and COVID-19. OMS906, Omeros' inhibitor of MASP-3, the key activator of the alternative pathway of complement, is initiating a Phase 1b clinical program in paroxysmal nocturnal hemoglobinuria (PNH). 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 expectations with regard to interactions and communications with FDA and Omeros' pursuit of regulatory approval for narsoplimab in HSCT-TMA, 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, risks associated with product commercialization, unproven preclinical and clinical development activities, the impact of COVID-19 on our business, 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 the company's Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 1, 2022. Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements, and the company assumes 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.
Non-GAAP Information
This press release includes financial measures that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP). To supplement Omeros' consolidated financial statements presented in accordance with GAAP, Omeros is presenting OMIDRIA product sales, net, adjusted net loss and adjusted net loss per share, which are non-GAAP financial measures and include adjustments to exclude the impact of the divestiture of OMIDRIA during the fourth quarter of 2021.
Omeros believes that the presentation of these non-GAAP financial measures provides important supplemental information to investors regarding financial trends relating to Omeros' results of operations and facilitates comparisons of against prior periods. The non-GAAP measures should be considered supplemental to, and not a substitute for or superior to, financial measures calculated in accordance with GAAP. The accompanying table provides more detail on the GAAP financial measures that are most directly comparable to the non-GAAP financial measures described above and the related reconciliations between these financial measures.
Jennifer Cook Williams
Cook Williams Communications, Inc.
Investor and Media Relations
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
| Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||
| Revenue: | |||||||||||||
| Product sales, net (1) | $ | - | $ | - | $ | - | $ | - | |||||
| Costs and expenses: | |||||||||||||
| Cost of product sales | - | - | - | - | |||||||||
| Research and development | 30,327 | 25,160 | 118,775 | 107,612 | |||||||||
| Selling, general and administrative | 12,560 | 12,235 | 54,842 | 49,306 | |||||||||
| Total costs and expenses | 42,887 | 37,395 | 173,617 | 156,918 | |||||||||
| Loss from continuing operations | (42,887) | (37,395) | (173,617) | (156,918) | |||||||||
| Loss on early extinguishment of debt | - | - | - | (13,374) | |||||||||
| Interest expense | (4,949) | (7,988) | (19,669) | (26,751) | |||||||||
| Other income | 526 | 373 | 1,740 | 654 | |||||||||
| Loss from continuing operations before income tax benefit | (47,310) | (45,010) | (191,546) | (196,389) | |||||||||
| Income tax benefit | - | 5,026 | - | 23,256 | |||||||||
| Net loss from continuing operations | (47,310) | (39,984) | (191,546) | (173,133) | |||||||||
| Net income from discontinued operations, net of tax | 327,930 | 2,711 | 385,781 | 35,072 | |||||||||
| Net income (loss) | $ | 280,620 | $ | (37,273) | $ | 194,235 | $ | (138,061) | |||||
| Comprehensive income (loss) | $ | 280,620 | $ | (37,273) | $ | 194,235 | $ | (138,061) | |||||
| Basic and diluted net income (loss) per share | |||||||||||||
| Net loss from continuing operations | $ | (0.76) | $ | (0.64) | $ | (3.07) | $ | (3.02) | |||||
| Net income from discontinued operations | 5.24 | 0.04 | 6.19 | 0.61 | |||||||||
| Net income (loss) | $ | 4.48 | $ | (0.60) | $ | 3.12 | $ | (2.41) | |||||
| Weighted-average shares used to compute basic and diluted net income (loss) per share | 62,552,395 | 61,659,835 | 62,344,100 | 57,176,743 |
UNAUDITED CONSOLIDATED BALANCE SHEET
(In thousands, except share and per share data)
| December 31, | December 31, | |||||
| 2021 | 2020 | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 100,808 | $ | 10,501 | ||
| Short-term investments | 56,458 | 124,452 | ||||
| OMIDRIA contract royalty asset, short-term | 44,319 | - | ||||
| Receivables, net | 38,155 | 3,841 | ||||
| Prepaid expense and other assets | 8,149 | 10,455 | ||||
| Current assets from discontinued operations (1) | - | 2,036 | ||||
| Total current assets | 247,889 | 151,285 | ||||
| OMIDRIA contract royalty asset | 140,251 | - | ||||
| Property and equipment, net | 1,731 | 2,551 | ||||
| Right of use assets | 28,276 | 25,526 | ||||
| Restricted investments | 1,054 | 1,055 | ||||
| Advanced payments, non-current | 67 | 625 | ||||
| Total assets | $ | 419,268 | $ | 181,042 | ||
| Liabilities and shareholders' equity (deficit) | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 13,400 | $ | 4,199 | ||
| Accrued expenses | 33,134 | 28,755 | ||||
| Current portion of lease liabilities | 5,255 | 3,782 | ||||
| Total current liabilities | 51,789 | 36,736 | ||||
| Lease liabilities, non-current | 29,126 | 28,770 | ||||
| Unsecured convertible senior notes, net | 313,458 | 236,288 | ||||
| Other accrued liabilities - non-current | 1,115 | - | ||||
| Shareholders' equity (deficit): | ||||||
| Preferred stock, par value $0.01 per share, 20,000,000 shares authorized; none issued and outstanding at December 31, 2021 and December 31, 2020. | - | - | ||||
| Common stock, par value $0.01 per share, 150,000,000 shares authorized at December 31, 2021 and December 31, 2020; 62,628,855 and 61,671,231 shares issued and outstanding at December 31, 2021 and December 31, 2020, respectively. | 626 | 616 | ||||
| Additional paid-in capital | 706,288 | 751,304 | ||||
| Accumulated deficit | (683,134) | (872,672) | ||||
| Total shareholders' equity (deficit) | 23,780 | (120,752) | ||||
| Total liabilities and shareholders' equity (deficit) | $ | 419,268 | $ | 181,042 |
UNAUDITED CONSOLIDATED SUPPLEMENTAL DATA
(In thousands, except share and per share data)
Net income from discontinued operations, net of tax is as follows:
| Three Months Ended | Twelve Months Ended | |||||
| December 31, 2021 | December 31, 2021 | |||||
| Product sales, net | $ | 30,845 | $ | 110,735 | ||
| Royalty income | 1,035 | 1,035 | ||||
| OMIDRIA income | 31,880 | 111,770 | ||||
| Costs and expenses: | ||||||
| Cost of product sales | 425 | 1,364 | ||||
| Research and development | 930 | 3,839 | ||||
| Selling, general and administrative | 7,237 | 25,428 | ||||
| Total costs and expenses | 8,592 | 30,631 | ||||
| Income before income tax expense | 23,288 | 81,139 | ||||
| Income tax expense | (1,006) | (1,006) | ||||
| Income from discontinued operations, net of tax | 22,282 | 80,133 | ||||
| Gain on sale of OMIDRIA, net | 305,648 | 305,648 | ||||
| Net income from discontinued operations, net of tax | $ | 327,930 | $ | 385,781 |
The gain on the sale of OMIDRIA included in discontinued operations for the year ended December 31, 2021 is as follows:
| Cash proceeds | $ | 125,993 | |
| OMIDRIA contract royalty asset | 184,570 | ||
| Gain on sale of OMIDRIA, gross | 310,563 | ||
| Transaction and closing costs | (1,972) | ||
| Restricted stock units ("RSUs") granted to transferred employees | (1,419) | ||
| Sale of prepaids and inventory | (1,524) | ||
| Gain on sale of OMIDRIA, net | $ | 305,648 |
UNAUDITED CONSOLIDATED SUPPLEMENTAL DATA
NON-GAAP RECONCILIATION
(In thousands, except share and per share data)
Following is the reconciliation of OMIDRIA product sales, net for the quarter ending December 31, 2021 as if the Rayner transaction did not occur:
| OMIDRIA product sales, net in discontinued operations - GAAP | $ | 30,845 | |
| OMIDRIA royalty sales in discontinued operations - GAAP | 1,035 | ||
| Total GAAP OMIDRIA revenues | 31,880 | ||
| Adjustments to include post-closing OMIDRIA product sales, net | 2,070 | ||
| Adjustments to exclude post-closing OMIDRIA royalties | (1,035) | ||
| OMIDRIA product sales, net (adjusted) | $ | 32,915 |
Following is the reconciliation of net income and basic and diluted earnings per share for the quarter ending December 31, 2021 as if the Rayner transaction did not occur:
| Net income - GAAP | $ | 280,620 | $ | 4.48 | ||
| Adjustments to exclude income from discontinued operations, net of tax - GAAP | (327,930) | (5.24) | ||||
| Adjustments to include OMIDRIA product sales, net | 32,915 | 0.53 | ||||
| Adjustments to include OMIDRIA operating costs | (8,592) | (0.14) | ||||
| OMIDRIA product sales, net (adjusted) | $ | (22,987) | $ | (0.37) | ||
| Weighted-average shares used to compute basic and diluted net loss per share | 62,552,395 |