Full Press Release Details
Omeros Corporation Reports Fourth Quarter and Year-End 2022 Financial Results
- Conference Call Today at 4:30 p.m. ET -
SEATTLE, WA - March 13, 2023 - 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, 2022, which include:
"With over $400 million available for operations and having secured our ongoing OMIDRIA royalty stream, Omeros now has the flexibility to retire our 2023 debt obligation while funding accelerated advancement across our portfolio of
cutting-edge platforms and programs well into 2025. Any additional revenue source - for which there are multiple opportunities - would only extend that runway, further driving shareholder value without the need for dilution," said Gregory A. Demopulos, M.D., Omeros' chairman and chief executive officer. "For narsoplimab, we are meeting with FDA to confirm the information required for approval of our resubmitted BLA for TA-TMA, we remain on track for third-quarter release of topline data from our pivotal ARTEMIS-IGAN trial, and there is mutual interest in working with the U.S. government in COVID-19 and ARDS. Our long-acting MASP-2 inhibitor OMS1029 looks promising in the clinic for quarterly IV or SC administration and, together with our orally available small-molecule inhibitors, complements narsoplimab and expands our control over the lectin pathway. OMS906, targeting the key activator of the alternative pathway MASP-3, we expect can also be dosed once quarterly and, given its significant biological advantages over potential competitors, pending efficacy data in PNH followed by C3G will go a long way in answering whether MASP-3 and OMS906 are the premier alternative-pathway target and therapeutic. We also are hoping for good news over the coming weeks on our PDE7 inhibitor OMS527 in both addiction and in Parkinson's disease. And our novel molecular and cellular immuno-oncology platforms and programs continue to generate exciting data that consistently point to the same conclusion - the potential for transformative cancer therapies. All of our portfolio programs could well be successful, but the success of any one of them would deliver substantial shareholder value."
Fourth Quarter and Recent Clinical Developments
Net income for the fourth quarter of 2022 was $128.7 million, or $2.05 per share, which includes the $200.0 million milestone recognized as income in discontinued operations. This compares to a net loss of $17.5 million in the third quarter of 2022, or $0.28 per share. Net loss from continuing operations for the fourth quarter of 2022 was $46.0 million, or $0.73 cents per share. For the third quarter of 2022, net loss from continuing operations was $54.8 million, or $0.87 per share. Cash burn for the fourth quarter of 2022 was $26.0 million.
Net income for the full year 2022 was $47.4 million, or $0.76 per share, and our net loss from continuing operations was $182.0 million or $2.90 per share. This compares to the prior full year's net income of $194.2 million, or $3.12 per share, and a loss from continuing operations of $191.5, or $3.07 per share.
In December 2022, the milestone event entitling us to a $200.0 million milestone payment from Rayner occurred. We recorded the $200.0 million milestone as revenue in discontinued operations and as a receivable in December 2022. We received the cash payment on February 3, 2023. Per the terms of the asset purchase agreement with Rayner, following the milestone event the applicable royalty rate was reduced to 30% of the net revenue from U.S. sales of OMIDRIA. Upon achieving the $200.0 million milestone, we conservatively revalued the OMIDRIA contract royalty asset using the reduced royalty rate of 30% on future OMIDRIA U.S. net sales while reflecting an increase in expected OMIDRIA U.S. net sales due to the CAA securing separate payment for drugs like OMIDRIA until at least January 1, 2028. This remeasurement resulted in a $26.2 million reduction in the OMIDRIA contract royalty asset and a corresponding loss being recorded in discontinued operations in the fourth quarter.
During the fourth quarter of 2022, we earned royalties of $17.9 million on $35.8 million of Rayner sales of OMIDRIA. This compares to earned royalties of $16.5 million in the third quarter of 2022. These royalties were recorded as a reduction of the OMIDRIA contract royalty asset.
Total costs and expenses for the fourth quarter of 2022 were $40.1 million compared to $50.8 million for the third quarter of 2022. The decrease was primarily due to the manufacturing of narsoplimab drug substance in the third quarter of 2022 for future commercial and clinical use. We expense commercial drug substance until approval is assured.
Interest expense during the fourth quarter of 2022 was $7.9 million, an increase of $3.0 million from the third quarter of 2022. On September 30, 2022, we sold to DRI Healthcare Acquisitions LP an interest in a portion of our future OMIDRIA royalty receivables and received $125.0 million in cash proceeds. The transaction was recorded as debt for financial reporting purposes with an implied interest rate of 9.4%.
Net income from discontinued operations, net of tax was $174.8 million, or $2.78 per share, in the fourth quarter of 2022 compared to net income from discontinued operations, net of tax of $37.3 million, or $0.59 per share, in the prior quarter. The increase was primarily due to the $200.0 milestone we earned in the fourth quarter, partially offset by the milestone-driven revaluation of the OMIDRIA contract royalty asset.
As of December 31, 2022, we had $194.9 million of cash, cash equivalents and short-term investments. In addition, we had $213.2 million in accounts receivable, all of which have now been collected. We previously maintained a line of credit with Silicon Valley Bank, which we allowed to expire in August 2022. We do not have any assets on deposit with Silicon Valley Bank nor do we have any other financial relationship with the bank or its affiliated entities
Conference Call Details
To access the live conference call via phone, participants must register to receive a unique PIN at the following URL: https://register.vevent.com/register/BIb42f849906d44aaea742e6f375a5609e.
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.
For online access to the live or subsequently archived webcast of the conference call, go to the investor page of Omeros' 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 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 (TA-TMA). Narsoplimab is also in multiple late-stage clinical development programs focused on other complement-mediated disorders, including IgA nephropathy, COVID-19, and atypical hemolytic uremic syndrome. Omeros' long-acting MASP-2 inhibitor OMS1029 is currently in a Phase 1 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 (PNH), complement 3 (C3) glomerulopathy and one or more related indications. 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 prospects for obtaining FDA approval of narsoplimab in TA-TMA and anticipated next steps in relation to the biologics license application for narsoplimab, expectations regarding the initiation or continuation of clinical trials evaluating Omeros' drug candidates and the anticipated availability of data therefrom, and expectations regarding growth in royalty-generating sales of OMIDRIA, 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, 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 13, 2023. 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.
Jennifer Cook Williams
Cook Williams Communications, Inc.
Investor and Media Relations
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, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| Costs and expenses: | ||||||||||||
| Research and development | $ | 26,550 | $ | 30,327 | $ | 112,721 | $ | 118,775 | ||||
| Selling, general and administrative | 13,589 | 12,560 | 50,668 | 54,842 | ||||||||
| Total costs and expenses | 40,139 | 42,887 | 163,389 | 173,617 | ||||||||
| Loss from continuing operations | (40,139) | (42,887) | (163,389) | (173,617) | ||||||||
| Interest expense | (7,902) | (4,949) | (22,702) | (19,669) | ||||||||
| Interest and other income | 1,993 | 526 | 4,062 | 1,740 | ||||||||
| Net loss from continuing operations | (46,048) | (47,310) | (182,029) | (191,546) | ||||||||
| Net income from discontinued operations, net of tax (1) | 174,781 | 327,930 | 229,446 | 385,781 | ||||||||
| Net income | $ | 128,733 | $ | 280,620 | $ | 47,417 | $ | 194,235 | ||||
| Basic and diluted net income (loss) per share: | ||||||||||||
| Net loss from continuing operations | $ | (0.73) | $ | (0.76) | $ | (2.90) | $ | (3.07) | ||||
| Net income from discontinued operations (1) | 2.78 | 5.24 | 3.66 | 6.19 | ||||||||
| Net income | $ | 2.05 | $ | 4.48 | $ | 0.76 | $ | 3.12 | ||||
| Weighted-average shares used to compute basic and diluted net income (loss) per share | 62,762,932 | 62,552,395 | 62,737,091 | 62,344,100 |
UNAUDITED CONSOLIDATED BALANCE SHEET
| December 31, | December 31, | |||||
| 2022 | 2021 | |||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 11,009 | $ | 100,808 | ||
| Short-term investments | 183,909 | 56,458 | ||||
| OMIDRIA contract royalty asset, short-term | 28,797 | 44,319 | ||||
| Receivables, net | 213,221 | 38,155 | ||||
| Prepaid expense and other assets | 6,300 | 8,216 | ||||
| Total current assets | 443,236 | 247,956 | ||||
| OMIDRIA contract royalty asset | 123,425 | 140,251 | ||||
| Right of use assets | 21,762 | 28,276 | ||||
| Property and equipment, net | 1,492 | 1,731 | ||||
| Restricted investments | 1,054 | 1,054 | ||||
| Total assets | $ | 590,969 | $ | 419,268 | ||
| Liabilities and shareholders' equity | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 5,989 | $ | 13,400 | ||
| Accrued expenses | 30,551 | 33,134 | ||||
| Current portion of unsecured convertible senior notes, net | 94,381 | - | ||||
| Current portion of OMIDRIA royalty obligation | 1,152 | - | ||||
| Current portion of lease liabilities | 4,310 | 5,255 | ||||
| Total current liabilities | 136,683 | 51,789 | ||||
| Unsecured convertible senior notes, net | 220,906 | 313,458 | ||||
| OMIDRIA royalty obligation | 125,126 | - | ||||
| Lease liabilities, non-current | 22,426 | 29,126 | ||||
| Other accrued liabilities - noncurrent | 444 | 1,115 | ||||
| Shareholders' equity: | ||||||
| Common stock and additional paid-in capital | 721,401 | 706,914 | ||||
| Accumulated deficit | (635,717) | (683,134) | ||||
| Total shareholders' equity | 85,684 | 23,780 | ||||
| Total liabilities and shareholders' equity | $ | 590,969 | $ | 419,268 |
UNAUDITED CONSOLIDATED SUPPLEMENTAL DATA
The following schedule presents a rollforward of the OMIDRIA contract royalty asset:
| OMIDRIA contract royalty asset at December 31, 2021 | $ | 184,570 | |
| Royalties earned | (65,439) | ||
| Interest on OMIDRIA contract royalty asset | 18,634 | ||
| Remeasurement adjustments | 14,457 | ||
| OMIDRIA contract royalty asset at December 31, 2022 | $ | 152,222 |
Net income from discontinued operations is as follows:
| Three Months Ended | Year Ended | |||||||||||
| December 31, | December 31, | |||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||
| (In thousands) | ||||||||||||
| Product sales, net | $ | - | $ | 30,845 | $ | - | $ | 110,735 | ||||
| Costs and expenses | - | 8,592 | - | 30,631 | ||||||||
| Gross margin | - | 22,253 | - | 80,104 | ||||||||
| Gain on sale of OMIDRIA | - | 305,648 | - | 305,648 | ||||||||
| Milestone payment | 200,000 | - | 200,000 | - | ||||||||
| Interest on OMIDRIA contract royalty asset | 4,895 | - | 18,634 | - | ||||||||
| Remeasurement adjustments | (26,174) | - | 14,457 | - | ||||||||
| Other income, net | 12 | 1,035 | 307 | 1,035 | ||||||||
| Income before income tax | 178,733 | 328,936 | 233,398 | 386,787 | ||||||||
| Income tax expense | (3,952) | (1,006) | (3,952) | (1,006) | ||||||||
| Net income from discontinued operations, net of tax | $ | 174,781 | $ | 327,930 | $ | 229,446 | $ | 385,781 |