On May 10, 2016 Omeros Corporation (NASDAQ: OMER), a biopharmaceutical company committed to discovering, developing and commercializing both small-molecule and protein therapeutics for large-market as well as orphan indications targeting inflammation, coagulopathies and disorders of the central nervous system, reported recent highlights and developments as well as financial results for the first quarter of 2016 (Press release, Omeros, MAY 10, 2016, View Source;p=RssLanding&cat=news&id=2166828 [SID:1234512179]). These include:

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1Q 2016 revenues were $7.4 million, an 11% increase over 4Q 2015.
Net loss in 1Q was $20.5 million, or $0.54 per share, which included $4.7 million ($0.12 per share) of non-cash expenses.
OMIDRIA units shipped by wholesalers ("sell-through") increased 20% over 4Q 2015.
OMIDRIA sales accelerated substantially in the second half of 1Q, with March accounting for nearly 50% of quarterly sales.
OMIDRIA sales growth trajectory has continued into 2Q with sales to date approximately 65% higher than the corresponding period in 1Q.
Based on recent sales activity, net sales of OMIDRIA, without any additional growth, annualize to an approximate run rate of $45 million to $50 million.
Entered into sales agreement for OMIDRIA in the Middle East in May 2016.
Initiated Phase 3 program of OMS721 for treatment of atypical hemolytic uremic syndrome (aHUS), with patient enrollment expected later this year, and commenced patient dosing in OMS721 Phase 2 program in complement-related, corticosteroid-dependent renal diseases.
"OMIDRIA sales continued to grow substantially in Q1," said Gregory A. Demopulos, M.D., chairman and chief executive officer of Omeros. "Growth in the first part of the quarter was relatively restrained due to both internal and external factors, with sales markedly ramping in March. The acceleration in sales growth has continued into the second quarter, with the run rate for OMIDRIA net sales in recent weeks annualizing to approximately $45 million to $50 million. We continue to expect that we will reach cash-flow positive status later this year, fully funding our pipeline. That pipeline continues to advance, with OMS721 entering a Phase 3 program for aHUS and two OMS721 Phase 2 trials ongoing in TMAs and renal disease. The remainder of the pipeline is progressing nicely, and 2016 is shaping up to hold a number of value-driving milestones."

First Quarter and Recent Highlights and Developments

Highlights and developments regarding OMS721, the company’s lead human monoclonal antibody in its mannan-binding lectin-associated serine protease-2 (MASP-2) program for the treatment of thrombotic microangiopathies (TMAs), including atypical hemolytic uremic syndrome (aHUS), include:
Omeros initiated a Phase 3 OMS721 program that will consist of one clinical trial – a single-arm (i.e., no control arm), open-label trial in patients with newly diagnosed or ongoing aHUS. Phase 3 enrollment is expected to begin later this year and patients currently being treated in the Phase 2 trial are likely to be included in the Phase 3 program. Omeros also plans to pursue accelerated approval for OMS721 in aHUS.
In the company’s Phase 2 clinical program evaluating OMS721 in patients with complement-related renal disorders, Omeros initiated dosing in a new Phase 2 clinical trial that includes patients with corticosteroid-dependent IgA nephropathy, membranous nephropathy, C3 glomerulopathy and lupus nephritis.
Physicians in Finland, based on review of OMS721 data, requested access to OMS721 under a Special License, granted by the Finnish regulatory authorities, for compassionate use in a patient with aHUS. The patient was previously treated with Soliris (eculizumab) but did not have an adequate response according to the requesting physicians and was continuing to display signs of active aHUS.
Omeros and ITROM Trading Drug Store (ITROM) entered into an exclusive supply and distribution agreement for the sale of OMIDRIA in the Kingdom of Saudi Arabia, the United Arab Emirates and certain other countries in the Middle East. Based in Dubai and internationally recognized, ITROM markets, sells and distributes ophthalmic pharmaceutical products in the Middle East. Under the agreement, ITROM will be responsible for obtaining marketing authorizations for OMIDRIA within the licensed territory in addition to marketing and distributing OMIDRIA supplied by Omeros. Omeros expects ITROM to begin selling OMIDRIA later this year.
In March 2016, Omeros was granted by the U.S. Patent and Trademark Office a fourth OMIDRIA patent directed to methods of use. Omeros amended its patent infringement lawsuit against Par Pharmaceutical to assert this additional patent.
A U.S. Patent was granted to Omeros that is directed to the use of any phosphodiesterase-7, or PDE7, inhibitor to treat any substance addiction or any addictive or compulsive behavior. Omeros expects to advance its OMS527 PDE7 inhibitor program into the clinic in 2017.
As previously reported, Omeros converted 26 of its previously contracted OMIDRIA field sales representatives to Omeros employees effective January 1, 2016. In connection with the conversion, the company also hired 11 additional sales representatives during the first quarter. In January 2016, Omeros also entered into a commission-only contract sales agent agreement with Precision Lens to cover "square" states in the Midwest that were not previously covered by the company’s sales force. Both the additional representatives and Precision Lens began making sales calls in February.
Financial Results

For the quarter ended March 31, 2016, total revenues were $7.4 million with OMIDRIA revenue of $7.2 million and grant revenue of $173,000. This compares to OMIDRIA revenues of $238,000 and grant revenue of $150,000 for the same period in 2015. OMIDRIA units sold by the company’s wholesalers to ambulatory surgery centers (ASCs) and hospitals increased 20% from the fourth quarter of 2015.

Sales were restrained in the first half of 1Q, likely due to a number of factors including: low cataract surgery procedural volumes in the first quarter of each year; a series of large ophthalmology annual meetings attracting high-volume cataract surgeons; and Omeros’ conversion of two-thirds of its contract to an in-house sales force and filling out the remaining one-third of the sales force with additional direct hires who began making sales calls in February. Also in February, our commission-only sales agents from Precision Lens, covering states in the Midwest, began making sales calls.

OMIDRIA sales accelerated substantially in the second half of 1Q, with March accounting for nearly 50% of quarterly sales. OMIDRIA sales growth trajectory has continued into 2Q with sales to date approximately 65% higher than the corresponding portion of 1Q. Based on recent sales activity, net sales of OMIDRIA, without any additional growth, annualize to an approximate run rate of $45 million to $50 million.

Total costs and expenses for the three months ended March 31, 2016 were $26.9 million ($4.7 million of noncash expenses) compared to $18.3 million ($2.8 million of noncash expenses) for the same period in 2015. The increase in the current year quarter was primarily due to increased OMS721 research and development activities and non-cash stock-based compensation costs associated with the annual company-wide option grants approval and pricing in February 2016 with retroactive vesting commencement dates of April 2015.

For the three months ended March 31, 2016, Omeros reported a net loss of $20.5 million, or $0.54 per share, which included noncash expenses of $4.7 million ($0.12 per share). This compares to a net loss of $18.7 million, or $0.51 per share, for the same period in 2015, which included noncash expenses of $2.8 million ($0.08 per share).

At March 31, 2016, the company had cash, cash equivalents and short-term investments of $13.2 million. In addition, the company had $10.7 million of restricted cash on hand to satisfy covenants under its loan agreement with Oxford Finance and East West Bank and its lease for the Omeros Building.