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Omeros Corporation Reports Fourth Quarter and Year-End 2013 Financial Results

Companies mentioned in this article: Omeros Corporation

SEATTLE, March 13, 2014 /PRNewswire/ -- Omeros Corporation (NASDAQ: OMER), a clinical-stage biopharmaceutical company committed to discovering, developing and commercializing small-molecule and protein therapeutics targeting inflammation, coagulopathies and disorders of the central nervous system, today announced recent highlights and financial results for the fourth quarter and year ended December 31, 2013, which include:

    --  4Q 2013 net loss of $1.8 million, or $0.05 per share, and for the full
        year of 2013 a net loss of $39.8 million, or $1.39 per share
    --  Operating expenses in 4Q 2013 were $14.1 million including $2.4 million
        of non-cash expenses, and for the full year of 2013 were $52.1 million
        including non-cash expenses of $9.7 million
    --  U.S. and European regulators accepted Omidria((TM)) (OMS302) marketing
        applications for review
    --  Omeros' OMS721 received Orphan Drug designation from the U.S. Food and
        Drug Administration (FDA) for complement-mediated thrombotic
        microangiopathies (TMAs)
    --  Closed senior loan facility with Oxford Finance and MidCap Financial in
        March 2014, receiving $12.6 million in net proceeds
    --  Received $12.5 million in settlement of insurance coverage lawsuit with
        former insurer

"Omeros achieved a number of significant milestones in 2013," said Gregory A. Demopulos, M.D., chairman and chief executive officer of Omeros. "In addition to submitting the NDA and MAA for Omidria, we completed successful clinical trials for OMS824 and OMS721, advancing both into Phase 2 clinical programs. In connection with the latter two programs, OMS824 received Orphan Drug and Fast Track Designations for Huntington's disease and OMS721 received Orphan Drug Designation for complement-mediated thrombotic microangiopathies. 2014 promises to be an exciting year - we look forward to the planned commercial launch of Omidria, Phase 2 data in Huntington's disease and TMAs, and continued success across our pipeline."

Fourth Quarter and Recent Highlights

    --  U.S. and European regulators accepted Omidria marketing applications for
        review. Omeros is preparing for a planned commercial launch of Omidria
        in the second half of 2014.
    --  Received Orphan Drug designation for OMS721, the company's lead human
        monoclonal antibody targeting mannan-binding lectin-associated serine
        protease-2 (MASP-2), for the treatment of complement-mediated TMAs.
    --  Closed a senior credit facility with Oxford Finance and MidCap Financial
        in March 2014, consisting of a $32.0 million term loan. The new loan
        requires interest-only payments through March 2015 and thereafter calls
        for monthly principal and interest payments through March 2018. Omeros
        used a portion of the loan proceeds to repay its obligations under its
        prior loan and security agreement with Oxford Finance and affiliates,
        and the remaining net proceeds of approximately $12.6 million will be
        used for general corporate purposes and working capital.
    --  Began enrollment in the first quarter of 2014 in a Phase 2 clinical
        trial evaluating OMS824, the company's phosphodiesterase 10 (PDE10)
        inhibitor, in patients with Huntington's disease. OMS824 also received
        Fast Track Designation from the FDA for the treatment of cognitive
        impairment in patients with Huntington's disease.
    --  Announced positive results from its OMS824 Phase 2a clinical trial, in
        which OMS824 was well tolerated and demonstrated comparable systemic
        pharmacokinetics when administered alone and concomitantly with approved
        antipsychotic agents in patients with stable schizophrenia, opening the
        potential for OMS824 to be delivered as monotherapy or as an adjunct to
        commercially available antipsychotics.
    --  Reported positive data following completion of dosing in a Phase 1
        clinical trial of OMS721, the company's lead human monoclonal antibody
        targeting mannan-binding lectin-associated serine protease-2 (MASP-2).
        Omeros expects to initiate a Phase 2 clinical trial to evaluate OMS721
        in the treatment of TMAs in the second quarter of 2014.
    --  Received positive data using OMS721 in ex vivo studies of endothelial
        activation relevant to the pathophysiology of human atypical hemolytic
        uremic syndrome (aHUS), a form of TMA. The data reported showed that
        OMS721 significantly inhibited complement deposition in the system using
        serum samples from aHUS patients obtained during the acute phase of
        disease (p<0.01) and during remission (p<0.001) compared to untreated
        controls.
    --  Announced that it had identified compounds that functionally interact
        with each of six additional orphan G protein-coupled receptors (GPCRs),
        bringing the number of Class A orphan GPCRs reported "unlocked" by
        Omeros to 52. Omeros also reported that it had identified small
        molecules that interact with two non-orphan Class B GPCRs, the
        glucagon-like peptide 1 receptor (GLP-1R) and the parathyroid hormone 1
        receptor (PTH-1R).
    --  Entered into a settlement agreement with Carolina Casualty Insurance
        Company, or, CCIC, in October 2013, related to CCIC's defense of, and
        coverage obligations owed to, Omeros and its chief executive officer and
        chairman, Dr. Demopulos, in previously settled litigation. The
        settlement included a release of each party's respective claims in the
        insurance coverage lawsuit and payment by CCIC of $12.5 million to
        Omeros.

Financial Results
Operating expenses for the three months ended December 31, 2013 were $14.1 million, including $2.4 million of non-cash expenses, compared to $9.1 million, including $2.6 million of non-cash expenses, for the same period in 2012. During the fourth quarter of 2012, operating expenses were reduced by $3.95 million due to a reimbursement Omeros received from its former insurer for expenses Omeros recognized in the third quarter of 2012 in connection with a litigation settlement. Excluding this reimbursement, Omeros' operating expenses for the three months ended December 31, 2013 increased by $1.0 million from the prior year period. The increase was primarily related to our Phase 1 clinical trials evaluating OMS824 and OMS721, legal costs for patents, employee costs and expenses associated with preparing for our planned commercial launch of Omidria in the U.S. These increased expenses were partially offset by lower clinical research and development expenses in the three months ended December 31, 2013 as compared to the same period in 2012 due to completion of our Omidria Phase 3 clinical trial in January 2013 and the completion of the first OMS103 Phase 3 clinical trial for meniscectomy in December 2012.

Operating expenses for the year ended December 31, 2013 were $52.1 million, including $9.7 million of non-cash expenses, compared to $42.9 million, including $4.9 million of non-cash expenses, in 2012. The 2013 increase related primarily to our Phase 1 clinical trials evaluating OMS824 and OMS721, non-cash rent expense associated with the lease of our new facilities, higher expenses related to the preparation and filing of the NDA and MAA and planned commercial launch for Omidria and increased legal and employee costs, including non-cash stock-based compensation. These increased expenses were partially offset by lower clinical research and development expenses related to the completion of our Omidria Phase 3 clinical trial in January 2013 and the first OMS103 Phase 3 clinical trial for meniscectomy in December 2012. These two clinical programs were ongoing during 2012.

Revenue for the year ended December 31, 2013, was $1.6 million, compared to $6.0 million in 2012. The decrease was primarily due to lower deferred revenue being recognized from our GPCR funding agreements, which were fully amortized in the first quarter of 2013.

For the quarter ended December 31, 2013, Omeros reported a net loss of $1.8 million, or $0.05 per share. The receipt of $12.5 million in October 2013 from Omeros' settlement with CCIC reduced our net loss by $0.41 per share. This compares to a net loss of $7.7 million, or $0.30 per share, for the same period in 2012, including a $3.95 million ($0.15 per share) reduction of our loss related to a payment received upon settlement of litigation. Noncash expenses were $2.4 million ($0.08 per share) for the quarter ended December 31, 2013 and $2.6 million ($0.10 per share) for the same period in 2012.

For the year ended December 31, 2013, Omeros reported a net loss of $39.8 million, or $1.39 per share. The receipt of the $12.5 million settlement payment from CCIC reduced our net loss by $0.44 per share. This compares to a net loss of $38.4 million, or $1.59 per share, in 2012. Noncash expenses were $9.7 million ($0.34 per share) for 2013 and $4.9 million ($0.20 per share) for 2012.

At December 31, 2013, Omeros had cash and cash equivalents and short-term investments of $14.1 million.

About Omeros Corporation
Omeros is a clinical-stage biopharmaceutical company committed to discovering, developing and commercializing small-molecule and protein therapeutics targeting inflammation, coagulopathies and disorders of the central nervous system. Derived from its proprietary PharmacoSurgery(®) platform, the company's lead drug product, Omidria (OMS302) for lens replacement surgery, is currently under review for marketing approval by both the US Food and Drug Administration and the European Medicines Agency with U.S. commercial launch planned for the second half of 2014. Omeros' six other clinical programs are focused on schizophrenia, Huntington's disease and cognitive impairment; addictive and compulsive disorders; complement-related diseases; and preventing problems associated with surgical procedures. Omeros also has a proprietary GPCR platform, which is making available an unprecedented number of new GPCR drug targets and corresponding compounds to the pharmaceutical industry for drug development.

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," "look forward to," "may," "plan," "potential," "predict," "project," "should," "will," "would" and similar expressions. Forward-looking statements 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 Omeros' unproven preclinical and clinical development activities, regulatory oversight, product commercialization, intellectual property claims, competitive developments 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, 2014. 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 unless required by law, even if new information becomes available in the future.

                                                                                     
                                  OMEROS CORPORATION
                                                                                     
                         CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                                     
                    (In thousands, except share and per share data)
                                                                                     
                                                                                                       
                                                                                                       
                                                                                                       
                                                                                                       
                                                                                                 
                                      Three Months Ended               Twelve Months Ended
                                                                                                 
                                         December 31,                     December 31,
                                         ------------                     ------------
                                                                                                     
                                         2013            2012               2013               2012
                                         ----            ----               ----               ----
                                                                                  
                                  (unaudited)
                                                                                                     
    Revenue                              $169          $1,583             $1,600             $6,022
                                                                                                     
    Operating expenses:
                                                                                                     
    Research and development           10,186           9,354             36,297             31,922
                                                                                                     
    General and administrative          3,885           3,715             15,819             10,985
                                                                                                     
    Litigation settlement                   -               -                  -              3,953
                                                                                                     
    Litigation recovery                     -          (3,953)                 -             (3,953)
                                          ---          ------                ---             ------
                                                                                                     
    Total operating expenses           14,071           9,116             52,116             42,907
                                       ------           -----             ------             ------
                                                                                                     
    Loss from operations              (13,902)         (7,533)           (50,516)           (36,885)
                                                                                                     
    Litigation settlement              12,500               -             12,500                  -
                                                                                                     
    Investment income                       2               8                 12                 40
                                                                                                     
    Interest expense                     (598)           (369)            (2,366)            (1,729)
                                                                                                     
    Other income (expense), net           153             160                574                130
                                          ---             ---                ---                ---
                                                                                                     
    Net loss                          $(1,845)        $(7,734)          $(39,796)          $(38,444)
                                      =======         =======           ========           ========
                                                                                                     
    Basic and diluted net loss
     per share                         $(0.05)         $(0.30)            $(1.39)            $(1.59)
                                       ======          ======             ======             ======
                                                                                                     
    Weighted-average shares
     used to compute basic and
     diluted net loss per share
                                                                                                   
      30,289,041                   25,886,586         28,560,360                         24,155,690
      ==========                   ==========         ==========                         ==========


                               OMEROS CORPORATION

                        CONSOLIDATED BALANCE SHEET DATA

                                 (In thousands)

                                      December 31,      December 31,

                                                  2013                   2012
                                                  ----                   ----



    Cash and cash
     equivalents and
     short-term
     investments                               $14,101                $22,350

    Total assets                                16,535                 26,575

    Total notes payable                         20,498                 20,103

    Total current
     liabilities                                11,873                  8,359

    Accumulated deficit                       (254,373)              (214,577)

    Total shareholders'
     (deficit) equity                          (18,384)                (6,531)

SOURCE Omeros Corporation