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Omeros Corporation Reports Third Quarter 2013 Financial Results

       Omeros Corporation Reports Third Quarter 2013 Financial Results

-- Obtains Additional $17.4 Million in Cash in 4Q 2013 --

PR Newswire

SEATTLE, Wash., Nov. 7, 2013

SEATTLE, Wash., Nov. 7, 2013 /PRNewswire/ --

  oReceived $17.4 million in cash in October 2013
  oTotal operating expenses in 3Q 2013 were $13.6 million including $3.2
    million in non-cash expenses compared to $13.3 million including non-cash
    expenses of $2.1 million in 2Q 2013
  oU.S. and European regulators accepted Omeros' OMS302 marketing
    applications for review
  oOMS824 and OMS721 Phase 1 clinical programs generated positive data
  oIncreased the number of unlocked orphan GPCRs to 52

Omeros Corporation (NASDAQ: OMER), a clinical-stage biopharmaceutical company
committed to discovering, developing and commercializing products targeting
inflammation, coagulopathies and disorders of the central nervous system,
today announced its financial results for the third quarter of 2013.

"Throughout the third quarter of 2013, we continued to make significant
strides in development across our pipeline," stated Gregory A. Demopulos,
M.D., chairman and chief executive officer of Omeros. "For OMS302, the
marketing applications were accepted for review by both the FDA and EMA, and
the market launch is planned for the second half of 2014. Our OMS824 program
for the treatment of cognitive disorders was granted orphan drug designation
by the FDA, generated positive Phase 1 clinical trial results, began
enrollment in a Phase 2 trial in patients with schizophrenia and is now
initiating a Phase 2 trial in Huntington's disease. OMS721, our MASP-2
inhibitor, entered a Phase 1 clinical trial from which we reported positive
data today, and a Phase 2 trial to evaluate the molecule's efficacy and safety
in patients with thrombotic microangiopathies is planned for early 2014.
Preclinically, our GPCR platform continued to identify functionally active
compounds against an unprecedented number of orphan receptors, and our
addiction and high-risk bleeding programs advanced toward the clinic.
Following the close of the quarter, we added over $17 million to our balance
sheet, positioning Omeros to execute on a series of value-driving milestones
during the remainder of 2013 and well into 2014."

Third Quarter and Recent Highlights

  oReported U.S. and European regulators had accepted Omeros' OMS302
    marketing applications for review. OMS302, added to standard irrigation
    solution used during ophthalmological procedures, is Omeros' proprietary
    PharmacoSurgery^® product designed to maintain intraoperative mydriasis,
    prevent miosis and reduce postoperative pain and irritation resulting from
    cataract and other lens replacement surgery. Omeros is preparing for a
    planned commercial launch of OMS302 in the second half of 2014.
  oAnnounced that Omeros entered into a settlement agreement with Carolina
    Casualty Insurance Company, or, CCIC, dated October 2, 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 with Omeros' former chief financial officer. 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, which was
    received on October 24, 2013.
  oReported positive clinical data from its Phase 1 clinical program
    evaluating OMS824, the lead compound from its phosphodiesterase 10 (PDE10)
    program. OMS824 selectively inhibits PDE10, an enzyme expressed in areas
    of the brain linked to a wide range of diseases that affect cognition,
    including Huntington's disease and schizophrenia. Omeros subsequently
    started a Phase 2 trial evaluating the drug in patients with schizophrenia
    and plans to start a Phase 2 trial in Huntington's disease in early 2014.
    OMS824 has received orphan drug designation from the FDA for the treatment
    of Huntington's disease.
  oReported positive clinical data from its Phase 1 clinical trial of OMS721,
    the company's lead human monoclonal antibody targeting mannan-binding
    lectin-associated serine protease-2 (MASP-2), an important regulator of
    the lectin pathway of the immune system. A Phase 2 clinical program to
    evaluate OMS721 in the treatment of thrombotic microangiopathies (TMAs), a
    family of disorders that occurs in the microcirculation of the body's
    organs, most commonly the kidney and brain, is expected to begin
    enrollment in early 2014.
  oAnnounced that its proprietary Cellular Redistribution Assay technology
    had "unlocked" six additional Class A orphan G protein-coupled receptors
    (GPCRs) for drug development, bringing the total number of Class A orphan
    GPCRs "unlocked" by Omeros to 52. These six orphan GPCRs are linked to a
    series of important indications, including cardiovascular indications,
    certain types of cancer and Grave's disease. Omeros also announced 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). Both of these receptors are established drug
    targets – GLP-1R for diabetes and PTH-1R for osteoporosis.

Financial Results

Total operating expenses for the quarter ended September 30, 2013 were $13.6
million and included non-cash expenses of $3.2 million related to rent expense
and stock-based compensation. For the same period in 2012, total operating
expenses were $14.5 million, which included non-cash rent and stock-based
compensation expenses of $576,000.

The decrease in total operating expenses for the quarter ended September 30,
2013 compared to the prior year quarter is primarily due to a litigation
settlement expense of $3.95 million recorded in the same period in 2012, which
was reimbursed by CCIC in the fourth quarter of 2012. For the quarter ended
September 30, 2013, total (i.e., cash and non-cash) operating expenses,
excluding the litigation expense, increased by $3.1 million compared to the
same period in 2012. The increase was primarily due to the non-cash rent and
stock-based compensation expenses of $3.2 million in 3Q 2013 compared to
$576,000 in 3Q 2012. The remaining increases were related to conducting the
company's Phase 1 clinical program evaluating OMS824, advancing our MASP-2
program, preparing the New Drug Application (NDA) and Marketing Authorization
Application (MAA) for OMS302, planning for the commercial launch of OMS302 in
the second half of 2014, and non-recurring legal expenses incurred in
connection with the CCIC matter. These higher costs were partially offset by
lower overall clinical trial expenses related to the completion of the
company's OMS302 Phase 3 clinical program in January 2013 and the completion
of the company's first OMS103HP Phase 3 clinical trial in arthroscopic partial
meniscectomy patients in December 2012.

Total revenue for the quarter ended September 30, 2013 was $196,000 compared
to $1.4 million for the same period in 2012. This decrease was primarily due
to lower revenue recognized from the company's GPCR platform development
funding agreement with Vulcan Inc. and its affiliate. While research continues
under the company's GPCR program, no additional deferred revenue under the
Vulcan agreement remains to be recognized after the first quarter of 2013.

For the quarter ended September 30, 2013, Omeros reported a net loss of $13.9
million, or $0.46 per share, inclusive of the above-referenced $3.2 million of
non-cash charges equaling $0.11 per share, compared to a net loss of $13.3
million, or $0.51 per share, inclusive of the above-referenced $576,000 of
non-cash charges equaling $0.02 per share, for the same period in 2012.

At September 30, 2013, Omeros had cash, cash equivalents and short-term
investments of $9.0 million. On October 24, 2013, subsequent to the end of the
quarter, Omeros received a payment of $12.5 million from CCIC pursuant to the
terms of the settlement agreement. Omeros also received $4.9 million in net
proceeds from the sale of 373,700 shares of its common stock, sold at an
average price of $13.29 per share, pursuant to the company's at-the-market
equity facility in October 2013.

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, 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 commercial launch planned for the second
half of 2014. Omeros' five 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," "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, commercialization of its products, intellectual property
claims and the risks, uncertainties and other factors described under the
heading "Risk Factors" in the Company's Quarterly Report on Form 10-Q filed
with the Securities and Exchange Commission on August 9, 2013. 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, 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       Nine Months Ended
                            September 30,            September 30,
                            2013          2012       2013        2012
                            (unaudited)              (unaudited)
Revenue                     $       $      $      $      
                            196           1,417        1,431  4,439
Operating expenses:
Research and development    9,420         7,764      26,111      22,568
Selling, general and        4,210         2,736      11,934      7,270
administrative
Litigation settlement       -             3,953      -           3,953
Total operating expenses    13,630        14,453     38,045      33,791
Loss from operations        (13,434)      (13,036)   (36,614)    (29,352)
Investment income           2             14         10          32
Interest expense            (592)         (413)      (1,768)     (1,360)
Other income, (expense) net 154           159        421         (30)
Net loss                    $           $        $      $    
                            (13,870)      (13,276)   (37,951)    (30,710)
Basic and diluted net loss  $         $      $      $      
per common share            (0.46)        (0.51)       (1.36) (1.30)
Weighted-average shares
used to compute basic and   29,844,507    25,834,730 27,984,133  23,578,724
diluted net loss per common
share
OMEROS CORPORATION
CONSOLIDATED BALANCE SHEET DATA
(In thousands)
                                                     September   December31,
                                                     30,
                                                     2013        2012
Cash and cash equivalents and short-term investments $      $     
                                                       8,998  22,350
Total assets                                         12,014      26,575
Total notes payable                                  20,395      20,103
Total current liabilities                            11,900      8,359
Accumulated deficit                                  (252,528)   (214,577)
Total shareholders' equity (deficit)                 (23,893)    (6,531)

SOURCE Omeros Corporation

Contact: Jennifer Cook Williams, Cook Williams Communications, Inc., Investor
and Media Relations, 360.668.3701, jennifer@cwcomm.org
 
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