x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Washington
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91-1663741
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(State or other jurisdiction of
incorporation or organization)
|
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(I.R.S. Employer
Identification Number)
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|
|
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201 Elliott Avenue West
Seattle, Washington
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|
98119
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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|
¨
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Accelerated filer
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x
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
|
•
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our plans for sales, marketing and distribution of Omidria
®
(phenylephrine and ketorolac injection) 1%/0.3% in the U.S. and for sales, marketing and distribution in the European Union and other international territories;
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•
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our ability to forecast accurately wholesaler demand as well as our estimates of charge-backs and rebates, distribution fees and estimated product returns;
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•
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our ability to enter into acceptable arrangements with potential corporate partners, including with respect to Omidria;
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•
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our expectations regarding the clinical, therapeutic and competitive benefits of Omidria and our product candidates;
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•
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our revenues and our estimate regarding how long our existing cash, cash equivalents and short-term investments will be sufficient to fund our anticipated operating expenses, capital expenditures and interest and principal payments on our outstanding notes;
|
•
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our expectations regarding our exclusive license agreement related to OMS103 including, without limitation, the ability of our partner to manufacture and commercialize OMS103 and the commencement and subsequent continuation of product sales on which we will receive royalty revenue;
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•
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our ability to raise additional capital through the capital markets or through one or more corporate partnerships, equity offerings, debt financings, collaboration or licensing arrangements or asset sales;
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•
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our anticipation that we will rely on contract manufacturers to manufacture Omidria for commercial sale and develop and manufacture our product candidates;
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•
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our expectations about the commercial competition that Omidria and our product candidates may face;
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•
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our expectation that a patient assistance program and a commercial copay program will increase patient accessibility to Omidria;
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•
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the extent of protection that our patents provide and that our pending patent applications will provide, if patents issue from such applications, for our technologies, programs, products and product candidates;
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•
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our ability to design and successfully complete clinical trials and other studies for our products and product candidates, including our Phase 2 clinical trials for OMS721 and OMS824;
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•
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our ability to recommence active enrollment in our Phase 2 clinical trial of OMS824 in Huntington’s disease or initiate further clinical studies in either our OMS824 Huntington’s or schizophrenia programs;
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•
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our expected financial position, performance, growth, expenses, magnitude of net losses and availability of resources; and
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•
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our estimates regarding our future net losses, revenues, research and development expenses and selling, general and administrative expenses.
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Page
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Condensed
Consolidated Statements of Operations and Comprehensive Loss for the Six
Months Ended June 30, 2015
and 2014 (unaudited)
|
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,561
|
|
|
$
|
354
|
|
Short-term investments
|
48,885
|
|
|
6,532
|
|
||
Receivables
|
3,071
|
|
|
392
|
|
||
Inventory
|
633
|
|
|
568
|
|
||
Prepaid expense
|
1,423
|
|
|
1,191
|
|
||
Other current assets
|
108
|
|
|
120
|
|
||
Total current assets
|
56,681
|
|
|
9,157
|
|
||
Property and equipment, net
|
789
|
|
|
782
|
|
||
Restricted cash
|
679
|
|
|
679
|
|
||
Other assets
|
488
|
|
|
472
|
|
||
Total assets
|
$
|
58,637
|
|
|
$
|
11,090
|
|
|
|
|
|
||||
Liabilities and shareholders’ equity (deficit)
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
4,045
|
|
|
$
|
4,915
|
|
Accrued expenses
|
6,757
|
|
|
7,070
|
|
||
Current portion of notes payable, net of discount
|
9,294
|
|
|
6,446
|
|
||
Total current liabilities
|
20,096
|
|
|
18,431
|
|
||
Notes payable, net of current portion and discount
|
21,477
|
|
|
26,263
|
|
||
Deferred rent
|
9,132
|
|
|
9,050
|
|
||
Commitments and contingencies (Note 7)
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, par value $0.01 per share, 20,000,000 authorized; none issued and outstanding at June 30, 2015 and December 31, 2014
|
—
|
|
|
—
|
|
||
Common stock, par value $0.01 per share, 150,000,000 authorized; 37,875,933 and 34,185,464 issued and outstanding at June 30, 2015 and December 31, 2014, respectively
|
379
|
|
|
342
|
|
||
Additional paid-in capital
|
370,948
|
|
|
285,050
|
|
||
Accumulated deficit
|
(363,395
|
)
|
|
(328,046
|
)
|
||
Total shareholders’ equity (deficit)
|
7,932
|
|
|
(42,654
|
)
|
||
Total liabilities and shareholders’ equity
|
$
|
58,637
|
|
|
$
|
11,090
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenues
|
|
|
|
|
|
|
|
||||||||
Product sales, net
|
$
|
3,125
|
|
|
$
|
—
|
|
|
$
|
3,363
|
|
|
$
|
—
|
|
Grant revenue
|
62
|
|
|
45
|
|
|
212
|
|
|
145
|
|
||||
Total revenue
|
3,187
|
|
|
45
|
|
|
3,575
|
|
|
145
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of product sales
|
365
|
|
|
—
|
|
|
376
|
|
|
—
|
|
||||
Research and development
|
10,900
|
|
|
12,407
|
|
|
20,218
|
|
|
24,424
|
|
||||
Selling, general and administrative
|
7,889
|
|
|
4,855
|
|
|
16,878
|
|
|
8,622
|
|
||||
Total costs and expenses
|
19,154
|
|
|
17,262
|
|
|
37,472
|
|
|
33,046
|
|
||||
Loss from operations
|
(15,967
|
)
|
|
(17,217
|
)
|
|
(33,897
|
)
|
|
(32,901
|
)
|
||||
Interest expense
|
(937
|
)
|
|
(939
|
)
|
|
(1,894
|
)
|
|
(1,611
|
)
|
||||
Investment income and other income (expense), net
|
224
|
|
|
165
|
|
|
442
|
|
|
(121
|
)
|
||||
Net loss
|
$
|
(16,680
|
)
|
|
$
|
(17,991
|
)
|
|
$
|
(35,349
|
)
|
|
$
|
(34,633
|
)
|
Comprehensive loss
|
$
|
(16,680
|
)
|
|
$
|
(17,991
|
)
|
|
$
|
(35,349
|
)
|
|
$
|
(34,633
|
)
|
Basic and diluted net loss per share
|
$
|
(0.44
|
)
|
|
$
|
(0.53
|
)
|
|
$
|
(0.95
|
)
|
|
$
|
(1.07
|
)
|
Weighted-average shares used to compute basic and diluted net loss per share
|
37,846,832
|
|
|
33,933,356
|
|
|
37,165,196
|
|
|
32,415,198
|
|
|
Six Months Ended
June 30, |
||||||
|
2015
|
|
2014
|
||||
Operating activities:
|
|
|
|
||||
Net loss
|
$
|
(35,349
|
)
|
|
$
|
(34,633
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Gain on sale of assets
|
—
|
|
|
(9
|
)
|
||
Depreciation and amortization
|
107
|
|
|
164
|
|
||
Stock-based compensation expense
|
4,898
|
|
|
3,417
|
|
||
Non-cash interest expense
|
442
|
|
|
331
|
|
||
Warrant modification expense
|
—
|
|
|
452
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Receivables
|
(2,679
|
)
|
|
127
|
|
||
Prepaid expenses and other current and noncurrent assets
|
(293
|
)
|
|
(1,064
|
)
|
||
Accounts payable, accrued expenses and other
|
(1,229
|
)
|
|
4,279
|
|
||
Deferred rent
|
82
|
|
|
525
|
|
||
Net cash used in operating activities
|
(34,021
|
)
|
|
(26,411
|
)
|
||
Investing activities:
|
|
|
|
||||
Purchases of property and equipment, net
|
(114
|
)
|
|
(2
|
)
|
||
Purchases of investments
|
(79,403
|
)
|
|
(58,844
|
)
|
||
Proceeds from the sale and maturities of investments
|
37,050
|
|
|
35,634
|
|
||
Net cash used in investing activities
|
(42,467
|
)
|
|
(23,212
|
)
|
||
Financing activities:
|
|
|
|
||||
Proceeds from issuance of common stock and pre-funded warrants, net of offering costs
|
79,076
|
|
|
37,754
|
|
||
Net proceeds from borrowings under notes payable
|
—
|
|
|
12,699
|
|
||
Payments on notes payable
|
(2,342
|
)
|
|
(1,464
|
)
|
||
Proceeds upon exercise of stock options and warrants
|
1,961
|
|
|
783
|
|
||
Net cash provided by financing activities
|
78,695
|
|
|
49,772
|
|
||
Net increase in cash and cash equivalents
|
2,207
|
|
|
149
|
|
||
Cash and cash equivalents at beginning of period
|
354
|
|
|
1,384
|
|
||
Cash and cash equivalents at end of period
|
$
|
2,561
|
|
|
$
|
1,533
|
|
Supplemental cash flow information
|
|
|
|
||||
Cash paid for interest
|
$
|
1,471
|
|
|
$
|
1,188
|
|
Prepaid expenses not yet paid
|
$
|
68
|
|
|
$
|
—
|
|
|
June 30,
|
||||
|
2015
|
|
2014
|
||
Outstanding options to purchase common stock
|
8,427,501
|
|
|
6,814,963
|
|
Warrants and pre-funded warrants to purchase common stock
|
1,149,249
|
|
|
609,016
|
|
Total
|
9,576,750
|
|
|
7,423,979
|
|
|
June 30, 2015
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money-market funds classified as non-current restricted cash
|
$
|
679
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
679
|
|
Money-market funds classified as short-term investments
|
48,885
|
|
|
—
|
|
|
—
|
|
|
48,885
|
|
||||
Total
|
$
|
49,564
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
49,564
|
|
|
December 31, 2014
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money-market funds classified as non-current restricted cash
|
$
|
679
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
679
|
|
Money-market funds classified as short-term investments
|
6,532
|
|
|
—
|
|
|
—
|
|
|
6,532
|
|
||||
Total
|
$
|
7,211
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,211
|
|
|
June 30,
2015 |
|
December 31,
2014 |
||||
|
(In thousands)
|
||||||
Employee compensation
|
$
|
2,095
|
|
|
$
|
2,421
|
|
Contract research
|
1,636
|
|
|
1,280
|
|
||
Consulting and professional fees
|
1,600
|
|
|
1,952
|
|
||
Clinical trials
|
630
|
|
|
828
|
|
||
Other accruals
|
796
|
|
|
589
|
|
||
Total accrued liabilities
|
$
|
6,757
|
|
|
$
|
7,070
|
|
Outstanding At
June 30, 2015 |
|
Expiration Date
|
|
Exercise Price ($)
|
133,333
|
|
October 21, 2015
|
|
20.00
|
133,333
|
|
October 21, 2015
|
|
30.00
|
133,333
|
|
October 21, 2015
|
|
40.00
|
749,250
|
|
February 3, 2022
|
|
0.01
|
1,149,249
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Estimated weighted-average fair value
|
$
|
12.63
|
|
|
$
|
8.20
|
|
|
$
|
12.97
|
|
|
$
|
8.20
|
|
Weighted-average assumptions
|
|
|
|
|
|
|
|
||||||||
Expected volatility
|
69
|
%
|
|
80
|
%
|
|
70
|
%
|
|
80
|
%
|
||||
Expected term, in years
|
5.9
|
|
|
5.9
|
|
|
5.9
|
|
|
5.9
|
|
||||
Risk-free interest rate
|
1.71
|
%
|
|
1.88
|
%
|
|
1.61
|
%
|
|
1.88
|
%
|
||||
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(In thousands)
|
|
(In thousands)
|
||||||||||||
Research and development
|
$
|
1,229
|
|
|
$
|
901
|
|
|
$
|
2,554
|
|
|
$
|
1,911
|
|
Selling, general and administrative
|
1,151
|
|
|
729
|
|
|
2,344
|
|
|
1,506
|
|
||||
Total
|
$
|
2,380
|
|
|
$
|
1,630
|
|
|
$
|
4,898
|
|
|
$
|
3,417
|
|
|
Options
Outstanding
|
|
Weighted-
Average
Exercise
Price per
Share
|
|
Remaining
Contractual Life
(In years)
|
|
Aggregate
Intrinsic
Value
(In thousands)
|
|||||
Balance at December 31, 2014
|
8,364,469
|
|
|
$
|
7.52
|
|
|
|
|
|
||
Granted
|
218,325
|
|
|
20.74
|
|
|
|
|
|
|||
Exercised
|
(112,398
|
)
|
|
4.66
|
|
|
|
|
|
|||
Forfeited
|
(42,895
|
)
|
|
13.52
|
|
|
|
|
|
|||
Balance at June 30, 2015
|
8,427,501
|
|
|
$
|
7.87
|
|
|
6.60
|
|
$
|
85,881
|
|
Vested and expected to vest at June 30, 2015
|
8,161,248
|
|
|
$
|
7.74
|
|
|
6.53
|
|
$
|
84,159
|
|
Exercisable at June 30, 2015
|
5,774,601
|
|
|
$
|
6.16
|
|
|
5.59
|
|
$
|
68,300
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(In thousands)
|
|
(In thousands)
|
||||||||||||
Product sales, net
|
$
|
3,125
|
|
|
$
|
—
|
|
|
$
|
3,363
|
|
|
$
|
—
|
|
Small Business Innovative Research Grants (SBIR)
|
62
|
|
|
45
|
|
|
212
|
|
|
145
|
|
||||
Total revenue
|
$
|
3,187
|
|
|
$
|
45
|
|
|
$
|
3,575
|
|
|
$
|
145
|
|
|
Charge-backs and Rebates
|
|
Distribution Fees and Product Return Allowances
|
|
Total
|
||||||
|
(In thousands)
|
||||||||||
Balance as of December 31, 2014
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Provision related to current period sales
|
60
|
|
|
140
|
|
|
200
|
|
|||
Payments/credits for current period sales
|
—
|
|
|
(60
|
)
|
|
(60
|
)
|
|||
Balance as of June 30, 2015
|
$
|
60
|
|
|
$
|
80
|
|
|
$
|
140
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(In thousands)
|
|
(In thousands)
|
||||||||||||
Direct external expenses:
|
|
|
|
|
|
||||||||||
Clinical research and development:
|
|
|
|
|
|
|
|
||||||||
OMS721
|
$
|
3,152
|
|
|
$
|
2,582
|
|
|
$
|
4,394
|
|
|
$
|
4,615
|
|
Omidria
|
974
|
|
|
1,316
|
|
|
1,727
|
|
|
2,455
|
|
||||
OMS824
|
518
|
|
|
3,141
|
|
|
1,051
|
|
|
6,760
|
|
||||
Other clinical programs
|
10
|
|
|
19
|
|
|
18
|
|
|
42
|
|
||||
Total clinical research and development
|
4,654
|
|
|
7,058
|
|
|
7,190
|
|
|
13,872
|
|
||||
Preclinical research and development
|
327
|
|
|
677
|
|
|
829
|
|
|
991
|
|
||||
Total direct external expenses
|
4,981
|
|
|
7,735
|
|
|
8,019
|
|
|
14,863
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Internal, overhead and other expenses
|
4,690
|
|
|
3,771
|
|
|
9,645
|
|
|
7,650
|
|
||||
Stock-based compensation expense
|
1,229
|
|
|
901
|
|
|
2,554
|
|
|
1,911
|
|
||||
Total research and development expenses
|
$
|
10,900
|
|
|
$
|
12,407
|
|
|
$
|
20,218
|
|
|
$
|
24,424
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(In thousands)
|
|
(In thousands)
|
||||||||||||
Selling, general and administrative expenses, excluding stock-based compensation expense
|
$
|
6,738
|
|
|
$
|
4,126
|
|
|
$
|
14,534
|
|
|
$
|
7,116
|
|
Stock-based compensation expense
|
1,151
|
|
|
729
|
|
|
2,344
|
|
|
1,506
|
|
||||
Total selling, general and administrative expenses
|
$
|
7,889
|
|
|
$
|
4,855
|
|
|
$
|
16,878
|
|
|
$
|
8,622
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
|
(In thousands)
|
|
(In thousands)
|
||||||||||||
Investment income and other income (expense), net
|
$
|
224
|
|
|
$
|
165
|
|
|
$
|
442
|
|
|
$
|
(121
|
)
|
|
Six Months Ended
June 30, |
||||||
|
2015
|
|
2014
|
||||
|
(In thousands)
|
||||||
Selected cash flow data
|
|
|
|
||||
Cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
(34,021
|
)
|
|
$
|
(26,411
|
)
|
Investing activities
|
(42,467
|
)
|
|
(23,212
|
)
|
||
Financing activities
|
78,695
|
|
|
49,772
|
|
|
Payments Due Within
|
||||||||||||||||||
|
1 Year
|
|
2-3 Years
|
|
4-5 Years
|
|
More than
5 Years |
|
Total
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Operating leases
|
$
|
4,055
|
|
|
$
|
8,360
|
|
|
$
|
8,701
|
|
|
$
|
35,497
|
|
|
$
|
56,613
|
|
Capital leases (principal and interest)
|
54
|
|
|
104
|
|
|
25
|
|
|
—
|
|
|
183
|
|
|||||
Notes payable (principal and interest)
|
12,256
|
|
|
21,448
|
|
|
—
|
|
|
—
|
|
|
33,704
|
|
|||||
Goods & services
|
6,333
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,333
|
|
|||||
Total
|
$
|
22,698
|
|
|
$
|
29,912
|
|
|
$
|
8,726
|
|
|
$
|
35,497
|
|
|
$
|
96,833
|
|
•
|
a lack of acceptance by physicians, patients, third-party payers and other members of the medical community;
|
•
|
our limited experience in marketing, selling and distributing Omidria or any other product;
|
•
|
our limited experience managing third-party commercial manufacturing of Omidria or any other product;
|
•
|
our reliance on a limited number of manufacturers and our reliance on a limited number of suppliers of the product’s active pharmaceutical ingredients, excipients and packaging materials;
|
•
|
pricing, reimbursement and coverage policies of government and private payers such as Medicare, Medicaid, the Department of Veterans Affairs, or VA, group purchasing organizations, insurance companies, health maintenance organizations and other plan administrators;
|
•
|
the availability, relative price and efficacy of the product as compared to alternative treatment options or competing products;
|
•
|
an unknown safety risk of Omidria or any product candidate;
|
•
|
the failure to obtain regulatory approval;
|
•
|
the failure to enter into and maintain acceptable partnering arrangements for marketing and distribution of products, including for Omidria, outside of the U.S.;
|
•
|
changed or increased regulatory restrictions in the U.S., EU and other foreign territories; and
|
•
|
a lack of adequate financial or other resources to commercialize the product successfully.
|
•
|
the level of demand for Omidria;
|
•
|
the extent to which coverage and reimbursement for Omidria is available from government and private third-party payers such as Medicare, Medicaid, the VA, insurance companies, group purchasing organizations, health maintenance organizations and other plan administrators;
|
•
|
the continued availability of adequate reimbursement for Omidria once transitional pass-through reimbursement expires;
|
•
|
the timing, cost and level of investment in our sales and marketing efforts to support Omidria sales;
|
•
|
the ability of Fagron to manufacture and commercialize OMS103 successfully and the level of royalties, if any, paid to Omeros by Fagron;
|
•
|
the timing, cost and level of investment in our research and development activities involving Omidria and our product candidates; and
|
•
|
the timing and cost of conducting required post-approval studies for Omidria and expenditures we will or may incur to acquire or develop additional technologies, products and product candidates.
|
•
|
a covered benefit under its health plan;
|
•
|
safe, effective and medically necessary;
|
•
|
appropriate for the specific patient;
|
•
|
cost-effective; and
|
•
|
neither experimental nor investigational.
|
•
|
continue the commercialization of Omidria;
|
•
|
continue research and development in all of our programs;
|
•
|
make principal and interest payments under the Oxford/MidCap Loan Agreement;
|
•
|
initiate and conduct clinical trials for other programs and product candidates; and
|
•
|
commercialize and launch any product candidates for which we receive regulatory approval.
|
•
|
a lack of acceptance by physicians, patients, third-party payers and other members of the medical community, including based on any conclusion that may be reached regarding the efficacy or lack of efficacy of OMS103;
|
•
|
pricing, reimbursement and coverage policies of government and private payers such as Medicare, Medicaid, the VA, group purchasing organizations, insurance companies, health maintenance organizations and other plan administrators;
|
•
|
the availability, relative price and efficacy of OMS103 as compared to alternative treatment options or competing products;
|
•
|
an unknown safety risk of OMS103;
|
•
|
failure to comply with applicable regulatory requirements;
|
•
|
failure to comply with applicable cGMPs;
|
•
|
changed or increased regulatory restrictions in the U.S.; and
|
•
|
a lack of adequate financial or other resources by Fagron to commercialize the product successfully.
|
•
|
discussions with the FDA, the European Medicines Agency, or EMA, or other foreign authorities regarding the scope or design of our clinical trials;
|
•
|
delays or the inability to obtain required approvals from Institutional Review Boards, Ethics Committees or other responsible entities at clinical sites selected for participation in our clinical trials;
|
•
|
delays in enrolling patients into clinical trials;
|
•
|
lower than anticipated retention rates of patients in clinical trials;
|
•
|
the need to repeat or conduct additional clinical trials as a result of problems such as inconclusive or negative results, failure to replicate positive early clinical data in subsequent clinical trials, poorly executed testing, a failure of a clinical site to adhere to the clinical protocol or an unacceptable study design;
|
•
|
adverse findings in clinical or nonclinical studies related to the safety of our product candidates in humans;
|
•
|
an insufficient supply of product candidate materials or other materials necessary to conduct our clinical trials;
|
•
|
the need to qualify new suppliers of product candidate materials for FDA and foreign regulatory approval;
|
•
|
an unfavorable FDA inspection or review of a clinical trial site or records of any clinical investigation;
|
•
|
the occurrence of unacceptable drug-related side effects or adverse events experienced by participants in our clinical trials; or
|
•
|
the placement by a regulatory agency of a trial on a clinical hold.
|
•
|
failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols;
|
•
|
inspection of the clinical trial operations or trial sites by the FDA or other regulatory authorities resulting in the imposition of a clinical hold;
|
•
|
the failure to remove a clinical hold in a timely manner (which we cannot predict with certainty) or at all;
|
•
|
unforeseen safety issues or any determination that a trial presents unacceptable health risks; or
|
•
|
lack of adequate funding to continue the clinical trial or development program, including the incurrence of unforeseen costs due to enrollment delays, requirements to conduct additional trials and studies and increased expenses associated with the services of our CROs and other third parties.
|
•
|
the severity of the disease under investigation;
|
•
|
the design of the trial protocol;
|
•
|
the size of the patient population;
|
•
|
the availability of competing therapies and clinical trials;
|
•
|
the eligibility criteria of the study in question;
|
•
|
the perceived risks and benefits of the product or product candidate under study;
|
•
|
the efforts to facilitate timely enrollment in clinical trials;
|
•
|
the patient referral practices of physicians;
|
•
|
the ability to monitor patients adequately before and after treatment; and
|
•
|
the proximity and availability of clinical trial sites for prospective patients.
|
•
|
we might not have been the first to make the inventions covered by any of our pending U.S. patent applications filed or having priority dates prior to the U.S. having adopted a first-to-file standard on March 16, 2013, or any U.S. patents issued based on such patent applications;
|
•
|
we might not have been the first to file patent applications on inventions that are the subject of pending foreign patent applications or that are the subject of pending U.S. patent applications filed or having priority dates after March 16, 2013, or any patents issued based on such foreign or U.S. patent applications;
|
•
|
others may independently develop similar or alternative technologies or products or duplicate any of our technologies or products or product candidates;
|
•
|
we may not be able to generate sufficient data to support fully patent applications that protect the entire breadth of developments expected to result from our development programs, including the GPCR program;
|
•
|
it is possible that none of our pending patent applications will result in issued patents or, if issued, that these patents will be sufficient to protect our technology or provide us with a basis for commercially viable products or provide us with any competitive advantages;
|
•
|
if our pending applications issue as patents, they may be challenged by third parties as not infringed, invalid or unenforceable under U.S. or foreign laws;
|
•
|
if issued, the patents under which we hold rights may not be valid or enforceable; or
|
•
|
we may develop additional proprietary technologies or products or product candidates that are not patentable and which are unlikely to be adequately protected through trade secrets if, for example, a competitor were to develop independently duplicative, similar or alternative technologies or products.
|
•
|
operate larger research and development programs, possess commercial-scale manufacturing operations or have substantially greater financial resources than we do;
|
•
|
initiate or withstand substantial price competition more successfully than we can;
|
•
|
have greater success in recruiting skilled technical and scientific workers from the limited pool of available talent;
|
•
|
more effectively negotiate third-party licenses and strategic relationships; and
|
•
|
take advantage of acquisition or other opportunities more readily than we can.
|
•
|
restrictions on such products or manufacturing processes;
|
•
|
withdrawal of the products from the market;
|
•
|
voluntary or mandatory recalls;
|
•
|
fines;
|
•
|
suspension or withdrawal of regulatory approvals;
|
•
|
product seizures; or
|
•
|
injunctions or the imposition of civil or criminal penalties.
|
•
|
failure of Omidria, or any of our product candidates if approved, to achieve commercial success;
|
•
|
FDA or foreign regulatory actions related to Omidria or any of our product candidates, including our currently suspended programs evaluating OMS824 for the treatment of Huntington’s disease and for the treatment of schizophrenia;
|
•
|
our ability to partner in the EU with respect to Omidria;
|
•
|
results from our clinical development programs, including the data from our ongoing clinical development programs evaluating Omidria, OMS721, OMS824, and PPARγ;
|
•
|
failure of Fagron to manufacture and commercialize OMS103 successfully;
|
•
|
announcements regarding the progress of our preclinical programs, including without limitation our GPCR program;
|
•
|
quarterly variations in our results of operations or those of our competitors;
|
•
|
our ability to develop and market new and enhanced products on a timely basis;
|
•
|
announcements by us or our competitors of acquisitions, regulatory approvals, clinical milestones, new products, significant contracts, commercial relationships or capital commitments;
|
•
|
third-party coverage and reimbursement policies;
|
•
|
additions or departures of key personnel;
|
•
|
commencement of, our involvement in and resolution of litigation;
|
•
|
our ability to meet our repayment and other obligations under the Oxford/MidCap Loan Agreement;
|
•
|
the inability of our contract manufacturers to provide us with adequate commercial supplies of Omidria and our product candidates;
|
•
|
changes in governmental regulations or in the status of our regulatory approvals;
|
•
|
changes in earnings estimates or recommendations by securities analysts;
|
•
|
any major change in our board or management;
|
•
|
the extent to which we raise funds by issuing equity or debt securities;
|
•
|
general economic conditions and slow or negative growth of our markets; and
|
•
|
political instability, natural disasters, war and/or events of terrorism.
|
Exhibit
Number
|
Description
|
10.1††
|
License Agreement effective as of June 9, 2015 by and between Omeros Corporation, JCB Laboratories, LLC, and Fagron Compounding Services, LLC, d/b/a Fagron Sterile Services
|
12.1
|
Ratio of Earnings to Fixed Charges
|
31.1
|
Certification of Principal Executive Officer Pursuant to Rule 13-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2
|
Certification of Principal Financial Officer Pursuant to Rule 13-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32.1
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
††
|
Portions of this exhibit are redacted in accordance with a request for confidential treatment.
|
|
OMEROS CORPORATION
|
|
|
Dated: August 10, 2015
|
/s/ Gregory A. Demopulos
|
|
Gregory A. Demopulos, M.D.
|
|
President, Chief Executive Officer and Chairman of the Board of Directors
|
|
|
Dated: August 10, 2015
|
/s/ Michael A. Jacobsen
|
|
Michael A. Jacobsen
|
|
Vice President, Finance, Chief Accounting Officer and Treasurer
|
OMEROS CORPORATION
|
JCB LABORATORIES, LLC
|
By:
/s/ Gregory A. Demopulos, MD
Name: Gregory A. Demopulos, MD
Title: Chief Executive Officer
|
By:
/s/ Brian Williamson
Name: Brian Williamson
Title: President
|
|
FAGRON COMPOUNDING SERVICES, LLC
|
|
By:
/s/ Brian Williamson
Name: Brian Williamson
Title: President
|
A.
|
For OMS103 Product: the trademark ARTHROSOL as well as US Trademark Application 86/259,542 therefor and any US Trademark Registration issued thereon, and any additional trademark applications or registrations that Omeros may file or obtain for such trademark or for stylized designs of such trademark or logos approved by Omeros for use with OMS103.
|
A.
|
For OMS103 Product: the United States
|
|
|
|
|
|
EXHIBIT 12.1
|
|
|||||||||||||||||
|
|
|
|
||||||||||||||||||||
Omeros Corporation
|
|||||||||||||||||||||||
Computation of Deficiency in the Coverage of Fixed Charges by Earnings Before Fixed Charges
|
|||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||
|
|
|
|
||||||||||||||||||||
|
For the
|
|
|
||||||||||||||||||||
|
six
|
|
|
||||||||||||||||||||
|
ended
|
|
|
||||||||||||||||||||
|
June 30,
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
||||||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||||||||||
Earnings before fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss from continuing operations before income taxes
|
$
|
(35,349
|
)
|
|
$
|
(73,673
|
)
|
|
$
|
(39,796
|
)
|
|
$
|
(38,444
|
)
|
|
$
|
(28,546
|
)
|
|
$
|
(29,251
|
)
|
Add fixed charges
|
3,554
|
|
|
6,824
|
|
|
5,621
|
|
|
2,305
|
|
|
2,144
|
|
|
2,104
|
|
||||||
Add amortization of capitalized interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Add distributed income of equity investees
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Subtract capitalized interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Loss before fixed charges
|
$
|
(31,795
|
)
|
|
$
|
(66,849
|
)
|
|
$
|
(34,175
|
)
|
|
$
|
(36,139
|
)
|
|
$
|
(26,402
|
)
|
|
$
|
(27,147
|
)
|
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
$
|
1,452
|
|
|
$
|
2,710
|
|
|
$
|
1,865
|
|
|
$
|
1,355
|
|
|
$
|
1,532
|
|
|
$
|
1,328
|
|
Amortization of debt expense and loss from extinguishment of debt
|
441
|
|
|
759
|
|
|
502
|
|
|
374
|
|
|
352
|
|
|
503
|
|
||||||
Estimate of interest expense within rental expense
|
1,661
|
|
|
3,355
|
|
|
3,254
|
|
|
576
|
|
|
260
|
|
|
273
|
|
||||||
Preference security dividend requirements of consolidated subsidiaries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total fixed charges
|
$
|
3,554
|
|
|
$
|
6,824
|
|
|
$
|
5,621
|
|
|
$
|
2,305
|
|
|
$
|
2,144
|
|
|
$
|
2,104
|
|
Deficiency of earnings available to cover fixed charges
|
$
|
(35,349
|
)
|
|
$
|
(73,673
|
)
|
|
$
|
(39,796
|
)
|
|
$
|
(38,444
|
)
|
|
$
|
(28,546
|
)
|
|
$
|
(29,251
|
)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Omeros Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
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Dated: August 10, 2015
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|
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/s/ Gregory A. Demopulos
|
|
Gregory A. Demopulos, M.D.
Principal Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Omeros Corporation;
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2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
Dated: August 10, 2015
|
|
|
|
/s/ Michael A. Jacobsen
|
|
Michael A. Jacobsen
|
|
Principal Financial and Accounting Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
Dated: August 10, 2015
|
|
|
|
/s/ Gregory A. Demopulos
|
|
Gregory A. Demopulos, M.D.
|
|
Principal Executive Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
Dated: August 10, 2015
|
|
|
|
/s/ Michael A. Jacobsen
|
|
Michael A. Jacobsen
|
|
Principal Financial and Accounting Officer
|