x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Washington
|
|
91-1663741
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification Number)
|
|
|
|
201 Elliott Avenue West
Seattle, Washington
|
|
98119
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer
|
|
o
|
|
Accelerated filer
|
|
x
|
Non-accelerated filer
|
|
o
(Do not check if a smaller reporting company)
|
|
Smaller reporting company
|
|
o
|
Emerging growth company
|
|
o
|
|
|
|
|
•
|
our plans for sales, marketing and distribution of OMIDRIA
®
(phenylephrine and ketorolac injection) 1%/0.3%;
|
•
|
our expectations regarding our product sales and our estimate regarding how long our existing cash, cash equivalents, short-term investments and revenues will be sufficient to fund our anticipated operating expenses, capital expenditures and interest and principal payments on our outstanding notes under our Term Loan Agreement, or the CRG Loan Agreement, with CRG Servicing LLC, or CRG, and the lenders identified therein;
|
•
|
our ability to raise additional capital through the capital markets, including under our at-the-market equity facility with JonesTrading Institutional Services LLC, or JonesTrading, or through one or more corporate partnerships, equity offerings, debt financings, collaborations, licensing arrangements or asset sales;
|
•
|
our ability to obtain separate or similar reimbursement for OMIDRIA beyond January 1, 2018, our expectations that OMIDRIA would be part of the packaged payment in the event that we do not obtain separate or similar reimbursement for OMIDRIA, and our expectations regarding the per unit price we will receive for OMIDRIA in the future;
|
•
|
our ability to forecast accurately wholesaler demand as well as our estimates of chargebacks and rebates, distribution fees and estimated product returns;
|
•
|
our expectations regarding the clinical, therapeutic and competitive benefits of OMIDRIA and our product candidates;
|
•
|
our ability to design and successfully complete clinical trials and other studies for our products and product candidates and our plans and expectations regarding our clinical trials, including our clinical trials for OMS721 and for OMS824;
|
•
|
our anticipation that we will rely on contract manufacturers to manufacture OMIDRIA for commercial sale and to manufacture our product candidates and our expectations regarding product supply and manufacturing of OMIDRIA;
|
•
|
our ability to enter into acceptable arrangements with potential corporate partners, including with respect to OMIDRIA, and our ability to effect any such arrangement with respect to OMIDRIA in the European Union, or EU, and place OMIDRIA on the market in at least one European Economic Area, or EEA, country prior to July 28, 2018;
|
•
|
our expectations about the commercial competition that OMIDRIA and our product candidates, if commercialized, face or may face;
|
•
|
our expectation that the OMIDRIAssure® Reimbursement Services Program will increase patient access to OMIDRIA;
|
•
|
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;
|
•
|
when or to what extent the dosing limitations in our OMS824 program may be removed, if at all;
|
•
|
in our OMS721 program, whether enrollment in a Phase 3 clinical trial in patients with atypical hemolytic uremic syndrome, or aHUS, will proceed as expected or whether accelerated approval, fast track designation, breakthrough therapy designation and/or orphan drug designation may be granted by the U.S. Food and Drug Administration, or FDA, for indications for which we are pursuing such approval or designation;
|
•
|
the expected course and costs of existing claims, legal proceedings and administrative actions, our involvement in potential claims, legal proceedings and administrative actions, and the merits, potential outcomes and effects of both existing and potential claims, legal proceedings and administrative actions, as well as regulatory determinations, on our business, prospects, financial condition and results of operations, including but not limited to our patent infringement lawsuit against Par Pharmaceutical, Inc. and its subsidiary, Par Sterile Products, LLC, which we refer to collectively as Par;
|
•
|
our expectations regarding our OMS103 exclusive license agreement including, without limitation, manufacturing and commercialization of OMS103 and the commencement and subsequent continuation of product sales on which we could receive royalty revenue;
|
•
|
the factors on which we base our estimates for accounting purposes and our expectations regarding the effect of changes in accounting guidance or standards on our operating results; and
|
•
|
our expected financial position, performance, revenues, growth, costs and expenses, magnitude of net losses and the availability of resources.
|
|
Page
|
Item 1. Financial Statements
(unaudited)
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
1,282
|
|
|
$
|
2,224
|
|
Short-term investments
|
32,371
|
|
|
43,107
|
|
||
Receivables
|
13,481
|
|
|
12,037
|
|
||
Inventory
|
960
|
|
|
1,128
|
|
||
Prepaid expense
|
3,260
|
|
|
1,766
|
|
||
Total current assets
|
51,354
|
|
|
60,262
|
|
||
Property and equipment, net
|
1,215
|
|
|
1,181
|
|
||
Restricted cash and investments
|
5,835
|
|
|
5,835
|
|
||
Total assets
|
$
|
58,404
|
|
|
$
|
67,278
|
|
|
|
|
|
||||
Liabilities and shareholders’ deficit
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
2,409
|
|
|
$
|
2,519
|
|
Accrued expenses
|
14,336
|
|
|
13,354
|
|
||
Current portion of lease financing obligations
|
228
|
|
|
198
|
|
||
Total current liabilities
|
16,973
|
|
|
16,071
|
|
||
Notes payable and lease financing obligations, net
|
80,503
|
|
|
79,512
|
|
||
Deferred rent
|
9,041
|
|
|
9,142
|
|
||
Commitments and contingencies (Note 8)
|
|
|
|
||||
Shareholders’ deficit:
|
|
|
|
||||
Preferred stock, par value $0.01 per share, 20,000,000 shares authorized and none issued and outstanding at March 31, 2017 and December 31, 2016
|
—
|
|
|
—
|
|
||
Common stock, par value $0.01 per share, 150,000,000 shares authorized at March 31, 2017 and December 31, 2016; 43,937,031 and 43,819,133 issued and outstanding at March 31, 2017 and December 31, 2016, respectively
|
439
|
|
|
438
|
|
||
Additional paid-in capital
|
436,424
|
|
|
432,002
|
|
||
Accumulated deficit
|
(484,976
|
)
|
|
(469,887
|
)
|
||
Total shareholders’ deficit
|
(48,113
|
)
|
|
(37,447
|
)
|
||
Total liabilities and shareholders’ deficit
|
$
|
58,404
|
|
|
$
|
67,278
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
Revenues
|
|
|
|
||||
Product sales, net
|
$
|
12,257
|
|
|
$
|
7,246
|
|
Grant revenue
|
—
|
|
|
173
|
|
||
Total revenue
|
12,257
|
|
|
7,419
|
|
||
|
|
|
|
||||
Costs and expenses
|
|
|
|
||||
Cost of product sales
|
271
|
|
|
327
|
|
||
Research and development
|
12,240
|
|
|
15,434
|
|
||
Selling, general and administrative
|
12,471
|
|
|
11,110
|
|
||
Total costs and expenses
|
24,982
|
|
|
26,871
|
|
||
Loss from operations
|
(12,725
|
)
|
|
(19,452
|
)
|
||
Interest expense
|
(2,663
|
)
|
|
(1,375
|
)
|
||
Other income (expense), net
|
299
|
|
|
288
|
|
||
Net loss
|
$
|
(15,089
|
)
|
|
$
|
(20,539
|
)
|
Comprehensive loss
|
$
|
(15,089
|
)
|
|
$
|
(20,539
|
)
|
Basic and diluted net loss per share
|
$
|
(0.34
|
)
|
|
$
|
(0.54
|
)
|
Weighted-average shares used to compute basic and diluted net loss per share
|
43,828,572
|
|
|
38,317,084
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
Operating activities:
|
|
|
|
||||
Net loss
|
$
|
(15,089
|
)
|
|
$
|
(20,539
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
115
|
|
|
53
|
|
||
Stock-based compensation expense
|
3,276
|
|
|
4,422
|
|
||
Non-cash interest expense
|
995
|
|
|
213
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Receivables
|
(1,444
|
)
|
|
(129
|
)
|
||
Inventory
|
168
|
|
|
(1,500
|
)
|
||
Prepaid expenses and other assets
|
(1,494
|
)
|
|
(420
|
)
|
||
Accounts payable, accrued expenses, and deferred rent
|
771
|
|
|
1,272
|
|
||
Net cash used in operating activities
|
(12,702
|
)
|
|
(16,628
|
)
|
||
Investing activities:
|
|
|
|
||||
Purchases of property and equipment
|
(72
|
)
|
|
—
|
|
||
Purchases of investments
|
(1,042
|
)
|
|
(18
|
)
|
||
Proceeds from the sale and maturities of investments
|
11,778
|
|
|
14,650
|
|
||
Net cash provided by investing activities
|
10,664
|
|
|
14,632
|
|
||
Financing activities:
|
|
|
|
||||
Payments on lease financing obligations
|
(51
|
)
|
|
—
|
|
||
Proceeds upon exercise of stock options and warrants
|
1,147
|
|
|
1,609
|
|
||
Net cash provided by financing activities
|
1,096
|
|
|
1,609
|
|
||
Net decrease in cash and cash equivalents
|
(942
|
)
|
|
(387
|
)
|
||
Cash and cash equivalents at beginning of period
|
2,224
|
|
|
1,365
|
|
||
Cash and cash equivalents at end of period
|
$
|
1,282
|
|
|
$
|
978
|
|
Supplemental cash flow information
|
|
|
|
||||
Cash paid for interest
|
$
|
1,667
|
|
|
$
|
776
|
|
Conversion of accrued interest to notes payable
|
$
|
805
|
|
|
$
|
—
|
|
Property acquired under capital lease
|
$
|
70
|
|
|
$
|
—
|
|
|
March 31,
|
||||
|
2017
|
|
2016
|
||
Outstanding options to purchase common stock
|
10,924,062
|
|
|
9,302,348
|
|
Outstanding warrants to purchase common stock
|
100,602
|
|
|
—
|
|
Total
|
11,024,664
|
|
|
9,302,348
|
|
|
March 31, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money-market funds classified as non-current restricted cash and investments
|
$
|
5,835
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,835
|
|
Money-market funds classified as short-term investments
|
32,371
|
|
|
—
|
|
|
—
|
|
|
32,371
|
|
||||
Total
|
$
|
38,206
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
38,206
|
|
|
December 31, 2016
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Money-market funds classified as non-current restricted cash and investments
|
$
|
5,835
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,835
|
|
Money-market funds classified as short-term investments
|
43,107
|
|
|
—
|
|
|
—
|
|
|
43,107
|
|
||||
Total
|
$
|
48,942
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
48,942
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
(In thousands)
|
||||||
Raw materials
|
$
|
101
|
|
|
$
|
101
|
|
Work-in-process
|
696
|
|
|
854
|
|
||
Finished goods
|
163
|
|
|
173
|
|
||
Total inventory
|
$
|
960
|
|
|
$
|
1,128
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
|
(In thousands)
|
||||||
Contract research and development
|
$
|
3,751
|
|
|
$
|
3,030
|
|
Consulting and professional fees
|
3,726
|
|
|
2,223
|
|
||
Employee compensation
|
2,704
|
|
|
4,551
|
|
||
Sales rebates and discounts
|
2,098
|
|
|
1,335
|
|
||
Clinical trials
|
999
|
|
|
1,167
|
|
||
Other accruals
|
1,058
|
|
|
1,048
|
|
||
Total accrued liabilities
|
$
|
14,336
|
|
|
$
|
13,354
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||
|
(in thousands)
|
||||||
Notes payable
|
$
|
81,321
|
|
|
$
|
80,516
|
|
Lender facility fee payable upon maturity
|
4,066
|
|
|
4,025
|
|
||
Lease financing obligations
|
549
|
|
|
522
|
|
||
Notes payable, facility fee and lease financing obligations
|
85,936
|
|
|
85,063
|
|
||
Unamortized debt discount
|
(3,859
|
)
|
|
(3,958
|
)
|
||
Unamortized debt issuance costs
|
(1,346
|
)
|
|
(1,395
|
)
|
||
Current portion of lease financing obligations
|
(228
|
)
|
|
(198
|
)
|
||
Non-current portion of notes payable and lease financing obligations, net
|
$
|
80,503
|
|
|
$
|
79,512
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Research and development
|
$
|
1,474
|
|
|
$
|
2,155
|
|
Selling, general and administrative
|
1,802
|
|
|
2,267
|
|
||
Total
|
$
|
3,276
|
|
|
$
|
4,422
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
Estimated weighted-average fair value
|
$
|
7.64
|
|
|
$
|
6.62
|
|
Weighted-average assumptions
|
|
|
|
||||
Expected volatility
|
75
|
%
|
|
74
|
%
|
||
Expected term, in years
|
6.0
|
|
|
5.7
|
|
||
Risk-free interest rate
|
2.06
|
%
|
|
1.44
|
%
|
||
Expected dividend yield
|
—
|
%
|
|
—
|
%
|
|
Options
Outstanding
|
|
Weighted-
Average
Exercise
Price per
Share
|
|
Remaining
Contractual Life
(In years)
|
|
Aggregate
Intrinsic
Value
(In thousands)
|
|||||
Balance at December 31, 2016
|
9,809,374
|
|
|
$
|
9.66
|
|
|
|
|
|
||
Granted
|
1,475,300
|
|
|
11.55
|
|
|
|
|
|
|||
Exercised
|
(117,898
|
)
|
|
9.74
|
|
|
|
|
|
|||
Forfeited
|
(242,714
|
)
|
|
10.44
|
|
|
|
|
|
|||
Balance at March 31, 2017
|
10,924,062
|
|
|
$
|
9.88
|
|
|
7.28
|
|
$
|
58,215
|
|
Vested and expected to vest at March 31, 2017
|
10,510,973
|
|
|
$
|
9.82
|
|
|
7.21
|
|
$
|
56,632
|
|
Exercisable at March 31, 2017
|
6,817,595
|
|
|
$
|
8.97
|
|
|
6.10
|
|
$
|
42,519
|
|
•
|
MASP-2 - OMS721
. OMS721 is our lead human monoclonal antibody targeting mannan-binding lectin-associated serine protease-2, or MASP-2, the effector enzyme of the lectin pathway of the complement system. OMS721 is being developed for diseases in which the lectin pathway is believed to contribute to significant tissue injury and pathology. One group of such diseases is thrombotic microangiopathies, or TMAs, including atypical hemolytic uremic syndrome, or aHUS, and hematopoietic stem-cell transplant, or HSCT, -related TMA. We have a Phase 3 clinical program in patients with aHUS and enrollment has opened in the Phase 3 clinical trial. The Phase 3 clinical program in patients with aHUS consists of one clinical trial - a single-arm (
i.e.
, no control arm), open-label trial in patients with newly diagnosed or ongoing aHUS. We are also currently conducting two OMS721 Phase 2 clinical programs: one in patients with HSCT-TMA; and a second Phase 2 clinical program in patients with kidney disorders, including immunoglobulin A, or IgA, nephropathy, membranous nephropathy, lupus nephritis and C3 glomerulopathy. In March 2017, we announced additional positive results in our Phase 2 trials of OMS721 in patients with HSCT-TMA and in patients with IgA nephropathy. We expect to initiate Phase 3 clinical programs in both IgA nephropathy and HSCT-TMA in 2017.
|
•
|
PDE10 - OMS824 for Huntington’s disease and Schizophrenia.
OMS824, our lead phosphodiesterase 10, or PDE10, inhibitor, is in a Phase 2 clinical program for the treatment of Huntington’s disease and a Phase 2 clinical program evaluating OMS824 for the treatment of schizophrenia. We are also evaluating other neurological indications for OMS824. Clinical trials in our Huntington’s program are currently subject to dosing limitations. Plans for continuation of the OMS824 program will be based on internal ongoing work and on discussions with FDA. Clinical trials evaluating OMS824 in schizophrenia are suspended currently at the request of the FDA. Given that there was no active schizophrenia trial at the time of program suspension, the FDA will address the OMS824 schizophrenia program when we have a related trial protocol ready for initiation.
|
•
|
PPARγ - OMS405
. In our peroxisome proliferator-activated receptor gamma, or PPARγ, program, Phase 2 clinical trials have been conducted by our collaborators to evaluate a PPARγ agonist, alone or in combination with other agents, for treatment of addiction to opioids and to nicotine. All of these Phase 2 clinical trials yielded positive results.
|
•
|
PDE7 - OMS527.
In our phosphodiesterase 7, or PDE7, program, we are developing proprietary compounds to treat addiction and compulsive disorders as well as movement disorders. We have selected a clinical candidate and have initiated toxicology studies intended to support the submission of an Investigational New Drug application, or IND, or Clinical Trial Application, or CTA, and subsequent clinical trials.
|
•
|
MASP-3 - OMS906
. In our mannan-binding lectin-associated serine protease-3, or MASP-3 program, we are developing MASP-3 inhibitors for the treatment of disorders related to the alternative pathway of the complement
|
•
|
GPCR Platform and Programs
. We have developed a proprietary cellular redistribution assay, or CRA, which we use in a high-throughput manner to identify synthetic ligands, including antagonists, agonists and inverse agonists, that bind to and affect the function of orphan GPCRs. We are conducting
in vivo
preclinical efficacy studies and optimizing compounds for a number of targets including: GPR17, linked to myelin formation; GPR101, linked to appetite and eating disorders; GPR151, linked to schizophrenia and cognition; GPR161, which is associated with triple negative breast cancer; GPR183, linked to osteoporosis and to Epstein-Barr virus infections and related diseases; GPR174, which appears to be involved in the modulation of the immune system and, in particular, of cytokine production and regulatory T cells, or “T-regs,” which are known to be important in autoimmune disease, such as multiple sclerosis, in cancer and in organ transplantation; and OPN4, linked to seasonal affective disorder.
|
•
|
Antibody Platform.
Our proprietary
ex vivo
platform for the discovery of novel, high-affinity monoclonal antibodies, which was in-licensed from the University of Washington and then further developed by our scientists, utilizes a chicken B-cell lymphoma cell line. Using our platform and other know-how and techniques, we have generated antibodies to several clinically significant targets, including highly potent antibodies against MASP-3 and MASP-1, and our platform continues to add to our pipeline antibodies against additional important targets.
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Product sales, net
|
$
|
12,257
|
|
|
$
|
7,246
|
|
Small Business Innovative Research Grants (SBIR)
|
—
|
|
|
173
|
|
||
Total revenue
|
$
|
12,257
|
|
|
$
|
7,419
|
|
|
Chargebacks and Rebates
|
|
Distribution Fees and Product Return Allowances
|
|
Total
|
||||||
|
(In thousands)
|
||||||||||
Balance as of December 31, 2016
|
$
|
1,629
|
|
|
$
|
481
|
|
|
$
|
2,110
|
|
Provisions
|
2,810
|
|
|
545
|
|
|
3,355
|
|
|||
Payments
|
(1,958
|
)
|
|
(407
|
)
|
|
(2,365
|
)
|
|||
Balance as of March 31, 2017
|
$
|
2,481
|
|
|
$
|
619
|
|
|
$
|
3,100
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Direct external expenses:
|
|
||||||
Clinical research and development:
|
|
|
|
||||
MASP-2 Program
|
$
|
3,850
|
|
|
$
|
5,996
|
|
OMIDRIA - Ophthalmology
|
1,035
|
|
|
1,266
|
|
||
Other clinical programs
|
55
|
|
|
287
|
|
||
Total clinical research and development
|
4,940
|
|
|
7,549
|
|
||
Preclinical research and development
|
670
|
|
|
488
|
|
||
Total direct external expenses
|
5,610
|
|
|
8,037
|
|
||
|
|
|
|
||||
Internal, overhead and other expenses
|
5,156
|
|
|
5,242
|
|
||
Stock-based compensation expense
|
1,474
|
|
|
2,155
|
|
||
Total research and development expenses
|
$
|
12,240
|
|
|
$
|
15,434
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Selling, general and administrative expenses, excluding stock-based compensation expense
|
$
|
10,669
|
|
|
$
|
8,843
|
|
Stock-based compensation expense
|
1,802
|
|
|
2,267
|
|
||
Total selling, general and administrative expenses
|
$
|
12,471
|
|
|
$
|
11,110
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Interest expense
|
$
|
2,663
|
|
|
$
|
1,375
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Other income (expense), net
|
$
|
299
|
|
|
$
|
288
|
|
|
Three Months Ended
March 31, |
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Selected cash flow data
|
|
|
|
||||
Cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
(12,702
|
)
|
|
$
|
(16,628
|
)
|
Investing activities
|
10,664
|
|
|
14,632
|
|
||
Financing activities
|
1,096
|
|
|
1,609
|
|
•
|
Revenue recognition;
|
•
|
Research and development expenses, primarily clinical trial expenses and manufacturing of drug product and clinical drug supply; and
|
•
|
Stock-based compensation.
|
•
|
a lack of acceptance by physicians, patients, government and private payers and other members of the healthcare community;
|
•
|
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;
|
•
|
our limited experience in marketing, selling and distributing OMIDRIA or any other product;
|
•
|
our limited experience managing third-party commercial manufacturing and distribution of OMIDRIA or any other product as well as our limited experience managing and maintaining a commercial sales and marketing organization;
|
•
|
the availability, relative price and efficacy of the product as compared to alternative treatment options or branded, compounded or generic competing products;
|
•
|
an unknown safety risk;
|
•
|
the failure to enter into and maintain acceptable partnering arrangements for marketing and distribution of 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.
|
•
|
the level and timing of commercial sales of OMIDRIA as well as our product candidates, if and when approved or commercialized;
|
•
|
the extent of coverage and reimbursement for OMIDRIA, including following the expiration of pass-through reimbursement effective January 1, 2018, and the amount of OMIDRIA chargebacks, rebates and product returns;
|
•
|
the extent of any payments received from collaboration arrangements and development funding as well as the achievement of development and clinical milestones under collaboration and license agreements that we may enter into from time to time and that may vary significantly from quarter to quarter; and
|
•
|
the timing, cost and level of investment in our research and development activities as well as expenditures we will or may incur to acquire or develop additional technologies, products and product candidates.
|
•
|
continue OMIDRIA sales and marketing;
|
•
|
continue research and development in our programs;
|
•
|
make principal and interest payments under the CRG Loan Agreement;
|
•
|
initiate and conduct clinical trials for our programs and product candidates; and
|
•
|
commercialize and launch product candidates for which we may receive regulatory approval.
|
•
|
reduced protection for intellectual property rights;
|
•
|
unexpected changes in tariffs, trade barriers and regulatory requirements;
|
•
|
economic weakness, including inflation, or political instability in particular foreign economies and markets;
|
•
|
foreign currency fluctuations, which could result in increased operating expenses and reduced revenues, and other obligations incident to doing business in another country; and
|
•
|
business interruptions resulting from geopolitical actions, including war and terrorism or natural disasters including earthquakes, typhoons, floods and fires.
|
•
|
discussions with the FDA, the 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 for any reason including disease severity, trial protocol design, study eligibility criteria, patient population size (
e.g.
, for orphan diseases or for some pediatric indications), proximity and/or availability of clinical trial sites for prospective patients, availability of competing therapies and clinical trials, regional differences in diagnosis and treatment, perceived risks and benefits of the product or product candidate, physician patient referral practices or the ability to monitor patients adequately before and after treatment;
|
•
|
lower than anticipated retention rates of patients in clinical trials;
|
•
|
the need to repeat or conduct additional clinical trials as a result of inconclusive or negative results, failure to replicate positive early clinical data in subsequent clinical trials, failure to deliver an efficacious dose of a product candidate, poorly executed testing, a failure of a clinical site to adhere to the clinical protocol, an unacceptable study design or other problems;
|
•
|
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 inspection or review by the FDA or other regulatory authority 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;
|
•
|
the suspension by a regulatory agency of a trial put on a clinical hold; and
|
•
|
the amendment of clinical trial protocols to reflect changes in regulatory requirements and guidance or other reasons as well as subsequent re-examination of amendments of clinical trial protocols by institutional review boards or ethics committees.
|
•
|
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), if at all;
|
•
|
unforeseen safety issues or any determination that a trial presents unacceptable health risks;
|
•
|
inability to deliver an efficacious dose of a product candidate; 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 contract research organizations, or CROs, and other third parties.
|
•
|
we may not be able to generate sufficient data to support full patent applications that protect the entire breadth of developments in one or more of our programs, including our GPCR program;
|
•
|
it is possible that one or more of our pending patent applications will not become an issued patent or, if issued, that the patent(s) will be sufficient to protect our technology, 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; or
|
•
|
if issued, the patents under which we hold rights may not be valid or enforceable.
|
|
OMEROS CORPORATION
|
|
|
Dated: May 10, 2017
|
/s/ Gregory A. Demopulos
|
|
Gregory A. Demopulos, M.D.
|
|
President, Chief Executive Officer and Chairman of the Board of Directors
|
|
|
Dated: May 10, 2017
|
/s/ Michael A. Jacobsen
|
|
Michael A. Jacobsen
|
|
Vice President, Finance, Chief Accounting Officer and Treasurer
|
Dates
|
Square Feet of Rentable Area
|
Annual Base Rent per Square Foot of Rentable Area
|
Monthly Base Rent
|
Annual Base Rent
|
Fifth Amendment Execution Date - November 15, 2016
|
924
|
$65.56
|
$5,048.12
|
$60,577.44
|
November 16, 2016 - November 15, 2017
|
924
|
$67.53
|
$5,199.81
|
$62,397.72
|
November 16, 2017 - November 15, 2018
|
924
|
$69.56
|
$5,356.12
|
$64,273.44
|
November 16, 2018 - November 15, 2019
|
924
|
$71.64
|
$5,516.28
|
$66,195.36
|
November 16, 2019 - November 15, 2020
|
924
|
$73.79
|
$5,681.83
|
$68,181.96
|
November 16, 2020 - November 15, 2021
|
924
|
$76.01
|
$5,852.77
|
$70,233.24
|
November 16, 2021 - November 15, 2022
|
924
|
$78.29
|
$6,028.33
|
$72,339.96
|
November 16, 2022 - November 15, 2023
|
924
|
$80.63
|
$6,208.51
|
$74,502.12
|
November 16, 2023 - November 15, 2024
|
924
|
$83.05
|
$6,394.85
|
$76,738.20
|
November 16, 2024 - November 15, 2025
|
924
|
$85.55
|
$6,587.35
|
$79,048.20
|
November 16, 2025 - November 15, 2026
|
924
|
$88.11
|
$6,784.47
|
$81,413.64
|
November 16, 2026 - November 15, 2027
|
924
|
$90.76
|
$6,988.52
|
$83,862.24
|
Dates
|
Square Feet of Rentable Area
|
Annual Base Rent per Square Foot of Rentable Area
|
Monthly Base Rent
|
Annual Base Rent
|
Fifth Amendment Execution Date - November 15, 2016
|
1,134
|
$65.56
|
$6,195.42
|
$74,345.04
|
November 16, 2016 - November 15, 2017
|
1,134
|
$67.53
|
$6,381.59
|
$76,579.02
|
November 16, 2017 - November 15, 2018
|
1,134
|
$69.56
|
$6,573.42
|
$78,881.04
|
November 16, 2018 - November 15, 2019
|
1,134
|
$71.64
|
$6,769.98
|
$81,239.76
|
November 16, 2019 - November 15, 2020
|
1,134
|
$73.79
|
$6,973.16
|
$83,677.86
|
November 16, 2020 - November 15, 2021
|
1,134
|
$76.01
|
$7,182.95
|
$86,195.34
|
November 16, 2021 - November 15, 2022
|
1,134
|
$78.29
|
$7,398.41
|
$88,780.86
|
November 16, 2022 - November 15, 2023
|
1,134
|
$80.63
|
$7,619.54
|
$91,434.42
|
November 16, 2023 - November 15, 2024
|
1,134
|
$83.05
|
$7,848.23
|
$94,178.70
|
November 16, 2024 - November 15, 2025
|
1,134
|
$85.55
|
$8,084.48
|
$97,013.70
|
November 16, 2025 - November 15, 2026
|
1,134
|
$88.11
|
$8,326.40
|
$99,916.74
|
November 16, 2026 - November 15, 2027
|
1,134
|
$90.76
|
$8,576.82
|
$102,921.84
|
|
|
|
|
|
EXHIBIT 12.1
|
|
|||||||||||||||||
|
|
|
|
||||||||||||||||||||
Omeros Corporation
|
|||||||||||||||||||||||
Computation of Deficiency in the Coverage of Fixed Charges by Earnings Before Fixed Charges
|
|||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||
|
For the three months ended
|
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
||||||||||||
|
(in thousands)
|
|
(in thousands)
|
||||||||||||||||||||
Earnings before fixed charges:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loss from continuing operations before income taxes
|
$
|
(15,089
|
)
|
|
$
|
(66,745
|
)
|
|
$
|
(75,096
|
)
|
|
$
|
(73,673
|
)
|
|
$
|
(39,796
|
)
|
|
$
|
(38,444
|
)
|
Add fixed charges
|
3,552
|
|
|
16,697
|
|
|
8,295
|
|
|
6,824
|
|
|
5,621
|
|
|
2,305
|
|
||||||
Add amortization of capitalized interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Add distributed income of equity investees
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Subtract capitalized interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Loss before fixed charges
|
$
|
(11,537
|
)
|
|
$
|
(50,048
|
)
|
|
$
|
(66,801
|
)
|
|
$
|
(66,849
|
)
|
|
$
|
(34,175
|
)
|
|
$
|
(36,139
|
)
|
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
$
|
2,473
|
|
|
$
|
6,359
|
|
|
$
|
2,709
|
|
|
$
|
2,710
|
|
|
$
|
1,865
|
|
|
$
|
1,355
|
|
Amortization of debt expense and loss from extinguishment of debt
|
190
|
|
|
7,055
|
|
|
2,177
|
|
|
759
|
|
|
502
|
|
|
374
|
|
||||||
Estimate of interest expense within rental expense
|
889
|
|
|
3,283
|
|
|
3,409
|
|
|
3,355
|
|
|
3,254
|
|
|
576
|
|
||||||
Preference security dividend requirements of consolidated subsidiaries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total fixed charges
|
$
|
3,552
|
|
|
$
|
16,697
|
|
|
$
|
8,295
|
|
|
$
|
6,824
|
|
|
$
|
5,621
|
|
|
$
|
2,305
|
|
Deficiency of earnings available to cover fixed charges
|
$
|
(15,089
|
)
|
|
$
|
(66,745
|
)
|
|
$
|
(75,096
|
)
|
|
$
|
(73,673
|
)
|
|
$
|
(39,796
|
)
|
|
$
|
(38,444
|
)
|
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;
|
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: May 10, 2017
|
|
|
|
/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;
|
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;
|
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: May 10, 2017
|
|
|
|
/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: May 10, 2017
|
|
|
|
/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: May 10, 2017
|
|
|
|
/s/ Michael A. Jacobsen
|
|
Michael A. Jacobsen
|
|
Principal Financial and Accounting Officer
|