x
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ANNUAL 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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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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Common Stock, $0.01 par value per share
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The Nasdaq Stock Market LLC
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(Title of each class)
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(Name of each exchange on which registered)
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Large accelerated filer
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x
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Accelerated filer
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¨
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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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Emerging growth company
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¨
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•
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our expectations regarding OMIDRIA
®
(phenylephrine and ketorolac intraocular solution) 1%/0.3% product sales;
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our estimates regarding how long our existing cash, cash equivalents, short-term investments and revenues will be sufficient to fund our anticipated operating expenses and capital expenditures, as well as our interest and principal payments on our outstanding notes under our Term Loan Agreement, or the CRG Loan Agreement, with CRG Servicing LLC and the lenders identified therein, and the satisfaction of covenants thereunder;
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our expectations related to obtaining a reinstatement or extension of the pass-through period, or separate or similar reimbursement, for OMIDRIA from the Centers for Medicare and Medicaid Services, or CMS, and/or from Congress for periods beyond January 1, 2018 and our expectations regarding the per unit price and net product revenues we may receive for OMIDRIA;
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our plans for marketing and distribution of OMIDRIA;
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our expectations relating to OMIDRIA demand from wholesalers, ambulatory surgery centers, or ASCs, and hospitals, our expectations regarding the collection of accounts receivable and our estimates of chargebacks and rebates, distribution fees and product returns;
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our expectations regarding the clinical, therapeutic and competitive benefits of OMIDRIA and our product candidates;
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our ability to design, initiate and/or 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, for OMS527 and for OMS824;
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in our OMS721 program, our expectations regarding: whether enrollment in any or all ongoing and planned Phase 3 clinical trials will proceed as expected; 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, or Priority Medicines status, conditional marketing authorization or orphan designation may be granted by the European Medicines Agency, or EMA, for indications for which we are pursuing such approval or designation; and potential label claims and assessments with respect to our Phase 3 clinical trial for patients with Immunoglobulin A nephropathy;
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our anticipation that we will rely on contract manufacturers to manufacture OMIDRIA for commercial sale and to manufacture our product candidates;
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our ability to enter into acceptable arrangements with potential corporate partners or contract service providers, including with respect to OMIDRIA, and our ability and plans to effect any such arrangement with respect to OMIDRIA in the European Union and place OMIDRIA on the market in at least one European Economic Area country prior to July 28, 2018 to preserve OMIDRIA marketing authorization in Europe;
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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, collaborations, licensing arrangements or asset sales;
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our expectations about the commercial competition that OMIDRIA and our product candidates, if commercialized, face or may face;
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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 lawsuits against Sandoz, Inc., or Sandoz, and against Lupin Ltd. and Lupin Pharmaceuticals, Inc., which we refer to collectively as Lupin;
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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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when or to what extent the dosing limitations in our OMS824 program may be removed, if at all;
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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
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our expected financial position, performance, revenues, growth, costs and expenses, magnitude of net losses and the availability of resources.
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Page
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ITEM 1.
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BUSINESS
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various purchase volume discount programs for OMIDRIA (for more information, see Part II, Item 7, “Management’s Discussion and Analysis--Results of Operations”);
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agreements to enable discounts on qualifying purchases of OMIDRIA by certain U.S. government purchasers and other eligible entities (
e.g.
, 340B-eligible hospitals and clinics); and
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the OMIDRIAssure
®
Reimbursement Services Program, or OMIDRIAssure.
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Product Candidate/Program
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Targeted Disease
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Development Status
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Next Expected
Milestone
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Worldwide
Rights
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Clinical
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MASP-2 (OMS721) - Lectin Pathway Disorders
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Immunoglobulin A (IgA) Nephropathy (IgAN)
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Phase 3
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Complete Phase 3 Patient Enrollment
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Omeros
(In-licensed)
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MASP-2 (OMS721) - Lectin Pathway Disorders
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Hematopoietic Stem-Cell Transplant-Associated Thrombotic Microangiopathy (HCT-TMA)
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Phase 3
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Discuss Approval Pathway(s), Including Accelerated and Conditional Approvals, with FDA and EMA
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Omeros
(In-licensed)
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MASP-2 (OMS721) - Lectin Pathway Disorders
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Atypical Hemolytic Uremic Syndrome (aHUS)
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Phase 3
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Complete Phase 3 Patient Enrollment
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Omeros
(In-licensed)
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MASP-2 (OMS721) - Lectin Pathway Disorders
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Lupus Nephritis and Other Renal Diseases
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Phase 2
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Review Data; Determine Whether to Initiate Phase 3 Program
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Omeros
(In-licensed)
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PDE10 (OMS824) - CNS Disorders
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Huntington’s Disease; Schizophrenia
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Phase 2
(1)
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Internal Review and Discussions with FDA
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Omeros
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PPARγ (OMS405) - Addiction
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Opioid and Nicotine Addiction
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Phase 2
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Further Refine Development Path
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Omeros
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(1)
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Plans for continuation of the OMS824 program will be based on internal ongoing work and discussions with the FDA. Clinical trials in our Huntington’s program are approved by the FDA to progress subject to dosing limitations. Clinical trials evaluating OMS824 in schizophrenia remain suspended at the request of the FDA until we submit to the FDA a protocol for a schizophrenia trial and receive the Agency’s clearance to proceed. For additional information, see “Other Clinical Programs-PDE10 Programs-OMS824 for Huntington’s Disease and Schizophrenia.”
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develop and market products that are less expensive, more effective or safer than our future products;
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commercialize competing products before we can launch our products;
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operate larger research and development programs, possess greater manufacturing capabilities or have substantially greater financial resources than we do;
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initiate or withstand substantial price competition more successfully than we can;
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have greater success in recruiting skilled technical and scientific workers from the limited pool of available talent;
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more effectively negotiate third-party licenses and strategic relationships; and
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take advantage of acquisition or other opportunities more readily than we can.
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OMIDRIA-Ophthalmology.
OMIDRIA is encompassed by our PharmacoSurgery patent portfolio. The relevant patents and patent applications in this portfolio are directed to combinations of agents, generic and/or proprietary to us or to others, drawn from therapeutic classes such as pain and inflammation inhibitory agents, mydriatic agents and agents that reduce intraocular pressure, delivered locally and intraoperatively to the site of ophthalmological procedures, including cataract and lens replacement surgery. As of February 16, 2018, we owned seven issued U.S. patents and three pending U.S. patent applications and 57 issued patents and 60 pending patent applications in foreign markets that are directed to OMIDRIA. Our OMIDRIA patents have terms that will expire as late as October 23, 2033 and, if currently pending patent applications are issued, as late as November 30, 2035.
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MASP-2 Program - OMS721.
We hold worldwide exclusive licenses to rights in connection with MASP-2, the antibodies targeting MASP-2 and the therapeutic applications for those antibodies from the University of Leicester, MRC and Helion. As of February 16, 2018, we exclusively controlled 19 issued patents and 29 pending patent applications in the U.S., and 273 issued patents and 101 pending patent applications in foreign markets, related to our MASP-2 program.
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MASP-3 Program - OMS906
. We own and exclusively control under a license from the University of Leicester all rights to methods of treating various disorders and diseases by inhibiting MASP-3. As of February 16, 2018, we exclusively controlled four pending patent applications in the U.S. and three issued and 43 pending patent applications in foreign markets that are directed to these therapeutic methods.
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PDE10 Program - OMS824.
As of February 16, 2018, we owned 12 issued patents and six pending patent applications in the U.S., and 32 issued patents and 48 pending patent applications in foreign markets, that are directed to proprietary PDE10 inhibitors.
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PPARγ Program - OMS405
. As of February 16, 2018, we owned one issued patent and two pending patent applications in the U.S., and 27 issued patents and 18 pending patent applications in foreign markets, directed to our discoveries linking PPARγ and addictive disorders.
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PDE7 Program - OMS527
. As of February 16, 2018, we owned two issued patents and one pending patent application in the U.S., and 22 issued patents and 10 pending patent applications in foreign markets directed to our discoveries linking PDE7 to movement disorders, as well as one issued patent and two pending patent applications in the U.S., and eight issued patents and 23 pending patent applications in foreign markets directed to the link between PDE7 and addiction and compulsive disorders. Additionally, under a license from Daiichi Sankyo, we exclusively control rights to three issued U.S. patents and 58 issued and four pending patent applications in foreign markets that are directed to proprietary PDE7 inhibitors. For a more detailed description of our agreement with Daiichi Sankyo, see “License and Development Agreements.”
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GPCR Platform.
As of February 16, 2018, we owned six issued patents and 14 pending patent applications in the U.S., and 54 issued patents and two pending patent applications in foreign markets, which are directed to previously unknown links between specific molecular targets in the brain and a series of CNS disorders, to our cellular redistribution assay and to other research tools that are used in our GPCR program, and to orphan GPCRs and other GPCRs for which we have identified functionally interacting compounds using our cellular redistribution assay.
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Antibody Platform
. As of February 16, 2018, we owned and/or held worldwide exclusive license rights from the UW to eight issued patents and one pending patent application in the U.S., and 13 issued patents and nine pending patent applications in foreign markets, directed to our antibody platform and antibodies generated using our platform.
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OMS103-Arthroscopy.
OMS103 is encompassed by our PharmacoSurgery patent portfolio. The relevant patents and patent applications in this portfolio are directed to combinations of agents, generic and/or proprietary to us or to others, drawn from therapeutic classes such as pain and inflammation inhibitory agents and vasoconstrictive agents, delivered locally and intraoperatively to the site of medical or surgical procedures, including arthroscopy. As of February 16, 2018, we owned three issued U.S. patents and three pending U.S. patent applications, together with 36 issued patents and eight pending patent applications in foreign markets, that are directed to OMS103. Our OMS103 patents have terms that will expire as late as September 24, 2022 and, if currently pending patent applications are issued, as late as August 3, 2032.
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PharmacoSurgery Platform.
Our scientific co-founders, Gregory A. Demopulos, M.D. and Pamela Pierce Palmer, M.D., Ph.D., conceived the initial invention underlying our PharmacoSurgery platform and transferred all of their related intellectual property rights to us in 1994. Other than their rights as shareholders, our scientific co-founders have not retained any rights to our PharmacoSurgery platform, except that if we file for liquidation under Chapter 7 of the U.S. Bankruptcy Act or voluntarily liquidate or dissolve, other than in connection with a merger, reorganization, consolidation or sale of assets, our scientific co-founders have the right to repurchase the initial PharmacoSurgery intellectual property at its then-current fair market value. Subsequent developments of the PharmacoSurgery intellectual property were assigned to us by Dr. Demopulos, Dr. Palmer and other of our employees and consultants, without restriction.
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MASP Program.
We hold worldwide exclusive licenses to rights related to MASP-2, the antibodies targeting MASP-2 and the therapeutic applications for the antibodies from the University of Leicester, MRC and Helion. We jointly own and hold worldwide exclusive license rights related to therapeutic applications for inhibiting MASP-3 from the University of Leicester. For more detailed descriptions of these licenses, see “License and Development Agreements.”
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PDE10 and PDE7 Programs.
We acquired our PDE10 and PDE7 programs and some of our related patents and other intellectual property rights as a result of our acquisition of nura, inc. We hold an exclusive license to certain PDE7 inhibitors claimed in patents and pending patent applications owned by Daiichi Sankyo for use in the treatment of movement, addiction and compulsive disorders as well as other specified indications. For a more detailed description of our agreement with Daiichi Sankyo, see “License and Development Agreements.”
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PPARγ Program
. We acquired the patent applications and related intellectual property rights for our PPARγ program in 2009 from Roberto Ciccocioppo, Ph.D., of the Università di Camerino, Italy, pursuant to a patent assignment agreement. For a more detailed description of this agreement, see “License and Development Agreements.”
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GPCR Platform.
We acquired our GPCR program and some of our related patents and other intellectual property rights as a result of our acquisition of nura, inc. In November of 2010 we acquired intellectual property rights related to an assay technology for our GPCR program from Patobios Limited for approximately $10.8 million.
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Antibody Platform
. We hold a worldwide exclusive license to patent rights related to our antibody platform from the UW. For a more detailed description of this agreement, see “License and Development Agreements.
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formulation development and manufacturing process development;
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preclinical laboratory and animal testing;
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submission to the FDA of an IND for human clinical testing, which must become effective before human clinical trials may begin; and in Europe, a CTA is filed according to the country’s local regulations;
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adequate and well-controlled human clinical trials to establish the efficacy and safety of the product for each indication for which approval is sought;
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adequate assessment of drug product stability to determine shelf life/expiry dating;
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in Europe, submission to the EMA or national regulatory authority of a marketing authorization application, or MAA, and in the U.S., submission to the FDA of a New Drug Application, or NDA, in the case of a drug product, or a BLA in the case of a biologic product;
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satisfactory completion of inspections of one or more clinical sites at which clinical trials with the product were carried out and of the manufacturing facility or facilities at which the product is produced to assess compliance with current Good Clinical Practices, or cGCP, and cGMP; and
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FDA review and approval of an NDA or BLA, or review and approval of an MAA by the applicable regulatory authorities in the EU.
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Phase 1 usually involves the initial administration of the investigational product to human subjects, who may or may not have the disease or condition for which the product is being developed, to evaluate the safety, dosage tolerance, pharmacodynamics and, if possible, to gain an early indication of the effectiveness of the product.
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Phase 2 usually involves trials in a limited patient population with the disease or condition for which the product is being developed to evaluate appropriate dosage, to identify possible adverse side effects and safety risks, and to evaluate preliminarily the effectiveness of the product for specific indications.
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Phase 3 clinical trials usually further evaluate and confirm effectiveness and test further for safety by administering the product in its final form in an expanded patient population.
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the federal Anti-Kickback Statute, which prohibits offering or paying anything of value to a person or entity to induce or reward referrals for goods or services reimbursed by a federal health care program such as Medicare or Medicaid;
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the federal False Claims Act, which prohibits presenting or causing to be presented a false claim for payment by a federal health care program, and which has been interpreted to also include claims caused by improper drug-manufacturer product promotion or the payment of kickbacks;
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a variety of governmental pricing, price reporting, and rebate requirements, including those under Medicaid and the Veterans Health Care Act; and
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the so-called Sunshine Act and certain provisions of the Affordable Care Act, which require that we report to the federal government information on financial payments that we make to physicians and certain healthcare institutions and also on drug samples that we distribute.
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a covered benefit under its health plan;
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safe, effective and medically necessary;
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appropriate for the specific patient;
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cost-effective; and
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neither experimental nor investigational.
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Name
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Age
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Position(s)
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Executive Officers:
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Gregory A. Demopulos, M.D.
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59
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President, Chief Executive Officer and Chairman of the Board of Directors
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Michael A. Jacobsen
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59
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Vice President, Finance, Chief Accounting Officer and Treasurer
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Marcia S. Kelbon, J.D., M.S.
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58
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Vice President, Patent, General Counsel and Secretary
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Significant Employees:
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Leonard Blum
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57
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Chief Business and Commercial Officer
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Christopher S. Bral, Ph.D.
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52
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Vice President, Nonclinical Development
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Daniel M. Canafax, Pharm.D., FCCP
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65
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Vice President, Medical Affairs and Clinical Research
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Timothy M. Duffy
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57
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Vice President, Business Development
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Timi Edeki, M.D., Ph.D.
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57
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Vice President, Clinical Development
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George A. Gaitanaris, M.D., Ph.D.
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61
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Vice President, Science and Chief Scientific Officer
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William J. Lambert, Ph.D.
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59
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Vice President, Chemistry, Manufacturing and Controls
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Catherine A. Melfi, Ph.D.
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58
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Vice President, Regulatory Affairs and Quality Systems and Chief Regulatory Officer
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J. Steven Whitaker, M.D., J.D.
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62
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Vice President, Clinical Development and Chief Medical Officer
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•
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the extent of coverage and reimbursement for OMIDRIA when used in Medicare patients following the expiration of pass-through reimbursement on January 1, 2018;
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pricing, coverage and reimbursement 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;
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a lack of acceptance by physicians, patients and other members of the healthcare community;
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the availability, relative price and efficacy of the product as compared to alternative treatment options or branded, compounded or generic competing products;
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an unknown safety risk;
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the failure to enter into and maintain acceptable partnering arrangements for marketing and distribution of OMIDRIA outside of the U.S.;
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changed or increased regulatory restrictions in the U.S., EU and other foreign territories; and
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a lack of adequate financial or other resources.
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the level and timing of commercial sales of OMIDRIA, as well as our product candidates if and when approved or commercialized;
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the extent of coverage and reimbursement for OMIDRIA following the expiration of pass-through reimbursement on January 1, 2018;
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the amount of OMIDRIA chargebacks, rebates and product returns;
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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
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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.
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initiate and conduct clinical trials for our programs and product candidates;
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continue OMIDRIA sales and marketing;
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continue research and development in our programs;
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make principal, interest and fee payments under the CRG Loan Agreement; and
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commercialize and launch product candidates for which we may receive regulatory approval.
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reduced protection for intellectual property rights;
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unexpected changes in tariffs, trade barriers and regulatory requirements;
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economic weakness, including inflation, or political instability in particular foreign economies and markets;
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foreign currency fluctuations and other obligations incident to doing business in another country; and
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business interruptions resulting from geopolitical actions, including war and terrorism or natural disasters including earthquakes, typhoons, floods and fires.
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discussions with the FDA, the EMA or other foreign authorities regarding the scope or design of our clinical trials;
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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;
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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;
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lower than anticipated retention rates of patients in clinical trials;
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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;
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adverse findings in clinical or nonclinical studies related to the safety of our product candidates in humans;
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an insufficient supply of product candidate materials or other materials necessary to conduct our clinical trials;
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the need to qualify new suppliers of product candidate materials for FDA and foreign regulatory approval;
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an unfavorable inspection or review by the FDA or other regulatory authority of a clinical trial site or records of any clinical investigation;
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the occurrence of unacceptable drug-related side effects or adverse events experienced by participants in our clinical trials;
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the suspension by a regulatory agency of a trial put on a clinical hold; or
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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.
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failure to conduct the clinical trial in accordance with regulatory requirements or our clinical protocols;
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inspection of the clinical trial operations or trial sites by the FDA or other regulatory authorities resulting in the imposition of a clinical hold;
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the failure to remove a clinical hold in a timely manner (which we cannot predict with certainty), if at all;
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unforeseen safety issues or any determination that a trial presents unacceptable health risks;
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inability to deliver an efficacious dose of a product candidate; or
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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.
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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;
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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;
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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
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if issued, the patents under which we hold rights may not be valid or enforceable.
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ITEM 1B.
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UNRESOLVED STAFF COMMENTS
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ITEM 2.
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PROPERTIES
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ITEM 4.
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MINE SAFETY DISCLOSURES
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ITEM 5.
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MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
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Year Ended December 31, 2017
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High
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Low
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4th Quarter
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$24.45
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$12.45
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3rd Quarter
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$25.19
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$18.63
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2nd Quarter
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$27.09
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$13.56
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1st Quarter
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$16.40
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$8.71
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Year Ended December 31, 2016
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High
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Low
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4th Quarter
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$14.15
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$7.20
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3rd Quarter
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$13.71
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$10.36
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2nd Quarter
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$16.38
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$9.46
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1st Quarter
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$16.80
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$8.90
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ITEM 6.
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SELECTED CONSOLIDATED FINANCIAL DATA
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Year Ended December 31,
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||||||||||||||||||
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2017
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2016
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2015
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2014
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2013
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||||||||||
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(In thousands, except per share and share data)
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||||||||||||||||||
Consolidated Statements of Operations and Comprehensive Loss Data:
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||||||||||
Revenues
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||||||||||
Product sales, net
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$
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64,826
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$
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41,444
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|
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$
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13,264
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$
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—
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|
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$
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—
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Grant revenue
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—
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173
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|
|
245
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|
|
539
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|
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1,600
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|||||
Total revenue
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64,826
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|
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41,617
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|
|
13,509
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|
|
539
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|
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1,600
|
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|||||
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Costs and expenses
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||||||||||
Cost of product sales
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1,078
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|
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1,412
|
|
|
1,041
|
|
|
—
|
|
|
—
|
|
|||||
Research and development
|
55,599
|
|
|
50,699
|
|
|
48,379
|
|
|
47,946
|
|
|
36,297
|
|
|||||
Selling, general and administrative
|
52,044
|
|
|
43,782
|
|
|
35,327
|
|
|
22,601
|
|
|
15,819
|
|
|||||
Total costs and expenses
|
108,721
|
|
|
95,893
|
|
|
84,747
|
|
|
70,547
|
|
|
52,116
|
|
|||||
Loss from operations
|
(43,895
|
)
|
|
(54,276
|
)
|
|
(71,238
|
)
|
|
(70,008
|
)
|
|
(50,516
|
)
|
|||||
Litigation settlement
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,500
|
|
|||||
Interest expense
|
(11,030
|
)
|
|
(7,819
|
)
|
|
(3,573
|
)
|
|
(3,470
|
)
|
|
(2,366
|
)
|
|||||
Other income (expense)
|
1,444
|
|
|
945
|
|
|
1,030
|
|
|
(195
|
)
|
|
586
|
|
|||||
Loss on early extinguishment of debt
|
—
|
|
|
(5,595
|
)
|
|
(1,315
|
)
|
|
—
|
|
|
—
|
|
|||||
Net loss
|
$
|
(53,481
|
)
|
|
$
|
(66,745
|
)
|
|
$
|
(75,096
|
)
|
|
$
|
(73,673
|
)
|
|
$
|
(39,796
|
)
|
Comprehensive loss
|
$
|
(53,481
|
)
|
|
$
|
(66,745
|
)
|
|
$
|
(75,096
|
)
|
|
$
|
(73,673
|
)
|
|
$
|
(39,796
|
)
|
Basic and diluted net loss per share
|
$
|
(1.17
|
)
|
|
$
|
(1.65
|
)
|
|
$
|
(2.00
|
)
|
|
$
|
(2.22
|
)
|
|
$
|
(1.39
|
)
|
Weighted-average shares used to compute basic and diluted net loss per share
|
45,539,362
|
|
|
40,446,410
|
|
|
37,560,257
|
|
|
33,234,294
|
|
|
28,560,360
|
|
|
As of December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash, cash equivalents and short-term investments
|
$
|
83,749
|
|
|
$
|
45,331
|
|
|
$
|
28,263
|
|
|
$
|
6,886
|
|
|
$
|
14,101
|
|
Working capital (deficit)
|
82,065
|
|
|
44,191
|
|
|
20,893
|
|
|
(9,274
|
)
|
|
2,944
|
|
|||||
Restricted cash and investments
|
5,835
|
|
|
5,835
|
|
|
10,679
|
|
|
679
|
|
|
679
|
|
|||||
Total assets
|
116,328
|
|
|
67,278
|
|
|
48,995
|
|
|
10,834
|
|
|
16,535
|
|
|||||
Notes payable and lease financing obligations, net
|
84,117
|
|
|
79,512
|
|
|
49,842
|
|
|
32,453
|
|
|
20,498
|
|
|||||
Accumulated deficit
|
(523,368
|
)
|
|
(469,887
|
)
|
|
(403,142
|
)
|
|
(328,046
|
)
|
|
(254,373
|
)
|
|||||
Total shareholders’ deficit
|
(2,814
|
)
|
|
(37,447
|
)
|
|
(26,234
|
)
|
|
(42,654
|
)
|
|
(18,384
|
)
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Product sales, net
|
$
|
64,826
|
|
|
$
|
41,444
|
|
|
$
|
13,264
|
|
|
|
Chargebacks and Rebates
|
|
Distribution Fees and Product Return Allowances
|
|
Total
|
||||||
|
|
(In thousands)
|
||||||||||
Balance as of December 31, 2014
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Provisions
|
|
320
|
|
|
555
|
|
|
875
|
|
|||
Payments
|
|
(140
|
)
|
|
(278
|
)
|
|
(418
|
)
|
|||
Balance as of December 31, 2015
|
|
180
|
|
277
|
|
457
|
||||||
Provisions
|
|
4,203
|
|
|
1,434
|
|
|
5,637
|
|
|||
Payments
|
|
(2,754
|
)
|
|
(1,230
|
)
|
|
(3,984
|
)
|
|||
Balance as of December 31, 2016
|
|
1,629
|
|
|
481
|
|
|
2,110
|
|
|||
Provisions
|
|
19,188
|
|
|
5,741
|
|
|
24,929
|
|
|||
Payments
|
|
(15,264
|
)
|
|
(2,687
|
)
|
|
(17,951
|
)
|
|||
Balance as of December 31, 2017
|
|
$
|
5,553
|
|
|
$
|
3,535
|
|
|
$
|
9,088
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Direct external expenses:
|
|
|
|
|
|
||||||
Clinical research and development:
|
|
|
|
|
|
||||||
MASP-2 Program - OMS721
|
$
|
19,557
|
|
|
$
|
17,241
|
|
|
$
|
15,852
|
|
OMIDRIA - Ophthalmology
|
3,458
|
|
|
3,864
|
|
|
4,396
|
|
|||
Other clinical programs
|
1,714
|
|
|
500
|
|
|
1,545
|
|
|||
Total clinical research and development
|
24,729
|
|
|
21,605
|
|
|
21,793
|
|
|||
Preclinical research and development
|
4,269
|
|
|
1,731
|
|
|
1,383
|
|
|||
Total direct external expenses
|
28,998
|
|
|
23,336
|
|
|
23,176
|
|
|||
Internal, overhead and other expenses
|
21,361
|
|
|
21,059
|
|
|
20,226
|
|
|||
Stock-based compensation expense
|
5,240
|
|
|
6,304
|
|
|
4,977
|
|
|||
Total research and development expenses
|
$
|
55,599
|
|
|
$
|
50,699
|
|
|
$
|
48,379
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Selling, general and administrative expenses, excluding stock-based compensation expense
|
$
|
44,596
|
|
|
$
|
36,504
|
|
|
$
|
30,723
|
|
Stock-based compensation expense
|
7,448
|
|
|
7,278
|
|
|
4,604
|
|
|||
Total selling, general and administrative expenses
|
$
|
52,044
|
|
|
$
|
43,782
|
|
|
$
|
35,327
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Interest Expense
|
$
|
11,030
|
|
|
$
|
7,819
|
|
|
$
|
3,573
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Loss on Early Extinguishment of Debt
|
$
|
—
|
|
|
$
|
5,595
|
|
|
$
|
1,315
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Other Income
|
$
|
1,444
|
|
|
$
|
945
|
|
|
$
|
1,030
|
|
|
Years ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Cash provided by (used in):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
(36,227
|
)
|
|
$
|
(51,504
|
)
|
|
$
|
(65,209
|
)
|
Investing activities
|
(37,598
|
)
|
|
(16,335
|
)
|
|
(20,606
|
)
|
|||
Financing activities
|
74,995
|
|
|
68,698
|
|
|
86,826
|
|
•
|
revenue recognition;
|
•
|
research and development expenses, primarily clinical trial expenses and manufacturing of drug product and clinical drug supply; and
|
•
|
stock-based compensation.
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
3,394
|
|
|
$
|
2,224
|
|
Short-term investments
|
80,355
|
|
|
43,107
|
|
||
Receivables, net
|
17,144
|
|
|
12,037
|
|
||
Inventory
|
443
|
|
|
1,128
|
|
||
Prepaid expense
|
7,036
|
|
|
1,766
|
|
||
Total current assets
|
108,372
|
|
|
60,262
|
|
||
Property and equipment, net
|
2,121
|
|
|
1,181
|
|
||
Restricted investments
|
5,835
|
|
|
5,835
|
|
||
Total assets
|
$
|
116,328
|
|
|
$
|
67,278
|
|
Liabilities and shareholders’ deficit
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
6,691
|
|
|
$
|
2,519
|
|
Accrued expenses
|
19,126
|
|
|
13,354
|
|
||
Current portion of lease financing obligations
|
490
|
|
|
198
|
|
||
Total current liabilities
|
26,307
|
|
|
16,071
|
|
||
Notes payable and lease financing obligations, net
|
84,117
|
|
|
79,512
|
|
||
Deferred rent
|
8,718
|
|
|
9,142
|
|
||
Commitments and contingencies (Note 8)
|
|
|
|
||||
Shareholders’ deficit:
|
|
|
|
||||
Preferred stock, par value $0.01 per share, 20,000,000 authorized and none issued at December 31, 2017 and 2016.
|
—
|
|
|
—
|
|
||
Common Stock, par value $0.01 per share, 150,000,000 shares authorized at December 31, 2017 and 2016; 48,211,226 and 43,819,133 issued and outstanding at December 31, 2017 and December 31, 2016, respectively.
|
482
|
|
|
438
|
|
||
Additional paid-in capital
|
520,072
|
|
|
432,002
|
|
||
Accumulated deficit
|
(523,368
|
)
|
|
(469,887
|
)
|
||
Total shareholders’ deficit
|
(2,814
|
)
|
|
(37,447
|
)
|
||
Total liabilities and shareholders’ deficit
|
$
|
116,328
|
|
|
$
|
67,278
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Product sales, net
|
$
|
64,826
|
|
|
$
|
41,444
|
|
|
$
|
13,264
|
|
Grant revenue
|
—
|
|
|
173
|
|
|
245
|
|
|||
Total revenue
|
64,826
|
|
|
41,617
|
|
|
13,509
|
|
|||
|
|
|
|
|
|
||||||
Costs and expenses:
|
|
|
|
|
|
||||||
Cost of product sales
|
1,078
|
|
|
1,412
|
|
|
1,041
|
|
|||
Research and development
|
55,599
|
|
|
50,699
|
|
|
48,379
|
|
|||
Selling, general and administrative
|
52,044
|
|
|
43,782
|
|
|
35,327
|
|
|||
Total costs and expenses
|
108,721
|
|
|
95,893
|
|
|
84,747
|
|
|||
Loss from operations
|
(43,895
|
)
|
|
(54,276
|
)
|
|
(71,238
|
)
|
|||
Interest expense
|
(11,030
|
)
|
|
(7,819
|
)
|
|
(3,573
|
)
|
|||
Other income
|
1,444
|
|
|
945
|
|
|
1,030
|
|
|||
Loss on early extinguishment of debt
|
—
|
|
|
(5,595
|
)
|
|
(1,315
|
)
|
|||
Net loss
|
$
|
(53,481
|
)
|
|
$
|
(66,745
|
)
|
|
$
|
(75,096
|
)
|
Comprehensive loss
|
$
|
(53,481
|
)
|
|
$
|
(66,745
|
)
|
|
$
|
(75,096
|
)
|
Basic and diluted net loss per share
|
$
|
(1.17
|
)
|
|
$
|
(1.65
|
)
|
|
$
|
(2.00
|
)
|
Weighted-average shares used to compute basic and diluted net loss per share
|
45,539,362
|
|
|
40,446,410
|
|
|
37,560,257
|
|
|
Common Stock
|
|
Additional
Paid-in Capital |
|
Accumulated
Deficit |
|
Total
Shareholders’ Deficit |
|||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||
Balance at December 31, 2014
|
34,185,464
|
|
|
$
|
342
|
|
|
$
|
285,050
|
|
|
$
|
(328,046
|
)
|
|
$
|
(42,654
|
)
|
Issuance of common stock and pre-funded warrants, net of offering costs
|
3,444,831
|
|
|
34
|
|
|
79,042
|
|
|
—
|
|
|
79,076
|
|
||||
Issuance of common stock upon exercise of warrants
|
133,240
|
|
|
1
|
|
|
1,435
|
|
|
—
|
|
|
1,436
|
|
||||
Issuance of common stock upon exercise of stock options
|
277,356
|
|
|
3
|
|
|
1,420
|
|
|
—
|
|
|
1,423
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
9,581
|
|
|
—
|
|
|
9,581
|
|
||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(75,096
|
)
|
|
(75,096
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Balance at December 31, 2015
|
38,040,891
|
|
|
380
|
|
|
376,528
|
|
|
(403,142
|
)
|
|
(26,234
|
)
|
||||
Issuance of common stock in direct offering, net of offering costs
|
3,478,260
|
|
|
35
|
|
|
37,279
|
|
|
—
|
|
|
37,314
|
|
||||
Issuance of common stock upon exercise of stock options
|
1,486,167
|
|
|
15
|
|
|
3,131
|
|
|
—
|
|
|
3,146
|
|
||||
Issuance of common stock upon exercise of warrants
|
749,250
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
7
|
|
||||
Issuance of common stock under the ATM Agreement, net of offering costs
|
64,565
|
|
|
1
|
|
|
724
|
|
|
—
|
|
|
725
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
13,582
|
|
|
—
|
|
|
13,582
|
|
||||
Warrants issued in connection with amendment to notes payable
|
—
|
|
|
—
|
|
|
758
|
|
|
—
|
|
|
758
|
|
||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(66,745
|
)
|
|
(66,745
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at December 31, 2016
|
43,819,133
|
|
|
438
|
|
|
432,002
|
|
|
(469,887
|
)
|
|
(37,447
|
)
|
||||
Issuance of common stock in direct offering, net of offering costs
|
3,000,000
|
|
|
30
|
|
|
63,627
|
|
|
—
|
|
|
63,657
|
|
||||
Issuance of common stock upon exercise of stock options
|
1,392,093
|
|
|
14
|
|
|
11,755
|
|
|
—
|
|
|
11,769
|
|
||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
12,688
|
|
|
—
|
|
|
12,688
|
|
||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(53,481
|
)
|
|
(53,481
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance at December 31, 2017
|
48,211,226
|
|
|
$
|
482
|
|
|
$
|
520,072
|
|
|
$
|
(523,368
|
)
|
|
$
|
(2,814
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Operating activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(53,481
|
)
|
|
$
|
(66,745
|
)
|
|
$
|
(75,096
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
||||||
Stock-based compensation expense
|
12,688
|
|
|
13,582
|
|
|
9,581
|
|
|||
Non-cash interest expense
|
4,187
|
|
|
1,977
|
|
|
1,045
|
|
|||
Depreciation and amortization
|
551
|
|
|
300
|
|
|
209
|
|
|||
Loss on early extinguishment of debt
|
—
|
|
|
5,595
|
|
|
1,315
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
||||
Receivables
|
(5,107
|
)
|
|
(5,520
|
)
|
|
(6,125
|
)
|
|||
Inventory
|
685
|
|
|
(656
|
)
|
|
96
|
|
|||
Prepaid expenses
|
(5,270
|
)
|
|
347
|
|
|
(586
|
)
|
|||
Accounts payable, accrued expenses and other
|
9,520
|
|
|
(384
|
)
|
|
4,352
|
|
|||
Net cash used in operating activities
|
(36,227
|
)
|
|
(51,504
|
)
|
|
(65,209
|
)
|
|||
Investing activities:
|
|
|
|
|
|
||||||
Purchases of property and equipment
|
(350
|
)
|
|
(126
|
)
|
|
(240
|
)
|
|||
Purchases of investments
|
(65,326
|
)
|
|
(73,966
|
)
|
|
(91,766
|
)
|
|||
Proceeds from the sale and maturities of investments
|
28,078
|
|
|
57,757
|
|
|
71,400
|
|
|||
Net cash used in investing activities
|
(37,598
|
)
|
|
(16,335
|
)
|
|
(20,606
|
)
|
|||
Financing activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of common stock and pre-funded warrants, net
|
63,657
|
|
|
38,039
|
|
|
79,076
|
|
|||
Proceeds from borrowings under notes payable
|
—
|
|
|
100,000
|
|
|
50,000
|
|
|||
Payments on notes payable and lease financing obligations
|
(431
|
)
|
|
(70,137
|
)
|
|
(32,000
|
)
|
|||
Payments on debt prepayment and extinguishment
|
—
|
|
|
(5,700
|
)
|
|
(2,673
|
)
|
|||
Payments for debt issuance costs
|
—
|
|
|
(1,501
|
)
|
|
(436
|
)
|
|||
Decrease (increase) in restricted investments
|
—
|
|
|
4,844
|
|
|
(10,000
|
)
|
|||
Proceeds upon exercise of stock options and warrants
|
11,769
|
|
|
3,153
|
|
|
2,859
|
|
|||
Net cash provided by financing activities
|
74,995
|
|
|
68,698
|
|
|
86,826
|
|
|||
Net increase in cash and cash equivalents
|
1,170
|
|
|
859
|
|
|
1,011
|
||||
Cash and cash equivalents at beginning of period
|
2,224
|
|
|
1,365
|
|
|
354
|
||||
Cash and cash equivalents at end of period
|
$
|
3,394
|
|
|
$
|
2,224
|
|
|
$
|
1,365
|
|
Supplemental cash flow information
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
6,895
|
|
|
$
|
5,293
|
|
|
$
|
4,236
|
|
Conversion of accrued interest to notes payable
|
$
|
3,315
|
|
|
$
|
516
|
|
|
$
|
—
|
|
Property acquired under capital lease
|
$
|
1,141
|
|
|
$
|
404
|
|
|
$
|
137
|
|
Issuance of warrants in connection with amendment to notes payable
|
$
|
—
|
|
|
$
|
758
|
|
|
$
|
—
|
|
•
|
No revenues from sales of OMIDRIA. We are unable at this time to predict accurately revenue from sales of OMIDRIA given the loss of CMS reimbursement and, therefore, no OMIDRIA revenues are included for this exercise. We are pursuing continued separate payment for OMIDRIA and, in the event that we are unsuccessful, we would implement in the near-term an alternative sales strategy for OMIDRIA;
|
•
|
No additional draws on our CRG debt facility. As disclosed in Note 7, we are in compliance with all covenants under our CRG Loan Agreement. On February 26, 2018, we amended our CRG Loan Agreement to extend our ability to borrow up to
$45.0 million
through May 20, 2018 subject only to customary closing conditions. However, given the existence of customary closing conditions, including a typical material adverse event clause in the CRG Loan Agreement, the draw on this facility was not considered for purposes of this exercise; and
|
•
|
No public or private equity transactions can be considered for purposes of this exercise in the absence of any existing or committed arrangements to raise additional capital.
|
|
|
2017
|
|
2016
|
|
2015
|
|||||||||
|
|
Percentage of Total Revenue
|
|
Percentage of Accounts Receivable
|
|
Percentage of Total Revenue
|
|
Percentage of Accounts Receivable
|
|
Percentage of Total Revenue
|
|||||
Distributor A
|
|
29
|
%
|
|
31
|
%
|
|
32
|
%
|
|
29
|
%
|
|
31
|
%
|
Distributor B
|
|
26
|
%
|
|
23
|
%
|
|
31
|
%
|
|
27
|
%
|
|
37
|
%
|
Distributor C
|
|
22
|
%
|
|
26
|
%
|
|
28
|
%
|
|
24
|
%
|
|
28
|
%
|
Distributor D
|
|
23
|
%
|
|
20
|
%
|
|
*
|
|
|
19
|
%
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
* Distributor did not account for greater than 10% of total revenues for the year ended December 31, 2016 or 2015.
|
|
Year Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Outstanding options to purchase common stock
|
9,657,259
|
|
|
9,809,374
|
|
|
8,310,235
|
|
Warrants and pre-funded warrants to purchase common stock
|
100,602
|
|
|
100,602
|
|
|
749,250
|
|
Total potentially dilutive securities
|
9,757,861
|
|
|
9,909,976
|
|
|
9,059,485
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Trade receivables, net
|
$
|
17,079
|
|
|
$
|
11,937
|
|
Sublease and other receivables
|
65
|
|
|
100
|
|
||
Total accounts receivables net
|
$
|
17,144
|
|
|
$
|
12,037
|
|
|
December 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
|
80,355
|
|
|
—
|
|
|
—
|
|
|
80,355
|
|
||||
Total
|
$
|
86,190
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
86,190
|
|
|
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
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Raw materials
|
$
|
83
|
|
|
$
|
101
|
|
Work-in-process
|
—
|
|
|
854
|
|
||
Finished goods
|
360
|
|
|
173
|
|
||
Total inventory cost
|
$
|
443
|
|
|
$
|
1,128
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Laboratory equipment
|
$
|
2,180
|
|
|
$
|
1,830
|
|
Capital lease equipment
|
1,915
|
|
|
774
|
|
||
Computer equipment
|
684
|
|
|
684
|
|
||
Office equipment and furniture
|
625
|
|
|
625
|
|
||
Total cost
|
5,404
|
|
|
3,913
|
|
||
Less accumulated depreciation and amortization
|
(3,283
|
)
|
|
(2,732
|
)
|
||
Total property and equipment, net
|
$
|
2,121
|
|
|
$
|
1,181
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Sales rebates, fees and discounts
|
$
|
6,561
|
|
|
$
|
1,773
|
|
Contract research and development
|
4,251
|
|
|
3,030
|
|
||
Employee compensation
|
2,178
|
|
|
4,551
|
|
||
ASC/hospital product return liability
|
2,350
|
|
|
—
|
|
||
Consulting and professional fees
|
1,758
|
|
|
2,223
|
|
||
Clinical trials
|
1,026
|
|
|
1,167
|
|
||
Other accruals
|
1,002
|
|
|
610
|
|
||
Total accrued liabilities
|
$
|
19,126
|
|
|
$
|
13,354
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Notes payable
|
$
|
83,831
|
|
|
$
|
80,516
|
|
Lender facility fee payable upon maturity
|
4,192
|
|
|
4,025
|
|
||
Lease financing obligations
|
1,300
|
|
|
522
|
|
||
Notes payable, facility fee and lease financing obligations
|
89,323
|
|
|
85,063
|
|
||
Unamortized debt discount
|
(3,527
|
)
|
|
(3,958
|
)
|
||
Unamortized debt issuance costs
|
(1,189
|
)
|
|
(1,395
|
)
|
||
Current portion of lease financing obligations
|
(490
|
)
|
|
(198
|
)
|
||
Non-current portion of notes payable and lease financing obligations, net
|
$
|
84,117
|
|
|
$
|
79,512
|
|
Year Ending December 31,
|
Notes Payable
|
|
Capital Lease Financing Obligations
|
|
Total
|
||||||
|
(In thousands)
|
||||||||||
2018
|
$
|
—
|
|
|
$
|
492
|
|
|
$
|
492
|
|
2019
|
—
|
|
|
391
|
|
|
391
|
|
|||
2020
|
10,479
|
|
|
232
|
|
|
10,711
|
|
|||
2021
|
41,915
|
|
|
99
|
|
|
42,014
|
|
|||
2022
|
31,437
|
|
|
86
|
|
|
31,523
|
|
|||
Total future principal payments
|
$
|
83,831
|
|
|
$
|
1,300
|
|
|
$
|
85,131
|
|
Year Ending December 31,
|
|
The Omeros Building Lease
|
|
Building Sublease Income
|
|
Net Operating Lease Payments
|
||||||
|
|
(In thousands)
|
||||||||||
2018
|
|
$
|
4,564
|
|
|
$
|
558
|
|
|
$
|
4,006
|
|
2019
|
|
4,660
|
|
|
—
|
|
|
4,660
|
|
|||
2020
|
|
4,769
|
|
|
—
|
|
|
4,769
|
|
|||
2021
|
|
4,880
|
|
|
—
|
|
|
4,880
|
|
|||
2022
|
|
4,995
|
|
|
—
|
|
|
4,995
|
|
|||
Thereafter
|
|
25,840
|
|
|
—
|
|
|
25,840
|
|
|||
Total
|
|
$
|
49,708
|
|
|
$
|
558
|
|
|
$
|
49,150
|
|
Options granted and outstanding
|
9,657,259
|
|
Options available for future grant
|
3,513,540
|
|
Common stock warrants
|
100,602
|
|
Total shares reserved
|
13,271,401
|
|
Outstanding At
December 31, 2017 |
|
Expiration Date
|
|
Exercise Price
|
100,602
|
|
May 18, 2023
|
|
$9.94
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Research and development
|
$
|
5,240
|
|
|
$
|
6,304
|
|
|
$
|
4,977
|
|
Selling, general and administrative
|
7,448
|
|
|
7,278
|
|
|
4,604
|
|
|||
Total stock-based compensation expense
|
$
|
12,688
|
|
|
$
|
13,582
|
|
|
$
|
9,581
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Estimated weighted-average fair value
|
$
|
8.66
|
|
|
$
|
6.89
|
|
|
$
|
11.31
|
|
Weighted-average assumptions:
|
|
|
|
|
|
||||||
Expected volatility
|
74
|
%
|
|
74
|
%
|
|
71
|
%
|
|||
Expected term, in years
|
6.0
|
|
|
5.7
|
|
|
6.0
|
|
|||
Risk-free interest rate
|
2.05
|
%
|
|
1.63
|
%
|
|
1.68
|
%
|
|||
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
|
1,825,140
|
|
|
13.14
|
|
|
|
|
|
|||
Exercised
|
(1,392,093
|
)
|
|
8.45
|
|
|
|
|
|
|||
Forfeited/expired
|
(585,162
|
)
|
|
11.13
|
|
|
|
|
|
|||
Balance at December 31, 2017
|
9,657,259
|
|
|
$
|
10.39
|
|
|
6.77
|
|
$
|
88,096
|
|
Vested and expected to vest at December 31, 2017
|
9,362,096
|
|
|
$
|
10.32
|
|
|
6.71
|
|
$
|
85,998
|
|
Exercisable at December 31, 2017
|
6,811,348
|
|
|
$
|
9.57
|
|
|
5.93
|
|
$
|
67,373
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Deferred tax assets:
|
|
|
|
||||
Net operating loss carryforwards
|
$
|
90,498
|
|
|
$
|
126,410
|
|
Tax credit carryforwards
|
26,748
|
|
|
18,741
|
|
||
Stock-based compensation
|
7,829
|
|
|
11,102
|
|
||
Deferred rent
|
2,123
|
|
|
3,318
|
|
||
Other
|
4,749
|
|
|
4,401
|
|
||
Total deferred tax assets
|
131,947
|
|
|
163,972
|
|
||
Less valuation allowance
|
(131,947
|
)
|
|
(163,972
|
)
|
||
Net deferred tax assets
|
$
|
—
|
|
|
$
|
—
|
|
|
Year ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
U.S. Federal statutory rate on net loss
|
(34
|
)%
|
|
(34
|
)%
|
|
(34
|
)%
|
State tax, net of federal tax benefit
|
(2
|
)%
|
|
(2
|
)%
|
|
(2
|
)%
|
Effects of statutory rate change
|
115
|
%
|
|
—
|
%
|
|
—
|
%
|
Change in valuation allowance
|
(60
|
)%
|
|
37
|
%
|
|
41
|
%
|
Tax credits
|
(11
|
)%
|
|
(4
|
)%
|
|
(5
|
)%
|
Other
|
(8
|
)%
|
|
3
|
%
|
|
—
|
%
|
Effective tax rate
|
—
|
%
|
|
—
|
%
|
|
—
|
%
|
2017
|
|
For the Quarter Ended
|
||||||||||||||
|
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
||||||||
Revenue
|
|
$
|
12,257
|
|
|
$
|
17,151
|
|
|
$
|
21,658
|
|
|
$
|
13,760
|
|
Total costs and expenses
|
|
24,982
|
|
|
29,090
|
|
|
26,768
|
|
|
27,881
|
|
||||
Loss from operations
|
|
(12,725
|
)
|
|
(11,939
|
)
|
|
(5,110
|
)
|
|
(14,121
|
)
|
||||
Net loss
|
|
(15,089
|
)
|
|
(14,359
|
)
|
|
(7,482
|
)
|
|
(16,551
|
)
|
||||
Basic and diluted net loss per share
|
|
$
|
(0.34
|
)
|
|
$
|
(0.33
|
)
|
|
$
|
(0.16
|
)
|
|
$
|
(0.34
|
)
|
|
||||||||||||||||
|
||||||||||||||||
2016
|
|
For the Quarter Ended
|
||||||||||||||
|
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
||||||||
Revenue
|
|
$
|
7,419
|
|
|
$
|
10,004
|
|
|
$
|
11,289
|
|
|
$
|
12,905
|
|
Total costs and expenses
|
|
26,871
|
|
|
20,933
|
|
|
23,327
|
|
|
24,762
|
|
||||
Loss from operations
|
|
(19,452
|
)
|
|
(10,929
|
)
|
|
(12,038
|
)
|
|
(11,857
|
)
|
||||
Net loss
|
|
(20,539
|
)
|
|
(12,612
|
)
|
|
(13,962
|
)
|
|
(19,632
|
)
|
||||
Basic and diluted net loss per share
|
|
$
|
(0.54
|
)
|
|
$
|
(0.32
|
)
|
|
$
|
(0.34
|
)
|
|
$
|
(0.45
|
)
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
|
|
Number of Securities to be
Issued Upon Exercise of
Outstanding Options,
Warrants and Rights
|
|
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
|
|
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans
|
||||
Equity compensation plans approved by security holders:
|
|
|
|
|
|
||||
2017 Omnibus Incentive Compensation Plan (1)
|
159,707
|
|
|
$
|
21.22
|
|
|
3,513,540
|
|
2008 Equity Incentive Plan (2)
|
9,497,552
|
|
|
$
|
10.21
|
|
|
—
|
|
Total
|
9,657,259
|
|
|
$
|
10.30
|
|
|
3,513,540
|
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
|
Exhibit Description
|
Incorporated by Reference
|
||||
Exhibit
No.
|
Form
|
File No.
|
Exhibit
No.
|
Filing Date
|
Filed
Herewith
|
|
|
|
|
|
|
|
|
3.1
|
10-K
|
001-34475
|
3.1
|
03/31/2010
|
|
|
|
|
|
|
|
|
|
3.2
|
10-K
|
001-34475
|
3.2
|
03/31/2010
|
|
|
|
|
|
|
|
|
|
4.1
|
S-1/A
|
333-148572
|
4.1
|
10/02/2009
|
|
|
|
|
|
|
|
|
|
4.2
|
8-K
|
001-34475
|
10.3
|
05/19/2016
|
|
|
|
|
|
|
|
|
|
10.1*
|
S-1
|
333-148572
|
10.1
|
01/09/2008
|
|
|
|
|
|
|
|
|
|
10.2*
|
10-K
|
001-34475
|
10.6
|
03/16/2017
|
|
|
|
|
|
|
|
|
|
10.3*
|
10-Q
|
001-34475
|
10.2
|
11/07/2013
|
|
|
|
|
|
|
|
|
|
10.4*
|
S-8
|
333-218882
|
4.3
|
06/21/2017
|
|
|
|
|
|
|
|
|
|
10.5*
|
S-8
|
333-218882
|
4.4
|
06/21/2017
|
|
|
|
|
|
|
|
|
|
10.6*
|
8-K
|
001-34475
|
10.1
|
04/12/2010
|
|
|
|
|
|
|
|
|
|
10.7*
|
S-1
|
333-148572
|
10.12
|
01/09/2008
|
|
|
|
|
|
|
|
|
|
10.8*
|
S-1
|
333-148572
|
10.14
|
01/09/2008
|
|
|
|
|
|
|
|
|
|
10.9
|
S-1
|
333-148572
|
10.15
|
01/09/2008
|
|
|
|
|
|
|
|
|
|
10.10*
|
S-1
|
333-148572
|
10.16
|
01/09/2008
|
|
|
|
|
|
|
|
|
|
10.11
|
S-1
|
333-148572
|
10.17
|
01/09/2008
|
|
|
|
|
|
|
|
|
|
10.12*
|
10-Q
|
001-34475
|
10.3
|
08/08/2017
|
|
|
|
|
|
|
|
|
|
10.13
|
8-K
|
001-34475
|
10.1
|
02/01/2012
|
|
|
|
|
|
|
|
|
|
10.14
|
10-Q
|
001-34475
|
10.2
|
11/09/2012
|
|
|
|
|
|
|
|
|
|
10.15
|
10-K
|
001-34475
|
10.18
|
03/18/2013
|
|
|
|
|
|
|
|
|
|
10.16
|
10-K
|
001-34475
|
10.18
|
03/13/2014
|
|
|
|
|
|
|
|
|
|
10.17
|
10-Q
|
001-34475
|
10.3
|
11/09/2015
|
|
|
|
|
|
|
|
|
|
10.18
|
10-Q
|
001-34475
|
10.1
|
05/10/2017
|
|
|
|
|
|
|
|
|
|
10.19†
|
S-1/A
|
333-148572
|
10.29
|
09/16/2009
|
|
|
|
|
|
|
|
|
|
10.20†
|
S-1
|
333-148572
|
10.30
|
01/09/2008
|
|
|
|
|
|
|
|
|
|
10.21†
|
10-K
|
001-34475
|
10.24
|
03/16/2015
|
|
|
|
|
|
|
|
|
|
10.22†
|
S-1/A
|
333-148572
|
10.31
|
09/16/2009
|
|
|
|
|
|
|
|
|
|
10.23†
|
S-1
|
333-148572
|
10.32
|
01/09/2008
|
|
|
|
|
|
|
|
|
|
10.24†
|
S-1/A
|
333-148572
|
10.33
|
05/15/2009
|
|
|
|
|
|
|
|
|
|
10.25†
|
S-1/A
|
333-148572
|
10.47
|
09/16/2009
|
|
|
|
|
|
|
|
|
|
10.26†
|
10-K
|
001-34475
|
10.28
|
03/18/2013
|
|
|
|
|
|
|
|
|
|
10.27†
|
10-Q
|
001-34475
|
10.1
|
05/12/2010
|
|
|
|
|
|
|
|
|
|
10.28†
|
10-Q
|
001-34475
|
10.1
|
05/10/2011
|
|
|
|
|
|
|
|
|
|
10.29†
|
10-Q
|
001-34475
|
10.1
|
05/09/2013
|
|
|
|
|
|
|
|
|
|
10.30†
|
10-Q
|
001-34475
|
10.2
|
08/10/2010
|
|
|
|
|
|
|
|
|
|
10.31†
|
10-K
|
001-34475
|
10.44
|
03/15/2011
|
|
|
|
|
|
|
|
|
|
10.32†
|
10-K
|
001-34475
|
10.45
|
03/15/2011
|
|
|
|
|
|
|
|
|
|
10.33†
|
10-K
|
001-34475
|
10.46
|
03/16/2015
|
|
|
|
|
|
|
|
|
|
10.34†
|
10-Q
|
001-34475
|
10.1
|
11/09/2015
|
|
|
|
|
|
|
|
|
|
10.35†
|
10-Q
|
001-34475
|
10.1
|
08/10/2015
|
|
|
|
|
|
|
|
|
|
10.36
|
8-K
|
001-34475
|
1.1
|
01/06/2016
|
|
|
|
|
|
|
|
|
|
10.37
|
10-Q
|
001-34475
|
10.2
|
11/09/2016
|
|
|
|
|
|
|
|
|
|
10.38
|
8-K
|
001-34475
|
10.2
|
10/27/2016
|
|
|
|
|
|
|
|
|
|
10.39
|
8-K
|
001-34475
|
10.1
|
10/17/2017
|
|
|
|
|
|
|
|
|
|
10.40
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
10.41
|
8-K
|
001-34475
|
10.1
|
10/05/2017
|
|
|
|
|
|
|
|
|
|
12.1
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
23.1
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
31.1
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
31.2
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
32.1
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
32.2
|
|
|
|
|
X
|
|
|
|
|
|
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
|
|
X
|
|
|
|
|
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
X
|
|
|
|
|
|
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
X
|
|
|
|
|
|
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
X
|
|
|
|
|
|
|
|
101.LAB
|
XBRL Taxonomy Extension Labels Linkbase Document
|
|
|
|
|
X
|
|
|
|
|
|
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
X
|
*
|
Indicates management contract or compensatory plan or arrangement.
|
†
|
Portions of this exhibit are redacted in accordance with a grant of confidential treatment.
|
ITEM 16.
|
FORM 10-K SUMMARY
|
OMEROS CORPORATION
|
/s/ GREGORY A. DEMOPULOS, M.D.
|
Gregory A. Demopulos, M.D.
|
President, Chief Executive Officer
and Chairman of the Board of Directors |
Signature
|
Title
|
Date
|
|
|
|
/s/ GREGORY A. DEMOPULOS, M.D.
|
President, Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)
|
March 1, 2018
|
Gregory A. Demopulos, M.D.
|
|
|
|
|
|
/s/ MICHAEL A. JACOBSEN
|
Vice President, Finance, Chief Accounting Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer)
|
March 1, 2018
|
Michael A. Jacobsen
|
|
|
|
|
|
/s/ RAY ASPIRI
|
Director
|
March 1, 2018
|
Ray Aspiri
|
|
|
|
|
|
/s/ THOMAS J. CABLE
|
Director
|
March 1, 2018
|
Thomas J. Cable
|
|
|
|
|
|
/s/ PETER A. DEMOPULOS, M.D.
|
Director
|
March 1, 2018
|
Peter A. Demopulos, M.D.
|
|
|
|
|
|
/s/ ARNOLD C. HANISH
|
Director
|
March 1, 2018
|
Arnold C. Hanish
|
|
|
|
|
|
/s/ LEROY E. HOOD, M.D., PH.D.
|
Director
|
March 1, 2018
|
Leroy E. Hood, M.D., Ph.D.
|
|
|
|
|
|
/s/ RAJIV SHAH, M.D.
|
Director
|
March 1, 2018
|
Rajiv Shah, M.D.
|
|
|
|
EXHIBIT 12.1
|
|
|||||||||||||||||
|
|
|
|
||||||||||||||||
Omeros Corporation
|
|||||||||||||||||||
Computation of Deficiency in the Coverage of Fixed Charges by Earnings Before Fixed Charges
|
|||||||||||||||||||
|
|
|
|
||||||||||||||||
|
|
|
|
||||||||||||||||
|
Year Ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Earnings before fixed charges:
|
|
|
|
|
|
|
|
|
|||||||||||
Loss from continuing operations before income taxes
|
$
|
(53,481
|
)
|
|
$
|
(66,745
|
)
|
|
$
|
(75,096
|
)
|
|
$
|
(73,673
|
)
|
|
$
|
(39,796
|
)
|
Add fixed charges
|
13,987
|
|
|
16,697
|
|
|
8,295
|
|
|
6,824
|
|
|
5,621
|
|
|||||
Add amortization of capitalized interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Add distributed income of equity investees
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Subtract capitalized interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Loss before fixed charges
|
$
|
(39,494
|
)
|
|
$
|
(50,048
|
)
|
|
$
|
(66,801
|
)
|
|
$
|
(66,849
|
)
|
|
$
|
(34,175
|
)
|
Fixed Charges:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense
|
$
|
10,013
|
|
|
$
|
6,359
|
|
|
$
|
2,709
|
|
|
$
|
2,710
|
|
|
$
|
1,865
|
|
Amortization of debt expense and loss from extinguishment of debt
|
804
|
|
|
7,055
|
|
|
2,177
|
|
|
759
|
|
|
502
|
|
|||||
Estimate of interest expense within rental expense
|
3,170
|
|
|
3,283
|
|
|
3,409
|
|
|
3,355
|
|
|
3,254
|
|
|||||
Preference security dividend requirements of consolidated subsidiaries
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total fixed charges
|
$
|
13,987
|
|
|
$
|
16,697
|
|
|
$
|
8,295
|
|
|
$
|
6,824
|
|
|
$
|
5,621
|
|
Deficiency of earnings available to cover fixed charges
|
$
|
(53,481
|
)
|
|
$
|
(66,745
|
)
|
|
$
|
(75,096
|
)
|
|
$
|
(73,673
|
)
|
|
$
|
(39,796
|
)
|
1.
|
I have reviewed this annual report on Form 10-K of Omeros Corporation;
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2.
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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.
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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;
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4.
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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:
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a.
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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;
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b.
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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.
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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.
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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):
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a.
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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.
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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: March 1, 2018
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/s/ Gregory A. Demopulos
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Gregory A. Demopulos, M.D.
Principal Executive Officer
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1.
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I have reviewed this annual report on Form 10-K of Omeros Corporation;
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2.
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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.
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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;
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4.
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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:
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a.
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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;
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b.
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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.
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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.
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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):
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a.
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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.
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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: March 1, 2018
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/s/ Michael A. Jacobsen
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Michael A. Jacobsen
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Principal Financial and Accounting Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Dated: March 1, 2018
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/s/ Gregory A. Demopulos
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Gregory A. Demopulos, M.D.
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Principal Executive Officer
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Dated: March 1, 2018
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/s/ Michael A. Jacobsen
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Michael A. Jacobsen
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Principal Financial and Accounting Officer
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