Omeros Corporation (OMER) Earnings Call Transcript & Summary

Good morning, and welcome to today's call for Omeros Corporation. [Operator Instructions] Please be advised that this call is being recorded at the company's request and a replay will be available on the company's website for 1 week from today. I'll turn over the call to Jennifer Williams, Investor Relations for Omeros.

Good morning, and thank you for joining the call today to discuss the Complete Response Letter received from Food and Drug Administration on Friday, October 15, after market close. I'd like to remind you that today's call will include forward-looking statements, including statements regarding our ability to resolve the matters set forth in the Complete Response Letter and obtain regulatory approval for narsoplimab, plans regarding future actions and communications with FDA and statements regarding the sufficiency of our capital resources and the availability of funding alternatives. These statements are based on management's beliefs and expectations as of today only and are subject to change. All forward-looking statements involve risks and uncertainties that could cause the company's actual results to differ materially. For a discussion of these risks and uncertainties, please refer to the Risk Factors section of the company's 2020 annual report on Form 10-K, subsequently filed quarterly reports on Form 10-Q and other SEC filings. Now I would like to turn the call over to Dr. Greg Demopulos, Chairman and CEO of Omeros.

Thank you, Jennifer, and good morning, everyone. We appreciate you joining us for today's call. With me for the call are Steve Whitaker, Omeros' Vice President of Clinical Development; Cathy Melfi, our Chief Regulatory Officer; Mike Jacobsen, our Chief Accounting Officer; and Nadia Dac, our Chief Commercial Officer. As Jennifer noted, on Friday, we received a Complete Response Letter from FDA regarding our Biologics License Application for narsoplimab in the treatment of hematopoietic stem cell transplant-associated thrombotic microangiopathy, which I'll refer to as stem cell transplant-associated TMA. Obviously, we are disappointed in FDA's action. We believe our data are already sufficient for approval, including having met the prespecified efficacy endpoint that was developed with FDA. These data are strong, have been presented in multiple international medical congresses by world transplant leaders and have been submitted for publication in a peer-reviewed journal. As we've said in the press release, our trial was designed in close collaboration with FDA and included agreement with respect to both the single-arm trial to support approval and the definition of response as the primary endpoint. We worked closely with FDA on the clinical development plan, including agreement that approval of a BLA could be supported by a single-arm trial with response rate as the primary endpoint. However, FDA expressed difficulty in interpreting the treatment effect, likely given the complexity and severity of both the disease and the patient population. We will be requesting a Type A meeting with FDA as soon as possible to discuss the CRL which, by regulation, will occur within 30 days of our request and submission of our briefing package. Our briefing package will include additional information and address all points raised by FDA. While reliant on some external input, we plan to submit the briefing package in a couple of weeks. Following the Type A meeting, we will better understand how to advance to approval, as FDA put it, as expeditiously and least onerously as possible. The CRL does not change our view of narsoplimab's demonstrated ability to address the substantial unmet need in stem cell transplant-associated TMA. Also, to be clear, there were no CMC, safety or nonclinical issues precluding approval raised in the CRL. Now I'd like to speak to our liquidity and capital resources. As of June 30, 2021, we had $74 million in cash, cash equivalents and short-term investments available for operations. We're assessing options to improve our cash position, including debt, equity, partnering activities and other means of accessing capital. We've always taken a flexible approach to our preparations for commercialization of narsoplimab. We wisely held off on hiring the full narsoplimab sales force. So any delay in approval is, at worst case, cash flow-neutral. With the work that's already done, we're well positioned to complete the efforts needed to launch narsoplimab on approval, which we hope will be soon. With that, let's open the call for questions. Operator, please.

[Operator Instructions] Your first question comes from the line of Steve Brozak with WBB.

Just one in 2 parts. Greg, what does this mean? And how long is it going to take? And I'll leave it at that.

I'm sorry, Steve, could you repeat that? It was faint.

Sure. Can you -- Can you tell us what does this mean and how long will it take.

Okay. Look, at the core of this really seems to be FDA's difficulty in interpreting the data. As we've said, this is a complex disease. Patients have multiple comorbidities. Those comorbidities requiring multiple concurrent therapies. We have a substantial disagreement with FDA on several substantive areas that seems to be sticking points. We will be discussing those with FDA at the Type A meeting and do believe that our additional information can provide better clarity for them. With respect to how long we think that this will take to resolve, which was your second part of the question, I believe, look, I don't want to speculate on timing at this point. We really need to meet with FDA at the Type A meeting to understand better the path forward. We do, again, look forward to working with FDA to resolve all of these issues or any issues as expeditiously as possible.

And your next question comes from Colin Bristow with UBS.

This is [ Alice ] on for Colin. So how does this development now impact your plans for the ex U.S. filing? And what can you say about the potential need to conduct an additional trial to gather new data to satisfy the FDA?

Well, with respect to the MAA, we're assessing this now. Obviously, our focus is on the BLA. The MAA will depend on available resources with respect to timing. But of course, as I said, our primary objective is to get the BLA over the finish line. With respect to your second question, I'll turn that over to Cathy Melfi, our Head of Regulatory.

Could you repeat the second question, please?

Sure. So I'm just wondering if you're thinking you might need to do an additional clinical trial to gather new information to satisfy the FDA based on the reason for the letter?

Yes, it's tough to speculate at this point until we have the meeting with FDA, but we don't feel like a clinical trial will be required. But again, I can't say anything definitive until after we meet with FDA.

And your next question comes from Greg Harrison with Bank of America.

In the case that you did need to collect more data or just supplement what you've presented so far, what would your proposal be to the FDA in the coming Type A meeting in terms of how you propose to remedy their concerns?

Steve, do you want to take that?

Sure. We have a lot of different options, and I don't think it's wise that we speculate at this point what those would be as to different types of data that we could provide to FDA. I'm sorry, I can't be more clear, but really feel like at this point we'll be speculating before the meeting.

Got it. And then one follow-up, if I could. What, if any, aspects of the disease complexity emerged since your initial agreement with the FDA on the design and endpoints? Did something unexpected or just previously unknown with their secular disease occur? Or is it simply more of a matter of you're dealing with different people at the FDA who interpret the need for data for approval? Sorry, the amount needed.

Yes, I'll take that, Greg. Look, I don't think anything has changed with respect to the complexity of the disease or the patients. Really can't -- I don't think I can speculate on personnel changes. But I can certainly say that I don't think there's been any change in the complexity.

And your next question comes from Eric Joseph with JPMorgan.

I guess in light of the CRL update here, I wonder if there are any implications for the Phase III, the ongoing Phase II study at IgAN and whether you still view it as designed to support a BLA filing based on proteinuria. Also whether we could get an update on where that study stands in terms of recruitments and whether the company is adequately capitalized to bring that to primary endpoint completion.

First, with respect to your initial question on IgAN, this has no effect on the IgAN trial. As we pointed out, FDA noted no issues in the CRL around safety or CMC. So that should have 0 spillover to any of the other programs. With respect to the endpoint for IgAN, those we fully expect to remain unchanged. These are 2 very different indications to different areas. And those endpoints have been agreed with FDA and are actually being used by other companies as well. Again, the only difference being that, as we understand it, we're the only drug that can obtain full approval on proteinuria alone or regular approval on proteinuria alone. With respect to enrollment, we don't give updates on enrollment numbers. And I think your last question, Eric, or the last part, was with respect to capital. So let me turn that over to Mike.

Yes. Eric, as Greg mentioned, we're obviously assessing options to improve our cash position, including debt, equity, partnering and other means. Just to kind of update you on that, as you're probably aware, OMIDRIA itself is a great asset to have and provides significant positive cash flow to us. Taking those things into consideration, we expect that our revenues will continue to go on OMIDRIA which will further enhance the positive cash flow there. And we're looking and assessing ways to dial back some of our program costs to extend our available cash into mid-2022 without the addition of any incremental cash flow -- or incremental cash inflow.

And your next question comes from Serge Belanger with Needham & Company.

Just one question for me. Greg, earlier this month, you issued a press release, I guess, saying that deficiencies identified by the FDA had precluded labeling discussions and discussions around post-marketing requirements. Just curious if it also precluded a pre-approval site inspection as part of the BLA review.

Cathy?

Yes. The deficiencies precluded discussion was just to do with discussion on labeling and post-marketing requirements or post-marketing commitments and no concerns about pre-approval inspections.

And your next question comes from Brandon Folkes with Cantor Fitzgerald.

Maybe just I just want to come back to the 28 patients. Are you able to just remind us what are the supportive -- I guess, it's going to be off-label therapy, those 28 patients were on during the trial. And how does this off-label supportive care maybe compare to that historical mortality rates that we've previously presented in this population? And then maybe just if I can squeeze one more in. I think on the financing, I think there was a comment about pulling back on some of the programs to extend the cash runway. Can I just confirm whether that includes the IgAN and aHUS trial for narsoplimab?

Brandon, I may have been breaking up here a little bit. Can you repeat the first question?

Sure. So just any color in terms of the 28 patients submitted in this NDA. Were they on any additional supportive care, off-label care, I guess? And if so, how does that off-label supportive care compare to some of the mortality rates we've looked at in the past?

No. These patients -- the 28 patients, you're talking about off-label supportive care for TMA specifically?

Yes. Just anything -- I'm just trying to parse out the FDA comment on difficulty passing up the treatment effect.

Let me be crystal clear about that. Those patients were not on other supportive care, off-label supportive care for TMA. So no.

Great. And then maybe just on the comment about pulling back on some of the early-stage development or just development in general. Any -- are you willing to discuss whether that includes the IgAN or aHUS trial at this stage? Is it just early stage?

Yes, we have not made final decisions on this, but it's certainly, the IgAN trial is moving forward as planned and on track.

I'll hand the call back to Dr. Demopulos.

All right. Well, look, not the news we had hoped for, certainly, but we plan on working through this as quickly as we can. As we've said, we are very confident in the data that we have. You've seen those data. Those have been out there publicly. And I just like to thank everyone for taking the time to join us today. We appreciate the ongoing support, and we'll update you as appropriate. Thank you very much.

And that concludes today's conference. Thank you all for joining. You may now disconnect.