Omeros Corporation (OMER) Earnings Call Transcript & Summary

Good morning, and welcome to today's earnings 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. I'd like to remind you that some of the statements that will be made on the call today will be forward-looking. 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. Please refer to the Risk Factors section of the company's most recent annual report on Form 10-K for a discussion of these risks and uncertainties. Now I would like to turn the call over to Dr. Greg Demopulos, Chairman and CEO of Omeros.

Thank you, Jennifer, and hello, everyone. With me today are Steve Whitaker and Bill Pullman, Cathy Melfi and Mike Jacobson, our respective heads of Clinical, Regulatory and Finance. Also joining us is Dr. Jonathan Barratt, the Professor of Renal Medicine at the University of Leicester and an investigator in the ARTEMIS-IGAN trial. As you all saw in our press release, we announced preliminary results of the prespecified interim analysis in our Phase III ARTEMIS-IGAN trial evaluating narsoplimab for the treatment of IgA nephropathy. Top line results show that narsoplimab did not reach statistically significant improvement over placebo. On the primary endpoint of reduction in proteinuria assessed by 24-hour urine protein excretion or UPE, at 36 weeks in the intent-to-treat population of 180 IgA nephropathy patients with high baseline proteinuria, meaning 24-hour UPE greater than 2 grams per day. Notably, the proteinuria reduction observed in the placebo group was substantially greater than in other Phase III IgAN clinical trials reported to date. Based on these surprising and disappointing results and as previously agreed with FDA, Omeros will not submit an application for approval at this time of narsoplimab in this indication, and we'll discontinue the ARTEMIS-IGAN clinical trial. Let me now invite our clinical team to speak to near-term next steps for this trial.

Thanks, Greg. Steve Wicker with external experts in IgA nephropathy, we'll now begin the process of performing more detailed analysis of the data to understand and learn from these trial results writ large. Certainly, one objective will be to uncover why the proteinuria reduction in the placebo group was substantially greater than another IgAN clinical trials reported to date. On relatively brief review of the data, there's no obvious reason for this, had the effect in our placebo group been within the range of that in other reported IgAN trials. The difference between active and placebo would have been statistically significant. We'll also be examining whether biomarkers, which likely will be available soon, can identify IgAN patients with clear lectin pathway involvement. Notably, as with all other clinical trials of narsoplimab, narsoplimab was well tolerated in this trial, there were no safety signals of concern. Greg?

Thanks, Steve. So absent the opportunity for near-term approval for narsoplimab and IgA nephropathy, we believe that the wise decision is to reallocate the budgeted funds associated with the ARTEMIS-IGAN trial and related commercialization to our other later-stage programs, including the alternative pathway inhibitor, OMS906. OMS906 has generated remarkable data in Phase II clinical trials in paroxysmal nocturnal hemoglobinuria or PNH. And next year, we expect to initiate Phase III programs in both PNH and C3 glomerulopathy. And Novartis' recent release on its alternative pathway inhibitor in IgA nephropathy adds to the expanding scope of validated indications for our MASP-3 inhibitor, OMS906. Our other near-term focus, the planned resubmission of our BLA for narsoplimab in hematopoietic stem cell transplant-associated thrombotic microangiopathy, or TMA, is advancing as planned, and we continue to target an FDA decision on that resubmission for mid-next year. Before we open the call to questions, Dr. Barratt , is there anything that you'd like to add or that we have left out here?

So thanks, Greg. Well, obviously, the results were not what we expected. For whatever reason, and I know we're going to be able to get to the bottom of this with the plan that we've set in place. [indiscernible] rate reduction in proteinuria than any of the other true placebo trials in Phase III in IgA nephropathy that have been reported to date. The biology, which levered in pathway activation as [indiscernible] still stands. [indiscernible] the long-term narsoplimab data from the Phase II that we published in Kidney International Reports and other published reports of narsoplimab used to [indiscernible] just not consistent with that data or with the preclinical data that [indiscernible] very clearly the importance of lectin pathway involvement in IgA nephropathy. And what we saw in this study, particularly in the placebo arm, is really inconsistent with what we believe to be the natural history of IgA nephropathy. So as you said, Greg, I think [indiscernible] and we need to learn from it so that we better [indiscernible] going forward. As Steve mentioned, biomarkers for lectin pathway activation in renal disease will soon be available, and these will be biomarkers of blood urine and kidney tissue. And we're going to be able to use this to exact [indiscernible] from this trial to determine [indiscernible] sedations, who will have a strong response to lectin pathway inhibition. And as you say, and I agree, Novartis' recent press release bodes well for complement inhibitors in general and for alternative pathway inhibitors like OMS906. So I think it's clear -- it remains clear that both alternatives [indiscernible] treatment of [indiscernible] in more detail. [indiscernible] that's been generated from the ARTEMIS-IGAN trial.

All right. Thank you, John. With that, operator, let's open the call to questions.

[Operator Instructions] Our first question comes from Elliott Bosco with UBS.

This is Elliott Bosco on for Colin Bristow, UBS. Could you just -- 2 questions for me. Could you just clarify how the reallocation of funds affect your cash runway? And then also, could you just go through the TA-TMA resubmission? I know you anticipate a potential decision mid next year, but have you resubmitted at this point?

Sure. First, with respect to your question about how it affects our cash burn. Clearly, stopping the IgAN trial and the launch preparations for narsoplimab and IgAN will significantly lower our cash burn in the near term. Your second question about TA-TMA. We remain on track, as I said. We have not yet resubmitted the BLA. The statistical analysis plan is well laid out. And with one additional, we hope discussion with FDA, we'll be ready to resubmit. But let me ask Cathy if she has any other color on that.

Thanks, Greg. As Greg mentioned, we're continuing to target the decision by mid next year with the expected approval times for a resubmission of a BLA, we continue to be on track for that expectation.

Does that answer your question, Elliot?

Yes, it did. That's all for me.

Our next question comes from Steve Brozak with WBB.

Yes, thanks for long for questions. I do have 2. One is, I know you can't say much, but it looks like the control behaved in a very, very different way than prior trials. And as far as the other specific applications for narsoplimab, this wouldn't change anything as far as those other potential applications and/or this just adds to the body of knowledge that you've already developed for narsoplimab. That's the first question. I've got a second question after that, please.

Yes. Well, first, directly to answer your question, no, this has no effect on anything else we would do with narsoplimab or any of our other lectin pathway inhibitors, 1029, small molecule that we're developing, et cetera. Obviously, this is not only disappointing, but frankly surprising. The proteinuria reduction seen in the placebo group in this trial was remarkably large. I mean, as John said, really inconsistent with the putative natural history of the disease. So we're left at this point, scratching our heads. We need to dig into it, as Steve said. The difference between the placebo effect and the improvement due to narsoplimab for those reasons did not reach statistical significance. We see some other unusual things in the trial as well, and we'll need to examine all of those closely. Of course, we have not had a chance to do that yet as soon as these data -- top line data were available and confirmed we wanted to make them publicly available as soon as we could. But there's a lot of work that needs to be done to really understand what happens. We need to examine it closely. We need to understand what happened, we need to learn from this to design any future renal trials, not just for narsoplimab, but for any of our complement inhibitors. I mean, OMS906 as well. So I think that sums it up pretty well. For competitive reasons here, we do not plan to release the details of the results at this time. We need to get smarter about it. We don't need to make everybody else, our competitor smarter about it.

Okay. And that gets us back to -- on the stem cell TA-TMA side. You're still getting significant requests on compassionate use. So as far as everything is concerned there, it is still the focus that it was. And just one item. On the safety, there were no -- there was nothing outside of the safety profile that you had expected. So the combination of those 2 still make it something that people are still asking for in the stem cell TA-TMA side. Is that an accurate description, please?

Yes. As Steve said, we saw no safety signal of concern at all in this study as we have not seen in any other of our studies, meaning none of our studies have shown a safety signal of concern with narsoplimab. Yes, Steve, we continue to get requests regularly. We've received, by at least 3 new requests last week for narsoplimab and TA-TMA. Many of these come from sites that have previously used narsoplimab in their patients for TA-TMA. And interestingly, a number of the patients -- obviously, when we get the request, the patients are in pretty poor shape. A number of them have undergone and failed treatment with other agents, other complement inhibitors and other agents as well. That's when the request comes. And frankly, the response rate survival rate in these patients has been quite remarkable with narsoplimab. I'll turn this over to, again, Cathy, and perhaps you can speak more to it.

Yes. Thanks, Greg. As you said, we do continue to get a lot of requests for compassionate use. I think we mentioned before that we'll share the data we have on compassion use patients with FDA. And as we said before, the pieces for the planned BLA resubmission for narsoplimab in TA-TMA are coming together nicely. And we're looking forward to getting that information to FDA and having them review it.

Our next question comes from Greg Harrison with Bank of America.

I know you're not giving details on the data, but are you able to say whether the narsoplimab arm trended towards greater proteinuria reduction in the placebo arm? And then also, are you able to give an update on your anticipated cash runway?

Yes, it did. And in fact, I think as the prepared statements included, Greg had the placebo group falling within the range even at the greatest amount of improvement reported for any other Phase III IgA trial, the delta between narsoplimab treatment and placebo would have been statistically significant. So somehow, we were bitten here by a substantially greater placebo effect. And we don't have a good answer for that right now. We will, I hope, but we don't have the answer for that. With respect to cash runway, as I mentioned earlier, again, stopping the IgA nephropathy trial and halting the launch preparations associated with narsoplimab and IgA significantly lower our cash burn in the near term. So did that answer your question?

Yes. That's helpful.

Thank you. I'm showing no further questions at this time. I'd like to turn the call back over to Dr. Demopulos for any closing remarks.

All right. Thank you, operator. Thank you, everyone. So as we've discussed here now, our work begins to dissect what happened in our ARTEMIS-IGAN trial. While the results of the trial are, I think, certainly disappointing, we remain confident in and committed to success of our ongoing programs. We look forward to sharing more information with you later this quarter. So thank you again for joining the call this morning. As always, we appreciate your continued support. Have a good day.

Thank you for your participation. This does conclude the program, and you may now disconnect. Everyone, have a great day.