Omeros Corp Q1 FY2021 Earnings Call

Good afternoon, and welcome to today's earnings call for Omeros Corporation. 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 one week from today. I'll turn over the call to Jennifer Williams, Investor Relations for Omeros.

Good afternoon, 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 special note regarding forward-looking statements and the Risk Factors section in the company's quarterly report on Form 10-Q which was filed today with the SEC and the Risk Factors section of the company's 2020 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, Omeros' Chairman and CEO.

Thank you, Jennifer, and good afternoon, everyone. We appreciate you joining us for today's call. Our agenda begins with a corporate update. As part of that, we'll be joined by Nadia Dac, our Chief Commercial Officer. Mike Jacobsen, our Chief Accounting Officer, will then provide an overview of our first quarter financial results. We reserve time for questions following the prepared comments. We'll start today's call with an update on narsoplimab. Narsoplimab is our fully human monoclonal antibody targeting MASP-2, the effector enzyme of the lectin pathway of complement. Our biologics license application, or BLA, for the treatment of hematopoietic stem cell transplant-associated thrombotic microangiopathy, or TA-TMA, was accepted by the FDA for a priority review, and the PDUFA date is July 17. As we recently shared, a new ICD-10 diagnosis code for TA-TMA and two new ICD-10 procedural codes for the administration of narsoplimab have been approved. The ICD-10 diagnosis code awarded by the Centers for Disease Control and Prevention, or CDC, will be effective October 1, 2021, consistent with CDC's annual schedule. This code will allow physicians and others to more accurately code, track, and bill for TA-TMA. The diagnosis code should also provide a competitive benefit to narsoplimab given that other therapies are currently used off-label to treat TA-TMA. This off-label use has frequently been reimbursed because without a specific TA-TMA diagnosis code, these off-label therapies have been coded with diagnoses for which they are approved. Now with the diagnosis code specifically for TA-TMA, it should become easier for payers to track and question the use of off-label therapies. We expect narsoplimab will be the first drug approved specifically for the treatment of TA-TMA, and if so, its use would be uniquely on-label for TA-TMA. In addition, the Centers for Medicare and Medicaid Services, or CMS, granted two ICD-10 procedural codes that will allow providers to bill for the administration of narsoplimab in the inpatient setting. These codes also become effective on October 1, 2021. Throughout the application process, Omeros collaborated closely with key transplant societies and organizations, including the Center for International Blood and Marrow Transplant Research, the American Society of Transplant and Cellular Therapy, the American Society of Hematology, the Pediatric Transplantation and Cellular Therapy Consortium, Be The Match National Bone Marrow Donor Program, and the TA-TMA Guidelines working group, which consists of some of the most respected transplant physicians in the U.S. and Europe. Narsoplimab is also a focus of attention at international society meetings. Selected for a podium presentation, Professor Alessandro Rambaldi of the University of Milan discussed the narsoplimab TA-TMA pivotal trial data in February at the annual meetings of the European Society for Blood and Marrow Transplantation. That conference also featured several other scientific presentations on narsoplimab in TA-TMA. For the upcoming 2021 Congress of the European Hematology Association in June, the narsoplimab TA-TMA pivotal trial data, again, were selected for a podium presentation. In addition, manuscripts will soon be submitted, one authored by investigators of the TA-TMA pivotal trial detailing the trial's results; and the other authored by international experts on complement as well as by leaders in adult and pediatric stem cell transplantation, elucidating the role of MASP-2 and the lectin pathway in TA-TMA and other endothelial injury syndromes. Narsoplimab also continues to be used to treat critically ill COVID-19 patients. In prior calls and presentations, we've highlighted the pathophysiologic similarities between TA-TMA and COVID-19, which are both endothelial injury syndromes. We've also published results from the first cohort of narsoplimab treated COVID-19 patients in Bergamo, Italy, all of whom recovered, survived, and showed no clinical or laboratory evidence of long-haul disease. Results from the second cohort of critically ill COVID-19 patients in Italy are similarly impressive. Data have been collected, and we expect that they also will be published. In addition to the severely ill COVID-19 patients we've treated under compassionate use, narsoplimab is part of the nationwide I-SPY COVID-19 trial sponsored by Quantum Leap Healthcare Collaborative. Partly funded by BARDA, the trial features an adaptive platform design intended to increase its efficiency by minimizing the number of study patients needed and the overall trial duration. Dosing of patients with narsoplimab in the trial began in early March. Work also continues at our laboratories at the University of Cambridge, the Omeros Cambridge Center for complement and inflammation research or OC3IR. The OC3IR is part of the humoral immune correlates of COVID-19 Consortium, funded by U.K. Research and Innovation and the British National Institute for Health Research. We expect that, soon, a series of manuscripts will begin coming from OC3IR directed to narsoplimab and the lectin pathway in COVID-19. The rollout of COVID-19 vaccines continues to have its challenges. Meanwhile, variants of the SARS CoV-2 virus continue to grow in number, perhaps hastened by selective pressure resulting from therapeutic approaches aimed at conferring passive immunity. At the same time, global COVID-19 infections, hospitalizations, and deaths continue mounting. Many experts in the field believe that the key to an effective therapeutic is targeting the endothelial injury and associated complications like thrombosis and hypercoagulation that reportedly are present across all COVID-19 variants to date. This speaks directly to narsoplimab, not only for acute COVID but potentially also for the debilitating aspects of long-haul disease. Discussions are ongoing with governments in the U.S. and internationally regarding funding and manufacturing support. Beyond our work in endothelial injury syndromes, namely TA-TMA and COVID, we have two ongoing Phase III programs for narsoplimab, one in IgA nephropathy, and the other in atypical hemolytic uremic syndrome, or aHUS. Our Phase III ARTEMIS-IGAN trial has over 120 sites already activated worldwide. We're also expanding to additional geographies, including China, where IgA nephropathy is more prevalent than in other parts of the world. We expect that this expansion will further accelerate progress in the ARTEMIS-IGAN trial and allow us to wrap up enrollment and read out proteinuria data next year. To our knowledge, narsoplimab is the only drug in development for IgA nephropathy that can obtain full or regular FDA approval on proteinuria data alone. Now let's look at our first quarter financial results. As we discussed on our last call, OMIDRIA recently was determined to qualify for separate payment by CMS when used in ambulatory surgery centers, or ASCs, under CMS' policy that provides separate payment for non-opioid pain management surgical drugs. Net revenues from the sale of OMIDRIA in the first quarter were $21.1 million, a doubling over the previous quarter. Sales of OMIDRIA have continued to grow through the first part of the current quarter and are quickly approaching revenue levels in the ASCs present before OMIDRIA's pass-through status expired on September 30 of last year. The revenues achieved in the first quarter were despite limited sales in January and part of February, caused by a delay on the part of Medicare Administrative Contractors, or MAX, in posting CMS' December action restoring separate payment for OMIDRIA. This delay created uncertainty regarding reimbursement among a good number of our customers who refrained from purchasing until the MAX publicly confirmed restoration of OMIDRIA separate payment in late January. Our net loss for the first quarter was $35.1 million or $0.57 per share, of which $4.1 million or $0.07 per share were noncash charges. As of March 31, we had $100.5 million of cash, cash equivalents, and short-term investments. We also have a $50 million accounts receivable baseline of credit and an additional $150 million available through an at-the-market equity program. Now that separate payment has been restored in the ASCs, we remain committed to ensuring that cataract surgery patients in hospital outpatient departments, or HOPDs, are also able to access OMIDRIA. The Non-Opioids Prevent Addiction in the Nation Act or the NOPAIN Act would do just that, mandating separate payment for non-opioid surgical pain management drugs like OMIDRIA when used in either ASCs or HOPDs. The NOPAIN Act has been reintroduced in the Senate and already lists 17 senators as cosponsors. We expect the House companion to the Senate bill to be introduced within the next several weeks by its lead sponsors: Democrat Representatives Kuster and Zoe, and Republican Representatives McKinley and Fitzpatrick. The NOPAIN Act has strong bipartisan support among congressional members and leadership as well as from medical societies, including the American Medical Association, and counts as its supporters a number of very strong patient advocacy groups. With that, I'll turn the call over to Nadia Dac, our Chief Commercial Officer, to provide an update on commercial activities for both narsoplimab and OMIDRIA. Nadia?

Thank you, Greg. It's been an exciting first three months for me with Omeros. I'm proud of the progress the commercial team has been making with building momentum for OMIDRIA following the December 2020 CMS decision for separate reimbursement in the ASCs as well as with narsoplimab launch readiness for our July PDUFA date. I'll begin with the significant progress with narsoplimab launch readiness. Talented regional hospital sales managers with deep experience in stem cell transplantation, hematology, and oncology have been identified for each of our territories. They have existing relationships with top transplant centers. They will focus on account profiling and disease awareness education ahead of our anticipated FDA approval. We are building a best-in-class hematology oncology field force to ensure we hit the ground running at the time of approval. The field marketing and medical science liaison teams are already in place, building relationships in key transplant centers of excellence, providing critical disease awareness education and creating center-specific plans to ensure rapid access to narsoplimab post-approval. Our national payer team has been engaging payers with disease state and preapproval information exchange presentations. Payers are reacting positively to narsoplimab's clinical and safety profile. We have held advisory boards with hospital formulary decision-makers who have indicated a likelihood of managing narsoplimab treatment according to the final label. In fact, they highlighted narsoplimab's strong efficacy data, coupled with a good safety profile as a rarity in their field, particularly for a life-threatening disease. In addition to these engagements, we have been executing a multichannel unbranded disease awareness campaign, driving online traffic to eisthreat.com, a website directed to educating physicians and patients about endothelial injury syndrome. The response has been impressive with over 11,000 unique users to date. Our market research with HSCT transplant physicians indicates a near-unanimous belief that numerous biologically linked endothelial injury complications can occur post-HSCT, a recognition that has steadily increased since our disease education efforts began. Respondents ranked TA-TMA as one of the most serious transplant complications. Ninety percent of transplants surveyed correctly cited complement activation as playing a central role in endothelial injury syndrome. Importantly, they also recognize the fundamental role of the lectin pathway in endothelial injury. Overall, it is clear from our interactions with transplanters that their understanding of endothelial injury syndrome essential to TA-TMA is rapidly growing and that they believe a novel therapeutic option for the treatment of TA-TMA represents a significant unmet need. The commercial team has also been focused on building OMIDRIA momentum with steady and sustained recovery following the uncertainty around reimbursement. The total number of ASCs ordering in the first quarter has increased by 43% over the fourth quarter, driving a total ASC purchase volume increase of 274% in the same period. Our efforts with establishing partnerships with ASC chains and groups of ASCs owned and operated by private equity groups have been instrumental in building this momentum. We successfully executed agreements with seven private equity groups and ASC chains in the first quarter. We estimate the aggregate procedural volume from the affiliated facilities at nearly 300,000 procedures annually or an additional 7% to 8% of the reported cataract market, representing a significant opportunity for future OMIDRIA growth. Additionally, cataract surgeons' favorable perception of OMIDRIA and expectation to use OMIDRIA in the future continues to strengthen. In a recently completed attitudes and usage market research study conducted with cataract surgeons, OMIDRIA shows a strong association with four key attributes that surgeons rated among the most important when prescribing a treatment for use during or following cataract surgery. Specifically, surgeons indicated familiarity with our real-world clinical data showing that OMIDRIA decreases complication rates, prevents iris prolapse and floppy iris syndrome, and that it decreases the use of pupil-expanding devices. These associations support a positive value proposition for OMIDRIA since complications and the use of additional devices in surgery can lead to increased costs, lower patient satisfaction, and reduced throughput in the OR. The surgeons also perceive the overall strong value proposition OMIDRIA offers. They specifically cited OMIDRIA's consistent outcomes and quality and markedly better safety profile and FDA approval as significant benefits over compounded products, which impose unnecessary and often unknown risks on patients. We believe that the growth we have seen since the fourth quarter coupled with positive perceptions among surgeons and ongoing efforts to expand reimbursement among commercial and Medicare Advantage payers will continue to build strong momentum throughout the second quarter. With that, I will turn the call back over to Greg.

Thank you, Nadia. Nadia underscored we've seen OMIDRIA's momentum growing in 2021, and we're excited about the work that Nadia and her team have been doing to prepare for a successful commercial market launch of narsoplimab. Working to realize the full potential of our MASP-2 program, we're also focused on life cycle management beyond narsoplimab. OMS1029 is our second-generation long-acting MASP-2 antibody. Targeting once monthly or less frequent subcutaneous dosing, OMS1029 is expected to enter the clinic in the first half of next year. In addition, we continue to advance our small molecule MASP-2 inhibitors designed for oral administration. Our MASP-3 program is also progressing well. MASP-3 is the key activator of the alternative pathway, and we, along with other leading complement researchers, believe that it's the premier target in the alternative pathway. The Phase I trial for our MASP-3 inhibitor, OMS906, remains on schedule. It's a placebo-controlled, double-blind, single ascending and multiple ascending dose trial. We have completed dosing five cohorts and expect a data readout later this quarter. Let's turn now to OMS527, our PDE7 inhibitor for the treatment of addictions and compulsions. Having completed a successful Phase I trial, the clinical program is planned to continue advancing when additional resources are available. In the meantime, a seminal paper detailing the mechanism of action of PDE7 inhibition and nicotine addiction will soon be published in the peer-reviewed Journal of Neuroscience. We'll wrap up the program update today with GPR174 for cancer immunotherapy. GPR174 is an immunosuppressive G protein-coupled receptor that is activated by products of the tumor microenvironment. We're building a broad and exclusive intellectual property position around GPR174. We also are aggressively developing both small molecule and antibody inhibitors of GPR174 to unlock the potential of this exciting new cancer immunotherapy target. We found that GPR174 deficiency in mouse models enhances T-cell proliferation and tumor killing phenotypes, leading to reduced tumor growth. We believe that a GPR174 inhibitor will be necessary to maximize tumor-killing immune responses following radiation in chemotherapy, all of which can cause cell death. We also believe that inhibitors of GPR174 could be combined with existing cancer immunotherapies like Yervoy or KEYTRUDA to improve their response rates. In addition, we plan to publish data soon from our studies demonstrating that combined inhibition of GPR174 and adenosine receptors synergistically enhances T-cell activation and tumor killing phenotypes. With that, I'll turn the call over to Mike for an overview of our first quarter financial results. Mike?

Yes. Thanks, Greg. As Greg noted, OMIDRIA and total revenues for the first quarter were $21.1 million. Our net loss for the first quarter was $35.1 million or $0.57 per share. This includes non-cash expenses of $4.1 million or $0.07 per share. As mentioned earlier, pass-through extension for OMIDRIA expired on October 1, 2020, and separate payment for OMIDRIA in the ASCs wasn't announced until December. The MAX, which is the regional reimbursement administrative for Medicare Part B didn't input the new reimbursement rules into their systems until well into the first quarter, and many of our ASC customers were hesitant to use OMIDRIA until they tested the reimbursement process. This negatively affected our January and February revenues. As of March 31, 2021, we had $100.5 million of cash, cash equivalents, and short-term investments available for general operations. We also have a $50 million accounts receivable baseline of credit which allows us to borrow up to 85% of our available accounts receivable borrowing base after certain reserves. As you may recall, in March, we also entered into an at-the-market sales agreement that allows us to sell from time to time up to $150 million of our common stock. During March and continuing into the second quarter, we have seen a steady increase in OMIDRIA sales to ASCs and our weekly sell-through to these customers are approaching levels seen prior to the loss and subsequent restoration of separate payment. Costs and expenses for the first quarter were $51.7 million, an increase of $7.2 million from the fourth quarter of last year. The increase was primarily due to additional narsoplimab commercial drug substance lots being produced at Lonza, our contract manufacturer. Until we receive approval for narsoplimab in TA-TMA, all CMC-related costs that would normally be included in inventory are being expensed as incurred. Interest expense for the current quarter was $4.9 million. This is $3.1 million less than in the fourth quarter of last year due to the January 1 adoption of ASU 2020-06, which allows us to account for our convertible senior notes solely as debt, instead of debt and equity. Looking ahead, we assume separate payment by CMS for OMIDRIA and the ASCs will continue consistent with CMS policy that has been in place since 2019. We are confident that OMIDRIA revenues will continue to increase as ASC customers ramp up their use of OMIDRIA and our customer base continues to grow. We expect our research and development costs to be similar in the second quarter to those in the first quarter. Our costs for manufacturing of narsoplimab commercial supply will decrease in the second quarter, but our ongoing costs for our Phase III clinical programs for narsoplimab and activities related to OMS906 and OMS1029 should increase. As I noted just a few moments ago, we will continue to expense narsoplimab manufacturing costs rather than include them as inventory until regulatory approval is certain. SG&A costs are expected to increase throughout the year, largely to support narsoplimab launch preparations and the hiring of our regional hospital sales managers. Interest expense for the second quarter should be approximately $5 million. With that, I'll turn the call back over to Greg.

Thanks, Mike. Let's open up the call, operator, to questions.

Our first question is from Steve Brozak from WBB.

Just one on the sales that you just posted on OMIDRIA. Can you tell us how you feel about it? Because I'm just looking for a general feedback on everything and what your thoughts are.

Yes, I'll answer that and then pass it to Nadia to see if she shares the same perspective. I'm pleased with those numbers, especially considering that the MAX had a delay in receiving CMS' decision on separate payment until late January. This caused some understandable concerns among our customers who wanted reassurance that the MAX would reimburse upon billing submission. Despite that, I believe the numbers were strong. As both Nadia and Mike have pointed out, those numbers have continued to improve throughout this quarter, and we feel very positive about it. Now, let's hear how Nadia views this.

Yes. Greg, I completely agree. Just having started within the first quarter, coming on the heels of a very challenging situation where reimbursement was lost, I'm really proud of the team because together, we focused on the areas that had the best return, meaning focusing on the customers, focusing on where we needed to make sure the messages were received, that reimbursement is restored. And this kind of focus is building really strong momentum. So I'm extremely pleased, and I'm excited even as we set out in this quarter for an even better outcome.

Your next question is from Colin Bristow from UBS.

So on Novartis' LNP023, I'd love to just get your view on the recent data in IgA nephropathy and how you see this leading through to your program.

I'm sorry, Colin, it's a bit unclear. I heard about IgA nephropathy. Could you please repeat the first part?

I was discussing Novartis' compound and their data, and someone is assisting me a bit with the question. I just want to confirm, was that the question? Yes. Sorry, Novartis' LNP023. Just your view on the data, any read for me to take from the program, the efficacy bar?

Right. Well, first, let me just say that all I know about those data are what is available publicly, which is some, but not in great detail. My recollection is that they showed about a 23.5% reduction in proteinuria in the patients treated with their Factor B inhibitor. Does that align with your understanding, Colin?

Yes, that's exactly right. The 90-day endpoint, 23% reduction.

Again, I would reference our discussions regarding the reduction of proteinuria with narsoplimab in IgA nephropathy. It seems that our results are significantly better. While other drugs, including Novartis' Factor B inhibitor, show reductions in the low to mid-20% range, narsoplimab has demonstrated reductions ranging from 50% to as high as 90% in some patients. This data gives me a lot of confidence in narsoplimab's potential impact on IgA nephropathy and highlights a clear distinction between our results and what others are reporting with their treatments. Let me pause here to see if that addresses your question.

Yes, that was very helpful.

Your next question is from Geoff Meacham from Bank of America.

I've got a couple, but one, Greg, on the narsoplimab COVID front. How do you view the path forward just given all the progress we've seen with vaccine? But I guess the question is, does the slowdown in new cases and hospitalizations affect kind of your view of the commercial potential for this indication? And then I have a follow-up.

That's an excellent question. I believe the vaccines have faced challenges, and the rollout has also encountered difficulties. We're observing that several states are pulling back on COVID vaccines, struggling to incentivize citizens to get vaccinated. Additionally, the publicized issues surrounding some vaccines have raised concerns. The emergence of new variants adds to the problem, and it raises questions about their origin. While the virus is mutating on its own, there may also be selective pressures at play. Some experts suggest that these pressures could partly stem from methods involving passive immunity, such as convalescent plasma and certain antibodies. In summary, I do not believe COVID will cease to be a problem anytime soon; I foresee it remaining an issue not only in the U.S. but worldwide for years ahead. A therapeutic approach is essential. While vaccines are beneficial in reducing infections and transmission, I don't think we can achieve collective immunity without effective treatments. The variants show consistent issues, such as endothelial injury and related complications, including microthrombosis and hypercoagulation. Addressing this at the endothelial level is crucial, and that's precisely what narsoplimab does. Unfortunately, it appears that COVID will remain prevalent for several more years, and narsoplimab may represent one of the best solutions available for the treatment of critically ill COVID patients. The reality is that these patients will continue to exist in significant numbers.

Got you. Okay. That's helpful, Greg. And then either for you or for Nadia, I just wanted to talk a bit about the launch in TMA. Maybe just help characterize the level of awareness today versus a year ago. And the follow-up is, do you think the treatment guidelines or some sort of consensus-building publication may be helpful? Or are physicians, in your view, likely to target at-risk patients in an effective way in TMA?

Yes. Let me hand that off to Nadia to answer your question, and I may add a little bit, but let's see. Nadia, would you? Thank you.

Thanks. The team has been conducting the attitudes and usage study for a while now, and we are currently in our third wave, allowing us to monitor awareness very closely. We are pleased with the growth we have observed wave over wave. While products used off-label have slightly higher awareness, we are very satisfied with the current unaided awareness levels. Regarding the diagnostic codes discussed earlier, having dedicated diagnostic codes for TA-TMA will indeed assist in increasing awareness and building consensus. Until now, there has been no effective way to track what is classified as TA-TMA versus off-label use. A consensus statement or paper would certainly help. While publications show a range of opinions, we strongly believe in the need for disease education. When our field team engages in discussions about signs, symptoms, and diagnostic criteria, we see a shift from the belief that there are no patients to the realization that there may be a patient currently hospitalized. We consider this a crucial aspect of preparing for launch and approaching the PDUFA date. Let me ask Greg if he has anything else to add.

No, I think that answers the question pretty well. I mean, just to underscore something you said is to your question about consensus, Geoff, there is a study group that is consisting of really the leading transplanters in both the U.S. and Europe who are doing just what you're proposing, which is they have come together as a group to better define the entity that is TA-TMA. And that will result in a publication. I think that will help certainly to align transplanters around the world on what is the TA-TMA and perhaps, how best to approach treatment for that. So I think certainly, as you've identified, that sort of alignment or consolidation would be helpful. And I think we're certainly headed toward that and I think could have that in a relatively short amount of time.

Your next question is from Raghuram Selvaraju from H.C. Wainwright.

Just a quick follow-up on what you just said regarding the ICD codes. Could you perhaps comment on the potential magnitude of the impact? And when do you think its influence on the utilization may kick in?

Yes. Again, I'm going to hand this over to Nadia in just a moment. But I think just from what I said, those become effective on October 1, 2021. So we would expect, obviously, to have an effect starting then, and that effect would continue to grow. But let me see, Nadia, how do you view the codes both for diagnosis and really for procedure, which allows for the reimbursement for administration of the drug, which is also very important.

Yes. I've launched my fair share of products. And when you're launching into an area that there are no established diagnosis codes, let alone procedural codes for the product, that's half the battle. And you don't know. There's no guarantee whether these are going to be in place when you get your PDUFA approval. Since you have received this approval on both diagnostic and procedural codes, and that will be effective in October, is a very big win for the launch. And as I said, it will help track actual TA-TMA patients. But it will also allow the prescribing of narsoplimab and positioning of the billing, obviously, these patients here in the hospital settings and the appropriate treatment centers. So I consider this a very big win and something that we're very happy about in terms of the momentum that the launch will take once we are approved.

It was also great to have the support of leading organizations in transplant and those addressing the complication of transplant TA-TMA, internationally. This highlights how people perceive the significance of this issue and also the potential importance of narsoplimab as the first approved treatment for TA-TMA, if we reach that milestone.

Awesome. And just a quick question on the COVID-19 study. And please excuse me if you've already answered it in your prepared remarks, but when can we anticipate data from the I-SPY study? And maybe if you could comment on how the asset is differentiated from the rest of the drugs in the study since it's the only complement inhibitor involved in the study?

Yes, I can confirm that narsoplimab is the only complement inhibitor in the I-SPY trial and the only one that has ever participated in it. Regarding when we can expect data, that's difficult to predict. We are not directly involved in the study's conduct or design, as required by the Quantum group to ensure independence from the industry. Our role is solely to provide the drug, and after that, we must wait for updates from them. I know the study has been enrolling patients, and our arm has also been recruiting. However, I cannot share specific enrollment numbers. We'll have to see how things develop. I believe they are aiming to provide data this year, but beyond that, it's uncertain. I understand that may seem evasive, but we genuinely have limited information, and that's intentional.

Great. And I should have probably mentioned this in the beginning of the call, I'm Chait filling in for Ram. But just a last thing from me. On OMS906, I know you provided some color in the press release, but can you still anticipate data this quarter? And lastly, maybe some color on the enrollment pace in the IgA nephropathy study with narsoplimab.

We anticipate having the initial data release from the 906 trial later this quarter. That trial is currently on schedule. Regarding the IgA study, we are continuing to enroll participants. As we have mentioned, we experienced some slowdowns due to COVID, which affected patient enrollment at the hospitals. However, COVID restrictions seem to be easing, and enrollment is picking up again. We also plan to expand our geographic regions for enrollment, targeting China specifically due to its high incidence of IgA nephropathy. To give you an idea, about one in four dialysis patients in China has IgA nephropathy. We believe that once we establish operations there, progress can be made quickly. Let me turn to Steve Whitaker to see if he has any additional thoughts on this.

No. Greg, you summed it up well.

Good. I think we’re in good shape there. We're excited about the program regarding Novartis' Factor B inhibitor. All the things we observe indicate that narsoplimab in IgA nephropathy has a uniquely significant role. We just need to review the data when it becomes available, and we certainly hope that it will confirm our previous observations. If that happens, it could be a game changer not only in IgA but potentially across various renal diseases, affecting mechanisms at both the glomerular and tubular interstitial levels. We are recognizing that the pathology and mechanism of our drug extend beyond IgA nephropathy to a broader category of proteinuric renal diseases in general, which is very important.

Your next question is from Jason McCarthy from Maxim Group.

This is Michael Okunewitch on the line. So I'd like to ask on midyear sales. Maybe if you could help us quantify the magnitude of the impact that, that lack of clarity on reimbursement had in the early part of the quarter, like how much of the revenue was concentrated in March versus January, February? And was there any impact due to COVID, given the high number of cases early in the quarter? Or was that kind of overshadowed by the reimbursement stuff?

Yes, I understand. It's challenging to quantify this. January is typically a slower month for cataract surgeries and surgeries in general due to the transition of health care plans. However, January and the early part of February are still significant for us. The best way to quantify this is to say that it has a substantial effect when some of our larger and more reliable customers are hesitant to proceed until it's confirmed that the MAX will be paid. While CMS can confirm that Omeros and OMIDRIA have separate payments in the ASCs, it’s a different matter when it comes to actual billing reimbursement. Many of these customers preferred to wait for that confirmation. After it was confirmed, we saw an uptick in activity in February, and March is generally one of our strongest months. Overall, these numbers are quite indicative, and as Nadia noted, we're pleased with the results. Nadia, do you have any additional thoughts on that?

No, I think you answered it very well, and I completely agree with it.

Your next question is from Andreas Argyrides from Wedbush Securities.

This is Andreas on filling in for Vasiliana Moussatos. A couple from us. Starting with OMIDRIA, just a quick comment on the number of cataract surgeries that you're seeing now compared to pre-COVID levels, and then I'll have a follow-up.

Yes. Understood. And I think that Michael asked the same question. I may not have answered that, so thank you for giving me another opportunity at that. It's a little difficult again to tell what's happening there. I think that COVID certainly is having an effect. It's not having the same kind of effect it had last year or last summer or, frankly, last spring when elective procedures were shut down. But I think, certainly, there's still hesitation on the patient side. I think also in the ASCs and in the HOPDs, there's still additional precautions that are in place, which reduced the throughput of these types of surgical procedures, right? If there's a longer turnover time, that is going to reduce the number of cases that you can run in any specific room on any given day. So there's an effect. We're not focused on it, I guess, would be our best answer. As you can see, the team has done a tremendous job of driving OMIDRIA utilization back. And we are, as I think you've heard a couple of times today, we're approaching the levels of utilization that we had prior to loss of pass-through and then restoration of separate payment by CMS. So we're not focused on it. I'm sure it's a factor. I can't quantify for you how big a factor that is.

Just a follow-up to that. What do you think will be a bigger contributor to sales going forward? Will it be the surgeons returning to pre-COVID levels, or will it be more about the restored access?

Yes, I don't think there's any doubt about it. The restored access is critical. COVID may still have an effect, but it will be minor compared to the restored access. The importance of restored access in ASCs is clear, as approximately 80% of cataract surgeries are performed there. The NOPAIN Act, which we discussed earlier, has a strong chance of success. It stands out as one of the few bills in Washington right now that enjoys solid bipartisan support. If both parties in Congress want to come together on anything, this presents a significant opportunity. The number of cosponsors is increasing; last I checked, there were 17 on the Senate side. Once the bill is introduced in the House, the number of bipartisan supporters will grow quickly. It’s important to note that with the new Congress, the NOPAIN Act had to be reintroduced. In the previous Congress, it had around 60 cosponsors in the House evenly split between Republicans and Democrats, and about 25 or 26 senators supporting it, also divided closely along party lines. The bipartisan backing has been strong. With the new Congress in session, the bill is currently being reintroduced, and we are not leading this process; it is primarily being driven by the Coalition for Non-Opioid Choices, with support from various associations and patient advocacy groups. We are observing this development from the sidelines, but it seems to be gaining traction, and that would lead to separate payments in HOPDs. Nadia, do you have any thoughts on that?

Yes. I want to expand on a point that Greg mentioned regarding the significant impact of the lack of reimbursement on us. When we assess the effects of that decision up until early December, when reimbursement was restored, we observed a noticeable change in the performance of OMIDRIA. While COVID and the deferral of elective surgeries are still concerns, we believe that the restoration of reimbursement is the most critical factor. I also mentioned that our team has done an outstanding job with focused execution, concentrating specifically on our major customers to re-engage them and enhance the prescribing of OMIDRIA. In a relatively short time, we expect to explore opportunities to broaden our reach as well, which is closely linked to the restoration of reimbursement.

Great. Following up on narsoplimab and IgAN, Novartis is advancing its Factor B into Phase III after meeting the primary endpoint in Phase II. They noted GFR as an approval endpoint in their comments. I believe you have previously indicated in your communications with the FDA that proteinuria is the approval endpoint for ARTEMIS. Could you share more about Novartis' perspective? Additionally, regarding your expansion into China, do you anticipate meeting the 2022 timeline, especially considering Ionis may not report their Phase II results this year due to COVID-related delays? First, regarding eGFR, the cardiorenal division has been requesting eGFR data for full or regular approval for most drugs in the IgA space. They have shown a willingness to consider accelerated approval based on proteinuria data, but this would necessitate demonstrating a reduced decline in eGFR over a 2- to 3-year period compared to expected outcomes. The reference for expected data is typically information from Dr. Lesley Inker. This is relevant as Novartis is focusing on proteinuria while also considering eGFR. In the case of narsoplimab, discussions with the cardiorenal division indicate that, due to the significant and quick reduction in proteinuria observed with narsoplimab, we could secure full or regular approval based solely on proteinuria. This requires a substantial decrease in proteinuria, likely more significant than what other drugs have achieved. Our proteinuria data shows a notable difference, as most other treatments are reporting reductions in the mid-20s, whereas narsoplimab has demonstrated greater efficacy. Assuming our Phase III data aligns with what we've publicized, we anticipate full or regular approval. Furthermore, our study design incorporates eGFR data in case we qualify for accelerated approval and later need confirmatory eGFR data for regular approval. Our focus remains primarily on proteinuria. We have two distinct patient groups: those spilling at least one gram of protein daily and high-protein spillers exceeding two grams daily. We have discussed with the FDA and can pursue full approval through either population. Our program is somewhat unique, reflecting the significant and rapid reductions in proteinuria we've observed.

And is the study powered to measure the impact on eGFR?

Yes, it is. Yes, it is.

Great. I appreciate the detailed explanation. I have a quick follow-up regarding the delays in Ionis' program and your confidence in reading out the top line in 2022. Is the expansion in China a strategic factor in that?

Right. We are looking to China to provide necessary patients to get that done on the timeline that we've built. But the timeline that we have built and the timeline that we are presenting publicly is one that we think and expect that we can meet again with the assumptions that you are identifying and I am identifying upfront.

Great. Congrats on the progress, guys.

I'm showing no further questions at this time. I would now like to turn the conference back to you, Dr. Demopulos.

All right. Thank you, operator. And thanks, everyone, again, for taking the time to join us. As you've heard today, 2021 is off to a strong start for Omeros. The next few months will be exciting as narsoplimab moves ahead to its PDUFA date for TA-TMA. And we hopefully learn more from the I-SPY COVID-19 trial and share data from our OMS906 Phase I trial. In the meantime, all of us at Omeros appreciate your continued support, and have a good evening. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect.