Omeros Corp Q1 FY2022 Earnings Call

Good afternoon and welcome to today's earnings call for Omeros Corporation. At this time, all participants are in a listen-only mode. After the company's remarks, we will conduct a question-and-answer session. 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 now turn the call over 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 factor 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 2021 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 good afternoon everyone. We appreciate you joining us for today's call. We'll start with a corporate update, then an overview of our first quarter 2022 financial results, followed by a more detailed financial summary. Joining me on the call today are Mike Jacobsen, Nadia Dac, Cathy Melfi, and Steve Whitaker, our respective heads of Finance, Commercial, Regulatory, and Clinical. Let's begin with our MASP-2 program and specifically narsoplimab in stem cell transplant-associated thrombotic microangiopathy or TA-TMA. In February, we had a Type A post-action meeting with FDA following receipt of our complete response letter. In our briefing package and during the meeting, we addressed all of FDA's stated concerns. FDA was delayed in providing their final meeting minutes to us. When we finally received them, there were no new requests. Yet we found that the division had repeated a number of critiques that we feel had not only been adequately addressed but also some that we view as demonstrably inaccurate based on FDA's own minutes and other official communications. After close review and discussions with our legal and regulatory advisers, we began drafting a dispute resolution request, an official FDA pathway that allows the sponsor to appeal a decision by an FDA division to a higher deciding authority in the agency, in this case, the Office of New Drugs. With the assistance of our legal and regulatory advisers including recent former FDA office and division directors, we are now completing the draft request. We believe that it lays out a very strong case across all components: our data, the documented regulatory history not only FDA precedent but precedent established by our specific division, and the literature. Now that the document is drafted and we have assessed the strength of both our position and the document, our path forward is clear. Based on the strength of our case and on the input and recommendation of our legal and regulatory advisers, we are foregoing negotiation with the division and proceeding directly to dispute resolution. We believe that this is the most expeditious route to approval. Dispute resolution, by design, is rapid. Our request is clear and that is regular approval based on the data in our existing BLA. With respect to timing, we're incorporating comments from our advisers and have begun the process of regulatory publishing required prior to submission. We expect to submit within the next couple of weeks. We are requesting a meeting with the Office of New Drugs. That meeting, according to FDA's PDUFA commitments, should be held within 30 days of the request. A decision is then to be rendered within 30 days following the meeting. Although public statistics indicate that most appeals are denied, those statistics are misleading. The collective experience of our advisers at both Covington & Burling and Hyman, Phelps & McNamara, shows that the good majority of their appeals, even if formally denied, result in a favorable outcome for the sponsor. We are confident in our data and in our submission. We believe that narsoplimab should have been approved last fall and we are committed to getting it approved as quickly as possible. In the meantime, transplanters continue requesting narsoplimab under our compassionate use program for their patients with TA-TMA, and we make every attempt to provide it, especially for children. Two recent examples include two seven-year-old little girls, one in Italy and the other in Australia, one who had failed defibrotide and the other had failed both defibrotide and eculizumab. With narsoplimab treatment, both children have recovered and have been able to return home. The results from our narsoplimab pivotal trial in TA-TMA were recently published in the Journal of Clinical Oncology or JCO, one of the premier medical journals and the flagship publication of the American Society of Clinical Oncology. Authored by a group of leading international transplanters, the manuscript was published online by JCO a few days prior to the start of Tandem 2022. Held this year in South Lake City, the Tandem conferences comprised the joint annual meetings of the American Society for Transplantation and Cellular Therapy or ASTCT and the Center for International Blood and Marrow Transplant Research. As part of the conference, Omeros received an award from the president of ASTCT, crediting Omeros for our work in raising awareness of TA-TMA and advancing the medical and scientific understanding in the field. The keen interest in narsoplimab was palpable among physicians, pharmacists, nurses, and patient advocacy groups in attendance at the meeting, underscored by the number of times our newly published manuscript was downloaded from the JCO website, more than 2,000 times during the first week of availability and more than 3,000 times only two short weeks since the Tandem Conference. In March, at the European Society for Blood and Marrow Transplantation or EBMT, important aspects of TA-TMA and narsoplimab were presented. One presentation reported on a rigorous literature review of the natural history of high-risk TA-TMA, which is the same patient population enrolled in the narsoplimab pivotal trial. In the literature review patients who received only supportive measures had just a 23% response rate, even though the definition of response for the literature review was less stringent than that used in the narsoplimab pivotal trial. Just to refresh your memory, in that pivotal trial Omeros found a 61% response rate to narsoplimab. Another EBMT presentation was a case report on a nine-month-old girl at Emory University who had failed treatment with eculizumab whose life the investigator believes was saved by narsoplimab. All of us at Omeros, along with the community of physicians, patients, and caregivers searching for an effective therapy for TA-TMA, look forward to wider availability of narsoplimab following regulatory approval, and we expect that we will get there. Our narsoplimab IgA nephropathy program also has made good progress. Enrollment in our Phase III ARTEMIS-IGAN trial has accelerated, and we continue to target reading out nine-month data on proteinuria in the first half of next year. The trial is assessing both an overall population of IgAN patients with baseline proteinuria greater than or equal to 1 gram per day and a population of patients with more severe disease whose baseline proteinuria is at least 2 grams of proteinuria per day. The trial is designed so that either population can support accelerated or regular approval. Our IgAN efforts in China are also proving successful. Our investigational new drug application for narsoplimab and IgAN was approved in China, and we look forward to completing the few remaining regulatory requirements and initiating enrollment there as soon as possible. Our Phase 3 narsoplimab trial in patients with aHUS is also ongoing, although, as previously reported, this program has been deprioritized relative to our other MASP-2 and MASP-3 programs. Narsoplimab is also being evaluated for the treatment of hospitalized COVID-19 patients in the I-SPY platform trial, sponsored by Quantum Leap Healthcare Collaborative. The trial has evaluated multiple drugs as potential COVID-19 therapeutics, and to date, none have been publicly reported to show a benefit relative to the background therapy in the trial. We are limited in what we can say about the trial per our agreement with Quantum. We can confirm though that in the latter part of last year, concurrent with stopping enrollment in the narsoplimab treatment arm, Quantum initiated discussions regarding additional clinical work focused on narsoplimab. For various reasons, that study did not go forward. We would very much like to report the data to date and are working collaboratively with Quantum to finalize analysis. As soon as we can, we all look forward to sharing the outcome of the trial. Meanwhile, work at the Omeros-Cambridge Center for Complement and Inflammation Research or OC3IR continues to provide important contributions to the field’s understanding of the mechanism of SARS-CoV-2 and the pathophysiology of COVID-19. A manuscript by Ali et al. published last month in Frontiers in Immunology detailed the secondary infection in COVID-19. A significant cause of morbidity and mortality in COVID is driven by complement hyperactivation, most likely lectin-pathway hyperactivation. A second manuscript, delayed to include additional new data, has now been submitted for publication and demonstrates that, in fact, it is hyperactivation of the lectin pathway that causes complement dysfunction in acute severe COVID-19 and that narsoplimab rapidly normalizes complement function, restoring the body’s infection-fighting ability. As more and more research from groups around the world is published demonstrating the importance of complement in COVID-19 and specifically, the central role of the lectin pathway, interest continues to increase in narsoplimab as a treatment for acute severe COVID-19 and also potentially as prevention or treatment of long COVID or PASC. This has resulted in receptive discussions with Biden administration COVID-19 advisors and principals at NIH. Our team continues to advance research in both acute severe and long COVID-19. With respect to life cycle management for our MASP-2 program, OMS1029, our long-acting second-generation MASP-2 antibody is advancing quickly. Having successfully completed nonclinical toxicology studies without a safety signal of concern, the Phase I trial is planned to begin this summer. With expected dosing in humans of once monthly to even once quarterly, OMS1029 allows us to pursue a range of indications complementary to those of narsoplimab. We’ve also made good progress on our small molecule MASP-2 inhibitors, designed for oral administration, and we are driving to advance a lead oral candidate to the clinic as soon as possible. Let’s now turn to OMIDRIA. As we discussed on our year-end earnings call, OMIDRIA completed the strategic divestiture to Rayner Surgical last December. The transaction with Rayner required us to classify all historical OMIDRIA revenue and expenses into discontinued operations, as well as to record the royalties we earn as a reduction of the OMIDRIA contract royalty asset on our balance sheet. Our royalty rate for US net sales of OMIDRIA is 50%. Given the required reclassification of OMIDRIA revenues and expenses, our revenues for the first quarter were reported as zero and our net loss from continuing operations recorded as $35 million compared to $45.3 million in the prior year quarter. Our overall loss for the current quarter was $33 million, or $0.53 per share compared to $35.1 million or $0.57 per share in the first quarter of last year. Our noncash expenses were $4.2 million or $0.07 per share, compared to the same quarter last year of $4.1 million and $0.07 per share. In total, our change in cash and investments from year-end was a decrease of $15 million. Rayner reported OMIDRIA net sales of $27.8 million for the first quarter. This represents an approximately 31% increase over the $21.1 million of sales for the first quarter of 2021. As I mentioned, we earn royalties at 50% of Rayner net sales, which translates to $13.8 million. As discussed in prior calls, when considering the royalty we receive and the reduction in our operating costs, we retain approximately 70% of the OMIDRIA operating profit when royalties are at 50% of OMIDRIA net sales. During the quarter, we worked closely with Rayner to help ensure a smooth transition of the product, the teams, and all operations with minimal disruption to customers. By all indications, the transition has gone very well. The first quarter typically is the lowest quarter for cataract procedure volume and as a consequence has historically been the weakest for OMIDRIA sales, and we expect OMIDRIA revenues to continue to grow. As of March 31, 2022, we had $142.2 million of cash and investments on hand available to support ongoing operations. As previously noted, this is a decrease of $15 million from December 31, 2021. We also have $16.3 million of receivables, primarily OMIDRIA royalties related to the first quarter, which will be collected this month. Going forward, OMIDRIA royalties will be paid monthly within 60 days of being earned. In addition, we have a $150 million at-the-market sales agreement, which we have not used. Also, under the terms of the Rayner transaction, Omeros is eligible to receive a $200 million milestone if before 2025, separate payment for OMIDRIA is secured for a continuous period of at least four years. One vehicle through which the $200 million milestone could be achieved is the enactment of the NOPAIN Act, which has been introduced in both chambers of commerce, and would provide separate payment for a renewable period of five years for non-opioid pain management drugs like OMIDRIA in ambulatory surgery centers or ASCs, as well as in hospital outpatient departments or HOPDs. Currently, CMS pays separately for OMIDRIA in the ASCs only. So the enactment of NOPAIN would expand separate payment to HOPDs as well. Efforts to advance the NOPAIN Act are being led nationally by voices for non-opioid choices, and the legislation has been endorsed by more than 80 major medical societies, patient advocacy groups, and prevention and recovery organizations across the country. The legislation is good policy and enjoys strong bipartisan and bicameral support in Congress, with sponsors and cosponsors now numbering 48 Senators and 99 Representatives. Most recently, the 98-member New Democrat Coalition, one of the largest and most influential caucuses in the House of Representatives, has endorsed the NOPAIN Act, making it a key part of the coalition's legislative agenda for this summer. So wrapping up. With the divestiture of OMIDRIA, we have a passive but substantial funding source to help finance Omeros' biotech portfolio, which is focused on immunology, including what many believe is the premier complement franchise in the industry and our novel immuno-oncology programs and addiction. Having already discussed narsoplimab and our MASP-2 program, let's move now to OMS906, our antibody targeting MASP-3. MASP-3 is the key activator of the alternative pathway of complement. After having received scientific advice from the UK's health authority MHRA, we submitted our clinical trial application and remain on schedule to initiate a Phase Ib trial this summer. The trial will evaluate OMS906 in patients with Paroxysmal Nocturnal Hemoglobinuria or PNH, who have an unsatisfactory response to the C5 inhibitor ravulizumab. We previously completed a Phase I study in healthy subjects and results showed high-level suppression of alternative pathway activity, favorable pharmacokinetics, and a good safety profile. While there can be no guarantees based on well-documented mechanism of action, animal data, and our Phase I results, we expect that OMS906 will be effective in PNH addressing both intravascular and extravascular hemolysis. We and others in the industry regard MASP-3 as the premier drug target in the alternative pathway and expect that OMS906 will have significant advantages over other agents on the market or in development to treat PNH. Those potential advantages include: one efficacy. Unlike C5 inhibitors, OMS906 is expected to inhibit intravascular and to prevent extravascular red blood cell destruction. Two safety. Unlike other agents on the market for PNH, OMS906 has been shown to leave intact the infection-fighting ability of the adaptive immune response. Three dosing. Unlike Factor B and C3 inhibitors, which are currently dosed twice daily or twice weekly, OMS906 is planned for once monthly to once quarterly administration. And finally, other drugs in the complement system's alternative pathway are what are referred to as acute phase reactants, meaning that the blood concentration of those targets fluctuate substantially with inflammation. This can make dosing drugs that interact with those targets challenging leading to under or over dosing. To the best of our knowledge, MASP-3 is not an acute phase reactant, meaning that the dosing of OMS906 can be more precise. We look forward to beginning dosing in PNH patients soon. Turning now to OMS527. Given resource constraints, we've prioritized our complement clinical programs over those of our phosphodiesterase 7 or PDE7 inhibitor program. We previously successfully completed a Phase I study of the lead molecule in this program. Discussions are underway regarding securing third-party funding for continued development of OMS527. We're also exploring the potential of our PDE7 inhibitors to improve dyskinesias in Parkinson's disease. More than 50% of Parkinson's patients develop L-DOPA induced dyskinesias following prolonged L-DOPA treatment. In collaboration with Emory University, we're evaluating our compounds in relevant primate Parkinson's disease models. We've previously shown that the PDE7 inhibitors improve outcomes in models of Parkinson's through modulation of the dopaminergic system. And we've established a broad intellectual property estate covering the use of PDE7 inhibitors for not only the treatment of addiction and compulsive disorders, but for the treatment of motor disorders, including Parkinson's disease. Finally, let's turn now to our immuno-oncology programs. We continue to focus on methods to improve the effectiveness of current cancer therapies. GPR174 is one of the 54 orphan G protein-coupled receptors or GPCRs that we have unlocked in our GPCR platform. And we continue to explore modulators of the GPR174 receptor as a means of significantly improving the tumor-killing effects of current therapies, including adenosine pathway inhibitors and checkpoint inhibitors. Additionally, we're advancing research on technology that may improve the potency and durability of a top two T cell therapies. We validated our novel approach, which enforces memory phenotypes in cultured T cells through a previously unexplored pathway in an aggressive mouse tumor model, and we're building a broad and exclusive intellectual property position around our platform. We believe that our novel approach has the potential to improve response rates for patients receiving either engineered or native T cell therapies for liquid or solid tumors and are continuing to explore the application of this technology to human CAR-T and adoptive T cell therapy systems. With that, I'll turn the call over to Mike Jacobsen, our Chief Accounting Officer, for a more detailed discussion of our first quarter financial results. Mike?

Thanks Greg. As Greg briefly discussed on December 23, Rayner acquired OMIDRIA and the associated business operations. The sale required us to restate our financial statements for all periods in two components: one, continuing operations, and the second, discontinued operations. This means that all historical OMIDRIA revenue and operating expenses are shown in a single line in our income statement as discontinued operations. All of our other activities are included in continuing operations. The OMIDRIA transaction includes royalties on worldwide sales. Omeros will continue to receive royalties of 50% of net sales of OMIDRIA in the U.S. until the earlier of January 1, 2025, or the payment of the $200 million milestone. Thereafter, we'll receive a 30% royalty on U.S. net sales for the duration of the relevant patent terms, which extends to at least 2033. We will also receive a 15% royalty on any non-U.S. net sales of OMIDRIA over the life of the relevant patents. From an overall standpoint, considering the U.S. royalties and a reduction in operating expenses, we will receive approximately 70% of the U.S. operating profit when royalties are at 50% and over 40% when the royalty is 30%. Turning to our actual results, our net loss for the first quarter was $33 million or $0.53 per share. This compares to a $35.1 million loss or $0.57 per share in the prior year first quarter. Our non-cash expenses for this quarter were $4.2 million or $0.07 per share compared to $4.1 million and $0.07 per share in the prior year quarter. As of March 31, 2022, we had $142 million of cash and investments available for general operations. This is a $15 million decrease from the December 31 balance. We also have $16 million in royalty and trade receivables that we will collect this quarter. In addition, we have an at-the-market sales agreement that allows us to sell from time to time up to $150 million of our common stock. Continuing operating costs and expenses for the first quarter were $35 million. This is a decrease of $10 million from the first quarter last year after reclassifying first quarter 2021 OMIDRIA operating expenses of $6.4 million to discontinued operations. The decrease in continuing operating cost was primarily due to reduced narsoplimab manufacturing activities and reduced narsoplimab prelaunch marketing activities. We continue to gate our narsoplimab sales and marketing spend until the timing of the FDA approval is clear. Additionally, we continue to expense any narsoplimab manufacturing costs until the timing of approval in the US is certain. Interest expense for the first quarter was $5 million and consistent with the previous year quarter. Now let's look at discontinued operations. As you may recall from our year-end earnings call, upon the closing of the Rayner transaction, we recorded a $185 million OMIDRIA contract royalty asset, which represents the minimum expected net present value of future US royalty payments. These minimum expected future royalties are quite conservative as the amount is a net present value computation using a double-digit discount rate. The assessment includes a 24.5% income tax rate, most of which we expect to avoid through the use of our historic net operating losses and tax credits. And the computed amount is intended to ensure that no downward adjustment whatsoever to the OMIDRIA contract royalty asset would be needed in the future. In the first quarter, the actual royalties earned from OMIDRIA sales were $13.8 million. This amount was recorded as a reduction in the OMIDRIA contract royalty asset on our balance sheet. Additionally, we recorded $7 million of income in discontinued operations in our income statement, recognizing for accounting purposes the interest earned on the OMIDRIA contract royalty asset and remeasurement adjustments. Now let's take a look at our expected second quarter results. We expect overall operating costs from continuing operations in the second quarter to increase modestly from those of the first quarter due to the timing of planned research and development activities and the timing of certain employee-related costs. Interest expense for the second quarter should be consistent with the first quarter at approximately $5 million. Income from discontinued operations should be similar to the $6 million we recognized in the first quarter. With that, I'll turn the call back over to Greg. Hey, Greg?

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

Thank you. Our first question comes from Eric Joseph with JPMorgan. Your line is open.

Hi. Good morning.

Hi. Good evening. Thank you for addressing my questions. I have a couple of inquiries, starting with narsoplimab. There have been numerous dispute resolutions related to this, so I'm interested in understanding what the best possible outcome from the dispute process could be. Would it mean automatic full approval if CDER's decision were reversed? Is there a possibility of negotiating for a middle ground, like accelerated or conditional approval? Additionally, I have a follow-up question.

Sure, let me discuss this and then I'll pass it over to the regulatory team. We are seeking regular approval based on the information and data in our current BLA. The best outcome would be to reach an agreement on that, which we believe is clear and well-supported. This would lead to discussions about labeling, allowing us to move forward. Regarding your question about a potential middle ground, as I mentioned in my prepared comments, Covington & Burling and Hyman, Phelps & McNamara have considerable experience in these matters. Their outcomes have been favorable for companies in similar situations. We’ll have to see how this unfolds for us, but I truly believe that when you examine our published data and our public statements about our regulatory history, they are quite accurate. If you consider the precedents set by this division for drugs in life-threatening conditions and the relevant literature, we believe, and our advisors concur, that we have a robust case. However, we are encountering some difficulties with interpreting the results, which we and the experts involved do not understand. It was particularly disappointing coming out of the Type A meeting, as we thought it had been productive and that we had effectively addressed all concerns raised. We felt we made significant progress and were collaborating well, which is why the meeting minutes were unexpected and led us to reevaluate our next steps and identify the quickest path forward. We believe we will be successful and that this approach will yield results in the shortest timeframe. Cathy, do you have any thoughts or anything to add?

Sure. Thanks Greg. Really all I have to add is, kind of, procedurally speaking in terms of getting a favorable outcome from this formal dispute resolution if the Office of New Drugs agrees with us that the information in the BLA supports approval, procedurally speaking we would have to then put a submission back into the division and then they would classify that as a Class I resubmission because it wouldn't have new data or new analysis in it. And so procedurally, FDA then has two months from our submission to reach their final decision. And it's during those two months that as Greg mentioned, we'd be talking about final label language. And hopefully they wouldn't even take the two months. But again, just procedurally speaking that's basically how it works. But again I think Greg did a nice summary of kind of where we are and the discussion we had at the post-action meeting.

Okay, great. These insights are very helpful. I have a follow-up question about OMIDRIA regarding the commercial milestone you mentioned related to the NOPAIN act and the potential passing legislation as a trigger. I'm curious if there are other ways you could secure a separate Part B payment for that four-year period. Considering the review cycle, usually, the separate payment is evaluated annually. Is there any possibility that the review cycle could be extended for more than a year or multiple years?

Understood. The answer is that OMIDRIA's separate payment under the non-opioid exclusion does not come up automatically every year. CMS’s decision on it was a going forward decision, meaning one that does not need to be renewed every year. CMS made the decision that OMIDRIA qualifies under the non-opioid exclusion for separate payment. So again, we follow the OPPS rules that come out annually. We look carefully at those. But this policy has been in place with CMS since 2019. So we expect, particularly given the opioid pandemic that's currently underway, that this is not something that CMS is going to meaningfully change. And again, the published data indicates that OMIDRIA meets all of the criteria for separate payment. So it's not an annual renewal.

Okay. Okay. Thanks for the color and thanks for taking the questions.

Thank you. Our next question comes from Greg Harrison with Bank of America. Your line is open.

Good afternoon. Thanks for taking our questions. So after the Type A meeting, what were the critiques that you referenced in your press release and in your remarks that were repeated by the agency? And how had you addressed those critiques? And what about your responses to them did the agency disagree with?

Yes. Hi Greg. Thanks for the question. We’re not going to discuss the specifics of this publicly as we don’t believe it would be beneficial. However, I can confirm that the division in the CRO laid out specific critiques, and we meticulously addressed each one. In many instances, this wasn’t the first time we had encountered or responded to those critiques. Our responses were precise and clear, so it was surprising to see some of these issues come up again. We feel we have adequately addressed them, and our responses are very clear. This was not an easy decision for us, and we were taken aback by the feedback we received. We needed to carefully draft our request and evaluate it both internally and with our external experts to assess our overall case. Considering the strength of our case and the clarity of our responses in that document and others, we believe it's time to move on and resolve this issue. That’s what we are focused on. Cathy, do you have any comments?

Sure. Thanks, Greg. We mentioned earlier that the FDA's critiques were focused on the challenges in interpreting treatment response. During the Type A meeting, we were able to address these issues. As Greg pointed out, we found the meeting to be constructive, even though it was a teleconference as mandated by the FDA. We believe we made significant progress toward getting approval. However, receiving the minutes late and noticing that some of the same critiques about interpreting the data were still present was frustrating. After reviewing our assembled information and consulting with many experts, including former FDA officials, we are convinced that the FDA's structured process for this situation is the best way forward, and that is the direction we are pursuing.

Got it. Understood. Regarding the dispute resolution pathway, Greg you mentioned that you have a database of examples of companies that have gone through this pathway. Do you have any information on how many of them were successful the first time around, which is your goal? What gives you the confidence that this is likely to happen, and that the FDA would essentially reconsider its previous decision?

Yes. As I mentioned, if you look at Covington & Burling and Hyman Phelps & McNamara, both of which we rely on for legal and regulatory advice, the collective experience indicates that less than half of applications are deemed successful based on published statistics. However, success is defined by whether a specific application is granted. Our understanding is that, based on the extensive work these two firms have done compared to others, the majority of outcomes tend to be favorable for the company. Therefore, we are optimistic, based on appropriate data and our own BLA, that we will be successful. All these factors have been considered, which is why it took us some time to reach this decision. The process involves repeated discussions and responses to critiques, which inevitably takes time, particularly with Type A or Type B meetings. Our stance is that there seems to be some difficulty in interpreting the data within the division, which is understandable given the complexities involved, especially regarding stem cell transplantation and the related complications. We believe the data is very clear, and while I would like to delve into the details further, I don't think that will be beneficial here. Our position is that we expect to be successful. While this is not a guarantee, I and my team have confidence in both the outcome and our approach. Considering the success that Covington and Hyman Phelps have had, I believe we’re making the right choice.

Got it. Thanks again for taking the question.

Thank you. Our next question comes from Brandon Folkes with Cantor Fitzgerald. Your line is open.

Hi. Thanks for taking my questions and thank you for all the updates. Greg, I hear your confidence in prevailing in this dispute resolution process. But can you just maybe help us think through the other scenario, if you don't prevail. Could you provide any color in terms of maybe what the FDA is asking for or what the path forward may be here? I mean, are you committed to an additional trial? You have a tremendously deep pipeline. Just taking the other side of the coin. But glad to hear your confidence? Thank you.

Sure Brandon. Thanks. We have considered the alternative scenario. However, we have proposed our plans to the FDA, and they have requested more information, as we’ve mentioned before. We believe we have not only met but exceeded the requirements for substantial evidence of effectiveness with this drug. Our stance is clear: we've achieved what we needed to, although it seems we are not effectively communicating this point. Therefore, we want to engage another group to resolve this matter. Typically, most cases end favorably for us. What that would mean moving forward is uncertain at this moment. Nevertheless, we are confident in our position and believe that the BLA supports a positive outcome. We look forward to progressing through this process and ultimately getting the drug approved. Cathy, Steve, do you have any additional comments?

None for me. Thanks.

The data is strong, Greg, and I agree with you completely that in my view there's certainly substantial evidence of effectiveness. And when we compare it to historical precedent, there's certainly strong evidence here.

I think Steve raises a good point. I mentioned this earlier, but I want to emphasize that there are substantial precedents, not just within the FDA, but also in this specific division. These precedents, when compared to what we have produced, put our BLA in a significantly favorable light. When you look at the data, the precedent, the literature, and the regulatory history all together, it is difficult for us to understand why we were not approved in October of last year. However, it's possible for someone to view it differently. We have made a conscious effort to critically assess the situation, identifying shortcomings and areas for improvement. However, our collective view is that this BLA deserved approval and still warrants it. We expect to be successful.

Okay. I'm showing no further questions, at this time. I'd like to turn the call back to Dr. Demopulos for closing remarks.

Well, thank you again, everyone, for joining the call today. We look forward, as I said, to completing the dispute resolution process quickly and bringing narsoplimab over the finish line. In parallel, our other programs continue pushing forward. Near-term value-driving milestones are coming up throughout 2022. We'll continue to keep you updated on our progress, as always. We appreciate your continued support and we hope you all have a good evening. Take care.

This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone have a great day.