Good afternoon, and welcome to today's earnings call for Omeros Corporation. At this time, all participants are on a listen-only mode. After the company's remarks, we will conduct a question-and-answer session. Please be advised this call is being recorded at the company's request, and the replay will be available on the company's website one week from today. I will now turn the call over to Jennifer Williams, Investor Relations for Omeros.

Good afternoon, and thank you for joining us or sticking with us. Before we begin, I'd like to remind you that certain statements made during this call are forward. These statements reflect management's current beliefs and expectations as of today and are subject to change. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially. For a discussion of these risks and uncertainties, please refer to the special note and the risk factors section regarding forward-looking statements in our quarterly report on Form 10-Q filed today with the SEC and the risk factors section of our most recent annual report on Form 10-K. With that, I'll turn and the call over to Chairman and CEO of Omeros, Dr. Greg Dimopoulos.

Thank you, Jennifer, and good afternoon, everyone. Joining me today are David Borges, our Chief Accounting Officer, Nadia Dock, Chief Commercial Officer, Dr. Andreas Grauer, Chief Medical Officer, Dr. Taffy Melfi, Chief Regulatory Officer, and Dr. Steve Whitaker, Vice President of Clinical. I'll begin with an overview of our second quarter 2025 financial results and provide updates across our development programs. David will then walk through the financials in more detail and we'll open the call for questions. Our net loss for the second quarter of 2025 was $25.4 million, or $0.43 per share, compared to a net loss of $33.5 million or $0.58 per share in the first quarter of this year. As of June 30, 2025, we had $28.7 million in cash and investments, further strengthened by a registered direct offering completed on July 28, 2025, which raised $20.6 million in net proceeds. During the quarter, we took decisive steps to strengthen our balance sheet and extend our debt maturity profile. Through a combination of convertible note exchanges and equity conversions, we reduced the outstanding principal on our 2026 notes from $98 million to $17 million, eliminated a $20 million mandatory prepayment on our term loan and extended the large majority of our debt out to 2029. These actions, including the July offering with Polar Asset Management Partners, reduced our near-term payment obligations by over $100 million. This further positions us to focus capital on advancing key programs and supporting the anticipated launch of Narsoplimet. We've removed a major structural overhang, streamlined our balance sheet, and are now better positioned to access additional capital through partnerships, equity or debt offering under our active ATM facility. As previously disclosed, we're in discussions regarding potential asset acquisition and or licensing agreements involving certain of our clinical assets the most advanced of these discussions is driving toward a multi-billion dollar transaction exclusive of royalties upon closing we expect to receive an upfront cash payment sufficient to repay in full the $67.1 million term loan outstanding under our senior secured credit facility. Repay at maturity, the remaining $17.1 million principal balance of our 2026 convertible notes provide sufficient capital for over 12 months of post-closing operations. This transaction is also expected to include near- and longer-term milestones and, if regulatory approval is obtained, sales-based milestones. Let's now turn to the anticipated approval and launch of Narsoplimab, our proprietary human monoclonal antibody against MASP-2, the key activator of the lectin pathway of complement. While we've identified slow-on indications for Narsoplimab, the initial indication, is stem cell transplant-associated thrombotic microangiopathy, or TATMA, a life-threatening complication of stem cell transplant. In March, we resubmitted our biologic license application, or BLA, for narsoplimab in TATMA. The FDA accepted the submission for review and assigned a PDUFA target action date of September 25th. Following our submission of additional information requested by FDA, the agency extended the PDUFA date to December 26. We continue to work collaboratively with FDA. Our objective is to expedite the review and potential approval. To date, results of all are statistically significant and are consistent with and supportive of narsoplimab's benefits as demonstrated in our BLA resubmission. Major deficiencies are identified during its review. FDA has indicated that labeling discussions are planned to begin no later than October 2025. In June, we submitted our Marketing Authorization Application, or MAA, for narsoplimab in TATMA to the European Medicines Agency. The MAA has been validated, initiating formal review process by the Committee for Medicinal Products for Human Use. We expect a decision on the MAA in mid-2026. We continue to expect that narsoclumab will be the first approved therapy for TATMA and that it is well-positioned to address a substantial market opportunity. Going among transplant physicians, C5 inhibitors like eculizumab and ravulizumab, which are often used off-label in TATMA and have been shown to be associated with increased infection rates and complications. A retrospective single-center case control study published last month in the American Journal of Hematology found that pediatric TATMA patients treated with the C5 inhibitor eculizumab higher infection rates compared to well-matched. Specifically in the eculizumab treated group, bacteremia was eight and a half-fold higher and one-year infection-related mortality was six-fold higher. Similar findings are being reported in adults. Mechanistically, C5 inhibitors, like C3 inhibitors, block the infection-fighting lytic arm of the classical pathway of complement, markedly increasing risk of infection and death in immunocompromised patients. In contrast, by targeting and inhibiting MASK2, narsoplimab preserves the classical pathway as lytic function and the adaptive immune response. We believe both safety and efficacy will be key differentiators and drivers of adoption for narsoplimab. Two manuscripts will soon be published in premier peer-reviewed journals detailing narsoplimab's safety and survival benefits in high-risk TATMA patients. The first, already accepted for publication, assesses survival in both adults and children treated under expanded access. The second is under review and compares narsoplimab-treated adults in both the Pivotal trial and in the expanded access program to a well-matched. Thanks to the continued efforts of our field-based market development and access teams, we're well positioned to drive demand in our highest priority transplant centers upon approval. These centers are already actively monitored for signs and symptoms of TATMA and are familiar with narsoplimab and its clinical profile. Executing a phased onboarding of hematology experience sales professionals, the highest volume transplant centers, expanding more broadly over time. Our sales leadership is currently in active discussions with top-tier candidates with deep expertise in transplant and rare hematologic diseases. Notably, many have been closely following nirsoplimab's development and are genuinely enthusiastic to launch a product that can significantly improve outcomes and save patients' lives. In parallel, we're engaging hospital decision-makers and payers through pre-approval information exchanges to support planning for coverage and reimbursement. Feedback has been highly encouraged. The strong clinical safety and efficacy data for Narsoplimab and are eager for an approved treatment option that avoids the risks associated with off-label C5 inhibitors. Marketing team and a highly skilled sales force to drive Wrap It Up. Emphasizing the compelling clinical data and we're confident in our ability to deliver a successful launch and life-saving outcomes to TATMA patients and their families. Looking to the rest of our MAST2 inhibitor family, OMS1029, our long-acting once-quarterly MAST2 antibody, is ready to restart Phase II clinical trial activities once resources are available. We have adequate supply of OMS1029 and matched placebo to support the Phase II program. Our orally-administered small-molecule MAS-2 inhibitor program is nearly ready to begin IND-enabling studies. Both programs target indications suited to their and pharmacologic profile. To our MAS-3 inhibitor program, Zoltanobar, also known as OMS906, is our phase 3 asset and lead MAS-3 antibody. MAP3 is the key activator and most proximal target in the alternative pathway of complement. The initial indication is paroxysmal nocturnal hemoglobinuria, or PNH. The global PNH market is projected to grow at 11% annually, reaching over $10 billion by 2032. The complement inhibitor segment alone is expected to more than double, from $2.2 billion today to $4.7 billion. Zaltenabart can carve out a significant share in this growing market. Phase 2 studies of Zaltenabart and PNH have shown efficacy at least equivalent to that of any other alternative pathway targeting agent on the market or in development. Zoltanabart's differentiators include once every two months to once quarterly dosing, improved compliance and reduced risk of life-threatening breakthrough disease, and no safety signals of concern observed in preclinical. Was paused to prioritize narsoplimab approval and market launch and is set to restart when capital is available. The potential indications for Zaltenabart are broad, and the market opportunity is. Let's now look at our programs beyond our complement franchise. Our PDE7 inhibitor program is evaluating OMS 527 for cocaine use disorder, or CUD, fully funded by a grant from the National Institute on Drug Abuse, or NIDA. Pre-clinical studies designed by NIDA toxicologists have been successfully completed with no safety findings and provide the drug interaction safety data in support of the planned inpatient human study of 527 in cocaine users. FDA has requested additional pre-clinical information before initiating the inpatient trial, which we target for the first part of 2026. We're also advancing our oncology platform, including IND-enabling studies for our Oncotox Biologics program. The lead indication is acute myeloid leukemia, or AML. Our Oncotox AML Therapeutic has consistently demonstrated superior-effig AML standard-of-care treatments, both in vivo, in immunocompromised mice with human tumors, and in vitro with human cell lines. The lead candidate therapeutic shows broad applicability across AML regardless of genetic mutations, whether that be TP53, NPM1, KMT2A, or FLT3. We aim to enter the clinic within 18 to 24 months, guided by our distinguished clinical steering committee, composed of world leaders in AML treatment and research. I'll now turn the call over to David Borges, our Chief Accounting Officer, to go through a more detailed discussion of our financial results. Thanks, Greg.

Our net loss for this quarter of 2025 was $25.4 million, or $0.43 per share, compared to a net loss of $33.5 million, or $0.58 per share in the first quarter of this year. As of June 30, 2025, we had $28.7 million of cash and investments on hand. And as Greg mentioned, we closed a registered direct offering on July 28th in which we received net proceeds of $20.6 million. As we noted in our May 13th conference call, we entered into an exchange agreement with certain holders of our 2026 convertible notes. We exchanged $70.8 million in aggregate principal amounts of our 2026 convertible notes on a one-for-one basis for newly issued convertible senior notes due in June. In addition, we reached an agreement with two holders to convert $10 million of their 2026 notes into shares of the company's stock in three tranches over a 90-day period, with a conversion to be finalized by mid-September 2025. Following these transactions, the outstanding principal balance of our 2026 notes has been reduced from $97.9 million to $17.1 million. Most importantly, this reduction in principle of the notes enabled the company to avoid making a $20 million mandatory prepayment under our term loan agreement, which otherwise would have been required on or before November 1st, 2025. These transactions significantly pushed out debt maturities with only $17.1 million of debt due within the next 12 months. And recall that we entered into a cap call transaction in connection with the issuance of the 2026 nodes to reduce potential dilution or cash outlay upon conversion. Even with the outstanding balance of the 26 nodes down to 17.1 million, we have retained a full potential value of the cap call, up to $92.6 million. Cost and expenses from continuing operations for the second quarter before interest and other income were $32.4 million, which was a decrease of $2.6 million from the first quarter of this year. Research and development expenses in the second quarter were primarily focused on Zaltanapart and Nersoplamab. primary components of interest expense include the 2026 notes, the DRI Midria Royalty Obligation, the Secure Term Loan, and the 2029 notes. For the second quarter, interest expense was near zero, primarily due to an $8.5 million non-cash remeasurement adjustment related to our DRI Midria Royalty Obligation. This adjustment reflects updated forecast of royalty receipts provided by Rainer. Excluding the DRI royalty obligation, which is entirely pass-through interest from Rainer to DRI, and amortization of debt issuance costs, debt discounts and premiums, contractual cash interest expense was $3.9 million compared to $3.7 million in the prior quarter. The increase was due to the higher interest on the 2029 notes relative to the 26 notes. Interest and income total of $1.2 million in the second quarter compared to $1.1 million in the first quarter of the share. During the second quarter, we reported an $8.2 million non-cash gain on marketing to market our financial instruments. Our financial instruments are comprised of a derivative liability on our 2029 notes, representing the ability of holders to convert their notes to equity. The remeasurement of our 2029 notes at June 30, 2025 resulted in a non-cash gain of $8 million. Income from discontinued operations in the second quarter was $465,000, a decrease of $3.6 million from the first quarter. This decline was primarily due to a remeasurement adjustment stemming from Rainer's downward revision of its forecast for U.S.-based royalties. As a result, we are required under GAAP to revise downward our imagery of contract royalty assets and DRI imagery of royalty obligation. It's important to note that the bulk of these transactions involve U.S.-based royalties, which are passed through in nature. Rainer remits these royalties to DRI via an escrow agent. However, because both Rainer and DRI are contractual counterparties to us, we're required to recognize these amounts as assets and liabilities on our balance sheet. As a reminder, in February 2024, we amended our agreement with DRI, granting them rights to all U.S. imagery royalties from Rainer through December 31st, 2031. Ameris retains royalties from ex-U.S. sales and will receive all global imagery royalties starting January 1st, 2032. Now, let's look at our expected third quarter 2025 results. We anticipate that overall operating expenses from continuing operations in the third quarter of 2025 will be lower than in the second quarter, primarily due to reduced spending on clinical development of Zaltenabart, decreased activity across certain other development programs, and other cost reduction efforts. Interest and other income for the third quarter is expected to be comparable to the second quarter. Interest expense, excluding any non-cash adjustments related to the Amidria royalty obligation and debt derivative revaluations, should be around $9.2 million. This represents a non-cash increase of $9.3 million from the second quarter, primarily reflecting the absence of a significant non-cash adjustment tied to the Amidria Royalty Obligation, as well as an incremental $500,000 in cash interest associated with the newly issued 2029 convertible notes. And finally, income from discontinued operations is expected to be in the $5 to $7 million range, excluding any non-cash remajerment adjustments to the Amidria contract asset. With that, I'll turn the call back over to Greg.

Thank you, David.

Operator, let's now please open the call to questions.

Thank you. Ladies and gentlemen, if you have a question or a comment at this time, please press star one one on your telephone. If your question has been answered, you wish to move yourself from the queue, please press star one one again. We'll pause for a moment while we compile our Q&A roster. Our first question comes from Steve Brozak with WBB Securities. Your line is open.

Hey, good afternoon, and thanks for the update. I really want to go over the financial modeling of Narcephalumab, and I'd like to compare it, if you don't mind. You've launched a product in the past, obviously. It's been a while, Onidria, and you've got about a billion dollars plus in revenue on that product more at the end of the day. How does that launch compare to what you're preparing for? Or, you know, you can go into as much detail as you'd like, and I have one follow-up after Okay.

Thanks, Steve. We have not delivered a lot of information publicly about our planned launch projections around the launch. What I can tell you is that it is a significantly more focused market than what we had with Omidria. With Omidria, we were targeting cataract surgeons, of which there are a good number, a large number nationally. With TATMA as the indication, transplants are done in 175 centers across the nation. So the number of on-the-ground sales people is significantly less than what we needed for Omidri. So that is clearly an advantage. We see the market opportunity, obviously, as large. I think others do as well, which is why there have been others in development. But I think with respect to specific numbers, pricing, launch projections, any of that information, we're going to beg off for that right now, Steve. It's just not the appropriate time, I think, to go through that. but know that we clearly are to optimize the launch and make sure that with Narsoplimab once approved that we are able to reach as many physicians and patients both in the U.S. that we can. We're very confident in the...

Leads me to the patient population you're talking about are very, very sick. And can you hear me now?

I can now.

Okay. Let me dive right in. The patient population you're talking about right now is very, very sick. And they've also had extraordinary expenses paid for, you know, their treatment process up until the TATMA hit. So how comfortable are the clinicians that you've talked to or that you've worked with so far in saying, yes, they want this product, and it is clearly something that is needed on an urgent basis? And I'll hop back in the queue. Thank you.

My take on that is that the physicians are eagerly awaiting the approval of Narsoplimab. But let me hand that over to Nadia, who I think can give you more detailed information on the response from physicians. Nadia?

Yeah, thanks, Greg. Steve, it's really a significant response from physicians about the need for nirsoplimab. You can imagine, you just commented on it, that these patients have been through so much just to go on this journey with transplant. And to be sort of nearing, getting out of the woods and then having a lethal complication is absolutely not what the physicians or the patients would want. And so they see this as a much-needed solution, the fact that it would be indicated, the first and only. And in terms of those that have had response already through the expanded access program, program, they're eager to have this approved and be able to assist these patients and to avoid these kinds of complications.

Does that answer the question, Steve? I think if there's any bright side to the length of time we've been waiting to get Narsoplimab approved in TATMA, it's been the ability for physicians through the Expanded Access Program, and obviously through numerous presentations, publications, to understand the effects of nirsoplimab, the benefits of nirsoplimab, and frankly, some of the challenges or risks associated with potential competitors in development.

Thanks again for the details.

One moment for our next question. Our next question comes from Brandon Foulkes with H.C. Wayne Wright, your line is open.

My question, then, congratulations on the program. If you are approved in December, how long would you anticipate before you could launch the product? And then maybe just sort of along the same lines, I think going into the prior, I'm talking a couple of years ago, I know you bought a fair amount of inventory. So I'm just thinking if we should be thinking about the same sort of approach this way around and modeling that into our R&D spend in 4Q.

Good question, Brandon. Thank you. You were breaking up a bit, but I think I caught it. We, again, are hopeful that we will reach an approval decision before December. But using your assumptions that approval were to occur in December, we would, as you understand, not be launching in December, but we would be launching then in the first quarter. And I think Obviously, we are geared up and ready to go with respect to supply. We have substantial supply, and that is not going to be a challenge in any way for us. Nadia, do you have any comments on the launch or David on supply?

I'll build on the launch before David comments on the supply. What we have in place is a plan to, upon approval, immediately train our field team that's in place on the Narsoplimab package insert information, and they will be deployed immediately upon certification, followed by the sales reps then that would be onboarded. So we will be driving awareness, education, and demand immediately upon approval. And then we have some other things lined up that would be non-personal in terms of digital tools and other things to supplement that because we view this as really it's two-pronged. We have to continue the education on TATMA while then educating on narthoplimab while the supply prepares to fill the channel as well. David, let me hand it back to you.

Yeah, with respect to supply, we have adequate supply for the first several years from launch. So I think we're in great shape there with respect to our inventory.

Thank you very much, Greg, and everyone. That answers my questions, and congrats on the program.

Yeah, thank you.

One moment for our next question. Our next question comes from Olivia Brayer with Canty. Your line is open.

Hi, good afternoon. Thank you for the question. Greg, can you talk about what the FDA requested that actually led to the three-month FIDUFA delay? Was it additional data from the historical database or something else? And then anything in that request that was maybe unexpected? And I've got one follow-up.

Hi, Olivia. Thanks for the question. It was really additional analyses. There were a number of analyses that they were requesting. And frankly, I think it may have been a bit overwhelming the amount of data that we subsequently supplied in response. And so that is my view of that. Kathy, do you want to elaborate?

Yeah. Again, as Greg said, they requested additional analyses, apparently felt that they could not review it in time to make the original PDUFA date and as you know when you get a major amendment the standard is to act three months on to the PDUFA date we're continuing to work with FDA and what we're hoping as Greg said before we can bring it in even earlier than the December 26 date the relationship Olivia has been really quite collaborative I know that there are a number of issues that are at least finding their way into the press around FDA and recent

responsiveness. Frankly, we have not encountered any of that with this division. The interactions have been responsive and very collaborative. So, to date, that's how we have found this process.

Yeah, good. That's great. I'm happy to hear that and hopefully that continues going forward. And then can you tell us anything more about the potential partnership that you're pursuing and just maybe, you know, what kind of partnership and which program in particular that you're looking to partner out?

Yes. All I can say on that at this point is that there's substantial interest really across our programs and we've outlined the one such partnership and as you might imagine we're required to do so equity financing to make sure that all all material non-public information was cleansed so I think we've said, really all that we can say or really will say on that topic at this point, but I think our, by definition, means that it is material from our position. Okay.

Understood. Thank you very much.

Thanks, Olivia.

Thank you.

And I'm not showing any further questions at this time. I'd like to turn the call back over to Dr. Demopoulos for any further remarks.

All right. Thank you, operator. Thank you this afternoon. technical component. I appreciate the help of that, so thank you. But as you can see, Omeros has a good number of value-driving milestones in process. Sharing more information with you, all of us at Omeros appreciate your continued support.

Gentlemen, let's conclude today's presentation. We do thank you for your participation and you may now disconnect and have a wonderful day.