Omeros Corporation (OMER) Q1 2021 Earnings Report, Transcript and Summary

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

Good 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 discussions 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. And 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 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 2 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 coated 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 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 2 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 to manuscripts will soon be submitted, one, authored by investigators of the TA-TMA pivotal trial details 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, elucidates 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, variance 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 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 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 2 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 base line 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 3 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 time for 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 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 EIS or 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. 90% 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 has been instrumental in building this momentum. We successfully executed agreements with 7 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 strong association with 4 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 rate, prevents iris prolapse and floppy iris syndrome, and that it decreases use of pupil expanding devices. These associations support a positive value proposition for OMIDRIA since complications and the use of additional devices and 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 5 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 noncash 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 and 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 in 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. Greg?

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

[Operator Instructions]. 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 I'll hand it over to Nadia to respond as well and see if she has the same or different view. But I can tell you that I'm pleased with those numbers, particularly given that the MAX had a delay in posting CMS' decision regarding separate payment until late in January. So that really did create some understandable -- I think, understandable discomfort among some of our customers or a good number of our customers who wanted to make sure that the MAX would, in fact, reimburse when billing was submitted. So given that, I think that the numbers were strong. And I think as both Nadia and Mike have also underscored, those numbers have continued to improve throughout this quarter. So we're feeling really quite good about it. But now let me see if -- how Nadia views that.

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.

Well, sorry, Colin, it's a bit muffled. I may have -- I heard about IgA nephropathy. Could you just repeat the first part?

I was talking about...

Novartis' compound and their data, is that -- somebody is helping me a bit with the question. So I just want to make sure, 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 are available publicly, which is some, but not in great detail. But what -- and you'll -- I'm sure you'll know this number probably better than I, but my recollection is that they showed about a 23.5% reduction in proteinuria in the patients treated with their Factor B inhibitor. Is that -- does that align with your understanding, Colin?

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

Right. Well, again, I would point to what we've said about reduction with narsoplimab in proteinuria and IgA nephropathy. It appears that we're really playing at a very different level. So the reports around other drugs and now including Novartis' Factor B inhibitor are all sort of playing in that low to mid-20% reduction in proteinuria. But what we've seen and reported with narsoplimab are numbers that are a multiple of that, right? 50%, 60%, 70%, 80%, up to 90% reduction in some patients in proteinuria. So I think it's -- I think when I saw those data, I was quite heartened. And again, I think, underscored our confidence in narsoplimab's ability to play a major role in IgA nephropathy. And again, really, I think, demonstrated the pretty clear distinction between what we're seeing with narsoplimab and kind of what everybody else is seeing with their respective drugs. So let me stop there and see if that answers 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 a good question. I think that the vaccines have been challenged. I think the rollout, it has been challenged. I think that we're finding just in the number of states that are turning back COVID vaccines. They're having trouble in the states getting their citizens to want to be vaccinated. And I think, obviously, the problems with some of the vaccines that have been very publicly discussed, have created a bit of a concern on that end. I also think that what we're seeing with the variance and the increasing number of variants is a real problem. And the interesting thing about that is how are these variants coming about? I mean, certainly, the virus is mutating independently. But is there a component of this, which is selective pressure. And what could be causing that selective pressure? Well, some believe, and I think with a reasonable scientific basis, that, that selective pressure may, in part, be driven by these approaches at passive immunity. So convalescent plasma or some of the antibodies that are intended to confirm passive immunity. I think as a distillate of everything I'm saying, do I think COVID is going to be not a problem in the near future? Unfortunately, I don't subscribe to that. I think this is going to be a problem, not just in the U.S. but globally for years to come. And I think that you need a therapeutic. I think vaccines, wonderful. They reduce the numbers. They reduce the infectivity. I think all of that's great. But I don't think you're -- that we are ever going to get there collectively if we don't have a real therapeutic that addresses this problem. And when you look at the variants, it's pretty clear that endothelial injury and the complications thereof, including the micro thrombosis, the hypercoagulation, et cetera, those things are consistent across the variants. So I think you've got to address it there, at that level, at the endothelial injury level. And it just happens to turn out that that's what narsoplimab does. So again, kind of bringing it all back around to your question, unfortunately, I think COVID is going to be here to stay for a number of years. And I think that, frankly, narsoplimab looks to be a really good answer or certainly one of the best answers we've seen for the treatment of critically ill COVID patients. And I think again, unfortunately, but the reality is those patients are still going to be there and be there in good 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. So in terms of awareness, the team has been running the attitudes and usage study for a bit of time now. We're actually in our third wave, so we track awareness very closely. And we're really pleased with the growth that we have seen wave over wave. So of course, the products that are out there and used for off-label have slightly higher awareness, but we are very pleased with the unaided awareness that we're seeing currently. And in terms of the codes that we talked about -- that Greg talked about in the beginning this is truly going to help, right now that there are dedicated diagnostic codes for TA-TMA, that awareness and the consensus building will come together because there's no way to track up until now what is TA-TMA, what's off-label. So would a consensus statement help or consensus paper? Absolutely. Because if you look at publications, you do see a range, but that's why we feel very strongly about the need to engage on disease education. And we see when our team in the field have a conversation about the signs of symptoms, the diagnostic criteria, the dialogue goes from, I don't think I have any patients to, I think I have a patient right now in the inpatient ward. So we view that as a critical part of preparing for launch and getting to the PDUFA date. Let me ask Greg to comment on anything else that he'd like 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 that we had the support, I think, Nadia, of really the premier organizations in transplant and those that deal with this complication of transplant TA-TMA, really internationally, which I think was -- sort of underscores, I think, how people view the importance of this and also potentially the importance of narsoplimab as the first approved treatment if we can reach that point for TA-TMA.

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 complement inhibitor that has ever been in the I-SPY trial. With respect to when we can anticipate data, that's pretty tough. We are kept very much at arm's length from that study. We are not involved in the conduct of the study. We were not involved in the design of the study. That's really one of the requirements that the group Quantum requires. And it is to make it wholly independent of industry. So really all we do is provide the drug. And then we have to wait to hear anything from them. What I do know is that it has been enrolling and that our arm has been enrolling. Can't give you a number of patients that have been enrolled. I think we'll just have to wait to see how that plays out. I know that they -- or I believe that they are targeting certainly this year for data. But, Ram, beyond that, kind of your guess is as good as mine at this point. We really are, and I know that may sound like I'm stiff arming the question, but I'm not. We really are kept in the dark and intentionally so.

Great. And I should have probably mentioned this in the beginning of the call, I'm Chait [ph] 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.

Sure. We do expect that we will have initial data release from the 906 trial later this quarter. That trial, as I said, in the comments is running on schedule. And so that is our expectation. With respect to IgA, we continue to enroll that study. We had, as we've discussed publicly, we had some slowdown due to COVID and due to being able to enroll patients as a result of COVID at these hospitals. But that seems to have been lightening, meaning the COVID restrictions. And so enrollment is picking up again. I also mentioned that we look to expand our geographic regions for enrollment. And one of the areas we're clearly targeting is China, and that's because China has a very high prevalence of IgA nephropathy. In fact, my understanding is that 1 out of every 4 dialysis patients in China has IgA nephropathy. So these are big numbers. And we think that once we're up and running there, we can move pretty quickly. But let me -- Steve Whitaker is here as well. Let me ask Steve if -- Steve, you have any other thoughts on that.

No. Greg, you summed it up well.

Good. I think -- yes, I think we're in good shape there. We're excited about the program to underscore the question about Novartis' Factor B inhibitor, I mean all of the things we see point to narsoplimab in IgA nephropathy, having really a singularly unique role. We just need to look at the data when the data are available, and we expect and certainly hope that those data will confirm what we've already seen. And when that occurs and if that occurs, then I think that's really a game changer in IGA and potentially not only in IgA but across renal diseases, the mechanism at the glomerular level and at the tubular interstitial level. We're seeing that this is a pathology and a mechanism of our drug that extends beyond IgA nephropathy to, again, more broadly really these proteinuric renal diseases in general. And that's a very big deal.

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. Understood. That's difficult to quantify, Michael, really. As you know, January traditionally is one of the slower months for cataract surgery or for surgery in general, and that's due to the rollover of health care plans beginning in January. But those are still meaningful months, January and the early part of February, for us. And so I think the only way that I can really quantify that is to say that it has a meaningful effect when you have a number of your larger customers and stronger customers who are waiting on the sideline to confirm that the MAX are really going to pay, right? It's one thing for CMS to say, yes, we confirm that Omeros has -- and that OMIDRIA has separate payment in the ASCs. It's another to have your billing reimbursed. And so everybody -- a lot of these folks wanted to sit that out until that was confirmed. Once confirmed, things started to pick up, as we said in February. And March is traditionally one of our stronger months. So I think all in all, those numbers are pretty telling. And I think as Nadia underscored and as I said, I think we certainly were pleased with those results. But let me see again, Nadia, do you -- any other thoughts on that?

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

Okay.

Your next question is from Andreas Argyrides from Wedbush Securities.

This is Andreas on filling on 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 is the -- going to be going forward a bigger contributor to sales? Would it be, again, the surgeons returning to pre-COVID levels or more about the restored access?

About the -- what was the second comment?

The restored access. So I'm just trying to figure out what you -- yes, yes.

Yes. I don't think -- and again, I'll ask Nadia her opinion on this. My opinion is that there's really no question about that. It is the restored access. I don't think that -- COVID may continue to have an effect, but that is going to pale in comparison to restored access. And the restored access in the ASCs is important, clearly, which we already have because cataract surgery is largely performed, probably 80% roughly of cataract procedures are performed in the ASCs. The NOPAIN Act, as we spoke about during the comments, I think, has a strong opportunity to succeed. It is really one of the only bills that you can point to in D.C. right now that really has strong bipartisan bicameral support. So if both sides in D.C. and in Congress want to agree on anything, this is a tremendous opportunity for them. And the numbers of cosponsors continue to grow. As I mentioned on the Senate side, at last count, there were 17. And as soon as the bill drops in the House, meaning it is introduced, the number of bipartisan supporters there will grow rapidly. As just so that it's very clear, with the new Congress, the NOPAIN Act needed to be reintroduced. So the previous Congress, the NOPAIN Act had about 60 House cosponsors kind of split directly down the middle R and D. And it had about 25 or 26 in Senate sponsors again, split directly or very closely directly down party lines. So bipartisan. When the new Congress took over, that bill needed to be reintroduced, and that's the process that's been undertaken currently. Remember that we are not in any way leading or driving that process. This is really voices for non-opioid choices who is the lead group for this with multiple association supporters and advocacy -- patient advocacy group. So we're really watching this from the sideline. But it certainly looks to be, again, gaining momentum, and that would add separate payment in the HOPDs. Nadia, any comments on that?

Yes. Just to build on one area that Greg already touched on is that really, the lack of reimbursement was the biggest hit to us. As we look at the impact from that decision to early December when it was restored, you see a market change, right, in the performance of OMIDRIA. And so while, of course, the COVID and elective surgeries is looming, we really view the restoration of reimbursement as the biggest factor. And when I said earlier that the team has done a really exceptional job of very focused execution, it was focused specifically on our biggest customers, getting them back on board and driving the depth of OMIDRIA prescribing. And over time -- over a short period of time, we're going to view the opportunity of increasing our breadth as well. And that's really directly related to the restoration of reimbursement.

Great. And just following up on narsoplimab and IgAN. So Novartis is advancing its Factor B into Phase III following -- meeting the primary end point in Phase II. In their comments, they mentioned GFR as an approval endpoint. I do believe in the past, you've mentioned, I guess, in your communications with the FDA that proteinuria -- is the approval on point for ARTEMIS? Could you provide some color around Novartis' thinking? And then when it comes to your expansion into China, is the more that we see that -- by the way, Ionis, it doesn't look like they're going to be reading out their Phase II this year possibly because of some COVID-related delays, et cetera. Is China -- the expansion of the China region, what you guys believe that you'll hit the 2022 time line?

Yes. First, an answer to the question about eGFR. What the cardiorenal division has been requesting for most drugs in the IgA space is eGFR data for full or regular approval. What they have indicated is a willingness to provide accelerated approval on proteinuria data. But the requirement then would be to look at really slope of eGFR over a 2- to 3-year period, and demonstrate that, in fact, that is that you're reducing the decline in eGFR relative to what would be expected. And usually, what's discussed is what would be expected or data that have come out of Dr. Lesley Inker. And so that's being used as the reference, and I think most groups are looking at that. And I think that's, again, why Novartis is looking at proteinuria, but also is referencing eGFR. Narsoplimab is in a different situation. Based on our discussions with the cardiorenal division, we are able, and this is really based on the magnitude and the rapidity of the reduction seen in proteinuria with narsoplimab, we are able to obtain full or regular approval on proteinuria alone, and again, I believe narsoplimab has been given this kind of singularly unique opportunity. Now that requires, of course, that the reduction in proteinuria is substantial, and I would expect meaningfully more substantial than what other drugs are showing. But I think if you look at our proteinuria data, as we discussed before, certainly, there's a difference there. I mean, everybody else, as I said, is sort of delivering in the mid-20s, 23, 25, 27. That's very different than the proteinuria reductions that we have seen and reported with narsoplimab. So assuming that the Phase III data look like what we've already made public and all the data that we have, we have made -- we've made public, we would expect that, that would result in a full or regular approval. At the same time, if you look at our design, we also are including eGFR. Should, for some reason, we qualify for an accelerated approval and need the confirmatory data from eGFR for the regular approval. So all of that's built into our study but we're very focused on proteinuria. And we -- remember, we have two separate groups, right? The overall population, which is spilling protein at a gram or more than a gram per day. And then the high-protein spillers that are 2 grams or more of proteinuria per day. And really, what we have been able to discuss and agree with FDA is we can obtain full, meaning regular or accelerated approval in either of those populations. So it's a little -- our program is a little different, but it, I think, warrants those differences based again on what we've seen in proteinuria and again, the magnitude and rapidity of that proteinuric reduction.

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

Yes, it is. Yes, it is.

Great. And then just -- I know you gave a detailed explanation. We appreciate that. And just a quick follow-up on the delays, I guess, to Ionis' program and the confidence you have behind reading out top line in 2022. If China -- is the Chinese expansion is a strategic mover for that?

Right. We are looking to China to provide necessary patients to get that done on the time line that we've built. But the time line that we have built and the time line 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.

Your next question is from Brandon Folkes from Cantor Fitzgerald.

This is Carvey in for Brandon today. We have a couple of questions here. First, can you talk about your most recent thinking of pricing of narsoplimab in TA-TMA given the product is in development for other indications beyond TA-TMA? Should we still assume you price it to maximize the TA-TMA opportunity? And is Soliris a good analog to get here? Second question. Can you talk about the manufacturing of narsoplimab, should it be approved in TA-TMA? We have seen a lot of capacity ticking up by the vaccines. So any update on manufacturing capacity would be really helpful.

Okay. I'll hand the pricing question over to Nadia. I'll just make a comment that we really don't discuss our pricing plans. But I understand your question about are we looking at TA-TMA in isolation or are we looking more broadly at other indications when we're considering pricing of TA-TMA. So let me hand that over to Nadia. Nadia, what do you think?

Yes. And as Greg said, we haven't given any guidance on pricing, but I can tell you that this is a very key piece of what the team is working on right now. We are collecting insights, doing quantitative pricing work. But we're not only looking at the TA-TMA, we're also looking at the other indications because as you know, indication-based pricing is quite challenging. So we're looking at all those variables. I will say what's really critical is a solid value proposition. And from everything that we've talked about and everything that we're encouraged by seeing in the attitude and usage study, the physicians, the formulary decision-makers see a very solid value proposition for narsoplimab between its clinical efficacy and safety profile. So all of that is quite encouraging for us as we build the story. In terms of analogs, it's difficult, right? You don't have an actual approved product for TA-TMA. So you pick analogs for stratifying urinalysis. And of course, we're doing that and making sure that we've got a solid recommendation ahead of PDUFA.

Thank you, Nadia. With respect to your question on manufacturing, we have supply sufficient for launch. In retrospect, it looks like the manufacturing that we've done and the additional lots that we manufactured at one point that might have seen perhaps a little premature have turned out to have served us well. So we certainly have supply for launch and well into launch. Of course, The COVID vaccines are putting a bit of a crimp in available raw materials. But we have our manufacturing slots reserved. We're able to access those raw materials. And in fact, our participation in the COVID-19 effort allow us some preferential treatment with respect to raw materials. So overall, we're feeling pretty good about our situation vis-a-vis manufacturing.

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.