Omeros Corp (OMER) 2021 Q3 法說會逐字稿

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 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 Factors section in the company's quarterly report on Form 10-Q, which was filed today with the SEC; and the Risk Factors section of the company's 2020 annual report on Form 10-K for a discussion of these risks and uncertainties.

Now I would like to turn the call over to Dr. Greg Demopulos, Omeros' Chairman and CEO.

Thank you, Jennifer, and good afternoon, everyone. We appreciate you joining us for today's call.

We'll start with a corporate update and then provide an overview of our third quarter financial results. With me today are Mike Jacobsen, Nadia Dac, Cathy Melfi and Steve Whitaker, our respective heads of finance, commercial, regulatory and clinical.

We'll begin today with narsoplimab, our fully human monoclonal antibody targeting MASP-2. MASP-2 is the effector enzyme of the lectin pathway of complement. On October 18, we announced receipt from FDA of a complete response letter, or CRL, regarding our biologics license application, or BLA, for the treatment of hematopoietic stem cell transplant-associated thrombotic microangiopathy, or TA-TMA.

We will have a Type A meeting with the FDA to help determine the most expeditious route to approval. Our briefing package for the Type A meeting with FDA is nearly complete, and once we have received all externally generated components, we will submit the package together with the meeting request to FDA. Because this is a Type A meeting, the meeting request can only be submitted in conjunction with the completed briefing package, and no changes can then be made to those materials.

The briefing package will address FDA's concerns noted in the CRL and will include a detailed history of communications with FDA, which has been reviewed and confirmed by outside regulatory legal counsel. Once the briefing package is assembled and submitted with the meeting request, FDA regulation requires that the Type A meeting be scheduled within 30 days. The FDA has indicated that they are ready to work with us to identify the most expeditious and least onerous path to approval for narsoplimab in TA-TMA.

In our conference call on October 18, we discussed that in the CRL, FDA expressed difficulty interpreting narsoplimab's treatment effect, given the complexity and severity of both the disease and the patient population, indicating that additional information would be necessary to support approval. There were no safety or CMC issues identified, so there is no bleed-over to other indications. This is not a narsoplimab issue. Rather, the issues are restricted to TA-TMA, and FDA said that they are resolvable. We hope to have more answers after the Type A meeting about whether additional information will be needed, and if so, what exactly that might entail.

Our goal is to bring a drug that met its prespecified efficacy endpoint with a favorable safety profile to patients with TA-TMA, a too-often lethal, ultra-orphan indication with no approved treatment. We worked very closely with FDA throughout the clinical development process, including agreement that approval could be based on a single-arm, open-label trial using a primary efficacy endpoint developed in conjunction with and agreed by FDA. To be clear, we believe that our agreements with FDA are unambiguous and that the narsoplimab BLA, as already submitted, is sufficient for approval. Having followed FDA's directions, recommendations and guidance throughout the program, and having met the primary endpoint, with all results from secondary endpoints supporting that achievement, it is unclear to us why FDA review division seemingly changed its position. For that reason, we look forward to working collaboratively with FDA to resolve any remaining issues that are also -- prepared to pursue all avenues for resolution.

Again, we are confident in the strength of our data, which have been presented by leaders in stem cell transplantation across a variety of scientific and medical venues internationally, and that international expert support continues. In addition to 2 manuscripts pending publication, the first detailing the findings from the pivotal trial, and the second elucidating the role of the lectin pathway in MASP-2 and TA-TMA, 3 oral presentations and 1 poster presentation related to narsoplimab and MASP-2 inhibition in TA-TMA have been accepted for the 2021 International Complement Workshop in December. Narsoplimab is also being evaluated in 3 other indications: immunoglobulin A, or IgA nephropathy; atypical hemolytic uremic syndrome, or aHUS; and COVID-19.

Our Phase III ARTEMIS-IGAN trial is enrolling internationally. We are also advancing to activate sites in China. Given the size of the population and the prevalence of IgA nephropathy in China, we've identified a large number of investigational sites in that country, and we expect that those will help us accelerate significantly the pace of enrollment in the trial. Regulatory submissions have been made, and we are working with authorities and our contract research organization to finalize those clearances and begin recruitment.

Here, again, we see international thought leaders' support for narsoplimab. Last month, the manuscript for which the senior author is Dr. Mohamed Daha, Professor Emeritus of Leiden University in the Netherlands, was published in the Journal of Clinical Medicine. The publication examined the role of the lectin pathway and specifically MASP-2 and its inhibitor, narsoplimab, in IgA nephropathy. Last week, at the Annual Meeting of the American Society of Nephrology, or ASN, narsoplimab and IgA-related disease was the subject of 2 presentations. The first, presented by Dr. Richard Lafayette, Professor of Medicine and Nephrology at Stanford University, detailed results of nearly 3 years of follow-up on the narsoplimab Phase II IgA nephropathy patients. During that time period, patients received a median of 1 12-week course of narsoplimab annually with 58% of patients receiving only 1 course per year or less. Overall, patients' renal function is assessed by estimated glomerular filtration rate, or eGFR, improved or stabilized versus a control group matched for proteinuria and eGFR.

Using the same analytical approach adopted by other companies to determine the impact of proteinuria reduction on long-term risk of need for dialysis, the proteinuria reduction seen in the Phase II in narsoplimab-treated patients, an unprecedented reduction of 64% is predicted to delay progression to renal dialysis by more than 41 years compared to standard of care. This represents a substantially greater reduction in proteinuria and a substantially longer projected delay to need for dialysis or end-stage renal disease than has been reported by any other drug in development for the treatment of renal disease.

The second presentation at ASN summarized the work conducted by a consortium from Denmark in the U.K. led by Dr. Peter Garred, Chair and Professor of Clinical Molecular Medicine at the University of Copenhagen. This was the first report describing the effects of lectin pathway inhibition by narsoplimab on urinary complement levels in kidney disease. The study assessed complement levels in urinary samples collected during the clinical course of a rapidly deteriorating young woman with IgA vasculitis. Narsoplimab treatment was associated with substantial reduction in markers of the local complement activation and with stabilization of kidney function, as measured by eGFR. Further studies are ongoing to evaluate the use of urine as a noninvasive and readily accessible resource to monitor responses to narsoplimab treatment.

Our other Phase III narsoplimab program is in patients with aHUS. Our aHUS Phase III trial remains open, although we have prioritized resources to other programs. Narsoplimab also continues to be evaluated as part of the nationwide I-SPY COVID-19 trial, a platform trial in severe COVID-19 patients. The I-SPY trial is sponsored by Quantum Leap Healthcare Collaborative and is funded in part by BARDA. Narsoplimab is the only complement inhibitor selected for inclusion in the trial. Omeros has no involvement in running the trial other than providing drug, and we look forward to seeing the results.

In the meantime, field-leading work in COVID-19 has continued at our laboratories in the University of Cambridge. Two manuscripts are being prepared for publication. The first is directed to a profile of disease-specific complement marker abnormalities that were identified by our team studying hospitalized COVID-19 patients in the 2 major hospitals affiliated with the University of Cambridge and a large number of sera from the U.K.'s national COVID response, Biobank. The data demonstrate that very early in severe COVID-19, lectin pathway activation is exceedingly high. This lectin pathway hyperactivation causes consumption of the complement components shared between the lectin and classical pathways, impairing classical pathway function. The classical pathway plays a central role in antibody production and the adaptive immune response.

Narsoplimab has now been shown to restore this classical pathway function in COVID-19 patients. Specifically, evaluation of blood samples from the Bergamo trial show that lectin pathway inhibition through narsoplimab can restore the loss of classical pathway functional activity caused by hyperactivation of the lectin pathway. Omeros is developing a broad intellectual property position directed to the profile of complement biomarkers and their associated assays as an early indicator of severe COVID-19 and as a means to assess therapeutic response. This could also prove to be relevant in post-acute sequelae of SARS-CoV-2 or long-haul disease, and we are exploring this as well.

The second manuscript builds on the first. As just discussed, lectin pathway activation is extremely high very early in severe COVID-19. As a result, the classical complement activation pathway, which critically supports the infection-fighting, adaptive immune response, is severely impaired in its ability to fend off opportunistic infections. This could well explain why a substantial incidence of life-threatening secondary infections occurs in severe COVID.

Again, narsoplimab blocks the uncontrolled consumption of the complement components shared between the lectin and classical pathways, allowing the recovery of classical pathway functional activity and restoring its ability to prevent and fight secondary infections in severe COVID-19 patients. This clearly suggests an important additional benefit of narsoplimab in reducing morbidity and mortality in severe COVID-19. Also, it should further clarify that narsoplimab, unlike other complement inhibitors and immunomodulators, likely does not increase the infection risk in COVID-19 patients but rather protects against infection by maintaining the complement-dependent antimicrobial defense of the adaptive immune response. We look forward to publishing these 2 important manuscripts.

Let's look now at our third quarter financial results. Net revenue from sales of OMIDRIA in the third quarter were $30 million, up 4.1% from the prior quarter's revenue of $28.8 million. Our net loss for the third quarter was $22.7 million or $0.36 per share, of which $6.4 million or $0.10 per share were noncash expenses. As of September 30, we had $54.4 million in cash, cash equivalents and short-term investments. We are tightly managing our expenditures as we work to resolve the narsoplimab BLA matter.

Given that we have not yet hired the narsoplimab field sales force, the delay in narsoplimab approval is neither cash flow neutral or slightly positive. We are temporarily deferring some of our research and development costs as we focus primarily on our complement programs. In addition, we have an unused line of credit with borrowing availability up to $50 million based on our accounts receivable and an additional $150 million available through an at-the-market facility.

During the fourth quarter, OMIDRIA revenues have continued to grow with weekly sales achieving repeated all-time highs in the ambulatory surgery centers, or ASCs. Our ASC customers continue to express increasing confidence in CMS' durable separate payment for OMIDRIA. In its outpatient prospective payment system final rule for 2022 issued last week, CMS reconfirmed separate payment for OMIDRIA in the ASC setting. It was gratifying to see the strong public support for OMIDRIA separate payment in both ASCs and hospitals from physicians as well as from national and state hospital associations and ophthalmic professional societies. These include the American Hospital Association, The Ohio Hospital Association, The California Hospital Association, America's Essential Hospitals, The American Academy of Ophthalmology, the American Society of Cataract and Refractive Surgery, the Outpatient Ophthalmic Surgery Society, the American Society of Retina Specialists and The Society for Excellence in Eye Care.

From a legislative standpoint, we continue to see momentum gathering behind the Non-Opioids Prevent Addiction in the Nation or the NOPAIN Act. If passed, the bill would provide separate payment for nonopioid pain management drugs like OMIDRIA, not only in ASCs, but also in hospital outpatient departments for a renewable period of 5 years. Introduced in the spring of this year in both chambers of Congress, the NOPAIN Act now has 34 senators and 74 representatives cosponsoring the bill. As previously reported, the growing roster of cosponsors is truly bipartisan with effectively equal support from Democrats and Republicans in both the House and Senate and includes leadership and key members on the committees of jurisdiction in both chambers. The bill is also well supported by a long list of major medical societies and public health organizations, and we look forward to its passage in the current Congress.

It's important to note that OMIDRIA has been shown in peer-reviewed publications to significantly reduce the use of opioids. In addition to the 2 publications already detailing the benefits of OMIDRIA in reducing opioid use, 2 recent manuscripts further supporting those OMIDRIA benefits were recently accepted for publication in the Journal of Cataract and Refractive Surgery. The first demonstrates that the administration of OMIDRIA during cataract surgery significantly reduced use of intraoperative fentanyl while concurrently decreasing pain scores versus an active comparator. This publication, which is currently available online at JCRS, further confirms the results of an earlier study published in Clinical Ophthalmology.

The second manuscript discusses the evolution of pain management and the use and associated risks of opioids in cataract surgery. The manuscript, which should be available online at JCRS any day now, underscores the benefits of OMIDRIA in limiting the risks of opioid use in cataract surgery patients.

With that, I'll ask Nadia Dac, our Chief Commercial Officer, to provide an update on commercial activities for both narsoplimab and OMIDRIA. Nadia?

Thank you, Greg. Our OMIDRIA business continued to see solid growth in the third quarter with revenue growing at 4.1%, driven once again by the ambulatory surgical center segment. The ASC segment has fully recovered following the decision last December by CMS to restore separate reimbursement for OMIDRIA in the ASCs. In fact, in the third quarter, this important and largest segment of our business surpassed Q3 2020 ASC sales performance just prior to losing reimbursement by 7%. Our efforts with establishing partnerships with ASC chains and groups of ASCs owned and operated by private equity groups continues to drive momentum. This growing segment now represents nearly 20% of our overall business.

The fourth quarter is already off to a strong start. As I shared on the last call, we've been working on a brand-new OMIDRIA promotional campaign that is launching this week at the Annual American Academy of Ophthalmology Conference in New Orleans. Our sales force already has the new promotional material in their hands, featuring a surgeon performing a successful cataract procedure on the stage of an OMIDRIA vial cap. they will be using the new material in our booth at the AAO conference, during which we'll be engaging the health care practitioners through one-to-one discussions.

This compelling campaign was tested in both qualitative and quantitative research among 124 ophthalmic surgeons, some of whom were not familiar with OMIDRIA. It consistently stood out as being memorable, unique and clearly demonstrating that OMIDRIA helps pave the way for surgical success without detracting from the surgeon's crucial role in the process. The focus of the new messaging will be on what surgeons in our research cited as most important to their procedure decisions, specifically OMIDRIA's effect on the reduction of both intraoperative and postoperative cataract surgery complications, including a reduction in intraoperative floppy iris syndrome, postoperative cystoid macular edema, breakthrough iritis, postoperative pain and reduction in the use of pupil expanding devices, all of which have been demonstrated in published studies. The campaign is also debuting online this month as we create a greater digital presence for our brand along with optimized search engine tools.

Turning to narsoplimab. Our field team is continuing its focus on account profiling in top transplant institutions, creating center-specific plans to ensure rapid access to narsoplimab post approval. In addition, we launched our disease education speaker program last month. Next month, as planned, our team will have a significant presence at the American Society of Hematology.

With that, I'll turn the call back over to Greg.

Thank you, Nadia. I understand that our listeners have been hearing some background noise during this presentation. I will just let you know that it is raining quite a bit in Seattle, and that's the sound of the rain hitting the windows here in the conference room. Again, rain in Seattle being an unusual phenomenon but one that we're dealing with today.

So with that, let's now turn to the rest of our pipeline. Our MASP-3 program is advancing in the clinic. MASP-3 is the key activator of the alternative pathway of complement. And Omeros continues to expand our broad intellectual property position around both MASP-3 and OMS906, our lead antibody targeting MASP-3. Recent data from our OMS906 Phase I clinical trial show high-level suppression of alternative pathway activity.

Based on our Phase I data, we're quite comfortable with our targeted OMS906 dosing of once-monthly subcutaneous and, where intravenous dosing may be preferable, every other month IV dosing. We've decided to forego the multiple-ascending dose portion of our Phase I work in healthy subjects in favor of moving directly into patients with paroxysmal nocturnal hematuria, or PNH, who have an unsatisfactory response to the C5 inhibitor ravulizumab. This shift should meaningfully accelerate the development time line for our 906 program in PNH.

Our MASP-2 life cycle management programs beyond narsoplimab are also advancing well. OMS1029, our second-generation and long-acting MASP-2 antibody, is on schedule to enter the clinic next summer. We expect that OMS1029 will be dosed subcutaneously at a frequency no greater than once monthly. Similar to that, for OMS906, our clinical plan for OMS1029 is to combine our Phase I and Phase IIa clinical trials, here also significantly shortening our development time line. In addition to OMS1029 for subcutaneous delivery, our small molecule MASP-2 inhibitors continue to progress. Designed for once-daily oral administration, we look forward to moving a lead candidate into the clinic.

Work also continues on OMS527, our phosphodiesterase 7, or PDE7, inhibitor for the treatment of addiction. Clinical efforts, though, are paused, given resource constraints while we explore options for external funding sources for this program.

Finally, let's turn to our immuno-oncology portfolio. While we continue to develop GPR174 inhibitors and to characterize the role that GPR174 plays in suppressing antitumor immune responses, we have also initiated programs that address current shortcomings in both adoptive T cell therapies and pharmaceutical-based immunotherapies.

Our novel cell therapy platform has the potential to markedly improve response rates for patients receiving T cell therapy for either liquid or solid tumors. We expect both CAR T and adoptive tumor infiltrating T cell therapies to benefit from this new technology. Importantly, we have validated this approach in an aggressive mouse tumor model, and we'll continue to explore its potential in conventional and humanized mouse models of cancer immunotherapy. In addition, our novel therapeutics appear to enhance endogenous antitumor immune responses and overcome immunosuppressive features of the tumor microenvironment. Around all of these programs, we continue to develop broad and exclusive intellectual property positions. We'll continue to release updates as these programs advance through 2022.

With that, I'll turn the call over to Mike Jacobsen, our Chief Accounting Officer, for an overview of our third quarter financial results.

Thank you, Greg. As we noted earlier, OMIDRIA and total revenues for the third quarter, one where sales are historically slower than other quarters, were $30 million, an increase of $1.2 million or 4.1% over the second quarter. Our net loss for the quarter was $22.7 million or $0.36 per share. This includes noncash expenses of $6.4 million or $0.10 per share.

As of September 30, we had $50.4 million of cash, cash equivalents and short-term investments available for general operations. We also have a $50 million accounts receivable base line of credit, which allows us to borrow up to 85% of our available accounts receivable borrowing base after certain reserves. As you may recall, we also have an at-the-market sales agreement that allows us to sell from time to time up to $150 million of our common stock. As usual, partnering opportunities are also present.

During the third quarter, and especially in September as we come out of the slower summer months, we have seen a steady increase in OMIDRIA sales to ASCs. Growth has continued into the fourth quarter as weekly units sold to ASCs have repeatedly set all-time highs. Hospital sales have remained consistent with the second quarter and are actually higher than expected. This is particularly satisfying as we do not currently have separate Medicare payment in the hospital setting. As Greg mentioned, we are pursuing a variety of options, including the NOPAIN Act, to regain Medicare reimbursement in the hospital setting.

Costs and expenses for the third quarter were $48.3 million, a decrease of $4.6 million from the second quarter of this year. The decrease was primarily the result of reduced research and development costs due to the timing of certain preclinical research activities. As Greg mentioned, during our October conference call, we have been gating on our narsoplimab sales and marketing expenses until we receive a definitive answer on FDA approval. As I stated previously, we are expensing our narsoplimab manufacturing costs in time -- until the timing of approval in the U.S. is certain. Interest expense for the third quarter was $4.9 million and consistent with the previous quarter.

Last week, CMS issued its final OPPS rule for 2022, which reconfirmed separate payment for OMIDRIA in the ASC setting. With the reimbursement concern currently off the table for our ASC customers, we expect OMIDRIA revenues will continue to increase as ASC customers ramp up their use of OMIDRIA and our customer base continues to grow. We expect overall research and development costs will remain effectively unchanged in the fourth quarter of 2021 compared to the third quarter of 2021. we also expect that our selling, general and administrative expenses during the fourth quarter of 2021 will be similar to those in the previous quarter. Interest expense for the fourth quarter should be consistent with the third quarter at $4.9 million.

With that, I'll turn the call back over to Greg. Greg?

Thanks, Mike. Operator, you can open the call, please, to questions.

(Operator Instructions) Your first question comes from the line of Colin Bristow with UBS.

I appreciate it's hard for you to sort of comment on the CRL, but just bigger picture on the path forward. If FDA were to require a new controlled trial, is this something that you would be willing to fund? Or would you ultimately see a better ROI on the capital and other programs?

And then just on the IGAN Phase III. Could you give us an update on enrollment and the subsequent timing of the readout there?

Sure. I'd answer to your first question, Colin, I don't think we expect that, that's going to be the result. So I'll hold on that question, and then I -- again, I don't think that's something that -- certainly that we're expecting.

I think with respect to the IGAN Phase III readout, I think we've been targeting end of 2022. That is going to depend on resources with respect to these other programs, specifically, obviously, the BLA, which is our primary focus. Could that slip into the following year? I would think possibly. If it did, I don't think it's going to move much into it.

Your next question comes from the line of Greg Harrison with Bank of America.

On the OMS906 program, how fast can this move given that you're expediting the clinical program? And when could we see potentially derisking data in the PNH? And then where do you see PNH within the context of diseases that could potentially benefit from MASP-3 inhibition?

I think our current plan is to initiate the PNH program in -- early in 2022. And again, this would be a Phase Ib program. So I think that we can move relatively quickly through that.

I think with respect, Greg, to your question around where do we see PNH fitting within the overall -- sort of the overall pantheon of indications for 906, I think it is an initial foray to demonstrate the effect of 906 and potentially the benefits, the -- advantage is probably a better word, of 906 other -- over other alternative pathway inhibitors with respect to dosing, and we'll look and see what other advantages are there.

We see the breadth of indications for OMS906 as quite large. There are indications that are focused, obviously, on ultra-orphan or orphan indications that have life-threatening implications. There are other broader indications that don't have that same life-threatening component but certainly have life-altering components to them, and those are also areas of focus. So we see it as the initial foray, and the objective would be to move from there more broadly.

Your next question comes from the line of Steve Brozak with WBB.

Yes. Greg, I know that you can't speak about what's taking place with FDA, but you've had significant support from the clinicians, the clinical community and the KOLs. What are they doing right now? What are they expressing to you? And can you just remind us of what -- how this plays into the standard course of therapy right now for the patients that narsoplimab would be appropriate for, please?

Sure. Thanks, Steve. Look, I think that the response from the thought leaders was one of surprise; I think, clearly, one of disappointment. They remain strongly supportive of the drug and what I think we all see as the benefits of the drug for patients with TA-TMA.

I think that is underscored by the number of requests we continue to receive for compassionate use, not just for adults, but for children, and some of those being for really very young children on the order of several months or a year old who have failed other therapies, and those therapies include eculizumab. And then the request for use of narsoplimab comes, and we provide it.

So I think the support remains strong. We continue to work with the thought leaders in this field. And I think we are all hopeful that we can get narsoplimab over the finish line as quickly as possible. There is no approved treatment for these patients. And certainly, in the adult population, there really is -- it appears no good, even off-label alternative.

So there's an obvious urgency here, and I think we're all feeling it. I think the thought leaders are sharing that feeling. And I think, collectively, with the FDA, we need to figure out how to get there as quickly as possible. Let me stop and see if Steve Whitaker, our Head of Clinical, has any other comments.

Well, Greg, I think I'd just echo what you said. The thought leaders are disappointed who we've spoken with, and not just thought leaders, but other physicians who have used the drug, investigators in trials or people who've used it under compassionate use. And as you said, compassionate use requests continue to come. That has not abated at all.

Thanks, Steve.

Your next question comes from the line of Ram Selvaraju with Wainwright.

Hello. Can you hear me?

I can, Ram.

Great. Firstly, I was wondering if you could clarify kind of some of the potential scenarios for the path forward with narsoplimab in TA-TMA. So if your upcoming interactions with the agency prove favorable, is there a situation in which this might not be treated like a Class II resubmission? Or should we be looking at that as kind of the default pathway?

Good question. Look, our hope is that when we meet with FDA and have discussions and present our analyses and other information, that this could well result in a Class I resubmission. Can we promise that? Absolutely not. But that's certainly the objective, and I think that is our focus. So you've kind of put your finger directly on it. That is our focus. And again, we believe in the strength of the data. We believe in the interpretability of the data. And I think that the thought leaders concur.

So, somehow, we need to navigate this and get the drug approved as quickly as we can so that it is available for physicians and for their patients. I mean, I know that, that sounds like a very trite thing to say and a commonly used phrase. But I mean in this case, it's really true. It's true, which is why we continue to get the request for compassionate use, so I think that underscores that.

So I don't know if that answers your question, Ram, but if not, let me know.

No. That's helpful. Secondly, this is kind of a 3-part question. I apologize. But the 3 parts are as follows. Firstly, if we look at specifically narsoplimab in the context of nephrology, what other primary proteinuric kidney diseases do you anticipate are likely to be promising avenues for future development, given what you're currently seeing in, for example, the IGAN context.

Secondly, with the development of 906, can you give us a sense of what the likely size of the total target patient population might be in the context of, for example, positioning this drug post ravulizumab use? And in particular, do you think that there is any potential for applicability or development of 906 in neuromyelitis optica spectrum disorder?

And lastly, can you just give us a little bit more information on how both narsoplimab and 906 are going to be positioned relative to 1029, the long-acting agent that you mentioned earlier? Because I just wanted to try to get a sense of strategically how you're planning to position these pieces on the chessboard.

Sure. And I'll just note that, that was 4 questions, not 3, Ram. But your first question on the extent of nephrology indications, those are broad. And the data coming out, not just from us, but from multiple independent research groups, show that the lectin pathway is not just involved in IgA nephropathy, so not just involved at the glomerular level, but also at the tubulointerstitial level.

What's the implication of that? Well, the implication of that is quite large. If all of that is correct, and it certainly appears that it is correct, what that means is that the application here is really -- and this is going to sound broad, but really any renal disease where proteinuria is a component.

So when you think about end-stage renal disease or renal diseases that advance to end-stage renal disease, the common pathway there is tubulointerstitial disease. And if narsoplimab is affecting that, which it -- there's evidence that it is, that moves from glomerular diseases like IgA nephropathy to broader indications, so specifically, things like lupus nephritis and others. So if you think about renal disease in general, that's a possibility.

Your second question about 906 and the patient population versus treatment post -- I think you were asking not about the patient population but the size of the market post treatment with ravulizumab. Remember that C5 inhibitors in PNH create -- they treat the intravascular hemolysis, but they create extravascular hemolysis through C3B deposition on the surfaces of those red cells or erythrocytes, which are then cleared by the reticuloendothelial system.

What we see -- and again, we haven't been in PNH patients, so all of this is ex vivo or in vitro work that we've done, what we have seen is that inhibition of MASP-3 blocks both the intravascular and the extravascular hemolysis. So we see it as really not adjunctive to ravulizumab or any other C5 inhibitor but as a replacement for. And there are -- there's another approved drug, a C3 inhibitor for -- that provides also inhibition of both intra and extravascular hemolysis. I think the dosing of our MASP-3 inhibitor will be significantly superior to that. And then there's also the potential safety advantages that we'll see how those are borne out in clinical trials.

So with respect to 906, the indications are, again, extremely broad. I mean, any alternative pathway indication or alternative pathway-related indication, we think, would be amenable to OMS906. You asked specifically about neuromyelitis opticans, and the answer to that is neuromyelitis opticans is certainly, we think that, that is an indication ripe for OMS906.

I think your other question was tied to how do we differentiate 906 from 1029 and from narsoplimab. I think the answers there are -- 906 is alternative pathway. MASP-3 is the key activator of the alternative pathway. The other 2, narsoplimab and 1029, are focused on the lectin pathway. So I think the differentiation there is pretty clear and readily discernible.

With respect to narsoplimab versus 1029, there are indications where you want a shorter dosing cycle. And for those, narsoplimab could be -- is ideal. Longer-acting, really chronic diseases, the advantage of 1029 is subcutaneous -- subcutaneously delivered antibodies with dosing monthly or longer. I think the advantages there are pretty clear as well. So let me see if I hit all of your questions.

Yes, you did. This has been very, very helpful. I'll jump back in the queue.

Your last question comes from the line of Eric Joseph with JPMorgan.

I guess a few from us, the first on the narsoplimab for TMA. Just wondering if you could speak to which division of FDA you consulted with in developing or revising endpoint selection, primary endpoint selection in the TMA study. Is it the same division that ultimately reviewed the BLA pack? If you can just kind of give a sense of whether the review might have been impacted by the senior reorganization for the past couple of years.

And then on 906, I'm curious to know whether you, from the healthy volunteer Phase I, have a sense of target engagement and alternative pathway discussion into the next pivotal studies and how that might inform starting dose selection in the PNH Phase Ib.

Okay. Sure. With respect to your first question, the division, and again, it was a little muffled, Eric, but I think I got it. The division with which we're working in TA-TMA is the nonmalignant hematology division, which is part of OCHEN, the Office of Cardiology, Hematology or Nonmalignant Hematology, Endocrinology and Nephrology.

Now it is the same division, but as you're pointing out, during the reorganization of FDA this specific division moved out from under the office of oncology, which is Rick Pazdur's Group, and then moved into OCHEN. The Director of that office was Ellis Unger. So there were some changes in that transition in the reviewers on our BLA.

And then in August, Ellis Unger retired from FDA. And we -- currently, the office does not have a head. They have a deputy director. So there have been some changes between our sort of pre-BLA period to our post-BLA period.

With respect to 906 and target engagement, 906 is highly specific with -- or for MASP-3. The PK/PD data that we are generating in the Phase I study, I think, show pretty clearly that we are able to suppress alternative pathway activity. And again, these are the data that we have in healthy subjects. So we look to see the same data in patients, but the expectation is that, that should be the case.

With respect to our dose selection, that is -- that's based on our, again, preclinical work that we have done, the animal work that we have done. That's been refined by the data coming out of the Phase I trial. So I think that answers your question. I think, again, as I said, we're quite comfortable that our dosing around 906 will give us more than adequate suppression of the alternative pathway in both the once-monthly subcutaneous routine. And where it might be more advantageous or preferable in specific indications for IV dosing, our expectation is that, that would be, frankly, every other month.

Okay. That's helpful. And just a follow-up on OMIDRIA, if that's all right.

Yes. Sure.

So a couple of quick ones here. First, a housekeeping item, whether you could talk about any -- whether there were any shifts in inventory builds quarter-on-quarter worth noting. And then with the formalization of the separate ACS payment or at least the expectation thereof, is there any, call it -- I'm just trying to understand the growth drivers near term that you're seeing. Are there any low-hanging fruit...

I missed the term. Can you say that again? Are there any...

Are there -- so any long-hanging fruit in terms of new ASC accounts that might be looking to carry the product with formalization of the separate payment schedule?

Sure, sure, sure. In response to your first question regarding shifts in inventory bill, the answer is no. With respect to NOPAIN and, in advance of that, having ASC accounts coming on board, we're seeing substantial increase in the number of accounts as well. This has been the result of our focusing, not just on individual ASCs, but on chains of ASCs. So whether those are private equity group-held ASCs or other collections of ASCs, that has helped significantly.

In addition, I think we're seeing -- as a result of the reimbursement from CMS, we're seeing real increases in Med Advantage and commercial payers paying now, reimbursing appropriately for OMIDRIA, which has been really great to see because that's also a key, obviously, to continuing to grow the business.

Well, let me see -- I'm going to turn this over to Nadia and see if Nadia had -- anything you'd like to add to that.

Yes. I agree with everything that Greg said. And I will also add to the fact that one of our key strategies is to drive depth and breadth of the ASCs. So, yes, we're not done with the ASCs that are coming on board. We're really pleased with how this business has not only recovered but actually is doing better than before we lost reimbursement.

So our focus on executing against that strategy, coupled with the market access strategy that we're executing against to make sure that we get these wins and pull them through at the ASC level, are really the 2 ingredients that's helping us drive that growth. It's a bit of a grassroots, from the bottom-up and top-down approach that we're doing.

Okay. Would there be any...

I'm sorry. Go ahead, Eric.

Sorry. Just with all the color there, I wonder if you can give a sense of guidance for OMIDRIA going forward.

Again, missed a good part of that question. Can you repeat it? Guidance...

Any plans to implement guidance for OMIDRIA with subsequent updates?

Yes. Not currently. But I think, again, we've talked about the growth that we have seen in the fourth quarter already. We also mentioned, I think, that we have reached repeated all-time highs in the ASCs in the first part of this fourth quarter. And that's not just since the reinitiation of separate payment, but that is since launch that we are seeing these repeated all-time highs.

So I think we're quite proud of what the group has been doing. We're seeing the hospitals are holding their contributions as well to the overall success of the program despite the fact that we're not even reimbursed in the hospital outpatient department. So we see opportunity for really significant growth across the ASC and HOPD settings for OMIDRIA.

I'd now like to turn the call back over to Dr. Greg Demopulos for any closing remarks.

Thank you, operator, and thanks again, everyone, for joining us today. Understandably, the near-term focus is on bringing narsoplimab over the line to FDA approval in TA-TMA. It's important to remember, though, and I think we've hit it, that we have additional indications advancing in Phase III trials for narsoplimab as well as our other exciting programs: our MASP-3 inhibitor, 906; our next-generation MASP-2 inhibitor, 1029; and our adoptive cell therapy program, either progressing through or slated to soon enter the clinic. We also have the benefit, as we've just been discussing, of what's shaping up to be a $120 million-plus net revenue generator in OMIDRIA.

So, we're comfortable with the way that things for Omeros are coming together. As always, all of us at Omeros appreciate your continued support, and have a good evening.

Ladies and gentlemen, this concludes today's conference call. We thank you for your participation. You may now disconnect.