Omeros Corp (OMER) 2018 Q1 法說會逐字稿

Good afternoon, and welcome today's conference 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 Mark Metcalf from 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 Risk Factors section of the company's Quarterly Report on Form 10-Q, which was filed today with the SEC, for a discussion of these risks and uncertainties.

Dr. Greg Demopulos, Chairman and CEO of Omeros, will take you through a corporate update; and then Mike Jacobsen, our Chief Accounting Officer, will provide an overview of our first quarter financial results. We have some time reserved for questions after the financial overview.

Now I'd like to turn the call over to Dr. Demopulos.

Thank you, Mark, and good afternoon, everyone. We appreciate all of you taking the time to join us.

We have important updates on OMS721 and today, I we'll start there. OMS721 inhibits MASP-2, the effector enzyme of the lectin pathway. The lectin pathway is part of the complement system, a key component of the immune response. For OMS721, we continue to advance our 3 Phase III clinical programs in hematopoietic stem cell transplant associated thrombotic microangiopathy, or stem cell TMA, in immunoglobulin A or IgA nephropathy, and in atypical hemolytic uremic syndrome or aHUS. We also have 2 ongoing OMS721 Phase II clinical trials, one in stem cell TMA, and the other in renal diseases, currently focused on patients with IgA nephropathy.

Let's begin our OMS721 update with our stem cell TMA program. To date, a total of 21 stem cell TMA patients have been treated with OMS721, 20 in the ongoing study, and 1 patient under a compassionate use protocol. In the first quarter, we reported results for the first 19 of these stem cell TMA patients. The estimated median survival for OMS721-treated patients was an order of magnitude greater than that for a matched historical control with a P value of less than 0.0001. When sufficient follow-up duration for these patients was reached to perform a 100-day mortality assessment, the analysis was conducted. 100-day mortality is a commonly used endpoint in conditions like stem cell TMA, in which patients have a high mortality rate, with death occurring rapidly. That analysis similarly showed that OMS721-treated patients had significantly improved 100-day survival relative to the historical control. 53% versus 10% with a P value of 0.0002.

Biomarkers of disease, including platelet count, lactate dehydrogenase and haptoglobin demonstrated statistically significant improvement. Study patients also showed substantial reduction in red blood cell and platelet transfusion requirements.

We also announced last month that FDA granted breakthrough therapy designation for OMS721 in the treatment of stem cell transplant patients who have persistent TMA, despite modification of immunosuppressive therapy. As you know, breakthrough therapy designation is granted to a small number of drugs, each intended to treat a serious condition and for which preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over available therapies on a clinically significant endpoint. This breakthrough therapy designation in high-risk stem cell TMA patients marks the second breakthrough designation for OMS721, the first having been granted last year for OMS721, in the treatment of IgA nephropathy. OMS721 is one of only a handful of drugs to have been granted multiple breakthrough designations.

We recently met with FDA to discuss requirements for approval of OMS721 in stem cell TMA. Based on that meeting, we believe we have clear path to both accelerated and full approval of OMS721 in this devastating disorder. In addition to the data provided to FDA, the agency requested that we further characterize the patients treated with OMS721, all of whom had high risk TMA, and compile and submit additional information on our historical control population for the purpose of further comparing outcomes across corresponding patients.

FDA also requested an analysis plan to assess our biomarker data. Should FDA grant OMS721 accelerated approval for the treatment of high-risk stem cell TMA patients, the drug would be made commercially available for stem cell patients with this highly lethal disorder. Concurrently, to obtain subsequent full approval, we would conduct a confirmatory trial that we expect will further define optimal dosing.

Omeros intends to continue working closely with FDA as we further compile all required information, with the objective of initiating a rolling biologics license application, or BLA submission, later this year.

With respect to Europe, we are scheduling meetings with regulatory authorities to discuss plans for submission of an application for conditional marketing authorization in the EU for OMS721 in stem cell TMA.

Let's turn now to our OMS721 program in patients with IgA nephropathy. Last year, FDA granted OMS721 its first breakthrough therapy designation, this one for IgA nephropathy. The Phase III program includes 2 clinical trials, each of which is designed to provide 1 or more pathways to approval. The clinical trial currently underway is enrolling a population of patients, with baseline proteinuria levels in excess of 1 gram per day, and includes a path to accelerated approval, based on proteinuria reduction.

The second trial, assessing OMS721 in patients with baseline proteinuria levels of 2 or more grams per day, is designed to include pathways for both accelerated and full approvals, depending on the size and duration of the effect on proteinuria. To our knowledge, OMS721 is the first and only drug for which FDA has agreed that full approval in IgA nephropathy can be granted on proteinuria reduction alone. Phase III patient enrollment began last quarter.

In the U.S. and Hong Kong, a Phase II placebo-controlled trial is underway, evaluating OMS721 in IgA nephropathy patients not taking steroids. The trial includes 12 weeks of dosing and extended open label follow-up with the option for retreatment if needed. Enrollment is complete in the U.S. portion of the study, and data from that cohort are expected in mid-year.

Data from the Hong Kong cohort are expected early in 2019. Our third OMS721 Phase III program, this one assessing the drug in aHUS patients, continues to enroll, and as agreed with both FDA and the European Medicines Agency, or EMA, consists of a single-arm, open-label clinical trial. Our Phase III aHUS trial is targeting approximately 40 patients for full approval in Europe, as well as accelerated approval in the U.S., with approximately 80 total patients required by FDA for full approval.

OMS721 has received multiple designations from FDA and from EMA across those 3 current indications. For stem cell TMA, OMS721 has breakthrough therapy and orphan drug designations in the U.S. and we are pursuing orphan designation in Europe. For IgA nephropathy, OMS721 has breakthrough therapy and orphan drug designations in the U.S. together with orphan drug designation in Europe, and we are pursuing priority medicines or prime designation from EMA.

For aHUS, OMS721 has received fast-track and orphan drug designations in the U.S. In every OMS721 clinical trial to date, the drug has been well-tolerated with no safety concerns identified.

As discussed in previous earnings calls, both intravenous and subcutaneous forms of our OMS721 are in use across our Phase III clinical trials. MASP-2 is the only targetable protein in the lectin pathway, and Omeros exclusively controls all antibodies against MASP-2.

To round out our OMS721 franchise, we continue to make significant progress in our campaign to develop small molecule, MASP-2 inhibitors. We have generated multiple families of highly potent, highly selective MASP-2 small molecule inhibitors for oral administration that we are targeting for clinical trials in 2020. The potent indications -- or the potential indications for MASP-2 inhibition are extensive, and we believe that small molecule oral agents will likely be a patient-friendly approach for many of them.

Let's now turn to our commercial product, OMIDRIA, the only product of its kind approved for use during cataract and lens replacement surgery. As scheduled, CMS's separate payment for OMIDRIA under the pass-through reimbursement program, expired at midnight, on December 31 of last year. In the absence of CMS reimbursement, physicians and facilities largely suspended ordering OMIDRIA while awaiting clarity on future status of separate payment for the drug. As a result, total revenues from OMIDRIA sales in the first quarter were $1.6 million. Net loss for the quarter was $30.1 million or $0.62 per share, which includes noncash expenses of $4.3 million or $0.09 per share. Our overall decrease in cash, cash equivalents and short-term investments for the quarter was $10.9 million.

Medicare is the largest insurer for cataract surgery patients nationwide. While some customers continued using OMIDRIA for commercial third-party insured patients, consistent reimbursement across those payers is uncertain enough, that most customers decided to stop ordering the drug to avoid financial exposure. Many who continued to use OMIDRIA on a limited basis in the first quarter drew from their existing OMIDRIA inventories.

Given the substantial decrease in ASC orders in Q1, we were not able to recognize revenues for a large portion of the wholesaler inventory that was in the channel. We will be able to recognize most or all of this amount as revenue when ASC purchases ramp back up with restoration of pass-through reimbursement on October 1.

Despite the reduced sales, we continue to support the product among the customer base in anticipation that CMS payment would be reinstated, and that is exactly what happened. In March, the consolidated Appropriations Act, or omnibus bill, was signed into law. Included in the omnibus bill is a bipartisan and broadly supported provision that extends pass-through reimbursement status for a small number of drugs, including OMIDRIA, for an additional 2 years, effective October 1, 2018.

In April, OMIDRIA was added to the Veteran's Health Administration National formulary, mandating that the drug be available for physician use in all VA facilities that perform cataract surgery. It is estimated that 65,000 to 80,000 cataract surgery procedures will occur within the VA system in 2018.

The VA is a closed system in which pharmacy costs are budgeted internally, and pharmaceuticals are not reimbursed by, or dependent on, reimbursement from Medicare or other insurers. The initial recommendation is that use of OMIDRIA be limited to the high-risk patients, a few examples of which include those with a history of using an alpha 1 antagonist, such as Flomax, and those who have a dense lens, or will be receiving a toric intraocular lens. These high risk factors are common in VA patients and the decision whether to use the product in any given case is appropriately left to the surgeon's discretion.

Also in April, 4 more real-world studies conducted by leading cataract surgeons were presented for the first time at the Annual Congress of the American Society of Cataract and Refractive Surgery and the American Society of Ophthalmic Administrators. These studies revealed statistically significant benefits associated with OMIDRIA, including, one, decreasing the incidence of intraoperative floppy iris syndrome, or IFIS, in patients at high-risk for this problem due to past alpha blocker use; two, shortening surgical times; and three, reducing the need for costly and IRIS damaging pupil expansion devices across a broad range of patients, including those operated on using the newer technology of femtosecond laser, which is known to increase the patient's inflammatory response and to cause myosis.

Currently, our commercial team remains focused on 3 primary objectives. First, we continue to service and expand our customer base, evidenced by the increasing adoption within VA facilities. We expect that the addition of OMIDRIA to the VA National Formulary, seen as an endorsement of the superior efficacy and safety of OMIDRIA, will help to continue broadening adoption of the product among ophthalmic surgeons.

Over 90% of all U.S. medical schools are affiliated with a VA facility. The VA conducts the largest education and training effort for health professionals in the nation, with nearly all U.S. trained physicians receiving some or all of their training in the VA system. New accounts likely will also include ASCs in hospitals that were ready to begin use of the product late in 2017, but the late adoption of OMIDRIA while 2018 reimbursement was uncertain. Now that separate payment is secure for another 2 years, starting in October, we expect these customers to also come on board.

Second, with the restoration of Medicare part B separate payment, we are working to broaden reimbursement within commercial and Medicare Advantage payers. We are building an internal team of payer experts to focus solely on this effort, with the goal of inclusion of OMIDRIA on the reimbursement schedules of a large number of these insurers as of January 2019. The addition to the VA National Formulary and the ever-increasing set of publications demonstrating the benefits and safety of OMIDRIA, should further supports this payer effort.

Third, we continue to pursue permanent separate payment from CMS. We believe that Congress sent a clear message to CMS through its legislative extension of pass-through in the omnibus bill, namely to fix CMS' packaged payment policy. That message reverberates throughout the scores of letters to CMS, from cataract surgery opinion leaders and professional societies, urging CMS to restore separate payment permanently for OMIDRIA and other innovative therapeutic drugs used during surgery. We remain optimistic that CMS will do the right thing for Medicare beneficiaries by continuing to ensure patient access to OMIDRIA beyond September 30, 2020.

The inability of physicians and facilities to access OMIDRIA for their patients has generated a heightened appreciation for the drug and its benefits, and has more acutely focused concerns regarding the risks associated with use of compounded products as inferior substitutes for OMIDRIA.

Ophthalmic surgeons and facility administrators have expressed both overwhelming excitement about the reinstatement of separate payment for OMIDRIA as well as gratitude to Congress for recognizing the needs of, and for protecting Medicare beneficiaries. After the resumption of CMS pass-through status on October 1, we expect sales and growth rates quickly to reach levels similar to those in late 2017.

Between now and October 1, we expect sales to grow modestly, with some of that growth coming from increased utilization within the VA system. In addition to expanding VA sales over the second and third quarters, we expect that the third quarter will bring replenishment of our wholesaler channels in preparation for a return to strong utilization across ASCs in hospitals in Q4.

Until OMIDRIA revenues recover following restoration of pass-through reimbursement on October 1, to bolster our cash position, driving OMS721 towards near term commercialization and fueling the ongoing development of the rest of our pipeline, we have elected to draw down the remaining $45 million under our loan agreement with CRG. This frankly became a relatively simple decision, following our negotiation of annual covenants with CRG, which we believe largely removed any associated risk. Specifically, the annual revenue and market capitalization covenants for 2018 were deemed to have been met, and the market capitalization requirement was reduced for 2019 and beyond. As you might recall, for 2019 through 2021, under our CRG agreement, Omeros must either meet a revenue or a market cap covenant. First, we expect that we will readily meet the annual revenue requirements. Putting aside the revenue requirements, given that the covenants have been deemed met for 2018, the next time that the market cap will be calculated for purposes of the covenant is in the first quarter of 2020. The requirement is a market cap of 3 times the amount of the outstanding loan, or following this month's draw, an amount equaling $375 million. We don't expect to have difficulty meeting that market cap requirement. We currently project that the additional $45 million draw, together with our existing funds, will provide sufficient working capital through the period of reduced OMIDRIA sales.

Finally, as you might recall, we are required to make a sale of OMIDRIA in the EU by July 28 to maintain our current European marketing authorization for the drug. Here again, we expect that we will meet that deadline.

Now I'd like to provide a few brief highlights of some of our other pipeline programs before we move on to financial results. Let's turn first to OMS906. OMS906 is our antibody targeting MASP-3 and the other half of our complement franchise. Omeros was the first to identify MASP-3 as the key activator of the complement system's alternative pathway. MASP-3 is responsible for the conversion of pro factor D to factor D, and its inhibition shuts down the alternative pathway, without affecting the functioning of the classical or lectin pathways.

We have completed the manufacturing scale-up process for our lead MASP-3 antibody in preparation for clinical trials, which are slated for late 2019 or early 2020. We currently plan to target Paroxysmal Nocturnal Hemoglobinuria, or PNH, as our initial indication. Compared to other PNH therapeutics on the market or in development, we believe that OMS906 holds significant advantages, including dosing, expected safety profile, and the ability to prevent both intra and extravascular hemolysis.

As with our program advancing small molecule inhibitors of MASP-2 for oral administration, we are similarly developing small molecule, MASP-3 inhibitors, to block only the alternative pathway, as well as potent bispecific MASP-2, MASP-3 inhibitors to shut down both the lectin and alternative pathways. The only remaining complement pathway is the classical and here, we are pursuing inhibitors of C1, the key enzymatic target in that pathway.

Now let's turn to our programs for addiction and compulsive disorders. Clinical trials for OMS527, our phosphodiesterase 7, or PDE7 inhibitor are scheduled to begin midyear.

Omeros exclusively controls the use of any PDE7 inhibitor for the treatment of any addiction or compulsive disorder, as well as for any movement disorder. For our initial trials, we are focused on the treatment of addictions and specifically, nicotine addiction. OMS527 has demonstrated the ability to block craving and relapse across animal models of nicotine, cocaine, alcohol and opioid addiction, as well as in binge eating. PDE7 inhibitors appear to modulate the dopamine system, a pathway thought to be common to all addictions and compulsive disorders, restoring normal dopamine levels in the parts of the brain associated with both acute and chronic addictions. PDE7 inhibition blocks craving, as well as both cue and stress-induced relapse, without depressing the reward system, a problem that significantly hinders the use of currently approved anti-addiction agents. The mechanism by which PDE7 inhibitors block addiction appears highly conserved between rodents and humans, and we look forward to seeing the effects of OMS527 in clinical trials.

Our other addiction program, OMS405, consists of PPAR-gamma agonist. Results from a Phase II clinical trial on cocaine use disorder conducted by independent investigators, were published in the journal, Addiction, and Phase II data from a nicotine study, were published in the journal, Pharmacology Biochemistry and Behavior. In addition, a manuscript summarizing data from a Phase II Heroin study has been submitted for publication in a peer-reviewed Journal.

We'll wrap up our pipeline discussion with our GPCR program, which has also continued to progress. Omeros believes that it exclusively controls 54 GPCRs with broad ranging indications, including cancer and cardiovascular disease as well as immunologic, metabolic, inflammatory and central nervous system disorders.

We have discovered and are advancing small molecules targeting, among others, GPR161 for triple-negative breast cancer and sarcomas; and GPR174, for immuno-oncology. We believe and the data supports, that our GPCR target and compounds hold immense promise for the treatment of a long list of serious and life-threatening diseases.

GPR174 and our ability to generate highly-selective inverse agonists against that receptor represent one of our GPCR's potential to change fundamentally the treatment of cancer. Treating human peripheral blood mononuclear cells with the small molecule GPR174 inverse agonists, results in increased levels of the tumor killing cytokines interleukin 2, interleukin 10, interferon gamma and tumor necrosis factor alpha, or TNF alpha. At the same time, they decreased levels of tumor growth promoters, specifically amphiregulin and checkpoint proteins, cytotoxic, T-lymphocytes associated protein 4, or CTLA-4, and Programmed Death Ligand 1, or PDL-1. Our GPR174 inverse agonists also reduced the population of tumor-protecting regulatory T cells or T Regs.

So we have shown that blocking GPR174 stimulates the immune system while at the same time, constraining its suppressive pathways, all critical functions for cancer treatment. To our knowledge, GPR174 and no other target, singly affects this constellation of cancer-related functions, and no entity, other than Omeros, has GPR174 inhibitors.

Consider a drug with superior effects to even a combination of Chimeric Antigen Receptor, or CAR T-Cell Therapy, and checkpoint inhibitors, both of which have tumor-by-tumor efficacy limitations, and exist only as proteins requiring intravenous administration. Now imagine that drug is an orally available anticancer drug, effective against all solid tumors. That's the promise of our GPCR 174 targeting compounds, and that magnitude of importance to patient care is shared by many of our other exclusively controlled GPCR targets and compounds. We continue to build a broad intellectual property estate around GPR174 and other GPCR targets, and we expect that you will be hearing more about these programs in the near future.

With that, I'll end the update on Omeros' products and programs, and turn the call over to Mike, for a summary of our first quarter financial results.

Thanks, Greg. As Greg noted, OMIDRIA total revenues for the first quarter was $1.6 million. Our net loss was $30.1 million or $0.62 per share. This includes noncash expenses of $4.3 million or $0.09 per share. Our overall decrease in cash, cash equivalents and short-term investments for the quarter was $10.9 million. Here are some specifics regarding the first quarter results.

As expected, our reported revenue for the first quarter was significantly impacted by the loss of pass-through reimbursement on January 1, 2018. With a substantial majority of our customers currently waiting for pass-through reimbursement to be reinstated October 1, and only using OMIDRIA on a very selective basis, sell-through volume has substantially declined from peak sales in November. We expect this generally to continue during the second quarter, except for the increase in revenues that may result from sales to the VA, which Greg discussed earlier.

From a reported revenue perspective, as we discussed on our last quarterly call, we have not yet recognized a large portion of the inventory purchased by our wholesalers in December of last year. We expect to recognize this revenue in the third and fourth quarters of this year as the ASC and the hospital demand are reestablished.

Costs and expenses for the current quarter were $29.3 million, a $1.4 million increase from the fourth quarter of 2017. The increase was primarily due to manufacturing scale-up activities for OMS721 and higher third-party development costs incurred on OMS721 and our other product candidates. These increases were partially offset by a reduction in SG&A costs, due to reduced legal fees incurred defending our OMIDRIA patents, due to the settlement of the Par litigation in October 2017, and reduced sales and marketing costs. Interest expense was $2.8 million for the current quarter, which is in line with our expectations.

As of March 31, 2018, we had $72.8 million of cash, cash equivalents and short-term investments available for our general operations, and the $5.8 million of restricted cash in support of our CRG loan agreement and our building lease. This month, we have requested the additional $45 million available under the CRG loan agreement, and expect to receive these proceeds later in the month. Now let's take a look ahead.

Our 2018 revenues will continue to be significantly affected by the lack of pass-through reimbursement until October 1, when pass-through is reinstated. During the fourth quarter of this year, we should see a significant increase in revenues over the run rate during the first 3 quarters of the year, but at this time, we cannot predict with certainty how quickly the ASCs and hospitals will resume or increase their usage of OMIDRIA.

During 2018, the majority of our research and development expenses will be related to OMS721, with OMS527, OMS906, and our GPCR program contributing to lesser amounts. We expect research and development costs will continue to increase on a quarterly basis in 2018, given our preparations to commercialize OMS721, as well as the ongoing OMS721 Phase III clinical programs and additional manufacturing scale-up costs.

SG&A expenses will likely increase from the first quarter of 2018, primarily due to expanding our OMIDRIA sales force and to precommercial activity -- commercialization activities for OMS721.

Interest expense will increase based on the additional $45 million we have requested from CRG. We anticipate the second quarter interest expense will be approximately $3.7 million, and beginning in the third quarter, quarterly interest expense will be approximately $4.5 million.

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

Thanks, Mike. Operator, let's open the call to questions.

(Operator Instructions) And our first question comes from the line of Jason McCarthy from Maxim Group.

So I was just wondering, with the pass-through reinstated for an additional 2 years, I'd just like to get a bit more detail on what steps you're taking to reach the permanent reimbursement status, and any progress so far on that?

Hi, Jason. Yes, I think the best way to answer that is we have been working on that specific issue for a couple of years now. The initial result was, I think, what you saw with respect to the extension of pass-through in March. With respect to the administrative approach, to obtain permanent separate payment from CMS, those are ongoing discussions and again, as I said, I think we remain optimistic that CMS understands the issues, understands well, well-intentioned, understands that the package payment policy is less than optimal, and does not adequately serve the needs of the Medicare beneficiaries. And for that reason, we expect and we certainly hope that CMS will find its way clear to correct that and do the right thing to ensure access for Medicare beneficiaries to drugs like OMIDRIA that are used during surgical procedures.

Okay. And then just one more question on 721, in TMA. So for Europe, I know that you are scheduling meetings. Do you have any idea on when we'll be able to get an update on any possibility of conditional marketing authorization in Europe?

We will inform you of that as we have information. But I think for right now, I think what we have said publicly is that we are scheduling those meetings. We will be providing the data that we have to the European regulators, and we hope also here that they will see the importance of OMS721 in this devastating condition, and recognize the data for what they are, which is, it seems pretty clear that patients are surviving with the use of OMS721. So I think with that -- let me stop there and again, we'll provide further updates in the future.

And our next question comes from the line of Ram Selvaraju with H.C. Wainwright.

So just on 721, a couple of quick things. Given that, from my understanding, there are no specific additional clinical trial requirements ahead of filing the BLA in HSCT TMA, can you maybe describe for us what the pre-commercial preparations are that you expect to be making, and what a potential commercial organization could look like within the context of this indication if OMS721 were to receive approval? And if you could elaborate on whether there would potentially be a rationale for development of an alternative formulation or significantly different dosing regimen, or route of administration for 721 in a disease indication like IgA nephropathy. And then, if you could perhaps, elaborate for us, on what kinds of small molecules you have in the MASP-2 pathway modulation portfolio, and if you could perhaps, give us a sense of how tractable those look, if they're all likely to be amenable to oral administration, if they look like peptidomimetics. Or if they look like something else. That would be helpful.

All right. I'll just start working through those, Ram. First, I want to make clear that we are in ongoing discussions with FDA regarding stem cell TMA. And as you know, obviously, the information we need to provide to FDA is going to need to satisfy FDA. And so I think it's premature to discuss at this point what else will be required to achieve accelerated approval in stem cell TMA. As we have said, we're working closely with FDA, and we have initiated preparations for a BLA, which I think as you would expect, would be the smart thing for us to do. With respect to the pre-commercialization activities, at this point, they would be the standard pre-commercialization activities that you would expect. We're looking at market sizes, we're assessing costs of management of these patients. For example, to manage a severe or high-risk stem cell transplant TMA patient is about $3 million a year. And those are rough numbers, but it's an extensive amount of effort that's required and cost associated with that. With respect to your next question, if I'm recalling, the next question is around IgA, and would we be expecting a different formulation. Certainly, we're initially evaluating an IV formulation, but as you know, we also have a subcu formulation, already in clinical trials. So the current plan is to take the IV formulation through initially, and then follow that with a subcu formulation. With respect to the MASP-2 small molecule inhibitors that we've developed, yes, a number of those do appear tractable, and we're very pleased with the compounds that we have. These efforts are assisted, and have been assisted by our ability to create co-crystals, and that I think, has helped us significantly. These are highly selective, highly potent MASP-2 inhibitors. And we're very pleased with these inhibitors really as a group, and I think we'll be speaking more about those in the future. I think that, that covered the questions.

And our next question comes from the line of Steve Brozak from WBB.

Greg, you just went over on describing what some of the standard of care realities are. Can you go back over -- because with the 3 possible indications that you're looking at, how would you look at what the current costs are on standard of care, because I'm not saying that I would want to use this to model, whatever is going to come out at the end of the day, but just to get an understanding of what we're currently looking at as the competitive landscape. And then a follow-up question, please.

Sure. Thanks, Steve. I think, first, let's just turn to aHUS, and I think the standard of care there is Solaris, which I think everyone understands the cost associated with treatment of aHUS with Solaris. IgA, these are -- as you know, there are no approved treatments for IgA. The treatment is standard is really RAS blockade, or renin-angiotensin system blockade, so ACE inhibitors and ARBs. And ultimately, a good portion of these patients develop end-stage renal disease, which requires dialysis. So one of the costs that you'd want to look at, I think, would be the cost of long-term dialysis for these patients. With respect to stem cell TMA, those costs are, I think, as I said, highly-intensive. These are patients who become very sick very quickly. Their conditions deteriorate very quickly, and almost always, death comes to these patients, at least the ones that we have treated, these high-risk patients, with greater than 90% certainty comes rapidly. But the costs associated with that are intensive, and the care and the costs of managing patients with these high-risk stem cell TMAs, as I said, is approximately $3 million, or certainly, in the order of several million dollars of these patients. So it is clearly a burden to the medical system, but also these patients really have no other option.

Again, most questions have been asked and answered, and you gave some detailed answers on OMIDRIA. Just one last question on OMIDRIA. By comparison to the original launch, and obviously, you're ramping up everything right now, as I would suspect. How would you describe the -- how would you compare what you're doing now, preparing for October, and obviously, before, and you do have current sales, how would you compare it in terms of what you learned on the -- when you did the original launch, in terms of what you're looking for, and what you think we could guide -- get guidance on?

That's an interesting and it's a good question. I think, certainly, we are much smarter today about how to relaunch the product than we were when we initially launched the product. I think it also helps clearly that we have well-identified benchmarks. I mean, we know how we were selling the product in 2017. We know what got us there, we know the demand from the physicians, we understand how to streamline the utilization of the product within the facilities. So that really, as I've said several times, the distillate here is always how can we increase patient access to this important drug. And I think we know how to do that well. Certainly, it was a learning curve throughout the first 3 years of pass-through, but I think certainly, we have more to learn and more to refine, but our ability to get there is, I think, well documented as well. So I think we'll be able, as I said, to quickly ramp back up to a level similar to our sales in 2017, and my hope is that we continue to grow those sales. I don't see any reason why that should not occur. If you look at the clinical data that has been published and the multiple studies that continue to be presented at annual meetings, it's just uniformly positive. The benefits of OMIDRIA, I really think, are not in question. And I think the one other thing, Steve, that certainly we're going to focus on is expanding the payer base. We're seeing the effects here, of having the payments in the CMS population stop. And I think we need to focus and we are now focusing on Medicare Advantage and on third-party payers to make sure that those patients also can have equal access to the drug. We, by no means, are saying all patients must have it, but certainly, I think it's appropriate that all patients have the option to have it. And for CMS to provide that option, for the VA to provide that option, but for Medicare Advantage programs and third-party private payers not to provide that option, seems questionable at best.

(Operator Instructions) And our next question comes from the line of Serge Belanger from Needham & Company.

A couple of questions on 721. First, on HSCT TMA. Greg, you talked a little bit about the accelerated path for approval. I just wanted to get some clarifications if the FDA has signed off on that, or they're still evaluating some data to make that evaluation? And then what would a confirmatory trial look for HSCT TMA?

Sure. First, in answer to your initial question, Serge, we remain in discussions. What we thought was important here was to update our investor base on our recent discussions with FDA. We thought those were material and that those needed to be shared. As I've said, discussions are ongoing with FDA and we'll see what else needs to be provided and/or submitted to FDA to satisfy the requirements for accelerated approval. But certainly, we are optimistic that we are well on the path to getting there. With respect to the design of the confirmatory trial, I think it may be a bit early to discuss that. As I said, we'd like to look at likely different dosing regimens, simply because we have largely used 1 dosing regimen in the TMA patients treated to date, and they've done well. But the question is, could they do better? And we want to make sure that we assess that. And the confirmatory trial, assuming that we can work our way clear to an accelerated approval in the near term, would allow us in parallel, to assess that dosing regimen and other dosing regimens, so that we know that we're treating patients as best as we can. This is a very serious disorder and one where every patient that we save is a very important thing, and we're focused on that.

Okay. And then on IgA nephropathy. Can you just talk about the Phase II trial that you expect to report results for in around mid-year? I don't think it's on clinicaltrials.gov, so maybe the patient population, the number of patients and the endpoints.

Yes. I believe it is on clincaltrials.gov, Serge, but I can run through it with you as well. The first cohort of these are 12 patients, U.S.-based, 6 patients on 721, 6 placebo patients -- very similar to the last study, other than the fact that these patients are not on steroids. And the endpoints, again, effectively the same. We're looking at 24-hour protein -- urine protein levels. And these patients can be retreated, we're following them. We expect that this will give us some additional information as we advance through the Phase III program.

And that completes and Q&A part of the call. I'd like to turn the call back to Dr. Demopulos for closing remarks.

So that wraps up our call for today. Thanks, again everyone for joining us. 2018 is shaping up to be an exacting year for Omeros and for our shareholders. And as I said earlier, we'll continue to keep you updated periodically on our progress. As always, we appreciate your continued interest and support. Everyone, have a good afternoon.