Omeros Corp (OMER) 2021 Q4 法說會逐字稿

Good afternoon, and welcome to today's earnings call of 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 one 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 factor section in the company's quarterly report on Form 10-Q, which was filed today with the SEC, for discussion of these risks and uncertainties.

Today's call will include a discussion of certain non-GAAP financial measures. A reconciliation of these non-GAAP measures to the corresponding GAAP measures is included with Omeros earnings plus press release included -- issued earlier today, which is available on the Investor Relations page of our website and has been furnished with the Form 8-K we filed with the SEC earlier today. 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'll start with a corporate update and a high-level overview of our fourth quarter and year-end 2021 financial results followed by a more detailed financial summary. With me today here are Mike Jacobsen, Nadia Dac, Cathy Melfi and Steve Whitaker, our respective heads of finance, commercial, regulatory and clinical. As publicly announced on December 23, 2021, Omeros completed the strategic divestiture of its commercial ophthalmic product, OMIDRIA, to Rainer Surgical. Rainer has a long heritage in ophthalmology and markets a portfolio of complementary ophthalmology products across more than 80 countries. At the transactions closing, Omeros received $126 million in cash. In addition, during this first quarter of 2022, Omeros is collecting all accounts receivable outstanding at the closing date, bringing the effective total cash received by Omeros to $165 million.

With cash on hand at year-end, this brings our effective cash and accounts receivable at December 31, 2021, to $195 million. Omeros will also receive a milestone payment of $200 million if before 2025, separate payment for OMIDRIA is secured for a continuous period of at least 4 years. The immediate capital infusion of $165 million, together with the ongoing royalty stream should provide sufficient capital for Omeros to run through late 2023. The $200 million milestone if achieved, will substantially extend that run room. Beyond the upfront payment and milestone, Omeros retains significant upside in the future growth of OMIDRIA through royalties on both U.S. and ex U.S. net sales of OMIDRIA.

In the U.S., Omeros received 50% of net sales, approximately 70% of the operating profit. From the closing date until the earlier of either January 1, 2025, or the payment of the $200 million milestone. Thereafter, Omeros will receive 30% of U.S. net sales, which equates to over 40% of operating profits until U.S. patent expiration, which at present is 2033 and given pending patent applications might well be later. Outside of the U.S., Omeros will receive a royalty of 15% of net sales, again, with a long duration running until the expiration of all relevant regional or national patents.

Let's turn to our fourth quarter financials. GAAP net income for the fourth quarter was $281 million or $4.48 per share, which includes a $306 million gain on the sale of OMIDRIA. As Mike will explain later the asset sale of OMIDRIA involved the mandatory restatement of our financials, which changed the way we need to report our fourth quarter OMIDRIA and transaction-related revenues and expenditures. I'll provide you now with a high-level overview of some key metrics. -- of our fourth quarter financial results adjusted to exclude the accounting impact of the sale.

Overall, fourth quarter net sales of OMIDRIA totaled $32.9 million, a growth of 10% over the third quarter. This represents a new quarterly record for OMIDRIA sales in ambulatory surgery centers and closely approaches an all-time record for quarterly sales in both ASCs and hospital outpatient departments despite the absence currently of separate payment by CMS [and] HOPDs. Omeros recognized as revenue, all but $1.1 million of that $32.9 million total $30.8 million from direct product sales prior to the acquisition and $1 million from our 50% royalty on Rainer's net sales in the remainder of Q4 following the acquisition. Absent the sale of OMIDRIA, our fourth quarter loss would have equaled $23 million or $0.37 per share, effectively unchanged from the prior quarter's loss and per share loss. Fourth quarter noncash expenses were $6.3 million or $0.10 per share. This too was effectively unchanged from the third quarter of 2021.

As of year-end, we had $157 million of cash, cash equivalents, and short-term investments and $38 million in accounts receivable. This -- this combination really brings our effective cash and accounts receivable at year-end to $195 million. We also have a $50 million line of credit against our accounts receivable, which includes our royalty receivables from Rainer. And we also have a $150 million at-the-market sales agreement, which we have not used. We're pleased with OMIDRIA's overall performance in the fourth quarter and expect OMIDRIA sales to continue to grow throughout 2022. In the transaction for OMIDRIA, Rainer acquired a great ophthalmic product, which will help Rainer grow its ophthalmology franchise. Rainer -- now also has what we collectively believe is the premier surgical facility-focused sales force in ophthalmology.

For Omeros, the transaction's economics are highly favorable, allowing monetization today of substantial downstream revenues, eliminating significant costs, and reducing risk while maintaining roughly 40% to 70% of future operating profit. Rainer plans to expand its U.S. and ex U.S. sales forces and to capitalize on synergies between OMIDRIA and their other ophthalmic products like intraocular lenses for cataract surgery, all of which should further accelerate sales of OMIDRIA. Also, Rainer plans to launch OMIDRIA in markets outside of the U.S. later this year, which we expect will bring substantial royalty revenues to Omeros from previously untapped regions.

Further, we remain optimistic that Omeros will receive the $200 million milestone payment. We're immensely proud to have conceived, developed, and successfully commercialized OMIDRIA, a drug that improves outcomes in cataract surgery and already has been used safely in more than 2 million cataract surgery procedures. I'm also tremendously proud of the OMIDRIA sales force that came together as a cohesive unit, launched a first-of-kind drug in ophthalmology, and grew OMIDRIA to a $125 million a year product. I know that under Rainer's leadership, that team will continue working hard to bring OMIDRIA to more and more patients who need it. We believe the product is in very good hands with Rainer, and we look forward to OMIDRIA's continued expanding utilization and our ongoing economic participation in that growth worldwide.

Before leaving OMIDRIA today, I'd like to give you a brief update on the NOPAIN Act, a legislative effort led nationally by voices for non-opioid choices and endorsed now by more than 80 major medical societies, patient advocacy groups, and prevention and recovery organizations across the country. The NOPAIN Act, if passed, will provide long-term separate payment for non-opioid pain management drugs like OMIDRIA in ambulatory surgery centers as well as in hospital outpatient departments. The NOPAIN Act now counts 44 and 93 representatives as cosponsors and is truly bipartisan. Momentum around the bill is growing and new cosponsors continue to sign on. Sponsors are now focused on identifying the appropriate legislative vehicle to carry in the near term, the NOPAIN Act across the finish line.

The divestiture of OMIDRIA marks a significant transition for Omeros as an organization as well. OMIDRIA is a unique specialty pharmaceutical product. Now Omeros is a pure biotech, leading scientific advancement across a portfolio of product candidates and development assets in immunology focused on the complement system and on immuno-oncology and in addiction. Here's an update on some of our programs.

Let's start with narsoplimab, our fully human monoclonal antibody targeting MASP-2, the effector enzyme of the lectin pathway of complement. On October 18, 2021, we announced receipt from FDA of a complete response letter regarding our Biologics License Application, or BLA, for the treatment of hematopoietic stem cell transplant-associated thrombotic microangiopathy, or TA-TMA. As we've previously disclosed, FDA in its CRL, expressed difficulty interpreting narsoplimab treatment effect, given the complexity and severity of both the disease and patient population, indicating that additional information would be necessary to support approval. There were no safety or CMC issues cited. So there's no bleed over to other indications in which narsoplimab is being evaluated.

In January, after discussion with and input from our regulatory consultants, including former FDA office and division directors. We submitted a comprehensive response addressing in detail all of FDA's critiques in the CRL. Accompanying that response was a request for a Type A meeting to discuss our responses to the CRO. The Type A meeting was granted and held last month during which Omeros responded to each of FDA's issues in the CRO. We believe that the meeting was constructive. We currently are awaiting feedback from FDA and we'll provide further updates as we have more information and clarity. We continue to believe that our BLA has submitted Merit's approval and that the data meet or exceed the threshold for substantial evidence of effectiveness. Narsoplimab delivered a highly statistically significant outcome compared to the prespecified efficacy threshold.

All secondary endpoints were also favorable, several reaching statistical significance and the benefit-risk balance heavily favors benefit. We work closely with FDA throughout the clinical development process, followed FDA's guidance on the design and conduct of our pivotal single-arm trial as well as on the appropriate registration path and collaborated with FDA to create the novel primary endpoint. The regulatory history, including agreements with FDA are well documented in meeting minutes and official communications.

TA-TMA is an orphan indication with no approved treatment, and our goal is to bring narsoplimab to stem cell transplant patients for whom TA-TMA is a too often lethal complication. During our ongoing interactions with FDA, we have continued to sharpen our launch plans and invest in TA-TMA disease education. We're confident that we'll be launch-ready once narsoplimab is approved. Also, more publications and presentations from international experts continue to accumulate. The manuscript detailing the findings from the pivotal trial and authored by a consortium of the trial's investigators is in the final stage of review by a peer-reviewed journal. A manuscript elucidating the role of the lectin pathway in MASP-2 and TA-TMA was recently published in the peer-reviewed journal Experimental Hematology and Oncology.

In November, a detailed summary of the successful treatment with narsoplimab in a 60-year-old with TA-TMA was published in [Blood]. And there will be 3 presentations at the upcoming Annual Meeting of the European Society for Blood and Marrow Transplantation later this month. The first details the findings of an international working group of experts in stem cell transplantation, establishing the first broad-based diagnostic criteria for TA-TMA, which will be important in helping identify TA-TMA in a greater number of patients early in the disease process. The second describes a systematic literature review of the natural history of TA-TMA in adults, which makes clear that the beneficial effects seen with narsoplimab are substantially better than would be expected in untreated patients or otherwise stated in the natural history of the disease.

And the third describes resolution of severe TA-TMA with narsoplimab treatment in a 9-month old girl at Emory University, who had failed treatment with eculizumab. Narsoplimab is also being evaluated in 3 other indications, immunoglobin A or IgA nephropathy, atypical hemolytic uremic syndrome or aHUS; and COVID-19.

Our Phase III ARTEMIS-IGAN trial is enrolling internationally. Despite the challenge of COVID-19 at hospital investigational sites, enrollment has continued to progress and has even accelerated. An investigational new drug application is under review by the Chinese FDA, Omeros has identified and is working with over 15 Chinese investigational centers so that enrollment can begin as soon as possible after IND clearance. IgA nephropathy accounts for about 45% of primary glomerular disease in China. And the magnitude of its prevalence in that country will meaningfully accelerate further enrollment in the trial. Multiple sites in other European, South American and Asian countries are also coming online. Proteinuria data are expected in the first part of next year.

As reported in our last earnings call and in our press release last November, results of nearly 3-year follow-up in IgA nephropathy patients treated with narsoplimab, demonstrate unprecedented effects on proteinuria reduction as well as eGFR stabilization and improvement. These data were presented by international renal experts at both the Annual Meeting of the American Society of Nephrology and at the World Congress of Nephrology, which took place just last week. We look forward to seeing the Phase III data. Our Phase III narsoplimab trial in patients with aHUS remains open. As previously reported for commercial reasons, we've deprioritized that program in favor of other MASP-2 and MASP-3 inhibitor programs. Narsoplimab is also being evaluated for the treatment of severe COVID-19 in the I-SPY COVID-19 platform trial sponsored by QuantumLeap Healthcare collaborative. The narsoplimab treatment arm of the trial has now concluded. Once all data are available, they will be analyzed. We look forward to a readout of the data once that analysis is completed.

2 manuscripts from Omeros' laboratories at the University of Cambridge have been submitted for peer-reviewed publication and detailed some of our recent discoveries in the pathophysiology of COVID-19. The first covers the discovery of a profile of complement markers of broad complement dysfunction seen in all patients examined during the acute phase of severe COVID-19. The dysfunction appears to be driven by hyperactivation of the lectin pathway. Narsoplimab restores complement function in these severe COVID-19 patients, while in patients not treated with narsoplimab, the broad complement dysfunction persists throughout hospitalization or until death.

The second manuscript demonstrates that the complement dysfunction in severe COVID-19 patients reported in the first manuscript results in impairment of the adaptive immune response necessary to fight infection, leading to an increased risk of life-threatening secondary infection. Here again, treatment with narsoplimab normalizes the adaptive immune response, which should restore the body's ability to prevent or fight secondary infection and reduce COVID-19 mortality. We look forward to both manuscripts being made available soon and we expect that they will spur important discussion and future research. Our MASP-2 life cycle management programs beyond narsoplimab are also moving ahead quickly. OMS1029 is our second-generation and long-acting MASP-2 antibody. A clinical trial application is planned for submission next quarter and OMS1029 remains on track to begin enrolling its Phase I trial this summer.

We expect that OMS1029 will be able to be dosed subcutaneously or intravenously at a frequency of once monthly and perhaps even once quarterly. We expect that OMS1029 will allow us to pursue different and complementary sets of indications for this molecule that are planned for narsoplimab. 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 when ready into the clinic.

Turning now to OMS906, which is our antibody targeting MASP-3. Our Phase I clinical work in healthy subjects is now complete and shows high-level suppression of alternative pathway activity, favorable pharmacokinetics, and a good safety profile to date. We're moving ahead with a Phase Ib trial in patients with paroxysmal nocturnal hemoglobinuria, or PNH, who have an unsatisfactory response to the C5 inhibitor ravulizumab. A successful meeting was held between Omeros and the Medicines and Healthcare Products Regulatory Agency or MHRA to discuss the design and conduct of the Phase Ib trial, and enrollment is expected to begin this summer. We expect that OMS906 unlike C5 inhibitors, will address both intravascular and extravascular hemolysis in PNH and will have significant advantages over agents, either on the market or in development to treat PNH.

In our phosphodiester E7 or PDE7 inhibitor program, OMS527 work is ongoing. OMS527 completed its Phase I program in humans without a safety signal. Given resource constraints, we have been limiting clinical activities. However, discussions are underway with an external funding source to accelerate clinical work. If successful in accessing external financial support for the program, we do plan to advance OMS527 through additional clinical trials.

Finally, let's turn to our immuno-oncology portfolio. A part of our recent efforts have really revolved around methods to improve the potency and durability of adoptive T cell therapies. Our novel approach, which enforces memory phenotypes and cultured T cells through a previously unexplored pathway has demonstrated marked tumor regression following transfer of expanded mouse T cells and an aggressive solid tumor model. We continue to explore the universality of our approach in human CAR T and adoptive T cell therapy systems, and we believe our platform has the potential to improve markedly response rates for patients receiving either engineered or native T cell therapies for liquid or solid tumors. Furthermore, we continue to explore the effects of GPR174 inhibitors and other novel biologics in promoting antitumor immune responses and overcoming the immunosuppressive tumor microenvironment. With that, I'll turn the call over to Mike Jacobson, our Chief Accounting Officer, for a more detailed discussion of our fourth quarter and year-end financial results.

Yes. Thanks, Greg. As Greg briefly discussed on December 23, Rainer acquired OMIDRIA and the associated business operations, including the OMIDRIA commercial and sales teams devoted to the product. The sale was accounted for as an asset sale, which required us to restate our financial statements into 2 components: the first being continuing operations and the second being discontinued operations for all of the historical periods presented. This means that all OMIDRIA revenue, operating expenses and the $306 million gain related to the sale of OMIDRIA are shown in a single line on our income statement as discontinued operations. All of our other activities are included in continuing operations. I will provide more details in a few minutes. Also, our Form 10-K provides additional details regarding the sale. And I suggest you look there if you have any additional questions on the accounting treatment following our call today.

I would like to now summarize the deal and why we believe it is positive for Omeros. We received an upfront payment of $126 million in December and retained all of our outstanding OMIDRIA-related accounts receivable, which amounted to $39 million as of the December 23rd closing. We also have the opportunity to achieve an additional $200 million milestone payment tied to the achievement of long-term separate payment from CMS. The OMIDRIA transaction includes royalties on all sales worldwide. Omeros will continue to receive 50% of the net sales in the U.S. until the earlier of either January 1, 2025, or the payment of the $200 million milestone. Thereafter, we will receive 30% royalty on U.S. net sales for the duration of the relevant patent terms, which will -- or which extend to at least 2033. We will also receive a 15% royalty on non-U.S. net sales for OMIDRIA over the life of the relevant patents.

From an overall standpoint, considering the U.S. royalties and our reduction in operating expenses, we will receive approximately 70% of the U.S. operating profit when royalties are 50% and over 40% when the royalties -- or the royalty is 30%. Turning to our actual results. Overall net income for the fourth quarter was $281 million or $4.48 per share. The results include the $306 million gain on the sale of OMIDRIA. Without this gain, our fourth quarter loss would have been $23 million or $0.37 per share. This is consistent with the last quarter where our net loss per share was 22.7 and $0.36 per share. Our noncash expenses for this quarter were $6.3 million or $0.10 per share. As of year-end, we had $157 million of cash, cash equivalents and short-term investments available for general operations. We also have $38 million in accounts receivable that we are collecting this quarter. As you may recall, we have an at-the-market sales agreement that allows us to sell from time to time up to $150 million of our common stock.

Fourth quarter sales from OMIDRIA are all included in discontinued operations as either sales or royalties. On a GAAP basis, we recognized $3.8 million of the sales as product revenue from pre-closing sales of OMIDRIA and $1 million is our 50% share of royalties on Rainer sales post-closing. Overall sales for OMIDRIA in the fourth quarter, both pre and post-closing was $32.9 million, an increase of $2.9 million or 10% over third quarter reported OMIDRIA revenues. We are very satisfied with the overall fourth quarter sales of OMIDRIA. Sales and ASCs reached another all-time high and overall sales for the quarter were nearly an all-time high, even though separate Medicare payment is not currently available in the hospital setting.

Together with Rainer, we are continuing to pursue a variety of options to ensure long-term reimbursement for OMIDRIA in both the ASC and hospital setting, as Greg mentioned earlier. Achievement there would trigger the $200 million milestone payment to Omeros. Continuing operating costs and expenses for the fourth quarter were $43 million. This is an increase of $3 million from the third quarter just due to the timing of additional narsoplimab clinical trial activities.

As Greg mentioned earlier in our call, we continue to gauge on our sopamab sales and marketing spend until the timing of the FDA approval is clear. As I've stated previously, we do continue to expansion in narsoplimab manufacturing costs until timing of approval in the U.S. is certain. Interest expense for the fourth quarter was $4.9 million and consistent with the previous quarter. Net income from discontinued operations for the year is $386 million and includes the $306 million gain on the sale of OMIDRIA as well as the $80 million in net operating profit from OMIDRIA prior to the sale to Rainer. The gain on the sale of OMIDRIA has 2 key components: an upfront cash payment of $126 million that we received upon closing in December and $185 million for the minimum expected net present value of future U.S. royalty payments.

These minimum expected future royalties are quite conservative for the following reasons. One, the future royalties by definition, is not a fair value assessment. Third, the accounting assessment uses net present value with a double-digit discount factor in the computation. Another item 4. The assessment does not include any gain related to the $200 million milestone payment because it's not yet a final certainty. And 5, the assessment does not include any revenues from ex U.S. sales. And lastly, the assessment includes a 20% effective tax rate in coming up with the amount. And we expect most of that would be avoided through the use of our historic net operating losses and tax credit carryforwards.

Now let's take a look at the first quarter '22 and the expected results. Because we recorded a $185 million future MID royalty payments on our balance sheet at closing in December of '21, cash received from royalty earned will primarily be recorded as a reduction in this OMIDRIA account royalty asset on our balance sheet versus revenue in our income statement. If and when we achieve the $200 million milestone event, we will record the payment as income from discontinued operations in our income statement. We would also adjust our OMIDRIA contract royalty asset to reflect the reduction in expected minimum future royalties earned as the royalty rate goes to 30%.

We expect overall operating costs in the first quarter of 2022 to remain essentially unchanged from those in the fourth quarter of 2021. Interest expense for the fourth quarter should be consistent with the third quarter at approximately $5 million. As we just discussed, net income from discontinued operations should have minimal amounts recorded as the OMIDRIA royalties earned next quarter or in the first quarter will primarily be recorded as a reduction of the established OMIDRIA contract royalty asset value on the balance sheet. With that, I'll turn the call back over to Greg. Hey Greg.

Thanks, Mike. Okay, operator, let's please open the call to questions.

(Operator Instructions) Our first question comes from Eric Joseph with JPMorgan.

Appreciating that you're still awaiting feedback or the minutes from FDA. But nevertheless, I'm wondering if you could just kind of walk us through some of the alternative scenarios going forward in TA-TMA with narsoplimab. Would you be able to resubmit the BLA with the additional responses discussed in the Type A meeting or if additional clinical data are needed? Would you look to conduct an additional study? How do you prioritize that versus focusing on the ongoing programs?

Eric, thank you. Well, let me take first answer to that, and then I'll probably ask others to answer as well. But again, I think it's obviously difficult for us to assess what we expect will need to do in the absence of the feedback from the last meeting. As I said at the last meeting we had with the FDA, we felt was constructive. And we really went through each of FDA's stated issues. And I think, responded quite strongly to those and all really database. With respect to where we go and what we do, I think we really need to see what comes back from FDA. Until then, I would be guessing, and I'm sure that's not what you want me to do. But let me see -- I'll turn the question over to Cathy Melfi, our Head of Regulatory and see. Cathy, do you want to add anything to that?

Again, just to reiterate that the meeting we have with that view was constructive. We're waiting for their feedback and so really can't speculate on what that might be. But again, just to reiterate that the data for narsoplimab and TA-TMA are strong, and we feel that the BLA has submitted merits approval. But right now, we're still waiting again.

So thanks. Yes, I mean, I think, again, summing up we think that we should be able to resubmit with the data we have. But we really need -- we need feedback and we need guidance. And right now, we're waiting for that as I'm sure you are.

Our next question comes from Greg Harrison with Bank of America.

Are you able to provide any other details as to the additional information that was requested and maybe whether your response to the CRL contained any additional data or if it was more explaining your take on the data that you provided in the initial BLA? And then if you have any description you could provide us of FDA's receptiveness to your arguments during that meeting?

Sure. Well, first, I would say that a lot of our responses to the stated concerns from FDA, I would characterize really as clarification of the existing data and perhaps a representation of existing data to address those issues. With respect to FDA's response, as you know, that's often very tough, tough to read. And I wouldn't want to speak for FDA at this point other than to say. We await their responses to what we think was a very strong package and a very strong set of responses to those issues. But again, let me ask Steve Whitaker, our Head of Clinical or again, Cathy Melfi, please feel free to add anything you'd like here. Greg, I agree with you. We -- it's hard to read FDA and we don't comment on FDA interactions anyway. But the data that we have is strong. We had strong responses to each of the points they raised, and we addressed every point that was raised in the CRL. And in my view that the BLA does deserve approval first round and certainly now with our responses with -- that should clarify things for FDA, in my view.

Yes. And again, I would just reiterate, as we said, when we received the CRL that there were questions that really got into the -- or [characterize] the complexity of the disease and the patient population. So it was important for us to provide some clarification. And so as Greg said, a lot of it was really reclarification of some of the data, and we feel that our responses were strong. And again, the meeting was constructive.

If I could sneak one more in on another topic. What are the steps going forward now that the narsoplimab arm is completed within the I-SPY trial. Is there anything you can imply as to the efficacy we could see or just the results in general, just considering the length of time that narsoplimab was included in the trial?

Yes, Steve, would you like to...

Sure. I doubt if this will be a very satisfactory answer, but this is -- as you know, the I-SPY group is very hands-off with the providers of the drugs that are included in that trial. Right now, we're just looking forward to getting the data set -- the full data set, and we can then at that point, all the analyses can be done and we can have out and then we will publicly disclose the results. I've never even talked to these people. So...

Our next question comes from Ram Selvaraju with H.C. Wainwright.

I was wondering if you could elaborate on specifically what you expect the usage pattern of narsoplimab to be in TA-TMA if it is approved? And to what extent you anticipate its use might succeed the deployment of eculizumab?

Well, let me take -- I'll answer that maybe at the back and move forward. With the approval of narsoplimab, that will be the only drug approved in stem-cell TMA. So I think that, that would make the use of really any off-label drug for TA-TMA difficult at best. So I think that becomes pretty clear. With respect to usage pattern, I guess I will look to Steve and Nadia to answer that from clinical and perhaps a commercial perspective.

Sure. I'll take the first crack from a clinical perspective. The population we studied, I think, as you all know, is a high-risk population, that high-risk population is actually a large population. And these patients can deteriorate quickly. And so I think that with approval, narsoplimab would be used in a substantial percentage of these patients because they do have -- so many of them have these risk factors. I think 2/3 had GVHD. I'm going off the top of my head now, and this data has been presented, 80% had infection, something like that. So a very large number have these risk factors of the entire TA-TMA population. And I think that because patients do poorly and can deteriorate so quickly, physicians with an approved drug would want to use this pretty aggressively.

And the only thing I'll add is just a reminder that the diagnostic code was also approved back in October. And so prior to this, we haven't had that for TA-TMA, which may make it even more difficult for an off-label use into narsoplimab, if approved, would be the only one approved for TA-TMA.

Yes, I think what you're hearing is we think the pattern of utilization would be strong that narsoplimab would be the only FDA-approved product in that space. And the data, I think, are pretty clear. The one thing I would add is, I think I mentioned the work that's being done by the expert group of transplanters who are looking through their data and identifying really criteria for diagnosis of TA-TMA. And I think that's going to be helpful when that ultimately is solidified and published I think that, that would likely increase the number of diagnoses or the frequency of diagnosis in TA-TMA. Remember, this is still largely a condition that is used -- where physicians use a number of different sets of criteria. And I think that makes it a little more difficult -- a unified, consistent set of diagnostic criteria, I think, will only serve to increase that base. And I think by extension, utilization of narsoplimab.

Great. I was just wondering also if you had any further clarity regarding the timing of potential top line data release from the ARTEMIS-IGAN trial given the commentary that enrollment has accelerated. And if you think it might still be possible for us to see that data before the end of this year?

No, I think realistically, that's going to be into, as I said, the first part of next year. The team is working very hard to do it. We are hospital-based. And so enrollment is a function of being able to access those hospitals. And in the setting of COVID, that can be quite a challenge. So we're pretty pleased with the progression of enrollment that we've seen, as I said, when we look, we've even seen acceleration -- but I think realistically, Ram, I would rather guide you into 2023 for those data. We're excited to see them. I think that the Phase II long-term 3-year data or nearly 3-year data really demonstrate an unprecedented picture of an effect, not only on proteinuria, but on estimated glomerular filtration rate or eGFR. And I think what we're seeing with narsoplimab, I know I just called it unprecedented, but I want to underscore it, hasn't been seen with any other drug. So we are excited to see the data. The renal experts are excited to see the data. Believe me, we're pushing as hard as we can to get those out.

And then the last question is if you have any additional thoughts or perspectives on the positioning of narsoplimab in COVID-19 given the rise not only of the Omicron variant, but sub-variants in that lineage and the fact that multiple therapeutic antibodies that were originally approved for use against SARS-CoV-2 do not appear to have retained significant binding activity versus Omicron? And what potential opportunities this may create for narsoplimab as a novel non-SARS-CoV-2 binding antibody therapeutic within COVID-19?

Well, yes. And I think, Ram, what you're pointing out was not unexpected to you or to many. I mean when you are targeting the spike protein or other parts of the virus and what we know is that this virus mutates like other viruses do. But this virus seems to have a very elegant escape mechanism for mutation largely driven by the spike protein. So the advantage that we see here with narsoplimab is that the effect -- the beneficial effect of narsoplimab would be downstream from that specific virus or the spike protein, the end protein, any of that. The focus of narsoplimab is not on the virus. The focus of narsoplimab is on the damage that the virus [REITs] -- and that's the endothelial damage. So really, narsoplimab is not subject -- would not be subject to the same limitations that the antivirals are. And to be more specific, isn't affected or shouldn't be affected by the mutational changes in the virus. All of those virus mutations that you have noted all affect the endothelium in the same way and then create the disease, and that's where narsoplimab works.

Now I mentioned some of the data and really I should underscore some of the discoveries that have come out of our collective group here at Omeros and in our labs at Cambridge. And those, I expect, will be published soon. They're already submitted. But what those studies show, I think will be illuminating for many. And I think our focus, which is part of your question, we are looking at treatment, but we're looking beyond treatment. We're also looking at past or the post-acute sequela of SARS-CoV-2 or long-haul disease or long COVID, however, you want to refer to it. We think that based on what we're seeing, in our -- again, primarily in our Cambridge labs that the lectin pathway may very well be a driver of long COVID. We have to do more work to have that borne out. But early on, I think that looks pretty promising. So we're not just focused on treatment. We're looking at how we -- meaning treatment of the acute disease, we're focused as well on how we can treat the long COVID or PASC.

Our next question comes from Brandon Folkes with Cantor Fitzgerald.

Congratulations on the progress. Maybe just a quick one from me. Just coming back to narsoplimab in stem cell TMA. Just given your interactions at the Taipei meeting, if the agency did come back and see we agree with your rebuttals, please resubmit. Do you expect an AdCom to evaluate that data? Or do you expect just a straight review following -- should you not -- have to do additional clinical work?

Hi Brandon, I think, again, we have no basis on which to make any statement about a potential outcome other than to say that -- we have discussed the AdCom more than once with FDA during the review process. And the response was that an AdCom would not be necessary. But other than that, I have no basis to make any statement or guide you in any way with respect to an AdCom.

Understood. I mean, Greg, would you be able to maybe just elaborate, if you feel an Adcom could actually be beneficial in such a situation, just given the rarity reality of this disease, I think it's not the first company we've seen where I think the companies feels the FDA may have not fully understood the disease in terms of making the decision. Are you prepared to comment whether you think an AdCom, if it would happen, would actually be favorable?

Well, Brandon, are you trying to talk me into an AdCom?

I just think it could be favorable. It could be a positive so, I just... I would like to hear your position.

I can tell you what happens when we lay the data out in front of expert transplanters, okay? And that is a uniform evaluation and then determination that what we have identified as responders are responders. And again, I'll just underscore the uniformity of that response or that assessment to date. So do I think that experts understand the data? Yes, I do. And that's not surprising. This is a complex disease, and TA-TMA is a complicated disorder on top of a complex disease. And so it's not surprising that the experts will be able to interpret data that other very skilled people may have more difficulty sorting out. So I guess, let me stop my answer there. But we know how the data are viewed. You see it yourselves. I mean you're going to see it at EBMT again. Why are we getting the request for compassionate use? So let me stop there and see if you've got any follow-up questions.

And we have a question from Serge Belanger with Needham.

This is [Rohit] on for Serge. In terms of narsoplimab, is there any scenario where you don't move forward with it? And in that scenario, what becomes the next focus of your pipeline?

Well, one, I think -- and how are you doing -- but one, I think -- look, it is entirely premature to address any thought that we would not move forward with narsoplimab. The data for narsoplimab that we see and that the experts see are pretty clear. And as I think Cathy mentioned earlier and as I mentioned in our prepared comments, we believe and this is a shared belief. We believe that narsoplimab merits approval, that it meets or exceeds the threshold for substantial evidence of effectiveness. And all of the components, we believe are there. So for us to abandon that is really not even in our thought process or lexicon at this point. We think that the drug warrants approval. We think that we will get there with FDA, and we're hoping we get there soon. But again, I can't comment other than to say we're awaiting a response.

But with respect to what other things we have in the pipeline, in addition to TA-TMA and narsoplimab for TA-TMA -- obviously, we're focused on IgA nephropathy. And there's a list of other indications on our whiteboard that we are targeting not only with narsoplimab, but with OMS1029 as our long-acting MASP-2 inhibitor. And as I said, we really see a set of indications for narsoplimab, and we see a complementary set of indications for a long-acting subcutaneously delivered or IV delivered OMS1029. And then we have another set of indications all tied to OMS906, which targets MASP-3, which we believe and others believe is the key activator of the alternative pathway and the premier target in the alternative pathway. And we're moving fast and hard on that as well. As I said, we plan to be enrolling in PNH patients this summer with OMS906. So the franchise around complement for Omeros is broad, and it is deep. And we see TA-TMA as the first step there, certainly not the last.

And I'm showing no further questions in the queue. I'd like to turn the call back to Dr. Demopulos for closing remarks.

Thank you, operator, and thanks again, everyone, for joining us today. As we've discussed, we're confident in our financial position and in the strength and value across our programs. With narsoplimab, we hope to bring our second product to market soon, and we look forward to what 2022 holds for the rest of our pipeline. As always, we appreciate your continued support, and have a good evening. Thank you.

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