Omeros Corporation (NASDAQ:OMER) Q1 2023 Earnings Call Transcript May 9, 2023

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

Jennifer Williams: 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 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 most recent 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, Chairman and CEO of Omeros.

Greg Demopulos: Thank you, Jennifer, and good afternoon, everyone. Joining me on today’s call today are Mike Jacobsen, Nadia Dac, Cathy Melfi, and Steve Whitaker, our respective heads of finance, commercial, regulatory and clinical. I will start today with the brief overview of our first quarter 2023 financial results followed by a corporate update. Mike will then provide a more detailed financial summary before we open up the call to questions. So now let’s look at our financial results for the first quarter. Our net loss for the first quarter of 2023 was $33.7 million or $0.54 per share compared to net income of $128.7 million or $2.05 per share in the fourth quarter of last year. This difference is the result of the OMIDRIA related $200 million milestone that was achieved in the fourth quarter.

Payment of the milestone together with accrued interest was later received from Rayner Surgical in February of this year. Cash burn for the first quarter of 2023 was $23.6 million, down from $26 million in the prior quarter. Net sales of OMIDRIA at $30.7 million were in line with expectations for Q1, which historically is the weakest quarter of the year. OMIDRIA royalties for the quarter were $9.2 million, reflecting the new 30% royalty rate on US net sales of OMIDRIA, following our achievement of the milestone and receipt of the milestone payment. The 30% royalty translates to more than 40% of the operating profit from OMIDRIA total sales. As of March 31, 2023, we had $371.4 million of cash and investments available to support ongoing operations.

This amount provides Omeros the flexibility simply to pay off the $95 million of convertible debt that matures this November, while still funding operations and advancing our multiple programs well in to 2025. We expect our royalties from OMIDRIA to continue to grow. As mandated by recent congressional legislation, OMIDRIA now has separate payment from CMS and ambulatory surgery centers until at least January 2028. No later than January 2025, CMS will also pay separately for OMIDRIA when used in hospital outpatient departments or HOPD. Further, we understand from Rayner that they expect to expand the US sales force as well as to begin selling OMIDRIA internationally later this year. One additional piece of financial information for our shareholders.

The rebalancing process for the Russell US Indexes is underway. Friday, April 28th, was rank day. At the close on that day, index membership eligibility was determined based on market capitalization. Multiple banking models show that Omeros once again will be part of the Russell 3000 Index, which based on those models is expected to drive index related buying in the open market of 7.5 million to 8 million shares of Omeros stock by the 26th of next month, the date when the market opens with the newly reconstituted index. Let’s turn now to our program update, starting first with our family of agents targeting MASP-2, the effector enzyme of the lectin pathway. Narsoplimab is our lead antibody against MASP-2 and narsoplimab biologics license application or BLA for hematopoietic stem cell transplant associated thrombotic microangiopathy or TA-TMA is pending with FDA.

Consistent with direction from FDA’s Office of New Drugs in response to our formal dispute resolution request and working closely with our regulatory and legal advisors led by Hyman, Phelps & McNamara, we have submitted to the division of non-malignant hematology a proposed plan to assess already existing clinical trial data together with external data on both response rate and survival. We are meeting with the division this month to discuss the details of our proposed analyses and to confirm the information required by FDA to support resubmission of the BLA for narsoplimab’s approval. Once the required package is confirmed, we expect to be able to use substantially the same package for our European regulatory submission as well. The objective of course is to bring narsoplimab to market as quickly as possible, helping patients with life threatening TA-TMA for whom there is no approved treatment.

Alexion and AstraZeneca are also pursuing this indication with their C5 inhibitor, ravulizumab. As evidence of the difficulty in conducting a clinical trial in TA-TMA, information available on clinicaltrials.gov indicates that Alexion just delayed its estimated study completion date by 16 months to June 2025, while at the same time reducing the targeted number of enrolled patients by nearly 40%. Clinician support for use of narsoplimab to treat TA-TMA continues to grow and a number of additional manuscripts have recently been published. One in the Thrombosis Journal describes a six year old girl who received a stem cell transplant for severe aplastic anemia and then developed TMA. Treatment with defibrotide was tried, but failed. She then received narsoplimab and her TMA resolved.

Here also, we have a convincing example of challenge re-challenge in that a parvovirus infection triggered a second episode of TMA in this child. And this recurrence of TMA was again successfully treated with narsoplimab. Another manuscript is in press at Clinical and Experimental Immunology, this one examining patients from our TA-TMA pivotal trial. The author is a group of clinical and search investigators from Weill Cornell Medicine, evaluated clinical plasma samples from our trial patients treated with narsoplimab. The authors showed that increased levels of Caspase-8, a biomarker of endothelial injury, are highly correlated with TA-TMA. When looking at the patients in our pivotal trial those patients that responded to narsoplimab showed a marked reduction in those Caspase-8 levels, while nonresponders did not.

These data might well help explain why some of our pivotal trial patients did not respond to narsoplimab and further strengthen our understanding of narsoplimab’s mechanism of action in TA-TMA. Growing physician support for use of narsoplimab in TA-TMA is also reflected in the frequent presentations at recent and upcoming scientific congresses. At the Annual Meeting of the European Society for Blood and Marrow Transplantation or EBMT, there were multiple presentations on the use of narsoplimab to treat TA-TMA. In reports of both pediatric and adult patients, all of whom had failed treatment with eculizumab or both eculizumab and defibrotide, narsoplimab was given under compassionate use and TMA’s resolve. Just this week at the Annual Meeting of the American Society of Pediatric Hematology Oncology, which begins tomorrow, another transplant expert will detail the course of a three-year old little girl with recurrent high risk cancer.

After her second stem cell transplant, she developed refractory TA-TMA, here again, physicians attempted to treat her with first eculizumab and then defibrotide, both failed and narsoplimab, requested under compassionate use, successfully treated her TA-TMA. Let’s now turn to our narsoplimab Phase 3 clinical program in IgA nephropathy. We remain on track to read out nine month proteinuria data next quarter. We expect that these data will form the basis for both a BLA in the US and a marketing authorization application or MAA in Europe. Our team is committed to making narsoplimab the first approved complement inhibitor in what’s expected to be a multi IgA nephropathy market. As in TA-TMA their strong physician support for use of narsoplimab in IgA nephropathy, the disease continues to represent a significant unmet need, despite recent market entries of a steroid and a blood pressure medication.

A recent narsoplimab presentation at the Annual Meeting of the Korean Society of Nephrology was the first reported use of complement inhibition in a patient with recurrent IgA nephropathy. Narsoplimab stabilized both proteinuria and EGFR, and these beneficial effects were further confirmed by kidney biopsy. Also, another manuscript authored by a group of international experts and recently accepted for publication in Kidney International details the role of the lectin pathway across the important pathophysiologic components of IgA nephropathy, namely glomerular injury, thrombotic microangiopathy and tubulointerstitial fibrosis. As previously discussed, our other narsoplimab Phase 3 program in atypical hemolytic uremic syndrome remains a low priority for us.

Turning to narsoplimab in COVID-19, as well as acute respiratory distress syndrome or ARDS. Our work continues at Omeros’ labs in the University of Cambridge where we are collaborating with multiple UK consortia in the study of acute severe and long COVID-19. A manuscript detailing the central role of lectin pathway inhibition and well established in vitro and animal models of both COVID-19 and ARDS has been submitted to and reviewed for peer reviewed publication, and we expect that it will be accepted. Discussions are ongoing with relevant branches of the US government, which have been public their focus and their intention to fund development of agents to treat both COVID and ARDS. Now let’s look at OMS1029, our long acting next generation antibody targeting MASP-2 and the lectin pathway.

Complimentary to narsoplimab, OMS1029 is designed for chronic use. Earlier this year, we successfully completed the Phase 1 single ascending dose clinical trial and data support our plans or once quarterly subcutaneous or intravenous dosing of OMS1029. There have been no safety concerns and dosing in the OMS1029 multiple ascending dose study in healthy subjects is scheduled to start this summer. We’re also nearly ready to select our lead drug development candidate from our orally active MASP-2 inhibitor program. Our strategy here of developing in orally available MASP-2 inhibitor together with narsoplimab and our long acting follow on antibody OMS1029 could well enable Omeros to control first line therapy for most, if not all, lectin pathway related diseases.

Okay, so we’ve completed the update on our MASP-2 and lectin pathway inhibitors. Let’s turn now to the other major part of our complement franchise, MASP-3 and OMS906. OMS906 is our lead antibody targeting MASP-3, the key activator of the alternative pathway of complement. Based on our data and those generated around our potential competitors, we believe that MASP-3 and OMS906 are the premier target and therapeutic for indications related to the alternative pathway. We recently disclosed publicly data from our prespecified interim analysis of our clinical trial of OMS906 in treatment naive patients with paroxysmal nocturnal hemoglobinuria or PNH, a life threatening form of hemolytic anemia. We’ve continued enrolling and following patients in this trial before sharing with you our most recent data.

Let’s first review the expected advantages of MASP-3 and OMS906 over other alternative pathway targets and drugs either on the market or in development. First, MASP-3 is the most upstream target in the alternative pathway, it’s inhibition leaves the infection fighting function of the classical pathway intact. This is a meaningful advantage over C3 and C5 inhibitors, which block the classical pathways, adaptive immune response and increase infection risk. Second, MASP-3 is known not to be an acute phase reactant and has very low native circulating levels relative to other alternative pathway targets. Together, these translate to a substantially lower risk of breakthrough occurrence of the underlying disease with OMS906, then with C3, C5 or factor B inhibitors, all of which are acute phase reactants.

Meaning that, in the setting of inflammation, such as even an infection or any other inflammatory condition, circulating concentrations of the target can increase beyond the inhibitory capability of the drug’s dosing, leaving a patient less protected from their life threatening disease. A third potential advantage is better patient convenience and compliance. Dosing for OMS906 should be once quarterly, either subcutaneously or intravenously. This is expected to be more convenient for patients improving their compliance with treatment compared to other alternative pathway inhibitors that are marketed or in development. Now here are some important updates since our recent press release on our trial data of OMS906 in treatment naive PNH patients.

Enrollment, as I said, is ongoing. And for these data, N or the number of patients, ranges from three to nine, depending on where the data points fall on the timeline, earlier time points capturing more patients. We’ll look first at hemoglobin. So as a reference point, mean baseline hemoglobin in the study is 6.8 grams per deciliter. The laboratory normal hemoglobin range for women is 12 to 15.6 grams per deciliter and for men 13. 5 to 17.2. So at day 29, in our study, the mean absolute increase in hemoglobin is 3.4 grams per deciliter, 6.3 at day 85 and at day 113 mean absolute increase in hemoglobin is 9.7 grams per deciliter. So what hemoglobin levels have been achieved? Well, by day 29 following only the first dose, 67% of patients increased their hemoglobin level by 2 grams per deciliter or more.

And after only two doses, all patients achieved this threshold of a 2 gram increase with 80% of them achieving at least twice that. Meaning, an increase of 4 grams per deciliter or more. By day 85, two-thirds of the patients had a hemoglobin level greater than 12 grams per deciliter and by day 113, all patients had a hemoglobin level of 15.7 grams per deciliter or higher. So by definition, they all had been restored to well within normal hemoglobin levels. Also at all time points, the mean reduction in absolute reticulocyte counts from baseline was at least 70,000 per microliter ranging from 70,000 to 136,000 per microliter. Hemoglobin improvement remains statistically significant at all time points throughout the study. And no patient has had a clinical breakthrough, none have had a thrombotic event and none have required a transfusion, while receiving OMS906 treatment.

Now let’s examine the LDH data. Mean baseline LDH is 1931 units per liter, that’s nearly eight fold higher than the upper limit of normal. 15 days after the first dose of OMS906 the mean reduction in LDH from baseline is 83%. And at day 29, the mean reduction in LDH is 80%. At the last available time point following four doses day 113, LDH reduction is 87% with all patients having either normal LDH or LDH levels less than 1.5 times the upper limit of normal. Just like the hemoglobin data, LDH reduction remains statistically significant at all time points throughout the study. It’s important to point out here that all of these data results from the lowest dose of OMS906 that we plan to evaluate in this study, and we’re now preparing to move to higher doses and exposures to allow for a longer dosing interval.

Yet, even at this lowest dose, our hemoglobin and LDH results compare very favorably to the detailed and publicly available data on other alternative pathway inhibitors on the market or in development. This comparison is even more impressive, in that of the nine PNH patients enrolled to date in our study in addition to the red cell destruction caused by PNH, two patients also have aplastic anemia, which suppresses the production of red blood cells and two others have myelodysplastic syndrome, a type of cancer that blocks the production of mature red blood cells and often increases LDH levels. So OMS906, despite these challenges, appears to be performing extremely well in all of these PNH patients. The second OMS906 clinical trial in PNH is ongoing.

This trial has a switch over design enrolling PNH patients receiving ravulizumab then adding OMS906 to provide combination therapy with ravulizumab for 24 weeks, and then providing OMS906 monotherapy in patients who demonstrate a hemoglobin response with combination therapy. Treatment with OMS906 has already begun. We also have a third clinical trial evaluating OMS906, this one treating patients with complement 3 glomerulopathy or C3G, a rare kidney disease. Here we plan to provide data updates really on all three of our PNH trials in the second half of this year, and we plan to present data as well at upcoming medical congresses. The data to date though really clearly demonstrate that OMS906 is a highly effective inhibitor of MASP-2 and of the alternative pathway.

Given those data and the requirement of nearly complete inhibition of the alternative pathway to be effective in PNH, which OMS906 has met. We’re confident that our drug should perform well across the other alternative pathway diseases and disorders. Those other indications already have been and continue to be identified and validated by our competitors who are already in the field. This should significantly accelerate our development programs given that much of the guesswork has already been removed. Our next steps are to evaluate higher doses of OMS906 so that we can quickly identify the optimal dose for Phase 3 trials. The aim is to initiate and complete Phase 3 trials across multiple indications as soon as possible, and the team is focused on and committed to achieving this goal.

Turning now to OMS527 or PDE7 inhibitor program. We’ve shown and published that PDE7 inhibition blocks both craving and relapse across substances of abuse with positive data in animal models of opioid, cocaine, nicotine and alcohol addiction. PDE7 inhibition in animals is also effective in compulsion, specifically, we’ve shown that in binge eating. In addition to blocking both craving and relapse, PDE7 inhibitors do not appear to depress the reward system, a significant advantage over current anti-addiction agents, all of which do depress the reward system. So while having only a limited effect on craving, these other agents can cause a reduction in the enjoyment of other aspects of a patient’s life, making compliance with treatment quite challenging.

In all of the animal and human Phase 1 clinical studies run with OMS527, we’ve seen no evidence of reward system depression. This would be a major differentiator between OMS527 and frankly, PDE7 inhibitors in general, over other anti-addiction agents on the market or in development. Last month, we announced the award of a three year 6.7 million grant from the National Institute on Drug Abuse or NIDA to support the continued development of our lead orally administered PDE7 inhibitor. NIDA, a part of the National Institutes of Health, had reached out to us last year to explore ways in which NIDA and Omeros could collaborate on advancing the development of OMS527 for the treatment of substance use disorders. NIDA wanted to begin with cocaine use disorder.

So our team prepared and submitted a grant application. And based on review by leaders in the addiction field, from both industry and academia, the grant was awarded. The 6.7 million in funding is intended to support both preclinical and clinical work, including a randomized double blind in patient study comparing the safety and effectiveness of our PDE7 inhibitor to placebo in the treatment of adults with cocaine use disorder who receive concurrent intravenous cocaine. There are no FDA approved drug treatments for cocaine use disorder. An estimated 1.4 million people in the US have cocaine use disorder and more than 24,000 Americans died in 2021 from cocaine overdoses. Research by our team and others shows that the mechanism of cocaine use disorder, specifically tied to the dopamine system in the brain, is the same or highly similar to that of other addictions and compulsions, including opioids, nicotine, alcohol and binge eating.

One in six Americans, 12 years of age or older, experienced a substance use disorder in 2021, and the societal costs of epidemic substance abuse runs well into the trillions. We look forward to working with NIDA and expect that PDE7 inhibition could be a major part of the solution to this massive societal challenge of addiction. Omeros also controls broad intellectual properties surrounding PDE7 inhibition and movement disorders with our collaborators at Emory University. We are evaluating OMS527 as a potential treatment for L-DOPA induced dyskinesias or LID. These dyskinesias are crippling, involuntary movements in Parkinson’s patients caused in good part by prolonged treatment with L-DOPA. L-DOPA is the most prescribed and most effective drug used to treat Parkinson’s disease itself and as a result, LID represents a large unmet patient need and a substantial market opportunity.

More than 10 million patients are living with Parkinson’s worldwide and reportedly 50% or more of those treated with L-DOPA suffer from LID. Only one drug extended release Amantadine is approved for the treatment of LID, but its use is limited by suboptimal efficacy as well as by numerous and significant adverse side effects. The investigators at Emory have developed a primate model of LID that is highly predictive of clinical efficacy and have evaluated OMS527. Extended release amantadine has also been evaluated extensively in the Emory model. We have recently received data on OMS527 from Emory and we will disclose them publicly after filing all appropriate patent applications. We will end today’s corporate update with our immuno oncology programs.

There are two broad subsets or platforms of our IO franchise, namely cellular and biologic therapies, and we are building expansive patent estates around each. Our cellular platform is comprised of novel approaches to adoptive T-cell and CAR-T therapies, both of these follow from our work on GPR174 and are based on our identification of specific T-cell signaling pathways, which once inhibited, expand the body’s population of tumor specific memory T-cells that recognize and effectively kill tumor cells. Our adoptive T-cell therapies, unlike currently available CAR-T approaches, do not require cellular modification or engineering and are not limited to cell surface expressing antigens. This represents a potentially revolutionary advance beyond currently available adoptive T-cell therapies.

Increasing rapidity of treatment preparation, decreasing cost and enhancing efficacy by enabling repetitive administration. If our data to date hold in the clinic, both our adoptive T-cell and CAR-T programs could substantially improve response rates for cancer patients across both liquid and solid tumors. Our biologic platform is equally or even more broad consisting of classes of novel molecules, combining tumor antigen binders with potent adjuvants. Based on our work, we expect some to function in the body as therapeutic vaccines against a wide range of tumors. Here again, our data suggest that we might well have overcome the challenges limiting the efficacy of currently available tumor vaccines, specifically, that the beneficial effects of the available vaccines are only transient.

Based on the data generated to date, the products from our biologic platform have the potential to be long acting and to improve greatly the survival rates across solid and hematologic tumors. I’ll now turn the call over to Mike Jacobsen, our Chief Accounting Officer, to go through a more detailed discussion of our first quarter financial results. Mike?

Mike Jacobsen: Thanks, Greg. Our net loss for the first quarter was $33.7 million or $0.54 per share compared to net income of $128.7 million or $2.05 per share in the fourth quarter of last year. The fourth quarter of last year includes the $200 million milestone we earned from Rayner in December Cash burn for the first quarter of 2023 was $23.6 million and that is exclusive of receiving the $200 million milestone payment. As of March 31st, we had $371 million of cash and investments on hand and $10 million in receivables, which primarily represent OMIDRIA royalties for the February and March, which are due 60 days after the respective month end. Costs and expenses from continuing operations for the first quarter was $35.7 million, which was a decrease of $4.4 million from the fourth quarter of last year.

The decrease was primarily due to receiving notification in the current quarter of a $2.1 million employee retention tax credit related to the CARES Act and annual bonuses that were accrued in the fourth quarter. Interest expense for the first quarter was $7.9 million, which is consistent with the fourth quarter of last year. The primary drivers of interest expense are the 2023 and 2026 unsecured senior notes and the DRI OMIDRIA royalty obligations. Now let’s take a quick look at the OMIDRIA royalties. From the divestiture the OMIDRIA business to Rayner until the passage of the 2023 omnibus bill in late December of last year, we received royalties of 50% of US net sales. Upon passage of the omnibus bill, OMIDRIA royalties decreased to 30% of US net sales.

30% royalty equates to approximately 40% of the US OMIDRIA operating profit, considering that we don’t have any OMIDRIA operating expenses. The 30% royalty rate extends throughout the duration of relevant patent terms, which we expect to be at least through 2033. For the first quarter of 2023, our 30% royalty on Rayner net sales was $9.2 million. Royalties earned are recorded as a reduction in the OMIDRIA contract royalty asset on our balance sheet. Income from discontinued operations in the first quarter was $6 million and included two primary components, $3.9 million of GAAP interest earned on the OMIDRIA contract royalty asset and $1.7 million of income due to remeasurement adjustments to that same OMIDRIA contract royalty asset. Now, let’s look at our expected second quarter results.

We expect overall operating costs from continuing operations in the second quarter to increase slightly due to the timing of clinical development and certain manufacturing activities. Interest income should be nearly $4 million and interest expense for the second quarter should be consistent with the first quarter approximately $8 million. Income from discontinued operations should be in the $5 million to $6 million range. With that, I’ll turn the call back over to Greg. Greg?

Greg Demopulos: Thanks Mike. Operator, let’s open the call to question.

Q&A Session

Operator: And I show our first question comes from the line of Steve Brozak from WBB.

Steve Brozak: I’ve got one. From what you said very, very early on in the call, specifically on the biomarkers that you’ve been looking at with the TA-TMA patients. How extensive do you believe these biomarkers can be? Because obviously in previous calls, you talked about collaborations that you had done and shown that the biomarkers were present with SARS-CoV-2. But is this — this is now something that transcends not just with that particular vital indication but also goes to other indications dealing with the lectin pathway. Can you tell as much as possible about this? Because it’s — I mean, it’s scientifically fascinating, but it’s more than that as far as what you’re looking at for the use of narsoplimab going into the future?

Greg Demopulos: First, the biomarkers that I was describing in the prepared comments were those or really is that used by the group at Weill Cornell, and that is Caspase-8 as a biomarker of microvascular cell injury, and that’s been well documented. So really what this does is tie our clinical data, our pivotal trial data of OMS721 and narsoplimab in TA-TMA to specifically Caspase-8 levels and the difference between responders and non-responders. I think what you’re referencing with respect to our work in COVID, which is ongoing as well as our work and ARDS, those are biomarkers that in part we have developed. And when I say, we, that’s the collective we of our group in Cambridge as well, where we have an assay or a set of assays that we are looking to effectively put on a single multiplex, which identifies those patients who have moderately severe to severe COVID.

We’re also doing work in ARDS, but also I think as you mentioned or I think you mentioned, we are looking at that as well in long COVID. And we are seeing some interesting data in long COVID as well, but I’m not at a point where I think we want to discuss that today.

Steve Brozak: Thanks for separating the two between the biomarkers at Cornell and the ones that you have got working in collaboration elsewhere. But I guess the point I’m getting back too is that this now shows that there is a quantifiable response, a quantifiable path for showing the effect in this, of narsoplimab, and specifically in dealing with the upregulation of lectin pathway. I would think that you would probably also be able to look at it for theoretically a number of other disease indications that you are looking for or looking at. And what does this mean as far as the ability for you to go into the future and say, you have a, designer diagnostic, that specifically references your drug?

Greg Demopulos: Yes, I see where you are going with that. I think there is more work that needs to be done. I would point you though to the publication that are out, one by in Frontiers in Immunology, the other by in Clinical and Translational Medicine, I believe, and these are both last year publications, if I’m remembering correctly, that speak directly to the biomarker. So let me just point you there. I don’t think going into detail on all of that now is going to be a useful expenditure of time given the limitations, but happy to address those offline if that would be helpful.

Operator: And I show our next question comes from the line of Greg Harrison from Bank of America.

Greg Harrison: Just wanted to talk about your expectations for the IgA nephropathy readout for narsoplimab. What would you view there as successful data and then how do you think about potential place in the market now that there are a couple of approved therapies in IgAN?

Greg Demopulos: With respect to what we would consider a successful readout, I guess, the answer to that is, let’s see what the data look like and we will tell you at that point. I think that certainly we are expecting that narsoplimab will work and work well in IgA nephropathy. As you understand, the question is also in what specific subsets, are there specific subsets, is it in high protein? Is it in those that are generally across the board in IgA nephropathy? These are all questions that I think the data will answer, and I think it’s really premature Greg to put a stake in any of those, the data. The trial that we’re running is placebo controlled, double blind. So we don’t have any sense of those data now. But if you look at the publications, I referenced a few in the prepared comments, but there are others.

I mean, if you take the time and actually read those, I think it’s clear that the lectin pathway plays a key role, not only in the glomerular injury of IgA nephropathy but in the tubulointerstitial disease. And that’s really important, because the tubulointerstitial is sort of the point of convergence of all of the end stage renal diseases, the end stage protein, uric renal diseases, certainly. So we’re really talking about something that is well beyond just IgA nephropathy. With respect to how I think we will fare or how I think we fit into the market with these other drugs, I don’t see those other drugs creating any impediment to our market entry. One, as you know, is a steroid that has reportedly increased activity in the gut but that is really only approved for a six month course just like any other steroid.

And the interesting thing is when you look at the use of steroids in IgA nephropathy, they can be effective but the testing study made it pretty clear that mortality was increased. So that study actually needed to be stopped with steroids. So the recommendations are six months only for treatment, and those recommendations hold as well for this new steroid. With respect to any of the blood pressure medications, RAAS blockade is a standard part of all IgA treatment. So again, I don’t see that affecting us in any way. But let me turn the call over to commercial and clinical and see if they’ve got any other thoughts that that they’d like to add. Nadia, do you want to go first?

Nadia Dac: The market opportunity is really significant. The way we look at this is IgA nephropathy market has been dormant, without anything that has been approved up until now. The nephrologist are open to combination use as well, which is something that they’re not afraid of and doing with limited options that they have. And certainly, when they look at a profile of a drug that isn’t dosed on a daily basis, has sort of a shorter course, they’re very excited by that. So we look at this as significant opportunity of a market that’s yet to wake up.

Steve Whitaker: If you look back at the data from the previous studies in proteinuria, as well as EGFR, narsoplimab has — and this is all data dependent, of course, tremendous potential to really help these patients and differentiate itself from the current competitors on the market as well as others that may appear.

Greg Harrison: Thank you.

Operator: And I show our next question comes from the line of Elliott Bosco from UBS.

Elliott Bosco: Elliott Bosco on for Colin Bristow from UBS. For the TA-TMA resubmission, last quarter, you noted the threshold for comparison would be based on an independent literature analysis. I was curious if there are any updates on this? And if so, could you elaborate on the thresholds? And then regarding the meeting, assuming positive feedback, what are the next steps and potential timeline for resubmission?

Greg Demopulos: First, with respect to the literature review, I think we listed that as one of a number of options, all of those being external sources of data for comparison. So I think that is — we talked about chart reviews, we talked about registries and we talked about literature reviews. So I think it’s all part and parcel of the same effort, and really that that will depend on our discussions with FDA. What I would see as next steps and again, I’ll turn this over to regulatory to comment as well. But obviously, we need to reach agreement with FDA on what needs to be included in the BLA, what do they want to see, what do we need to do? And once we know that then we can get that work done, we believe, pretty quickly. And then that requires pulling together most of the BLAs that would be the same, but we need to update the safety part of the BLA, put the new data in and provide all of this to FDA, which would then have a six month timeline to review.

I would hope they wouldn’t take that long, but they well could, they’re busy. And so I think from that you can establish a timeline. But let me see, Cathy, do you want to comment?

Cathy Melfi: Just to say, as Greg mentioned in his prepared remarks, our proposal to FDA is consistent with the decision that we had received in response to our formal dispute resolution request. But I mean, we do have to run it by the review division before we can embark on it. So that’s what our next step is and consistent with what we heard. So that’s where we are right now.

Elliott Bosco: Could I get one more in if we have time?

Greg Demopulos: Yes, sure.

Elliott Bosco: So on 906, you mentioned your intention to pursue geographic atrophy. And I was curious if you could give a little more color on this and what your thoughts are on the competitive landscape?

Greg Demopulos: We are looking at geographic atrophy as a possible indication to pursue. Again, we haven’t finalized any of our plans. Our focus is sort of pushing hard on PNH and C3G. But clearly, we are thinking about what else to start. The potential there is obviously the potential for systemic delivery versus intravitreal. MASP-3, to our knowledge, is not generated in the eye or specifically in the retina. And so clearing MASP-3 from circulation should be sufficient. But we are also obviously looking at the commercial aspects, and systemic versus intravitreal and how might we want to pursue, is it a different molecule that we take forward. These are all questions that the team is currently addressing. So again, I don’t want to get out ahead of ourselves there.

How I think we would compare, I think, we would compare very well. When you look at the PNH data, again, I think we have referenced this, but maybe not as clearly as we should. PNH really represents a pretty high bar in alternative pathway inhibition. It is a life threatening indication and the inhibition of the alternative pathway needs to be effectively complete. So you are talking about as close to ablation as you can get to be effective. Clearly, 906 is showing that capability even at this low dose. And so we are pushing, we’re going to push the dose. We have the headroom to do that in terms of our safety studies. So we can push dose and exposure. So we think we compare very well. But I should after having said all that, I want to make sure that clinical is in agreement.

So Steve, can you feel free to comment on that?

Steve Whitaker: Geographic atrophy is a really attractive indication for a lot of reasons, commercial, as well as Greg said the differentiation, if we can provide it systemically. We are obviously focused on PNH and C3G and pushing those as hard as we can. But I can say that we are looking into resource, not just strategy but resourcing to get a GA program going as quickly as we can, because it represents such a substantial opportunity.

Operator: And I show our next question comes from the line of Brandon Folkes from Cantor Fitzgerald.

Brandon Folkes: Thanks for taking my questions and congratulations on all the progress. I just want to come back to OMS906. Obviously, that looks really good there. So maybe just two questions on that from my side. One, any way to speed up development given your strong balance sheet you have now? And then secondly, given the good data you are seeing at the lower dose, do you think you can get quarterly dosing with this lower dose, or do we need to go to the high doses to achieve that quarterly dosing?

Greg Demopulos: I think I caught most of that, you were trailing off at the end. But first, with respect to you, can we accelerate it. We are absolutely looking at that. We want to put the throttle all the way down on this program. I mean, the data are clear. The endpoints are objective. These are not subjective endpoints. These are endpoints that have been used for approval. So we know where FDA stands on those. So yes, we are going to push very hard on the 906 program. We think that it has tremendous value. And I think that that’s abundantly clear when you look at potential competitors, and then you look at the advantages of or potential advantages of 906 over those. But the other question that you had, yes, absolutely, we believe that we can reach, we’re quite comfortable that we can reach once quarterly dosing, which would be a tremendous advantage over either the subcu or oral agents already approved or are in development.

Operator: Thank you. I’m showing no further questions in the queue. At this time, I’d like to turn the conference back to Dr. Demopulos for closing remarks.

Greg Demopulos: All right. Again, everyone, thank you for joining us today. We hope that the call was helpful and that we’ve made clear the team’s substantial and steady progress. The remainder of 2023 holds a good number of important milestones, and we look forward to sharing more information with you over the coming months. Now as always, we appreciate your continued support. Have a good evening.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.