Omeros third quarter net loss increases to $7.6 million

Nov 4 2010

Omeros Corporation (Nasdaq: OMER), a biopharmaceutical company committed to discovering, developing and commercializing products focused on inflammation and disorders of the central nervous system, today announced its financial results for the third quarter of 2010.

Financial Results

Total operating expenses for the three and nine months ended September 30, 2010 were $7.7 million and $22.7 million, respectively, compared to $5.0 and $16.5 million for the same periods in 2009. The increases in operating expenses were primarily due to higher contract service and consulting costs associated with several of Omeros' clinical and preclinical programs, increased costs associated with being a public company, and higher employee expenses.  In addition, the increase during the nine months ended September 30, 2010 included a one-time payment of $500,000 to Affitech AS in the first quarter of 2010 and a one-time payment of $500,000 to Helion Biotech ApS in the second quarter of 2010 related to the Company's MASP-2 program.

For the three and nine months ended September 30, 2010, Omeros reported a net loss of $7.6 million, or $0.35 per share, and $22.0 million, or $1.03 per share, respectively. During the same periods in 2009, Omeros reported a net loss of $3.9 million, or $1.34 per share, and $15.5 million, or $5.29 per share, respectively. At September 30, 2010, Omeros had cash, cash equivalents and short-term investments of $34.5 million.  Following the end of the third quarter, Omeros received $20.0 million from Vulcan Capital (Vulcan) and a $5.0 million grant award from Washington State's Life Sciences Discovery Fund (LSDF) to fund its G protein-coupled receptor (GPCR) program.  Also following the end of the quarter, Omeros entered into a loan and security agreement with Oxford Finance Corporation (Oxford) pursuant to which the Company may borrow up to $20.0 million, and Omeros was awarded approximately $1.7 million in grants from the U.S. government pursuant to the Qualifying Therapeutic Discovery Project program. These amounts are not included in the $34.5 million of cash, cash equivalents and short-term investments at September 30, 2010.

"We continued to advance our programs during the quarter and now look forward to achieving a number of clinical milestones in the near term.  We expect to announce data from our Phase 3 program evaluating OMS103HP in ACL reconstruction in the first quarter of 2011.  In that same quarter, we plan to announce data from the Phase 2b trial of OMS302 in cataract surgery and, in the current quarter, expect to release data from our Phase 1/2 OMS201 ureteroscopy trial," said Gregory A. Demopulos, M.D., chairman and chief executive officer of Omeros. "The fourth quarter began well for Omeros with the completion of the transactions with Vulcan and LSDF, bringing $25 million for our GPCR program.  These funds enable us to move forward aggressively to unlock additional orphan GPCRs for drug development."

Recent Highlights

• Announced that the Company received $20.0 million from Vulcan and a grant award for $5.0 million from LSDF to support the advancement of the Company's GPCR program. In return, Vulcan and LSDF have a right to receive a percentage of net proceeds generated by the GPCR program. Additionally, Omeros issued to Vulcan three five-year warrants to purchase common stock, each for 133,333 shares, with exercise prices of $20, $30 and $40 per share, respectively.
• Gave notice to Patobios Limited (Patobios) of Omeros' intent to acquire intellectual property assets from Patobios for use in our GPCR program.  As previously disclosed, the total purchase price of these assets is approximately $10.8 million CAD, approximately $7.8 million CAD of which is payable in cash and $3.0 million CAD is payable in Omeros common stock.  Omeros expects to complete this acquisition in the fourth quarter of 2010.
• Completed a $20.0 million debt facility with Oxford.  The first $10.0 million tranche drawn from Oxford was used to repay the approximately $9.0 million due under our previous facility.  The second $10.0 million tranche is available to us, at our sole discretion, until March 31, 2011. Payments for the first tranche and the second tranche, if borrowed, are interest only through October 31, 2011. Beginning November 1, 2011, 36 payments of principal and interest are payable monthly, in arrears.
• Announced the National Institute on Drug Abuse has provided an additional grant of $3.6 million over four years to fund clinical studies for the Company's Addiction program.  This money will be used to fund Phase 2 clinical studies to be conducted by researchers at the New York State Psychiatric Institute.
• Awarded $1.7 million in grants from the U.S. government pursuant to the Qualifying Therapeutic Discovery Project program.

SOURCE Omeros Corporation