What changed in this filing

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Item 1. Financial Statements

2025-08-14 compared with 2025-05-15 · 507 added, 316 removed, 563 unchanged (59% of the section changed)

19 unchanged sentences

Convertible senior notes, net

Share-settled liability

Lease liabilities

2 unchanged sentences

Convertible senior notes, non-current, net

Long-term debt, net

Term debt, non-current, net

Lease liabilities, non-current

3 unchanged sentences

Preferred stock, par value $ 0.01 per share, 20,000,000 shares authorized;

none issued and outstanding at March 31, 2025 and December 31, 2024.

Common stock, par value $ 0.01 per share, 150,000,000 shares authorized at March 31, 2025 and December 31, 2024;

58,063,901 and 58,044,465 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively.

none issued and outstanding at June 30, 2025 and December 31, 2024.

Common stock, par value $ 0.01 per share, 150,000,000 shares authorized at June 30, 2025 and December 31, 2024;

60,022,332 and 58,044,465 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively.

Additional paid-in capital

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Three Months Ended

Six Months Ended

Costs and expenses:

5 unchanged sentences

Interest and other income

Loss on early extinguishment of 2026 convertible senior notes

Gain on change in fair value of financial instruments

Net loss from continuing operations

Net income from discontinued operations, net of tax

Basic and diluted net income (loss) per share:

Basic net income (loss) per share:

Net loss from continuing operations

Net income from discontinued operations

Weighted-average shares used to compute basic and diluted net income (loss) per share

Weighted-average shares used to compute basic net income (loss) per share

See accompanying Notes to Condensed Consolidated Financial Statements

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Balance at March 31, 2025

Issuance of common stock upon exercise of stock options

Stock-based compensation expense

Issuance of common stock - at-the-market equity offering facility, net

Issuance of common stock - 2026 Notes equitization

Balance at June 30, 2025

Balance at January 1, 2024

3 unchanged sentences

Balance at March 31, 2024

Issuance of common stock upon exercise of stock options

Stock-based compensation expense

Balance at June 30, 2024

See accompanying Notes to Condensed Consolidated Financial Statements

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(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Operating activities:

1 unchanged sentence

Stock-based compensation expense

Amortization of non-cash interest and issuance costs on term debt

Depreciation and amortization

Loss on early extinguishment of 2026 convertible senior notes

Amortization of discount and issuance costs on convertible notes

Non-cash interest remeasurement on the OMIDRIA royalty obligation

Depreciation and amortization

Remeasurement on OMIDRIA royalty obligation

Non-cash interest on OMIDRIA contract royalty asset

Remeasurement of OMIDRIA contract royalty asset

Remeasurement on fair value of financial instruments

Amortization of non-cash interest and issuance costs on term debt

Accretion on U.S.

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Purchases of property and equipment

Net cash provided by (used in) investing activities

Net cash provided by investing activities

Financing activities:

Proceeds from issuance of common stock from the ATM facility, net

Proceeds upon exercise of stock options

Proceeds from sale of future royalties

Principal payments on OMIDRIA royalty obligation

Payment of debt issuance costs related to 2029 Notes

Payments on finance lease obligations

Proceeds from sale of future royalties

Cash paid to repurchase 2026 convertible senior notes

Repurchases of common stock

Net cash provided by (used in) financing activities

Net increase (decrease) in cash and cash equivalents

Net decrease in cash and cash equivalents

Cash and cash equivalents at beginning of period

1 unchanged sentence

Supplemental cash flow information

Exchange of 2026 Notes for 2029 Notes

Exchange of 2026 Notes for share-settled liability

Exchange of 2026 Notes for common stock

Cash paid for interest

Cash paid (received) for income taxes, net

Equipment acquired under finance lease

See accompanying Notes to Condensed Consolidated Financial Statements

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and OMS527, our phosphodiesterase 7 (“PDE7”) inhibitor program.

Clinical development of narsoplimab is currently focused primarily on hematopoietic stem cell transplant-associated thrombotic microangiopathy (“TA-TMA”).

We successfully completed a pivotal clinical trial for narsoplimab in TA-TMA and previously submitted to FDA a biologics license application (“BLA”) seeking marketing approval for narsoplimab in this indication.

Clinical development of narsoplimab is currently focused primarily on TA-TMA.

We successfully completed a pivotal clinical trial for narsoplimab in TA-TMA and previously submitted to FDA a BLA seeking marketing approval for narsoplimab in this indication.

In October 2021, FDA issued a complete response letter (“CRL”) with respect to the original BLA and indicated that additional information would be needed to support regulatory approval.

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In March 2025, we resubmitted to FDA the BLA seeking regulatory approval for narsoplimab in TA-TMA.

The resubmission was accepted for review by FDA as a class 2 resubmission and, pursuant to the Prescription Drug User Fee Act (“PDUFA”), has been assigned a target action date for the FDA decision of September 25, 2025.

As with any BLA or new drug application, there can be no guarantee that FDA will complete its review within a given timeframe, or that our BLA will ultimately be approved.

The resubmission was accepted for review by FDA as a class 2 resubmission and, pursuant to the Prescription Drug User Fee Act (“PDUFA”), was assigned a target action date for the FDA decision of September 25, 2025.

Following the submission of information in response to an information request from FDA, FDA informed us that the PDUFA date will be extended to December 26, 2025.

To date, all analyses requested by FDA as part of its review have been consistent with and have provided statistically significant support of narsoplimab’s benefit demonstrated in the analyses submitted as part of the BLA resubmission.

In addition, FDA has stated that, assuming no major deficiencies are identified during its review, labeling discussions are planned to begin no later than October 2025.

In June 2025, we submitted a MAA for narsoplimab for the treatment of TA-TMA in the European Union.

The EMA completed validation of the narsoplimab MAA, which confirms that the submission is accepted and starts the formal review process by EMA’s Committee for Medicinal Products for Human Use.

We expect an opinion on the MAA in mid-2026.

As with any BLA or MAA, there can be no guarantee that FDA or the EMA will complete their respective reviews within a given timeframe, or that our BLA or MAA will ultimately be approved.

Our lectin pathway program also includes OMS1029, our long-acting antibody targeting MASP-2.

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Several indications for potential Phase 2 clinical development of OMS1029 have been evaluated/selected and may be pursued pending the availability and allocation of capital.

OMS1029 drug product and placebo have been manufactured and stored for future use.

Available quantities are expected to be sufficient to support a Phase 2 clinical program.

Our pipeline of clinical-stage complement-targeted therapeutic candidates also includes zaltenibart, a proprietary, patented monoclonal antibody targeting MASP-3, the key and most proximal activator of the alternative pathway of complement.

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We are working with our vendors and investigators to ensure that these studies can be restarted with as little disruption to the timeline as possible after securing capital and allocating it to the program.

Our phosphodiesterase 7 (“PDE7”) inhibitor program, which we refer to as OMS527, comprises multiple PDE7 inhibitor compounds and is based on our discoveries of previously unknown links between PDE7 and any addiction or compulsive disorder, and between PDE7 and any movement disorders.

In April 2023, we were awarded a grant from the National Institute on Drug Abuse (“NIDA”), part of the National Institutes of Health, to develop, at NIDA’s request, our lead orally administered PDE7 inhibitor compound for the treatment of cocaine use disorder (“CUD”).

Our PDE7 inhibitor program, which we refer to as OMS527, comprises multiple PDE7 inhibitor compounds and is based on our discoveries of previously unknown links between PDE7 and any addiction or compulsive disorder, and between PDE7 and any movement disorders.

NIDA awarded the grant to us for a total of $ 6.2 million over three years, of which we have claimed and received $ 1.5 million of funding to date.

The grant is intended to support preclinical cocaine interaction/toxicology studies to assess safety of the therapeutic candidate in the presence of concomitant cocaine administration, as well as an in-patient, placebo-controlled clinical study evaluating the safety and effectiveness of OMS527 in adults with CUD who receive concurrent intravenous cocaine.

The preclinical studies have been completed successfully and provide the drug-interaction safety data necessary to support the human study of OMS527 in CUD.

We expect enrollment in the study evaluating OMS527 in adult subjects with CUD to begin in 2025, also fully funded by NIDA with data anticipated to be available late this year or early 2026.

The grant is intended to support preclinical cocaine interaction/toxicology studies to assess safety of the therapeutic candidate in the presence of concomitant cocaine administration, as well as an in-patient, placebo-controlled clinical study evaluating the safety and effectiveness of OMS527 in adult cocaine users who receive concurrent intravenous cocaine.

The preclinical studies, designed by NIDA toxicologists, have been successfully completed with no safety findings and provide drug-interaction safety data in support of the planned in-patient human study of OMS527 in cocaine users.

FDA has requested that we provide additional preclinical information prior to initiating the clinical in-patient study in cocaine users, which we are targeting for the first part of 2026.

We also have various programs in preclinical research and development.

OMIDRIA Sale and Royalty Monetization Transactions

On December 23, 2021, we closed an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Rayner Surgical Inc.

(“Rayner”) for the sale of our commercial product OMIDRIA which we recorded as an OMIDRIA contract asset on our condensed consolidated balance sheet.

As a result of the divestiture, the results of OMIDRIA activities are classified as discontinued operations in our condensed consolidated statements of operations and comprehensive loss and excluded from continuing operations for all periods presented (See “Note 7 — Discontinued Operations – Sale of OMIDRIA”).

On September 30, 2022, we sold an interest in a portion of our future OMIDRIA royalty receipts to DRI Healthcare Acquisition LP (“DRI”) and received $ 125.0 million in cash consideration, which we recorded as an OMIDRIA royalty obligation on our condensed consolidated balance sheet.

Interest expense on the royalty obligation is recorded as a component of continuing operations.

On February 1, 2024, we sold an expanded interest in our OMIDRIA royalties to DRI and received $ 115.5 million in cash consideration, which we recorded as an addition to the OMIDRIA royalty obligation.

The amended and restated royalty purchase agreement with DRI (the “Amendment”) eliminates the previously existing annual caps on royalty payments after January 1, 2024, and provides that DRI now receives all royalties on U.S.

net sales of OMIDRIA payable between January 1, 2024 and December 31, 2031.

All royalties earned on OMIDRIA sales within the U.S.

through December 31, 2031 are remitted by Rayner to an escrow account established by Omeros, from which payments are made to DRI.

After December 31, 2031, we will retain any U.S.

OMIDRIA royalties.

We are entitled to retain all royalties on net sales of OMIDRIA outside of the United States.

To date, international royalties have not been significant.

(See “Note 8 — OMIDRIA Royalty Obligation”).

2024 Term Loan and Repurchase of 2026 Notes

On June 3, 2024, we, with certain subsidiaries, as guarantors, entered into a Credit and Guaranty Agreement (the “Credit Agreement”) with funds managed by Athyrium Capital Management LP (collectively, “Athyrium”) and funds managed by Highbridge Capital Management, LLC (collectively, “Highbridge”) as Lenders (the “Lenders”).

The Credit Agreement provides for a senior secured term loan facility of up to $ 92.1 million, consisting of a term loan of $ 67.1 million (the “Term Loan”) and a $ 25.0 million delayed draw term loan (the “Delayed Draw Term Loan”), which may be drawn once in full upon notice delivered on or prior to June 3, 2025, conditioned on receipt of FDA approval of narsoplimab in TA-TMA within 30 days of the notice.

Based on the September 2025 target date for FDA action assigned to the narsoplimab BLA, we do not expect to meet the conditions required to utilize the Delayed Draw Term Loan.

Also, we used the Term Loan proceeds along with $ 21.7 million of cash on hand, to repurchase from the Lenders $ 118.1 million aggregate principal amount of our existing 5.25 % convertible senior notes due on February 15, 2026 (the “2026 Notes” and such repurchase, the “2026 Note Repurchase Transaction”), which resulted in a $ 51.0 million reduction in our total debt outstanding.

(See “Note 6 — Debt” for a description of the Credit Agreement provisions).

Basis of Presentation

Our condensed consolidated financial statements include the financial position and results of operations of Omeros and our wholly owned subsidiaries.

All inter-company transactions have been eliminated.

The accompanying condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments and non-recurring adjustments, considered necessary for the fair presentation of such information.

Our financial statements have been prepared in accordance with U.S.

generally accepted accounting principles (“GAAP”).

These financial statements should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024, from which the December 31, 2024, condensed consolidated balance sheet has been derived.

Liquidity and Capital Resources

As of March 31, 2025, we had cash, cash equivalents and short-term investments of $ 52.4 million.

For the three months ended March 31, 2025, our cash used in operations was $ 35.8 million and included a net loss for the quarter of $ 33.5 million.

Pursuant to a covenant in the Credit Agreement entered on June 3, 2024, we must maintain $ 25.0 million of unrestricted cash, cash equivalents and short-term investments at all times.

(See “Note 6 — Debt”).

As of June 30, 2025, we had cash, cash equivalents, and short-term investments of $ 28.7 million.

For the six months ended June 30, 2025, our cash used in operations was $ 57.8 million and included a net loss for the six months ended June 30, 2025 of $ 58.9 million.

Pursuant to a covenant in the Credit Agreement, we must maintain $ 25.0 million of unrestricted cash, cash equivalents and short-term investments at all times.

We have maintained a balance of unrestricted cash, cash equivalents, and short-term investments greater than $ 25.0 million and at no time during the quarter or through the date of issuance of these condensed consolidated financial statements have we been in violation of any of our debt covenants.

In recent years, Omeros has incurred net losses from continuing operations and negative cash flows from operations.

The recurring losses, in combination with our cash and investment balances as of March 31, 2025, along with the maturity of the 2026 Notes on February 15, 2026, raises substantial doubt about our ability to continue as a going concern.

The accompanying condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from uncertainty related to our ability to continue as a going concern.

As we currently do not have an ongoing source of revenue sufficient to cover our operating costs, we will need to raise additional capital to accomplish our business plan.

On May 14, 2025, we completed the exchange (the “Convertible Note Exchange”) of $ 70.8 million of our 2026 Notes on a one-for-one basis for newly issued convertible senior notes maturing on June 15, 2029 (the “2029 Notes”).

On May 14, 2025, we completed the exchange (the “Convertible Note Exchange”) of $ 70.8 million of our existing 5.25 % convertible senior notes due on February 15, 2026 (“2026 Notes”) on a one-for-one basis for newly issued convertible senior notes maturing on June 15, 2029 (the “2029 Notes”).

The Convertible Note Exchange was conducted with a limited number of holders of the 2026 Notes pursuant to exchange agreements dated as of May 12, 2025.

On May 12, 2025, the Company entered into note conversion agreements (each, a “Note Conversion Agreement”) with two affiliated holders of the 2026 Notes to convert $ 10.0 million aggregate principal amount of 2026 Notes into shares of the Company’s common stock (the “Equitization Transaction”).

Under the terms of the Note Conversion Agreements, the holders will convert the equitized principal amount of the 2026 Notes in three equal tranches for a number of shares of common stock to be determined based in part on the closing price of the Company’s common stock on May 9, 2025 and in part based on the 20 -day volume-weighted average price applicable to each tranche conversion date, subject to a floor conversion price.

The 2029 Notes are convertible at the option of the holder into shares of common stock, cash or a combination thereof, as elected by the Company, at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date.

Holders who convert their 2029 Notes after November 13, 2025 and prior to June 1, 2029 (except for any conversion in connection with a make-whole fundamental change) are entitled to an interest make-whole payment equal to the sum of the remaining scheduled payments of interest that would have been made had the 2029 Notes remained outstanding from their conversion date through the earlier of (i) the date that is 18 months following their conversion date, and (ii) June 15, 2029 , the maturity date.

The initial conversion rate for the 2029 Notes is equivalent to an initial conversion price of approximately $ 6.18 per share of the Company’s common stock.

The conversion rate is subject to adjustment in certain circumstances.

On May 12, 2025, we also entered into note conversion agreements (each, a “Note Conversion Agreement”) with two affiliated holders of the 2026 Notes to convert $ 10.0 million aggregate principal amount of 2026 Notes into shares of our common stock (the “Equitization Transaction”) in three tranches.

The number of shares of common stock issued or issuable in each tranche has been, or is to be, determined based in part on the closing price of the Company’s common stock on May 9, 2025 and in part based on the 20 -day VWAP applicable to the relevant tranche conversion date, subject to a floor conversion price.

As of June 30, 2025, we delivered 539,320 shares of the first tranche under this agreement with the remaining shares of the first tranche to be delivered on July 15, 2025.

As of June 30, 2025, we have recorded a $ 7.6 million share-settled liability in our condensed consolidated balance sheet representing the remaining liability owed to the two affiliate holders.

We subsequently delivered an aggregate of 1,996,555 additional shares in connection with the completion of the settlement for the first tranche, the settlement of the second tranche and the partial settlement of the third tranche.

The Note Conversion Agreements provide that the final settlement will occur no later than September 15, 2025.

The Convertible Note Exchange reduced the aggregate principal balance of our 2026 Notes from $ 97.9 million to $ 27.1 million.

As a result of the reduced principal balance of the 2026 Notes, the Company will no longer be required to make a $ 20.0 million prepayment of the Term Loan outstanding under the Credit Agreement which otherwise would have been required to be paid in November 2025 to avoid accelerated maturity of the entire Term Loan balance (see “Note 6 — Debt”).

Upon completion of the Equitization Transaction, the aggregate principal balance of our 2026 Notes will be further reduced from $ 27.1 million to $ 17.1 million.

No new cash was received as a result of these transactions.

The accompanying condensed consolidated balance sheet as of March 31, 2025 reflects the reclassification from current to non-current on May 14, 2025 of the 2026 Notes that were acquired in the Convertible Note Exchange and that are subject to the Note Conversion Agreement.

To raise capital for our operations, we may also pursue public and private offerings of our equity securities, additional debt transactions or restructuring, future royalty sales, or other strategic transactions, which may include licensing or selling a portion or all of one or more of our existing technologies.

The Convertible Note Exchange and the Equitization Transaction reduced the aggregate principal balance of our 2026 Notes from $ 97.9 million to $ 17.1 million.

As a result of the Company reducing the principal balance of the 2026 Notes through the Convertible Note Exchange and the Equitization Transaction discussed earlier, we will no longer be required to make a $ 20.0 million prepayment of our outstanding Term Loan and an associated prepayment premium under the Credit Agreement.

These amounts otherwise would have been required to be paid in November 2025 to avoid accelerated maturity of the entire Term Loan balance.

(See “Note 6 — Debt”).

On July 28, 2025, we issued and sold to entities managed by Polar Asset Management Partners (collectively, “Polar”) 5,365,853 shares of our common stock at a price of $ 4.10 per share, representing a 14 % premium to the closing OMER stock price on the day of pricing, in a registered direct offering.

We received approximately $ 20.6 million in cash proceeds net of offering expenses.

As we currently do not have an ongoing source of revenue sufficient to cover our operating costs, we will need to raise additional capital to accomplish our business plan.

To raise capital for our operations, we may pursue public and private offerings of our equity securities, additional debt transactions or restructurings, future royalty sales, or other strategic transactions, which may include licensing or selling a portion or all of one or more of our existing technologies.

However, pursuing debt financings, certain equity offerings or other strategic transactions may result in mandatory prepayments of the Term Loan to the Credit Agreement.

(See “Note 6 — Debt” for further details).

In addition, we have a sales agreement pursuant to an at the market (“ATM”) equity offering facility through which we may, from time to time, offer and sell shares of our common stock equaling an aggregate amount of up to $ 150.0 million.

Subsequent to March 31, 2025, we received $ 3.5 million in net proceeds from sale of our common stock through the ATM facility.

If these capital resources, for any reason, are needed but inaccessible, it would have a significant negative impact on our financial condition.

Further, we have a sales agreement pursuant to an at-the-market (“ATM”) equity offering facility through which we may, from time to time, offer and sell shares of our common stock equaling an aggregate amount of up to $ 150.0 million.

During the six months ended June 30, 2025, we received $ 6.4 million of net proceeds from the sale of our common stock through the ATM facility and have received $ 2.1 million subsequent to June 30, 2025.

(See “Note 11 – Stockholders Deficit”).

We may also consider potential asset acquisition and/or licensing agreements in connection with certain of our clinical assets to raise capital.

If the ATM facility or other capital resources, for any reason, are needed but inaccessible, it would have a significant negative impact on our financial condition.

For purposes of determining available capital resources, any future royalty and/or milestone receipts are excluded.

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The conditions described above, including the need to raise additional capital, when evaluated in accordance with the relevant accounting literature, raise substantial doubt with respect to our ability to meet our obligations through one year from the issuance of the Company’s condensed consolidated financial statements.

Our ability to continue as a going concern will require us to generate positive cash flow from operations, obtain additional financing, enter into strategic alliances, and/or sell assets, and this determination is made without considering any such potential future activities.

Basis of Presentation

Our condensed consolidated financial statements include the financial position and results of operations of Omeros and our wholly owned subsidiaries.

All inter-company transactions have been eliminated.

Our financial statements have been prepared in accordance with U.S.

generally accepted accounting principles (“GAAP”).

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.

Significant items subject to such estimates include the OMIDRIA contract royalty asset valuation and the OMIDRIA royalty obligation valuation.

Significant items subject to such estimates include the OMIDRIA contract royalty asset valuation, the OMIDRIA royalty obligation valuation and our valuation of embedded derivatives.

We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances;

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The Company’s CODM is our Chief Executive Officer.

For the three months ended March 31, 2025, the Company has identified one operating and reportable segment.

For the three and six months ended June 30, 2025, the Company has identified one operating and reportable segment.

The CODM reviews net loss and expenses reported on the condensed consolidated statement of operations and comprehensive income (loss).

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Our segment net income (loss) aligns with our condensed consolidated statement of operations and comprehensive income (loss).

2024 Term Loan and Repurchase of 2026 Notes

In June 2024, we performed an assessment of the Credit Agreement and determined that it met the criteria to be accounted for as a troubled debt restructuring.

As a result, the $ 29.3 million difference between the $ 118.1 million aggregate principal amount of the 2026 Notes repurchased by the Company and the $ 88.8 million aggregate repurchase price (consisting of the $ 67.1 million Term Loan and $ 21.7 million cash on hand) was recorded as a premium (i.e.

an increase) to the term debt recorded on our condensed consolidated balance sheet instead of being recognized as a gain on early extinguishment of debt.

We amortize the premium as both a reduction of term debt in the condensed consolidated balance sheet and interest expense in the condensed consolidated statement of operations and comprehensive loss over the duration of the Term Loan.

Exchange of 2026 Notes for 2029 Notes and Share-Settled Liabilities

On May 14, 2025, we exchanged (1) $ 70.8 million of aggregate principal amount of 2026 Notes on a one-for-one basis for newly-issued 2029 Notes in the Convertible Note Exchange and (2) $ 10.0 million of aggregate principal amount of 2026 Notes for shares of our common stock to be delivered in three tranches pursuant to terms of the Note Conversion Agreements.

We did not receive new cash proceeds in these transactions.

We performed an assessment of the Convertible Note Exchange and Note Conversion Agreements and determined that these transactions were not a troubled debt restructuring and were a partial extinguishment of our 2026 Notes.

The Company’s obligation to deliver shares in three tranches was accounted for as a share-settled liability measured at fair value.

Embedded Derivatives

We account for convertible instruments in accordance with ASC 470-20, Debt with Conversion and Other Option s, when we determine that embedded conversion features do not require bifurcation from the host instrument.

We account for convertible instruments (when we have determined that the embedded conversion options should be bifurcated from their host instruments) in accordance with ASC 815 – Derivative and Hedge Accounting (“ASC 815”).

Under ASC 815, proceeds received upon the issuance of the hybrid contract are allocated between the fair value of the notes and the fair value of the derivative.

The derivative is subsequently marked-to-market at each reporting date based on current fair value, with the changes in fair value reported in the condensed consolidated statements of operations and comprehensive loss.

On our 2029 Notes, we recorded an initial $ 23.0 million liability for our embedded derivative, which is shown as a component of the 2029 Notes.

The embedded derivative represents the conversion feature and interest make-whole feature available to holders of the 2029 Notes allowing them to convert the notes into common stock.

At June 30, 2025, we marked-to-market the initial $ 23.0 million embedded derivative on the 2029 Notes to $ 15.0 million, recording an $ 8.0 million gain on remeasurement to our condensed consolidated statement of operations and comprehensive loss.

(For further details, see “Note 6 – Debt”).

Discontinued Operations

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Planned or completed business dispositions are presented as discontinued operations when all the criteria described above are met.

For those divestitures that qualify as discontinued operations, all comparative periods presented are reclassified in the condensed consolidated balance sheets.

Additionally, the results of operations of a discontinued operation are reclassified to income from discontinued operations, net of tax, for all periods presented in the condensed consolidated statements of operations and comprehensive income (loss).

Results of discontinued operations include all revenues and expenses directly derived from such businesses.

General corporate overhead is not allocated to discontinued operations.

The OMIDRIA asset sale to Rayner qualifies as a discontinued operation and has been presented as such for all reporting periods presented.

The Company included information regarding cash flow from discontinued operations (See “Note 7 — Discontinued Operations – Sale of OMIDRIA”).

OMIDRIA Royalties, Milestones and Contract Royalty Assets

On December 23, 2021, we closed on an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Rayner Surgical Inc.

(“Rayner”) for the sale of our commercial product OMIDRIA which we recorded as an OMIDRIA contract asset on our condensed consolidated balance sheet.

We have rights to receive future royalties from Rayner on OMIDRIA net sales at royalty rates that vary based on geography and certain regulatory contingencies.

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To measure the OMIDRIA contract royalty asset, we use the expected value approach which is the sum of the discounted probability-weighted royalty payments we would receive using a range of potential outcomes, to the extent that it is probable that a significant reversal in the amount of cumulative income recognized will not occur.

The royalty rate applicable to U.S.

net sales of OMIDRIA is 30 % until the expiration or termination of the last issued and unexpired U.S.

patent, which we expect to occur no earlier than 2035.

Royalties earned are recorded as a reduction to the OMIDRIA contract royalty asset.

All royalties received from Rayner, other than royalties related to any sales outside the U.S.

and any royalties received after December 31, 2031, are passed through directly to DRI and are accounted for as interest expense and a reduction of the OMIDRIA royalty obligation.

royalties received from Rayner through December 31, 2031 are remitted by Rayner to an escrow account established by Omeros, from which payments are made to DRI Healthcare Acquisition LP (“DRI”).

These payments comprise interest expense, with the remainder treated as a reduction of the OMIDRIA royalty obligation.

The amount recorded in discontinued operations in future periods will reflect interest earned on the outstanding OMIDRIA contract royalty asset at 11.0 % and any amounts we receive that are different from the expected royalties.

The OMIDRIA contract royalty asset is re-measured quarterly using the expected value approach, which incorporates actual results and future expectations.

Any required adjustment to the OMIDRIA contract royalty asset is recorded in discontinued operations.

(See “Note 7 — Discontinued Operations – Sale of OMIDRIA”).

OMIDRIA Royalty Obligation

On September 30, 2022, we sold to DRI an interest in a portion of our future OMIDRIA royalty receipts for a purchase price of $ 125.0 million and recorded an OMIDRIA Royalty Obligation for the same amount.

On February 1, 2024, DRI purchased our remaining U.S.

OMIDRIA royalty receipts through December 31, 2031 for $ 115.5 million in cash, which increased the OMIDRIA royalty obligation by the same amount.

The OMIDRIA royalty obligation is valued based on our estimates of future OMIDRIA royalties and is amortized through December 31, 2031 using the implied effective interest rate of 10.27 %.

Interest expense is recorded in continuing operations.

To the extent our estimates of future royalties differ materially from previous estimates, we will adjust the carrying amount of the OMIDRIA royalty obligation to reflect the present value of the revised estimated cash flows, discounted at the implied effective interest rate of 10.27 % utilizing the cumulative catch-up method.

This is reflected as a remeasurement adjustment recognized as non-cash interest expense, a component of net income (loss) from continuing operations (See “Note 8 — OMIDRIA Royalty Obligation”).

We have sold to DRI our future U.S.

based OMIDRIA royalty receipts through December 31, 2031, which we recorded as an OMIDRIA royalty obligation on our condensed consolidated balance sheet.

The OMIDRIA royalty obligation is valued based on our estimates of future royalties from Rayner.

Interest expense is calculated at an implied effective interest rate of 10.27 % and represents a component of the total pass-through payments to DRI from Rayner.

To the extent our estimates of future royalties differ materially from previous estimates, we will adjust the carrying amount of the OMIDRIA royalty obligation to reflect the present value of the revised estimated cash flows from Rayner utilizing the cumulative catch-up method.

This is reflected as a remeasurement adjustment recognized as non-cash interest expense.

Pass-through interest, remitted through an administrative agent by Rayner to DRI, and non-cash interest on remeasurements are recorded to continuing operations to arrive at interest (income) or expense on the OMIDRIA royalty obligation.

(See “Note 8 — OMIDRIA Royalty Obligation”).

We expense inventory costs related to product candidates as research and development expenses until regulatory approval is reasonably assured in the U.S.

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We account for leases with initial terms of 12 months or less as an operating expense.

2024 Term Loan and Repurchase of 2026 Notes

In June 2024, we performed an assessment of the Credit Agreement which was entered into with Highbridge and Athyrium and determined that it met the criteria to be accounted for as a troubled debt restructuring.

an increase) to the term debt recorded on the Company's condensed consolidated balance sheet instead of being recognized as a gain on early extinguishment of debt.

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their tax basis.

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The fair value of short-term investments is based on quoted market prices.

Financial instruments that potentially subject to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments and receivables.

Financial instruments that are potentially subject to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, receivables, convertible notes, and term debt.

Convertible notes and term debt are measured at fair market value at issuance.

Associated embedded derivatives of the convertible notes and term debt are remeasured quarterly to fair value.

At times, our cash and cash equivalents balance held at financial institutions may exceed the federally insured limits.

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Diluted net income (loss) per share (“Diluted EPS”) is computed by dividing net income (loss) by the weighted average number of common shares and potentially dilutive common shares outstanding during the period.

Our potential dilutive securities include common shares related to our stock options and convertible senior notes calculated using the treasury stock method.

Our potential dilutive securities include common shares related to our stock options which are calculated using the treasury stock method.

Our potential dilutive securities related to our convertible senior notes and share-settled liabilities are calculated using the if-converted method.

In periods where we have a net loss from continuing operations but overall net income, we do not compute Diluted EPS because the effect would be anti-dilutive.

Potentially dilutive securities excluded from Diluted EPS are as follows:

When there is a net loss, potentially dilutive securities, like stock options, warrants, or convertible debt, are typically excluded from the diluted net loss per share calculation.

Potentially dilutive securities excluded from Diluted EPS are calculated based on a weighted average of days in the quarter from when the respective transactions occurred and are shown as follows:

Three Months Ended

Six Months Ended

2029 Notes convertible to common stock (1)

2026 Notes convertible to common stock (1)(2)(3)

Outstanding options to purchase common stock

Share-settled liability (4)

Total potentially dilutive shares excluded from net loss per share

On May 14, 2025, we exchanged $ 70.8 million aggregate principal amount of our 2026 Notes for 2029 Notes on a one-for-one basis in the Convertible Note Exchange and recorded a reduction of an additional $ 10.0 million aggregate principal amount of our 2026 Notes to be equitized pursuant to the Equitization Transaction.

The 2029 Notes are subject to a conversion arrangement that potentially increases the dilutive effect of conversion as described in “Note 6 — Debt.”

The 2026 Notes are subject to a capped call arrangement that potentially reduces the dilutive effect of conversion as described in “Note 6 — Debt.” Any potential impact of the capped call arrangement is excluded from this table.

On June 3, 2024, we repurchased $ 118.1 million of our 2026 Notes reducing any effect of dilution related to those notes.

On June 3, 2024, we repurchased $ 118.1 million of our 2026 Notes reducing any effect of the dilution related to these notes.

(For further details refer to “Note 6 — Debt”).

Note 4 — Investments and Fair-Value Measurements

All of our investments are short-term and held in our name.

Money market funds are classified as available-for-sale on the accompanying condensed consolidated balance sheets.

Interest income is included as a component of interest and other income on our condensed consolidated statement of operations and comprehensive loss.

Interest and other income for the three months ended March 31, 2025 and March 31, 2024 consists primarily of interest earned of $ 0.7 million and $ 2.8 million, respectively.

The following tables summarize our investments:

March 31, 2025

Gross Unrealized

Amortized Cost

Gains/(Losses)

Estimated Fair Value

(In thousands)

Money-market funds classified as short-term investments

Certificate of deposit classified as non-current restricted investments

Total investments

December 31, 2024

Gross Unrealized

Amortized Cost

Gains/(Losses)

Estimated Fair Value

(In thousands)

Money-market funds classified as short-term investments

Certificate of deposit classified as non-current restricted investments

Total investments

On May 12, 2025, the Company entered into Note Conversion Agreements to exchange $ 10.0 million of aggregate principal of our 2026 Notes for shares of our common stock reducing the effect of dilution on these notes.

The Note Conversion Agreements provide for delivery of the common stock in three tranches.

The above calculation assumes dilution to occur at the stock price at June 30, 2025.

(For further details refer to “Note 6 — Debt”).

Note 4 — Fair-Value Measurements

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, an exit price, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

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Level 3—Unobservable inputs in which little or no market data exists, therefore they are developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

Our fair value hierarchy for our financial assets and liabilities are as follows:

March 31, 2025

We review the fair value hierarchy classification on a quarterly basis.

Changes in the observability of valuation inputs may result in a reclassification of levels for certain securities within the fair value hierarchy.

There have been no transfers of assets or liabilities between fair value measurement classifications during the six months ended June 30, 2025.

Our fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis are as follows:

June 30, 2025

(In thousands)

Money-market funds classified as short-term investments

Cash and cash equivalents:

Certificate of deposit classified as non-current restricted investments

Total investments

Short-term investment:

Money-market funds

Share-settled liability

Call and put options derivative (1)

2029 Notes conversion option derivative

Total Liabilities

While the Term Loan is recorded as a liability, the embedded call and put options that have been identified as requiring bifurcation are recognized as a net embedded derivative asset reflected as a component of the Term Loan on the balance sheet.

December 31, 2024

(In thousands)

Money-market funds classified as short-term investments

Cash and cash equivalents:

Certificate of deposit classified as non-current restricted investments

Total investments

Cash held in demand deposit accounts of $ 4.3 million and $ 3.4 million is excluded from our fair-value hierarchy disclosure as of March 31, 2025 and December 31, 2024, respectively.

Short-term investment:

Money-market funds

Call and put options derivative (1)

Total Liabilities

Cash held in demand deposit accounts of $ 1.9 million and $ 3.4 million is excluded from our fair-value hierarchy disclosure as of June 30, 2025 and December 31, 2024, respectively.

The carrying amounts reported in the accompanying condensed consolidated balance sheets for receivables, accounts payable and accrued liabilities, and other current monetary assets and liabilities approximate fair value.

See “Note 6 — Debt” and “Note 8 — OMIDRIA Royalty Obligation” for the carrying amount and estimated fair value of our outstanding term loan, convertible senior notes and the OMIDRIA royalty obligation.

All of our investments, which are classified as Level 1 assets, are short-term and held in our name.

Money market funds are classified as available-for-sale.

Our share-settled liability and embedded derivatives are classified as Level 3 assets and liabilities.

Our embedded derivatives are grouped with their related host contract as a net liability on our condensed consolidated balance sheet.

(For further details see “Note 6 – Debt”).

The fair value of our share-settled liability was determined using the Monte Carlo model assuming a yield volatility of 137 %, a stock price floor of $ 2.50 and a fixed conversion price of $ 6.18 .

The fair value of our embedded derivatives were determined using both the Lattice and Discounted Cash Flow models with the following key assumptions:

Term Loan derivative

Interest comprised of:

SOFR benchmark rate

Securitized discount rate

Yield volatility

Probability weighted term (in years)

Changes in valuation assumptions could have a significant impact on our Term Loan derivative.

The Company can provide no assurance that changes in yield would not be significant in the future.

2029 Notes conversion option derivative

Stock price (per share)

Unsecuritized discount rate

Risk-free rate

Stock price volatility

Dividend yield

Term (in years)

Changes in valuation assumptions could have a significant impact on the 2029 Note conversion option derivative.

The Company can provide no assurance that changes in yield or in our stock price would not have a significant impact on the derivative in the future.

An increase in our stock price volatility could increase the valuation of the 2029 Note conversion option derivative, whereas an increase in interest rates could decrease the valuation of the 2029 Note conversion option derivative.

The following table sets forth a summary of changes in the fair value of Level 3 liabilities for the six months ended June 30, 2025:

Balance as of

Change in Fair Value

(In thousands)

Share-settled liability

Call and put options derivative

2029 Notes conversion option derivative

Total Liabilities

Note 5 — Certain Balance Sheet Accounts

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Total receivables

Other receivables of $ 1.4 million includes $ 1.1 million of royalties paid by Rayner representing escrowed funds in-transit to DRI and received on April 1, 2025.

These funds are also recorded as a current OMIDRIA royalty obligation during the quarter.

Property and Equipment, Net

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Total property and equipment, net

For the three months ended March 31, 2025 and 2024, depreciation and amortization expense was $ 0.3 million and $ 0.2 million, respectively.

For each of the three months ended June 30, 2025 and 2024, depreciation and amortization expense was $ 0.2 million, for both periods, respectively.

For the six months ended June 30, 2025 and 2024, depreciation and amortization expense was $ 0.5 million and $ 0.4 million, respectively.

Accrued Expenses

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Contract research and development

Consulting and professional fees

Interest payable

Consulting and professional fees

Other accrued expenses

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Note 6 — Debt

Convertible senior notes, net, along with share-settled liabilities, and term debt balances are comprised of the following:

(In thousands)

Exchange of 2026 Notes for common stock (share-settled liability)

Convertible senior notes, net maturing on June 15, 2029 (2029 Notes)

Term debt, net maturing on June 3, 2028 (Term Loan)

Convertible senior notes, net maturing on February 15, 2026 (2026 Notes)

Exchange of 2026 Notes for 2029 Notes and Share-Settled Liabilities

On May 14, 2025, we completed the exchange of $ 70.4 million of net carrying value of our 2026 Notes on a one-for-one basis for newly issued convertible senior notes maturing on June 15, 2029 which had a fair market value of $ 73.5 million.

The $ 70.4 million net carrying value of our 2026 Notes includes $ 70.8 million of aggregate principal amount less $ 0.4 million of issuance costs.

Including the Equitization Transaction, this exchange results in a net $ 3.0 million loss on extinguishment which we recorded to our statement of operations and comprehensive loss.

The Convertible Note Exchange was conducted with a limited number of holders of the 2026 Notes pursuant to exchange agreements dated May 12, 2025 (each, an “Exchange Agreement”).

The 2029 Notes were issued pursuant to an Indenture, dated as of August 14, 2020 (the “Base Indenture”), between the Company and Computershare Trust Company, National Association, as successor to Wells Fargo Bank, National Association, as trustee (the “Trustee”), as supplemented by a Second Supplemental Indenture, dated as of May 14, 2025 (the “Second Supplemental Indenture”), between the Company and the Trustee (the Base Indenture, as amended and supplemented by the Second Supplemental Indenture, the “Indenture”).

The 2029 Notes will mature on June 15, 2029 unless earlier converted, redeemed or repurchased in accordance with their terms prior to such date.

Interest on the 2029 Notes is payable semi-annually in arrears at a rate of 9.50 % per annum on each June 15 and December 15, beginning on December 15, 2025.

Due to the discount amortization on the 2029 Notes, interest expense is currently being recognized at an implied effective interest rate of 1.82 %.

The 2029 Notes are convertible at the option of the holder into shares of common stock, cash or a combination thereof, as elected by us, at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date.

The conversion rate is 161.81 shares of our common stock per $ 1,000 of note principal (equivalent to an initial conversion price of approximately $ 6.18 per share of common stock), which equals approximately 11.5 million shares issuable upon conversion, subject to adjustment in certain circumstances.

The conversion rate is subject to adjustment in certain circumstances as described in the Indenture.

Holders who convert their 2029 Notes from, and including, November 14, 2025 to, but excluding, June 1, 2029 (except for any conversion in connection with a make-whole fundamental change) will also be entitled to an interest make-whole payment equal to the sum of the remaining scheduled payments of interest that would have been made on the 2029 Notes to be converted had such notes remained outstanding from the conversion date through the earlier of (i) the date that is 18 months following the conversion date and (ii) the maturity date.

We recorded a $ 23.0 million initial embedded derivative as a component of our 2029 Notes which represents the conversion feature available to holders of the 2029 Notes allowing them to convert the notes into common stock.

The 2029 Notes include a $ 20.2 million discount which we amortize as an addition to the carrying value and treat as non-cash interest expense in the condensed consolidated statement of operations and comprehensive loss over the duration of the term.

The 2029 Notes will be redeemable, in whole or in part, at our option at any time, and from time to time, on or after June 20, 2027 and on or before the 50 th scheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, but only if the last reported sale price per share of our common stock exceeds 130 % of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice and (ii) the trading day immediately before the date we send such notice.

In addition, calling any 2029 Note for redemption will constitute a “make-whole fundamental change” (as defined in the Indenture) with respect to that 2029 Note, in which case the conversion rate applicable to the conversion of that 2029 Note will be increased in certain circumstances if it is converted after it is called for redemption.

The Indenture contains customary terms and covenants and events of default.

If an event of default (other than certain events of bankruptcy, insolvency or reorganization involving the Company) occurs and is continuing, the Trustee or the holders of at least 25 % in aggregate principal amount of the 2029 Notes then outstanding may declare the principal amount of, and all accrued and unpaid interest on, all of the 2029 Notes then outstanding to become due and payable immediately.

Upon the occurrence of certain events of bankruptcy, insolvency or reorganization involving the Company, the principal amount of, and all accrued and unpaid interest, if any, on all of the 2029 Notes then outstanding will immediately become due and payable without any further action or notice by the Trustee or any holder.

Notwithstanding the foregoing, the Indenture provides that, to the extent we elect and for up to 180 days, the sole remedy for an event of default relating to certain failures by us to comply with certain reporting covenants in the Indenture may consist exclusively of the right to receive special interest on the 2029 Notes.

The 2029 Notes are structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent we are not a holder thereof) preferred equity, if any, of its subsidiaries.

Equitization Transaction

On May 12, 2025, we entered into Note Conversion Agreements with two affiliated holders of the 2026 Notes to convert $ 10.0 million aggregate principal amount of the 2026 Notes into shares of our common stock.

Under the terms of the Note Conversion Agreements, the holders agreed to convert the equitized principal amount of the 2026 Notes in three tranches for a number of shares of common stock to be determined based in part on the closing price of our common stock on May 9, 2025 and in part based on the 20 -day volume-weighted average price applicable to each tranche conversion date, subject to a floor conversion price.

The Note Conversion Agreements provide that the final settlement will occur no later than September 15, 2025.

As of June 30, 2025, we delivered 539,320 shares of the first tranche under this agreement with the remaining shares for the first tranche delivered on July 15, 2025.

As of June 30, 2025, we have recorded a $ 7.6 million share-settled liability in our condensed consolidated balance sheet representing the remaining liability owed to the two affiliated holders under the Note Conversion Agreements.

The Note Conversion Agreements provide that the final settlement will occur no later than September 15, 2025.

The Convertible Note Exchange transaction and Equitization Transaction reduced the aggregate principal balance of our 2026 Notes from $ 97.9 million to $ 17.1 million.

The $ 80.8 million reduction in aggregate principal amount of our 2026 Notes reflects the exchange of $ 70.8 million aggregate principal amount of 2026 Notes for 2029 Notes under the Convertible Note Exchange and the reduction of $ 10.0 million in aggregate principal amount to be equitized under the Note Conversion Agreements.

Because we have a contractual obligation to cancel $ 10.0 million aggregate principal amount of 2026 Notes pursuant to the Note Conversion Agreements, we recognize the full reduction of the $ 10.0 million at June 30, 2025 from the 2026 Notes balance.

Accordingly, the Equitization Transaction resulted in us initially recording a share-settled liability.

As of June 30, 2025, we cancelled $ 3.3 million of this liability, reflecting equitization of the first tranche under the Note Conversion Agreements.

The amount outstanding on the 2029 Notes is as follows:

(In thousands)

Principal amount

Unamortized debt discount, net of issuance costs

Fair value of embedded derivative

Total unsecured convertible senior notes, net

Fair value of outstanding unsecured convertible senior notes (1)

The fair value is classified as a Level 2 liability due to the limited trading activity for the 2029 Notes.

This balance reflects the fair value of the 2029 Notes based on quoted prices in an over-the counter market using the most recent trading information at the end of the reporting period.

The following table sets forth interest expense recognized related to the 2029 Notes:

Three and Six Months Ended

(In thousands)

Contractual interest expense

Amortization of debt discount and issuance costs

Total interest expense

2024 Secured Term Loan

On June 3, 2024, we entered into a Credit Agreement with the Lenders, pursuant to which we have a Term Loan of $ 67.1 million.

The Credit Agreement also provides for a Delayed Draw Term Loan of $ 25.0 million conditioned on the receipt of FDA approval of narsoplimab for TA-TMA within 30 days of a draw notice delivered no later than June 3, 2025, but we do not expect to meet this condition based on the September 25, 2025 target date for FDA action on our narsoplimab BLA.

At any time prior to November 1, 2025, the Company, at its sole discretion, may exchange up to $ 14.9 million aggregate principal amount of outstanding 2026 Notes for cash and/or additional term loan amounts, with the holders of such notes becoming Lenders under the Credit Agreement (any such additional term loans, together with the Term Loan and the Delayed Draw Term Loan, the “Loans”).

As of May 15, 2025, no such additional exchanges for additional term loans have occurred.

On June 3, 2024, we entered into a Credit Agreement with the Lenders, pursuant to which we have an outstanding Term Loan of $ 67.1 million.

The Credit Agreement provides that, at any time prior to November 1, 2025, the Company, at its sole discretion, may exchange up to $ 14.9 million aggregate principal amount of outstanding 2026 Notes for cash and/or additional Term Loan amounts, with the holders of such notes becoming Lenders under the Credit Agreement.

As of August 14, 2025, no such additional exchanges for additional Term Loans have occurred.

All indebtedness under the Credit Agreement is secured by a first-priority security interest in and lien on substantially all our tangible and intangible property, subject to customary exceptions, and excluding royalty interests in OMIDRIA and certain related rights.

In connection with our entry into the Credit Agreement, we used the Term Loan along with $ 21.7 million of cash on hand to repurchase $ 118.1 million aggregate principal amount of the 2026 Notes held by the Lenders.

In connection with our entry into the Credit Agreement, we used the Term Loan proceeds along with $ 21.7 million of cash on hand to repurchase $ 118.1 million aggregate principal amount of the 2026 Notes held by the Lenders.

The total consideration paid at closing of $ 88.8 million represented a purchase price equal to approximately 75 % of the par value of the 2026 Notes retired in the transaction.

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Unamortized debt premium, net of issuance costs and other

Fair value of embedded derivative

Total term debt, net

The Loans have a stated maturity date of June 3, 2028 and bear interest at an adjusted secured overnight financing rate (“adjusted SOFR”), subject to a 3.00 % floor, plus 8.75 % per annum, payable quarterly from the closing date.

As of March 31, 2025, the contractual interest rate on the Loans was 13.17 %.

The Term Loan has a stated maturity date of June 3, 2028 and bears interest at an adjusted secured overnight financing rate (“adjusted SOFR”), subject to a 3.00 % floor, plus 8.75 % per annum, payable quarterly from the Closing Date.

As of June 30, 2025, the contractual interest rate on the Term Loan was 13.17 %.

We have the option to pay all of the interest in cash or to pay 50 % in cash and pay-in-kind (“PIK”), the remaining interest.

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The following table sets forth interest expense recognized related to the Term Loan:

Three Months Ended

Six Months Ended

(In thousands)

Contractual interest expense

Amortization of debt issuance costs

Amortization of debt premium and issuance costs

Total interest expense

We may elect to prepay the Loans, in whole or in part, in cash, plus an applicable prepayment and/or make-whole premium.

We may elect to prepay the Term Loan, in whole or in part, in cash, plus an applicable prepayment and/or make-whole premium.

Under certain circumstances, we are required to prepay all or a portion of the outstanding Loans, plus an applicable prepayment and/or make-whole premium, as described below.

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As a result of the Convertible Note Exchange completed on May 14, 2025, the prepayment requirement is no longer applicable because the outstanding principal amount under the 2026 Notes was reduced below $ 38.5 million.

As a result, the accompanying condensed consolidated balance sheet as of March 31, 2025 reflects the entire Term Loan balance of $ 67.1 million as a long-term liability.

(2) Upon the occurrence of a change in control, we must prepay the entire outstanding amount of the Loans, plus the applicable make-whole or prepayment premium.

(3) We must prepay the Loans in an amount equal to:

As a result, the accompanying condensed consolidated balance sheet as of June 30, 2025 reflects the entire Term Loan as a long-term liability.

(2) Upon the occurrence of a change in control, we must prepay the entire outstanding amount of the Term Loan, plus the applicable make-whole or prepayment premium.

(3) We must prepay the outstanding Term Loan in an amount equal to:

(i) 25.0 % of any milestone payments received from DRI or its affiliates on the basis of net sales of OMIDRIA;

(ii) 60.0 % of the net cash proceeds (excluding transaction expenses and certain milestone payments) received by Omeros from the sale or license of our assets (or in the case of an asset sale or license involving narsoplimab that occurs while any Delayed Draw Term Loan is outstanding, an amount equal to 100 % of the net cash proceeds from such transaction);

(ii) 60.0 % of the net cash proceeds (excluding transaction expenses and certain milestone payments) received by Omeros from the sale or license of our assets;

(iii) 100.0 % of net cash proceeds of indebtedness incurred by the Company other than as permitted by the Credit Agreement;

and (iv) 100.0 % of the net cash proceeds of insurance recoveries on loss of property, except to the extent utilized to repair or replace the relevant assets within a specified time.

Voluntary and mandatory prepayments of the Loans are subject to payment of the following premiums:

(i) during the first year of such Loans, a make-whole premium plus 5.0 % of the applicable prepayment amount (unless the prepayment is made in contemplation of a change of control, in which case only the make-whole premium would be payable);

Voluntary and mandatory prepayments of the Term Loan are subject to payment of the following premiums:

(i) during the first year of such amounts are outstanding under the Term Loan, a make-whole premium plus 5.0 % of the applicable prepayment amount (unless the prepayment is made in contemplation of a change of control, in which case only the make-whole premium would be payable);

(ii) during the second year, a prepayment premium equal to 5.0 % of the applicable prepayment amount;

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(i) an initial amount not exceeding $ 25.0 million, which may be increased by up to an additional $ 10.0 million subject to the satisfaction of certain conditions;

(ii) an unlimited amount, if the amount of the Loans outstanding at the time of repurchase does not exceed $ 38.5 million;

and (iii) an additional amount not to exceed 50 % of the net cash proceeds from an equity offering, provided that the Company offers to prepay an equal amount of the Loans with the net cash proceeds of such offering.

As of March 31, 2025, the Company was in compliance with the covenants under the Credit Agreement.

After review of the customary default provisions, affirmative and negative covenants, and voluntary and mandatory prepayment options, this resulted in a net derivative asset that was not significant as of March 31, 2025.

A default under the Credit Agreement that results in the outstanding debt thereunder being declared due and payable prior to the stated maturity would constitute a cross-default under the indenture governing the 2026 Notes.

In such an event, the principal and all accrued and unpaid interest on the 2026 Notes may be declared immediately due and payable either by the trustee under the indenture, or by holders of at least 25 % of the aggregate principal amount of the 2026 Notes outstanding.

The fair value of the Loans is classified as a Level 3 liability.

As of March 31, 2025 and December 31, 2024, the approximate fair value of our Loan obligations was $ 70.2 million and $ 69.5 million, respectively.

(ii) an unlimited amount, if the amount of the outstanding Term Loan at the time of repurchase does not exceed $ 38.5 million;

and (iii) an additional amount not to exceed 50 % of the net cash proceeds from an equity offering, provided that the Company offers to prepay an equal amount of the Term Loan with the net cash proceeds of such offering.

As of June 30, 2025 and through the date of issuance of these condensed consolidated financial statements, the Company was in compliance with the covenants under the Credit Agreement.

In such an event, the principal and all accrued and unpaid interest on the 2026 Notes and the 2029 Notes may be declared immediately due and payable either by the trustee under the applicable indenture, or by holders of at least 25 % of the aggregate outstanding principal amounts of the 2026 Notes and the 2029 Notes, respectively.

The fair value of the Term Loan is classified as a Level 3 liability.

As of June 30, 2025 and December 31, 2024, the approximate fair value of our Term Loan obligations was $ 69.9 million and $ 69.5 million, respectively.

We determined the fair market value by discounting the future cash flows based on adjusted SOFR at each measurement date.

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On May 14, 2025, we completed the Convertible Note Exchange in which we exchanged $ 70.8 million in aggregate principal of our 2026 Notes for a like principal amount of our 2029 Notes.

The Convertible Note Exchange reduced the principal balance of our 2026 Notes from $ 97.9 million to $ 27.1 million.

In addition, on May 12, 2025, we entered into the Equitization Transaction, which will result in conversion of an additional $ 10.0 million aggregate principal amount of our 2026 Notes into shares of the Company's common stock, to be delivered in three approximately equal tranches on or prior to September 15, 2025.

Amounts outstanding on our 2026 Notes as of March 31, 2025 and December 31, 2024 are as follows:

On May 12, 2025, we entered into the Equitization Transaction, which resulted in the conversion of an additional $ 10.0 million aggregate principal amount of 2026 Notes into shares of our common stock, to be delivered in three approximately equal tranches on or prior to September 15, 2025.

As of June 30, 2025, we recorded a $ 7.6 million share-settled liability reflecting the unsettled shares still to be issued.

The principal balance of our 2026 Notes was reduced from $ 97.9 million to $ 17.1 million as a result of the Convertible Note Exchange and Equitization Transaction.

Amounts outstanding on our 2026 Notes as of June 30, 2025 and December 31, 2024 are as follows:

(In thousands)

Principal amount not subject to the Convertible Note Exchange

Unamortized debt issuance costs

Total 2026 Notes, net, classified as current

Principal amount subject to the Convertible Note Exchange

Principal amount

Unamortized debt issuance costs

Total 2026 Notes, net, classified as noncurrent

Total unsecured convertible senior notes, net

Fair value of outstanding unsecured convertible senior notes (1)

The fair value is classified as Level 2 liability due to the limited trading activity for the unsecured convertible senior notes.

The fair value is classified as Level 2 liability due to the limited trading activity for the 2026 Notes.

This balance reflects the fair value of the 2026 Notes based on quoted prices in an over-the counter market using the most recent trading information at the end of the reporting period.

The value of the conversion feature of the 2026 Notes is not deemed to be significant as the current market price of our common stock is below the initial conversion price of $ 18.49 per share of common stock.

Unamortized debt issuance costs represent an allocation of the $ 0.5 million of debt issuance costs under the original 2026 Notes as of March 31, 2025.

The Equitization Transaction resulted in us initially recording a share-settled liability.

As of June 30, 2025, we cancelled $ 3.3 million of this liability at the time of initial settlement of the first tranche.

Unamortized debt issuance costs represent an allocation of the $ 0.1 million of debt issuance costs under the original 2026 Notes as of June 30, 2025.

We have amortized interest expense on the 2026 Notes at an effective interest rate of 5.89 %.

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Three Months Ended

Six Months Ended

(In thousands)

Contractual interest expense

Amortization of debt issuance costs

Amortization of debt discount and issuance costs

Total interest expense

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We will settle any conversions by paying or delivering, as applicable, cash, shares of our common stock or a combination of cash and shares of our common stock, at our election, based on the applicable conversion rate(s).

Subject to the satisfaction of certain conditions, we may redeem in whole or in part the 2026 Notes at our option beginning August 15, 2023 through the 50 th scheduled trading day immediately before the maturity date at a cash redemption price equal to the principal amount of the 2026 Notes to be redeemed plus any accrued and unpaid interest.

Subject to the satisfaction of certain conditions, we may redeem in whole or in part the 2026 Notes at our option through the 50 th scheduled trading day immediately before the maturity date at a cash redemption price equal to the principal amount of the 2026 Notes to be redeemed plus any accrued and unpaid interest.

The 2026 Notes are subject to redemption only if certain requirements are satisfied, including that the last reported sale price per share of our common stock exceeds 130 % of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date we send the related redemption notice and (ii) the trading day immediately before the date we send such notice.

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The amount paid for the 2026 Capped Call was recorded as a reduction to additional paid-in capital in the condensed consolidated balance sheet.

As of March 31, 2025, approximately 12.2 million shares remained outstanding under the 2026 Capped Call.

As of June 30, 2025, approximately 12.2 million shares remained outstanding under the 2026 Capped Call.

We also retain all potential future value of the capped call purchased in connection with the issuance of the 2026 Notes covering all shares underlying the original 2026 Notes.

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Minimum Commitments

As of March 31, 2025, the most probable principal payments on our convertible notes and the Term Loan are as follows and reflects the impact of refinancing our 2026 Notes from short-term to long-term:

As of June 30, 2025, the most probable principal payments on our 2026 Notes, Term Loan and 2029 Notes are as follows:

(In thousands)

1 unchanged sentence

Total principal payments

Unamortized premiums, discounts, issuance costs and other

Net unamortized premiums, discounts, derivatives and issuance costs

Carrying value of debt

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Three Months Ended

Six Months Ended

(In thousands)

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Remeasurement adjustments

Other loss, net

Other income (loss), net

Ex-US royalties

Net income from discontinued operations, net of tax

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Remeasurement adjustments

OMIDRIA contract royalty asset at March 31, 2025

OMIDRIA contract royalty asset at June 30, 2025

We remeasure the OMIDRIA contract royalty asset on a quarterly basis using the expected value approach, which incorporates actual results and future expectations.

Cash flow from discontinued operations is as follows:

Three Months Ended

Six Months Ended

(In thousands)

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DRI was entitled to receive royalties on OMIDRIA net sales between September 1, 2022 and December 31, 2030, subject to annual caps.

In February 2024, Omeros and DRI expanded their royalty purchase agreement under the Amendment, resulting the elimination of previously existing annual caps on royalty payments and Omeros receiving an additional $ 115.5 million in cash consideration, which we accounted for as a modification of our existing debt from DRI.

In February 2024, Omeros and DRI expanded their royalty purchase agreement under the Amendment, resulting in the elimination of previously existing annual caps on royalty payments and Omeros receiving an additional $ 115.5 million in cash consideration, which we accounted for as a modification of our existing debt from DRI.

All royalties earned on OMIDRIA sales within the U.S.

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We retain the right to receive all royalties payable by Rayner on any U.S.

net sales of OMIDRIA after December 31, 2031 and all royalties on global net sales of OMIDRIA from and after December 31, 2031.

net sales of OMIDRIA after December 31, 2031 and on all royalties on global net sales of OMIDRIA payable from and after December 31, 2031.

To date, international royalties have not been significant.

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We are also entitled to receive a milestone payment ranging between $ 10.0 million and $ 27.5 million if U.S.

net sales of OMIDRIA reach applicable thresholds ranging between a total of $ 156.0 million and $ 160.0 million for any period of four consecutive quarters prior to January 1, 2026.

net sales of OMIDRIA reach applicable thresholds ranging between a total of $ 156.0 million and $ 160.0 million in the aggregate for any period of four consecutive quarters prior to January 1, 2026.

We do not expect to receive this milestone payment.

In addition, we are entitled to receive a separate milestone payment ranging between $ 8.0 million and $ 27.5 million if U.S.

net sales of OMIDRIA reach applicable thresholds ranging between a total of $ 181.0 million and $ 185.0 million for any period of four consecutive quarters prior to January 1, 2028.

The changes in the OMIDRIA royalty obligation during the three months ended March 31, 2025 are as follows (in thousands):

net sales of OMIDRIA reach applicable thresholds ranging between a total of $ 181.0 million and $ 185.0 million in the aggregate for any period of four consecutive quarters prior to January 1, 2028.

The changes in the OMIDRIA royalty obligation during the six months ended June 30, 2025 are as follows (in thousands):

Balance at December 31, 2024

Non-cash interest

Remeasurement on the OMIDRIA royalty obligation

Principal payments

Balance at March 31, 2025

Balance at June 30, 2025

The OMIDRIA royalty obligation is classified as a Level 3 liability as its valuation requires substantial judgment and estimation of factors that are not currently observable in the market.

The fair value of the OMIDRIA royalty obligation is determined by calculating the net present value of our estimated future OMIDRIA cash flows using the interest rate at inception of our royalty purchase agreement with DRI, adjusted for the change in the prime rate through the measurement date.

As of March 31, 2025 and December 31, 2024, the approximate fair value of our obligation was $ 204.9 million and $ 209.7 million, respectively .

For the three months ended March 31, 2025 and 2024, we incurred interest expense of $ 1.8 million and $ 5.0 million, respectively.

As of March 31, 2025, the expected scheduled principal and interest payments (based on an implied effective interest rate of 10.27 %) are as follows:

As of June 30, 2025 and December 31, 2024, the approximate fair value of our obligation was $ 191.9 million and $ 209.7 million, respectively .

Interest expense is comprised of the effective interest component of any cash payment remitted through an administrative agent to DRI, based on an implied effective interest rate of 10.27 %, and any remeasurement adjustments taken during the period.

Remeasurements are non-cash adjustments to the OMIDRIA royalty obligation reflecting changes in forecasted cash flows stemming from the OMIDRIA contract royalty asset.

For the three and six months ended June 30, 2025 and 2024, interest expense is as follows:

Three Months Ended

Six Months Ended

(In thousands)

Pass through interest remitted through administrative agent

Non-cash remeasurement adjustment

Interest (income)/expense on OMIDRIA royalty obligation

As of June 30, 2025, the expected scheduled principal and interest payments are as follows:

(In thousands)

2029 and thereafter

Total scheduled payments

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Three Months Ended

Six Months Ended

(In thousands)

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The supplemental cash flow information related to leases is as follows:

Three Months Ended

Six Months Ended

(In thousands)

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Good and Service Contracts

We have various agreements with third parties that collectively require payment of termination fees totaling $ 4.4 million as of March 31, 2025 if we cancel the work within specific time frames, either prior to commencing or during performance of the contracted services.

We have various agreements with third parties that collectively require payment of termination fees totaling $ 3.9 million as of June 30, 2025 if we cancel the work within specific time frames, either prior to commencing or during performance of the contracted services.

Development Milestones and Product Royalties

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Some of these agreements require milestone payments based on achievements of development, regulatory or sales milestones, and/or low-single to low-double digit royalties on net income or net sales of the relevant product.

For the three months ended March 31, 2025 and 2024, development milestone expenses were not significant.

For the three and six months ended June 30, 2025 and 2024, development milestone expenses were not significant.

Note 11 — Shareholders ’ Deficit

At-the-Market Sales Agreement - We have a sales agreement to sell shares of our common stock having an aggregate offering price of up to $ 150.0 million, from time to time, through an ATM equity offering program.

Subsequent to March 31, 2025, we sold 0.5 million shares of common stock pursuant to our ATM program, generating net proceeds of $ 3.5 million at an average price per share of $ 6.94 .

During the six months ended June 30, 2025, we sold 1.4 million shares of common stock pursuant to our ATM program, generating net proceeds of $ 6.4 million at an average price per share of $ 4.55 .

Subsequent to June 30, 2025, we sold 0.7 million shares of common stock, generating net proceeds of $ 2.1 million at an average price per share of $ 3.14 .

Share Repurchase Program - On November 9, 2023, the Board of Directors approved a share repurchase program under which we were permitted to repurchase from time to time up to $ 50.0 million of our common stock in the open market or through privately negotiated transactions.

From inception through its termination in June 2024, we repurchased and retired 5.0 million shares at an average price of $ 3.30 per share.

During the first quarter of 2024, we repurchased and retired 3.2 million shares of common stock at an average share price of $ 3.71 at an aggregate cost of $ 11.9 million.

During the six months ended June 30, 2024, we repurchased and retired 3.2 million shares of common stock for an average price per share of $ 3.71 at an aggregate cost of $ 11.9 million.

The terms of the Credit Agreement prohibit us from repurchasing our common stock unless expressly agreed to by the Lenders.

Consequently, the Board of Directors terminated the share repurchase program effective upon the execution of the Credit Agreement.

Equitization Transaction - On May 12, 2025, we entered into the Note Conversion Agreements with two affiliated holders of the 2026 Notes to convert $ 10.0 million aggregate principal amount of 2026 Notes into shares of our common stock to be delivered in three approximately equal tranches.

As of June 30, 2025, we delivered 539,320 shares of the first tranche under this agreement and recorded a $ 7.6 million share-settled liability in our condensed consolidated balance sheet representing the remaining liability owed to the two affiliate holders.

(For further details, see “Note 6 – Debt”).

Share issuances subsequent to June 30, 2025 through August 14, 2025 are shown below:

Number of Shares

Final settlement

July 15, 2025

Initial settlement

July 11, 2025

Final settlement

August 11, 2025

Initial settlement

August 11, 2025

With respect to final settlement of Tranche 3, we will issue a number of shares to be determined based on the 20 -day VWAP applicable at the final settlement date (subject to a floor conversion price of $ 2.50 ), less the initial settled shares listed above.

The Note Conversion Agreements provide that the final settlement with respect to Tranche 3 will occur no later than September 15, 2025.

(For further details refer to “Note 6 – Debt”).

Registered Direct Offering - On July 28, 2025, we issued and sold to Polar 5,365,853 shares of our common stock at a price of $ 4.10 per share, representing a 14 % premium to the closing OMER stock price on the day of pricing, in a registered direct offering.

We received approximately $ 20.6 million in cash proceeds net of offering expenses.

Note 12 — Stock-Based Compensation

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Three Months Ended

Six Months Ended

(In thousands)

Continuing operations

Research and development

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Three Months Ended

March 31, 2025

Six Months Ended

June 30, 2025

Estimated weighted-average fair value

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Balance at December 31, 2024

Balance at March 31, 2025

Vested and expected to vest at March 31, 2025

Exercisable at March 31, 2025

Of the 16.6 million common stock options outstanding as of March 31, 2025, 8.2 million have an exercise price per share above $ 8.22 , which was the closing price of our stock on the Nasdaq exchange on March 31, 2025.

As of March 31, 2025, there were 4.8 million unvested options outstanding that will vest over a weighted-average period of 2.4 years.

Balance at June 30, 2025

Vested and expected to vest at June 30, 2025

Exercisable at June 30, 2025

On June 30, 2025, annual stock options grants of approximately 3.1 million shares of common stock were awarded to eligible participants for the 2024 annual performance period under the 2017 Omnibus Incentive Compensation Plan.

Of the 19.7 million common stock options outstanding as of June 30, 2025, 16.9 million shares have an exercise price per share above $ 3.00 , which was the closing price of our stock on the Nasdaq exchange on June 30, 2025.

As of June 30, 2025, there were 7.2 million unvested options outstanding that will vest over a weighted-average period of 2.8 years.

The total estimated compensation expense yet to be recognized on outstanding options is $ 16.2 million.

As of March 31, 2025, the total number of shares of common stock available for grant was 6.9 million.

As of June 30, 2025, the total number of shares of common stock available for grant was 3.8 million.

MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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The lead product candidate in our pipeline of complement-targeted therapeutics is narsoplimab (OMS721), a proprietary, patented human monoclonal antibody targeting MASP-2, the key activator of the lectin pathway of complement.

In March 2025, we resubmitted to FDA a BLA seeking regulatory approval for narsoplimab in TA-TMA.

As with any BLA or new drug application, there can be no guarantee that FDA will complete its review within a given timeframe, or that our BLA will ultimately be approved.

We also preparing a European marketing authorization application (MAA) for narsoplimab in TA-TMA, which is targeted for submission to the European Medicines Agency during the second quarter of 2025.

Development efforts in our narsoplimab program have also been directed to COVID-19, acute respiratory distress syndrome and post-acute sequelae SARS-CoV-2, commonly known as long COVID.

As previously disclosed, in March 2025, the Company resubmitted to U.S.

Food and Drug Administration (“FDA”) the biologics license application (“BLA”) seeking regulatory approval for narsoplimab in hematopoietic stem cell transplant-associated thrombotic microangiopathy (“TA-TMA”).

The resubmission was accepted for review by FDA as a class 2 resubmission and, pursuant to the Prescription Drug User Fee Act (“PDUFA”), was assigned an initial target action date for the FDA decision of September 25, 2025.

Following the submission of information in response to an information request from FDA, FDA informed us that the PDUFA date will be extended to December 26, 2025.

In addition, FDA has stated that, assuming no major deficiencies are identified during its review, labeling discussions are planned to begin no later than October 2025.

In June 2025, we submitted a Marketing Authorization Application (“MAA”) for narsoplimab for the treatment of TA-TMA in the European Union.

The European Medicines Agency (“EMA”) completed validation of the narsoplimab MAA, which confirms that the submission is accepted and starts the formal review process by EMA’s Committee for Medicinal Products for Human Use.

We expect an opinion on the MAA in mid-2026.

As with any BLA or MAA, there can be no guarantee that FDA or the EMA will complete their respective reviews within a given timeframe, or that the Company’s BLA or MAA will ultimately be approved.

Our pipeline also includes OMS1029, our long-acting antibody targeting MASP-2 which we expect will be well-suited to indications requiring long-term, chronic administration.

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however, based on considerations of capital availability and the anticipated ramp up in spending on those trials, we have determined temporarily to pause our Phase 3 clinical development program for zaltenibart in this indication to prioritize the use of our available capital to other programs.

We are working with our vendors and investigators to ensure that these studies can be restarted after securing capital and allocating it to the program with as little disruption to the timeline as possible.

We have worked, and will continue to work, with our vendors and investigators to ensure that these studies can be restarted after securing capital and allocating it to the program with as little disruption to the timeline as possible.

PDE7 Inhibitor Programs

In April 2023, we were awarded a grant from the National Institute on Drug Abuse, part of the National Institutes of Health, to develop our lead orally administered PDE7 inhibitor compound, for which we have successfully completed a Phase 1 study, for the treatment of cocaine use disorder (“CUD”).

With NIDA funding, we successfully completed preclinical cocaine interaction/toxicology studies to assess safety of the OMS527 compound when co-administered with cocaine.

Based on the successful outcome of the preclinical studies, we have initiated, and NIDA has confirmed availability of grant funding for, an in-patient, placebo-controlled clinical study evaluating the safety and effectiveness of OMS527 in adults with CUD who receive concurrent intravenous cocaine.

Organizational and regulatory activities necessary to begin the study evaluating OMS527 in adult patients with CUD is in progress with enrollment expected to begin in 2025 and data anticipated to become available late this year or early 2026.

In April 2023, we were awarded a grant from the National Institute on Drug Abuse (“NIDA”), part of the National Institutes of Health, to develop our lead orally administered PDE7 inhibitor compound for the treatment of cocaine use disorder.

NIDA awarded the grant to us for a total of $6.24 million over three years, of which we have claimed and received $1.5 million of funding to date.

The grant is intended to support preclinical cocaine interaction/toxicology studies to assess safety of the therapeutic candidate in the presence of concomitant cocaine administration, as well as an in-patient, placebo-controlled clinical study evaluating the safety and effectiveness of OMS527 in adult cocaine users who receive concurrent intravenous cocaine.

FDA has requested that we provide additional preclinical information prior to initiating the clinical in-patient study in cocaine users, which we are targeting for the first part of 2026.

Preclinical Programs - Oncology Platform

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We continue on a limited basis to progress pre-clinical studies within our novel oncology program, including IND-enabling studies in our program to develop novel, proprietary large molecule therapeutics designed to target and kill only dividing cancer cells.

Acute myeloid leukemia (“AML”) is the lead indication for development in this program, which we refer to as OncotoX-AML.

In preclinical models both in vivo and in vitro , our potential AML therapeutic has consistently demonstrated superior efficacy to current AML standard of care treatments and has been well-tolerated in preliminary, preclinical tolerability studies.

Our OncotoX-AML therapeutic also shows broad potential application across AML regardless of genetic mutation, including TP53, NPM1, KMT2a and FLT3.

In April 2025, we established the Omeros Oncology Clinical Steering Committee to help advance our OncotoX-AML program.

Acute myeloid leukemia (“AML”) is the lead indication for development in this program, which we refer to as O ncoto X-AML.

In preclinical models both in vivo – in immunocompromised mice with human tumors – and in vitro , our potential AML therapeutic has consistently demonstrated superior efficacy to current AML standard of care treatments and has been well-tolerated in preliminary, preclinical tolerability studies.

Our O ncoto X-AML therapeutic also shows broad potential application across AML regardless of genetic mutation, including TP53, NPM1, KMT2A, and FLT3.

In April 2025, we established the Omeros Oncology Clinical Steering Committee to help advance our O ncoto X-AML program.

The clinical steering committee is composed of leaders in AML treatment and research at the premier cancer centers across the United States.

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We continue to confirm our results and to generate new data which we expect will contribute to our intellectual property position.

OMIDRIA Sale and Royalty Monetization Transactions

We previously developed and commercialized OMIDRIA® (phenylephrine and ketorolac intraocular solutions) 1%/0.3%, which is approved by FDA for use during cataract surgery or intraocular lens replacement to maintain pupil size by preventing intraoperative miosis (pupil constriction) and to reduce postoperative ocular pain.

We marketed OMIDRIA in the U.S.

from the time of its commercial launch in 2015 until December 2021.

On December 23, 2021, we closed an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Rayner Surgical Inc.

(“Rayner”) for the sale of OMIDRIA and related business assets.

As contemplated by the Asset Purchase Agreement, in December 2022, we achieved a milestone event upon the establishment of separate payment for OMIDRIA for a continuous period of at least four years when furnished in the ambulatory surgery center setting.

The achievement of this milestone event resulted in a reduction of our royalty rate applicable to U.S.

net sales of OMIDRIA from 50% to 30%.

The 30% royalty rate continues until the expiration or termination of the last issued and unexpired U.S.

patent, which we expect to occur no earlier than 2035.

Upon the occurrence of certain events described in the Asset Purchase Agreement, including during any specific period in which OMIDRIA is no longer eligible for separate payment (i.e., becomes included in the packaged payment rate for the surgical procedure) under Medicare Part B, or in certain circumstances involving entry of generic competition for OMIDRIA, the U.S.

base royalty rate would be further reduced to 10%.

Pursuant to legislation enacted in late 2022, we expect separate payment for OMIDRIA under Medicare Part B to extend until at least January 1, 2028.

As a result of the OMIDRIA divestiture, we recorded an OMIDRIA contract royalty asset on our balance sheet.

The results of OMIDRIA activities are classified as discontinued operations in our condensed consolidated statements of operations and comprehensive income (loss) and excluded from continuing operations for all periods presented.

See “Note 8 — OMIDRIA Royalty Obligation” in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

On September 30, 2022, we sold to DRI Healthcare Acquisition LP (“DRI”) an interest in a portion of our future OMIDRIA royalty receipts for $125.0 million which we recorded as an OMIDRIA royalty obligation in our condensed consolidated balance sheet.

DRI was entitled under that arrangement to receive royalties on OMIDRIA net sales between September 1, 2022 and December 31, 2030, subject to certain annual caps.

On February 1, 2024, we sold an expanded interest in our future OMIDRIA royalties to DRI and received $115.5 million in cash consideration, which we recorded as an addition to the OMIDRIA royalty obligation.

The amended and restated royalty purchase agreement with DRI (the “Amendment”) eliminated the previously existing annual caps on royalty payments after January 1, 2024, and provides that DRI receives all royalties on U.S.

net sales of OMIDRIA payable between January 1, 2024 and December 31, 2031.

In addition to the cash consideration received at closing, the Amendment also entitles us to receive two milestone payments of up to $27.5 million each, payable in January 2026 and January 2028, respectively, based on achievement of certain thresholds for U.S.

net sales of OMIDRIA.

All royalties earned on OMIDRIA sales within the U.S.

through December 31, 2031 are remitted by Rayner to an escrow account established by Omeros, from which payments are made to DRI.

We retain the rights to receive all royalties payable by Rayner on any net sales of OMIDRIA outside the U.S.

as well as royalties on global net sales of OMIDRIA payable from and after December 31, 2031, including royalties on U.S.

OMIDRIA net sales.

To date, international royalties have not been significant.

DRI has no recourse to our assets other than its interest in OMIDRIA royalties.

Interest expense on the OMIDRIA royalty obligation is recorded as a component of continuing operations.

See “Note 8 — OMIDRIA Royalty Obligation” in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

2024 Term Loan and Repurchase of 2026 Notes

On June 3, 2024 (the “Closing Date”), we, with certain subsidiaries, as guarantors, entered into the Credit and Guaranty Agreement (the “Credit Agreement”) with Athyrium Capital Management, LP (collectively, “Athyrium”) and certain funds managed by Highbridge Capital Management, LLC (collectively, “Highbridge”) as lenders (together with additional lenders from time to time, the “Lenders”) and Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent.

The Credit Agreement provides for a senior secured term loan facility initially of up to $92.1 million consisting of (i) the term loan of $67.1 million (the “Term Loan”), which was fully funded on the Closing Date, and (ii) a $25.0 million delayed draw term loan (the “Delayed Draw Term Loan”), which may be drawn once in full upon notice delivered on or prior to June 3, 2025, conditioned on receipt of FDA approval of narsoplimab in TA-TMA within 30 days of the notice.

We do not expect to meet the conditions required to access the Delayed Draw Term Loan based on the September 25, 2025 target date for FDA action assigned to the BLA for narsoplimab.

In 2024, we used the $67.1 million Term Loan, along with $21.7 million of cash on hand to repurchase from the Lenders $118.1 million aggregate principal amount of the Company's existing 5.25% convertible senior notes due on February 15, 2026 (the “2026 Notes”, and such repurchase the “2026 Note Repurchase Transaction”).

The principal amount retired in the 2026 Note Repurchase Transaction represented a 55% reduction of the outstanding principal balance of the 2026 Notes at a purchase price of approximately 75% of par value.

We are permitted under the Credit Agreement to repurchase additional outstanding 2026 Notes for cash in open market or privately negotiated transactions, subject to certain limitations described below.

Additionally, until November 1, 2025, we may at our sole discretion exchange up to $14.9 million aggregate principal amount of outstanding 2026 Notes for cash and additional term loan amounts, with the holders of such notes becoming Lenders under the Credit Agreement (any such additional term loans, together with the Term Loan and the Delayed Draw Term Loan, the “Loans”).

We also retain all potential future value of the capped call purchased in connection with the issuance of the 2026 Notes covering all shares underlying the original 2026 Notes.

On June 3, 2024 (the “Closing Date”), we, with certain subsidiaries, as guarantors, entered into the Credit and Guaranty Agreement (the “Credit Agreement”) with Athyrium Capital Management, LP and certain funds managed by Highbridge Capital Management, LLC, as lenders (together with additional lenders from time to time, the “Lenders”) and Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent.

The Credit Agreement provides for a senior secured term loan facility of $67.1 million (the “Term Loan”), which was fully funded on the Closing Date.

In 2024, we used the $67.1 million Term Loan proceeds, along with $21.7 million of cash on hand to repurchase from the Lenders $118.1 million aggregate principal amount of our existing 5.25% convertible senior notes due on February 15, 2026 (the “2026 Notes”), which resulted in a $51.0 million reduction in our total outstanding debt.

All indebtedness outstanding under the Credit Agreement is guaranteed by certain of our direct and indirect subsidiaries, other than certain foreign subsidiaries that are not material (we and the guarantors, collectively, the “Credit Parties”).

Pursuant to a Pledge and Security Agreement, dated June 3, 2024, the indebtedness under the Credit Agreement is secured by a first-priority security interest in and lien on substantially all tangible and intangible property of the Credit Parties, subject to customary exceptions, and excluding royalty interests in OMIDRIA and certain related rights.

The Credit Agreement contains certain customary default provisions, representations and warranties and affirmative and negative covenants, including a covenant for the Credit Parties to maintain at all times unrestricted cash, cash equivalents and short-term investments of at least $25.0 million in accounts subject to control agreements, and a covenant limiting the use of cash for open market or privately negotiated repurchases of any outstanding 2026 Notes to:

(i) an initial amount not exceeding $25.0 million, which may be increased by up to an additional $10.0 million subject to the satisfaction of certain conditions;

(ii) an unlimited amount, if the amount of Loans outstanding at the time of repurchase does not exceed $38.5 million;

and (iii) an additional amount not to exceed 50% of the net cash proceeds from an equity offering, provided that we offer to prepay an equal amount of Loans with the net cash proceeds of such offering.

The Loans accrue interest at an adjusted term secured overnight financing rate, (“adjusted term SOFR”) (with a 3.00% floor) plus 8.75% per annum, payable quarterly.

As of March 31, 2025, the contractual interest rate on the Term Loan was 13.17%.

Additionally, until November 1, 2025, we may at our sole discretion exchange up to $14.9 million aggregate principal amount of outstanding 2026 Notes for cash and additional Term Loan amounts, with the holders of such notes becoming Lenders under the Credit Agreement.

Amounts outstanding under the Term Loan accrues interest at an adjusted term secured overnight financing rate, (“adjusted term SOFR”) (with a 3.00% floor) plus 8.75% per annum, payable quarterly.

As of June 30, 2025, the contractual interest rate on the Term Loan was 13.17%.

We may choose to pay up to 50% of any quarterly interest payment in kind by adding the portion of such interest payment to the outstanding principal amount of Loans using a quarterly interest rate of adjusted term SOFR (with a 3.00% floor) plus 10.25% per annum.

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The Credit Agreement has a scheduled maturity date of June 3, 2028.

We may elect to prepay Loans, in whole or in part, in cash, subject to (i) during the first year of such Loans, a make-whole premium plus 5.00% of the aggregate principal amount of Loans subject to prepayment (unless the prepayment is made in contemplation of a change of control, in which case only the make-whole premium would be payable);

We may elect to prepay the Term Loan, in whole or in part, in cash, subject to (i) during the first year amounts are outstanding under the Term Loan, a make-whole premium plus 5.00% of the aggregate principal amount of the Term Loan balance subject to prepayment (unless the prepayment is made in contemplation of a change of control, in which case only the make-whole premium would be payable);

(ii) during the second year, a 5.00% prepayment premium;

and (iii) during the third year, a 3.00% prepayment premium.

The Credit Agreement requires mandatory prepayments of Loans in an amount equal to 60% of the net cash proceeds (excluding research and development and certain other milestone payments) received by the Credit Parties from asset sales and licenses.

The Credit Agreement requires mandatory prepayments of outstanding Term Loans in an amount equal to 60% of the net cash proceeds (excluding research and development and certain other milestone payments) received by the Credit Parties from asset sales and licenses.

Mandatory prepayments are also required:

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Convertible Note Exchange and Equitization Transaction

In May 2025, we completed the exchange of $70.8 million of our 2026 Notes on a one-for-one basis for newly issued convertible senior notes maturing on June 15, 2029 (the “Convertible Note Exchange”).

In addition, the Company entered into note conversion agreements (each, a “Note Conversion Agreement”) with two affiliated holders of the 2026 Notes to convert $10.0 million aggregate principal amount of 2026 Notes into shares of the Company’s common stock (the “Equitization Transaction”).

Under the terms of the Note Conversion Agreements, the holders will convert the principal amount of the 2026 Notes in three equal tranches for a number of shares of common stock to be determined based in part on the closing price of the Company’s common stock on May 9, 2025 and in part based on the 20-day volume-weighted average price applicable to each tranche conversion date, subject to a floor conversion price.

The Note Conversion Agreements provide that conversion of the entire $10.0 million principal amount of 2026 Notes will be completed no later than September 15, 2025.

The Convertible Note Exchange reduced the aggregate principal balance of our 2026 Notes from $97.9 million to $27.1 million.

Upon completion of the Equitization Transaction, the aggregate principal balance of our 2026 Notes will have been further reduced from $27.1 million to $17.1 million.

As a result of the reduced principal balance of the 2026 Notes, the Company will no longer be required to make a $20.0 million prepayment of the Term Loan outstanding under the Credit Agreement.

The prepayment otherwise would have been required to be paid in November 2025 to avoid accelerated maturity of the entire Term Loan balance.

See “Note 6 — Debt” in the Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

On May 14, 2025, we completed with a limited number of holders of the 2026 Notes the exchange (the “Convertible Note Exchange”) of $70.8 million aggregate principal amount of our 2026 Notes on a one-for-one basis for newly issued convertible senior notes maturing on June 15, 2029 (the “2029 Notes”).

On May 12, 2025, the Company entered into note conversion agreements (each, a “Note Conversion Agreement”) with two affiliated holders of the 2026 Notes to convert $10.0 million aggregate principal amount of 2026 Notes into shares of the Company’s common stock (the “Equitization Transaction”).

Under the terms of the Note Conversion Agreements, the holders agreed to convert the equitized principal amount of the 2026 Notes in three tranches for a number of shares of common stock to be determined based in part on the closing price of the Company’s common stock on May 9, 2025 and in part based on the 20-day volume-weighted average price applicable to each tranche conversion date, subject to a floor conversion price.

As of the date of this report, $10.0 million aggregate principal amount of 2026 Notes have been converted and retired and we have issued an aggregate of 2,535,875 shares of common stock.

The Note Conversion Agreements provide that the final settlement for the third tranche of notes will occur no later than September 15, 2025.

The aggregate principal balance of our 2026 Notes was reduced from $97.9 million to $17.1 million as a result of the Convertible Note Exchange and Equitization Transaction.

No new cash was received as a result of these transactions.

As a result of the reduced principal balance of the 2026 Notes, the Company will no longer be required to make a $20.0 million prepayment of the Term Loan outstanding under the Credit Agreement which otherwise would have been required to be paid in November 2025 to avoid accelerated maturity of the entire Term Loan balance.

We retain all potential future value of up to $92.6 million of the capped call purchased in connection with the issuance of the 2026 Notes covering all shares underlying the aggregate principal amount of 2026 Notes issued originally.

See “Note 1 — Organization and Basis of Presentation” and “Note 6 — Debt” in the Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

Financial Summary

As of March 31, 2025, we had cash, cash equivalents and short-term investments of $52.4 million available to fund operations and to service debt.

Our loss for the three months ended March 31, 2025 and 2024 was $33.5 million and $37.2 million, respectively.

For the three months ended March 31, 2025, our cash used in operations was $35.8 million and included a net loss for the year of $33.5 million.

As of June 30, 2025, we had cash, cash equivalents and short-term investments of $28.7 million available to fund operations and to service debt.

For the six months ended June 30, 2025, our cash used in operations was $57.8 million and included a net loss for the six months ended June 30, 2025 of $58.9 million.

On July 28, 2025, we received approximately $20.6 million in cash proceeds net offering expenses from funds managed by Polar Asset Management Partners (collectively, “Polar”) in exchange for 5,365,853 shares of our common stock sold in a registered direct offering at a price of $4.10 per share, representing a 14 percent premium to the closing price of our common stock on the day of pricing.

See “Note 1 — Organization and Basis of Presentation, Liquidity and Capital Resources ” in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

OMIDRIA Sale and Royalty Monetization Transactions

We marketed OMIDRIA in the U.S.

from the time of its commercial launch in 2015 until December 2021.

On December 23, 2021, we closed on an Asset Purchase Agreement (the “Asset Purchase Agreement”) with Rayner Surgical Inc.

(“Rayner”) for the sale of our commercial product OMIDRIA which we recorded as an OMIDRIA contract asset on our condensed consolidated balance sheet.

The results of OMIDRIA activities, which includes royalties earned and the effect of any remeasurement adjustments, are classified as discontinued operations in our condensed consolidated statements of operations and comprehensive loss.

We currently earn royalties from Rayner on all U.S.

based sales through December 31, 2031 at a royalty rate of 30%.

Our royalty rate would be reduced to 10% upon the occurrence of certain events described in the Asset Purchase Agreement, including during any specific period in which OMIDRIA is no longer eligible for separate payment (i.e., becomes included in the packaged payment rate for the surgical procedure) under Medicare Part B, or in certain circumstances involving entry of generic competition for OMIDRIA.

We continue to earn royalties until the expiration or termination of the last issued and unexpired U.S.

patent, which we expect to occur no earlier than 2035.

Pursuant to legislation enacted in late 2022, we also expect separate payment for OMIDRIA under Medicare Part B to extend until at least January 1, 2028.

We have sold to DRI Healthcare Acquisition LP (“DRI”) our future U.S.

based OMIDRIA royalty receipts through December 31, 2031 which we record as an OMIDRIA royalty obligation on our condensed consolidated balance sheet.

based royalties through December 31, 2031 are remitted by Rayner to an escrow account established by Omeros, from which payments are made to DRI.

We retain the rights to receive all ex-U.S.

royalties through December 31, 2031 and royalties on global net sales of OMIDRIA after this date, including royalties on U.S.

OMIDRIA net sales.

Interest expense on the OMIDRIA royalty obligation is recorded as a component of continuing operations.

For further details, see “Note 2 – Significant Accounting Policies, Discontinued Operations and OMIDRIA Royalty Obligations ,” and “Note 8 — OMIDRIA Royalty Obligation” in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

Results of Operations

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Three Months Ended

Six Months Ended

(In thousands)

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MASP-2 program - OMS721 (narsoplimab)

PDE7 program - (NIDA)

MASP-2 program - OMS1029 and other

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Total research and development expenses

For the three months ended March 31, 2025, clinical research and development expenses decreased $3.0 million compared to the prior year quarter primarily due to the winding down of our IgA nephropathy program following analysis of our Phase 3 clinical trial results and reduction in spend on our OMS1029 program.

These costs were offset by increased PNH clinical development costs.

We expect research and development expenses, exclusive of any one-time restructuring expenses, in the second quarter of 2025 to be lower than those in the first quarter of this year due to a pause in our two Phase 3 clinical trials for zaltenibart and reductions in development activities across certain other programs.

For the three months ended June 30, 2025, clinical research and development expenses decreased $22.1 million primarily due to reduced manufacturing expenses of OMS906 by $3.8 million as compared to the prior year quarter and the inclusion in the prior year quarter of $17.6 million related to the release of narsoplimab drug substance batches.

For the six months ended June 30, 2025, clinical research and development expenses decreased $25.1 million primarily due to a $4.7 million reduction in manufacturing expenses associated with our zaltenibart program, a $4.9 million reduction in costs associated with our terminated Phase 3 program evaluating narsoplimab for treatment for immunoglobulin-A nephropathy and the inclusion in the prior year period of $17.6 million of expenses upon delivery of narsoplimab drug substance batches.

These decreases were partially offset by increases in clinical trial costs incurred in connection with our zaltenibart development programs in the current year period.

We expect research and development expenses in the third quarter of 2025 to be lower than those in the second quarter of this year due to the pause in our two Phase 3 clinical trials for zaltenibart and reductions in development activities across certain other programs.

At this time, we are unable to estimate with certainty the longer-term costs we will incur in the continued development of our product candidates due to the inherently unpredictable nature of our preclinical and clinical development activities.

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Three Months Ended

Six Months Ended

(In thousands)

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Total selling, general and administrative expenses

We expect selling, general and administrative expenses, exclusive of any one-time restructuring expenses, in the second quarter of 2025 to be comparable to those in the first quarter of this year.

Total selling, general and administrative expenses, excluding stock-based compensation, decreased by $2.9 million and $3.8 million, respectively, for the three and six months ended June 30, 2025, compared to the same periods in the prior year.

These decreases were primarily due to capitalizing $2.8 million of debt issuance costs as a contra liability under our 2029 Notes related to our Convertible Note Exchange, which occurred in May 2025.

In addition, there were further decreases due to reduced consulting expenses in the current quarter as well as recognition of state tax expense in the prior year period.

We expect selling, general and administrative expenses in the third quarter of 2025 to be comparable to those in the second quarter of this year.

Interest Expense

Interest expense is comprised of contractual cash and accrued interest on our 2026 Notes and Term Loan.

In addition, we record pass through interest on the OMIDRIA royalty obligation, non-cash interest comprised of remeasurement adjustments taken on our OMIDRIA royalty obligation and amortization of debt discount or premiums on our notes and term debt.

Interest expense, net of premiums, discounts, issuance costs and remeasurement adjustments is shown below:

Three Months Ended

Six Months Ended

(In thousands)

Contractual interest expense

Amortization of debt discount and issuance costs

Interest expense on 2026 Notes

OMIDRIA royalty obligation

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Non-cash remeasurement adjustment

Interest expense on OMIDRIA royalty obligation

2024 Term Loan

Interest (income)/expense on OMIDRIA royalty obligation

Contractual interest expense

Amortization of debt discount and issuance costs

Interest expense on 2026 Notes

Contractual interest expense

Amortization of debt premium and issuance costs

Interest expense on Term Loan

Contractual interest expense

Amortization of debt discount and issuance costs

Interest expense on 2029 Notes

Finance leases and other

Total interest expense

Contractual interest expense is comprised of cash interest paid during the year and the net change in accrued interest.

Interest on our OMIDRIA royalty obligation is calculated under the effective interest method and represents a portion of the royalties remitted by Rayner to our administrative agent, Wilmington Savings Fund Society, FSB, along with principal.

Pass through interest paid to DRI is offset by non-cash remeasurement adjustments taken to properly reflect the OMIDRIA royalty obligation for changes in probable cash flows on our future expected Rayner royalties.

Debt discounts on the 2026 Notes are accretive whereas the unrealized gain on the 2026 Note Repurchase Transaction is treated as a premium on the Term Loan and deducted from contractual interest expense.

For the three months ended March 31, 2025, interest expense decreased $4.6 million compared to the same period in 2024.

This decrease was primarily due to (i) non-cash remeasurement costs of our OMIDRIA royalty obligation to reflect the change in the future expected OMIDRIA cash flows from Rayner and (ii) decreased contractual interest expense on our 2026 Notes due to repurchasing $118.1 million of principal amount outstanding (approximately 75% of par value) in the 2026 Note Repurchase Transaction.

These expenses were offset by an increase in pass through interest remitted to DRI through our administrative agent, resulting from DRI purchasing an expanded interest in all U.S.

OMIDRIA royalties through 2031 for $115.5 million in February 2024, which consequentially increased the OMIDRIA royalty obligation by the same amount in the prior year.

Contractual interest expense is comprised of cash interest paid during the year and the net change in accrued interest.

Amortization of debt discounts, premiums, and issuance costs are reflected as non-cash interest expense.

Debt discounts on the 2026 Notes and 2029 Notes are accretive whereas the premium on the Term Loan is deducted from contractual interest expense.

For the three months ended June 30, 2025, interest expense decreased $9.2 million compared to the same period in 2024.

The decrease primarily relates to $9.2 million of non-cash remeasurement costs on our OMIDRIA royalty obligation to reflect the change in the future expected OMIDRIA cash flows from Rayner and a $1.7 million net decrease in interest expense on our 2026 Notes.

The decrease in 2026 Notes interest expense relates to the $118.1 million aggregate principal amount of the 2026 Notes we repurchased in June 2024, the exchange of $70.8 million aggregate principal amount of 2026 Notes for 2029 Notes in May 2025 and cancellation of $3.3 million aggregate principal amount of 2026 Notes upon delivery of shares in June 2025 for the first tranche of the Equitization Transaction.

These decreases were partially offset by a $2.4 million increase in net interest due to incurring a full quarter of interest expense on the Term Loan and due to incurring interest on the 2029 Notes issued in May 2025.

For the six months ended June 30, 2025, interest expense decreased $13.8 million compared to the same period in 2024.

This decrease was primarily due to non-cash remeasurement costs of our OMIDRIA royalty obligation to reflect the change in the future expected OMIDRIA cash flows from Rayner of $13.7 million and decreased contractual interest expense on our 2026 Notes of $3.1 million due to the overall $192.2 million reduction in principal as a result of the repurchase of notes in June 2024 and the exchange of 2026 Notes for 2029 Notes in May 2025.

These expenses were partially offset by increases in interest expense on the Term Loan as we incurred a full six months of interest expense compared to the prior year period and due to incurring new interest on the 2029 Notes issued in May 2025.

For further information see “Note 6 — Debt” and “Note 8 – OMIDRIA Royalty Obligation” in the Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

We expect that interest expense for the second quarter of 2025 will be higher compared to the first quarter, under the assumption that there is no remeasurement adjustment to the OMIDRIA royalty obligation.

We expect that interest expense for the third quarter of 2025 will be higher compared to the second quarter, under the assumption that there is no remeasurement adjustment to the OMIDRIA contract royalty obligation.

Interest and Other Income

Three Months Ended

Six Months Ended

(In thousands)

Interest and other income

Interest and other income decreased $2.4 million for the three months ended March 31, 2025 as compared to the same period in 2024 primarily due to holding a lower average cash and investment balance than in the prior year period.

We expect interest and other income for the second quarter of 2025 to be lower compared to those in the first quarter of this year due to lower average cash and investment balances.

Interest and other income decreased $2.0 million and $4.3 million, respectively, for the three and six months ended June 30, 2025 as compared to the same periods in 2024 primarily due to holding a lower average cash and investment balance than in the prior year period.

We expect interest and other income for the third quarter of 2025 to be comparable to the second quarter of this year.

Loss on early extinguishment of 2026 convertible senior notes

Three Months Ended

Six Months Ended

(In thousands)

Loss on early extinguishment of 2026 convertible senior notes

In May 2025, we exchanged $70.8 million of 2026 Notes for 2029 Notes and entered into agreements to equitize $10.0 million of 2026 Notes, realizing a $3.0 million non-cash loss on extinguishment.

The extinguishment reflects marking-to-market the 2029 Notes and the expensing of capitalized debt issuance costs on the retired portion of the 2026 Notes.

Gain on change in fair value of financial instruments

Three Months Ended

Six Months Ended

(In thousands)

Gain on change in fair value of financial instruments

Prior to June 30, 2025, net embedded derivative assets and liabilities were not significant.

The issuance of our 2029 Notes resulted in an initial $23.0 million embedded derivative which we recorded when the transaction closed on May 14, 2025.

As of June 30, 2025, we remeasured the derivative to fair value.

The gain on change in fair value of financial instruments primarily reflects an $8.0 million remeasurement of the 2029 Notes embedded derivative.

Discontinued operations and the OMIDRIA contract royalty asset

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Three Months Ended

Six Months Ended

(In thousands)

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Remeasurement adjustments

Other loss, net

Other income (loss), net

Ex-US royalties

Net income from discontinued operations, net of tax

Interest is earned on the OMIDRIA contract royalty asset at an implied effective interest rate of 11.0%.

The $2.6 million decrease in net income from discontinued operations is primarily due to lower royalties earned in the first quarter of 2025 compared to the first quarter of 2024, which resulted in a lower remeasurement adjustment.

Net income from discontinued operations decreased $8.6 million and $11.2 million, respectively, for the three and six months ended June 30, 2025 due to remeasurement of the OMIDRIA contract royalty asset.

The decrease was primarily attributable to a remeasurement of our OMIDRIA contract royalty asset to reflect lower forecasted sales of OMIDRIA.

The following schedule presents a roll forward of the OMIDRIA contract royalty asset (in thousands):

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Remeasurement adjustments

OMIDRIA contract royalty asset at March 31, 2025

OMIDRIA contract royalty asset at June 30, 2025

Financial Condition – Liquidity and Capital Resources

As of March 31, 2025, we had cash, cash equivalents and short-term investments of $52.4 million.

For the three months ended March 31, 2025, our cash used in operations was $35.8 million and included a net loss for the quarter of $33.5 million.

Pursuant to a covenant in the Credit Agreement entered on June 3, 2024, we must maintain $25.0 million of unrestricted cash, cash equivalents and short-term investments at all times.

As of June 30, 2025, we had cash, cash equivalents, and short-term investments of $28.7 million.

For the six months ended June 30, 2025, our cash provided by operations was $57.8 million and included a net loss for the period of $58.9 million.

Pursuant to a covenant in the Credit Agreement entered into on June 3, 2024, we must maintain $25.0 million of unrestricted cash, cash equivalents and short-term investments at all times.

We have maintained a balance of unrestricted cash, cash equivalents, and short-term investments greater than $25.0 million and at no time during the quarter or through the date of issuance of these condensed consolidated financial statements have we been in violation of any of our debt covenants.

In recent years, Omeros has incurred net losses from continuing operations and negative cash flows from operations.

The recurring losses, in combination with our cash and investment balances as of March 31, 2025, along with the maturity of our remaining 2026 Notes on February 15, 2026, raise substantial doubt about our ability to continue as a going concern through one year from the issuance of the Company's condensed consolidated financial statements.

On May 12, 2025, we entered into the Equitization Transaction, and on May 14, 2025, we completed the Convertible Note Exchange.

(See “Note 1 — Organization and Basis of Presentation” and “Note 6 — Debt” in the Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for further details.)

On July 28, 2025, we issued and sold to Polar 5,365,853 shares of our common stock sold in a registered direct offering at a price of $4.10 per share, representing a 14 percent premium to the closing price of our common stock on the day of pricing.

We received approximately $20.6 million in cash proceeds net of offering expenses.

As we currently do not have an ongoing source of revenue sufficient to cover our operating costs, we will need to raise additional capital to accomplish our business plan.

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However, pursuing debt financings, certain equity offerings or other strategic transactions may result in mandatory prepayments of the Term Loan to the Credit Agreement.

See “Note 6 — Debt” in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q for further details.

We also have a sales agreement pursuant to an at the market (“ATM”) equity offering facility through which we may, from time to time, offer and sell shares of our common stock equaling an aggregate amount of up to $150.0 million.

Subsequent to March 31, 2025, we received $3.5 million in net proceeds from sale of our common stock through the ATM facility.

(See “Note 6 — Debt” for further details).

We are in discussions regarding potential asset acquisition and/or licensing agreements in connection with certain of our clinical assets.

The most advanced of these discussions relates to an agreement with a potential multi-billion total transaction value exclusive of royalties.

Upon closing this transaction, we would expect to receive an upfront payment that would (1) provide for the repayment in full of our Term Loan, as well as related prepayment premiums, (2) allow for repayment at or prior to maturity of our outstanding 2026 Notes, and (3) provide sufficient additional capital for more than 12 months of post-closing operations.

We would expect this transaction also would include near- and longer-term milestones that could provide substantial additional capital and, if regulatory approval is obtained, sales-based milestones and royalties with respect to commercial sales.

We can provide no assurance that any transaction will be consummated on favorable terms or at all.

During the six months ended June 30, 2025, we received $6.4 million of net proceeds from the sale of our common stock through the ATM facility and have received $2.1 million subsequent to June 30, 2025.

If these capital resources, for any reason, are needed but inaccessible, it would have a significant negative impact on our financial condition.

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Should it be necessary, we may determine to further reduce or delay these or other aspects of our operations and/or implement other restructuring activities.

Cash Flow Data

Three Months Ended

Six Months Ended

(In thousands)

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Operating Activities.

Net cash used in operating activities for the three months ended March 31, 2025 decreased by $5.9 million compared to the same period in 2024.

This decrease was primarily due to a $4.6 million reduction in prepayments during the quarter as compared to the same period in the prior year.

Net cash used in operating activities for the six months ended June 30, 2025 decreased by $30.0 million as compared to the same period in 2024, driven primarily by a $34.3 million decrease in net loss and a $9.2 million increase in accounts payable, partially offset by $13.8 million of non-cash items, which is primarily comprised of pass-through royalties from Rayner and a gain on change in fair value of financial instruments.

Investing Activities.

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As we manage our usage with respect to total cash, cash equivalents, and short-term investments, we do not consider fluctuations in cash flows from investing activities to be important to the understanding of our liquidity and capital resources.

Net cash provided by investing activities during the three months ended March 31, 2025 changed by $100.5 million as compared to the same period in 2024 as cash and investments were used to fund operations.

Net cash provided by investing activities during the six months ended June 30, 2025 increased by $46.8 million reflecting the timing of purchase of investments from proceeds received on maturities and sales.

Financing Activities.

Net cash used by financing activities decreased $100.3 million for the three months ended March 31, 2025 as compared to the same period in the prior year.

The decrease was primarily due to prior year activities related to (i) receiving $115.5 million in cash from DRI related to the sale of expanded OMIDRIA royalties in February 2024, (ii) repurchases of $11.9 million in common stock and (iii) payments to DRI of $3.4 million in royalties.

Net cash provided by financing activities for the six months ended June 30, 2025 decreased by $75.1 million primarily due to prior year activities related to (i) receiving $115.5 million in cash from DRI related to the sale of expanded OMIDRIA royalties in February 2024, (ii) repurchasing certain of our outstanding 2026 Notes for $27.5 million in cash, (iii) repurchasing $11.9 million in common stock and (iv) payments to DRI of $3.4 million in royalties.

These prior year activities were partially offset by current year payments of $2.8 million related to debt issuance costs pertaining to the Convertible Note Exchange.

Contractual Obligations and Commitments

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In addition, we carry various finance lease obligations for laboratory and office equipment.

As of March 31, 2025, the remaining aggregate non-cancelable rent payable under the initial term of the lease, excluding common area maintenance and related operating expenses, is $18.5 million.

As of June 30, 2025, the remaining aggregate non-cancelable rent payable under the initial term of the lease, excluding common area maintenance and related operating expenses, is $16.8 million.

Convertible Senior Notes and Long-Term Debt

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Critical Accounting Policies and Significant Judgments and Estimates

There have not been any material changes in our critical accounting policies and significant judgments and estimates as disclosed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2024, which was filed with the SEC on March 31, 2025.

For further details see “Note 2 — Significant Accounting Policies” in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements