OMER filing — read by section

Item 8. Financial Statements and Supplementary Data

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 

 Index to Consolidated Financial Statements 

 Page 

 Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 

 49 

 Consolidated Balance Sheets 

 50 

 Consolidated Statements of Operations and Comprehensive Loss 

 51 

 Consolidated Statement of Shareholders ’ Equity (Deficit) 

 52 

 Consolidated Statements of Cash Flows 

 53 

 Notes to Consolidated Financial Statements 

 54 

 48

 Table of Contents 

 Report of Independent Registered Public Accounting Firm 

 To the Shareholders and the Board of Directors of Omeros Corporation

 Opinion on the Financial Statements 

 We have audited the accompanying consolidated balance sheets of Omeros Corporation (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations and comprehensive loss, shareholders' equity (deficit) and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

 Basis for Opinion 

 These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

 Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion . 

 Critical Audit Matter 

 The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

 Table of Contents 

 OMIDRIA Contract Royalty Asset 

 Description of the Matter 

 As more fully described in Note 2 of the financial statements, the Company recorded a contract royalty asset in connection with its sale of OMIDRIA to Rayner Surgical, Inc. on December 23, 2021. To measure that contract royalty asset, the Company used the expected value approach, which is the discounted sum of the probability-weighted royalty payments 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.

 Auditing management’s forecasts of expected royalty payments is complex and requires judgment due to the level of estimation uncertainty and the sensitivity of the asset’s value to changes in forecast assumptions. In particular, the value of the OMIDRIA contract royalty asset is sensitive to changes in significant assumptions such as forecasted royalties due from Rayner Surgical, Inc. in various scenarios, and the probability weighting of those scenarios, which are affected by expectations of future market and regulatory conditions.

 How We Addressed 

 the Matter in Our 

 Audit 

 To test the measurement of the OMIDRIA contract royalty asset, we performed audit procedures that included, among others, evaluating (1) the estimated future royalties in various scenarios, and (2) management’s probability weighting of those scenarios.

 To evaluate the appropriateness and likelihood of occurrence of the estimated future royalties in various scenarios and probability weighting included in management’s calculation, we considered historical results of the Company’s business and third-party data. We verified the clerical accuracy of the contract royalty asset calculation and agreed it to royalty rates in the asset purchase agreement. We also evaluated the Company’s disclosures in the consolidated financial statements related to these matters . 

 /s/ Ernst & Young LLP 

 We have served as the Company’s auditor since 1998.

 Seattle, Washington 

 March 31, 2026

 49

 Table of Contents 

 OMEROS CORPORATION 

 CONSOLIDATED BALANCE SHEETS 

 (In thousands, except share and per share data) 

 December 31, 

 December 31, 

 2025 

 2024 

 Assets 

 Current assets: 
 
 Cash and cash equivalents

 $ 
 9,660 
 
 $ 
 3,400 
 
 Short-term investments

 162,144 
 
 86,732 
 
 OMIDRIA contract royalty asset

 25,351 
 
 29,083 
 
 Receivables

 10,917 
 
 7,739 
 
 Prepaid expense and other assets

 7,595 
 
 7,166 
 
 Total current assets

 215,667 
 
 134,120 
 
 OMIDRIA contract royalty asset, non-current

 96,435 
 
 124,266 
 
 Right of use assets

 10,708 
 
 14,961 
 
 Property and equipment, net

 1,768 
 
 2,678 
 
 Restricted investments

 1,054 
 
 1,054 
 
 Total assets 

 $ 
 325,632 
 
 $ 
 277,079 
 
 Liabilities and shareholders’ equity (deficit) 
 
 Current liabilities: 
 
 Accounts payable

 $ 
 4,764 
 
 $ 
 5,905 
 
 Accrued expenses

 29,388 
 
 26,005 
 
 OMIDRIA royalty obligation

 20,547 
 
 20,645 
 
 2026 Notes, net

 17,063 
 
 — 
 
 Term debt

 — 
 
 21,000 
 
 Lease liabilities

 6,300 
 
 5,971 
 
 Total current liabilities

 78,062 
 
 79,526 
 
 OMIDRIA royalty obligation, non-current

 147,319 
 
 195,612 
 
 2026 and 2029 Notes, non-current, net

 51,364 
 
 97,178 
 
 2029 Notes embedded derivative, non-current

 157,171 
 
 — 
 
 Term debt, non-current, net

 — 
 
 69,640 
 
 Term debt, embedded derivative, non-current

 — 
 
 ( 235 
 ) 
 
 Lease liabilities, non-current

 7,245 
 
 13,466 
 
 Other accrued liabilities, non-current

 5,702 
 
 4,501 
 
 Commitments and contingencies (Note 10)

 Shareholders’ equity/(deficit): 
 
 Preferred stock, par value $ 0.01 per share, 20,000,000 shares authorized; none issued and outstanding at December 31, 2025 and December 31, 2024

 — 
 
 — 
 
 Common stock, par value $ 0.01 per share, 150,000,000 shares authorized at December 31, 2025 and December 31, 2024; 71,670,791 and 58,044,465 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively.

 716 
 
 580 
 
 Additional paid-in capital

 791,748 
 
 727,156 
 
 Accumulated deficit

 ( 913,695 
 ) 
 
 ( 910,345 
 ) 
 
 Total shareholders’ equity/(deficit)

 ( 121,231 
 ) 
 
 ( 182,609 
 ) 
 
 Total liabilities and shareholders’ equity/(deficit) 

 $ 
 325,632 
 
 $ 
 277,079 
 
 See accompanying Notes to Consolidated Financial Statements

 50

 Table of Contents 

 OMEROS CORPORATION 

 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS 

 (In thousands, except share and per share data) 

 Year Ended December 31, 

 2025 

 2024 

 2023 

 Costs and expenses: 
 
 Research and development

 $ 
 81,296 
 
 $ 
 119,523 
 
 $ 
 114,870 
 
 Selling, general and administrative

 41,500 
 
 47,430 
 
 49,660 
 
 Total costs and expenses

 122,796 
 
 166,953 
 
 164,530 
 
 Loss from operations

 ( 122,796 
 ) 
 
 ( 166,953 
 ) 
 
 ( 164,530 
 ) 
 
 Gain on sale of zaltenibart

 237,594 
 
 — 
 
 — 
 
 Gain on early extinguishment of term debt, net

 17,035 
 
 — 
 
 — 
 
 Gain (loss) on early extinguishment of 2026 Notes

 ( 2,968 
 ) 
 
 — 
 
 4,112 
 
 Interest and other income

 4,096 
 
 11,285 
 
 16,342 
 
 Interest expense, net of remeasurement adjustments and other

 960 
 
 ( 24,675 
 ) 
 
 ( 30,844 
 ) 
 
 Gain (loss) on change in fair value of financial instruments, net

 ( 136,717 
 ) 
 
 19 
 
 — 
 
 Loss from continuing operations before income tax expense

 ( 2,796 
 ) 
 
 ( 180,324 
 ) 
 
 ( 174,920 
 ) 
 
 Income tax expense

 ( 2,012 
 ) 
 
 ( 2,305 
 ) 
 
 — 
 
 Net loss from continuing operations, net of tax

 ( 4,808 
 ) 
 
 ( 182,629 
 ) 
 
 ( 174,920 
 ) 
 
 Net income from discontinued operations, net of tax

 1,458 
 
 25,814 
 
 57,107 
 
 Net loss

 $ 
 ( 3,350 
 ) 
 
 $ 
 ( 156,815 
 ) 
 
 $ 
 ( 117,813 
 ) 
 
 Basic and diluted net income (loss) per share: 
 
 Net loss from continuing operations

 $ 
 ( 0.08 
 ) 
 
 $ 
 ( 3.14 
 ) 
 
 $ 
 ( 2.79 
 ) 
 
 Net income from discontinued operations

 0.03 
 
 0.44 
 
 0.91 
 
 Net loss

 $ 
 ( 0.05 
 ) 
 
 $ 
 ( 2.70 
 ) 
 
 $ 
 ( 1.88 
 ) 
 
 Weighted-average shares used to compute basic and diluted net income (loss) per share

 63,510,201 
 
 58,170,931 
 
 62,739,227 
 
 See accompanying Notes to Consolidated Financial Statements

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 Table of Contents 

 OMEROS CORPORATION 

 CONSOLIDATED STATEMENTS OF SHAREHOLDERS ’ EQUITY (DEFICIT) 

 (In thousands, except share data) 

 Additional 

 Total 

 Common Stock 

 Paid-in 

 Accumulated 

 Shareholders’ 

 Shares 

 Amount 

 Capital 

 Deficit 

 Equity/(Deficit) 

 Balance at December 31, 2022 

 62,828,765 
 
 $ 
 628 
 
 $ 
 720,773 
 
 $ 
 ( 635,717 
 ) 
 $ 
 85,684 
 
 Issuance of common stock upon exercise of stock options

 36,726 
 
 — 
 
 150 
 
 — 
 
 150 
 
 Issuance of common stock upon vesting of restricted stock units

 67,250 
 
 1 
 
 ( 1 
 ) 
 
 — 
 
 — 
 
 Repurchases of common stock

 ( 1,804,144 
 ) 
 
 ( 18 
 ) 
 
 ( 4,636 
 ) 
 
 ( 4,654 
 ) 
 
 Stock-based compensation

 — 
 
 — 
 
 11,650 
 
 — 
 
 11,650 
 
 Net loss

 — 
 
 — 
 
 — 
 
 ( 117,813 
 ) 
 
 ( 117,813 
 ) 
 
 Balance at December 31, 2023 

 61,128,597 
 
 611 
 
 727,936 
 
 ( 753,530 
 ) 
 
 ( 24,983 
 ) 
 
 Issuance of common stock upon exercise of stock options

 111,109 
 
 1 
 
 546 
 
 — 
 
 547 
 
 Repurchases of common stock

 ( 3,195,241 
 ) 
 
 ( 32 
 ) 
 
 ( 11,819 
 ) 
 
 — 
 
 ( 11,851 
 ) 
 
 Stock-based compensation

 — 
 
 — 
 
 10,493 
 
 — 
 
 10,493 
 
 Net loss

 — 
 
 — 
 
 — 
 
 ( 156,815 
 ) 
 
 ( 156,815 
 ) 
 
 Balance at December 31, 2024 

 58,044,465 
 
 580 
 
 727,156 
 
 ( 910,345 
 ) 
 
 ( 182,609 
 ) 
 
 Issuance of common stock - registered direct offering, net

 5,365,853 
 
 53 
 
 20,274 
 
 — 
 
 20,327 
 
 Issuance of common stock - at-the-market equity offering facility, net

 4,367,628 
 
 44 
 
 18,972 
 
 — 
 
 19,016 
 
 Issuance of common stock - 2026 Notes equitization, net

 2,819,866 
 
 28 
 
 9,514 
 
 — 
 
 9,542 
 
 Issuance of common stock upon exercise of stock options

 1,072,979 
 
 11 
 
 7,640 
 
 — 
 
 7,651 
 
 Stock-based compensation

 — 
 
 — 
 
 8,192 
 
 — 
 
 8,192 
 
 Net loss

 — 
 
 — 
 
 — 
 
 ( 3,350 
 ) 
 
 ( 3,350 
 ) 
 
 Balance at December 31, 2025 

 71,670,791 
 
 $ 
 716 
 
 $ 
 791,748 
 
 $ 
 ( 913,695 
 ) 
 $ 
 ( 121,231 
 ) 
 
 See accompanying Notes to Consolidated Financial Statements

 52

 Table of Contents 

 OMEROS CORPORATION 

 CONSOLIDATED STATEMENTS OF CASH FLOWS 

 (In thousands) 

 Year Ended December 31, 

 2025 

 2024 

 2023 

 Operating activities: 
 
 Net loss

 $ 
 ( 3,350 
 ) 
 
 $ 
 ( 156,815 
 ) 
 
 $ 
 ( 117,813 
 ) 
 
 Adjustments to reconcile net loss to net cash provided by (used in) operating activities: 
 
 Gain on sale of zaltenibart

 ( 237,594 
 ) 
 
 — 
 
 — 
 
 Remeasurement on fair value of financial instruments

 136,717 
 
 ( 19 
 ) 
 
 — 
 
 Stock-based compensation expense

 8,192 
 
 10,493 
 
 11,650 
 
 Depreciation and amortization

 964 
 
 950 
 
 920 
 
 (Gain) loss on early extinguishment of 2026 Notes

 2,968 
 
 — 
 
 ( 4,112 
 ) 
 
 Amortization of discount and issuance costs on 2026 Notes and 2029 Notes

 3,945 
 
 859 
 
 1,853 
 
 Amortization of premium and issuance costs on term debt

 ( 5,578 
 ) 
 
 ( 4,681 
 ) 
 
 — 
 
 Gain on early extinguishment on term debt, gross

 ( 20,579 
 ) 
 
 — 
 
 — 
 
 Non-cash interest remeasurement on OMIDRIA royalty obligation

 ( 33,435 
 ) 
 
 ( 5,614 
 ) 
 
 — 
 
 Non-cash interest on OMIDRIA contract royalty asset

 ( 14,717 
 ) 
 
 ( 16,922 
 ) 
 
 ( 15,315 
 ) 
 
 Remeasurement on OMIDRIA contract royalty asset

 12,657 
 
 ( 7,969 
 ) 
 
 ( 41,167 
 ) 
 
 Accretion on U.S. government treasury bills, net

 — 
 
 ( 4,371 
 ) 
 
 ( 8,714 
 ) 
 
 Changes in operating assets and liabilities: 
 
 OMIDRIA contract royalty asset

 33,623 
 
 39,651 
 
 40,595 
 
 Accounts payable and accrued expense

 4,582 
 
 ( 5,239 
 ) 
 
 4,682 
 
 Receivables

 ( 3,178 
 ) 
 
 357 
 
 205,125 
 
 Prepaid expenses and other

 ( 1,311 
 ) 
 
 517 
 
 ( 2,978 
 ) 
 
 Net cash provided by (used in) operating activities

 ( 116,094 
 ) 
 
 ( 148,803 
 ) 
 
 74,726 
 
 Investing activities: 
 
 Gross cash proceeds from sale of zaltenibart

 240,000 
 
 — 
 
 — 
 
 Proceeds from the sale and maturities of investments

 109,900 
 
 1,069,767 
 
 1,046,482 
 
 Purchases of investments

 ( 185,312 
 ) 
 
 ( 987,385 
 ) 
 
 ( 1,018,602 
 ) 
 
 Purchases of property and equipment

 ( 65 
 ) 
 
 ( 165 
 ) 
 
 ( 426 
 ) 
 
 Net cash provided by investing activities

 164,523 
 
 82,217 
 
 27,454 
 
 Financing activities: 
 
 Proceeds from registered direct offering, net

 20,327 
 
 — 
 
 — 
 
 Proceeds from issuance of common stock from the ATM facility, net

 19,016 
 
 — 
 
 — 
 
 Proceeds upon exercise of stock options

 7,651 
 
 547 
 
 150 
 
 Repayment of term debt principal

 ( 67,077 
 ) 
 
 — 
 
 — 
 
 Principal payments on OMIDRIA royalty obligation

 ( 14,956 
 ) 
 
 ( 18,780 
 ) 
 
 ( 1,152 
 ) 
 
 Prepayment premium and transaction costs on repayment of term debt

 ( 3,544 
 ) 
 
 — 
 
 — 
 
 Payment of debt issuance costs related to 2029 Notes

 ( 2,837 
 ) 
 
 — 
 
 — 
 
 Payments on finance lease obligations

 ( 749 
 ) 
 
 ( 829 
 ) 
 
 ( 555 
 ) 
 
 Proceeds from sale of future royalties

 — 
 
 115,525 
 
 — 
 
 Payment on maturity of 2023 Notes

 — 
 
 — 
 
 ( 95,000 
 ) 
 
 Cash paid to repurchase 2026 Notes

 — 
 
 ( 21,731 
 ) 
 
 ( 4,873 
 ) 
 
 Repurchases of common stock

 — 
 
 ( 11,851 
 ) 
 
 ( 4,654 
 ) 
 
 Net cash provided by (used in) financing activities

 ( 42,169 
 ) 
 
 62,881 
 
 ( 106,084 
 ) 
 
 Net increase (decrease) in cash and cash equivalents

 6,260 
 
 ( 3,705 
 ) 
 
 ( 3,904 
 ) 
 
 Cash and cash equivalents at beginning of period

 3,400 
 
 7,105 
 
 11,009 
 
 Cash and cash equivalents at end of period

 $ 
 9,660 
 
 $ 
 3,400 
 
 $ 
 7,105 
 
 Supplemental cash flow information 
 
 Exchange of 2026 Notes for 2029 Notes

 $ 
 70,785 
 
 $ 
 — 
 
 $ 
 — 
 
 Exchange of 2026 Notes for common stock

 $ 
 10,000 
 
 $ 
 — 
 
 $ 
 — 
 
 Cash paid for interest

 $ 
 35,419 
 
 $ 
 35,686 
 
 $ 
 29,923 
 
 Cash paid for income taxes, net

 $ 
 153 
 
 $ 
 165 
 
 $ 
 3,292 
 
 Equipment acquired under finance lease

 $ 
 — 
 
 $ 
 1,523 
 
 $ 
 952 
 
 See accompanying Notes to Consolidated Financial Statements

 53

 Table of Contents 

 OMEROS CORPORATION 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 Note 1 — Organization and Basis of Presentation 

 General 

 Omeros Corporation (“Omeros,” the “Company” or “we”) is an innovative, commercial-stage biotechnology company that discovers and develops first-in-class protein and small-molecule therapeutics for large-market and orphan indications, with particular emphasis on complement-mediated diseases, cancers, and addictive or compulsive disorders. 

 Our clinical-stage development programs include: narsoplimab, our antibody targeting mannan-binding lectin-associated serine protease 2 (“MASP-2”), the effector enzyme of the lectin pathway of complement; OMS1029, our long-acting antibody targeting MASP-2; and OMS527, our phosphodiesterase 7 (“PDE7”) inhibitor program. During 2025, we sold to Novo Nordisk Health Care AG the exclusive global rights in all indications to develop and commercialize zaltenibart, also known as OMS906, our antibody targeting mannan-binding lectin-associated serine protease-3 (“MASP-3”), the key activator of the alternative pathway of complement.

 FDA Approval of YARTEMLEA ® 

 On December 23, 2025, FDA approved YARTEMLEA ® (narsoplimab-wuug) for the treatment of hematopoietic stem cell transplant-associated thrombotic microangiopathy (“TA-TMA”). TA-TMA is a severe and often-fatal complication of hematopoietic stem cell transplantation in adults and children, driven by systemic endothelial injury triggered by conditioning regimens, immunosuppressants, infection, graft-versus-host disease, and other transplant-related factors. Activation of the lectin pathway of complement plays a central role in disease pathogenesis. YARTEMLEA selectively inhibits MASP-2, blocking pathway activation while preserving classical and alternative complement functions important for host defense. In TA-TMA, MASP-2 inhibition prevents lectin pathway-mediated cellular injury, including endothelial damage in small blood vessels, and thrombus formation. 

 YARTEMLEA is the first and only approved inhibitor of the lectin pathway of complement. YARTEMLEA is approved for use in adults and in children ages two years and older.

 Commercial distribution and sales of YARTEMLEA commenced in January 2026.

 A marketing authorization application (“MAA”) for YARTEMLEA in TA-TMA has been submitted to the European Medicines Agency (“EMA”) and is being reviewed under EMA’s centralized review procedure, which allows review of a single marketing authorization application. If the MAA is approved, it would authorize the product to be marketed in all EU member states and European Economic Area countries. The European Commission (the “EC”) has granted narsoplimab designation as an orphan medicinal product for treatment in hematopoietic stem cell transplantation.

 Sale of Zaltenibart 

 On November 25, 2025, we completed a transaction (the “Transaction”) pursuant to an Asset Purchase and License Agreement (“APLA”) between Omeros and Novo Nordisk Healthcare AG (“Novo Nordisk”), dated October 10, 2025, in which Novo Nordisk received exclusive global rights in all indications to develop and commercialize our lead investigational MASP-3 inhibitor, zaltenibart (formerly OMS906), and certain related compounds and products. Zaltenibart is a first-in-class, late-stage clinical humanized monoclonal antibody targeting MASP-3, the most upstream and key activator of the alternative pathway of the complement system. Zaltenibart has shown multiple potential advantages over other alternative pathway inhibitors in development and on the market.

 At the closing of the Transaction, we received an upfront cash payment of $240.0 million. In addition, we are eligible to receive (i) up to $510.0 million in one-time milestone payments upon the first achievement by Novo Nordisk or its affiliates or sublicensees of each of the development and approval milestone events as set forth in the APLA and (ii) up to $1.3 billion in one-time milestone payments upon the first achievement by Novo Nordisk or its affiliates or sublicensees of certain sales-based milestone events as set forth in the APLA. We are also eligible under the APLA to receive tiered royalties on annual net sales of products at percentage rates ranging from high single digit to high teens, subject to reduction in certain circumstances, as set forth in the APLA. In total, we are eligible to receive up to an additional $1.8 billion in potential development and commercial milestones, plus tiered royalties on net sales.

 Pursuant to the APLA, we sold and transferred, and Novo Nordisk purchased zaltenibart and certain related assets, and the parties agreed to grant and receive certain intellectual property licenses to facilitate the continued development and commercialization activities of both companies. We retain rights to our MASP-3 small-molecule program unrelated to zaltenibart, including the ability to develop and commercialize small-molecule MASP-3 inhibitors, across a range of therapeutic areas, including, but not limited to, ophthalmology, neurology, gastrointestinal disorders, dermatology, musculoskeletal diseases, and oncology. We also retain rights to our “grandfathered” MASP-3 antibodies, with temporal and indication restrictions on commercialization and for use in advancing our small-molecule therapeutics.

 In accordance with the APLA, at the closing of the Transaction, Omeros and Novo Nordisk entered into a transition services agreement (the “Transition Services Agreement”) pursuant to which we are providing certain transition services to Novo Nordisk to facilitate the transfer of the acquired assets and liabilities under the APLA and to provide for the continued operation of relevant studies and program activities during the applicable term. Subject to certain exceptions and limitations, Novo Nordisk reimburses us for costs and expenses we incur under the Transition Services Agreement, including third-party costs and expenses, costs associated with delivery of transition services by Omeros personnel on an hourly basis at rates specified in the Transition Services Agreement, and for our inventories of zaltenibart drug substance and product.

 Other Development Programs 

 Our lectin pathway program also includes OMS1029, our long-acting antibody targeting MASP-2. We have completed Phase 1 clinical trials evaluating both single-ascending and multiple ascending doses of OMS1029. Results of these studies support once-quarterly dosing administered either intravenously or subcutaneously. OMS1029 has been well tolerated to date with no safety concerns identified. We are working to finalize selection of an indication and initiate Phase 2 clinical development of OMS1029.

 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”), to develop an orally administered PDE7 inhibitor compound for the treatment of cocaine use disorder (“CUD”). NIDA awarded the grant to us for a total of $ 6.24 million over three years, of which we have claimed and received $ 2.2 million of funding to date and for the year ended December 31, 2025 recognized $ 0.9 million into Other Income in our consolidated statement of operations and comprehensive loss. FDA subsequently requested additional preclinical information prior to initiating the clinical in-patient study in cocaine users. Together with our collaborators at NIDA, we are scheduled to meet with FDA to discuss that request.

 We also have various programs in preclinical research and development.

 Basis of Presentation 

 Our 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 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”).

 Liquidity and Capital Resources 

 The Transaction with Novo Nordisk, which closed on November 25, 2025, provided us with $ 240.0 million in upfront cash. Under that certain Credit and Guarantee Agreement, dated June 3, 2024 (the “Credit Agreement”), among the Company, the Lenders (as defined below) from time to time party thereto, and Wilmington Savings Fund Society, FSB, as administrative agent and collateral agent, the Company used a portion of the proceeds from the sale of zaltenibart to repay the $ 67.1 million outstanding principal on the term debt (the “Term Loan”) under the Credit Agreement, along with $ 3.5 million in related prepayment premiums and transaction expenses. Repayment of our obligations under the Credit Agreement resulted in the release in full of all liens and covenants thereunder including the covenant requiring us to maintain a minimum of $ 25.0 million in unrestricted cash, cash equivalents and short-term investments at all times.

 As of December 31, 2025, we had cash, cash equivalents and short-term investments of $ 171.8 million. We had $ 87.9 million in aggregate principal amount of debt at December 31, 2025, reflecting a decrease of $ 77.1 million, or 46.7 %, compared to $ 164.9 million in aggregate principal amount of debt at December 31, 2024.

 54

 Table of Contents 

 On February 17, 2026, using funds received upon the closing of the Transaction, we repaid at maturity the remaining $ 17.1 million principal balance on our 5.25 % convertible senior notes due 2026 (the “2026 Notes”). Omeros expects that it will be able to fund more than 12 months of operations from the date the financial statements are issued, utilizing our current cash, cash equivalents, and short-term investments, along with funds we expect to receive from commercial sales of YARTEMLEA. 

 Should it be necessary or determined to be strategically advantageous, we also could pursue public and private offerings of our equity securities, 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. In addition, we have a sales agreement to sell shares of our common stock, from time to time, in an “at the market” equity offering facility through which we may offer and sell shares of our common stock in an aggregate amount of up to $ 150.0 million.

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

 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, OMIDRIA royalty obligation valuations and the embedded derivatives associated with our debt. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances; however, actual results could differ from these estimates. 

 Note 2 — Significant Accounting Policies 

 Segment Reporting 

 We operate in one business segment focusing on the research, discovery, development and commercialization of small-molecule and protein therapeutics targeting immunologic diseases, including complement-mediated diseases and cancers related to dysfunction of the immune system, as well as addictive and compulsive disorders. The Company defines its operating segment based on internally reported financial information that is regularly used by the Chief Operating Decision Maker (“CODM”) to analyze performance, make decisions and allocate resources. The Company's CODM is our Chief Executive Officer. For the year ended December 31, 2025, the Company has identified one operating and reporting segment. The CODM reviews net income (loss) and expenses reported on the consolidated statement of operations and comprehensive income (loss). The measurement of segment assets is reported on the consolidated balance sheet as total consolidated assets. All long-lived assets are held in the U.S. Our segment net loss aligns with our consolidated statement of operations and comprehensive loss. 

 Research and Development 

 Research and development expenses are comprised primarily of contracted research, clinical trial study and manufacturing costs prior to approval; consulting services; contract milestones; materials and supplies; costs for personnel, including salaries, benefits and stock compensation; depreciation; an allocation of our occupancy costs; and other expenses incurred to sustain our overall research and development programs. Advance payments for goods or services that will be used for future research and development activities are deferred and then recognized as an expense as the related goods are delivered or the services are performed. All other research and development costs are expensed as incurred.

 Selling, General and Administrative 

 Selling, general and administrative expenses are comprised primarily of marketing expenses; professional and legal services; patent costs; and salaries, benefits, and stock-compensation costs for marketing and other personnel not directly engaged in research and development. Additionally, selling, general and administrative expenses include depreciation; an allocation of our occupancy costs; and other general corporate expenses. Advertising costs are expensed as incurred. We had no advertising costs during the years ended December 31, 2025, 2024 and 2023. 

 Stock-Based Compensation 

 Stock-based compensation expense is recognized for all share-based payments, including grants of stock option awards and restricted stock units based on estimated fair values. The fair value of our stock is calculated using the Black-Scholes option-pricing model, which requires assumptions around volatility, forfeiture rates, risk-free interest rate and expected term. Compensation expense is recognized over the requisite service periods, which is generally the vesting period, using the straight-line method. Forfeiture expense is estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates.

 Income Taxes 

 The Company included the impact of the One Big Beautiful Bill Act (“OBBBA”) in its income tax provision for the twelve months ended December 31, 2025. The enactment of the OBBBA reduced the Company’s taxable income for federal income tax purposes, resulting in no federal taxable income for the year. The impact of the OBBBA on state income taxes varies by jurisdiction due to differences in state conformity with federal tax law, and the Company incurred state income tax expense in certain jurisdictions.

 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 bases. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be recovered or settled. We recognize the effect of income tax positions only if those positions are more likely than not to be sustained upon an examination by the relevant taxing authority. A valuation allowance is established when it is more likely than not that the deferred tax assets will not be realized. (For further details, see “Note 14 — Income Taxes”).

 Asset Sale Transactions 

 The Company evaluates transactions involving the sale of our compounds, products or drug programs to determine whether such arrangements represent a sale of a business or a sale of a nonfinancial asset. Transactions that do not meet the definition of a business are accounted for as the sale of a nonfinancial asset under Accounting Standards Codification (“ASC”) 610‑20, Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets .

 Upon transfer of control of the compound, product or drug program asset to a counterparty, the Company recognizes consideration received. Any excess of consideration over the carrying value of the asset sold is recognized as a gain in the consolidated statements of operations.

 Potential Milestone Income 

 The APLA with Novo Nordisk includes variable consideration in the form of milestone payments that are contingent upon the achievement of specified development, regulatory, or commercialization events. The Company applies the variable consideration and constraint guidance in ASC 606, Revenue from Contracts with Customers , by analogy. At contract inception and throughout the term of the arrangement, the Company assesses whether the achievement of each milestone is probable and estimates variable consideration using the most likely amount method. Contingent milestone payments are excluded from the transaction price until the related milestone is achieved and it is probable that a significant reversal of cumulative revenue recognized will not occur.

 Amounts are included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company re-evaluates the transaction price at each reporting period, including the estimated variable consideration and the application of the constraint, to reflect changes in circumstances. Factors considered in these evaluations include the clinical or technical complexity of the milestone, the stage of development, and the risk of regulatory approval. Because of the risk that products in development will not receive regulatory approval, we generally do not recognize any contingent payments that would be due to us until regulatory approval.

 Discontinued Operations 

 We review the presentation of planned or completed business dispositions in the consolidated financial statements based on the available information and events that have occurred. The review consists of evaluating whether the business meets the definition of a component for which the operations and cash flows are clearly distinguishable from the other components of the business and, if so, whether it is anticipated that after the disposal the cash flows of the component would be eliminated from continuing operations and whether the disposition represents a strategic shift that has a major effect on operations and financial results. Planned or completed business dispositions are presented as discontinued operations when all the criteria described above are met.

 We determined that the sale of OMS906 to Novo Nordisk did not meet the above criteria. As such, we have recorded the gain on sale of zaltenibart in Other Income in our consolidated statement of operations and comprehensive loss.

 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 record as an OMIDRIA contract asset on our consolidated balance sheet. As a result of the divestiture, the results of OMIDRIA activities are classified as discontinued operations in our consolidated statement of operations and comprehensive loss and excluded from continuing operations for all periods presented. 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. Therefore, future OMIDRIA royalties are treated as variable consideration. The sale of OMIDRIA qualified as an asset sale under GAAP. 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.

 All U.S. 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”) and are entirely pass-through in nature to the Company. 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. (For further details see “Note 8 — Discontinued Operations —Sale of OMIDRIA”). 

 OMIDRIA Royalty Obligation 

 On September 30, 2022, we sold to DRI 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 under an Amended and Restated Royalty Purchase Agreement (the “Amendment”). The Amendment with DRI 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. We accounted for the Amendment as a modification of our existing debt from DRI. The OMIDRIA royalty obligation is valued based on our estimates of future OMIDRIA royalties and is amortized through December 31, 2031. 

 To the extent our estimates of future royalties differ materially from the previous estimates, we will adjust for future OMIDRIA royalties to 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. We record interest expense as a component within continuing operations. Any such remeasurement adjustment is recognized as non-cash interest expense within continuing operations (see “Note 9 - OMIDRIA Royalty Obligation”).

 Cash and Cash Equivalents, Short-Term Investments and Restricted Investments 

 Cash and cash equivalents include highly liquid instruments with a maturity of three months or less on the date of purchase, which can be easily converted into cash without a significant impact on their value. Short-term investment securities are classified as held-to-maturity, except for money market funds which are classified as available-for-sale. Investments classified as available-for-sale are measured at fair value. Investments classified as held-to-maturity are carried at cost. Amortization, accretion, interest, and dividends, realized gains and losses and declines in value judged to be other-than-temporary are included within other income.

 The cost of securities sold is based on the specific-identification method. Investments with maturities of less than one year, or those for which management intends to use the investments to fund current operations, are included in current assets. We evaluate whether an investment is other-than-temporarily impaired based on the specific facts and circumstances. Factors that are considered in determining whether an other-than-temporary decline in value has occurred include: the market value of the security in relation to its cost basis; the financial condition of the investee; and the intent and ability to retain the investment for a sufficient period of time to allow for recovery in the market value of the investment. Restricted investments held in money-market funds include security deposits on our office lease.

 Investment income, which is included as a component of other income, consists primarily of interest earned.

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 Receivables 

 Receivables primarily consist of royalties receivable from Rayner and receivables from Novo Nordisk for work performed under the Transition Services Agreement. Considering the nature of our receivables, we concluded an allowance for doubtful accounts was not necessary as of December 31, 2025 and 2024, respectively.

 Property and Equipment, Net 

 Property and equipment are stated at cost, and depreciation is calculated using the straight-line method over the estimated useful life of the assets, which is generally between three and ten years. Expenditures for repairs and maintenance are expensed as incurred.

 Inventory 

 We expense inventory costs related to product candidates as research and development expenses until regulatory approval is reasonably assured in the U.S. or the European Union (“EU”). Once approval is reasonably assured, costs, including amounts related to third-party manufacturing, labelling, transportation and internal labor and overhead, are capitalized.

 Debt 

 Transactions involving contemporaneous exchanges of cash between the same debtor and creditor in connection with the issuance of a new debt obligation and satisfaction of an existing debt obligation are evaluated as a modification or an extinguishment depending on whether the exchange is determined to have substantially different terms.

 Repayment at Maturity of 2023 Notes 

 On November 15, 2023, we repaid $ 95.0 million aggregate principal amount of our 6.25 % convertible senior notes (the “2023 Notes”) at maturity.

 Repurchase of 2026 Notes for Cash 

 In December 2023, we repurchased $ 9.1 million aggregate principal amount of our 2026 Notes at a discount, realizing a $ 4.1 million non-cash gain on extinguishment. 

 Repurchase of 2026 Notes under the Credit Agreement 

 On June 3, 2024, we entered into a Credit Agreement with certain funds managed by 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 provided for the Term Loan. We used the Term Loan along with $ 21.7 million in cash on hand, to repurchase from the Lenders $ 118.1 million aggregate principal amount of our 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 (as defined above) 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 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 consolidated balance sheet and as interest expense in the consolidated statement of operations and comprehensive loss over the duration of the Term Loan.

 Exchange of 2026 Notes for 2029 Notes and Equitization Transaction 

 On May 14, 2025, we completed the exchange (the “Convertible Note Exchange”) of $ 70.8 million of our existing 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, we entered into note conversion agreements (each, a “Note Conversion Agreement”) with two 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. Our obligation to deliver shares in three tranches was initially accounted for as a share-settled liability measured at fair value. We completed the conversion of the final tranche in September 2025, resulting in the issuance of an aggregate of 2,819,866 shares of our common stock to the two holders in exchange for $ 10.0 million aggregate principal amount of 2026 Notes. We did not receive new cash proceeds in these transactions. We performed an assessment of the Convertible Note Exchange and Equitization Transaction and determined that these transactions were not a troubled debt restructuring and were a partial extinguishment of our 2026 Notes. 

 Together with the Equitization Transaction, these transactions resulted in a net $ 3.0 million non-cash loss on extinguishment due to (i) expensing of the unamortized debt issuance costs of the extinguished 2026 Notes, (ii) recording the 2029 Notes to fair market value (i.e., at a discount) which we recorded both in our consolidated statement of operations and comprehensive loss and as debt on our consolidated balance sheet and (iii) recording the fair market value of the share-settled liability upon settlement.

 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. 

 Repayment of 2026 Notes 

 In February 2026, we repaid in full the remaining $ 17.1 million principal balance on our 2026 Notes upon maturity.

 Repayment of Term Loan under the Credit Agreement 

 On November 25, 2025, concurrent with the closing of the sale of zaltenibart (OMS906) to Novo Nordisk under the APLA, the Company repaid in full the $ 67.1 million principal outstanding under the Term Loan. As a result, we recognized a net non-cash gain on extinguishment in the amount of $ 17.0 million which represents the de-recognition of $ 17.9 million in unamortized premium and debt issuance costs, derecognition of $ 2.6 million of embedded derivatives, offset by $ 3.5 million of prepayment premium and related transaction expenses. (For further details, see “Note 7 – Debt”).

 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 consolidated statements of operations and comprehensive loss.

 The embedded derivative on our 2029 Notes represents the conversion feature and interest make-whole feature available to holders of the 2029 Notes allowing them to convert the notes into cash, common stock and/or a combination thereof. The embedded derivative on our Term Loan was eliminated upon repayment on November 25, 2025. (For further details, see “Note 5 – Fair Value Measurements” and “Note 7 – Debt”). 

 Right-of-Use Assets and Related Lease Liabilities 

 We record operating leases as right-of-use assets and recognize the related lease liabilities equal to the fair value of the lease payments using our incremental borrowing rate when the implicit rate in the lease agreement is not readily available. We recognize variable lease payments when incurred. Costs associated with operating lease assets are recognized on a straight-line basis within operating expenses over the term of the lease.

 We record finance lease obligations as a component of property and equipment and amortize these assets within operating expenses on a straight-line basis to their residual values over the shorter of the term of the underlying lease or the estimated useful life of the equipment. The interest component of finance lease obligations is included in interest expense and recognized using the effective interest method over the lease term.

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

 Impairment of Long-Lived Assets 

 We assess the impairment of long-lived assets, whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Recoverability of these assets is measured by comparing the carrying value to future undiscounted cash flows that the asset is expected to generate. If the asset is impaired, the amount of any impairment will be reflected in the results of operations in the period of impairment. We have not recognized any impairment losses for the years ended December 31, 2025, 2024 and 2023.

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 Common Stock Repurchases 

 We have repurchased shares of our common stock from time to time under authorization made by our Board of Directors. Under applicable Washington State law, repurchased shares are retired and not presented separately as treasury stock in the consolidated financial statements. 

 Accumulated Other Comprehensive Income (Loss) 

 Accumulated other comprehensive income (loss) is comprised of net income (loss) and certain changes in equity that are excluded from net income (loss). There were no differences between comprehensive loss and net loss for the years ended December 31, 2025, 2024 and 2023.

 Financial Instruments and Concentrations of Credit Risk 

 Cash and cash equivalents, receivables, accounts payable and accrued liabilities, which are recorded at invoiced amount or cost, approximate fair value based on the short-term nature of these financial instruments. The fair value of short-term investments is based on quoted market prices. Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments and receivables. Cash and cash equivalents are held by financial institutions and are federally insured up to certain limits. At times, our cash and cash equivalents balance held at a financial institution may exceeds the federally insured limits. To limit the credit risk, we invest our excess cash in high-quality securities such as money market mutual funds, certificates of deposit and U.S. treasury bills. 

 Recent Accounting Pronouncements 

 In November 2024, the Financial Accounting Standards Board (“FASB”) issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expense , requiring public entities to disclose additional information about specific expense categories in the notes to the financial statements on an interim and annual basis. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact on its financial statement disclosures.

 In December 2025, the FASB issued ASU 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities , which establishes authoritative guidance on the recognition, measurement, presentation, and disclosure of government grants. Under ASU 2025-10, government grants are recognized when it is probable that the entity will both comply with the conditions of the grant and the grant will be received. The ASU provides specific accounting models for grants related to assets and grants related to income, including options to recognize government grants as deferred income or as a reduction of the asset’s cost basis. The ASU also requires enhanced disclosures regarding the nature of government grants, significant terms and conditions, accounting policies applied, and amounts recognized in the financial statements. ASU 2025-10 is effective for fiscal years beginning after December 15, 2028, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-10.

 In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements , which clarifies the guidance in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11.

 Recently Adopted Accounting Pronouncements 

 In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company prospectively adopted ASU 2023-09 for the year ended December 31, 2025, and applied the new disclosure requirements.

 In November 2024, the FASB issued ASU 2024-04, Debt with Conversion and Other Options (Subtopic 470-20), Induced Conversions of Convertible Debt Instruments , which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion or extinguishment of convertible debt. The Company early adopted ASU 2024-04 during the year ended December 31, 2025, applying the guidance prospectively as of January 1, 2025. The adoption of this standard did not have an impact on the Company’s consolidated financial statements.

 In September 2025, the FASB issued ASU 2025-07 , Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Scope Clarification and Share-Based Consideration . The update refines the scope of derivative accounting by expanding the scope exception for certain non-exchange-traded contracts with underlyings based on the operations or activities of one of the parties to the contract, such as regulatory approvals or development milestones, and clarifies the accounting for share-based noncash consideration received from a customer under Topic 606. The Company early adopted ASU 2025-07 during the year ended December 31, 2025. The adoption did not result in any reclassification within the Company’s consolidated financial statements.

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 Note 3 — Gain on Sale of Zaltenibart 

 On November 25, 2025, we closed a previously announced transaction under an APLA with Novo Nordisk, pursuant to which Novo Nordisk received exclusive global rights in all indications to develop and commercialize zaltenibart, the Compounds, and the Products. At the closing, we received net proceeds of $ 237.6 million comprising $ 240.0 million in upfront cash less $ 2.4 million in transaction fees. 

 As set forth in the APLA, beyond the $ 240.0 million, we are eligible to receive (i) up to an additional $ 510.0 million in one-time milestone payments upon the first achievement by Novo Nordisk or its affiliates or sublicensees of each of the development and approval milestone events and (ii) up to $ 1.3 billion in one-time milestone payments upon the first achievement by Novo Nordisk or its affiliates or sublicensees of certain sales-based milestone events. We are also eligible under the APLA to receive tiered royalties on annual net sales of Products at percentage rates ranging from high single digit to high teens, subject to reduction in certain circumstances. 

 In accordance with the APLA, at the closing of the Transaction, Omeros and Novo Nordisk entered into the Transition Services Agreement pursuant to which we are providing certain transition services to Novo Nordisk to facilitate the transfer of the acquired assets and liabilities under the APLA and to provide for the continued operation of relevant studies and program activities during the applicable term. Subject to certain exceptions and limitations, Novo Nordisk reimburses us for costs and expenses we incur under the Transition Services Agreement, including third-party costs and expenses, costs associated with delivery of transition services by Omeros personnel on an hourly basis at rates specified in the Transition Services Agreement, and for our inventories of zaltenibart drug substance and product. We report such expenses net of reimbursement within Other Income in our statement of operations and comprehensive loss.

 Note 4— Net Loss Per Share 

 Basic net loss per share (“Basic EPS”) is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per share (“Diluted EPS”) is computed by dividing net loss by the weighted average number of common shares and potentially dilutive common shares outstanding during the period. Our potentially dilutive securities include common shares related to our stock options using the treasury stock method and convertible senior notes 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 antidilutive. When there is a net loss, potentially dilutive securities, like stock options 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:

 Year Ended December 31, 

 2025 

 2024 

 2023 

 2029 Notes convertible to common stock (1) 

 7,248,896 
 
 — 
 
 — 
 
 2026 Notes convertible to common stock (1)(2)(3) 

 2,614,893 
 
 7,980,438 
 
 11,132,366 
 
 2023 Notes convertible to common stock (4) 

 — 
 
 — 
 
 4,318,944 
 
 Outstanding options to purchase common stock

 2,941,957 
 
 252,397 
 
 38,462 
 
 Total dilutive shares excluded from net loss per share

 12,805,746 
 
 8,232,835 
 
 15,489,772 
 
 (1) 
 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 7 — Debt.” 
 
 (2) 
 The 2026 Notes were subject to a capped call arrangement that potentially reduced the dilutive effect of conversion as described in “Note 7 — Debt.” Any potential impact of the capped call arrangement is excluded from this table. The remaining outstanding 2026 Notes were fully repaid at maturity on February 15, 2026. 
 
 (3) 
 On June 3, 2024, we repurchased $ 118.1 million aggregate principal amount of our 2026 Notes, reducing any effect of the dilution related to these notes. (For further details refer to “Note 7 — Debt”). 
 
 (4) 
 The 2023 Notes were fully repaid at maturity on November 15, 2023. 
 
 Note 5 — Investments and 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. The accounting standard establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required:

 Level 1—Observable inputs for identical assets or liabilities, such as quoted prices in active markets;

 Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable; and

 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.

 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 year ended December 31, 2025.

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

 December 31, 2025 

 Level 1 

 Level 3 

 Total 

 (In thousands) 

 Assets: 

 Cash and cash equivalents:

 Certificate of deposit classified as non-current restricted investments

 $ 
 1,054 
 
 $ 
 — 
 
 $ 
 1,054 
 
 Short-term investment:

 Money-market funds

 162,144 
 
 — 
 
 162,144 
 
 Total Assets

 $ 
 163,198 
 
 $ 
 — 
 
 $ 
 163,198 
 
 Liabilities: 

 2029 Notes:

 2029 Note conversion option derivative

 $ 
 — 
 
 $ 
 ( 157,171 
 ) 
 
 $ 
 ( 157,171 
 ) 
 
 Total Liabilities

 $ 
 — 
 
 $ 
 ( 157,171 
 ) 
 
 $ 
 ( 157,171 
 ) 
 
 December 31, 2024 

 Level 1 

 Level 3 

 Total 

 (In thousands) 

 Assets: 

 Cash and cash equivalents:

 Certificate of deposit classified as non-current restricted investments

 $ 
 1,054 
 
 $ 
 — 
 
 $ 
 1,054 
 
 Short-term investment:

 Money-market funds

 86,732 
 
 — 
 
 86,732 
 
 Total Assets

 $ 
 87,786 
 
 $ 
 — 
 
 $ 
 87,786 
 
 Liabilities: 

 Term Loan

 Call and put options derivative (1) 

 $ 
 — 
 
 $ 
 235 
 
 $ 
 235 
 
 Total Liabilities

 $ 
 — 
 
 $ 
 235 
 
 $ 
 235 
 
 (1)

 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 consolidated balance sheet. 

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 Cash held in demand deposit accounts of $ 9.7 million and $ 3.4 million is excluded from our fair-value hierarchy disclosure as of December 31, 2025 and 2024, respectively. The carrying amounts for receivables, accounts payable and accrued liabilities, and other current monetary assets and liabilities, including lease financing obligations, approximate fair value. 

 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 on the accompanying consolidated balance sheets. Interest income is included as a component of interest and other income on our consolidated statement of operations and comprehensive loss. Interest and other income for the years ended December 31, 2025, December 31, 2024 and December 31, 2023 consists primarily of interest earned from investments of $ 2.3 million, $ 8.4 million and $ 14.7 million, respectively.

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

 2029 Note conversion option derivative 

 December 31, 

 2025 

 Stock price (per share)

 $ 
 17.18 
 
 Unsecuritized discount rate

 18.03 
 % 
 
 Risk-free rate

 3.53 
 % 
 
 Stock price volatility

 75 
 % 
 
 Dividend yield

 — 
 % 
 
 Term (in years)

 3.5 
 
 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 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. (For further details see “Note 7 — Debt”).

 Term Loan derivative 

 December 31, 

 2024 

 Interest is comprised of:

 SOFR benchmark rate

 3.91 - 4.30 
 % 
 
 Securitized discount rate

 13.16 
 % 
 
 Yield volatility

 21 
 % 
 
 Probability weighted term (in years)

 3.4 
 
 The repayment of our Term Loan on November 25, 2025 eliminated the related Term Loan embedded derivative as of December 31, 2025.

 The following table sets forth a summary of changes in the fair value of Level 3 liabilities for the year ended December 31, 2025:

 Balance as of 

 Balance as of 

 December 31, 

 December 31, 

 2024 

 Additions 

 Change in Fair Value 

 Conversions & Extinguishment 

 2025 

 (In thousands) 

 Liabilities: 

 2026 Note:

 Share-settled liability

 $ 
 — 
 
 $ 
 ( 9,838 
 ) 
 
 $ 
 295 
 
 $ 
 9,543 
 
 $ 
 — 
 
 Term Loan:

 Call and put options derivative

 235 
 
 — 
 
 ( 2,829 
 ) 
 
 2,594 
 
 — 
 
 2029 Note:

 Conversion option derivative

 — 
 
 ( 22,988 
 ) 
 
 ( 134,183 
 ) 
 
 — 
 
 ( 157,171 
 ) 
 
 Total Liabilities 

 $ 
 235 
 
 $ 
 ( 32,826 
 ) 
 
 $ 
 ( 136,717 
 ) 
 
 $ 
 12,137 
 
 $ 
 ( 157,171 
 ) 
 
 See “Note 7 - Debt” for the estimated fair market values of our 2029 Notes and 2026 Notes. See “Note 9 – OMIDRIA Royalty Obligation” for the estimated fair value of our OMIDRIA royalty obligation. 

 Note 6 — Certain Balance Sheet Accounts 

 OMIDRIA contract royalty asset 

 OMIDRIA contract royalty asset consists of the following:

 December 31, 

 December 31, 

 2025 

 2024 

 (In thousands) 

 Short-term OMIDRIA contract royalty asset

 $ 
 25,351 
 
 $ 
 29,083 
 
 Long-term OMIDRIA contract royalty asset

 96,435 
 
 124,266 
 
 Total OMIDRIA contract royalty asset

 $ 
 121,786 
 
 $ 
 153,349 
 
 See “Note 8 — Discontinued Operations – Sale of OMIDRIA” for discussion regarding the estimated fair value of our OMIDRIA contract royalty asset.

 OMIDRIA royalty obligation 

 OMIDRIA royalty obligation consists of the following:

 December 31, 

 December 31, 

 2025 

 2024 

 (In thousands) 

 Short-term OMIDRIA royalty obligation

 $ 
 20,547 
 
 $ 
 20,645 
 
 Long-term OMIDRIA royalty obligation

 147,319 
 
 195,612 
 
 Total OMIDRIA royalty obligation

 $ 
 167,866 
 
 $ 
 216,257 
 
 See “Note 9 — OMIDRIA Royalty Obligation” for further details.

 Receivables 

 Receivables consist of the following:

 December 31, 

 December 31, 

 2025 

 2024 

 (In thousands) 

 OMIDRIA royalty receivables

 $ 
 6,443 
 
 $ 
 6,940 
 
 Novo Nordisk receivables

 3,724 
 
 — 
 
 Other receivables

 750 
 
 799 
 
 Total receivables

 $ 
 10,917 
 
 $ 
 7,739 
 
 OMIDRIA royalty receivables represents approximately two months of royalty earnings from Rayner. All U.S. royalties received from Rayner are remitted by Rayner to an escrow account, established by Omeros, from which payments are made on our behalf to DRI. These payments are entirely pass-through in nature to the Company with DRI as the recipient.

 Property and Equipment, Net 

 Property and equipment, net consists of the following:

 December 31, 

 December 31, 

 2025 

 2024 

 (In thousands) 

 Equipment under finance leases

 $ 
 8,323 
 
 $ 
 8,323 
 
 Laboratory equipment

 3,744 
 
 3,690 
 
 Computer equipment

 1,113 
 
 1,113 
 
 Office equipment and furniture

 624 
 
 624 
 
 Total cost

 13,804 
 
 13,750 
 
 Less accumulated depreciation and amortization

 ( 12,036 
 ) 
 
 ( 11,072 
 ) 
 
 Total property and equipment, net

 $ 
 1,768 
 
 $ 
 2,678 
 
 For the years ended December 31, 2025, 2024 and 2023, depreciation and amortization expenses were $ 1.0 million, $ 1.0 million and $ 0.9 million, respectively.

 59

 Table of Contents 

 Accrued Expenses 

 Accrued expenses consist of the following:

 December 31, 

 December 31, 

 2025 

 2024 

 (In thousands) 

 Employee compensation

 $ 
 10,348 
 
 $ 
 8,868 
 
 Clinical trials

 6,248 
 
 7,100 
 
 Contract research and development

 5,773 
 
 4,334 
 
 Deferred income

 2,473 
 
 183 
 
 Consulting and professional fees

 2,406 
 
 2,602 
 
 Income taxes payable

 1,146 
 
 55 
 
 Interest payable

 616 
 
 2,667 
 
 Other accrued expenses

 378 
 
 196 
 
 Total accrued expenses

 $ 
 29,388 
 
 $ 
 26,005 
 
 Deferred income as of December 31, 2025 primarily relates to billings under the Transition Services Agreement to Novo Nordisk.

 Note 7 — Debt 

 Convertible senior notes, net, and term debt balances are comprised of the following:

 December 31, 

 December 31, 

 2025 

 2024 

 (In thousands) 

 2029 Notes, net maturing on June 15, 2029

 Long-term

 $ 
 51,364 
 
 $ 
 — 
 
 Term Loan, net maturing on June 3, 2028, repaid November 25, 2025

 Short-term

 — 
 
 21,000 
 
 Term Loan, net maturing on June 3, 2028, repaid November 25, 2025

 Long-term

 — 
 
 69,640 
 
 2026 Notes, net maturing on February 15, 2026, repaid February 13, 2026

 Short-term

 17,063 
 
 — 
 
 2026 Notes, net maturing on February 15, 2026, repaid February 13, 2026

 Long-term

 — 
 
 97,178 
 
 $ 
 68,427 
 
 $ 
 187,818 
 
 Term Loan embedded derivative reported at fair value

 Long-term

 $ 
 — 
 
 $ 
 ( 235 
 ) 
 
 2029 Notes embedded derivative reported at fair value

 Long-term

 $ 
 157,171 
 
 $ 
 — 
 
 2029 Notes 

 Exchange of 2026 Notes for 2029 Notes and Equitization Transaction 

 On May 14, 2025, we completed the Convertible Note Exchange of $ 70.8 million in aggregate principal amount of our existing 2026 Notes on a one-for-one basis for newly-issued 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. The 2029 Notes are convertible at the option of the holders 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.

 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.

 Embedded Derivative 

 The embedded derivative on the 2029 Notes includes both a derivative for the interest make-whole feature and a derivative for the conversion feature available to holders allowing them to convert their notes to common stock, cash or a combination thereof. At each reporting date, we remeasure the embedded derivative instruments to fair market value. At contract inception, we recorded a net $ 23.0 million embedded derivative as a component of our 2029 Notes. However, with the sale of OMS906 to Novo Nordisk and the announcement of FDA approval of TA-TMA, our stock price significantly increased. At December 31, 2025, the fair market value of our embedded derivative was $ 157.2 million. We marked-to-market the initial $ 23.0 million embedded derivative on the 2029 Notes and recorded a $ 134.2 million non-cash loss on remeasurement in our consolidated statement of operations and comprehensive loss. Increases or decreases in our stock price may materially affect the value of the derivative.

 Interest Make Whole Feature 

 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.

 Conversion Feature 

 The 2029 Notes are convertible at the option of the holder into shares of common stock, cash or a combination thereof at any time prior to the close of business on the second scheduled trading day immediately preceding the maturity date. The Company elects whether the conversion occurs in common stock, cash or a combination thereof. 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. The conversion rate is subject to adjustment in certain circumstances as described in the Indenture.

 The 2029 Notes are comprised of the following:

 December 31, 

 2025 

 (In thousands) 

 Principal amount

 $ 
 70,785 
 
 Unamortized debt discount, net of issuance costs

 ( 19,421 
 ) 
 
 Total 2029 Notes

 $ 
 51,364 
 
 Fair value of outstanding 2029 Notes (1) 

 $ 
 111,992 
 
 Fair value of 2029 Notes embedded derivative (2) 

 $ 
 157,171 
 
 (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. 

 (2) 
 The fair value of the 2029 Notes embedded derivative is classified as a Level 3 liability due to unobservable inputs in which little or no market data exists. (For further details refer to “Note 5 — Investments and Fair-Value Measurements”). 
 
 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. The carrying value of the 2029 Notes includes a discount which we amortize over the duration of the term as non-cash interest expense in the consolidated statement of operations and comprehensive loss. 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 following table sets forth interest expense recognized on the 2029 Notes:

 Twelve Months Ended 

 December 31, 2025 

 (In thousands) 

 Contractual interest expense

 $ 
 4,222 
 
 Amortization of debt discount and issuance costs

 3,658 
 
 Total interest expense

 $ 
 7,880 
 
 The 2029 Notes are 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 holders of the 2026 Notes to convert $ 10.0 million aggregate principal amount of 2026 Notes into shares of our common stock in three tranches. Our obligation to deliver shares in three tranches was initially accounted for as a share-settled liability measured at fair value. We completed the conversion of the final tranche in September 2025, resulting in the issuance of an aggregate of 2,819,866 shares of our common stock to the two holders in exchange for $ 10.0 million aggregate principal amount of the 2026 Notes. We did not receive new cash proceeds in these transactions. 

 We performed an assessment of the Convertible Note Exchange and Equitization Transaction and determined that these transactions were not a troubled debt restructuring and were a partial extinguishment of our 2026 Notes. These exchanges resulted in a net $ 3.0 million non-cash loss on extinguishment due to (i) expensing of the unamortized debt issuance costs of the extinguished 2026 Notes, (ii) recording the 2029 Notes to fair market value (i.e., at a discount) which we recorded both to our consolidated statement of operations and comprehensive loss and as debt on our consolidated balance sheet and (iii) recording the difference between the principal value of converted 2026 Notes and the fair market value of the share-settled liability.

 The Convertible Note Exchange 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 reflects the exchange of $ 70.8 million aggregate principal amount of 2026 Notes for the same amount of principal under the 2029 Notes and the reduction of $ 10.0 million in aggregate principal amount of 2026 Notes for common stock. 

 Term Loan 

 On June 3, 2024, we entered into a Credit Agreement to borrow $ 67.1 million under our Term Loan. In connection with our entry into the Credit Agreement, we used the Term Loan of $ 67.1 million, along with $ 21.7 million of cash on hand (for a total aggregate purchase price of $ 88.8 million) to repurchase $ 118.1 million aggregate principal amount of the 2026 Notes held by the Lenders. The $ 29.3 million difference between the $ 118.1 million aggregate principal amount of the 2026 Notes and the $ 88.8 million aggregate repurchase price was recorded as a premium (i.e., an increase) to the Term Loan on the Company’s consolidated balance sheet instead of being recognized as a gain on early extinguishment of debt.

 On November 25, 2025, concurrent with the closing of the sale and licensing of zaltenibart (OMS906) to Novo Nordisk under the APLA, we were required under the terms of the Credit Agreement to repay in full the $ 67.1 million principal outstanding under the Term Loan along with a 5 % prepayment premium. We recognized a net non-cash gain on extinguishment in the amount of $ 17.0 million which represents the de-recognition of $ 17.9 million in unamortized premium and debt issuance costs, derecognition of $ 2.6 million of embedded derivatives, and partially offset by $ 3.5 million of prepayment premium and related transaction expenses. The repayment of the Term Loan eliminated the embedded derivative associated with the Term Loan as of December 31, 2025. 

 Pursuant to a covenant under the Credit Agreement, we were required to maintain $ 25.0 million of unrestricted cash, cash equivalents and short-term investments at all times. Repayment of our obligations under the Credit Agreement resulted in the release in full of all liens and covenants thereunder including the covenant requiring us to maintain a minimum of $ 25.0 million in unrestricted cash, cash equivalents and short-term investments.

 The amount outstanding on the Term Loan is as follows:

 December 31, 

 December 31, 

 2025 

 2024 

 (In thousands) 

 Principal amount

 $ 
 — 
 
 $ 
 67,077 
 
 Unamortized debt premium, net of issuance costs and other

 — 
 
 23,563 
 
 Total term debt

 $ 
 — 
 
 $ 
 90,640 
 
 Fair value of outstanding term debt (1) 

 $ 
 — 
 
 $ 
 69,530 
 
 Fair value of term debt embedded derivative (2) 

 $ 
 — 
 
 $ 
 ( 235 
 ) 
 
 (1)

 The fair value was classified as Level 3 liability. We determine the fair market value by discounting future flows based on adjusted SOFR on each measurement date. 
 
 (2) 
 While the Term Loan is recorded as a liability, the embedded call and put options that have been identified as requiring bifurcations are recognized as a net embedded derivative asset reflected as a component of the Term Loan on the consolidated balance sheet. (For further details refer to “Note 5 — Investments and Fair-Value Measurements”) 
 
 The Term Loan had a stated maturity date of June 3, 2028 , bearing interest at an adjusted secured overnight financing rate (“adjusted SOFR”), subject to a 3.0 % floor, plus 8.75 % per annum, payable quarterly from the closing date. As of December 31, 2025 and 2024, the contractual interest rate on the Term Loans was 13.02 % and 13.32 %, respectively. We amortized the premium as both a non-cash reduction of long-term debt in the consolidated balance sheets and as interest expense in the consolidated statement of operations and comprehensive loss.

 Due to the premium amortization on the Term Loan, interest expense was being recognized at an implied effective interest rate of 3.38 %.

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

 Year Ended December 31, 

 2025 

 2024 

 (In thousands) 

 Contractual interest expense

 $ 
 8,021 
 
 $ 
 5,525 
 
 Amortization of debt premium and issuance costs

 ( 5,578 
 ) 
 
 ( 4,681 
 ) 
 
 Total interest expense

 $ 
 2,443 
 
 $ 
 844 
 
 2026 Notes 

 As of December 31, 2025, we had outstanding $ 17.1 million aggregate principal amount of unsecured convertible senior notes, which accrued interest at an annual rate of 5.25 % per annum, payable semi-annually in arrears on February 15 and August 15 of each year. The 2026 Notes matured on February 15, 2026 .

 The 2026 Notes were issued in the third quarter of 2020 in an aggregate principal amount of $ 225.0 million. In order to reduce the dilutive impact or potential cash expenditure associated with the conversion of the 2026 Notes, we entered into capped call transactions in connection with the issuances of the 2026 Notes (the “2026 Capped Call”). The 2026 Capped Call was a separate transaction and not part of the terms of the 2026 Notes and was executed separately from the issuance of the 2026 Notes. The amount paid for the 2026 Capped Call was recorded as a reduction to additional paid-in capital in the consolidated balance sheet. As of December 31, 2025, approximately 12.2 million shares remained outstanding under the 2026 Capped Call. Further, we concluded the 2026 Capped Call qualifies for a derivative scope exception for instruments that are both indexed to an entity’s own stock and classified in stockholders’ equity in its balance sheet. Consequently, the fair value of the 2026 Capped Call of $ 23.2 million is classified as equity. The 2026 Capped Call expired upon maturity of the 2026 Notes on February 15, 2026.

 In December 2023, we repurchased $ 9.1 million aggregate par value of our 2026 Notes for cash on hand of $ 5.0 million, resulting in a $ 4.1 million non-cash gain on extinguishment (approximately 55 % of par value). 

 In connection with our entry into the Credit Agreement, we used the $ 67.1 million in Term Loan proceeds along with $ 21.7 million of cash on hand for a total purchase price of $ 88.8 million to repurchase $ 118.1 million aggregate principal amount of the 2026 Notes held by the Lenders (approximately 75 % of par value).

 The May 2025 Convertible Note Exchange and Equitization Transaction further reduced the aggregate principal balance of our 2026 Notes by $ 80.8 million. The $ 80.8 million reduction reflects the exchange of $ 70.8 million aggregate principal amount of 2026 Notes for the same amount of principal under the 2029 Notes and the reduction of $ 10.0 million in aggregate principal amount of 2026 Notes for common stock. The Convertible Note Exchange and the Equitization Transaction resulted in a net $ 3.0 million non-cash loss on extinguishment as previously discussed. 

 As of December 31, 2025, we had $ 17.1 million outstanding principal under the 2026 Notes. This balance was repaid in full at maturity in February 2026. The 2026 Capped Call expired upon maturity of the 2026 Notes.

 Unamortized debt issuance costs are amortized to interest expense at an effective interest rate of 5.9 % over the remaining term of the loan.

 The 2026 Notes were comprised of the following:

 December 31, 

 December 31, 

 2025 

 2024 

 (In thousands) 

 Principal amount

 $ 
 17,077 
 
 $ 
 97,862 
 
 Unamortized debt issuance costs

 ( 14 
 ) 
 
 ( 684 
 ) 
 
 Total 2026 Notes, net

 $ 
 17,063 
 
 $ 
 97,178 
 
 Fair value of outstanding 2026 Notes (1) 

 $ 
 16,996 
 
 $ 
 93,752 
 
 (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 of the 2026 Notes is determined based on quoted prices in an over-the counter market using the most recent trading information available at the end of the reporting period. The value of the conversion feature of the 2026 Notes is not deemed to be significant as subsequent to year-end, no holders converted their notes prior to repayment 
 
 The following table sets forth interest expense recognized related to the 2026 Notes:

 Year Ended December 31, 

 2025 

 2024 

 2023 

 (In thousands) 

 Contractual interest expense

 $ 
 2,547 
 
 $ 
 7,772 
 
 $ 
 11,774 
 
 Amortization of debt issuance costs

 287 
 
 859 
 
 1,355 
 
 Total interest expense

 $ 
 2,834 
 
 $ 
 8,631 
 
 $ 
 13,129 
 
 2023 Notes 

 We repaid the $ 95.0 million aggregate principal amount of our 6.25 % convertible senior notes (the “2023 Notes”) that remained outstanding at maturity on November 15, 2023 . The following table sets forth interest expense recognized related to the 2023 Notes: 

 Year Ended December 31, 

 2025 

 2024 

 2023 

 (In thousands) 

 Contractual interest expense

 $ 
 — 
 
 $ 
 — 
 
 $ 
 5,195 
 
 Amortization of debt issuance costs

 — 
 
 — 
 
 619 
 
 Total interest expense

 $ 
 — 
 
 $ 
 — 
 
 $ 
 5,814 
 
 Minimum Commitments 

 As of December 31, 2025, the most probable principal payments on our 2026 Notes and 2029 Notes are as follows:

 2026 Notes 

 2029 Notes 

 Total 

 (In thousands) 

 2026

 $ 
 17,077 
 
 $ 
 — 
 
 $ 
 17,077 
 
 2027

 — 
 
 — 
 
 — 
 
 2028

 — 
 
 — 
 
 — 
 
 2029

 — 
 
 70,785 
 
 70,785 
 
 2030 and thereafter

 — 
 
 — 
 
 — 
 
 Total principal payments

 17,077 
 
 70,785 
 
 87,862 
 
 Net unamortized discounts and issuance costs

 ( 14 
 ) 
 
 ( 19,421 
 ) 
 
 ( 19,435 
 ) 
 
 Carrying value of debt

 $ 
 17,063 
 
 $ 
 51,364 
 
 $ 
 68,427 
 
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 Table of Contents 

 Note 8 — Discontinued Operations - Sale of OMIDRIA 

 On December 23, 2021, we sold the rights to OMIDRIA and related assets to Rayner, which is reported as discontinued operations in our consolidated statements of operations and comprehensive loss and excluded from continuing operations for all periods presented. 

 As contemplated by the Asset Purchase Agreement between Omeros and Rayner, in December 2022, we earned a $ 200.0 million milestone payment 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 “Milestone Event”). We received the $ 200.0 million in February 2023. Upon achieving the Milestone Event, the royalty rate applicable to U.S. net sales of OMIDRIA was reduced 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 later than early 2035. We currently earn a royalty rate of 15 % on net ex-U.S. sales. To date, ex-U.S. royalties have not been significant.

 The results of operations for OMIDRIA are recorded as income from discontinued operations in the consolidated statements of operations and comprehensive loss are as follows:

 Year Ended December 31, 

 2025 

 2024 

 2023 

 (In thousands) 

 Interest on OMIDRIA contract royalty asset

 $ 
 14,717 
 
 $ 
 16,922 
 
 $ 
 15,315 
 
 Remeasurement adjustments

 ( 12,657 
 ) 
 
 7,969 
 
 41,167 
 
 Other income (expense), net

 ( 58 
 ) 
 
 1,211 
 
 1,087 
 
 Ex-US royalties

 12 
 
 — 
 
 — 
 
 Income before income tax

 2,014 
 
 26,102 
 
 57,569 
 
 Income tax expense (1) 

 ( 556 
 ) 
 
 ( 288 
 ) 
 
 ( 462 
 ) 
 
 Net income from discontinued operations, net of tax

 $ 
 1,458 
 
 $ 
 25,814 
 
 $ 
 57,107 
 
 (1)

 For further discussion of income tax expense refer to “Note 14 – Income Taxes”. 
 
 The following schedule is a rollforward of the OMIDRIA contract royalty asset (in thousands):

 Balance at December 31, 2023

 $ 
 168,109 
 
 Royalties earned

 ( 39,651 
 ) 
 
 Interest on OMIDRIA contract royalty asset

 16,922 
 
 Remeasurement adjustments

 7,969 
 
 Balance at December 31, 2024

 153,349 
 
 Royalties earned

 ( 33,623 
 ) 
 
 Interest on OMIDRIA contract royalty asset

 14,717 
 
 Remeasurement adjustments

 ( 12,657 
 ) 
 
 Balance at December 31, 2025

 $ 
 121,786 
 
 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:

 Year Ended December 31, 

 2025 

 2024 

 2023 

 (In thousands) 

 Net cash provided by discontinued operations from operating activities

 $ 
 32,122 
 
 $ 
 40,484 
 
 $ 
 243,405 
 
 Net cash provided by discontinued operations primarily represents royalties received and a $ 200.0 million milestone payment that we collected from Rayner in February 2023. All royalties earned on OMIDRIA net 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. 

 Note 9 — OMIDRIA Royalty Obligation 

 On September 30, 2022, we sold to DRI 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 under the Amendment. The Amendment with DRI 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. We accounted for the Amendment as a modification of our existing debt from DRI. The OMIDRIA royalty obligation is valued based on our estimates of future OMIDRIA royalties and is amortized through 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. DRI has no recourse to our assets other than in its interest in OMIDRIA royalties.

 We currently retain the right to receive all royalties payable by Rayner on any ex-U.S. net sales. After December 31, 2031, we retain the right to receive all global royalties payable by Rayner on net sales of OMIDRIA. 

 Changes in the OMIDRIA royalty obligation are as follows (in thousands):

 Balance at December 31, 2023

 $ 
 125,126 
 
 Additional proceeds

 115,525 
 
 Principal payments

 ( 18,780 
 ) 
 
 Non-cash interest

 ( 5,614 
 ) 
 
 Balance at December 31, 2024

 216,257 
 
 Non-cash interest

 ( 33,435 
 ) 
 
 Principal payments

 ( 14,956 
 ) 
 
 Balance at December 31, 2025

 $ 
 167,866 
 
 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 remeasurement date. As of December 31, 2025, the approximate fair value of our obligation was $ 166.7 million.

 Interest expense is comprised of cash interest which is paid by escrow directly from Rayner and non-cash interest is comprised of remeasurement adjustments taken on the OMIDRIA royalty obligation based on changes in Rayner's forecasted OMIDRIA cash flows: 

 Year Ended December 31, 

 2025 

 2024 

 2023 

 (In thousands) 

 OMIDRIA royalty obligation

 Pass through interest remitted to administrative agent

 $ 
 19,166 
 
 $ 
 20,634 
 
 $ 
 11,848 
 
 Non-cash remeasurement adjustment

 ( 33,435 
 ) 
 
 ( 5,614 
 ) 
 
 — 
 
 Interest expense, net of remeasurement on OMIDRIA royalty obligation

 ( 14,269 
 ) 
 
 15,020 
 
 11,848 
 
 As of December 31, 2025, the expected scheduled principal and interest payments (based on an implied effective interest rate of 10.27 %) are as follows:

 Principal 

 Interest 

 Total 

 (In thousands) 

 2026

 $ 
 20,547 
 
 $ 
 15,323 
 
 $ 
 35,870 
 
 2027

 22,691 
 
 13,266 
 
 35,957 
 
 2028

 25,738 
 
 10,939 
 
 36,677 
 
 2029

 29,107 
 
 8,303 
 
 37,410 
 
 2030

 32,832 
 
 5,326 
 
 38,158 
 
 Thereafter

 36,951 
 
 1,971 
 
 38,922 
 
 Total scheduled payments

 $ 
 167,866 
 
 $ 
 55,128 
 
 $ 
 222,994 
 
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 Table of Contents 

 Note 10 — Lease Liabilities 

 We have operating leases related to our office and laboratory space. The initial term of the leases is through November 2027, and we have two options to extend the lease term, each by five years. We have finance leases for certain laboratory and office equipment that have lease terms expiring through October 2029.

 Lease-related assets and liabilities recorded on our consolidated balance sheet are as follows:

 December 31, 

 December 31, 

 2025 

 2024 

 (In thousands) 

 Assets

 Operating lease assets

 $ 
 10,708 
 
 $ 
 14,961 
 
 Finance lease assets, net 
 
 1,287 
 
 2,025 
 
 Total lease assets

 $ 
 11,995 
 
 $ 
 16,986 
 
 Liabilities

 Current:

 Operating leases 
 
 $ 
 5,797 
 
 $ 
 5,239 
 
 Finance leases 
 
 503 
 
 732 
 
 Non-current:

 Operating leases 
 
 6,524 
 
 12,224 
 
 Finance leases 
 
 721 
 
 1,242 
 
 Total lease liabilities

 $ 
 13,545 
 
 $ 
 19,437 
 
 Weighted-average remaining lease term

 Operating leases (years)

 1.9 
 
 2.9 
 
 Finance leases (years)

 3.0 
 
 3.5 
 
 Weighted-average discount rate

 Operating leases

 12.80 
 % 
 
 12.62 
 % 
 
 Finance leases

 5.33 
 % 
 
 5.87 
 % 
 
 The components of total lease costs are as follows:

 Year Ended 

 December 31, 

 2025 

 2024 

 (In thousands) 

 Lease cost

 Operating lease cost

 $ 
 6,162 
 
 $ 
 6,403 
 
 Finance lease cost:

 Amortization

 738 
 
 708 
 
 Interest

 152 
 
 171 
 
 Variable lease cost

 3,723 
 
 3,471 
 
 Sublease income

 ( 892 
 ) 
 
 ( 1,589 
 ) 
 
 Net lease cost

 $ 
 9,883 
 
 $ 
 9,164 
 
 The supplemental cash flow information related to leases is as follows:

 Year Ended 

 December 31, 

 2025 

 2024 

 (In thousands) 

 Cash paid for amounts included in the measurement of lease liabilities

 Cash payments for operating leases

 $ 
 6,828 
 
 $ 
 7,003 
 
 Cash payments for financing leases

 901 
 
 944 
 
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 The future maturities of our lease liabilities as of December 31, 2025 are as follows:

 Operating 

 Finance 

 Leases 

 Leases 

 Total 

 (In thousands) 

 2026

 $ 
 6,606 
 
 $ 
 569 
 
 $ 
 7,175 
 
 2027

 6,128 
 
 299 
 
 6,427 
 
 2028

 — 
 
 272 
 
 272 
 
 2029

 — 
 
 201 
 
 201 
 
 2030

 — 
 
 — 
 
 — 
 
 Total undiscounted lease payments

 12,734 
 
 1,341 
 
 14,075 
 
 Less interest

 ( 414 
 ) 
 
 ( 116 
 ) 
 
 ( 530 
 ) 
 
 Total lease liabilities

 $ 
 12,320 
 
 $ 
 1,225 
 
 $ 
 13,545 
 
 Note 11 — Commitments and Contingencies 

 Contracts 

 We have various agreements with third parties that collectively require payment of termination fees totaling $ 2.6 million as of December 31, 2025 if we cancel the work within specific time frames, either prior to commencing or during performance of the contracted services.

 Payment of Development Milestones and Product Royalties 

 We have entered a variety of development, collaboration, licensing or similar agreements with third parties under which we have accessed technology or services in connection with our development assets and programs. 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 years ended December 31, 2025 and 2024, development milestones were not significant. For the year ended December 31, 2023, we paid $ 5.0 million in development milestones. 

 Note 12 — Shareholders ’ Equity (Deficit) 

 Common Stock 

 As of December 31, 2025, we had reserved shares of common stock under our equity plans as follows:

 Stock options outstanding

 18,273,105 
 
 Awards available to issue under the 2017 Plan

 3,893,710 
 
 Total shares reserved

 22,166,815 
 
 At the Market Sales Agreement - 2021 – We have a sales agreement to sell shares of our common stock, from time to time, through an “at the market” (“ATM”) equity offering program. During the year ended December 31, 2025, we sold 4.4 million shares of common stock pursuant to our ATM program, generating $ 19.0 million in net proceeds at an average price per share of $ 4.51 . On November 14, 2025, the Company filed a shelf registration statement and prospectus supplement renewing the ATM for an aggregate offering price up to $ 150.0 million, and as of the date of this annual report, we have $ 150.0 million in shares of our common stock available to sell under our ATM program.

 Amendment of 2017 Omnibus Incentive Compensation Plan - At our June 23, 2023 annual meeting, our shareholders approved a 5,000,000 share increase in the number of shares of common stock available for grant under the 2017 Omnibus Incentive Compensation Plan, as amended and restated.

 Share Repurchase Program - 2023 - 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. For the year ended December 31, 2023, we repurchased and retired 1.8 million shares of common stock at an average price of $ 2.54 per share for an aggregate purchase price of $ 4.7 million. During the first quarter of 2024, we repurchased and retired 3.2 million shares of common stock at an average of $ 3.71 per share for an aggregate purchase price of $ 11.9 million. The terms of the Credit Agreement prohibited 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.

 Share Repurchase Program - 2025 - On November 29, 2025, the Board of Directors approved a new share repurchase program under which we are permitted to repurchase from time to time up to $ 100.0 million of our common stock in the open market or through privately negotiated transactions. 

 Equitization Transaction - On May 12, 2025, we entered into Note Conversion Agreements with two holders of the 2026 Notes which resulted in the conversion of $ 10.0 million aggregate principal amount of 2026 Notes into 2,819,866 shares of our common stock. (For further details, see “Note 7 – Debt”). 

 Registered Direct Offering - On July 28, 2025, we issued and sold 5,365,853 shares of our common stock in a registered direct offering to entities managed by Polar Asset Management Partners at a price of $ 4.10 per share, representing a 14 % premium to the closing price of our common stock on the date of the definitive agreement for the purchase of the shares. We received $ 20.3 million in cash proceeds net of offering expenses.

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 Note 13 — Stock-Based Compensation 

 Our equity plans provide for the grant of incentive and non-statutory stock options, stock appreciation rights, restricted stock awards, restricted stock units, performance units, performance shares and other stock and cash awards to employees and consultants. Stock options are granted with an exercise price not less than the fair market value of Omeros’ common stock on the date of the grant. Any unexercised options expire 10 years from grant date, and any unvested stock options granted which are subsequently canceled become available for future reissuance.

 Vesting schedules for our equity plans generally are as follows:

 Grant Type 

 Vesting Schedule 

 Employee initial options grants

 25 % at one -year anniversary, 1/48 monthly thereafter

 Employee recurring options grants

 1/48 monthly

 Non-employee consultant options grants

 1/12 or 1/48 monthly

 Stock-based compensation expense is as follows:

 Year Ended December 31, 

 2025 

 2024 

 2023 

 (In thousands) 

 Continuing operations:

 Research and development

 $ 
 3,530 
 
 $ 
 4,133 
 
 $ 
 4,754 
 
 Selling, general and administrative

 4,662 
 
 6,360 
 
 7,140 
 
 Total stock-based compensation in continuing operations

 8,192 
 
 10,493 
 
 11,894 
 
 Discontinued operations

 — 
 
 — 
 
 ( 244 
 ) 
 
 Total stock-based compensation

 $ 
 8,192 
 
 $ 
 10,493 
 
 $ 
 11,650 
 
 The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The following assumptions were applied to stock option grants during the periods ended:

 Year Ended December 31, 

 2025 

 2024 

 2023 

 Estimated weighted-average fair value

 $ 
 2.63 
 
 $ 
 2.68 
 
 $ 
 2.44 
 
 Weighted-average assumptions:

 Expected volatility

 101 
 % 
 
 95 
 % 
 
 93 
 % 
 
 Expected life, in years

 7.3 
 
 7.2 
 
 7.2 
 
 Risk-free interest rate

 4.13 
 % 
 
 4.36 
 % 
 
 3.97 
 % 
 
 Expected dividend yield

 — 
 % 
 
 — 
 % 
 
 — 
 % 
 
 Expected volatility is based on the historical volatility of our stock price weighted by grant issuances over the reporting period. We estimated the expected life of the stock options granted using the historical exercise behavior of option holders. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant. Forfeiture expense is estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates.

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 Stock option activity for all stock plans is as follows: 

 Options Outstanding 

 Weighted- Average Exercise Price per Share 
 
 Remaining Contractual Life (In years) 

 Aggregate Intrinsic Value (In thousands) 

 Balance at December 31, 2024

 16,690,882 
 
 $ 
 8.17 
 
 Granted

 3,323,400 
 
 3.30 
 
 Exercised

 ( 1,072,979 
 ) 
 
 7.13 
 
 Forfeited

 ( 668,198 
 ) 
 
 10.15 
 
 Balance at December 31, 2025

 18,273,105 
 
 $ 
 7.27 
 
 6.1 
 
 $ 
 182,253 
 
 Vested and expected to vest at December 31, 2025

 17,711,818 
 
 $ 
 7.40 
 
 6.0 
 
 $ 
 174,415 
 
 Exercisable at December 31, 2025

 12,685,226 
 
 $ 
 9.07 
 
 4.9 
 
 $ 
 104,093 
 
 Of the 18.3 million common stock options outstanding as of December 31, 2025, 0.4 million have an exercise price above the $ 17.18 closing price of our stock on the Nasdaq Global Market on December 31, 2025. The total intrinsic value of stock options exercised during the years ended December 31, 2025, 2024 and 2023 was $ 6.2 million, $ 0.5 million and $ 0.1 million, respectively.

 At December 31, 2025 and December 31, 2024, there were 5.6 million and 5.4 million unvested stock options outstanding, respectively, that vest over a weighted-average period of 2.5 years and 2.4 years, respectively. The remaining estimated compensation expense to be recognized in connection with these unvested stock options is $ 12.1 million and $ 12.5 million for the years ended December 31, 2025 and December 31, 2024, respectively.

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 Note 14 — Income Taxes 

 The components of income tax benefit from continuing and discontinued operations were as follows:

 December 31, 

 2025 

 2024 

 2023 

 (In thousands) 

 Continuing operations:

 Current income tax expense:

 Federal

 $ 
 — 
 
 $ 
 — 
 
 $ 
 — 
 
 State

 2,012 
 
 2,305 
 
 — 
 
 Total current income tax expense

 2,012 
 
 2,305 
 
 — 
 
 Deferred income tax benefit:

 Federal

 — 
 
 — 
 
 — 
 
 State

 — 
 
 — 
 
 — 
 
 Total deferred income tax benefit

 — 
 
 — 
 
 — 
 
 Income tax expense in continuing operations

 $ 
 2,012 
 
 $ 
 2,305 
 
 $ 
 — 
 
 Income tax expense as a component of discontinued operations

 $ 
 556 
 
 $ 
 288 
 
 $ 
 462 
 
 Our income is wholly derived from domestic U.S. operations, and we have no income from foreign subsidiaries for all years presented. For the years ended December 31, 2025, 2024 and 2023, we have net losses from continuing operations before income tax expense of $ 2.8 million, $ 180.3 million and $ 174.9 million, respectively. For the years ended December 31, 2025, 2024 and 2023, we have net pre-tax income from discontinued operations of $ 2.0 million, $ 26.1 million and $ 57.6 million, respectively. In 2025 and 2023, we had net losses for federal income tax purposes and no federal tax liability. In 2024, we had net income for federal income tax purposes; therefore, we utilized existing net operating losses (“NOLs”) of $ 62.5 million, to fully offset our federal tax liability for the period.

 We recorded state income tax expense in continuing operations of $ 2.0 million and $ 2.3 million in 2025 and 2024, and $ 0.6 million, $ 0.3 million and $ 0.5 million in discontinued operations in 2025, 2024 and 2023, respectively, as we did not have adequate NOLs and tax credits to fully offset our state tax liability. 

 The Tax Cuts and Jobs Act was enacted on December 22, 2017 and includes the requirement to capitalize and amortize research and development expenditures beginning in 2022. The U.S. government enacted the OBBBA on July 4, 2025, which includes new Section IRC 174A. This section allows for immediate expensing of domestic research and development expenditures for tax years beginning after December 31, 2024, reversing the prior requirement under the 2017 Tax Cuts and Jobs Act which capitalized domestic research and development costs over five years. As a result of the most recent OBBBA legislation, we have chosen to accelerate the previously capitalized and unamortized U.S. research and development expenditures as a current year deduction which allows us to reduce our federal tax liability in the current year to zero. We plan to expense our U.S. research and development expenditures moving forward. Foreign research and development expenditures continue to be subject to capitalization and amortization requirements. State income tax treatment of research and development expenditures continues to vary, as not all states conform to federal provisions, which may result in differences between federal and state taxable income.

 At December 31, 2025, 2024, and 2023, we had federal NOL carryforwards of $ 386.5 million, $ 331.7 million and $ 398.6 million, respectively. Pre-2018 federal NOL carryforwards of $ 45.4 million expire between 2036 and 2037. Post-2018 federal NOL carryforwards of $ 340.9 million do not expire. Research and development tax credit carryforwards of $ 111.8 million expire between 2026 and 2044. At December 31, 2025, 2024 and 2023, we had state NOL carryforwards of $ 229.8 million, $ 233.2 million and $ 245.8 million, respectively. We file federal and certain state income tax returns, which provides varying statutes of limitations on assessments. However, because of NOL carryforwards, substantially all of our tax years remain open to federal and state tax examination.

 Deferred income tax assets and liabilities reflect the tax effect of NOL and tax credit carryforwards and the net temporary difference between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

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 Significant components of deferred income taxes were as follows:

 December 31, 

 2025 

 2024 

 (In thousands) 

 Deferred tax assets:

 Research and development tax credits

 $ 
 111,757 
 
 $ 
 104,772 
 
 Net operating loss carryforwards

 91,713 
 
 80,414 
 
 OMIDRIA royalty obligation

 38,820 
 
 50,446 
 
 Debt derivative

 36,332 
 
 — 
 
 Capitalized research and development

 19,448 
 
 52,388 
 
 Stock-based compensation

 8,183 
 
 9,573 
 
 Inventory

 6,933 
 
 6,993 
 
 Intangibles

 5,436 
 
 5,903 
 
 Other

 6,681 
 
 13,085 
 
 Total deferred tax assets

 325,303 
 
 323,574 
 
 Deferred tax liabilities:

 OMIDRIA contract royalty asset

 ( 28,163 
 ) 
 
 ( 35,772 
 ) 
 
 Other

 ( 6,613 
 ) 
 
 ( 3,839 
 ) 
 
 Total deferred tax liabilities

 ( 34,776 
 ) 
 
 ( 39,611 
 ) 
 
 Net deferred tax assets before valuation allowance

 290,527 
 
 283,963 
 
 Less valuation allowance

 ( 290,527 
 ) 
 
 ( 283,963 
 ) 
 
 Net deferred tax liabilities

 $ 
 — 
 
 $ 
 — 
 
 The valuation allowance relates primarily to net U.S. deferred tax assets from research tax credit carryforwards, operating losses, the OMIDRIA royalty obligation, the 2029 Notes derivative, capitalized research and development, and amounts paid and accrued for which the tax treatment requires capitalization and amortization. 

 The Company maintains a full valuation allowance on its net U.S. deferred tax assets. The assessment regarding whether a valuation allowance is required considers both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. In making this assessment, significant weight is given to evidence that can be objectively verified. In its evaluation, the Company considered its cumulative losses and its forecasted losses in the near term as significant negative evidence. Based upon a review of the four sources of income identified within ASC 740, Accounting for Income Taxes , the Company determined that the negative evidence outweighed the positive evidence, and a full valuation allowance on its net deferred tax assets should be maintained. The Company will continue to assess the realizability of its deferred tax assets going forward and will adjust the valuation allowance as needed.

 The following table summarizes the activities related to the Company's gross unrecognized tax benefits (in thousands): 

 Balance at December 31, 2023

 $ 
 1,966 
 
 Increase in balance related to tax positions taken during prior years

 2,509 
 
 Decrease in balance as a result of a lapse of the applicable statute of limitations

 ( 12 
 ) 
 
 Balance at December 31, 2024

 4,463 
 
 Decrease in balance related to tax positions taken during current year

 ( 52 
 ) 
 
 Decrease in balance as a result of a lapse of the applicable statute of limitations

 ( 34 
 ) 
 
 Balance at December 31, 2025

 $ 
 4,377 
 
 As of December 31, 2025, 2024 and 2023, the total amount of gross unrecognized tax benefits was $ 4.4 million, $ 4.5 million and $ 2.0 million, respectively. Accrued interest and penalties of $ 1.5 million, $ 0.5 million and $ 0.3 million, respectively, were included within our unrecognized tax benefits as of December 31, 2025, December 2024 and December 2023, which are excluded from the table above. As of December 31, 2025, $ 4.4 million of the total unrecognized tax benefits, if recognized, would have an impact on the Company's effective tax rate. The Company's policy is to recognize interest and penalties accrued on any unrecognized tax benefits as a component of income tax expense.

 Rate Reconciliation 

 The Company adopted ASU 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosure s on a prospective basis beginning with the year ended December 31, 2025. The following table presents required disclosure pursuant to ASU 2023-09 and reconciles the Company's U.S. federal statutory tax amount and rate to its actual effective amount and rate:

 December 31, 2025 

 (In thousands) 

 Percent 

 U.S. federal tax at statutory rate

 $ 
 ( 587 
 ) 
 
 ( 21.0 
 )% 
 
 State tax, net of federal benefit (1) 

 1,289 
 
 46.1 
 % 
 
 Change in valuation allowance

 6,122 
 
 219.0 
 % 
 
 Changes in unrecognized tax benefits

 625 
 
 22.4 
 % 
 
 Tax credits

 Research and development credit

 ( 1,243 
 ) 
 
 ( 44.5 
 )% 
 
 Orphan drug credit

 ( 5,779 
 ) 
 
 ( 206.7 
 )% 
 
 Non-deductible items

 Stock based compensation awards

 295 
 
 10.5 
 % 
 
 Section 162(m) limitations

 1,405 
 
 50.2 
 % 
 
 State taxes

 ( 250 
 ) 
 
 ( 8.9 
 )% 
 
 Other items

 135 
 
 4.9 
 % 
 
 Effective tax rate

 $ 
 2,012 
 
 72.0 
 % 
 
 (1)

 The states and local jurisdiction that contribute to the majority (greater than 50%) of the tax effect in this category include California, Michigan and Minnesota 
 
 The following table presents the required disclosures prior to the Company's adoption of ASU 2023-09 and reconciles the U.S. federal statutory income tax rate to the actual global effective income tax rate for the years ended December 31, 2024 and December 31, 2023:

 Year ended December 31, 

 2024 

 2023 

 U.S. federal statutory rate on net loss

 ( 21.0 
 )% 
 
 ( 21.0 
 )% 
 
 State tax, net of federal tax benefit

 ( 2.3 
 )% 
 
 ( 2.1 
 )% 
 
 Change in valuation allowance

 28.2 
 % 
 
 27.7 
 % 
 
 Tax credits

 ( 6.6 
 )% 
 
 ( 8.0 
 )% 
 
 Nondeductible items

 0.1 
 % 
 
 0.0 
 % 
 
 Stock compensation

 1.7 
 % 
 
 1.5 
 % 
 
 Other

 1.2 
 % 
 
 1.9 
 % 
 
 Effective tax rate

 1.3 
 % 
 
 0.0 
 % 
 
 Income taxes paid, net of refunds received for the year ended December 31, 2025 are shown as follows (in thousands):

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 Table of Contents 

 December 31, 2025 

 New York

 $ 
 111 
 
 Texas

 21 
 
 Massachusetts

 18 
 
 All other states

 3 
 
 Income tax, net of amounts refunded

 $ 
 153 
 
 We did not pay any federal or foreign income taxes during 2025. The amount of cash income taxes paid by the Company during the years ended December 31, 2025, December 31, 2024 and December 31, 2023 was $ 0.2 million, $ 0.2 million and $ 3.3 million, respectively.

 Note 15 — 401(k) Retirement Plan 

 Our 401(k) retirement plan provides for an annual company discretionary match on employee contributions.For each of the three years ended December 31, 2025, 2024 and 2023, Omeros' 401(k) match expense was $ 0.6 million. We match up to 4.0 % of each participant's eligible earnings, with a maximum annual company match of $ 4,000 per employee. All employees are eligible to participate in the 401(k) match.

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 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 

 None.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.
OMEROS CORP 10-K

Item 8. Financial Statements and Supplementary Data
