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Item 1. Business

2021-03-01 compared with 2020-03-02 · 279 added, 280 removed, 697 unchanged (45% of the section changed)

We are a commercial-stage biopharmaceutical company committed to discovering, developing and commercializing small-molecule and protein therapeutics for large-market as well as orphan indications targeting inflammation, complement-mediated diseases, disorders of the central nervous system and immune-related diseases, including cancers.

Our drug product OMIDRIA ® is marketed in the United States for use during cataract surgery or intraocular lens (“IOL”) replacement for adult and pediatric patients.

We have multiple Phase 3 and Phase 2 clinical-stage development programs in our pipeline, which are focused on:

complement-mediated disorders, including HSCT-TMA, IgA nephropathy and aHUS, as well as addiction.

In addition, we have a diverse group of preclinical programs, including GPR174, a novel target in immuno-oncology that modulates a new cancer immunity axis that we recently discovered.

Small-molecule inhibitors of GPR174 are part of our proprietary G protein-coupled receptor (“GPCR”) platform through which we control 54 new GPCR drug targets and their corresponding compounds.

We also exclusively possess a novel antibody-generating platform.

Our drug product OMIDRIA® is marketed in the United States for use during cataract surgery or intraocular lens replacement for adult and pediatric patients.

Our drug candidate narsoplimab is the subject of a biologics license application (“BLA”) under priority review by the U.S.

Food and Drug Administration (“FDA”) for the treatment of hematopoietic stem cell transplant-associated thrombotic microangiopathy (“HSCT-TMA”).

We also have multiple Phase 3 and Phase 2 clinical-stage development programs in our pipeline, which are focused on:

complement-mediated disorders, including immunoglobulin A (“IgA”) nephropathy, atypical hemolytic uremic syndrome (“aHUS”) and COVID-19.

We have also initiated a Phase 1 clinical program for our MASP-3 inhibitor OMS906 targeting the alternative pathway of complement and have successfully completed a Phase 1 study in our phosphodiesterase 7 (“PDE7”) program focused on addiction.

In addition, we have a diverse group of preclinical programs, including GPR174, a novel target in immuno-oncology that modulates a new cancer immunity axis that we discovered.

Small-molecule and antibody inhibitors of GPR174 are part of our proprietary G protein-coupled receptor (“GPCR”) platform through which we control 54 GPCR drug targets and their corresponding compounds.

We also possess a proprietary-asset-enabled antibody-generating technology.

We have retained control of all commercial rights for OMIDRIA and each of our product candidates and programs.

Commercial Product -- OMIDRIA ® (phenylephrine and ketorolac intraocular solution) 1%/0.3%

OMIDRIA is approved by the FDA for use during cataract surgery or IOL replacement to maintain pupil size by preventing intraoperative miosis (pupil constriction) and to reduce postoperative ocular pain.

Outside the U.S., we have received approval from the EC to market OMIDRIA in the European Economic Area (“EEA”), for use during cataract surgery and other IOL replacement procedures for maintenance of intraoperative mydriasis (pupil dilation), prevention of intraoperative miosis and reduction of acute postoperative ocular pain.

OMIDRIA is approved by FDA for use during cataract surgery or intraocular lens (“IOL”) replacement to maintain pupil size by preventing intraoperative miosis (pupil constriction) and to reduce postoperative ocular pain.

Outside the U.S., we have received approval from the European Commission (“EC”) to market OMIDRIA in the European Economic Area (“EEA”), for use during cataract surgery and other IOL replacement procedures for maintenance of intraoperative mydriasis (pupil dilation), prevention of intraoperative miosis and reduction of acute postoperative ocular pain.

OMIDRIA is a proprietary drug product containing two active pharmaceutical ingredients (“APIs”):

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in the second quarter of 2015 and sell OMIDRIA primarily through wholesalers which, in turn, sell to ASCs and hospitals.

Pass-through status allows for separate payment (i.e., outside the packaged payment rate for the surgical procedure) under Medicare Part B.

In March 2018, Congress extended pass-through reimbursement status for a small number of drugs, including OMIDRIA, used during procedures performed on Medicare Part B fee-for-service patients for an additional two years, running from October 1, 2018 through September 30, 2020.

We continue to pursue permanent separate reimbursement for OMIDRIA beyond the currently scheduled expiration of pass-through reimbursement.

CMS is required under the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act to review payments under CMS’ outpatient prospective payment system (“OPPS”) for opioids and evidence-based non-opioid alternatives for pain management with a goal to ensure that there are not financial incentives to use opioids instead of non-opioid alternatives.

In its 2020 OPPS proposed

rule, CMS noted that non-opioid drugs that are indicated for reduction of post-operative pain may warrant separate payment if there is evidence to show that such drugs help to deter or avoid prescription opioid use and addiction and that packaged payment presents a demonstrated barrier to access for such drugs.

Although Omeros provided CMS with evidence that it believes shows that OMIDRIA meets these criteria, CMS declined in its 2020 OPPS final rule to grant separate payment to OMIDRIA beyond the expiration of its current pass-through status on September 30, 2020.

CMS also noted in the 2020 OPPS final rule that it will continue to analyze evidence and monitor utilization of OMIDRIA.

We continue to generate evidence and intend to continue pursuing administrative and legislative avenues to secure permanent separate payment or similar reimbursement for OMIDRIA beyond September 30, 2020;

however, we cannot provide assurance that these efforts will be successful.

We continue to pursue expansion of reimbursement for OMIDRIA by Medicare Advantage and other third-party payers.

CMS assigned a permanent product-specific Healthcare Common Procedure Coding System (“HCPCS”) J-code for OMIDRIA, which became effective October 1, 2019 and replaced the drug's former temporary HCPCS C-code.

J-codes are reimbursement codes used by commercial insurance plans, Medicare, Medicare Advantage, and other government payers for drugs like OMIDRIA that are administered by a physician.

Benefits of the new J-code include having one consistent billing code that can be used across all government and commercial payer plans as well as expanding coverage in state Medicaid and commercial plans that recognize J-codes, but not C-codes, for reimbursement and enabling access to the increasing number of cataract procedures performed in the physician office setting.

See Part II, Item 7, “Management’s Discussion and Analysis-Results of Operations” for further discussion of OMIDRIA reimbursement and pricing.

CMS, the federal agency responsible for administering the Medicare program, granted transitional pass-through reimbursement status for OMIDRIA in 2014, effective from January 1, 2015 through December 31, 2017 and, in March 2018, Congress extended pass-through reimbursement status for a small number of drugs, including OMIDRIA, for an additional two years, running from October 1, 2018 through September 30, 2020.

Pass-through status allows for separate payment (i.e., outside the packaged payment rate for the

surgical procedure) under Medicare Part B.

In CMS’ CY2021 Hospital Outpatient Prospective Payment System (HOPPS) and Ambulatory Surgical Center (ASC) Payment System Final Rule, CMS confirmed that OMIDRIA, as an otherwise policy packaged drug following OMIDRIA’s expiration of pass-through status on October 1, 2020, qualifies for separate payment when used on Medicare Part B patients in the ASC setting under CMS’ policy for non-opioid pain management surgical drugs.

CMS made separate payment for OMIDRIA effective retroactively as of October 1, 2020.

CMS’ current non-opioid separate payment policy and, as a result, separate payment for OMIDRIA thereunder, like other CMS policies in the OPPS and ASC systems, can be changed by CMS through its OPPS/ASC annual rulemaking and comment process.

We believe that CMS will continue its separate payment policy for non-opioid pain management surgical drugs, which has been in effect since 2019, and that OMIDRIA will continue to be separately reimbursed when used in the ASC setting.

We have implemented a variety of programs and arrangements to facilitate the availability of OMIDRIA to cataract and IOL replacement patients in the U.S., including the following:

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European Union and other International Territories.

In July 2018, we placed OMIDRIA on the market in the EU on a limited basis, which maintained the ongoing validity of the European marketing authorization for OMIDRIA.

In July 2018, we placed OMIDRIA on the market in the European Union (“EU”) on a limited basis and continue to maintain the ongoing validity of the Marketing Authorization for OMIDRIA in EU member states and EEA countries.

Decisions about price and reimbursement for OMIDRIA are made on a country-by-country basis and may be required before marketing may occur in a particular country.

At this time we do not expect to see significant sales of OMIDRIA in any countries within the EEA or other international territories if we are unable to complete a broad sales launch in any such country either independently or through partnerships for the marketing and distribution of OMIDRIA.

A marketing authorization will cease to be valid if a product previously placed on the market is no longer actually present on the market for three consecutive years.

Timing of any partnerships or independent launch depends on numerous factors, including domestic sales of OMIDRIA, completion of mutual diligence exercises and/or entry into suitable agreements with contract service vendors.

Our Product Candidates and Development Programs

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Pivotal Trial Complete;

Complete BLA and submit MAA

BLA under priority review

FDA’s PDUFA Action Date July 17, 2021

(In-licensed)

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(In-licensed)

Narsoplimab (OMS721/MASP-2)

Severe COVID-19 requiring mechanical ventilation

Complete clinical trial and/or obtain regulatory authorization

(In-licensed)

PDE7 (OMS527)

Addictions and compulsive disorders;

Initiate Phase 2a study

Advance clinical development pending availability of resources

(Compounds In-licensed)

MASP-3 (OMS906) -

Alternative Pathway Disorders

Paroxysmal Nocturnal Hemoglobinuria (PNH) and other alternative pathway disorders

Read out Phase 1 clinical trial data and initiate Phase 2 trial

PPARγ (OMS405) -

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Preclinical / Platform

MASP-3 (OMS906) -

Alternative Pathway Disorders

Paroxysmal Nocturnal Hemoglobinuria (PNH) and other alternative pathway disorders

Submit IND or CTA

MASP-2 - Small-

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Long-acting second generation antibody targeting lectin pathway disorders

Process development and manufacturing scale-up

Complete preclinical toxicology studies and manufacturing scale-up;

submit IND and/or CTA to initiate clinical trials

MASP-3 - Small-

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Continue drug discovery and selected medicinal chemistry for Class A Orphan GPCRs

Antibody Platform

Metabolic, cardiovascular, oncologic, musculoskeletal & other disorders

Continue developing antibodies targeting lectin and alternative pathway of complement system

(In-licensed)

MASP Inhibitor Clinical Programs

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We have completed our pivotal clinical trial for narsoplimab in HSCT-TMA, and Phase 3 clinical programs are in process for narsoplimab in IgA nephropathy and aHUS.

Narsoplimab is also being evaluated for treatment of COVID-19 in an adaptive platform trial and has been used under compassionate use to treat COVID-19 patients in Italy and in the U.S.

Thrombotic Microangiopathies

In October 2019, we initiated the rolling submission to FDA of our BLA for narsoplimab for the treatment of HSCT-TMA, a frequently lethal complication of HSCT.

A rolling submission enables us to submit sections of the BLA as they are completed, which can accelerate the time to approval by allowing FDA to review completed sections of the application as they are submitted rather than waiting for the entire BLA to be submitted before beginning its review.

The initial submission to FDA included all of the nonclinical (i.e., pharmacology, pharmacokinetics and toxicology) data, study reports, overview and summaries for the nonclinical sections of the BLA.

We have also successfully completed the manufacturing of the required process validation lots of narsoplimab.

The clinical sections and the chemistry, manufacturing and controls sections of the BLA are being prepared for submission and, once all data collection and analysis are complete, these remaining parts of the BLA will be submitted.

On March 2, 2020, we reported clinical data from our pivotal trial of narsoplimab in HSCT-TMA.

In November 2020, we completed the rolling submission to FDA of our BLA for narsoplimab for the treatment of HSCT-TMA, a frequently lethal complication of HSCT.

The BLA has been accepted for filing by FDA and granted priority review with an FDA action date under the Prescription Drug User Fee Act (“PDUFA”) of July 17, 2021.

In October 2020, we reported final clinical data from our pivotal trial of narsoplimab in HSCT-TMA.

The single-arm, open-label trial included safety and efficacy endpoints that were previously agreed to with FDA.

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This is referred to as the “complete response rate.” The primary laboratory markers that were evaluated were platelet count and lactate dehydrogenase (“LDH”), levels, while improvement in clinical status was evaluated based on organ function and transfusions.

Patients who did not fully meet these criteria were considered “non-responders.”

The FDA-agreed efficacy threshold for the primary endpoint is a complete response rate of 15 percent.

Among patients who received at least one dose of narsoplimab, the complete response rate was 54% (p<0.0001), while the complete response rate among patients who received the protocol-specified narsoplimab treatment of at least four weeks of dosing was 65% (p<0.0001).

Each patient was required to show improvement in both laboratory markers and clinical status to be considered a responder.

All others were considered non-responders.

Among patients who received at least one dose of narsoplimab, the complete response rate was 61% (95% confidence interval [CI] 40.6 to 78.5;

p<0.0001), while the complete response rate among patients who received the protocol-specified narsoplimab treatment of at least four weeks of dosing was 74% (95% CI 51.6 to 89.8;

The response rates and their respective lower levels of the 95% confidence intervals are a multiple of the pre-specified efficacy threshold of 15%.

Secondary endpoints in the trial were survival rates and change from baseline in HSCT-TMA laboratory markers.

Among the responder population, 93% of patients survived for at least 100 days following HSCT-TMA diagnosis, while 83% of patients who received treatment for at least four weeks and 68% of the total treated population achieved this endpoint.

Among all treated patients, 68% survived for at least 100 days following HSCT-TMA diagnosis, while 83% of patients who received treatment for at least four weeks and 94% of the responders achieved this endpoint.

Median overall survival was 274 days among all patients and 361 days among patients who received the protocol-specified treatment of at least four weeks.

Median survival could not be estimated for responders because more than half of the responders were alive at last follow-up.

Results also included statistically significant improvements in platelet count, LDH and haptoglobin.

The treated population had multiple high-risk features that portend a poor outcome, including the persistence of HSCT-TMA despite modification of immunosuppression (which was a criterion for entry into the trial), graft-versus-host disease, significant infections, non-infectious pulmonary complications and neurological findings.

Patients in the trial had a high expected mortality rate, with 93% of them having multiple risk factors.

The most common adverse events observed in the trial were nausea, vomiting, diarrhea, hypokalemia, neutropenia and fever, which are all common in stem-cell transplant patients.

Six deaths occurred during the trial.

These were due to sepsis, progression of the underlying disease, and graft-versus-host disease.

These were due to sepsis, progression of the underlying disease, and graft-versus-host disease with TMA.

All of these are common causes of death in this patient population.

In Europe, EMA has confirmed narsoplimab’s eligibility for EMA’s centralized review of a single MAA that, if approved, authorizes the product to be marketed in all EU member states and EEA countries.

We plan to complete the submission of an MAA after our BLA submission has been filed with FDA.

In October 2019 we received a positive opinion from EMA on our pediatric investigation plan (“PIP”) for narsoplimab in the treatment of HSCT-TMA.

A PIP outlining a development program for the investigational product in the pediatric population must be agreed with EMA as a prerequisite to EMA’s acceptance of an MAA.

The narsoplimab PIP provides a study plan to evaluate the safety and

effectiveness of the drug for HSCT-TMA in patients from one month through 17 years of age.

We received a deferral for completion of our PIP until after approval of the narsoplimab MAA.

In the U.S., the FDA has granted narsoplimab (1) breakthrough therapy designation in patients who have persistent TMA despite modification of immunosuppressive therapy, (2) orphan drug designation for the prevention (inhibition) of complement-mediated TMAs, and (3) orphan drug designation for the treatment of HSCT-TMA.

In Europe, the EMA has confirmed narsoplimab’s eligibility for EMA’s centralized review of a single MAA that, if approved, authorizes the product to be marketed in all EU member states and EEA countries.

We are targeting to complete our MAA submission in 2021.

In the U.S., FDA has granted narsoplimab (1) breakthrough therapy designation in patients who have persistent TMA despite modification of immunosuppressive therapy, (2) priority review for the HSCT-TMA BLA, (3) orphan drug designation for the prevention (inhibition) of complement-mediated TMAs, and (4) orphan drug designation for the treatment of HSCT-TMA.

The EC also granted narsoplimab designation as an orphan medicinal product for treatment in hematopoietic stem cell transplantation.

We have an ongoing Phase 3 clinical program in patients with aHUS with active sites in the U.S., Europe and Asia.

The single-arm ( i.e.

, no control arm), open-label Phase 3 clinical trial in patients with newly diagnosed or ongoing aHUS is enrolling.

The single-arm, open-label Phase 3 clinical trial in patients with newly diagnosed or ongoing aHUS is enrolling.

This trial is targeting approximately 40 patients for EU approval and U.S.

accelerated approval with 80 patients required for full approval in the U.S.

The trial includes multiple sites in the U.S., Asia and Europe, and is actively enrolling, though enrollment has been slowed in part due to prioritizing the use of resources within our narsoplimab programs on HSCT-TMA and IgA nephropathy.

Dosing consists of an initial IV loading followed by daily subcutaneous dosing.

Based on discussions with the FDA and the EMA, we expect that the clinical package for the BLA would be similar to that which formed the basis of approval for Soliris ® (eculizumab), which is marketed by Alexion Pharmaceuticals, Inc.

Dosing consists of an initial IV loading

followed by daily subcutaneous dosing.

Based on discussions with FDA and the EMA, we expect that the clinical package for the BLA would be similar to that which formed the basis of approval for Soliris ® (eculizumab), which is marketed by Alexion Pharmaceuticals, Inc.

The FDA has granted to narsoplimab orphan drug designation for the prevention (inhibition) of complement-mediated TMAs and fast-track designation for the treatment of patients with aHUS.

Renal Disease

Phase 2 Clinical Trial - Renal Diseases .

We have been conducting a Phase 2 clinical trial in patients with complement-associated renal diseases, specifically designed to cover:

(1) IgA nephropathy;

(2) membranous nephropathy;

and (3) lupus nephritis.

An initial open-label cohort of patients completed treatment in May 2017.

All patients in the initial open-label cohort of the trial were required to have high levels of urinary protein, or proteinuria (a marker used by nephrologists to assess disease activity), despite ongoing treatment with corticosteroids.

These inclusion criteria were intended to ensure that study patients are unlikely to improve spontaneously.

Patients in this open-label cohort were treated with narsoplimab for a total of 12 weeks:

four weeks maintaining their entry corticosteroid dose;

four weeks of corticosteroid tapering, if tolerated;

and four weeks of resultant corticosteroid dose maintenance or discontinuation.

Patients were then followed post-treatment for six weeks.

All four patients with IgA nephropathy in the initial open-label cohort demonstrated clinically meaningful and statistically significant improvement in proteinuria during the 18-week trial period.

Follow-up data collected after patients completed treatment in the trial period showed that three of the four IgA nephropathy patients in this cohort maintained the proteinuria reduction (as measured by urine albumin/creatinine ratio) shown in the clinical trial during the follow-up period (assessed at 12, 11 and three months, respectively, after cessation of dosing).

Numerical improvement in estimated glomerular filtration rate (“eGFR”), a measure of renal function, was also observed in three of the four patients after the trial.

Narsoplimab was well-tolerated in the clinical trial with fatigue and anemia being the most commonly reported adverse events.

In the second cohort evaluating patients with IgA nephropathy in the U.S., patients must have elevated levels of urinary protein but are not treated with corticosteroids.

Patients in this cohort were treated for 12 weeks with weekly dosing of either narsoplimab or placebo, then followed for six weeks with no treatment.

After week 18, patients initially treated with placebo and patients initially treated with narsoplimab were able to receive additional 12-week courses of open-label dosing with narsoplimab at investigator discretion.

Patients may receive more than one 12-week course of narsoplimab and will be followed for a total of two years.

In October 2018, we reported interim results from the second cohort of IgA nephropathy patients in the U.S.

Unlike the first open-label cohort comprised of four IgA nephropathy patients who were taking corticosteroids at the time of study enrollment, patients in the second cohort were not taking steroids.

The cohort included nine evaluable patients.

At week 18, median reduction in proteinuria was 18.4% in the five narsoplimab-treated patients and 18.0% in the four

placebo patients.

This study did not include a run-in period during which time renin-angiotensin system (“RAS”), blockade is optimized and patient compliance with RAS blockade is improved.

The placebo response in this first 18-week period is consistent with improvement in placebo groups seen during the run-in periods of other studies in IgA nephropathy patients.

After week 18, eight of the nine evaluable patients entered the extended dosing and observation period, all of whom received narsoplimab treatment during this period.

At the last observation point for each the eight patients (between 31 and 54 weeks post-baseline) the median reduction from baseline proteinuria was 61%.

Five of the eight patients have achieved greater than 50% proteinuria reductions (median reduction of 65%), with two of those five patients having received their last narsoplimab administration five months earlier.

Measurement of eGFR have also remained stable, consistent with preservation of renal function.

Despite the small cohort of patients, and although median reductions in proteinuria in the placebo group were comparable to those in the narsoplimab group following the initial 12-week course of treatment, we and international experts in IgA nephropathy with whom we have consulted and who have reviewed the individual patient data believe that these data are positive and supportive of a substantial disease modifying effect.

With proteinuria reduction in five of eight patients ranging from greater than 50% to approximately 70%, this magnitude is consistent with what we previously reported from the first cohort of this clinical trial.

This trial also includes a third cohort of patients with all study sites for this cohort located in Hong Kong.

This is a small study, slated to enroll approximately 10 patients, all Asians.

It has been redesigned to focus on subcutaneous dosing and associated biomarkers.

Given demonstrated activity with subcutaneous dosing, we will continue to determine the pharmacokinetics and pharmacodynamics of narsoplimab in IgA nephropathy patients when administered subcutaneously over a 12-week period.

Enrollment in this study began in September 2019, though enrollment is currently suspended due to restrictions imposed at the site in connection with the COVID-19 coronavirus.

Data from this cohort will support the ongoing Phase 3 program in IgA nephropathy and planned lifecycle management for narsoplimab.

We have also reported encouraging results in lupus nephritis patients from the first cohort in the Phase 2 renal disease trial.

We are considering possible further development in lupus nephritis.

Phase 3 Program - IgA Nephropathy .

Patient enrollment is ongoing in our Phase 3 clinical trial evaluating narsoplimab, which is referred to as ARTEMIS-IGAN.

The single Phase 3 trial design is a randomized, double-blind, placebo-controlled multicenter trial in patients at least 18 years of age with biopsy-confirmed IgA nephropathy and with 24-hour urine protein excretion greater than 1 g/day at baseline on optimized RAS blockade.

Patient enrollment is ongoing in our Phase 3 clinical trial evaluating narsoplimab in IgA nephropathy, which is referred to as ARTEMIS-IGAN.

This trial includes a run-in period.

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We believe that the trial design will allow assessment for either full or accelerated approval at 36 weeks based on proteinuria results either (1) across the general population of study patients or (2) in the high-proteinuria subset of patients.

In the event of full approval, eGFR becomes a safety endpoint only.

In the event that the primary endpoint at 36 weeks results in accelerated approval from the FDA, change in eGFR is expected to be assessed at approximately three years after the start of dosing.

In the event of full approval, estimated glomerular filtration rate (“eGFR”) becomes a safety endpoint only.

In the event that the primary endpoint at 36 weeks results in accelerated approval from FDA, change in eGFR is expected to be assessed at approximately two years after the start of dosing.

These eGFR data, if satisfactory, would then likely form the basis for full approval.

In response to investigators’ concerns about extended withholding of narsoplimab treatment from any high-proteinuria patient initially randomized to the placebo-treated group, the FDA will allow patients in that sub-population open-label treatment with narsoplimab after at least 1 year of blinded treatment.

In the U.S., narsoplimab has received breakthrough therapy and orphan drug designations from the FDA for the treatment of IgA nephropathy.

In Europe narsoplimab has received orphan drug designation from the EC in patients with IgA nephropathy.

Expanded Access / Compassionate Use .

We have received requests from investigators and other physicians for expanded access to narsoplimab.

Expanded access, sometimes called “compassionate use,” is the use of an investigational medical product outside of a clinical trial.

Expanded access is permitted by the FDA and other regulatory agencies under specific circumstances.

Narsoplimab has been provided to several patients in compassionate use

In December 2019, we announced a collaboration with myTomorrows, a health technology company, to broaden our expanded access program for narsoplimab.

In response to investigators’ concerns about extended withholding of narsoplimab treatment from any high-proteinuria patient initially randomized to the placebo-treated group, FDA will allow patients in that sub-population open-label treatment with narsoplimab after at least 1 year of blinded treatment.

In the U.S., narsoplimab has received breakthrough therapy and orphan drug designations from FDA for the treatment of IgA nephropathy.

In Europe, narsoplimab has received orphan drug designation from the EMA in patients with IgA nephropathy.

Phase 2 Clinical Trial - Renal Diseases .

We have been conducting a Phase 2 clinical trial in patients with complement-associated renal diseases, specifically designed to cover:

(1) IgA nephropathy;

(2) membranous nephropathy;

and (3) lupus nephritis.

An initial open-label cohort of patients completed treatment in May 2017.

In August 2020, a manuscript detailing the results of the Phase 2 clinical trial in patients with IgA nephropathy was published in the peer-reviewed journal Kidney International Reports .

In March 2020, in response to a request from physicians at the Papa Giovanni XXIII Hospital in Bergamo, Italy, we initiated a compassionate use program for narsoplimab to treat patients with severe COVID-19 requiring mechanical ventilation.

The initial cohort treated under this compassionate use program included a total of six COVID-19 patients treated with narsoplimab under compassionate use, all with acute respiratory distress syndrome (“ARDS”) and requiring continuous positive airway pressure (“CPAP”) or intubation.

At baseline, circulating endothelial cell (“CEC”) counts and serum levels of interleukin-6 (“IL-6”), interleukin-8 (“IL-8”), C-reactive protein (“CRP”), LDH, D-dimer and aspartate aminotransferase (“AST”) were markedly elevated.

During the course of the compassionate use program, institutional guidelines at the treating hospital were updated to require that all COVID-19 patients in the hospital receive steroids.

One patient treated with narsoplimab did not receive steroids.

Of the five narsoplimab-treated patients who received steroids, two initiated them after already improving such that CPAP was no longer required or was discontinued the following day.

The study evaluated CEC counts in a separate group of four patients receiving only steroids for a short duration, and the counts were found to be unaffected by steroid administration.

This suggests that any beneficial

effect of steroids on COVID-19-associated endothelial damage may be delayed and had little effect on the recovery course of the narsoplimab-treated patients who initiated steroid treatment after improving.

Narsoplimab treatment was associated with rapid and sustained reduction across all of these markers of endothelial damage and inflammation.

In addition, massive bilateral pulmonary thromboses, seen in two of the patients, resolved while on narsoplimab.

All six narsoplimab-treated patients recovered, survived and were discharged.

Narsoplimab was well tolerated and no adverse drug reactions were reported.

Two control groups with similar baseline characteristics were used for retrospective comparison, both showing substantial mortality rates of 32% and 53%.

A manuscript detailing the results of the initial cohort of Bergamo patients treated with narsoplimab was published in the peer-reviewed journal Immunobiology .

All six patients were evaluated five to six months after cessation of narsoplimab treatment.

None of them showed any clinical or laboratory evidence of long-term effects of COVID-19, such as cognitive impairment or cardiac, pulmonary or other organ disorder, commonly seen following resolution of initial COVID-19 symptoms.

Endothelial damage and resultant thromboses are significant to the pathophysiology of COVID-19, and we believe these data illustrate the importance of inhibiting the lectin pathway to treat critically ill COVID-19 patients.

Endothelial damage activates the lectin pathway of complement.

We believe the results observed following narsoplimab treatment in critically ill COVID-19 patients at Papa Giovanni were consistent with those seen in HSCT-TMA and underscore the pathophysiologic similarities between these two disorders.

Narsoplimab has been shown to inhibit lectin pathway activation and to block the MASP-2-mediated conversion of prothrombin to thrombin, microvascular injury-associated thrombus formation and the activation of factor XII as well as the MASP-2-mediated activation of kallikrein.

We believe that the anticoagulant effects of narsoplimab may provide therapeutic benefits in both HSCT-TMA and COVID-19.

Following treatment of the initial six patients under the compassionate use program in Italy, we have continued compassionate-use treatment with nine more patients in Italy and four patients in the U.S.

All of these patients prior to receiving narsoplimab were severely ill, intubated, had multiple comorbidities, and had failed other therapies, including anti-virals, targeted anti-inflammatory therapeutics, convalescent plasma and steroids.

Following treatment with narsoplimab, the laboratory improvements and clinical outcomes of these patients are similar to those seen in the initial cohort of Bergamo patients.

Narsoplimab is also the only complement inhibitor included in the I-SPY COVID-19 platform trial sponsored by Quantum Leap Healthcare Collaborative, which is evaluating drugs and investigational products for the treatment of critically ill COVID-19 patients.

The trial utilizes Quantum Leap Healthcare Collaborative's adaptive platform trial design, which is intended to increase trial efficiency by minimizing the number of participants and time required to evaluate potential treatments.

Discussions regarding the use of narsoplimab in COVID-19 with leaders across various U.S.

government agencies as well as international regulatory authorities and global healthcare organizations continue to progress.

Licensing Arrangements .

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For a more detailed description of these licenses, see “License and Development Agreements” below.

MASP Inhibitor Preclinical Programs

MASP-3 Program - OMS906 - Alternative Pathway Disorders

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converted factor D is necessary for the activation of the APC.

Based on our alternative pathway-related discoveries, we have expanded our intellectual property position to protect our inventions stemming from these discoveries beyond MASP-2-associated inhibition of the lectin pathway to include inhibition of the alternative pathway.

Based on our alternative pathway-related discoveries, we have expanded our intellectual property position to protect our inventions stemming from these discoveries beyond MASP-2 associated

inhibition of the lectin pathway to include inhibition of the alternative pathway.

Our current primary focus in this program is developing MASP-3 inhibitors for the treatment of disorders related to the APC.

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paroxysmal nocturnal hemoglobinuria (“PNH”);

C3 glomerulopathy;

multiple sclerosis;

traumatic brain injury;

neuromyelitis optica;

pauci-immune necrotizing crescentic glomerulonephritis;

disseminated intravascular coagulation;

age-related macular degeneration;

dense deposit disease;

Bechet’s disease;

aspiration pneumonia;

ischemia-reperfusion injury;

Guillain Barre syndrome;

Alzheimer’s disease;

amylotrophic lateral sclerosis;

systemic lupus erythematosus;

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chronic obstructive pulmonary disease;

transplant rejection;

acute respiratory distress syndrome;

antineutrophil cytoplasmic antibody-associated vasculitis;

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myasthenia gravis and others.

Our OMS906 program has generated positive data in a well-established animal model associated with PNH including in non-human primates.

The program has also generated positive data in a well-established model of arthritis.

In preparation for clinical trials, the manufacturing scale-up process is underway for a MASP-3 inhibitor antibody and we are currently targeting PNH as the first clinical indication for OMS906.

Clinical trials are slated to begin in the first half of 2020.

Our OMS906 monoclonal antibody program has generated positive data in a well-established animal model associated with PNH as well as strong pharmacodynamic activity in non-human primates.

The program has also generated positive data in a well-established animal model of arthritis.

In September 2020 we began enrollment and dosing in a placebo-controlled, double-blind, single-ascending-dose and multiple-ascending-dose Phase 1 clinical trial to evaluate the safety, tolerability, pharmacodynamics and pharmacokinetics of OMS906.

We have completed all of the intravenous dosing cohorts in the single-ascending-dose study and expect to begin subcutaneous dosing in March 2021.

Initial data from the Phase 1 trial are expected in the second quarter of 2021.

Licensing Arrangements.

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For a more detailed description of these licenses, see “License and Development Agreements” below.

MASP Inhibitor Preclinical Programs

Other MASP Inhibitor Preclinical Programs

We have generated positive preclinical data from MASP-2 inhibition in in vivo models of AMD, myocardial infarction, diabetic neuropathy, stroke, ischemia-reperfusion injury, and other diseases and disorders.

We are also developing a longer-acting second generation antibody targeting MASP-2, which we are targeting for initiation of clinical trials in 2022.

We are also developing a longer-acting second generation antibody targeting MASP-2, which we are targeting for initiation of clinical trials in early 2022.

Development efforts are also directed to a small-molecule inhibitor of MASP-2 designed for oral administration, as well as small-molecule inhibitors of MASP-3 and bispecific small- and large-molecule inhibitors of MASP-2/-3.

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PDE7 Program - OMS527

Our phosphodiesterase 7 (“PDE7”) program is based on our discoveries of previously unknown links between PDE7 and any addiction or compulsive disorder, and between PDE7 and any movement disorders, such as Parkinson’s disease.

Our PDE7 program is based on our discoveries of previously unknown links between PDE7 and any addiction or compulsive disorder, and between PDE7 and any movement disorders, such as Parkinson’s disease.

PDE7 appears to modulate the dopaminergic system, which plays a significant role in regulating both addiction and movement.

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There was no apparent food effect on plasma exposure to OMS182399.

Our focus is nicotine addiction, and we are planning our Phase 2 development program.

Continued clinical development in our PDE7 program is subject to allocation of financial and other resources, which are currently prioritized for other programs.

Exclusive License Agreement with Daiichi Sankyo Co., Ltd.

We hold an exclusive license to certain PDE7 inhibitors claimed in patents and pending patent applications owned by Daiichi Sankyo Co., Ltd.

(“Daiichi Sankyo”), as successor-in-interest to Asubio Pharma Co., Ltd., or, for use in the treatment of movement, addiction and compulsive disorders as well as other specified indications.

(“Daiichi Sankyo”), as successor-in-interest to Asubio Pharma Co., Ltd., or, for use in the treatment of movement, addiction and compulsive disorders as

well as other specified indications.

For a more detailed description of our agreement with Daiichi Sankyo, see “License and Development Agreements” below.

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The National Institute on Drug Abuse provided substantially all of the funding for these clinical trials and solely oversaw the conduct of these trials.

We have the right or expect to be able to reference the data obtained from these studies for subsequent submissions to the FDA and continue to retain all other rights in connection with the PPARγ program.

We have the right or expect to be able to reference the data obtained from these studies for subsequent submissions to FDA and continue to retain all other rights in connection with the PPARγ program.

We have also reported positive results ( i.e.

, decreased cravings and protection of brain white matter) from a Phase 2 clinical trial conducted by an independent investigator evaluating the effects of a PPARγ agonist in patients with cocaine use disorder.

An investigator-sponsored study on the prevention of relapse following treatment of cocaine use disorder is expected to begin enrolling in March 2021.

The study is funded by the National Institute on Drug Abuse (“NIDA”).

Patent Assignment Agreement with Roberto Ciccocioppo, Ph.D.

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GPCRs, which are cell surface membrane proteins involved in mediating both sensory and nonsensory functions, comprise one of the largest families of proteins in the genomes of multicellular organisms.

Sensory GPCRs

are involved in the perception of light, odors, taste and sexual attractants.

Sensory GPCRs are involved in the perception of light, odors, taste and sexual attractants.

Non-sensory GPCRs are involved in metabolism, behavior, reproduction, development, hormonal homeostasis and regulation of the central nervous system.

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In November 2019, we announced that our studies in mouse models of melanoma and colon carcinoma found that GPR174-deficiency resulted in significantly reduced tumor growth and improved survival of the animals versus normal mice.

We continue to focus on GPR174 and several other of our GPCR targets with the objective of moving compounds targeting them into human trials.

We are developing both small-molecule and antibody inhibitors of GPR174 with the objective of moving compounds into human trials and exploring several of our other GPCR targets as well.

We have also conducted in vitro and in vivo preclinical efficacy studies and engaged in compound optimization for a number of targets including GPR151, which is linked to schizophrenia, cognition and obesity, and GPR161, which is associated with triple negative breast cancer and various sarcomas.

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For a more detailed description of these agreements, see “License and Development Agreements” below.

Antibody Platform

Our proprietary ex vivo platform for the discovery of novel, high-affinity monoclonal antibodies, which was in-licensed from the University of Washington (“UW”) and then further developed by our scientists, utilizes a chicken B-cell lymphoma cell line.

It has successfully generated diverse antibodies that can be readily engineered.

We believe this platform offers several advantages over other antibody platforms.

The ex vivo immunizations of our proprietary cell line are significantly more rapid than whole animal immunizations and conventional hybridoma technology.

By avoiding immunization of mice or other animals, we believe the antibodies we generate from this platform are not limited by immunological tolerance.

In addition, our platform is capable of producing novel antibodies against difficult targets, such as highly homologous proteins, enzymes, and receptors with short extracellular domains.

Chicken antibodies also have unique features that enable binding capabilities distinct from mammalian antibodies.

Using our platform and other know-how and techniques, we have generated antibodies to several clinically significant targets, including highly potent antibodies against MASP-2, MASP-3 and MASP-1, and we continue to add to our pipeline antibodies against additional important targets.

Asset Purchase Agreement with Xori Corporation .

In February 2012 we entered into an asset purchase agreement with Xori Corporation (“Xori”), pursuant to which we acquired all of Xori’s rights and obligations in certain license and material transfer agreements, intellectual property, antibodies and other assets related to our antibody platform.

We are obligated to make development and research-related milestone payments to Xori.

Exclusive License Agreement with the University of Washington .

We hold a worldwide exclusive license to patent rights related to our antibody platform from the University of Washington.

For a more detailed description of this agreement, see “License and Development Agreements” below.

Sales and Marketing

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With respect to OMIDRIA in the U.S., we have developed our own internal marketing and sales capabilities and, as of December 31, 2020, we employed 63 sales and reimbursement team members.

In July 2018 we placed OMIDRIA on the market in the EU on a limited basis, which maintained the ongoing validity of the European marketing authorization for OMIDRIA.

Our European marketing authorization will cease to be valid if a product previously placed on the market is no longer actually present on the market for three consecutive years.

Other than an agreement with a third party for sale and distribution of OMIDRIA in certain countries in the Middle East, which has not generated significant sales, we have not yet entered into any agreements with third parties to market OMIDRIA outside of the U.S.

In July 2018 we placed OMIDRIA on the market in the EU on a limited basis, which maintained the ongoing validity of the European marketing authorization for OMIDRIA for a period of three years and we expect to continue to market the product within Europe on a limited basis for purposes of maintaining the marketing authorization.

At this time we do not expect to generate, in the near-term, significant sales of OMIDRIA outside of the U.S.

Manufacturing, Supply and Commercial Operations

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In addition, Hospira has agreed to manufacture and supply a portion of our requirements of OMIDRIA in the EU, with there being no minimum purchase and supply requirement in the EU if the parties do not enter into such an amendment to the agreement.

We have not yet entered into such an agreement with Hospira relating to

the supply of OMIDRIA for the EU.

We have not yet entered into such an agreement with Hospira relating to the supply of OMIDRIA for the EU.

The Hospira OMIDRIA Agreement expires in February 2022, but may be terminated prior to the end of its term upon the occurrence of certain specified events, including without limitation an uncured breach of the agreement or bankruptcy or dissolution of a party.

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or EU and is subject to automatic renewal for an additional four-year term unless we provide notice of non-renewal at least three years prior to the end of the initial term.

In addition, either party may terminate the agreement, subject to applicable notice and cure periods under certain circumstances.

In addition, either party may terminate the agreement, subject to

applicable notice and cure periods under certain circumstances.

Other than our agreement for commercial supply of narsoplimab, we have not yet entered into a commercial supply agreement for any of our product candidates.

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MASP Program .

Under our exclusive license agreements with the University of Leicester and MRC, we have agreed to pay royalties to each of the University of Leicester and MRC that are a percentage of any proceeds we receive from

the licensed MASP-2 technology during the terms of the agreements.

Our exclusive license agreement with the University of Leicester, but not our agreement with the MRC, also applies to other MASPs.

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Ciccocioppo ends when there are no longer any valid and enforceable patents related to the intellectual property rights we acquired from him, provided that either party may terminate the agreement earlier in case of an uncured breach by the other party.

Under the terms of the agreement, we have agreed to pay a portion of the payments due to Dr.

Under the terms of the

agreement, we have agreed to pay a portion of the payments due to Dr.

Ciccocioppo to the Università di Camerino without any increase to our payment obligations.

Under an agreement with Daiichi Sankyo, we hold an exclusive worldwide license to PDE7 inhibitors claimed in certain patents and pending patent applications owned by Daiichi Sankyo for use in the treatment of (1) movement disorders and other specified indications, (2) addiction and compulsive disorders and (3) all other diseases except those related to dermatologic conditions.

Under the agreement, we agreed to make milestone payments to Daiichi

Sankyo of up to an aggregate total of $33.5 million upon the achievement of certain events in each of these three fields;

Under the agreement, we agreed to make milestone payments to Daiichi Sankyo of up to an aggregate total of $33.5 million upon the achievement of certain events in each of these three fields;

however, if only one of the three indications is advanced through the milestones, the total milestone payments would be $23.5 million.

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The term of our payment obligations to LSDF is the same as that under our agreement with Vulcan.

Antibody Platform .

We hold a worldwide exclusive license to patent rights related to our antibody platform from the University of Washington.

Pursuant to our asset purchase agreement with Xori, we acquired all of Xori’s exclusive rights under a license agreement with the UW to certain patents and patent applications related to our antibody platform owned by the UW in exchange for our agreement to make royalty and development milestone payments to UW.

We entered into settlement agreements and consent judgments with (1) Par Pharmaceutical, Inc.

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During this period, Par and Lupin, as applicable, are each required to pay us a royalty equal to 15% of net sales of its generic version of OMIDRIA.

The pharmaceutical industry is highly competitive and characterized by a number of established, large pharmaceutical companies as well as smaller companies like ours.

The pharmaceutical and biotechnology industry is highly competitive and characterized by a number of established, large pharmaceutical and biotechnology companies as well as smaller companies like ours.

We expect to compete with other pharmaceutical and biotechnology companies, and our competitors may:

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Soliris ® (eculizumab) and Ultomiris ® (ravulizumab-cwvz) are monoclonal complement inhibitors administered intravenously and approved for commercial use with which our lead MASP-2 inhibitor, narsoplimab (OMS721), and/or our MASP-3 inhibitor OMS906 will compete, if either is approved for any indication(s) for which Soliris ® and/or Ultomiris ® are also approved.

Alexion Pharmaceuticals, Inc., the manufacturer of Soliris ® and Ultomiris ® , has announced plans to begin a Phase 3 trial of Ultomiris ® for HSCT-TMA in the second half of 2020 and has an ongoing Phase 3 trial of an antibody directed to C5, the same complement target as Soliris ® and Ultomiris ® , but which can be administered subcutaneously.

Alexion Pharmaceuticals, Inc., the manufacturer of Soliris ® and Ultomiris ® , initiated a Phase 3 trial of Ultomiris ® for HSCT-TMA in the fourth quarter of 2020.

We are aware of other companies attempting to de-orphanize orphan GPCRs.

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patent applications and 99 issued patents and 55 pending patent applications in foreign markets that are directed to OMIDRIA.

Our OMIDRIA patents have

terms that will expire as late as October 23, 2033 and, if currently pending patent applications are issued, as late as November 30, 2035.

Our OMIDRIA patents have terms that will expire as late as October 23, 2033 and, if currently pending patent applications are issued, as late as November 30, 2035.

● MASP-2 Program - Narsoplimab (OMS721).

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We own and exclusively control under a license from the University of Leicester all rights to methods of treating various disorders and diseases by inhibiting MASP-3.

As of February 12, 2020, we exclusively controlled three pending patent applications in the U.S.

As of February 10, 2021, we exclusively controlled two issued patents and five pending patent applications in the U.S.

and 81 issued and 87 pending patent applications in foreign markets that are related to our MASP-3 program.

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Additionally, under a license from Daiichi Sankyo, we exclusively control rights to three issued U.S.

patents and 58 issued and four pending patent applications in foreign markets that are directed to proprietary PDE7 inhibitors.

patents and 61 issued and one pending patent application in foreign markets that are directed to proprietary PDE7 inhibitors.

For a more detailed description of our agreement with Daiichi Sankyo, see “License and Development Agreements” below.

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As of February 10, 2021, we owned seven issued patents and 12 pending patent applications in the U.S., and 56 issued patents and one pending patent application in foreign markets, which are directed to previously unknown links between specific molecular targets in the brain and a series of CNS disorders, to our CRA and to other research tools that are used in our GPCR program, and to orphan GPCRs and other GPCRs for which we have identified functionally interacting compounds using our CRA.

Five of the pending patent applications in the U.S.

Two of the pending patent applications in the U.S.

and the pending patent application in foreign markets are directed to GPR174.

● Antibody Platform .

As of February 12, 2020, we owned and/or held worldwide exclusive license rights from the UW to eight issued patents and one pending patent application in the U.S., and 22 issued patents and eight pending patent applications in foreign markets, directed to our antibody platform and antibodies generated using our platform.

All of our employees enter into our standard employee proprietary information and inventions agreement, which includes confidentiality provisions and provides us ownership of all inventions and other intellectual property made by our employees that pertain to our business or that relate to our employees’ work for us or that result from the use of our resources.

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No consistent policy regarding the breadth of claims allowed in biotechnology patents has emerged to date in the U.S., and tests used for determining the patentability of patent claims in all technologies are in flux.

The pharmaceutical, biotechnology and

other life sciences patent situation outside the U.S.

The pharmaceutical, biotechnology and other life sciences patent situation outside the U.S.

is even more uncertain.

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We have registered, and intend to maintain, the trademarks “OMEROS”, “OMIDRIA”, “OMIDRIASSURE” and “PHARMACOSURGERY” with the U.S.

Patent and Trademark Office in connection with the products and services we offer.

Patent and Trademark Office in connection with the products and services we

We are not aware of any material claims of infringement or other challenges to our right to use the “OMEROS,” “OMIDRIA,” “OMIDRIASSURE” or “PHARMACOSURGERY” trademarks in the U.S.

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Failure to comply with applicable requirements, both before and after receipt of regulatory approval, may subject us, our third-party manufacturers, and other partners to administrative and judicial sanctions, such as warning letters, product recalls, product seizures, a delay in approving or refusal to approve pending applications, civil and other monetary penalties, total or partial suspension of production or distribution, injunctions, and/or criminal prosecutions.

In the U.S., our products and product candidates are regulated by the FDA as drugs or biologics under the FDCA and implementing regulations and, in the case of biologics, also under the Public Health Service Act (“PHSA”).

In the U.S., our products and product candidates are regulated by FDA as drugs or biologics under the FDCA and implementing regulations and under the Public Health Service Act (“PHSA”).

In Europe, our products and product candidates are regulated by the EMA and national medicines regulators under the rules governing medicinal products in the EU as well as national regulations in individual countries.

OMIDRIA has received marketing approval from the FDA and from the applicable regulatory authorities in the EU.

Our product candidates are in various stages of testing and none of our product candidates has received marketing approval from the FDA or the applicable regulatory authorities in the EU.

The steps required before a product may be approved for marketing by the FDA, or the applicable regulatory authorities outside of the U.S., typically include the following:

OMIDRIA has received marketing approval from FDA and from the applicable regulatory authorities in the EU.

Our product candidates are in various stages of testing and none of our product candidates has received marketing approval from FDA or the applicable regulatory authorities in the EU.

The steps required before a product may be approved for marketing by FDA, or the applicable regulatory authorities outside of the U.S., typically include the following:

● formulation development and manufacturing process development;

● preclinical laboratory and animal testing;

● submission to the FDA of an Investigational New Drug application (“IND”) for human clinical testing, which must become effective before human clinical trials may begin;

● submission to FDA of an Investigational New Drug application (“IND”) for human clinical testing, which must become effective before human clinical trials may begin;

and in countries outside the U.S., a Clinical Trial Application (“CTA”), is filed according to the country’s local regulations;

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● adequate assessment of drug product stability to determine shelf life/expiry dating;

● in the U.S., submission to the FDA of a New Drug Application (“NDA”), in the case of a drug product, or a BLA in the case of a biologic product and, in Europe, submission to the EMA or a national regulatory authority of an MAA;

● in the U.S., submission to FDA of a New Drug Application (“NDA”), in the case of a drug product, or a BLA in the case of a biologic product and, in Europe, submission to the EMA or a national regulatory authority of an MAA;

● satisfactory completion of inspections of one or more clinical sites at which clinical trials with the product were carried out and of the manufacturing facility or facilities at which the product is produced to assess compliance with Good Clinical Practices (“GCPs”), and cGMPs;

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An IND or CTA must become effective before human clinical trials may begin.

An IND will automatically become effective 30 days after receipt by the FDA unless, before that time, the FDA raises concerns or questions and imposes a clinical hold.

In that event, the IND sponsor and the FDA must resolve any outstanding FDA concerns or questions before the clinical hold is lifted and clinical trials can proceed.

INDs are extensive submissions including, among other things, the results of the preclinical tests, together with manufacturing information and analytical data.

In addition to including the results of the preclinical studies, the IND will also include one or more protocols for proposed clinical trials detailing, among other things, the objectives of the clinical trial, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated.

An IND will become effective 30 days after receipt by FDA unless, before that time, FDA raises concerns or questions and imposes a clinical hold.

In that event, the IND sponsor and FDA must resolve any outstanding FDA concerns or questions before the clinical hold is lifted and clinical trials can proceed.

Similarly, a CTA must be cleared by the local independent ethics committee and competent authority prior to conducting a clinical trial in the country in which it was submitted.

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● Phase 3 clinical trials usually further evaluate and confirm effectiveness and test further for safety by administering the product in its final form in an expanded patient population.

We, our product development partners, institutional review boards or ethics committees, the FDA or other regulatory authorities may suspend clinical trials at any time on various grounds, including a belief that the subjects are being exposed to an unacceptable health risk.

We, our product development partners, institutional review boards or ethics committees, FDA or other regulatory authorities may suspend or terminate clinical trials at any time on various grounds, including a belief that the subjects are being exposed to an unacceptable health risk.

Disclosure of Clinical Trial Information .

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The Application Process.

If the necessary clinical trials are successfully completed, the results of the preclinical trials and the clinical trials, together with other detailed information, including information on the manufacture and composition of the product, are submitted to the FDA in the form of an NDA or a BLA, as applicable, and to the EMA or national regulators in the form of an MAA, requesting approval to market the product for a specified indication.

In the EU, an MAA may be submitted to the EMA for review and, if the EMA gives a positive opinion, the EC may grant a marketing authorization that is valid across the EU (centralized procedure).

If the necessary clinical trials are successfully completed, the results of the preclinical trials and the clinical trials, together with other detailed information, including information on the manufacture and composition of the product, are submitted to FDA in the form of an NDA or a BLA, as applicable, and to the EMA or national regulators in the form of an MAA, requesting approval to market the product for a specified indication.

In the EU, an MAA may be submitted to the EMA for review and, if the EMA gives a positive opinion, the EC may grant a

marketing authorization that is valid across the EU (centralized procedure).

Alternatively, an MAA may be submitted to one or more national regulators in the EU according to one of several national or decentralized procedures.

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If the regulatory authority determines that the application is not acceptable, it may refuse to accept the application for filing and review, outlining the deficiencies in the application and specifying additional information needed to file the application.

Notwithstanding the submission of any requested additional testing or information, the regulatory authority ultimately may decide that the application does not satisfy the criteria for approval.

Before approving an NDA or BLA, or an MAA, the FDA or the EMA, respectively, may inspect one or more of the clinical sites at which the clinical studies were conducted to ensure that GCPs were followed and may inspect facilities at which the product is manufactured to ensure satisfactory compliance with cGMP.

After approval, changes to the approved product such as adding new indications, manufacturing changes, or additional labeling claims will require submission of a supplemental application, referred to as a variation in the EU, or, in some instances, a new application, for further review and approval.

Notwithstanding the submission of any requested additional testing or information, the regulatory authority ultimately may decide that the proposed product is not safe or effective, or that the application does not otherwise satisfy the criteria for approval.

In the U.S., to support an approval an NDA must demonstrate, among other things, that the proposed drug product is safe and effective, has a favorable benefit-risk profile, is manufactured in a way that preserves its identity, strength, purity and potency, and that its labeling is adequate and not false or misleading.

A similar standard exists for BLAs.

Before approving an NDA or BLA, or an MAA, FDA or the EMA, respectively, may inspect one or more of the clinical sites at which the clinical studies were conducted to ensure that GCPs were followed and may inspect facilities at which the product is manufactured to ensure satisfactory compliance with cGMP.

The FDA may refer the NDA or BLA to an advisory committee for review and recommendation as to whether the application should be approved and under what conditions.

The FDA is not bound by the recommendation of an advisory committee, but it generally follows such recommendation.

In addition, even if a product candidate satisfied its endpoints with statistical significance during clinical trials, FDA could determine that the overall balance of risks and benefits for the product candidate is not adequate to support approval, or only justifies approval for a narrow set of clinical uses and/or subject to restricted distribution or other burdensome post-approval requirements or limitations.

If approval is obtained changes to the approved product such as adding new indications, manufacturing changes, or additional labeling claims will require submission of a supplemental application, referred to as a variation in the EU, or, in some instances, a new application, for further review and approval.

The testing and approval process requires substantial time, effort, and financial resources, and we cannot be sure that any future approval will be granted on a timely basis, if at all.

Some of our drug products may be eligible for NDA submissions to the FDA for approval under the Section 505(b)(2) process.

Section 505(b)(2) applications may be submitted for drug products that represent a modification, such as a new indication or new dosage form, of a previously approved drug.

Section 505(b)(2) applications may rely on the FDA’s previous findings for the safety and effectiveness of the previously approved drug in addition to information obtained by the 505(b)(2) applicant to support the modification of the previously approved drug.

Some of our drug products may be eligible for NDA submissions to FDA for approval under the Section 505(b)(2) process.

Section 505(b)(2) applications are a type of NDA that may be submitted for drug products that represent a modification, such as a new indication or new dosage form, of a previously approved drug.

Section 505(b)(2) applications may rely on FDA’s previous findings for the safety and effectiveness of the previously approved drug along with additional clinical data and information obtained by the 505(b)(2) applicant to support the modification of the previously approved drug.

Preparing Section 505(b)(2) applications may be less costly and time-consuming than preparing an NDA that is based entirely on new data and information.

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We must also comply with certain requirements concerning advertising and promotion for our products.

The regulatory authorities may impose specific obligations as a condition of the marketing authorization, such as additional safety monitoring, or the conduct of additional clinical trials or post-marketing safety studies, or the imposition of a Risk Evaluation and Mitigation Strategy (“REMS”), which could include significant restrictions on distribution or use of the product.

Also, quality control and manufacturing procedures must continue to conform to cGMPs after approval.

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Fast-Track and Priority Review Designations.

Section 506(b) of the FDCA provides for the designation of a drug as a fast-track product if it is intended, whether alone or in combination with one or more other drugs, for the treatment of a serious or life-threatening disease or condition, and it demonstrates the potential to address unmet medical needs for such a disease or condition.

A program with fast-track status is afforded greater access to the FDA for the purpose of expediting the product’s development, review and potential approval.

Many products that receive fast-track designation are also considered appropriate to receive priority review, and their respective applications may be accepted by the FDA as a rolling submission in which portions of an NDA or BLA are reviewed before the complete application is submitted.

Section 506(b) of the FDCA provides for the designation of a drug as a fast-track product if it is intended, whether alone or in combination with one or more other drugs, for the treatment of a

serious or life-threatening disease or condition, and it demonstrates the potential to address unmet medical needs for such a disease or condition.

A program with fast-track status is afforded greater access to FDA for the purpose of expediting the product’s development, review and potential approval.

Many products that receive fast-track designation are also considered appropriate to receive priority review, and their respective applications may be accepted by FDA as a rolling submission in which portions of an NDA or BLA are reviewed before the complete application is submitted.

Together, these may reduce time of development and FDA review time.

In Europe, products that are considered to be of

major public health interest are eligible for accelerated assessment, which shortens the review period.

In Europe, products that are considered to be of major public health interest are eligible for accelerated assessment, which shortens the review period.

The grant of fast-track status, priority review or accelerated assessment does not alter the standard regulatory requirements for obtaining marketing approval.

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In 2012, Congress enacted the Food and Drug Administration Safety and Innovation Act.

This law established a regulatory process allowing for increased interactions with the FDA with the goal of expediting development and review of products designated as “breakthrough therapies.” A product may be designated as a breakthrough therapy if it is intended, either alone or in combination with one or more other products, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

This law established a regulatory process allowing for increased interactions with FDA with the goal of expediting development and review of products designated as “breakthrough therapies.” A product may be designated as a breakthrough therapy if it is intended, either alone or in combination with one or more other products, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

The FDA may take certain actions with respect to breakthrough therapies, including holding meetings with the sponsor throughout the development process;

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Studies that are conducted to demonstrate a drug’s effect on a surrogate or intermediate clinical endpoint for accelerated approval must be adequate and well-controlled as required by the FDCA.

Following accelerated approval, the FDA requires that the company provide confirmatory evidence, which may include certain adequate and well-controlled post-marketing clinical studies to verify and describe the clinical benefit of the product, and the FDA may impose restrictions on distribution to assure safe use.

Following accelerated approval, FDA requires that the company provide confirmatory evidence, which may include certain adequate and well-controlled post-marketing clinical studies to verify and describe the clinical benefit of the product, and FDA may impose restrictions on distribution to assure safe use.

Confirmatory studies are typically required to be underway at the time of the accelerated approval.

If the required confirmatory studies fail to verify the clinical benefit of the drug, or if the applicant fails to perform the required confirmatory studies with due diligence, the FDA may withdraw approval of the drug under streamlined procedures in accordance with the Agency’s regulations.

If the required confirmatory studies fail to verify the clinical benefit of the drug, or if the applicant fails to perform the required confirmatory studies with due diligence, FDA may withdraw approval of the drug under streamlined procedures in accordance with the Agency’s regulations.

The Agency may also withdraw approval of a drug if, among other things, other evidence demonstrates that the drug product is not shown to be safe or effective under its conditions of use.

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Orphan Drug Designation .

Under the Orphan Drug Act (“ODA”), the FDA may grant orphan drug designation to drugs or biologics intended to treat a rare disease or condition that affects fewer than 200,000 individuals in the U.S.

Under the Orphan Drug Act (“ODA”), FDA may grant orphan drug designation to drugs or biologics intended to treat a rare disease or condition that affects fewer than 200,000 individuals in the U.S.

or more than 200,000 individuals in the U.S.

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sales for that product.

The granting of orphan designation does not alter the standard regulatory requirements (other than payment of certain fees), nor does it alter the standards or process for obtaining marketing approval.

If a product that has an orphan drug designation subsequently receives the first FDA approval for the indication for which it has been designated as an orphan drug, the sponsor of the product qualifies for various development incentives specified in the ODA, including a tax credit of up to 25% of expenditures on qualified clinical testing for the orphan drug.

Furthermore, the product is entitled to an orphan drug exclusivity period, which means that the FDA may not grant approval to any other application to market the same drug for the same indication for a period of seven years except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity for the protected indication.

If the FDA designates an orphan

drug based on a finding of clinical superiority, the FDA must provide a written notification to the sponsor that states the basis for orphan designation, including “any plausible hypothesis” relied on by the FDA.

The FDA must also publish a summary of its clinical superiority findings upon granting orphan drug exclusivity based on clinical superiority.

Orphan drug exclusivity does not prevent the FDA from approving a different drug for the same disease or condition, or the same drug for a different disease or condition.

The granting of orphan designation does not alter the standard regulatory requirements (other than payment of certain fees and the applicability of certain pediatric assessment requirements), nor does it alter the standards or process for obtaining marketing approval.

The sponsor of a product that has an orphan drug designation qualifies for various development incentives specified in the ODA, including a tax credit of up to 25% of expenditures on qualified clinical testing for the orphan drug.

Furthermore, if the orphan designated product subsequently receives the first FDA approval for the orphan indication, the product is entitled to an orphan drug exclusivity period, which means that FDA may not grant approval to any other application to market the same drug for the same indication for a period of seven years except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity for the protected indication.

Orphan drug exclusivity does not prevent FDA from approving a different drug for the same disease or condition, or the same drug for a different disease or condition.

The EU has a similar Orphan Drug program to that of the U.S., and it is administered through the EMA’s Committee for Orphan Medicinal Products.

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An additional six months of exclusivity in the U.S.

may be granted to a sponsor of an NDA or BLA if the sponsor conducts certain pediatric studies.

This process is initiated when the FDA issues a Written Request for pediatric studies to determine if the drug or biologic could have meaningful pediatric health benefits.

If the FDA determines that the sponsor has conducted the requested pediatric studies in accordance with the written request, then an additional six months of exclusivity may attach in the case of a drug to any other regulatory exclusivity or patent protection applicable to the drug and, in the case of a biologic, to any other regulatory exclusivity applicable to the biologic.

may be granted to a sponsor of an NDA or BLA if the sponsor conducts certain pediatric studies, which studies are conducted pursuant to a written request from FDA.

This process is initiated when FDA issues a Written Request for pediatric studies to determine if the drug or biologic could have meaningful pediatric health benefits.

If FDA determines that the sponsor has conducted the requested pediatric studies in accordance with the written request, then an additional six months of exclusivity may attach in the case of a drug to any other regulatory exclusivity or patent protection applicable to the drug and, in the case of a biologic, to any other regulatory exclusivity applicable to the biologic.

The EU has a similar requirement and incentive for the conduct of pediatric studies according to the pediatric investigation plan, which must be adopted by the EMA before an MAA may be submitted.

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and expanded access for large patient populations under a treatment IND or treatment protocol.

For all types of expanded access, the FDA must determine prior to authorizing expanded access that:

For all types of expanded access, FDA must determine prior to authorizing expanded access that:

(1) the patient or patients to be treated have a serious or life-threatening disease or condition and there is no comparable or satisfactory alternative therapy;

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Only a licensed physician or the drug’s manufacturer may apply for expanded access.

Manufacturers are not required to supply the investigational product.

The FDA has established streamlined processes for physicians to request individual patient expanded access whereby physicians can submit an abbreviated application.

Manufacturers are not required to supply the investigational product for expanded access.

The FDA has established streamlined processes for physicians to request individual patient expanded access whereby physicians can submit a single patient IND.

In cases of individual patient emergency expanded access, physicians can receive FDA approval for access by phone and follow up with the abbreviated form.

In addition, the sponsor of an expanded access IND must submit IND safety reports and, in the cases of protocols continuing for one year or longer, annual reports to the FDA.

Expanded access programs are not intended to yield information relevant to evaluating a drug’s effectiveness for regulatory purposes.

INDs for expanded access trials may be sponsored by physicians or by manufacturers.

In addition, the sponsor of an expanded access IND must submit IND safety reports and, in the cases of protocols continuing for one year or longer, annual reports to FDA.

Labeling, Marketing and Promotion.

The FDA closely regulates the labeling, marketing and promotion of drugs.

In general, our labeling and promotion must not be false or misleading in any particular, and claims that we make must be adequately substantiated.

In addition, our approved labeling must include adequate directions to physicians for each intended use of our products.

Failure to comply with these requirements can result in adverse publicity, warning letters, corrective advertising, injunctions and potential civil and criminal penalties.

In addition to regulation by the FDA, the research, manufacturing, distribution, sale and promotion of drug products in the U.S.

are potentially subject to regulation by various federal, state and local authorities, including CMS, other divisions of the U.S.

In addition to regulation by FDA, the research, manufacturing, distribution, sale and promotion of drug products in the U.S.

are subject to regulation by various federal, state and local authorities, including CMS, other divisions of the U.S.

Department of Health and Human Services ( e.g.

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There are also an increasing number of state laws that require manufacturers to make reports to states on pricing and marketing information or impose other special requirements for the sale and marketing of drug products.

Many of these laws contain ambiguities as to what is required to comply with the laws.

In addition, federal and state “transparency laws” require manufacturers to track and report certain payments made to healthcare providers and, under some state laws, other information concerning our products.

These laws may affect our sales, marketing and other promotional

activities by imposing administrative and compliance burdens on us.

Many of these

laws contain ambiguities as to what is required to comply with the laws.

In addition, federal and state “transparency laws” require manufacturers to track and report certain payments made to health care providers and, under some state laws, other information concerning our products.

These laws may affect our sales, marketing and other promotional activities by imposing administrative and compliance burdens on us.

In addition, our reporting actions could be subject to the penalty provisions of the pertinent state and federal authorities.

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Outside of the U.S., our ability to conduct clinical trials or market our products will also depend on receiving the requisite authorizations from the appropriate regulatory authorities.

The foreign regulatory approval processes include similar requirements and many of the risks associated with the FDA and/or the EU approval process described above, although the precise requirements may vary from country to country.

The foreign regulatory approval processes include similar requirements and many of the risks associated with FDA and/or the EU approval process described above, although the precise requirements may vary from country to country.

In the EU, once an MAA is granted, the product must be “placed on the market” in at least one EEA country within three years of the date of authorization.

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In July 2018, we placed OMIDRIA on the market in the EU, on a limited basis, which maintained the ongoing validity of the European marketing authorization for OMIDRIA.

A marketing authorization will cease to be valid if a product previously placed on the market is no longer actually present on the market for three consecutive years.

A marketing authorization will cease to be valid if a product previously placed on the market is no longer actually present on the market for three consecutive years and we expect to make OMIDRIA available in the European market on a limited basis to the extent necessary to continue the validity of our marketing authorization.

Hatch-Waxman Act.

In seeking approval for a drug through an NDA, applicants are required to list with the FDA each patent with claims that cover the applicant’s drug or an approved method of use of the drug.

Upon approval of a drug, each of the patents listed in the application for the drug is then published in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book.

In seeking approval for a drug through an NDA, applicants are required to list with FDA each patent with claims that cover the applicant’s drug or an approved method of use of the drug.

Upon approval of a drug, each of the patents listed in the application for the drug is then published in FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book.

Drugs listed in the Orange Book can, in turn, be cited by potential competitors in support of approval of an ANDA or a 505(b)(2) application.

An ANDA provides for marketing of a drug that has the same active ingredients and, in some cases ( e.g., ophthalmology), also the same inactive ingredients, in the same strengths and dosage form as the listed drug and has been shown through testing to be bioequivalent to the listed drug or receives a waiver from bioequivalence testing.

In this case the original NDA, i.e., the pioneer drug, is known as the “listed” drug or “reference-listed” drug.

An ANDA provides for marketing of a drug that has the same active ingredients and, in some cases ( e.g., ophthalmology), also the same inactive ingredients, in the same strengths, route of administration and dosage form as the listed drug and has been shown through testing to be bioequivalent to the listed drug or receives a waiver from bioequivalence testing.

ANDA applicants are generally not required to conduct or submit results of preclinical or clinical tests to prove the safety or effectiveness of their drug, other than the requirement for bioequivalence testing.

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These drugs then generally can be substituted by pharmacists under prescriptions written for the original listed drug.

The ANDA or 505(b)(2) applicant is required to certify to the FDA concerning any patents listed for the referenced approved drug in the FDA’s Orange Book.

Specifically, the applicant must certify that:

The ANDA or 505(b)(2) applicant is required to certify to FDA concerning any patents listed for the referenced approved drug in FDA’s Orange Book.

Specifically, for each listed patent, the applicant must certify that:

(1) the required patent information has not been filed;

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A certification that the new drug will not infringe the already approved drug’s listed patents or that such patents are invalid or unenforceable is called a Paragraph IV certification.

If the ANDA or 505(b)(2) applicant does not include a Paragraph IV certification, the ANDA or 505(b)(2) application will not be approved until all of the listed patents claiming the referenced drug have expired, except for any listed patents that only apply to uses of the drug not being sought by the ANDA or 505(b)(2) applicant.

If the ANDA or 505(b)(2) applicant has made a Paragraph IV certification, the applicant must also send notice of a Paragraph IV Notice Letter to the NDA and patent holders once the ANDA or 505(b)(2) application has been accepted for filing by the FDA.

the ANDA or 505(b)(2) applicant does not include a Paragraph IV certification, the ANDA or 505(b)(2) application will not be approved until all of the listed patents claiming the referenced drug have expired, except for any listed patents that only apply to uses of the drug not being sought by the ANDA or 505(b)(2) applicant.

The NDA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV Notice Letter.

The filing of a patent infringement lawsuit within 45 days of the receipt of notice of a Paragraph IV Notice Letter automatically prevents the FDA from approving the ANDA until the earlier of 30 months, expiration of the patent, settlement of the lawsuit, modification by a court or a decision in the infringement case that is favorable to the ANDA or 505(b)(2) applicant.

The ANDA or 505(b)(2) application also will not be approved until any applicable non-patent exclusivity, such as exclusivity for obtaining approval of a new chemical entity, listed in the Orange Book for the referenced drug has expired.

The filing of a patent infringement lawsuit within 45 days of the receipt of notice of a Paragraph IV Notice Letter automatically prevents FDA from approving the ANDA until the earlier of 30 months, expiration of the patent, settlement of the lawsuit, modification by a court or a decision in the infringement case that is favorable to the ANDA or 505(b)(2) applicant.

Drug Price Competition and Patent Term Restoration Act of 1984, more commonly known as the Hatch-Waxman Act, provides a period of five years following approval of a drug containing no previously approved active moiety, during which ANDAs for generic versions of those drugs and 505(b)(2) applications referencing those drugs cannot be submitted unless the submission contains a Paragraph IV challenge to a listed patent, in which case the submission may be made four years following the original drug approval.

Federal law provides for a period of three years of exclusivity following approval of a listed drug that contains previously approved active ingredients but is approved in a new dosage form, route of administration or combination, or for a new use, the approval of which was supported by new clinical trials other than bioavailability studies that were essential to the approval and conducted by or for the sponsor.

The Hatch-Waxman Act also provides for a period of three years of exclusivity following approval of a listed drug that contains previously approved active ingredients but is approved in a new dosage form, route of administration or combination, or for a new use, the approval of which was supported by new clinical trials other than bioavailability studies that were essential to the approval and conducted by or for the sponsor.

During those three years of exclusivity, FDA cannot grant approval of an ANDA or 505(b)(2) application for the protected dosage form, route of administration or combination, or use of that listed drug.

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Biosimilars .

In the U.S., the FDA regulates biologics under the FDCA, the PHSA, and implementing regulations.

The enactment of federal health care reform legislation in March 2010 provided a new pathway for approval of follow-on biologics ( i.e.

The enactment of federal healthcare reform legislation in March 2010 provided a new pathway for approval of follow-on biologics ( i.e.

, biosimilars) under the PHSA.

Licensure by the FDA is dependent upon many factors, including a showing that the proposed biosimilar is “highly similar” to the reference product, notwithstanding minor differences in clinically inactive components, and has no clinically meaningful differences from the reference product in terms of safety, purity, and potency.

FDA licensure of a biosimilar is dependent upon many factors, including a showing that the proposed biosimilar is “highly similar” to the reference product, notwithstanding minor differences in clinically inactive components, and has no clinically meaningful differences from the reference product in terms of safety, purity, and potency.

The types of data ordinarily required in a biosimilar application to show high similarity include analytical data, animal studies (including toxicity studies), and clinical studies (including immunogenicity and pharmacokinetic/pharmacodynamic studies).

A biosimilar must seek licensure for a condition of use for which the reference product is licensed.

A biosimilar must seek licensure for a condition of use for which the reference-listed product is licensed.

Furthermore, the PHSA provides that for a biosimilar to be considered “interchangeable” ( i.e.

, the biological product may be substituted for the reference product without the intervention of the health care provider who prescribed the reference product), the applicant must make an additional showing that the biosimilar can be expected to produce the same clinical result as the reference product in any given patient, and if the product is administered more than once to a patient, that risks in terms of safety or diminished efficacy of alternating or switching between the biological product and the reference product is no greater than the risk of using the reference product without switching.

Although the FDA has provided guidance on what information and data an applicant should submit to enable an interchangeability determination, thus far the FDA has not licensed any biologic as being interchangeable with its reference product.

Although FDA has provided guidance on what information and data an applicant should submit to enable an interchangeability determination, thus far FDA has not licensed any biologic as being interchangeable with its reference product.

The PHSA also provides a period of exclusivity for pioneer biologics.

Specifically, FDA may not accept a biosimilar application referencing data from a pioneer biologic (i.e., one approved through a full BLA) until four years have elapsed from the date of first licensure of the pioneer biologic.

FDA may not approve a biosimilar application

referencing data from a pioneer biologic until 12 years have elapsed since the date of first licensure of the pioneer biologic.

There are certain restrictions and limitations on the types of BLAs that are eligible for biologics exclusivity as well as what constitutes the date of first licensure for a pioneer biologic.

In the EU, a pathway for the approval of biosimilars has existed since 2005.

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These include, but are not limited to, the following:

● the federal Anti-Kickback Statute, which prohibits offering or paying anything of value to a person or entity to induce or reward referrals for goods or services reimbursed by a federal health care program such as Medicare or Medicaid;

● the federal False Claims Act, which prohibits presenting or causing to be presented a false claim for payment by a federal health care program, and which has been interpreted to also include claims caused by improper drug-manufacturer product promotion or the payment of kickbacks;

● the federal False Claims Act, which prohibits presenting or causing to be presented a false claim for payment by a federal healthcare program, and which has been interpreted to also include claims caused by improper drug-manufacturer product promotion or the payment of kickbacks;

● a variety of governmental pricing, price reporting, and rebate requirements, including those under Medicaid and the Veterans Health Care Act;

● the so-called Sunshine Act and certain provisions of the Affordable Care Act, which require that we report to the federal government information on certain financial payments and other transfers of value made to certain healthcare providers and institutions, as well as certain information regarding our distribution of drug samples.

● the so-called Sunshine Act and certain provisions of the Affordable Care Act, which require that we report to the federal government information on certain financial payments and other transfers of value made to certain health care providers and institutions, as well as certain information regarding our distribution of drug samples.

In addition to these federal law requirements, several U.S.

states have enacted similar laws requiring periodic reporting and/or disclosure related to our marketing, sales and other activities, or regulating certain sales and marketing activities, such as provision of meals, gifts or entertainment to certain healthcare providers.

We may also be subject to federal or state privacy laws if we receive protected patient health information.

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Laws in the U.S.

such as the Foreign Corrupt Practices Act prohibit the offering or payment of bribes or inducements to foreign public officials for business, including physicians or other medical professionals who are employees of public health care entities.

In addition, many non-U.S.

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Other legislative changes included a two percent across-the-board reduction to Medicare payments to providers, effective April 1, 2013, which, due to subsequent legislative amendments, will stay in effect through fiscal year 2029 unless additional congressional action is taken.

The American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers, and increased the period for the government to recover overpayments to providers from three to five years.

President Trump and various members of Congress have expressed a desire to repeal all or portions of the ACA and, in December 2017, portions of the ACA dealing with the individual mandate insurance requirement were effectively repealed by the Tax Cuts and Jobs Act of 2017.

(A temporary suspension of this reduction during the public health emergency for the pandemic is currently scheduled to expire on March 31, 2021.) The American Taxpayer Relief Act of 2012, among other things, reduced Medicare payments to several providers, and increased the period for the government to recover overpayments to providers from three to five years.

In December 2017, portions of the ACA dealing with the individual mandate insurance requirement were effectively repealed by the Tax Cuts and Jobs Act of 2017.

In December 2018, a federal district court judge in Texas found the ACA’s individual mandate to be unconstitutional and, therefore, the entire law to be invalid.

In December 2019, the Fifth Circuit affirmed the ruling regarding the individual mandate but remanded the case to the district court for additional analysis of the question of severability and whether portions of the law remain valid.

The case has been appealed to the Supreme Court and on March 2, 2020, the Supreme Court announced that it would hear oral argument during its next term.

President Trump, the Secretary of Health and Human Services, various members of Congress and CMS have made statements and/or issued proposals regarding containment of drug prices through various means, including enabling CMS to negotiate U.S.

drug pricing, aligning U.S.

drug pricing with foreign drug pricing, pricing transparency measures, reform of drug rebate programs, and conditioning coverage and reimbursement of certain drugs upon the prior failure or inadequacy of less expensive therapies (sometimes referred to as “step therapy”).

The case is currently pending at the Supreme Court, and a decision is expected by mid-2021.

In November 2020, CMS issued an interim final rule through the CMS Innovation Center whereby Medicare Part B reimbursement for “certain high-cost prescriptions drugs” would be no more than most-favored-nation price (i.e., the lowest price) after adjustments, for a pharmaceutical product that the drug manufacturer sells in a member country of the Organization for Economic Cooperation and Development that has a comparable per-capita gross domestic product.

In December 2020, the United States District Court in Northern California issued a nationwide preliminary injunction against implementation of the interim final rule.

The incoming Biden administration has indicated that lowering prescription drug prices is a priority, but it is not yet clear what steps the administration will take or whether such steps will be successful.

We cannot predict the ultimate content, timing or effect of any healthcare reform legislation or executive order or the impact that the resulting changes may have on us.

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We engage third parties on a limited basis to conduct portions of our preclinical research;

we are not substantially dependent on any third parties for our preclinical research nor do any of these third parties conduct a major portion of our preclinical research.

however, we are not substantially dependent on any third parties for our preclinical research nor do any of these third parties conduct a major portion of our preclinical research.

We also engage multiple clinical sites to conduct our clinical trials.

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Vice President, Nonclinical Development

Vice President, Chief Commercial Officer

Vice President, Business Development

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Vice President, Science and Chief Scientific Officer

Vice President, Chief Commercial Officer

Bruce Meiklejohn, Ph.D.

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Vice President, Chief Medical Officer

Vice President, Human Resources

Demopulos, M.D.

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He has been board-certified in toxicology through the American Board of Toxicology since 2000.

Nadia Dac has served as our Chief Commercial Officer since January 2021.

Dac brings nearly three decades of international experience as a strategic commercial leader at large and small biopharmaceutical companies.

Prior to joining Omeros, Ms.

Dac served as the chief commercial officer at Alder Pharmaceuticals, Inc.

(acquired in 2019 by Lundbeck) from April 2019 until June 2020 and as vice president of global specialty commercial development at AbbVie, Inc.

from December 2014 to March 2019.

She previously served as vice president of marketing at Auxilium Pharmaceuticals, Inc.

from May 2013 to September 2014, when the company was acquired by Endo International plc.

From 2009 to 2013, Ms.

Dac held several roles of increasing responsibility at Novartis AG, including global vice president of neuroscience professional relations prior to her role as vice president of Novartis’ multiple sclerosis franchise, and at Biogen Inc., Johnson & Johnson, and Eli Lilly and Company.

She holds a B.S.

in Marketing from Rutgers University.

Duffy has served as our vice president, business development since March 2010.

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Gaitanaris received his Ph.D.

in cellular, molecular and biophysical studies and his M.Ph.

in cellular, molecular and

biophysical studies and his M.Ph.

from Columbia University and his M.D.

from the Aristotelian University of Greece.

Kirby has served as our chief commercial officer since August 2019 and as our vice president, head of commercial since November 2018.

From March 2018 until September 2018 Mr.

Kirby was the U.S.

CAR T-cell commercial lead for Celgene Corporation, having joined Celgene following its acquisition of Juno Therapeutics, Inc.

Kirby served as Juno’s Vice President of Market and Market Access from March 2016 until its acquisition by Celgene in March 2018.

Prior to his work at Celgene and Juno, Mr.

Kirby was the head of marketing at Medivation, Inc.

from 2015 to 2016, and spent nearly 15 years in commercial leadership roles at Amgen Inc.

In his final role at Amgen, Mr.

Kirby oversaw the U.S.

customer-facing marketing efforts for the G-CSF franchise, NEULASTA ® and NEUPOGEN ® .

Kirby’s experience also includes commercial roles at GlaxoSmithKline.

Kirby holds an undergraduate degree from the University of Maryland at College Park.

Bruce Meiklejohn, Ph.D .

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Meiklejohn was an expert CMC consultant for several biotechnology companies, including Omeros.

His consulting work followed a career at Eli Lilly and Company, where he held a number of CMC leadership roles including head of Lilly’s biopharmaceutical product development division and senior research fellow in regulatory affairs CMC.

His consulting work followed a career of over 27 years at Eli Lilly and Company, where he held a number of CMC leadership roles including head of Lilly’s biopharmaceutical product development division and senior research fellow in regulatory affairs CMC.

While at Lilly, Dr.

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from Butler University.

Williams has served as our vice president, human resources since June 2020.

Prior to joining Omeros, Mr.

Williams served as the senior vice president of human resources at Redbox Automated Retail, LLC from 2016 to 2019, where he led human resources and internal communications functions.

From 2013 to 2016, Mr.

Williams served as the vice president, HR operations at Outerwall Inc.

(Coinstar) and before that he held human resources leadership roles at Coinstar from 2009 to 2013.

Prior to 2009, Mr.

Williams held human resources leadership roles at various technology and consumer focused companies, including Washington Mutual, Inc., Sterling Commerce, Inc., Expedia, Inc., and Verio, Inc.

Williams received a B.A.

in Business Administration and a B.A.

in English from the University of Washington.

Corporate Information

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Our principal executive offices are located at 201 Elliott Avenue West, Seattle, Washington, 98119, and our telephone number is (206) 676-5000.

Our website address is www.omeros.com.

Our website address is

www.omeros.com.

We make available, free of charge through our investor relations website at investor.omeros.com, our annual report on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, including exhibits to those reports, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

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The SEC maintains a website that contains reports, proxy and information statements, and other information regarding reports that we file or furnish electronically with them at www.sec.gov.

SUMMARY RISK FACTORS

The risk factors described below are a summary of the principal risk factors associated with an investment in our company.

These are not the only risks we face.

You should carefully consider the risk factors discussed in this summary, as well as the risk factors described in Item 1A.

of this Annual Report on Form 10-K.

Risks related to our products, programs and operations include, but are not limited to, the following:

● the commercial success of OMIDRIA and whether we will continue to maintain separate payment for OMIDRIA;

● the impact of the COVID-19 pandemic on our business, operations and financial results as well as significant uncertainty around the evaluation of narsoplimab as a potential treatment for critically ill COVID-19 patients;

● lack of adequate coverage or reimbursement from government and/or private payers for our products;

● failure to obtain and maintain regulatory approval for marketing of our current or future commercial products in the U.S.

or in foreign jurisdictions;

● unpredictability of our operating results;

● our ability to raise capital when needed;

● any failure to comply with current or future government regulations;

● lack of internal manufacturing capacity and reliance on third parties to manufacture, finish, store and ship supplies of our investigational and marketed drugs for clinical and commercial use;

● ability to acquire ingredients, excipients, test kits and other materials to manufacture our product or product candidates on commercially reasonable terms;

● delays, suspensions or terminations of our clinical trials or clinical protocols;

● failure to capitalize on product candidates or indications;

● whether our product candidates will successfully complete clinical development or be suitable for successful commercialization or generation of revenue;

● substantial costs as a result of commercial disputes, claims, litigation or other legal proceedings;

● ability to protect our intellectual property and proprietary technologies;

● our indebtedness and liabilities, which could limit the cash flow available for our operations;

● competition with companies with more resources and experience;

● reliance on members of our management team and our ability to recruit and retain key personnel;

● reliance on third parties to conduct portions of our preclinical research and clinical trials.

General risks related to our business include the following:

● cyber-attacks or failures in telecommunications or other information technology systems;

● volatility of our stock price;

● dilution to our existing shareholders if we issue additional shares of our common stock or other securities that may be convertible into, or exercisable for, our common stock;

● the impact of anti-takeover provisions in our charter documents and under Washington law on potential acquisitions of our company.

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

What changed 10-K

Item 1. Business