Omeros - Q2 2024

Transcript

Operator (participant)

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

Jennifer Williams (Head of Investor Relations)

Good afternoon, and thank you for joining the call today. I'd like to remind you that some of the statements that will be made on the call today will be forward-looking. These statements are based on management's beliefs and expectations as of today only and are subject to change. All forward-looking statements involve risks and uncertainties that could cause the company's actual results to differ materially. Please refer to the special note regarding forward-looking statements in the company's quarterly report on Form 10-Q, which was filed today with the SEC, and the Risk Factors section of the company's most recent annual report on Form 10-K for a discussion of these risks and uncertainties. Now, I would like to turn the call over to Dr. Greg Demopulos, Chairman and CEO of Omeros.

Gregory Demopulos (Chairman and CEO)

Thank you, Jennifer, and good afternoon, everyone. I'm joined on today's call by David Borges, our Chief Accounting Officer; Nadia Dac, our Chief Commercial Officer; Andreas Grauer, our Chief Medical Officer; Catherine Melfi, our Chief Regulatory Officer; and Steven Whittaker, our Clinical Vice President. I'll start today with an overview and discussion of our 2024 second quarter financial results, followed by an update on our ongoing development programs. David will then provide a more detailed financial summary before we open the call to questions. Now, let's look at our financial results for the second quarter. Our net loss for the second quarter of 2024 was $56 million, or 97 cents per share, compared to a net loss of $37.2 million or 63 cents per share in the first quarter of 2024.

In the second quarter, we incurred $17.6 million of R&D expense related to the manufacture of narsoplimab drug substance lots that commenced in October 2023, $21.2 million in discounted term loan-related debt repurchase, and $1.9 million of term loan-related transaction costs. These significant cash outlays are representing a total of $40.7 million are not expected to be repeated in the foreseeable future. As of June 30, 2024, we had $158.9 million of cash and investments on hand. In addition, as explained in earlier calls, our recent sale of OMIDRIA royalties to DRI Healthcare carries with it two sales contingent milestones payable by DRI to Omeros, each up to $27.5 million, with payment dates in January 2026 and January 2028.

In the second quarter, we substantially strengthened our balance sheet through our debt repurchase and exchange transaction. At March 31, 2024, we had $216 million in notional value outstanding on our 2026 notes, all maturing in February 2026. In June, we entered into an agreement with Athyrium Capital Management and Highbridge Capital Management, under which we repurchased and retired 2026 notes held by Athyrium and by Highbridge, representing a collective notional value of $118.1 million for $21.2 million in cash and $67.1 million in a new secured term loan, with maturity extended out to June of 2028. The total of $88.3 million in cash paid and new term loan represents a discount of approximately 25% or $29.8 million off of par.

This transaction brings our remaining 2026 notes down by 55% from $216 million to a much more manageable $98 million, with the option at Omeros's discretion to reduce that amount by another $15 million in notional value with additional lenders. We view the outcome of the transaction as highly favorable to Omeros for the following reasons: Through both the restructuring and repurchase of $118.1 million of our outstanding 2026 notes, we extinguished nearly $30 million of debt through financial engineering alone. The transaction was completed at approximately 75% of par, so rather than being priced at the typical 10%-15% premium above the prevailing market, our transaction was priced slightly below the market.

We've further de-risked the balance sheet, with the majority of our debt now extinguished or having its maturity profile extended from February 2026 to June 2028. Again, unusual for this type of transaction, the deal is non-dilutive for Omeros, with no common stock or warrants included. The interest rate on the new term loan is highly competitive, resulting in a lower cash outflow than our prior principal and interest payments on the retired 2026 notes. Omeros also retains the ability to spend up to $25 million to repurchase additional outstanding 2026 notes. In addition, as I mentioned a bit earlier, Omeros has the option to allow other lenders to join the transaction to a total of an additional $15 million of notional value, provided that they are given terms no better than those received by Athyrium and Highbridge.

The term loan agreement also includes an additional commitment by the lenders to fund a $25 million delayed draw facility at our request prior to July 3rd, 2025, contingent on FDA approval of narsoplimab in TA-TMA. This additional commitment provides Omeros with a ready source of capital to fuel narsoplimab's early commercialization, while preserving our cash to fund program development, to reduce the remaining balance of our outstanding 2026 notes, and/or to reduce the outstanding balance on our term loan. As part of this transaction, we also retain all future value of the capped calls associated with all the 2026 notes, including those retired in the debt repurchase and exchange. Collectively, now these capped calls represent substantial potential value.

In summary, our recent debt repurchase and exchange non-dilutively reduces by more than half the outstanding principal amount of our 2026 maturing debt at a substantial discount to par value, replacing a portion of that outstanding debt with a term loan maturing out in June of 2028, and also provides funding flexibility to manage the remaining lesser balance of our 2026 notes, to fund the early commercialization of narsoplimab, and to continue advancing through upcoming shareholder value-driving catalysts within our development programs. Building on our earlier retirement of $9.1 million notional value of our 2026 notes and our recent open market purchases and return to our treasury of 8% of Omeros' outstanding common stock, this transaction with Athyrium and Highbridge represents another substantial step in managing our capital structure to remove financial overhang.

With that, let's move on to an update on our development programs. I'll begin with narsoplimab, our MASP-2 inhibitor, targeting the lectin pathway of complement. As I described in our last earnings call and at our annual shareholder meeting in June, we continue to engage with FDA regarding the proposed resubmission of our biologics license application, or BLA, for narsoplimab in hematopoietic stem cell transplant-associated thrombotic microangiopathy, or TA-TMA. Another upcoming meeting has been scheduled with FDA. In the meantime, we're preparing the BLA for resubmission. We're further encouraged by FDA's recent establishment of the Rare Disease Innovation Hub, which will serve as a single point of connection and engagement within the FDA to promote and support the development of therapeutics for rare diseases.

The hub is designed to focus especially on rare diseases for which the natural history is variable and not fully understood, recognizing that development of therapies for these conditions is often particularly challenging. Regarding our plans for resubmission and its anticipated timing, we will provide a further update when more definitive information from our FDA interactions becomes available. Also, in addition to the publications already available, two more manuscripts authored by international transplant experts are in preparation. One, directed to the results of a survival comparison between our pivotal TA-TMA trial and a rigorous external control. And the second, detailing the survival data in our expanded access program... Physicians continue to increasingly request narsoplimab under expanded access for their patients with TA-TMA. Given that there is no approved treatment for this life-threatening condition, we continue to do what we can to help these patients.

In parallel with our efforts to obtain FDA approval for narsoplimab, we continue rapidly advancing the clinical development program for our MASP-3 inhibitor, targeting the alternative pathway of complement. OMS906, our lead MASP-3 antibody, now has a recently adopted non-proprietary name, zaltenibart. We have multiple phase II studies of zaltenibart ongoing in two rare disease indications: paroxysmal nocturnal hemoglobinuria, or PNH, a life-threatening hematologic disorder, and C3 glomerulopathy, or C3G, a debilitating and potentially life-threatening kidney disease. We'll look first at our ongoing phase II PNH clinical trial. The annual European Hematology Association Congress in June, Dr. Morag Griffin, an internationally recognized PNH expert from St. James's University Hospital in the U.K., presented the results of the adjunctive treatment stage of our switchover study in PNH patients with a suboptimal response to treatment with the C5 inhibitor, ravulizumab.

The study evaluated two zaltenibart dose levels. As previously discussed, patients in this study began adjunctive zaltenibart treatment while receiving ravulizumab, and then, those patients adequately responding to combination treatment were switched to zaltenibart monotherapy. During the adjunctive therapy period, the statistically significant mean hemoglobin improvement from baseline was 3.27 grams per deciliter, and 10 of 12 patients advanced to monotherapy. Absolute reticulocyte count also demonstrated statistically significant improvement, and consistent, with our clinical experience with zaltenibart, the drug was safe and well-tolerated. The last patient visit in this switchover study is scheduled for October, and patients completing the study are entering our long-term extension study. An abstract providing results of the zaltenibart monotherapy stage has been submitted to the American Society of Hematology for presentation at their annual meeting in December.

The efficacy and safety profiles of zaltenibart as monotherapy remain strong, including demonstration of sustained and clinically meaningful improvements in hemoglobin levels and absolute reticulocyte counts, as well as prevention of extravascular and intravascular hemolysis. We look forward to sharing these data with you later this year. Our second ongoing phase II PNH study continues to progress well. This one is in patients who are naive to complement inhibitor treatment, meaning, that they have not received previous complement therapy. After presentation of the early results of subcutaneous zaltenibart treatment at the 2023 American Society of Hematology meeting last December, we amended the study protocol to identify the plasma concentrations and the level of MASP-3 inhibition required to inhibit breakthrough hemolysis.

These data, together with data derived from our switchover PNH study and from our phase I studies in healthy subjects, provide the basis for selecting the zaltenibart dose for our upcoming phase III clinical trials. We now have the needed data to finalize our phase III dose selection, and analyses will be completed soon. Looking ahead to our PNH phase III program, we remain on track to initiate both our naive patient and switchover phase III trials later this year. All required activities have either been completed or are progressing as planned. We have completed three international and U.S. medical advisory boards to gather input on the current and future needs of the PNH community and to understand how best to position zaltenibart for success against competitors.

Physician advisors and focus group patients have uniformly responded positively to the unique properties of both zaltenibart and its MASP-3 target, as well as to our clinical data, and they expect that zaltenibart, when approved, will see significant uptake. These PNH experts are working closely with us to ensure that our study protocols are designed to demonstrate zaltenibart's potential and to help us prepare for efficient study execution. Our clinical operations team has already begun site identification and has been developing strong relationships with investigators, which should serve to speed enrollment. We anticipate having broad and geographically diverse site participation that will support both post-approval adoption and utilization. All external vendors have already been identified and awarded, and on the manufacturing front, all zaltenibart needed for our phase III program has already been manufactured and earmarked for the clinical trials.

With respect to our zaltenibart regulatory efforts, we have prepared our briefing materials to confirm FDA and European regulatory alignment with our clinical plan and phase III trial designs. Following our meeting with FDA earlier this year, we incorporated all FDA feedback, and we look forward to our upcoming pre-phase III meetings with both US and European regulators, which have already been scheduled or requested. Turning now to zaltenibart in C3 glomerulopathy or C3G, our phase II study is enrolling. We look forward to sharing data from this study later this year or early next. The phase III program in C3G is planned to initiate in the first quarter of 2025.

Finally, while our current primary objective is to initiate our zaltenibart PNH phase III trials quickly and to drive them to successful completion, we remain acutely focused on the wide applicability of MASP-3 and alternative pathway inhibition. As previously discussed, competitors with other agents targeting the alternative pathway have substantially de-risked for zaltenibart an array of indications beyond PNH. These include IgA nephropathy, C3 glomerulopathy, and age-related macular degeneration. All of these and others, zaltenibart could provide significant patient benefits over currently available treatments, specifically, better safety, more consistent efficacy, and superior dosing, convenience, and compliance. I'll now turn back to our lectin pathway franchise and update you on OMS1029, our next generation long-acting inhibitor of MASP-2. We've now successfully completed both the single and multiple ascending dose phase I studies of OMS1029.

The results support once quarterly dosing, administered either subcutaneously or intravenously. OMS1029 remains well tolerated, with no safety concerns identified. As previously disclosed, we're evaluating several chronic large value indications for potential development of OMS1029, one of these being neovascular age-related macular degeneration, also known as wet AMD. In a preclinical murine model of wet AMD, MASP-2 inhibition showed good efficacy. We are now running a primate study comparing OMS1029 to Eylea, which by recent report, holds the major revenue share in AMD. We look forward to receiving those data later this quarter. As discussed on our last call, all currently approved treatments for wet AMD, be it Eylea, Lucentis, they all require frequent intravitreal injections, meaning injections directly into the posterior chamber of the eye.

By contrast, because MASP-2 is produced only in the liver, MASP-2 inhibition throughout the body is achieved through systemic administration by any route of administration, whether that be intravenously, subcutaneously, or orally. Wet AMD is a very large market, and our work to date indicates that an effective therapeutic that does not require patients to receive painful injections in their eyes would be regarded by both patients and their physicians as a highly attractive alternative. As detailed in earlier earnings calls and during our annual shareholder meeting last June, we continue our work with narsoplimab and MASP-2 inhibition in both severe acute and long COVID or PASC, as well as an acute respiratory distress, or ARDS, including H1N1 and the recently concerning H5N1. In addition to the wide therapeutic potential of MASP-2 inhibition, we're also developing a diagnostic approach for these broad indications.

Adoption and utilization of a diagnostic for MASP-2 and lectin pathway hyperactivation would not only help physicians and their patients in early diagnosis, but would also drive adoption and utilization of narsoplimab and other members of our MASP-2 inhibitor therapeutic franchise across these diseases. As they become available, we'll share further important updates on our efforts on this front. In addition to our MASP-2 and MASP-3 antibodies, narsoplimab, zaltenibart, and OMS1029, our growing complement franchise includes small molecule, orally available MASP-2 and MASP-3 inhibitor programs. Both these programs are progressing rapidly, with lessons learned from our MASP-2 small molecule program being applied to and levered for advancing development of our MASP-3 orally administered agents. Let's turn now to OMS527, our PDE7 inhibitor program aimed at treating addictions, compulsions, and movement disorders.

As previously disclosed, the National Institute on Drug Abuse, or NIDA, requested that we shift our focus for OMS527 from nicotine addiction to the unmet and urgent need for a treatment for cocaine use disorder. Our program is funded by NIDA through a $6.7 million grant. We anticipate receiving results later this year from a preclinical toxicology study of primates exposed concurrently to cocaine and OMS527. Assuming positive results in the toxicology study, together with NIDA, we plan to initiate next year a randomized, double-blind, inpatient clinical trial evaluating OMS527 treatment in individuals with cocaine use disorder. As also discussed in earlier calls, we're exploring the potential use of OMS527 in movement disorders, specifically, levodopa-induced dyskinesias, or LID. This is a major problem in patients with Parkinson's disease and is caused by levodopa, the most common therapeutic used in Parkinson's disease.

There is no good treatment for LID, and as a result, LID certainly represents a large and essentially untapped commercial market for an effective and safe therapeutic. We'll wrap up our program discussion with our family of biologic and cellular immuno-oncology platforms, namely our signaling-driven immunomodulators, our antigen-driven immunomodulators that function not only as therapeutics, but also as cancer vaccines, our oncotoxins, and our adoptive T-cell therapy that requires no engineering and could supersede CAR T, able to treat both liquid and solid tumors and amenable to multiply repetitive dosing. All these platforms are advancing quickly. Around each, we continue generating really a steady stream of compelling and exciting in vivo data, expanding and strengthening their respective intellectual property positions.

Each of our IO platforms represent novel approaches to cancer treatment, designed to, one, target both cell surface and intracellular cancer targets for broad cancer applicability. Two, increase CD4, CD8, and memory T-cell levels to attack cancer cells effectively and sustainably. Three, create immune memory against future relapse. And four, eliminate the need for costly and time-intensive cellular modification or engineering. Given the growing volume and breadth of encouraging data, we are working diligently to include them in our patent applications. Once all initial patent applications have been filed, we will share data through one or more public avenues. I'll now turn the call over to David Borges, our Chief Accounting Officer, to go through a more detailed discussion of our financial results. David?

David Borges (Chief Accounting Officer)

Thanks, Greg. Our net loss for the second quarter of 2024 was $56 million, or $0.97 per share, compared to a net loss of $37.2 million, or $0.63 per share, in the first quarter of 2024. In Q2, we incurred $17.6 million of R&D expense related to the manufacture of narsoplimab drug substance lots that commenced in October 2023 and were delivered in the second quarter of this year. Recall that our accounting policy is to expense all manufacturing costs related to drug candidates until a regulatory approval is reasonably assured in either the U.S. or the European Union. We also incurred $21.2 million in discounted term loan-related debt repurchase and $1.9 million for term loan-related transaction costs in the second quarter.

Costs and expenditures of this significance, the narsoplimab manufacturing amount, the discounted term loan-related debt repurchase, and the term loan-related transaction cost, representing a total of $40.7 million, are not expected in the foreseeable future. As of June 30, 2024, we had $158.9 million of cash and investments on hand, a decrease of $71.4 million from March 31, 2024. Two second quarter transactions significantly affected our Q2 ending cash balance. One, we paid $10.7 million in the second quarter and $6.9 million in the first quarter, related to 6 lots of narsoplimab drug substance, which were commenced in October 2023 and released in the current quarter.

And two, we paid $21.2 million to Highbridge and Athyrium in connection with the discounted debt repurchase in June 2024. Costs and expenses from continuing operations for the second quarter were $59.2 million, which was an increase of $20.1 million from the first quarter of this year. The increase was driven by narsoplimab drug substance manufacturing, zaltenibart clinical research, and the discounted debt repurchase transaction cost, all partially offset by lower expenditures on the IgAN clinical trial as we closed down that trial. Interest expense for the second quarter was $9.2 million, which is $1 million higher than the first quarter of this year due to increased interest expense associated with the DRI transaction that was finalized in February 2024.

The primary drivers of interest expense are the 2026 notes and the DRI OMIDRIA royalty obligation. Interest and other income for the second quarter was $3.2 million, which was slightly lower compared to interest and other income from the first quarter of this year, due to lower cash balances to invest. Income from discontinued operations in the second quarter of this year was $9.1 million and includes two primary components: One, $4.3 million of interest earned on the OMIDRIA contract royalty asset. Two, $4.3 million of remeasurement adjustments to the OMIDRIA contract royalty asset. As we have previously made clear, royalties earned are recorded as a reduction in the OMIDRIA contract royalty asset on our balance sheet, and not in our income statement.

OMIDRIA royalties for the second quarter were $10.9 million on OMIDRIA net sales of $36.4 million. This is compared to royalties of $9.4 million on first quarter net sales of $31.2 million, a $5.2 million increase in net sales over the first quarter of 2024. The increase in net sales from the first quarter is consistent with historical OMIDRIA net sales trends. As we discussed in last quarter's earnings call, in February 2024, we entered into an amended agreement with DRI, by which they acquired the right to receive all US OMIDRIA royalties payable by Rayner through December 31, 2031. We continue to hold all royalty rights to ex-US sales of OMIDRIA, and after December 31, 2031, all US royalty payments also accrue to Omeros.

In addition, we have the opportunity to earn two sales-contingent milestones, each up to $27.5 million, with payment dates in January 2026 and January 2028. As Greg mentioned, in June, we substantially strengthened our balance sheet through our debt repurchase and exchange transaction, whereby we repurchased and retired a portion of our 2026 notes for cash and a new term loan. The total principal amount of the 2026 notes exchanged was $118.1 million, in exchange for total consideration of $88.3 million, consisting of a cash payment of $21.2 million and a new secured loan of $67.1 million, extending maturity on that portion of our debt out to June of 2028.

In addition, we have a $25 million delayed draw term loan available to be drawn on or prior to June 3, 2025, contingent on regulatory approval of narsoplimab and TA-TMA. The term loan is secured by substantially all our assets and carries an interest rate based on the current adjusted secured overnight financing rate, or SOFR, plus 875 basis points. The combined rate at June 30, 2024, was 14.2%. The term loan agreement includes a covenant requiring us to maintain unrestricted cash and cash equivalents of at least $25 million. The $88.3 million of new term loan and total cash spent to repurchase debt represent a discount of approximately 25%, or $29.8 million off of par.

This transaction brings our remaining total of outstanding 2026 notes down by 55%, from $216 million to a much more manageable $98 million. The $29.8 million discount from par has been recorded as a premium, i.e., an increase to the term loan being recognized as a gain on early extinguishment of debt. The $29.8 million premium will be amortized against interest expense over the term of the loan, which results in an effective interest rate of 1.6% for financial statement purposes. The amount of interest expense expected to be recognized in the third quarter related to this new term loan is approximately $400,000. Now, let's look at our expected third quarter results. We expect overall operating costs from continuing operations in the third quarter to decrease by approximately $20 million.

The decrease is primarily due to the significant expenses reported in the second quarter related to the receipt of narsoplimab drug substance, the cash paid to repurchase our 2026 notes, and transaction costs incurred in connection with the discounted debt repurchase. Interest income for the third quarter should be nearly $2.5 million, and interest expense should be approximately $8.2 million, a decrease of $1 million from the second quarter due to a decrease in our outstanding debt and the lower financial statement interest rate on the term loan. Finally, income from discontinued operations should be in the $7-$8 million range. With that, turn the call back over to Greg.

Gregory Demopulos (Chairman and CEO)

Thanks, David. Operator, let's please open the call up to questions.

Operator (participant)

Thank you very much. To ask a question, you will need to press star one one on your telephone and wait to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question today comes from Steve Brozak with WBB. Your line is open.

Steve Brozak (President and Managing Partner)

Hey, good afternoon, and thanks for taking the question, questions. I actually have two. The first one is, on the quarter, in terms of the expenses, can you give us any modeling or any idea as to how this expense that we modeled in basically would factor into the future? And I've got a follow-up after that, please.

Gregory Demopulos (Chairman and CEO)

Sure. I think I hope we were pretty clear, Steve, that those expenses that were the large expenses or and charges and costs incurred in the second quarter were those that we don't expect to be repeated. There was a large manufacturing cost. There was a repurchase of the term loan related debt, $21.2 million, where again that was at 75% of par. So all of that got retired. And then there were the term loan-related transaction costs. So I think that. I'm not sure that answered your question, but if not, let me know and we can, we can-

Steve Brozak (President and Managing Partner)

Yeah, no, that covered it exactly. I just wanted to understand how to see about modeling into the future. These were just obviously one-time expenses, which actually brings me on the manufacturing side. For the purposes of future, when you see approval, what else do you need now that you've got this manufacturing expense done? What else do you need to be able to go out there and when you will get approval, what else would you need to literally go into the markets? You can be as detailed as you want on that, because I'm kind of curious to see how to model that in the future, please.

Gregory Demopulos (Chairman and CEO)

Well, there's one rather large component that we would need, which would be FDA approval. And we're working hard to secure that. I mean, you know, when you look at the data, we think the data are very clear. And, frankly, as I said, we have a meeting scheduled with FDA. Those were part of the prepared comments. And we believe we're in very good shape with respect to the data and the case for its approval. So we just need to play this out a bit. But that's really what we need in the US. We're also pursuing, as you know, EMA approval for narsoplimab.

Let me stop and get Kathy to weigh in, and then I'll also ask Nadia and Andreas to comment if they have anything else to add from the commercial or clinical perspective. But Kathy, do you want to? You want to take that?

Catherine Melfi (Chief Regulatory Officer)

Yeah, sure. And I think also part of the question was, when we get approval, you know, what next? And we are well positioned, and we're anticipating, and we're preparing for success, and we're set up in terms of our packaging operations and that sort of thing from a regulatory perspective. So we are definitely planning for success in terms of what we have lined up, as you said, Steve, when we get approval. But I'll let commercial and clinical teams weigh in as well.

Nadia Dac (Chief Commercial Officer)

Yeah, I'll jump in, and we are planning for success and have been, and so we have everything laid out down to the last month and gated behind key decisions all the way down to brand name as well, and making sure all of that is ready to go. So that's kind of the good news of the delay, is that we could plan for this, but there are multiple things that we still need, and everything is being planned for and progressed.

Andreas Grauer (Chief Medical Officer)

But from a clinical point of view, I think what we need for after approval is patients and physicians ready to use the product. And if our expanded access program is any indication, then they're already there. They want narsoplimab, they're using it in their patients, especially in patients that fail currently available treatments. So we're encouraged that we actually can bring something to market that is needed and will help patients. And also the international scientific community seems to look differently at transplant-associated TMA in the last years. They've issued a harmonization of the diagnostic criteria. They've identified clear, high risk and treatment criteria. So to Greg's point, the only thing we need is approval.

Gregory Demopulos (Chairman and CEO)

Thank you, all of you. We, you know, we certainly, as I think everyone has relayed in their comments, we believe we are well prepared and frankly, well deserving of having narsoplimab approved. Patients clearly need it. Patients clearly are using it, physicians using it, as Andreas said, through the expanded access program. Remember, the only thing they have available now are all off-label therapies. As I think we pointed out in a previous call in the expanded access program, where we treat both adult and pediatric patients, of the 136 patients, when we did the data cut on the expanded access program, 53 of those had failed or stopped treatments with one or more other agents.

And so you really have to think about that ASH when narsoplimab was used in these patients, it was really catching a falling knife. And yet, despite that, about half of those patients did well and resolved their TMA. So, you know, that is a somewhat controlled experiment and internal control, that you see the effect of narsoplimab. So we are obviously pushing hard here, and we need to get to resolution quickly.

Steve Brozak (President and Managing Partner)

Oh, great. Thank you. Thank you for the iteration on all the steps that have been covered. That's something that frankly, I'm thrilled that you've covered those bases, and I look forward to obviously the good news in the future. Thank you.

Gregory Demopulos (Chairman and CEO)

Thanks, Steve.

Operator (participant)

Thank you. Our next question comes from Olivia Brayer with Cantor. Your line is open.

Olivia Brayer (Director and Senior Biotech Analyst)

Hey, good afternoon, guys, and thank you for the questions. Greg, can you tell us when that additional meeting with the FDA is expected to happen, and whether there's any new information or data that they've asked for ahead of that meeting? Then I have a follow-up on the pipeline on 906.

Gregory Demopulos (Chairman and CEO)

Yeah. Hi, Olivia, how are you? We won't specify the date of the meeting, and the information is, as you might expect, information on our programs and responses to FDA questions. I think that's a fair representation, but I'll again, let me see if Kathy wants to add anything specifically to that.

Catherine Melfi (Chief Regulatory Officer)

Yeah, really nothing to add. I think you covered it, Greg. Thanks.

Olivia Brayer (Director and Senior Biotech Analyst)

Okay, understood. And then on 906, just wanted to clarify that you guys do have the monotherapy data in-house, and if so, can you give us a sense for just level of confidence around that program and anything you can tell us at this point on the phase III trial designs, both for PNH but also C3G?

Gregory Demopulos (Chairman and CEO)

Let me hand that over to Steve Whittaker.

Steven Whitaker (Clinical VP)

First, I'll talk about the monotherapy data. Unfortunately, we can't give you any specific details on that data because as Greg said, that's been submitted to an ASH abstract and embargoed until as publishes that, which will come later in the year, the data are strong. We're feeling positive about everything we're seeing, both in that, adjunctive switch study as well as the data we've already presented in the naive study. And, Greg also mentioned that we've amended that protocol to develop data to help with dose selection. Your second question was related to how the phase III program is moving forward?

Gregory Demopulos (Chairman and CEO)

Well, I think one was also how are we viewing the program generally? How do we-

Steven Whitaker (Clinical VP)

Ah.

Gregory Demopulos (Chairman and CEO)

What's our sense of?

Steven Whitaker (Clinical VP)

Very excited about the program. The data are coming in strongly. Good differentiators with competitors out there, both in the target as well as the drug, and having tremendous response from both key opinion leaders as well as potential clinical trial sites who we're talking to now. The responses have been uniformly positive in the advisory boards that we've conducted to date. Just a little anecdotal example, at European Hematology Association, we took clinical operations people with us to get ready for the phase III trials. Not only did they have a lot of meetings set up with investigative sites who were interested, but people we hadn't contacted were coming up to our booth and asking to talk to them about potentially getting their patients into the clinical trials.

There's a lot of excitement out there around the program, which is keeping us very excited.

Gregory Demopulos (Chairman and CEO)

Steve and Andreas, collectively, your views of the phase III program and upcoming, I mean, do you anticipate any change in the response we're seeing in patients between the phase II program and what we could see in the phase III?

Andreas Grauer (Chief Medical Officer)

I think even in the phase II, although the phase II studies are naturally small, we've treated a fairly representative set of patients. And so we expect to see very similar results in the phase III program.

Steven Whitaker (Clinical VP)

I agree.

Olivia Brayer (Director and Senior Biotech Analyst)

Okay.

Steven Whitaker (Clinical VP)

Everything is looking good.

Olivia Brayer (Director and Senior Biotech Analyst)

Thank you.

Gregory Demopulos (Chairman and CEO)

Okay. Thanks, Olivia.

Operator (participant)

Thank you very much. Our next question comes from Serge Belanger with Needham & Company. Your line is open.

Gregory Demopulos (Chairman and CEO)

Hi, Serge.

John Gionco (Equity Research Associate)

Hi, this is John on for Serge today.

Gregory Demopulos (Chairman and CEO)

Oh, okay.

John Gionco (Equity Research Associate)

Just, my first question, regarding zaltenibart and the C3G program. You're currently still enrolling patients for the phase II study. Do you have any timelines set to complete that study ahead of the potential launch in one—in the first quarter of next year? And whether or not there could be any potential overlap between phase II and phase III during that time? And then, just on regarding-

Gregory Demopulos (Chairman and CEO)

Yeah, go ahead.

John Gionco (Equity Research Associate)

Go ahead.

Gregory Demopulos (Chairman and CEO)

Go ahead.

John Gionco (Equity Research Associate)

And then just my second question was regarding OMS1029. You're expecting data in the third quarter of this year. How quickly do you think, you know, pending good data, how quickly do you think you'd be able to get this into the clinic, following the study? Thanks.

Gregory Demopulos (Chairman and CEO)

Good. Well, let me first, I'll hand this off to clinical in a moment, but as I mentioned, we think that we will have data from the C3g phase II study later this year or early next. And also, as I noted, we're planning to initiate the phase III program early in 2025. But let, Steve, do you, again, do you wanna take this on C3g and the question about potential overlap of a phase II and phase III?

Steven Whitaker (Clinical VP)

Sure. I would actually anticipate having an overlap between phase II and phase III. The phase II study has a year of treatment, and if you recall, I believe it was seven patients that Novartis presented at an ASH meeting or an ERA meeting. So you can get a good sense of efficacy with small numbers of patients in an open label study. So we would, as soon as we gather the data to see a strong efficacy signal, we would start initiating phase III activities immediately before we run the study out completely.

Gregory Demopulos (Chairman and CEO)

Great. Thank you. Your second question about 1029 was how quickly, following data, we think we could be in the clinic, and I'm assuming meaning in the clinic in a Phase II study. Andreas, do you have any thoughts on that?

Andreas Grauer (Chief Medical Officer)

Well, I mean, if the data are as clear as we would hope, then I think we would get right to finalizing a clinical trial design. We would get the necessary input from the opinion leaders in the field to make sure that the trial design makes sense, and will, you know, deliver a clear answer. So I would expect us to move into the clinic sometime early in 2025.

Gregory Demopulos (Chairman and CEO)

Great. Now, again, the objective of the primate study is to run a comparator. So we're looking at the effects of 1029 versus EYLEA in these animals. So we think that model is representative or pretty well predictive of what one would see in the human. And that way, I think we'll get a pretty good sense coming out of these primate studies. And as Andreas said, we're hoping to see the data that we expect.

John Gionco (Equity Research Associate)

Great. Thank you.

Gregory Demopulos (Chairman and CEO)

Thanks.

Operator (participant)

This does conclude our question and answer session. I would now like to turn it back to Dr. Demopulos for final remarks.

Gregory Demopulos (Chairman and CEO)

Thank you, operator. And again, thank you all for joining this afternoon. I think we've laid out clear paths around how we are advancing our programs. We are really quite excited about the data we're generating. I know there, again, remains the question about narsoplimab in everyone's mind and timing. We are confident in the effect of narsoplimab in these patients, the need for narsoplimab in these patients, and we expect we're going to get there. As Kathy made clear, can't give you the when right now, but as soon as we have a better sense of the when, we will. But all of these programs are moving forward, and I think, you know, when you look at what's coming next in zaltenibart, you know, certainly looks to be exciting.

So with that, I will thank you all for your continued support, and have a good rest of the day.