Omeros(OMER) - 2022 Q2 - Quarterly Report

PART I — FINANCIAL INFORMATION This section presents Omeros Corporation's unaudited condensed consolidated financial statements and related disclosures ITEM 1. FINANCIAL STATEMENTS This section provides Omeros Corporation's unaudited condensed consolidated financial statements and related notes Condensed Consolidated Balance Sheets This section details the company's financial position, including assets, liabilities, and equity Balance Sheet Summary | Metric | June 30, 2022 (in thousands) | December 31, 2021 (in thousands) | Change (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | | Cash and cash equivalents | $14,136 | $100,808 | $(86,672) | | Short-term investments | $108,427 | $56,458 | $51,969 | | Total current assets | $192,722 | $247,956 | $(55,234) | | Total assets | $345,638 | $419,268 | $(73,630) | | Total current liabilities | $38,501 | $51,789 | $(13,288) | | Total shareholders' equity (deficit) | $(32,702) | $23,780 | $(56,482) | - Total assets decreased by $73.6 million from December 31, 2021, to June 30, 2022, primarily driven by a significant reduction in cash and cash equivalents, partially offset by an increase in short-term investments[15] - Shareholders' equity shifted from a positive balance of $23.8 million at December 31, 2021, to a deficit of $32.7 million at June 30, 2022, reflecting accumulated losses[15] Condensed Consolidated Statements of Operations and Comprehensive Loss This section presents the company's revenues, expenses, and net loss from continuing and discontinued operations Operations and Comprehensive Loss Summary | Metric (in thousands) | Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Research and development | $23,516 | $30,126 | $47,603 | $62,630 | | Selling, general and administrative | $13,922 | $15,484 | $24,881 | $28,270 | | Total costs and expenses | $37,438 | $45,610 | $72,484 | $90,900 | | Net loss from continuing operations | $(41,695) | $(50,187) | $(81,189) | $(99,956) | | Net income from discontinued operations | $10,846 | $21,594 | $17,329 | $36,273 | | Net loss | $(30,849) | $(28,593) | $(63,860) | $(63,683) | | Basic and diluted net loss per share | $(0.49) | $(0.46) | $(1.02) | $(1.02) | - Net loss from continuing operations decreased by $8.5 million for the three months ended June 30, 2022, and by $18.8 million for the six months ended June 30, 2022, compared to the prior year periods[18] - Net income from discontinued operations decreased significantly, from $21.6 million to $10.8 million for the three months, and from $36.3 million to $17.3 million for the six months, primarily due to the sale of OMIDRIA[18] Condensed Consolidated Statements of Stockholders' Equity (Deficit) This section tracks changes in the company's equity or deficit, reflecting net losses and capital transactions Stockholders' Equity (Deficit) Summary | Metric (in thousands) | Balance at January 1, 2022 | Balance at June 30, 2022 | | :-------------------- | :------------------------- | :----------------------- | | Common Stock Amount | $626 | $627 | | Additional Paid-In Capital | $706,288 | $713,665 | | Accumulated Deficit | $(683,134) | $(746,994) | | Total Equity (Deficit) | $23,780 | $(32,702) | - The company's total shareholders' equity shifted from a positive balance of $23.8 million at January 1, 2022, to a deficit of $32.7 million by June 30, 2022, primarily due to a net loss of $63.9 million during the period[21] - Additional paid-in capital increased by $7.4 million, mainly from stock-based compensation expense and exercise of stock options[21] Condensed Consolidated Statements of Cash Flows This section reports the cash inflows and outflows from operating, investing, and financing activities Cash Flow Summary | Activity (in thousands) | Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | | :---------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(34,662) | $(67,846) | | Net cash provided by (used in) investing activities | $(52,072) | $63,396 | | Net cash provided by financing activities | $62 | $6,651 | | Net decrease (increase) in cash and cash equivalents | $(86,672) | $2,201 | | Cash and cash equivalents at end of period | $14,136 | $12,702 | - Net cash used in operating activities decreased by $33.2 million for the six months ended June 30, 2022, compared to the same period in 2021, primarily due to changes in receivables following the OMIDRIA sale[23][130] - Investing activities shifted from providing $63.4 million in cash in 2021 to using $52.1 million in 2022, largely due to the purchase of short-term investments with proceeds from the OMIDRIA sale[23][132] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures for the condensed consolidated financial statements Note 1—Organization and Basis of Presentation This note covers the company's business, product development status, and OMIDRIA divestiture's financial impact - Omeros Corporation is a clinical-stage biopharmaceutical company focused on small-molecule and protein therapeutics for immunologic diseases, cancers, and addictive/compulsive disorders[24] - The Biologics License Application (BLA) for narsoplimab in HSCT-TMA received a Complete Response Letter (CRL) from the FDA, leading to a Formal Dispute Resolution Request submitted in June 2022, with a decision expected in August 2022[25] - The company sold OMIDRIA and related assets to Rayner Surgical Inc. on December 23, 2021, for $126.0 million upfront, plus royalties and a potential $200.0 million milestone payment[27] - As of June 30, 2022, the company had $122.6 million in cash, cash equivalents, and short-term investments, and expects these, along with OMIDRIA royalties and potential milestone payments, to fund operations through at least August 9, 2023[32][34] Note 2—Significant Accounting Policies This note outlines critical accounting policies, including discontinued operations and revenue recognition - The sale of OMIDRIA assets to Rayner qualifies as a discontinued operation, with all related revenues and expenses reclassified to income from discontinued operations for all periods presented[37][39] - Future OMIDRIA royalties are treated as variable consideration and measured using an expected value approach, with royalties earned primarily reducing the OMIDRIA contract royalty asset[40] - Inventory costs for product candidates are expensed as R&D until regulatory approval is reasonably assured, then capitalized[43] -