Mar 16, 2015
Executives
Erin Cox - IR Greg Demopulos - CEO Mike Jacobsen - CAO
Analysts
Steve Brozak - WBB Securities Yatin Suneja - Cowen & Company Ram Selvaraju - MLV & Co Liana Moussatos - Wedbush Securities George Zavoico - Jones Trading Norman Hale - Stifel
Operator
Good afternoon and welcome to today’s conference 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 over the call to Erin Cox, Investor Relations for Omeros.
Erin Cox
Good afternoon. I’d like to remind you that some of the statements that will be made today on the call 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 risk factors section of the company’s Annual Report filed with the SEC earlier today 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.
Greg Demopulos
Thank you and good afternoon everyone. The voice you just heard is of Erin Cox.
Before we start today’s program update, I’d like to take a moment to let you all know that Erin is our new in-house Senior Manager of Investor Relations. Omeros Investor Relations is currently transitioning from Jennifer Williams of Cook Williams Communications to Erin and I would like to take this opportunity to thank Jennifer for her years of service, support and friendship.
With me also today is Mike Jacobsen, our Chief Accounting Officer. I’ll start today’s call with a corporate update and after which Mike will provide an overview of our fourth quarter and year-end financial results.
We have reserved some time for Q&A after the financial overview. To provide some financial context for the discussion of our commercial and development programs at Omeros, I would like to remind you that Omeros completed a successful equity financing in February of this year with a group of top-tier life science focused funds netting proceeds of approximately 79.1 million.
This financing further strengthened our institutional shareholder base providing the required capital for both the successful launch of Omidria and for the advancement of our pipeline programs. Now let's turn to our programs.
As many of you know, our first commercial product Omidria was approved last year by the FDA for use during cataract and intraocular lens replacement surgery. Omidria is the only FDA approved intraocular product that maintains pupil diameter by preventing intraoperative miosis or pupil constriction and reduces postoperative pain providing consistent and predictable management of these problems for ophthalmic surgeons and their patients.
The need to maintain pupil size throughout the surgical procedure particularly the prevention of miosis or pupil constriction and the need to inhibit postoperative pain are two key challenges facing ophthalmic surgeons and their patients in lens replacement surgery today. Small pupils during cataract surgery are associated with a multiply increased risk of serious complications including some that are sight threatening.
Cataract and intraocular lens replacement surgery today represents one of the most common surgical procedures in the U.S. with approximately 4 million performed annually.
Worldwide there are more than 15 million of these procedures performed each year in the developed nations. Within Omeros our primary focus at this time is the successful U.S.
launch of Omidria. In February, we began a controlled launch of the product to a relatively small number of ophthalmic surgeons drawn from each of the Medicare administrative contractor regions across the U.S.
The purpose of this controlled launch is to pressure test our commercial processes including distribution and reimbursement allowing us to identify areas to optimize prior to our broad launch. The feedback to-date from the surgeons using Omidria has been uniformly positive including anecdotal reports of how Omidria has precluded the need for pupil expanding devices and has removed the surgeons anxiety during what otherwise have been difficult and stressful cases.
The broad national launch of Omidria is planned for early April, the timing of which will coincide nicely with the products increased visibility essentially Omidria's coming out party at the Annual Meeting of the American Society of Cataract and Refractive Surgery later in April. Over the past six months, we have worked to put all of the pieces in place for a successful full scale product launch of Omidria.
Our marketing and sales leadership teams including our national and regional sales managers have been hired and our 40 contract sales representatives each solely dedicated to Omeros have been calling on ophthalmic surgeons and their staff. Our head of national reimbursement has been hired, manufacturing and supply agreements are completed and wholesaler agreements have been finalized.
Our third-party logistics provider is up and running and has been shipping product during the controlled launch. On the marketing front, Omidria has received a substantial amount of attention from industry media in connection with our launch.
A string of peer-reviewed journal articles have begun to publish. Our ads for Omidria have been running in the trade journals and we have built the presence at key ophthalmology conferences and within the ophthalmic surgery community.
Our advisors include the ophthalmic surgeons who shape practice habits both today and in the future. With respect to pricing as many of you know, we received transitional pass through reimbursement status for Omidria from the Center for Medicare and Medicaid Services or CMS effective January 1, 2015.
We are grateful to CMS for their inclusion of Omidria in the pass through program and we expect our pass through to remain in effect through December 31, 2017 near which time CMS will evaluate utilization of Omidria and will reassess its reimbursement status. CMS has set the reimbursement rate for a single use vial of Omidria at the product's Wholesale Acquisition Cost or WAC of $465 plus 6%.
This reimbursement rate will be in effect under Medicare Part B for the first two full quarters of sale after which the rate will adjust to Average Selling Price or ASP plus 6%. As I mentioned earlier, we have hired a national head of reimbursement and are assembling a reimbursement accounts team across all regions of the U.S.
Their sole responsibility will be to assist surgeons and facilities in appropriately receiving Medicare Part B reimbursement for Omidria and to expand coverage and payment to include Medicare advantage as well as commercial payers. Moving now from our U.S.
launch to our European plans for Omidria. We expect to receive a positive opinion from CHMP on our marketing authorization application in the first half of this year.
Our European strategy for Omidria remains to partner for marketing and distribution. Turning to our pipeline, let's first focus on our MASP program.
OMS721 is our MASP-2 antibody targeting the lectin pathway of the complement system, a key part of the immune response. Our current Phase 2 clinical program is evaluating OMS721 in patients with complement mediated thrombotic microangiopathies or TMAs including atypical hemolytic uremic syndrome or aHUS, thrombocytopenic purpura as well as human stem cell transplant related TMAs.
We also have recently expanded our study population to include TMAs associated with renal transplantation. Last month, we released preliminary data from the low-dose cohort in our OMS721 Phase 2 trial, which showed that improvements were observed across TMA disease markers for all patients in this study cohort.
Based on these clinical results, a European investigator has requested that we provide extended access to OMS721 for compassionate use in patients with TMA. The request is of course subject to approval by the applicable regulatory authority.
Although, the first dosing cohort was a small sample size, experts in this disease field including the study investigators believe that the patients’ improvements were clinically meaningful and directly related to treatment with OMS721. Patient enrolment at a higher dose continues and we expect to release additional data from this trial later during the year.
We also have made significant advances in our MASP-3 program OMS906. As some of you might recall, we believe that Omeros together with our lead collaborator in the complement field Professor Wilhelm Schwaeble was the first to identify MASP-3 as the activator of the alternative pathway, another important components of the complement system.
Omeros is building a strong patent position around these discoveries focused on the inhibition of MASP-3 across a broad range of disorders linked to the alternative pathway, including paroxysmal nocturnal hemoglobinuria or PNH. Our patent state is also being expanded to cover a large series of MASP-3 antibodies that we have generated.
Many of these antibodies have very high affinity for the MASP-3 protein and we currently are determining which of these MASP-3 antibodies we will take forward into manufacturing scale up in preparation for clinical trials. As previously reported for OMS824, our PDE10 inhibitor for the treatment of Huntington’s disease, schizophrenia and other cognitive disorders.
Clinical trial enrolment is currently suspended in connection with an observation in a single non-clinical rat study. We are finalizing the package of non-clinical materials requested by the FDA to allow reinitiation of the OMS824 Phase 2 programs and we look forward to reactivating enrolment in the near future.
Our G protein-coupled receptor or GPCR program continues to progresses well. To-date we have unlocked or identified compounds that functionally interact with 54 Class A Orphan GPCRs and are also able now to unlock Class B Orphan GPCRs.
We are advancing Medicinal Chemistry efforts on a handful of targets including GPR17 for the treatment of demyelinating diseases. GPR151 targeting neuropathic pain and GPR161 for the treatment of sarcomas and triple negative breast cancer.
We also continue to focus on our patented efforts to protect broadly the 54 Orphan GPCRs that we have already unlocked for drug development. The last few programs that I would like to discuss are our PDE7 inhibitor, OMS527 and our anti-plasmin protein OMS616.
Omeros discovered the link between PDE7 and any form of addiction as well as the link between PDE7 and any form of movement disorder. We currently are focused on developing what we believe could be a treatment for a wide range of addictions and compulsive disorders.
OMS616 is our novel antifibrinolytic agent to limit blood loss during trauma or surgery or associated with hyperfibrinolytic states such as chronic liver disease. We are moving ahead to initiate the clinical programs for OMS527 and OMS616 in 2015 and 2016 respectively.
That concludes our corporate update. At this point, I’d like to turn the call over to Mike for a summary of our fourth quarter and year-end financial results.
Mike Jacobsen
Thanks, Greg. For the quarter ended December 31, 2014, we reported net loss of 20.7 million or $0.61 per share, which includes non-cash expenses of 4.2 million or $0.12 per share.
This compares to a net loss of 1.8 million or $0.05 per share for the same period in 2013 including non-cash expenses of 2.6 million or $0.09 a share. As you may recall, during the fourth quarter of 2013, we received a 12.5 million or $0.41 per share litigation settlement.
Excluding the effects of the litigation settlement, our net loss would have been 14.3 million or $0.47 per share. For the full year of 2014, we reported a net loss of 73.7 million or $2.22 per share which again includes non-cash expenses of 11.7 million or $0.35 per share.
This compares to a net loss of 39.8 million or $1.39 per share in 2013, including non-cash expenses of 10.6 million or $0.37 per share. Excluding the litigation settlement, the 2013 net loss would have been 52.3 million or $1.83 per share.
Operating expenses for this quarter were 20.2 million compared to 14.1 million one year ago. The increase was primarily related preparing for the U.S.
commercial launch of Omidria, non-cash expenses related to stock-based compensation, some increased employee cost and the U.S. pediatric clinical trial for Omidria which began in 2014.
Operating expenses for the year ended December 31, 2014 were 70.5 million compared to 52.1 million in 2013. The 2014 increase related primarily to our clinical trials evaluating OMS824 and OMS721 preparing for the U.S.
commercial launch of Omidria and increased employee cost, non-cash expenses related to the stock-based compensation. These increased expenses were partially offset by lower preclinical activity on our PVE7 program.
Revenue for the current quarter was 180,000 compared to 169,000 for the same period in 2013. For the year ended December 31, 2014 revenue was 539,000 compared to 1.6 million in 2013.
The decrease for the full year of 2014 was due to lower revenue recognized from our GPCR program funding agreements, which were fully recognized back in 2013. At December 31, 2014 the company had cash and cash equivalents in short-term investments of 6.9 million.
As Greg mentioned earlier, in February 2015, we sold approximately 3.4 million shares of common stock at a public offering price of $20.03 per share and also sold pre-funded warrants at $20.02 per share to purchase up to about 750,000 shares of common stock, with these warrants share having a stock price of $0.01. After deducting the underwriting discounts and the other operating expenses, we received a total net proceeds of 79.1 million.
As we've talked before, I wanted to give a little bit of financial guidance as it relates to 2015. As we discussed previously, we're not really in a position to provide overall revenue guidance for U.S.
sales of Omidria during the launch phase, but did want to point out a few key points related to that launch. With regard to actual sales Greg mentioned earlier in the call, we've began a controlled launch of Omidria in mid-February to a small number of surgeons.
We expect this controlled launch to be completed in early April and that the revenues generated during the controlled launch will be relatively nominal, though broad launch is expected in early April. Looking at operating expenses, we expect our overall 2015 operating expenses to be in the $110 million to $120 million range including approximately 15 million of non-cash expenses related to stock options, deferred rent, depreciation et cetera.
For research and development cost, we are assuming that the suspension of our clinical trials for OMS824 will be lifted allowing the continuation of Phase 2 trials in schizophrenia and Huntington's disease, that will continue our OMS721 Phase 2 trials in TMA patients and it will continue to advance our preclinical programs toward the clinic. In addition, we plan to expand our manufacturing capabilities for Omidria.
As we look across 2015, we expect R&D cost to increase progressively from quarter to quarter beginning with the first quarter of the year. With respect to SG&A expenses as of January 2015, we have all 40 of our third-party sales force representatives on board and in the field calling on ophthalmic surgeons.
In addition, we've initiated a variety of marketing activities that we expect to continue throughout 2015. We expect SG&A expenses to increase slightly in the first quarter compared to Q4 2014 due to the 20 incremental sales reps that came on board at the beginning of January and increase the second quarter due to launch activities, the hiring of the reimbursement team, et cetera.
And then general remain at second quarter levels across the remainder of 2015. Other income and expenses, primarily the interest expense on the 32 million on outstanding debt that we currently carry.
Interest expense is approximately 3.6 million per year and the outstanding debt is expected to be fully repaid in March 2018. I would like to conclude with a look at our cash position.
As you are aware we began 2015 with 6.9 million in cash and then in early February we raised additional 79.1 million in the net proceeds from our public offering as a common stock and the warrants. This effectively provides us with 86 million as of the beginning of 2015.
With that I'd like to turn the call back over to Greg.
Greg Demopulos
Thanks Mike and I think now what we'll do is open the call to questions from those out there.
Operator
[Operator Instructions] Our first question comes from Steve Brozak with WBB Securities. Your line is open.
Steve Brozak
Congratulations on all good news. Obviously the question has to deal with the launch, but I know that you can't be specific.
What I would like if you could itemize is, why would a physician, a clinicians use Omidria versus the compound being product. And specially since I think it was three days ago the journal talked about there were four major compound issues in the last two years if you could go over both the medical necessity and also the financial benefits of Omidria and one follow up after that please.
Greg Demopulos
Yes hi Steve, well in part you've already answered the question with the reference to the problems with compounding. But look we believe that Omidria is really superior clinically to any compounded product out there.
The combination of the mydriatic and the anti-inflammatory not only dilates the people as any other mydriatic does. But it's the Ketorolac that provides the in ambition of pupil constriction which is really the key to protecting that pupil, keeping it wide open during the surgical procedure.
In addition, as you know the Ketorolac reduces postoperative pain and that overall experience for the patient of postoperative comfort is important and surgeons really are graded so to speak by their patients based on their overall experience, of which comfort plays a really central role. So I think -- again the issues here are around compounded products; they are not FDA approve; they have not under gone any kind of clinical efficacy or safety testing.
Of course Omidria having been FDA approve has gone through all of the safety and efficacy testing, has been found to be efficacious and has been found obviously to be safe for use. So these are the differences I think that they are stark and I think that ophthalmic surgeons understand those differences and frankly appreciate those differences.
With respect to your second question around cost, I'm not going to speak to cost advantages of Omidria I don’t think that would be so appropriate. But I will just talk to you about the facts.
The facts are that Omidria has received pass through from CMS. What that means is that for the first two full quarters of sales Omidria is reimbursed at WAC which is 465 plus 6%.
Following those two quarters reimbursement shifts to ASP or Average Selling Price plus 6%. Currently surgeons are paying for compounded products out of there bundled reimbursement for cataract surgery.
Omidria is reimbursed separate from the bundle meaning outside of the bundle. So those physicians, those surgeons using Omidria very likely would not need to spend what they are currently spending on those compounded products from there bundled payment.
There is also I believe appropriately a handling fee effectively this 6% on top of the WAC or ASP and this does require likely some additional effort by surgeons or by their facilities and I think that’s why CMS provides that additional 6%. So, let me stop there and see if I answered your question.
Steve Brozak
No, you really did, and the last question because obviously a soft launch isn’t going to tell you anything. But what were the KOL feedbacks that you got based on, obviously the trials and how strong were they and I’ll hop back into the queue because I'm sure there's a lot of people that have questions.
Greg Demopulos
You are talking about the feedback specifically during the controlled launch?
Steve Brozak
No, more prior to the controlled launch, because it's too early to tell on the controlled launch.
Greg Demopulos
Actually, interestingly I think that the feedback from the controlled launch has been very much in line or representative of what we were hearing during the clinical trials. The feedback has -- as I think I said been uniformly positive.
In fact the responses from docs have been from a number of them that they thought the product would be good, they didn't realize how good until they actually had it in their hands and were using it. Again I want to underscore that these are anecdotal statements only and they should be taken as that which they are only.
But I think that clearly the docs are understand what the product does, I think they're seeing clearly the advantages and we're excited about what the full launch is going to bring us.
Steve Brozak
Wow, that's a great answer. Thank you
Operator
Thank you. Our next question comes from Yatin Suneja with Cowen & Company.
Your line is now open.
Yatin Suneja
Thank you very much for taking my questions and congrats on all the progress you have made this past year. So with regard to the controlled launch, could you give us a sense how many centers have been contacted so far.
And then as you go into the full mode -- full launch, how are you going to prioritize the centers that you will be contacting? Is there any specific threshold or physician that you are looking for at a particular surgery center and basically what's your strategy around it?
Greg Demopulos
Thank you, Yatin. Good question.
Let me first address the question about the controlled launch. We have not released the number of sites.
The focus on the controlled launch has really been to have a set of sites within each of the MAC regions or the Medicare Administrative Contractor regions. This again is to make sure that the MACs are aware of the product, that the reimbursement processes are in place, that they're running really without any kinks or hiccups and that all of this then will translate to the full launch, which as we've said will be in early April.
So, I think we're getting a lot of good information from the controlled launch, it was done strategically and again to sort of pressure test all of the commercial processes, not just reimbursement but distribution and frankly utilization processes within the surgical facilities where the products currently being used. And I think again the information has been very helpful, and will just better refine for us the large launch -- the full scale launch in early April.
With respect to how, during that full scale of launch we're targeting specific surgery centers or specific surgeons. I think better let me just tell you what our 40% sales force can access.
With that 40% sales force, we're really able to access effectively 80% or greater than that of the top 8 deciles -- of the top 50, top 100, top 150 surgeons across the U.S., we again are able to access with that 40% sales force as their areas have been setup, 80% or greater of each of those group. So the top 50, 100, 150 producing cataract surgeons in the country.
Where we really have that small gap is in the areas of sort of Wyoming, New Mexico, Kansas I believe and those were looking at how to access through additional means. So I think actually with respect to prioritization I would say we're kind of prioritizing all of the top cataract surgeons out there and as I said really the top 80% or more than the top 80% of the top 8 deciles.
Yatin Suneja
Great, that’s helpful. Greg, you've mentioned that you've had uniformly positive feedback, is there any pushback that you got so far?
Greg Demopulos
During the controlled launch there has been -- I got to frankly say -- and again this is a limited number, so I don’t want to extrapolate this to the large launch, but I would have to say that frankly there has been really no push back that we have received from those involved in the controlled launch. Understand again that in this controlled launch, we are also using surgeons who have been familiar with the product or have some understanding of the product and this is in part how they have been selected; that and again their location within each of the MAC regions that we wanted to pressure test.
Yatin Suneja
Moving on to the MASP-2 inhibitor OMS721, have you started dosing patients in the second cohort? And then with regard to the two patients in which you saw meaningful activity, what needs to be done?
Do you have to share any data with EMA before they can get access to the drug? And then how quickly could we see a follow-up from those patients?
Thank you very much.
Greg Demopulos
So your first question is yes enrolment has begun in the second cohort. So at the higher dose.
Your second question I believe, Yatin was tied to the two patients, actually remember those were three patients in the first cohort; all of which demonstrated disease markers all moving in the right direction. So and you also recall that one of those patients actually went through sort of a challenge/de-challenge meaning patient moved out of the acute phase of aHUS, resolve those symptoms while on drug, once drug was stopped patient went back into the acute phase and that’s what I mean by challenge/de-challenge.
With respect to the compassionate use or extended access, that is correct that it's going to need the approval of the regulatory authority in the country in which that investigator is located. We do not anticipate any difficulty there, the surgeon -- the physician is very enthusiastic about the effects that he believe are due to OMS721 and obviously he and we are advocating on behalf of those patients and their health.
So, I think I do expect that this will move forward expeditiously.
Operator
Thank you. Our next question comes from Ram Selvaraju with MLV & Co.
your line is open.
Ram Selvaraju
Firstly, with regard to Omidria, could you perhaps provide us with some color on the European situation? And if hypothetically stitch for us what a -- what a possibly an ideal collaboration target might look like?
What you're looking for them to bring to the table? Assuming that you go down that route, with regard to commercialization in regard to Europe?
And then secondly with respect to the potential compassion use plan for the 721 product candidate, maybe give us an idea of what that would look like, whether you could be able to charge for the drug and if you're able to charge for the drug; what we might potentially be able to see as a revenue stream going forward prior to its actual formal regulatory approval? Thanks.
Greg Demopulos
I’ll try to remember all of those Ram, good questions. First with respect to Omidria and Europe, as I’ve said we do expect that we will receive a positive opinion from the CHMP in the first-half of this year that would translate to a launch of Omidria in Europe in the second half of 2015.
With respect to what kind of partner, obviously we’re looking for someone there who has strength in ophthalmology and one who can handle the marketing and distribution in Europe and potentially in other regions. I think that those are what you would expect to be and are our areas of focus with respect to partner.
More than that I probably shouldn’t say, we really as you know don’t comment on the status of our business development effort. With respect to Omidria -- sorry with respect to now 721, I believe was the second part of your question, I don’t believe that we’re going to be charging for the product as part of the compassionate use.
This is going to be a product that we are providing truly on a compassionate basis to maintain the -- these people out of the acute phase of aHUS. So we don’t expect the revenue stream from that compassionate use.
The data from those patients of course would be usable as we talk to regulatory authorities about next steps following completion or termination of the Phase 2 study.
Ram Selvaraju
And then just as a very quick follow up. Do you anticipate advancing another monoclonal antibody candidate targeting the compliment pathway later this year or should we expect that to occur for example next year?
Greg Demopulos
No, I would not expect that this year just to scale up process alone. We've actually made very rapid -- what appears to be very rapid progress and tremendous progress on our MASP-3 program.
As I mentioned, we have antibodies. They have very high affinity for the MASP-3 protein and we are currently doing additional preclinical work on those, but we are expecting to in the relatively near term be able to select which one or which couple or small number of these antibodies we want to move forward into manufacturing scale up.
That process as you know takes time and therefore I would not expect that we would be in the -- and when I say that process, it's the manufacturing scale up that is just sort of a fixed process, not a way to really accelerate that. So I would not expect to see a MASP-3 inhibitor or 906 program in the clinic this year.
We'll talk more about that program as we go forward, but I think the opportunities here are pretty significant. You look at MASP-2 and OMS721, we really control at the affecter enzyme, at the activation of the lectin pathway.
We control the intellectual property there, so one could say we really control in that way the lectin pathway. Now it appears that we also control the activation or the activator of the alternative pathway.
One can see lectin pathway specific antibodies like 721. One could also see alternative pathway specific antibodies like we would be developing under the 906 program.
One could also see bi-specific antibodies targeting both the lectin and the alternative pathway meaning MASP-2 and MASP-3 by specific inhibitor for a number of other indications. The distillate of all of that is that we really do expect that we will be a significant player now and going into the future in the complement space.
Ram Selvaraju
And then with 824, could you give us some color on how rat specific the pharmacokinetic issues that may have led to the clinical hold are. And what the evidence might be for this being a rat specific issue?
I know that in the non-human primates, you haven’t seen any similar spikes.
Greg Demopulos
Well I mean that's a good part of it, right. I mean we -- this finding was seen at a very high dose only, in rat only.
Similar dosing in cynomolgus monkeys has produced no similar change. You recall that what the FDA asked us to do was to go back and to look at all of our preclinical studies in both rat and monkey knowing now what we're looking for to see if we saw a similar change in any of those other studies.
And I can tell you and because this is a webcast this I will say that we saw no other changes in any of those other studies, so this is the information that we'll be providing to the FDA. We'll be providing as well the multiples of safety over the dose where we saw this finding and I think that, as again as we've said, we think that we will not be able to reinitiate enrollment in the Phase 2, 824 program in the near future.
Operator
Thank you. Our next question comes from Liana Moussatos with Wedbush Securities.
Your line is open.
Liana Moussatos
I just have a couple of [indiscernible]. So OMS 721, we get the high dose data for the Phase 2 TMA trial.
Will that be a similar press release that what we got from the low dose or will there be more patients and will there be quantitative data in it -- or similar to what we’ve already seen?
Greg Demopulos
I think it's going to be different, remember why we put the initial press release out. The initial press release was put out because the investigator had requested compassionate use or extended use of OMS721 and that had been submitted to ClinicalTrials.gov.
I was receiving calls from a number of individuals -- some actually on this call with us today who had identified that notification on ClinicalTrials.gov and we're calling asking what is promoting this and asking for more detail around that posting on ClinicalTrials.gov. In order to be able to at least address the question other than just saying I can say nothing else than what is on ClinicalTrials.gov that is why we put that initial release out on that small number of patient.
As we collect additional data, as more patients are enrolled and patients at higher doses we will put out more information; frankly as is warranted remember that this was the low dose that we put out. This was really a dose where frankly we weren’t expecting to see a response.
The fact that we did, clearly exciting to all of us here at Omeros and obviously to the investigators involved in the study. So additional information will be forth coming the timing of that and the nature of that will be as appropriate.
Liana Moussatos
And the next steps for OMS527 and 616, OMS527 has already been tested in the clinic or is being tested now. What are your next step this year and to get 616 into the clinic next year?
Greg Demopulos
Right just for clarification neither of those programs is currently in the clinic. 527 we are pushing to get into the clinic this year, 616 we expect would be able to go into the clinic in 2016.
So that’s the timing we're excited about both of the programs. I think the data we continue to mass around PDE7 inhibition and addiction only makes that story better.
The mechanisms of action remember we also have elucidated and that whole story is just really a beautiful one and we’ll be publishing at some point here, data on the mechanism of that will include also additional pre-clinical data again ultimately the proof of all of this in the clinic and that’s why we are pushing to get 527 into the clinic this year followed by 2016 with 616.
Liana Moussatos
And will the trial this year for 527 be in healthy volunteers or patients.
Greg Demopulos
The initial study would be in healthy volunteers. We would run a traditional -- the current plan is to run a traditional Phase 1 healthier volunteer study.
Operator
Our next question comes from Jason Kolbert with Maxim Group. Your line is open.
Unidentified Analyst
This is Robert [indiscernible] from Maxim and first of all congratulates all the great progress you've been making lately. And the question just a follow up on 824, when you say near future any expected time frame between submission of the data and getting an answer?
Greg Demopulos
That is a I believe a 30 day cycle I would have to check with our regulatory group to confirm that. But I don’t want to put any tighter time constraints on what I said the near term, we have to share those data with the FDA; I've given you what the findings have been which is that we did not see any of these similar findings outside of the smaller number of rat in which they were originally identified.
Unidentified Analyst
My -- another question for Mike is when you book the revenues is it going to be [what shift] or is going to be on a sell through method or any hybrid method of recognizing them?
Mike Jacobsen
The general thought is definitely one things were up and running it will be on a sell in basis; like Greg talked about in the initial launched we sold directly from ourselves to certain customers in the February and continue in the March time frame those in all likelihood are going to be booked in the first quarter based on direct sales into those people since they are the ultimate consumers of the drug.
Operator
Thank you. Our next question comes from George Zavoico with Jones Trading.
Your line is open.
George Zavoico
Greg a question about to pass through designation going forward in 2017, what was the criteria that the CMS may use in choosing to continue to pass through or to deny it?
Greg Demopulos
The pass through is not continued, pass through run for a minimum of two and a maximum of three years. The question is really what could be done with Omidria after expiration of pass through, one is obviously CMS can look at the utilization, look at the value proposition and decide to do something with Omidria outside of the bundle, CMS has the potential to bundle Omidria within the Cataract procedure aAPC or the ambulatory payment classification, if that is done then one would expect that the APC would increase to accommodate and to reflect the utilization of Omidria within Cataract surgery.
So really I think it's a little premature right now to -- for us to address what we’re going to see there. I think right now we’re focused on maximizing the efficiency and the success of the launch and we’ll talk more about what happens, what we expect that date to be again 12/31/17 what happens after that.
George Zavoico
And regarding the a mid-year launch as well, you mentioned manufacturing and expanding on manufacturing, are you doing that third-party or you're building at in-house and --?
Greg Demopulos
All contracted George, it will all be contracted. We’re looking at U.S.
and European manufacturers, the idea here is to make sure that we have necessary supply both domestically and internationally.
George Zavoico
And with regard to the limited launch, clearly the way you stated the limited launch you're going to one of the high volume provider, is -- I would have mentioned you could also be [indiscernible] to support Omidria in educational efforts and outreach efforts, is that -- are you doing that as well? And is there a patient advocacy group that you might also employ for patient to looking to get Cataract or IOR surgery that might help you get the word out to the patients?
Greg Demopulos
Yes, there really is no patient advocacy group around Cataract surgery. Obviously, the surgeons who used the product and are positive about the product; those folks are supportive and we have a speaker bureau that’s established and that these groups may or may not overlap with that.
George Zavoico
And finally, you touched upon pharmacoeconomics here in the acceleration and facilitation of the operation and potentially lack of comprising side effects, it may have a pharmaeconomic benefits and try to do that obviously pre-clinically. But once it gets out in the field do you have any plans for these sorts of studies that would further help promote Omidria?
Greg Demopulos
Sure there are and remember that you made a very good point which is; these are procedures that have a high success rate already, right. There are 4 million of these in the U.S.
alone. The differentiator really is the complication rate and I think that’s our area of focus.
It is clear that patients with less than 6 millimeters of pupil diameter during surgery have a multiply increased, so increase rate of complications that has multiply higher than those procedures in which their pupil does not constrict below 6 millimeters. So while it may be difficult to run specific studies because patients, these are still somewhat rare complications, but when there are 4 million of them done a year those even small percentages become large numbers.
So using literature based reviews, studies that have been published it is pretty straight forward to draw the connection between complication rates, pupil diameter and then Omidria and pupil diameter. So I think that’s really the focus.
I think you’ll see some publications at least one publication on that coming in the future, but the idea here is really around complications, making that operation safer for the patient and less stressful for the surgeon.
George Zavoico
And then similarly, I’ve mentioned it could probably leverage the recent FDA draft guidance for compiling to your benefit as well, are you leveraging that is well?
Greg Demopulos
We are very aware of it, we’re looking at it. I think it speaks for itself.
The FDA is sitting on compounding, the restrictions are only increasing with the drug quality and Security Act of November of 2013; that was a pretty good first step in controlling compounding with the generation of 503B outsourcing facilities or compounders as well as and the 503A. So I think we’re certainly aware of it.
We think that we could not have really [script] it a better scenario for the launch of Omidria than the one that we have and compounding and the difficulties and risks associated with compounding clearly play into that.
Operator
Thank you. Our next question comes from the Norman Hale with Stifel.
Your line is open.
Norman Hale
On Omidria with that product, so you guys -- you have the U.S. launch, you’re looking for potentially launch second half of this year for Europe, are you intending the launch them to any of their geographic regions beyond Europe?
Greg Demopulos
We’ve spoken to date only about the U.S. and the European launch and I think I’d like to just stop there for now.
Norman Hale
Okay that’s fine. On the OMS721 program, the MASP-3 will that be included in that category to have both MASP-2 and MASP-3, considered part of OMS721?
Greg Demopulos
No, OMS721 is a specific MASP-2 inhibitor. We’re developing antibodies that targets specifically MASP-3.
So that will be a wholly different antibody or therapeutic and again I don’t want to limit ourselves just to antibodies here we’re also clearly looking at other therapeutics targeting MASP-2 and MASP-3, but that will be a different compound.
Norman Hale
Is -- MASP-3 currently is in preclinical, correct?
Greg Demopulos
That is correct. MASP-3 inhibitors are currently preclinical.
Norman Hale
Do you have any kind of rough timetable at which it could get into some clinical trial?
Greg Demopulos
Yes, I think -- let me provide an update on that perhaps at our next call. I think what we really want to do is make sure that we have selected the antibodies against MASP-3 for scale up; once we have done that, then I think I’ll have a much firmer date to provide.
Right now it would be speculation and I prefer not to do that. So let me first -- once we have selected those antibodies to scale up I’ll be able to guide much more specifically to that timeframe.
Norman Hale
The data that you have received to-date relative to OMS721, is it too early or is there enough data where you can do some sort of a comparative analysis compared to Soliris?
Greg Demopulos
To-date the data are of small set -- on a small set of patients and again we released them for the reason that I gave, I won’t repeat that, but I think it is too early certainly to make direct comparisons. Look, it’s obvious that we’re both -- they have an approved product for aHUS.
We’re targeting TMA one of which is aHUS. We believe that our administration will be able to be subcutaneous.
We believe that’s an advantage. We also believe that buy not inhibiting the [lyric] arm of the classical pathway that that’s favorable for a lectin pathway or a MASP-2 inhibitor, but all of these things will need to be borne out through more patience and at some point will put all of those data out.
Norman Hale
And great to realize, I am not a scientist okay, so the next question maybe kind of stupid from your perspective, assuming that both MASP-2 -- your research on both MASP-2 and on MASP-3 both turned out to be very positive, that both of those therapeutic agents turnout to be very efficient in terms of the objective. Would there be a situation where both drugs would be combined so that it would have a higher beneficial impact on some of the TMA indications?
Greg Demopulos
Well not just TMA, but others as well, yes. Those are the bi-specific antibodies that I was mentioning Norm which are targeting both MASP-2 and MASP-3, so the beauty of the program that we're developing is that it's -- we have MASP-2 specific, MASP-3 specific and then potentially MASP-2 and MASP-3 bi-specific.
So it really allows us to cover the waterfront with respect to the alternative in the lectin pathways.
Norman Hale
That's exciting stuff that you're progressing on. On your GPCR platform, is there anything in that category that is going to be moving from preclinical to actually Phase 1 clinical trial in term in the relative near future?
Greg Demopulos
Yes again, we are as we said, we're working through the medicinal chemistry on a number of targets GPR 17 myelinating or de-myelinating diseases OMS, ALS, et cetera. Even some of the cognitive disorders the Alzheimer's, et cetera are de-myelinating.
GPR 151 for neuropathic pain, GPR 161 for a number of cancer types including sarcomas and triple negative breast cancer, so these are all being developed. They're being moved forward with respect to timing.
It won't be this year and I think it would be a push to even expect those into the clinic next year, but we'll give you a further guidance as we make better headway.
Norman Hale
And without any real specifics as you indicated earlier, your business development activities you try to keep that confidential; but are you still maintaining discussions with other entity relative to collaborative or licensing agreements for certain of your products?
Greg Demopulos
Sure, sure we are. And again, we don’t as you know don’t discuss the specifics of that so, we'll provide update as tangible events occur.
Operator
Thank you. That concludes the Q&A part of the call.
I'd now like to turn the call back over to Dr. Demopulos for closing remarks.
Greg Demopulos
Okay, thank you operator and so that wraps up our call for today. Thanks again to all of you for taking the time to listen-in.
As always, all of us at Omeros appreciate your continued interest and support. Omeros is now a commercial as well as an R&D company.
The launch of Omidria is underway, the Omeros Team is working hard and really within the company and among many in the ophthalmic surgery community there is a palpable excitement about what the coming months will bring. Again we'll continue to keep you updated on our progress toward commercial success of Omidria as well as on our efforts to advance all of the products in our pipeline.
Have a good afternoon everyone.
Operator
Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program.
You may all disconnect. Everyone have a great day.