Aug 9, 2018
Executives
Jennifer Williams - IR Dr. Greg Demopulos - Chairman and CEO Mike Jacobsen - Chief Accounting Officer
Analysts
Steve Brozak - WBB Securities Corey Davis - Seaport Ram Selvaraju - H.C. Wainwright Jason McCarthy - Maxim
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 the call over to Jennifer Williams, Investor Relations for Omeros.
Jennifer Williams
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 Risk Factors section of the Company’s quarterly report on Form 10-Q, which was filed today with the SEC, for a discussion of these risks and uncertainties. Dr.
Greg Demopulos, Chairman and CEO of Omeros, will take you through a corporate update; and then, Mike Jacobsen, our Chief Accounting Officer, will provide an overview of our second quarter financial results. We have some time reserved for questions after the financial overview.
Now, I would like to turn the call over to Dr. Demopulos.
Dr. Greg Demopulos
Thank you, Jennifer, and good afternoon, everyone. We appreciate all of you taking the time to join us today.
We’ll start today’s call with an update on our OMS721 program. As many of you know OMS721 inhibits MASP-2 the effector enzyme of the lectin pathway.
The lectin pathway is part of the complement system, a key component of the immune response. We continue to advance each of our three OMS721 Phase 3 clinical programs in hematopoietic stem cell transplant-associated thrombotic microangiopathy, or stem cell TMA, in immunoglobulin A or IgA nephropathy and in atypical hemolytic uremic syndrome or aHUS.
We also have two ongoing OMS721 Phase 2 clinical trials, one in stem cell TMA and the other in renal diseases currently focused on patients with IgA nephropathy. We’ll first focus on our stem cell TMA program, which has received breakthrough therapy designation from FDA for OMS721, in the treatment of stem cell transplant patients with high-risk TMA, or those who have persistent TMA, despite modification of immunosuppressive therapy.
Since our last earnings call, we’ve continued to make good progress in our OMS721 Phase 3 program for the treatment of stem cell TMA. As you may remember, we previously disclosed the results of data analyses on the first 19 stem cell TMA patients treated with OMS721.
Responses in patients treated with OMS721 were markedly and statistically significantly superior to a matched historical control, demonstrating an order of magnitude improvement on overall survival, and a fivefold improvement, 53% versus 10% on survival at 100 days following TMA diagnosis. P values for these two outcomes were less than 0.001 and 0.002, respectively.
These data were presented at the 23rd Congress of the European Hematology Association in June of this year, by Professor Alessandro Rambaldi of the University of Milan. Since June, we’ve had additional meetings with FDA and with the European national regulatory authority.
These meetings were substantive and focused on accelerated, conditional, and full approval pathways for OMS721 for the treatment of stem cell TMA. With both U.S.
and European regulators, we discussed details of a marketing approval plan based on data from all TMA patients treated to-date, and any additional ones who might be treated prior to database lock, together with a matched historical control population derived from a retrospective chart review. We intend to begin historical data collection later this year to support an accelerated approval in the U.S.
and a conditional or full approval in Europe. In Europe, we have upcoming meetings with the small number of additional national European regulatory agencies to achieve consensus on the positive response already obtained on our clinical path to filing a European Marketing Authorization Application, whether that be for conditional or full approval.
Close interactions with both U.S. and European regulatory agencies are ongoing, and we continue preparations for submission of a U.S.
Biologic License Application or BLA and a European Marketing Authorization Application or MAA. We anticipate providing updates on our progress toward both the BLA and MAA for OMS721 and stem cell TMA at or before our next quarterly earnings call.
We believe that we will be able to achieve accelerated approval in the U.S., and either conditional or full approval in Europe. Last month, EMA’s Committee on Orphan Medicinal Products, granted OMS721 a positive opinion for orphan designation for treatment in stem cell transplantation.
We expect this opinion to be confirmed by the European Commission later this month. Let’s turn now to our OMS721 program in patients with IgA nephropathy.
Like our program in stem cell TMA, this program also has received FDA breakthrough therapy designation. The Phase 3 clinical trial is currently enrolling.
Two patient populations are included in the trial, one with baseline proteinuria levels in excess of 1 gram per day on optimized renin-angiotensin system or RAS blockade; and a second, smaller population consisting of patients who are at high risk of rapid disease progression with baseline proteinuria levels of 2 or more grams per day despite optimized RAS blockade. None of the patients are taking steroids at the time of enrollment.
The trial has been designed to include pathways for both accelerated and full approvals, depending on the size and duration of the effective OMS721 on proteinuria, which is the trial’s primary endpoint. In the U.S.
and Hong Kong, a Phase 2 placebo-controlled trial is underway, evaluating OMS721 in IgA nephropathy patients, not taking steroids. The trial includes 12 weeks of dosing and extended open label follow-up with the option for retreatment, if needed.
Enrollment is complete in the U.S. portion of the study and data from that cohort are expected next month.
Data from the Hong Kong cohort are expected in the first half of 2019. Our OMS721 Phase 3 program assessing the drug in aHUS patients, continues enrollment in a single arm, open label clinical trial.
Our Phase 3 aHUS trial is targeting approximately 40 patients for both, full approval in Europe and accelerated approval in the U.S. with approximately 80 patients required by FDA for full approval.
Administration of OMS721 in this trial consists of intravenous loading followed by subcutaneous dosing. In every OMS721 clinical trial to-date, the drug has been well-tolerated, with no safety concerns identified.
Wrapping up our discussion on our MASP-2 program. We continue rapidly advancing our development of small molecule MASP-2 inhibitors.
With multiple families of highly potent, highly selective compounds, we remain on track to enter clinical trials for orally administered MASP-2 inhibitors in 2020. Let’s now turn to our commercial product, OMIDRIA.
As discussed during our last quarterly earnings call and as expected, second quarter revenues from OMIDRIA sales remained limited at $1.7 million. Net loss for the quarter was $33.7 million or $0.70 per share, which includes noncash expenses of $4.6 million or $0.10 per share.
As most of you know, the reduced OMIDRIA sales in the first half of this year are due to a hiatus in separate payment or payment outside of the packaged reimbursement amount for the cataract procedure by the Centers for Medicare and Medicaid Services, or CMS. This was directly caused by the loss of pass-through reimbursement status for OMIDRIA, which occurred as scheduled on January 1, 2018 and resulted in markedly decreased access to the benefits of OMIDRIA for both cataract surgery and their surgeons and Medicare patients.
The good news is that this hiatus in CMS separate payment and pass-through status for OMIDRIA will soon be ending. In March of this year, Congress, in a bipartisan effort, in both the House of Representatives and the Senate legislated as part of the Omnibus bill that pass-through status be reinstated for OMIDRIA and three other drugs, beginning October 1st.
Signed into law on March 23rd, the extended pass-through period will run for an additional two years until October 1, 2020. As part of this legislation, Congress also mandated that for purposes of calculating the CMS payment amount, the average selling price or ASP, for OMIDRIA and the other drugs receiving extended pass-through, would, until the second quarter of 2019 to, be held fixed at the ASP reported for 4Q 2017.
As a result, the CMS payment amount for OMIDRIA remains fixed at approximately $466 until April of 2019, after which ASP and the derived CMS payment amount will be calculated in the usual manner. So, what are we doing to prepare for the October 1st reinstatement of pass-through status for OMIDRIA?
Our commercial team is focused on three overarching objectives. First, ensuring that for our existing customers, the OMIDRIA ordering and utilization processes are running smoothly; second, expanding new account by demonstrating the benefits of OMIDRIA through the widely published literature together with holding OMIDRIA trial days during which facilities are provided samples for use in their cataract surgery patients; and third, identifying those patients who do not currently reimburse for OMIDRIA and converting them into the ranks that do.
Here are some specifics. In July, we reintroduced our patient-focused OMIDRIAssure reimbursement services and our volume purchase discount program.
We also are continuing our 340B discount pricing program to provide the benefits of OMIDRIA to low-income patients undergoing cataract surgery. Customer response to the continuation of all of these programs has been uniformly positive, and we expect that these programs will help to accelerate the uptake of OMIDRIA utilization in the fourth quarter and beyond.
Our efforts to recruit new accounts also have been productive. In the second quarter alone, we provided more than 100 facilities, that had never used OMIDRIA, the opportunity to experience directly the benefits of the drug for surgeons and their patients.
This outreach to potential new customers is ongoing. To implement the recruitment and servicing of these new accounts, we have expanded our sales team.
The number of our territorial sales representatives has increased to 44, and we have hired an additional team of 6 representatives, focused solely on hospitals, nationwide, another national account director is responsible for securing sales within organizations that manage chains of ASCs nationally or regionally. All of these additional territorial, hospital-focused and ASC chain representative are already onboard and in the field.
With the reinstatement of an additional two years of Medicare Part B separate payment for OMIDRIA, we now are also keenly focused on broadening reimbursement beyond Medicare, and across commercial third-party and Medicare Advantage plans. To that end, we’ve hired a Director of National Payer Access, who is building an internal team of payer experts and is already meeting with targeted payer representatives.
The team’s immediate objective is the inclusion of OMIDRIA on the reimbursement schedules of these insurers, beginning late this year or early in 2019. Supporting our efforts across existing accounts, new customers and payers is the growing set of published data on the benefits of OMIDRIA as well as the recent inclusion of OMIDRIA on the Veterans Health Administration national Formulary.
This month, the results of an investigator-initiated, prospective, randomized, double-masked clinical trial were published in the Journal of Cataract and Refractive Surgery. The data demonstrate the ability of OMIDRIA to prevent intraoperative floppy iris syndrome or IFIS in patients at high-risk for this problem.
Another investigator-initiated study has been submitted for publication. This one shows that OMIDRIA when compared to epinephrine, reduces the need for costly and iris damaging pupil expansion devices in a broad range of patients, including those operated on using the newer technology of femtosecond laser.
These data collectively demonstrate the significant benefits of OMIDRIA in these two large populations of cataract surgery patients and should further drive the drug’s expanded adoption. In addition, the results of two other studies, revealing statistically significant benefits associated with OMIDRIA, including pupil management in femtosecond laser cases and shorter surgical times, are currently in preparation for submission.
As many of you know, in the second quarter of this year, OMIDRIA was added to the VA National Formulary, meaning that all VA facilities that perform ophthalmic procedures, must make OMIDRIA available to their surgeons and patients. This is seen as a meaningful endorsement of the efficacy and safety of OMIDRIA, and is expected to help broaden adoption across not only VA facilities, but also across payers.
We expect that it will take some time to ramp up sales in the VA system. VA surgical facilities are predominantly hospitals, which often are more bureaucratic than ASCs and the VA system does not allow drugs sampling.
Despite these challenges, however, we are off to a good start. Since the addition of OMIDRIA to the VA National Formulary on April 10, new accounts representing 15% of all VA facilities that perform cataract surgery have begun placing orders for the drug.
In anticipation of October 1st, we expect ASCs and hospitals to begin purchasing OMIDRIA, late in the third quarter of this year. This increased demand will likely allow us in the third quarter to recognize a portion of the December 2017 wholesaler inventory that has not been recognized yet as revenue.
We then expect a relatively rapid uptick in OMIDRIA sales after October 1st, with continued growth during the extended pass-through period. Looking to the end of the current pass-through extension in October 2020, we continue to pursue for OMIDRIA permanent separate payment from CMS.
In the recently released 2019 proposed rule for CMS’s Outpatient Prospective Payment System or OPPS, CMS indicated that it will separately pay in the ASC setting for non-opioid drugs with an FDA approved indication for post-operative pain relief. Although not specifically named, we believe that OMIDRIA clearly meets this definition.
We look forward to further engagement with CMS and remain optimistic that there will be permanent access to OMIDRIA for Medicare beneficiaries. With respect to our European plans for OMIDRIA, we recently reported that following successful completion of required testing, labeling, packaging, and release for European use.
Initial sales of OMIDRIA had occurred in the EU on a limited basis. This maintains the ongoing validity of the European marketing authorization for OMIDRIA and preserves our options for future European commercialization.
We’ll end today’s OMIDRIA comments with an update on the status of legal proceedings against generic manufacturers. All of our litigation with Abbreviated new Drug Application or ANDA filers has now been concluded and concluded favorably to Omeros.
Our patent infringement lawsuit against Par was settled last year. In May of this year, we similarly settled our lawsuit against Lupin.
Then, last month, we agreed to dismiss our patent infringement case against Sandoz in view of Sandoz amending its ANDA and stipulating to no longer pursue FDA approval of its proposed generic drug until the expiration of all of Omeros’ Orange Book listed patents for OMIDRIA. The distillate of these successes is that the earliest ANDA entry date for any of the three generic manufacturers is April 2032, unless otherwise subsequently authorized, pursuant to the settlement agreement.
We are pleased that Par, Lupin and now Sandoz have all decided to respect our OMIDRIA patents. Now, I’d like to provide a brief -- few highlights of some of our other pipeline programs before we move on to financial results.
Let’s first turn to our program for addiction and compulsive disorders. In the interest of time, I’ll focus only on OMS527, our phosphodiesterase 7 or PDE7 inhibitor, which is planned to target nicotine addiction first.
A Phase 1 single-ascending and multiple-ascending-dose clinical trial is underway and designed to assess safety and pharmacokinetics in healthy subjects. We have completed dosing in the first two cohorts of subjects.
OMS527 has been well tolerated and pharmacokinetic data collected to date indicates that the drug should be able to be dosed once daily. Completion of the Phase 1 trial is expected in the first half of 2019.
Now, let’s discuss the other half of our complement franchise, our MASP-3 inhibitor or OMS906. Omeros was the first to identify MSAP-3 as the key activator of the complement systems alternative pathway.
MASP-3 is responsible for the conversion of pro-factor D to factor D and systemic administration of our MASP-3 antibody is capable of achieving a long duration of alternative pathway inhibition and therapeutic benefit, even in compartments that are often not able to be accessed by antibody therapeutics. So, unlike a number of other complement inhibitors on the market or in development, one advantage of OMS906 is the ability to treat local inflammatory diseases with the systemic mechanism of action.
Another advantage is that OMS906 shuts down the alterative pathway without affecting the functioning of the classical or lectin pathways. Therefore, we don’t anticipate OMS906 carrying the infection risks seen in inhibitors that block all three pathways.
We’re completing the generation a Master Cell Bank for our lead antibody to enable production of lots for clinical and commercial use. Clinical trials are slated for late-2019 or early-2020.
And we plan to target paroxysmal nocturnal hemoglobinuria or PNH as our initial indication. Compared to other PNH therapeutics, we believe that OMS906 holds key advantages, including dosing and expected safety profile.
MASP-3 inhibition also should block both, intra and extravascular hemolysis and treat the remaining anemia seen in patients currently receiving a C5 inhibitor. As with our program advancing small molecule inhibitors of MASP-2 for oral administration, we’re similarly developing small molecule MASP-3 inhibitors to block only the alternative pathway as well as potent bispecific MASP-2, MASP-3 inhibitors to shutdown both the lectin and alternative pathways.
We’ll close out our pipeline discussion with our GPCR program which continues to make significant progress. Omeros believes that it exclusively controls 54 GPCRs with broad-ranging indications including cancer and cardiovascular disease as well as immunologic metabolic inflammatory and central nervous system disorders.
We have discovered and are advancing small molecules against the number of these GPCRs with the focus currently on two specific cancer-related targets, GPR161 and GPR174. With respect to GPR161, our data demonstrated the receptor plays a critical role in oncogenicity or tumor formation in triple negative breast cancer and sarcomas.
We expected modulators of GPR161 will block the growth of these tumors. As discussed during our last earnings call GPR174 appears to be a unique target for cancer immunotherapy.
Inhibition of GPR174 in human tissue increases tumor killing cytokine levels while both suppressing tumor-protecting regulatory T cells and blocking tumor-promoting checkpoint inhibitors or molecules. To our knowledge, GPR174 and no other target singly affects this constellation of cancer-related functions and no entity other than Omeros has GPR174 inhibitors.
We currently are expanding our medicinal chemistry teams so that we can expedite optimization of our compounds against both of these promising cancer targets to enable the initiation of clinical trials as quickly as possible. I’ll now turn the call over to Mike Jacobsen to discuss our second quarter financial results.
Mike Jacobsen
Thanks, Greg. As Greg noted OMIDRIA in total revenues for the second quarter were $1.7 million and our net loss was $33.7 million or $0.70 per share.
This includes noncash expenses of $4.6 million or $0.10 per share. During the quarter, after favorably renegotiating the covenants under our loan agreement with CRG, we borrowed the remaining $45 million available under the debt facility.
Here are some specifics regarding the second quarter results. Our reported revenue for the second quarter increased from the first quarter but continued to be significantly impacted by the loss of pass-through reimbursement on January 1, 2018.
A substantial majority of our customers continue to wait for pass-through reimbursement to be reinstated October 1st, and are using OMIDRIA on a selected basis only. We expect to see utilization pattern generally to continue during the third quarter.
Costs and expenses for the current quarter were $32.3 million, a $3 million increase from the first quarter of 2018. The increase was primarily due to manufacturing scale-up activities for OMS721, higher third-party development costs incurred on 721, and our other product candidates together with increased patent application costs.
Interest expense was $3.7 million for the current quarter, which is in line with our expectations. As of June 30, 2018, we had $88.4 million of cash, cash equivalents and short-term investments available for general operations, and $5.8 million of restricted cash in support of our CRG loan agreement and our building lease.
Now, let’s take a look ahead. We expect that our third quarter reported revenues will continue to be significantly affected by the lack of pass-through reimbursement.
On a positive note, we expect to see an increase in purchases from ASCs and hospitals near the end of the third quarter as they stock OMIDRIA in anticipation of the October 1st, reinstatement of pass-through. As these ASC and hospital purchases increase, we expect to recognize as revenue, a portion of the inventory purchased by the wholesalers in December of 2017 that was deferred due to the expiration of pass-through on January 1, 2018.
During the fourth quarter of this year, based on our actions with customers, we expect to see a significant increase in revenues over the run-rate in the first three quarters of 2018. During the remainder of 2018, the majority of our research and development expenses are planned to be related to OMS721, with OMS527, OMS906 and our GPCR program contributing lesser amounts.
We expect research and development costs will continue to increase in the third quarter of this year given our ongoing OMS721 Phase 3 clinical programs and manufacturing scale-up costs. Selling, general and administrative expenses for the remainder of 2018 will increase from the second quarter of this year, primarily due to expanding our OMIDRIA sales force and precommercialization activities for OMS721.
Interest expense increased based on the additional $45 million we borrowed from CRG in May. We anticipate our third quarter interest expense will be approximately $4.5 million.
With that, I’d like to turn the call back over to Greg.
Dr. Greg Demopulos
Thanks, Mike. Let’s open the call to questions.
Operator
[Operator Instructions] Our first question comes from the line of Steve Brozak with WBB Securities. Your line is open.
Steve Brozak
Thanks for taking the question. I’ve got one, and one follow-up, please.
On OMIDRIA, if I’m interpreting what you’re talking about on the opioid side as being something that we should look at. The way I would look at it would somewhere along the lines of that you would see continued pass-through or continued reimbursement even after the current resumption in a few months.
Is that correct, and is that the way you’re interpreting as well?
Dr. Greg Demopulos
Well, as you know, Steve, CMS sets its rules on a yearly basis, rarely do they extend beyond the one year, unless there is some sort of statutory component to it. But, what I can say is, certainly our interpretation of that provision and the rule directed to non-opioid treatments, which have an FDA-approved indication for the reduction of post-operative pain, fits OMIDRIA, or probably better stated, conversely, OMIDRIDA clearly fits that definition.
So, we believe that that provision applies to OMIDRIA. It would be our hope and frankly expectation that, should that rule be -- or should that provision be included in the final OPPS rule for 2019, coming likely in November that that would be a provision that that would be continued, given that the opioid crisis at hand is not one that will likely be remedied next year.
So, I think in short, I would expect that that would continue. Again, I can't speak directly for CMS or to any kind of ability to predict what will come.
But, that would be my expectation.
Steve Brozak
Got it. Great.
Let me let me jump into 721 and then I'll hop back in the queue. On 721, looking at transplant, one of the things that I would like greater clarity on, and if you could provide as much specificity as possible, what are -- why is this significantly important for transplants, and what are the current standards of care, what are the costs, what are you looking at in terms of what happens as far as patient debilitation, what are the clinicians looking for, and how do you see 721 fitting all of that?
And again, thank you, and as much detail as you can given. And I’ll hop back in the queue.
Dr. Greg Demopulos
Yes. Thanks, Steve.
In answer to that question, well, currently, there is no approved treatment for stem cell TMA. So, with respect to the current standard of care, really first line management for stem cell TMA now includes modulation or modification or stopping any immunosuppressive regimen that is currently in place, treating appropriately any infections or GvHD that may be concurrently present; jumping on hypertension, so aggressively managing hypertension and providing really any other supportive therapy that the treating physician deems appropriate.
So, you get the sense that this is clearly supportive, supportive therapy. Plasma therapy has been tried, but is really thought to have no utility in this patient population.
And the patients who don't respond to modification of their immunosuppressive agents, really have a terribly poor prognosis. Adult mortality has been reported to be as high as 100%, and even another recently published large series, again, the survival was quite poor, in patients who underwent immunosuppression modification, and then subsequently received treatment with plasmapheresis, defibrotide or rituximab, I think survival at one year was pretty poor.
So, that really is the current landscape. And again, no approved treatment for stem cell associated TMA.
I think you also asked about the cost…
Steve Brozak
Yes. What the current cost is?
Dr. Greg Demopulos
Yes. I understand.
And, again, I want to be careful that this is secondhand information. But, I understand that there will be one or more publications soon out, demonstrating the costs associated with this kind of supportive management of these high-risk TMA.
And that cost is about, as I understand it -- and again I'm receiving the secondhand, but it's about $3 million. So, obviously, the outcomes are poor, the cost is high, and there is a clear need for an approved and effective therapy for stem cell associated TMAs, particularly these high risk TMAs that 721 is targeting.
Steve Brozak
Again, thanks for taking the questions. And obviously, we look forward to the resumption of OMIDRIA.
Thank you.
Dr. Greg Demopulos
Thanks, Steve.
Operator
Our next question is from Corey Davis with Seaport. Your line is open.
Corey Davis
Thanks very much. The first question is, am I right in interpreting your language that filing a BLA this year for TMA is no longer a foregone conclusion?
Can you kind of go into the details on what you need to do before you have more certainty with the filing timelines on that ruling application?
Dr. Greg Demopulos
Well, I will say that our objective really remains initiating the filing of a BLA this year. So, I don't think that objective -- I don’t think that’s on our end.
Corey, that might be on your end. I think though that remains our objective.
Corey Davis
Okay, thanks. And, I think, you mentioned that you're going to start looking at the historical controls, later this year.
Did I mishear that, or..
Dr. Greg Demopulos
No. That's correct.
Corey Davis
Is that different than the 10% comparator that you've been citing.
Dr. Greg Demopulos
Yes. The 10% -- correct.
The 10% comparator, I think, we've put out publicly as a literature-based historical control. We're talking about -- and again a matched literature-based historical controls.
So, these were patients from the literature that met specific criteria that had been set ahead of time to assess versus the OMS721-treated patients. What we're talking about with the historical controls later this year are really chart reviews.
So, in-depth chart reviews of patients, again, on a prospective basis. So, defining prospectively, a protocol to assess the outcomes and other factors, so confounding factors or other concomitant problems such as GvHD or DAH, diffuse alveolar hemorrhage.
So, this is all prospectively defined, but it would be a chart review again for matched historical controls.
Corey Davis
Okay. And how many more patients are likely to comprise that filing?
Do you have an idea, how many patients you have enrolled and how many would be able to be included in the data package beyond the ‘19?
Dr. Greg Demopulos
Yes. I do have an idea of how many we have enrolled.
But, we haven't put them out yet. And we've made it clear that we continue to enroll.
And as I mentioned in the prepared comments, our objective there is to continue to enroll all the way up through the database lock. So, to be collecting data on patients treated with OMS721 up to database lock.
The objective is to bring in as many as we can. And as you're pointing out, I think, very much on point, to include as many as we can in that submission.
Corey Davis
Okay. Then, last question, your IgaN trial that you mentioned, you're going to be able to release in September, how like the results, if at all, affect your ongoing Phase 3 trial, giving that this is the first time you're going to have a blinded study result in this population?
Dr. Greg Demopulos
Yes. I mean, obviously, we'll look at those data.
We're not expecting those data to change in any meaningful way, what we're doing in the Phase 3 program. The way we've structured the endpoints for the Phase 3 program, I think would accommodate the data that we would expect to be receiving across really a range of outcomes in these patients.
Remember that what we're looking at in this Phase 2 program are relatively small number of patients on the treated side, on the control side, they're ranging in proteinuria levels. The inclusion threshold is a gram, but they can range into the nephrotic, and well into the nephrotic range.
The objective here is really to get some sense of what's going on there and also to get a sense of what's happening in the Asian population, just to make sure that there's not a difference as you know. And I know you know this well Corey that the Asian population has a significantly higher incidence of IgA nephropathy.
So, our interest in enrolling those patients in Hong Kong is to just get a sense of whether as we expect, but to confirm that we're really dealing with the same disease, the same set of issues in both the non-Asian and Asian populations. So, in short, I don't expect any real change to our Phase 3 program.
Corey Davis
So, would you expect those results to be very predictive of the ongoing Phase 3 when that matures, are there reasons to suspect it that the patient population excluding the Asian trial you mentioned would be any different than Phase 3?
Dr. Greg Demopulos
Yes. It's a good question.
We won't know that until we see all the data. And we dig into -- number one, we see what the effects on proteinuria are?
Are there similarities, dissimilarities? Are there any factors that would make the response stronger in some, not in others?
Again, we're still sort of learning about the disorder. And again, this is a disorder for which there is no approved treatment.
So, here again, we're somewhat blazing a new trail. And I think, this is this is largely information gathering to help us, as we move forward.
But, we're eager to get the data. We are looking forward to making those data available to everyone next month.
Operator
Our next question from Ram Selvaraju with H.C. Wainwright.
Your line is open.
Ram Selvaraju
Hi. Thanks very much for taking my questions.
These are relatively straightforward, I believe. With respect to OMS721.
I believe in the press release, you made allusion to different indications that utilize the same 100-day mortality endpoint. Could you clarify for us what that indication was?
Where in that 100-day mortality endpoint was used for an approval?
Dr. Greg Demopulos
That I'm going to have to check with our clinical group and get back to you. I don't have the specific study on that.
But, I can make that available to you, Ram.
Ram Selvaraju
Okay, perfect. And then, with respect to the Phase 2 trial in IgaN, can you just clarify a little bit for us what you expect to be able to directly extrapolate from that study into the pivotal study for OMS721 in this indication?
Dr. Greg Demopulos
Well, the major similarity between those two studies is the absence of steroids. So, I think, we'll be looking at that.
I think, also, we'll be very interested in seeing incoming proteinuria levels and responses. I think, in this trial, we have the ability to retreat.
Remember, in the first set of patients, we did not retreat. So, this allows us the ability to retreat the patients.
And that is already structured into the Phase 3 program. So, I think that there, again, it gives us some further insight.
And, I think we see the Phase 2 program as really supportive of the Phase 3.
Ram Selvaraju
Okay, perfect. And then, just two strategic things.
For OMS721, given the epidemiology of IgaN among Asian subjects, can you comment on whether or not at this time you are seeking to identify a potential Asian regional partner for the drug? And then, on OMIDRIA, could you speak to whether or not the European commercial strategy is likely to be optimally series of relationships with regional partners, each potentially covering an individual country within the European Union or that you're currently looking at this as being better off in the hands of a larger European partner that has established commercial presence in multiple European territories?
Thank you.
Dr. Greg Demopulos
Okay. So, first with respect to -- and both again good questions.
First with respect to Asia. Without speaking specifically about our partnering activities, because as you know, we don’t comment specifically on those.
But certainly, one would expect that we are broadly in discussions around potential partnering of OMS721. And one would think that those partnerships could be either global or they could be regional.
And I guess -- I expect that one would also anticipate that within that regional subset, Asia or parts of Asia would be included. So, I think that's about as much as I'll comment in response to your first question.
With respect to OMIDRIA and our plans in Europe, whether as you're asking those would be regional or really more national, I think, probably all withhold comment there, other than to say that we're exploring and have been exploring both. I think, the important piece to understand here is that pricing is obviously very different in Europe currently than in the U.S.
And the focus for Omeros with respect to OMIDRIA is to further drive its adoption in the U.S. I think, if we are successful as we believe we will be, should be, in establishing OMIDRIA as a standard of use in cataract surgery where there are a list of really indications within cataract surgery subsets where that can really become standard of use, I think that Europe would potentially, I might even say, would likely follow.
And I think it's at that point that really putting something together in Europe makes the most sense. Remember that anything we've put together in Europe, if we're not selling it there ourselves, and your question I think implies the understanding that likely we're not going to be selling, at least our current plan is not to be selling directly into Europe that we're going to be dealing with a royalty basis.
And from that perspective, you want to make sure that the utilization is as high as possible, and that the pricing accurately reflects the value of the drug. And I think that in order to establish both of those components, you really need to establish the drug and its value within the U.S.
I think this extension of pass-through certainly allows us the opportunity to build on that approach.
Operator
And our next question is from Jason McCarthy with Maxim. Your lines open.
Jason McCarthy
Hi. Thanks for taking my question.
So, in addition to OMIDRIA in 721, I'd like to discuss a bit about 527. So, obviously, it's widely known that addiction is a major problem in the U.S., in particular, relating to opioid and nicotine.
So, with the first two cohorts dose in the Phase 1 and without getting ahead of ourselves here, could you give us a bit more color on a clinical path forward in nicotine addiction, such as possible endpoints, or what kind of timelines we could expect in a Phase 2 down the road?
Dr. Greg Demopulos
Sure. I think -- let me take several steps back and remind everyone, and you this, Jason, I know, but just that what we've demonstrated with PDE7 inhibition and OMS-527 specifically, but generally with all of our PDE7 heaven inhibitors.
Remember, we’re the ones who discovered the link between PDE7 and any form of addiction and also PDE7 and any form of movement disorder. Focusing on the addiction and compulsion side, we have data in nicotine, cocaine, alcohol, opioids and on the compulsive side again binge-eating.
So, we really think that the mechanism here is widely applicable and probably central to -- at least currently our thinking is currently central to any form of addiction or compulsive disorder. The reason that we focused first on nicotine was because there was a clear roadmap for the development of OMS527, and that roadmap is Chantix.
So, kind of to short circuit my response here to your question, I would say, look, the roadmap is Chantix. You look at Chantix, you look at the endpoints, you look at the development program for Chantix.
That's what we're focused on with respect to OMS527 and nicotine. As you know OMS527, the core of that mechanism for PDE7 inhibition is dopamine, PDE7 inhibitors in general.
And in that I include OMS527. But in general, what we have elucidated in the mechanism for PDE7 inhibitors is that they make the parts of the brand responsible for addiction or compulsion U dopamine dopaminergic.
So, in the acute addictive phase where the brain is -- the VTA and the nucleus accumbens are hyperdopaminergic, you really bring those levels down largely through the VTA to U dopaminergic or normal dopamine levels in the chronic addictive phase. You're working largely postsynaptically in the nucleus accumbens to elevate those dopamine levels back to again normal.
That should apply across the board in addictions and in compulsive disorders. Obviously, with opioids, there is a tremendous focus now on opioids.
We talked about it with OMIDRIA. And it's a hot topic, as we all know.
To-date, the FDA has been a little more variable and perhaps challenging in their approving of drugs to treat these sorts of opioid-focused problems. That in part also led to our decision to go with nicotine, cocaine, really interesting.
But there, again, we would be blazing a pathway that that would be difficult. So, I think our focus here was on nicotine for all of those reasons.
And again, I point you to Chantix. And I think that will answer all your questions about development and timeline.
We would expect to get a very quick, hopefully, and relatively quick Phase 2 proof of concept study underway, once we see the data from our Phase 1 trial, once we have the time to digest that. And as I said, we expect the Phase 1 data in the first half of ‘19.
So, assuming those data look good or continue to look good, we quickly turn that around and work on a proof of concept study for nicotine.
Operator
I'm not showing any further questions. So, I'll now turn the call back over to Dr.
Demopulos for closing remarks.
Dr. Greg Demopulos
All right. Well, thank you, operator.
That wraps up our call for today. Thanks again, everyone for joining us.
We like the way the things are coming together for OMIDRIA and our pipeline. And we expect we'll keep you updated periodically on our progress going forward.
As always, we appreciate your continued interest and support. And have a good afternoon, everyone.
Thank you.
Operator
Ladies and gentlemen, this does conclude the program. You may now disconnect.
Everyone, have a great day.