Omeros Corp: Form 10-Q for the period ended Jun 30, 2026

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report on Form 10‑Q and with our audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on March 31, 2026. In addition, you should read the section entitled “Risk Factors” and the disclaimers regarding forward-looking statements included herein and in our Annual Report on Form 10-K for the year ended December 31, 2025 for a discussion of important factors that could cause our results to differ materially from the results described in or implied by any forward-looking statements contained herein.

Overview

We are an innovative, commercial-stage biotechnology company that discovers and develops first-in-class protein and small-molecule therapeutics for large-market and orphan indications. Our drug product YARTEMLEA® (narsoplimab-wuug) is commercially available in the U.S. for the treatment of hematopoietic stem cell transplant-associated thrombotic microangiopathy (TA-TMA) in adult and pediatric patients two years of age and older. Our diverse pipeline of development programs is focused on the treatment of complement-mediated diseases, cancers, and addictive or compulsive disorders.

Commercial Product – YARTEMLEA

Our commercial product, YARTEMLEA, is the first and only approved inhibitor of the lectin pathway of complement. On December 23, 2025, FDA approved YARTEMLEA for the treatment of TA-TMA in adults and in children two years of age and older. TA-TMA is a severe and often-fatal complication of hematopoietic stem cell transplantation in adults and children, driven by systemic endothelial injury triggered by conditioning regimens, immunosuppressants, infection, graft-versus-host disease, and other transplant-related factors. Activation of the lectin pathway of complement plays a central role in disease pathogenesis. YARTEMLEA selectively inhibits MASP-2, blocking pathway activation while preserving classical and alternative complement pathway functions important for host defense. In TA-TMA, MASP-2 inhibition prevents lectin pathway-mediated cellular injury, including endothelial damage in small blood vessels, and thrombus formation. Unlike other complement inhibitors, YARTEMLEA has no boxed warning and no Risk Evaluation and Mitigation Strategy (REMS), and vaccinations are not required prior to treatment.

Commercial distribution and sales of YARTEMLEA began in January 2026. Both adult and pediatric patients with TA-TMA are now receiving YARTEMLEA, including patients who have recently failed prior off-label C5- and C3-inhibitor regimens, in both hospital and outpatient settings.

We are commercializing YARTEMLEA in the U.S. market and have deployed our field force of account managers and directors, market development managers, access leads, and medical science liaisons to engage directly with transplant centers across the U.S. There are 175 stem-cell transplant centers across the U.S., with the top 80 centers representing approximately 80% of procedures. Our field force is actively engaging all 175 U.S. transplant centers. By June 30, 2026, 73 unique accounts had ordered YARTEMLEA, representing a 143% increase in ordering accounts since March 31, 2026.

At this early stage, our primary launch objectives are fourfold: (i) educate the entire transplant care team, including transplant physicians, nurses, hospital pharmacies, and reimbursement teams, regarding the recently harmonized TA-TMA diagnostic criteria, thereby driving awareness, early diagnosis, and treatment of TA-TMA; (ii) support transplant centers in obtaining their pharmacy and therapeutic committee approvals and adding YARTEMLEA to their formularies to streamline the ordering process and facilitate access to YARTEMLEA in both in- and out-patient settings; (iii) work with third-party payers to provide timely reimbursement consistent with the YARTEMLEA label and published diagnostic criteria; and (iv) finalize and prepare for presentation and publication of the health economics and outcomes research analysis using the strong clinical efficacy data and favorable safety profile of YARTEMLEA to demonstrate its compelling cost-effectiveness to healthcare providers and payors. Together, these factors are intended to shift the paradigm toward proactive screening for TA-TMA, with the goal of enabling clinicians to identify and treat more patients earlier, thus ultimately improving transplant outcomes.

In June 2026, the Committee for Medicinal Products for Human Use (“CHMP”) of the European Medicines Agency (“EMA”) adopted a negative opinion on our marketing authorization application (“MAA”) for narsoplimab in TA-TMA. We believe the clinical evidence supports approval and have requested re-examination. As part of that procedure, an Ad Hoc Expert Group, expected to comprise external scientific and clinical experts in hematology and stem cell transplantation, will review the evidence and address questions central to CHMP’s assessment. If the MAA is ultimately approved, it would authorize the product to be marketed in all European Union (“EU”) member states and European Economic Area countries, although there can be no guarantee that the re-examination will result in a reversal of CHMP’s negative opinion or the ultimate approval of the MAA. The European Commission has granted narsoplimab designation as an orphan medicinal product for treatment in hematopoietic stem cell transplantation. For potential commercialization of YARTEMLEA outside the U.S., including Europe, we are evaluating potential partnerships, including broad ex-U.S. and regional collaborations.

Complement Inhibitor Programs

The complement system plays a role in the body’s inflammatory response and becomes activated as a result of tissue damage or trauma or microbial pathogen invasion. Inappropriate or uncontrolled activation of the complement system can cause diseases characterized by serious tissue injury. Three main pathways can activate the complement system: classical, lectin, and alternative. We are focused on development of therapeutics to treat diseases associated with the lectin and/or alternative pathways of complement. We are developing antibodies as well as small-molecule inhibitors of key enzymes known to be centrally involved in the activation of the targeted pathway of complement.

Lectin Pathway / MASP-2

MASP-2 is a novel pro-inflammatory protein target that is the effector enzyme of the lectin pathway and is required for the function of this pathway. We are developing antibodies and small-molecule inhibitors of MASP-2 as potential therapeutics for diseases in which the lectin pathway has been shown to contribute to significant tissue injury and pathology. When not treated, these diseases are typically characterized by significant end-organ damage, such as kidney or central nervous system injury. Importantly, inhibition of MASP-2 has been demonstrated not to interfere with the antigen-antibody complex-dependent classical complement activation pathway, a critical component of the acquired immune response to infection.

Clinical development of YARTEMLEA is anticipated to continue expanding the approved label in TA-TMA and to develop the drug in additional indications. We are assessing further development opportunities across indications involving endothelial injury, lectin pathway activation, or thrombo-inflammation, including solid organ transplant-related TMA, chemotherapy-induced TMA, acute respiratory distress syndrome (“ARDS”), sickle cell disease, acute kidney injury, delayed graft function, and stem cell transplant-related endothelial syndromes, including diffuse alveolar hemorrhage, capillary leak syndrome, graft-versus-host disease, and sinusoidal obstruction syndrome. By year-end 2026, we expect enrollment to begin in two investigator-sponsored and Omeros-supported studies, one evaluating YARTEMLEA in hyperinflammatory ARDS, and the other assessing prophylactic YARTEMLEA in pediatric patients with predictably severe TA-TMA.

We are also finalizing selection of an indication for a Phase 2 clinical program for OMS1029, our long-acting antibody targeting MASP-2, which we expect will be well-suited to indications requiring long-term, chronic administration once quarterly, either intravenously or subcutaneously. In addition, in our MASP-2 small molecule program, following the completion of one ongoing study, we expect to select a drug development candidate, targeting once-daily oral administration.

Alternative Pathway / MASP-3

On November 25, 2025, we completed a transaction (the “Transaction”) pursuant to our Asset Purchase and Licensing Agreement (“APLA”) with Novo Nordisk Healthcare AG (“Novo Nordisk”) for our candidate drug zaltenibart (formerly OMS906). Zaltenibart is a first-in-class, late-stage clinical humanized monoclonal antibody targeting MASP-3, the most upstream and key activator of the alternative pathway of the complement system. Zaltenibart has shown multiple potential advantages over other alternative pathway inhibitors in development and on the market.

At the closing of the Transaction, we received an upfront cash payment of $240.0 million. In addition, we are eligible to receive (i) up to $510.0 million in one-time milestone payments upon the first achievement by Novo Nordisk or its affiliates or sublicensees of each of the development and approval milestone events as set forth in the APLA, including $100.0 million in aggregate one-time milestone payments that we expect to be achievable in the near term, and (ii) up to $1.3 billion in one-time milestone payments upon the first achievement by Novo Nordisk or its affiliates or sublicensees of certain sales-based milestone events as set forth in the APLA. We are also eligible under the APLA to receive tiered royalties on annual net sales of products at percentage rates ranging from high single digit to high teens, subject to reduction in certain circumstances, as set forth in the APLA. In total, we have received and are eligible to receive up to $2.1 billion in potential development and commercial milestones, plus tiered royalties on net sales.

Pursuant to the APLA, we sold and transferred, and Novo Nordisk purchased zaltenibart and certain related assets, and the parties agreed to grant and receive certain intellectual property licenses to facilitate the continued development and commercialization activities of both companies. We retain rights to our entire MASP-3 small-molecule program, including the ability to develop and commercialize small-molecule MASP-3 inhibitors, across a range of therapeutic areas, including, but not limited to, ophthalmology, neurology, gastrointestinal disorders, dermatology, musculoskeletal diseases, and oncology. We also retain rights to our “grandfathered” MASP-3 antibodies, with temporal and indication restrictions on commercialization and for use in advancing our small-molecule therapeutics.

In accordance with the APLA, at the closing of the Transaction, Omeros and Novo Nordisk entered into a transition services agreement (the “Transition Services Agreement”) pursuant to which we are providing certain transition services to Novo Nordisk to facilitate the transfer of the acquired assets and liabilities under the APLA and to provide for the continued operation of relevant studies and program activities during the applicable term. Subject to certain exceptions and limitations, Novo Nordisk reimburses us for costs and expenses we incur under the Transition Services Agreement, including third-party costs and expenses, costs associated with delivery of transition services by Omeros personnel on an hourly basis at rates specified in the Transition Services Agreement, and for our inventories of zaltenibart drug substance and product.

Other Development Programs

PDE7 Inhibitor Program

Our PDE7 inhibitor program, which we refer to as OMS527, comprises multiple PDE7 inhibitor compounds and is based on our discoveries of previously unknown links between PDE7 and any addiction or compulsive disorder, and between PDE7 and any movement disorder. In April 2023, we were awarded a grant from the National Institute on Drug Abuse (“NIDA”) part of the National Institutes of Health, to develop our lead orally administered PDE7 inhibitor compound, for which we have successfully completed a Phase 1 study, for the treatment of cocaine use disorder. With NIDA funding, we successfully completed preclinical cocaine interaction/toxicology studies to assess safety of the OMS527 compound when co-administered with cocaine. FDA subsequently requested additional nonclinical information prior to initiating the clinical in-patient trial. We are commencing the nonclinical study, and we expect to be able to start enrollment in the in-patient clinical trial by year-end 2026.

Preclinical Program - OncotoX-AML (OMS805)

We continue to progress preclinical studies within our oncology program, focused on developing novel, proprietary large molecule therapeutics designed to selectively target and kill dividing cancer cells. We have completed selection of a drug development candidate, which we refer to as OncotoX-AML or OMS805. Acute myeloid leukemia (“AML”), an aggressive and highly fatal bone marrow and blood cancer, is the lead indication for development. The effectiveness of current AML treatments, such as chemotherapeutics and antibody-drug conjugates, is limited by a number of factors, including high relapse rates and substantial side effects.

OncotoX-AML is an engineered biologic designed to selectively kill both AML blasts (abnormal myeloid cells) and relapse-related leukemia stem cells. Its unique mechanism of action is independent of myeloid cell genetic mutations, including TP53, NPM1, KMT2A, and FLT3, which are collectively found in approximately 90% of AML patients and are historically difficult to treat.

In February 2026, we announced the successful completion of our initial study in nonhuman primates evaluating the efficacy and safety of OncotoX-AML. Administration of only one course of OncotoX-AML treatment to immunocompetent primates demonstrated the desired pharmacologic response, specifically marked, selective, reversible, and dose-related reduction in myeloid progenitor cells — the cells that can mutate and lead to AML — by up to 99%. OncotoX-AML was well tolerated, without causing broader or lasting hematologic changes while preserving hematopoietic stem cells. There were no observed safety signals or meaningful changes in blood chemistry values often seen with current AML treatments.

In April 2025, we established the Omeros Oncology Clinical Steering Committee to help advance our OncotoX-AML program. The clinical steering committee is comprised of leaders in AML treatment and research at premier cancer centers. Together with this steering committee, we are designing our first in-human clinical trial, which we are targeting to initiate in late 2027.

Investigational New Drug (IND)-enabling studies are underway, and we have entered into an agreement with a leading contract biologics manufacturer for process development and initial clinical supply of OMS805 drug substance.

Preclinical Program - T-CAT

We are also advancing our targeted complement activating therapy (“T-CAT”) platform: a new class of recombinant antibodies intended for broad action against pathogens, including bacteria, fungi, viruses, and parasites. T-CAT is designed to harness complement activation to kill pathogens directly, which represents a novel approach to infectious disease treatment.

T-CAT monoclonal antibodies were shown to safely and effectively treat infections in translationally relevant murine models of sepsis and pneumonia caused by Klebsiella pneumoniae, Pseudomonas aeruginosa, Streptococcus pneumoniae, and Neisseria meningitidis. We believe that the results of these studies demonstrate T-CAT’s potential as a next-generation platform with broad applicability across microbial species, including multidrug-resistant pathogens, and we intend to continue advancing T-CAT toward the clinic.

Debt Financing Transactions

Repurchase of 2029 Notes

In June and July 2026, we entered into privately negotiated agreements with certain holders of our unsecured convertible senior notes due 2029 (the “2029 Notes”) under which we agreed to repurchase approximately $30.5 million aggregate principal amount of 2029 Notes for a total purchase price of approximately $60.2 million, plus accrued and unpaid interest of $0.2 million. Both transactions closed in July 2026, leaving approximately $40.3 million aggregate principal amount of the 2029 Notes outstanding.

(in thousands)

For the three months ended June 30, 2026, the Company recognized a loss on extinguishment of the first tranche of debt of approximately $1.9 million, reflecting the difference between the fair value of the payment obligation of $30.6 million established on June 17, 2026, the carrying amount of the repurchased notes ($16.0 million in aggregate principal amount net of any unamortized discount and issuance costs), and the de-recognition of the associated embedded derivative liability of $16.7 million. In addition, the Company recognized a $0.7 million increase in the fair value of the payment obligation from June 17, 2026 through June 30, 2026 which reflects the cash consideration of $31.3 million paid at closing on July 6, 2026. As of June 30, 2026, the initial repurchase was classified as a $31.3 million current note repurchase obligation in our condensed consolidated balance sheet. The repurchase agreements for the second tranche, comprising $14.5 million aggregate principal amount, were entered into in July 2026. As such, the related accounting will be reflected in our third quarter filing. (For further detail, see “Note 6 — Debt — 2029 Notes” in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.)

Repayment of Debt

On February 17, 2026, we repaid the remaining $17.1 million aggregate principal balance outstanding on our 5.25% convertible senior notes (the “2026 Notes”) in full upon maturity.

Equity Financing Transactions

At the Market Sales Agreement

We have an “at the market” (“ATM”) facility agreement under which we have the capability to sell shares of our common stock from time to time, through an ATM equity offering program. On November 14, 2025, the Company filed a shelf registration statement and prospectus supplement renewing the ATM program for an aggregate offering price up to $150.0 million. We did not sell any shares under the ATM program during the three or six months ended June 30, 2026.

Share Repurchase Programs

On November 29, 2025, the Board of Directors approved a share repurchase program under which we are permitted to repurchase from time to time up to $100.0 million of our common stock in the open market or through privately negotiated transactions. During the three months ended June 30, 2026, we repurchased and retired 0.5 million shares of common stock pursuant to our share repurchase program, at an average cost of $11.70 per share, for an aggregate purchase price of $5.7 million. During the six months ended June 30, 2026, we repurchased and retired 0.8 million shares of common stock pursuant to our share repurchase program, at an average cost of $11.70 per share, for an aggregate purchase price of $9.9 million.

Financial Summary

As of June 30, 2026, we had cash, cash equivalents and short-term investments of $132.0 million. For the three months ended June 30, 2026, company-wide our cash provided by operations was $4.1 million. For the six months ended June 30, 2026, our cash used in operations was $10.4 million.

Results of Operations

Product Sales, Net

Distribution and sales of our only commercial product, YARTEMLEA, commenced in January 2026. Revenue in the current period reflects sales of YARTEMLEA to wholesalers in the U.S.

As YARTEMLEA is in the early stages of commercialization, period-over-period comparisons are of limited usefulness, and our product sales revenues mayfluctuate from quarter to quarter as physician adoption, patient access and ordering patterns continue to develop. For the three and six months ended June 30, 2026, gross revenues were $32.2 million and $43.4 million, respectively. The increase in revenue during the second quarter of 2026 primarily reflects continued physician adoption and increasing market penetration following product launch.

Product sales, net were as follows:

(In thousands)

Net revenues of $28.5 million and $38.4 million for the three and six months ended June 30, 2026, respectively, reflect gross-to-net adjustments of approximately 11.5% and 11.4%, respectively.

Gross-to-Net Deductions

We record YARTEMLEA product sales net of estimated chargebacks, distribution fees and returns, (collectively, gross-to-net deductions). Gross-to-net deductions are estimates based on contractual terms and expected utilization and require some judgment. For the three and six months ended June 30, 2026, no chargebacks were recorded related to Medicaid claims. Because YARTEMLEA remains in the early stages of commercialization, these estimates continue to be based on limited historical experience and are subject to change as additional information becomes available. A summary of our gross-to-net related accruals for the six months ended June 30, 2026 is as follows:

(In thousands)

Chargebacks

We record a provision for estimated chargebacks when YARTEMLEA product sales are recognized and reduce the accrual as payments are made or credits are granted. Chargebacks represent the difference between the price we charge wholesalers and the contracted or statutorily required prices available to eligible purchasers under government programs, including our federal supply schedule agreement, and are estimated based on known pricing terms and expected utilization.

Distribution Fees

We pay our wholesalers a distribution fee for services they perform for us based on the dollar value of their purchases of YARTEMLEA. We record a provision for these charges as a reduction to revenue at the time of sale to the wholesaler and make payments to our wholesalers based on contractual terms.

Cost of Product Sales

Cost of product sales is as follows:

(In thousands)

Cost of product sold for the period was low, primarily reflecting the sale of inventory manufactured prior to regulatory approval, for which the associated manufacturing costs were expensed as research and development in prior periods. This inventory carries a low or no cost basis, resulting in lower cost of product sold and higher gross margin during the initial commercialization period. Accordingly, cost of product sold for the three and six months ended June 30, 2026 primarily reflects stability testing, storage and royalty payments on our product sales.

Research and Development Expenses

Our research and development expenses can be divided into three categories: direct external expenses, which include clinical and preclinical research and development activities; internal overhead and other expenses; and stock-based compensation expense. Direct external expenses consist primarily of expenses with third-party manufacturing organizations, contract research organizations, clinical trial sites, collaborators, licensors and consultants prior to receiving regulatory approval for a product candidate. Preclinical research and development include costs prior to beginning Phase 1 studies in human subjects. Internal overhead and other expenses primarily consist of costs for personnel, overhead, rent, utilities and depreciation. Our accounting policy is to expense all manufacturing costs related to product candidates until regulatory approval is reasonably assured in either the U.S. or EU.

The following table illustrates our expenses associated with these activities:

(In thousands)

For the three and six months ended June 30, 2026, clinical research and development expenses decreased $5.9 million and $13.2 million, respectively, as compared to the prior year period as a result of reduced expenditures on OMS906 due to the sale of zaltenibart to Novo Nordisk. For the three and six months ended June 30, 2026, internal overhead and other expenses decreased $2.2 million and $4.9 million, respectively, as compared to the prior year period primarily due to Novo Nordisk reimbursing the Company for hours worked under the Transition Services Agreement and decreased employee compensation costs.

We expect research and development expenses in the third quarter of 2026 to be higher than in the second quarter of this year, driven primarily by increased investment in YARTEMLEA and our other MASP-2 inhibitor programs and our OncotoX-AML program, including costs associated with manufacturing and related activities.

At this time, we are unable to estimate with certainty the longer-term costs we will incur in the continued development of our product candidates due to the inherently unpredictable nature of our preclinical and clinical development activities. Clinical development timelines, the probability of success, and development costs can differ materially as new data become available and as expectations change. Our future research and development expenses will depend, in part, on the preclinical or clinical success of each product candidate as well as ongoing assessments of each program’s commercial potential. In addition, we cannot forecast with precision which product candidates, if any, may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

We are required to expend substantial resources in the development of our product candidates due to the lengthy process of completing clinical trials and seeking regulatory approval. Any failure or delay in completing clinical trials, or in obtaining regulatory approvals, could delay our generation of product revenue and increase our research and development expenses.

Selling, General and Administrative Expenses

Selling, general and administrative expenses are as follows:

(In thousands)

For the three and six months ended June 30, 2026, total selling, general and administrative expenses, excluding stock-based compensation, increased $3.7 million and $6.3 million, respectively, primarily due to the build-out of our U.S. commercial organization, including the hiring of a sales force and increased marketing and market access activities in support of the YARTEMLEA launch.

We expect selling, general and administrative expenses in the third quarter of 2026 to be higher than in the second quarter of 2026, driven primarily by increased selling and marketing activities associated with YARTEMLEA.

Interest Expense

Interest expense, net of premiums, discounts, issuance costs, and remeasurement adjustments is shown below:

(In thousands)

Interest on our OMIDRIA royalty obligation is calculated under the effective interest method and represents a portion of the royalties remitted by Rayner to our administrative agent, Wilmington Savings Fund Society, FSB, along with principal. Pass-through interest paid to DRI is offset by non-cash remeasurement adjustments taken to properly reflect the OMIDRIA royalty obligation for changes in probable cash flows on our future expected Rayner royalties.

Contractual interest expense is comprised of cash interest paid during the year and the net change in accrued interest. Amortization of debt discounts, premiums and issuance costs are reflected as non-cash interest expense. Debt discounts on the 2026 Notes and 2029 Notes are accretive whereas the premium on the Credit and Guarantee Agreement with funds managed by Athyrium Capital Management LP and funds managed by Highbridge Capital Management, LLC, as lenders (the “Term Loan”) is deducted from contractual interest expense.

For the three months ended June 30, 2026, interest expense increased $7.6 million, compared to the same period in 2025. The increase primarily relates to a remeasurement change occurring in the prior year period related to the OMIDRIA royalty obligation due to a change in forecasted royalties from Rayner.

For the six months ended June 30, 2026, interest expense increased $9.8 million, compared to the same period in 2025. The increase primarily relates to a remeasurement change occurring in the prior year period related to the OMIDRIA royalty obligation due to a change in forecasted royalties from Rayner and additional interest incurred on our 2029 Notes as the notes were issued May 2025; however, we incurred a full six months of interest in the current year. These increases are partially offset by decreases in interest related to our 2026 Notes, which were repaid in February 2026, and the Term Loan, which was repaid in November 2025.

For further details, please see “Note 6 — Debt” and “Note 8 – OMIDRIA Royalty Obligation” in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

We expect interest expense for the third quarter of 2026 to be lower than in the second quarter of 2026, driven primarily by the decreased aggregate principal amount of 2029 Notes outstanding.

Interest and Other Income

(In thousands)

Interest and other income increased $3.4 million and $3.7 million, respectively, for the three and six months ended June 30, 2026 as compared to the same period in 2025 primarily due to reimbursement from Novo Nordisk for inventory which we transferred during the quarter.

We expect interest and other income for the third quarter of 2026 to be lower than in the second quarter of 2026, reflecting the completion of planned transfers of zaltenibart inventory to Novo Nordisk.

Net Gain on Change in Fair Value of Financial Instruments

(In thousands)

Our embedded derivatives comprise interest make-whole and conversion options related to our 2029 Notes as well as call and put options related to the Term Loan. We repaid our Term Loan on November 25, 2025, thereby eliminating the Term Loan embedded derivative in the current year. The net gain of $11.4 million and $84.6 million on the 2029 Notes derivative for the three and six months ended June 30, 2026, respectively, reflects marking to market the option of the holders to convert their notes into shares of common stock, cash or a combination thereof.

Swings in our stock price could significantly affect the valuation of the 2029 Note conversion derivative. In addition, a decrease in interest rates could increase the valuation of the derivative.

Loss on early extinguishment of 2029 Notes

(In thousands)

On June 17, 2026, the Company entered into privately negotiated agreements with certain holders of its 2029 Notes under which the Company agreed to repurchase a portion of the outstanding notes. For the three months ended June 30, 2026, the Company recognized a loss on extinguishment of debt of approximately $1.9 million. This loss reflects the difference between the fair value of the payment obligation of $30.6 million established on June 17, 2026 less the carrying amount of the repurchased notes (the aggregate principal of $16.0 million net of unamortized discount and issuance costs) and the de-recognition of the associated embedded derivative liability of $16.7 million.

In addition, the Company recognized a $0.7 million increase in the fair value of the payment obligation from June 17, 2026 through June 30, 2026 to more properly reflect the approximated contractual settlement amount of $31.3 million.

Loss on early extinguishment of 2026 Notes

(In thousands)

In May 2025, we exchanged $70.8 million of 2026 Notes for 2029 Notes and entered into agreements to equitize $10.0 million of 2026 Notes, realizing a $3.0 million non-cash loss on extinguishment. The extinguishment reflects marking-to-market the 2029 Notes and the expensing of capitalized debt issuance costs on the retired portion of the 2026 Notes.

Income tax expense

(In thousands)

Income tax expense reflects estimated income tax expense for various state jurisdictions.

Discontinued operations and the OMIDRIA contract royalty asset

Net income from OMIDRIA discontinued operations, net of tax is shown below:

(In thousands)

Net income from discontinued operations increased $6.1 million and $6.8 million for the three and six months ended June 30, 2026, primarily due to remeasurement of the OMIDRIA contract royalty asset in the same period in the prior year due to a change in Rayner’s revenue forecast.

We expect income from discontinued operations in the third quarter of 2026 to be comparable to the second quarter of 2026.

The following schedule presents a roll-forward of the OMIDRIA contract royalty asset (in thousands):

Financial Condition – Liquidity and Capital Resources

As of June 30, 2026, we had cash, cash equivalents, and short-term investments of $132.0 million. For the three months ended June 30, 2026, company-wide our cash provided by operations was $4.1 million. For the six months ended June 30, 2026, our cash used in operations was $10.4 million.

On February 17, 2026, we repaid at maturity the remaining $17.1 million outstanding aggregate principal amount of our 2026 Notes.

In June and July 2026, the Company entered into privately negotiated agreements with certain holders of the 2029 Notes under which we agreed to repurchase approximately $30.5 million aggregate principal amount of 2029 Notes for a total purchase price of approximately $60.2 million, plus accrued and unpaid interest of $0.2 million. Both transactions closed in July 2026, leaving approximately $40.3 million aggregate principal amount of 2029 Notes outstanding. The transactions also reduced the aggregate number of shares issuable on conversion of the 2029 Notes from approximately 11.4 million to 6.5 million. We achieved this reduction at a weighted average cost of $12.21 per share and concurrently eliminated $8.6 million dollars in future interest payments.

Furthermore, during the six months ended June 30, 2026, we repurchased and retired 0.8 million shares of common stock pursuant to our share repurchase program, at an average cost of $11.70 per share, for an aggregate purchase price of $9.9 million.

Year to date, our share repurchase program repurchases and privately negotiated 2029 Note repurchases have reduced our potential fully diluted share count by 5.8 million shares.

Omeros expects that it will be able to fund more than 12 months of operations from the date the financial statements are issued, utilizing our current cash, cash equivalents, and short-term investments, along with funds we expect to receive from commercial sales of YARTEMLEA.

From time to time, we may seek to repurchase, redeem, retire, refinance, exchange or otherwise restructure portions of our outstanding indebtedness through open-market purchases, privately negotiated transactions, tender offers or other means. Any such transactions will depend on prevailing market conditions, our liquidity and capital requirements, contractual restrictions and other factors. Should it be necessary or determined to be strategically advantageous, we also could pursue debt transactions or public and private offerings of our equity securities, future royalty sales, or other strategic transactions, which may include licensing or selling a portion or all of one or more of our existing technologies. In addition, we have an at-the-market (“ATM”) facility agreement under which we have the capability to sell shares of our common stock, from time to time, in an ATM equity offering through which we may offer and sell shares of our common stock equaling an aggregate amount of up to $150.0 million.

Cash Flow Data

(In thousands)

19

Operating Activities. Net cash used in operating activities for the six months ended June 30, 2026 decreased $47.4 million compared to the same period in 2025, driven primarily by a $128.2 million increase in net income reflecting commercial sales of YARTEMLEA in the current period and lower research and development expenditures following the sale of zaltenibart to Novo Nordisk. This favorable change is partially offset by $69.8 million of non-cash charges, primarily relating to the fair value remeasurement of our 2029 Notes embedded derivative and a significantly lower remeasurement of the OMIDRIA contract royalty asset. Following the commercialization of YARTEMLEA in January 2026, trade receivables also increased by $11.7 million in the current year.

Investing Activities. Cash flows provided by investing activities primarily reflects cash used to purchase short-term investments and proceeds from the sale of those investments. This frequently causes a shift between our cash, cash equivalents, and short-term investment balances. As we manage our usage with respect to total cash, cash equivalents, and short-term investments, we do not consider fluctuations in cash flows from investing activities to be important to the understanding of our liquidity and capital resources.

Net cash provided by investing activities during the six months ended June 30, 2026 decreased $27.7 million, reflecting the timing of purchase of investments from proceeds received on maturities and sales.

Financing Activities. Net cash used in financing activities for the six months ended June 30, 2026 increased $25.9 million compared to the same period in the prior year. This increase was primarily driven by the repayment of $17.1 million in aggregate principal amount of our 2026 Notes in February 2026, the repurchase of $9.9 million of our common stock and $3.6 million of other financing related activities. In addition, the prior year included $6.3 million in proceeds from our ATM facility that did not recur in the current period. This use of cash and decreases in proceeds were offset by cash received from employee exercises of stock options of $11.0 million.

Contractual Obligations and Commitments

Our future minimum contractual commitments and obligations were reported in our Annual Report on Form 10-K for the year ended December 31, 2025. Other than the following, our future minimum contractual obligations and commitments have not changed materially from the amounts previously reported. See “Note 10 — Commitments and Contingencies” in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

Operating Leases

Our lease for our office and laboratory space ends in November 2027. We have two options to extend the lease term, each by five years. In addition, we carry various finance lease obligations for laboratory and office equipment. As of June 30, 2026, the remaining aggregate non-cancelable rent payable under the initial term of the lease, excluding common area maintenance and related operating expenses, is $9.4 million.

Convertible Senior Notes and Long-Term Debt

See “Note 6 — Debt” in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

OMIDRIA Royalty Obligation

See “Note 8 — OMIDRIA Royalty Obligation” in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

Goods and Services Contracts, Development Milestones and Product Royalties

See “Note 10 — Commitment and Contingencies” in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

Critical Accounting Policies and Significant Judgments and Estimates

The preparation of our condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in the financial statements and accompanying notes. We base our estimates on historical experience, current conditions and other factors we believe to be reasonable under the circumstances; however, actual results could differ materially from those estimates. We consider an accounting policy to be critical if it requires significant judgment and has a material impact on our financial condition and results of operations.

Revenue Recognition

We recognize revenue from product sales when title of the product is transferred to our customers, which generally occurs upon delivery to wholesalers. At that point, our performance obligations are satisfied. Activities performed by wholesalers after delivery are not considered separate performance obligations.

We generally record revenue from product sales when the product is delivered to our wholesalers and title for the product is transferred, upon which we have satisfied our performance obligations. Fulfillment activities by the wholesalers are not considered to be a separate performance obligation. Product revenue is recorded net of variable consideration, including wholesaler distribution fees, chargebacks, returns and discounts. We estimate variable consideration using the expected value approach. This estimate is based on several factors, including: historical return rates, expiration date by product, estimated levels of inventory in the wholesale channel. Since there is often a timing lag between the product sale and the settlement of accruals relating to these programs, our net product revenue may incorporate revisions of accruals for several periods. We include such estimates in the transaction price only to the extent that it is probable that a significant reversal of revenue will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

Chargebacks represent discounts provided to eligible covered entities under government programs, including the 340B Drug Pricing Program and the Medicaid Drug Rebate Program. In addition, we are subject to pricing obligations under our Federal Supply Schedule agreement with the U.S. government (the “FSS Agreement”), which establishes maximum prices for sales to certain federal agencies and may give rise to additional discounts and rebates. Chargebacks are recorded as a reduction of gross product revenue at the time of sale. Reserves for chargebacks are generally recorded as reductions of accounts receivable, while reserves for Medicaid rebates and patient co-pay assistance, if applicable, are recorded as accrued liabilities.

We also maintain programs that may give rise to similar deductions, including patient co-pay assistance programs. For the six months ended June 30, 2026, chargebacks were primarily attributable to discounts under the 340B Drug Pricing Program, and no material reductions to gross product revenue were recorded for other programs. We will continue to evaluate utilization of these programs and recognize the related reductions to revenue in the period in which they occur.

For further details of our other Critical Accounting Policies, see “Note 2 — Significant Accounting Policies” in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q and Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the SEC on March 31, 2026.

Our exposure to market risk is primarily confined to our investment securities, debt instruments and embedded derivatives.

Cash, Cash Equivalents, and Short-Term Investments

Our exposure to market risk is primarily confined to our investment securities. The primary objective of our investment activities is to preserve our capital to fund operations, and we do not enter into financial instruments for trading or speculative purposes. We also seek to maximize income from our investments without assuming significant risk. To achieve our objectives, we maintain a portfolio of investments in high-credit-quality securities. As of June 30, 2026, we had cash, cash equivalents and short-term investments of $132.0 million. In accordance with our investment policy, we invest funds in highly liquid, investment-grade securities. The money market funds in our investment portfolio are not leveraged and are classified as available-for-sale. We currently do not hedge interest rate exposure. Because of the short-term maturities of our investments, we do not believe that an increase in market rates would have a material negative effect on the realized value of our investment portfolio. We actively monitor changes in interest rates and, with our current portfolio of short-term investments, we are not exposed to significant potential loss due to changes in interest rates.

Convertible Notes, Term Debt, and Embedded Derivatives

As of June 30, 2026, we had fixed-rate borrowings from our 2029 Notes, and as of December 31, 2025, we had fixed-rate borrowings from our 2026 Notes and 2029 Notes. We record all our fixed-rate borrowings at carrying value and, therefore, do not experience any risk for changes in interest rates. However, we include an embedded derivative along with our debt in our reporting of our 2029 Notes. The derivative on our 2029 Notes is marked to fair value every reporting period. The fair value inputs to the 2029 Notes’ derivative valuation include stock price, unsecuritized discount rate, risk-free rate, volatility, and term. Swings in our stock price could significantly affect the valuation of the 2029 Note conversion derivative. In addition, a decrease in interest rates could increase the valuation of the derivative. As of June 30, 2026, a 20% decrease or increase in our stock price would result in an approximate $15.8 million change in the fair value of the 2029 Notes embedded derivative within the range of $40.4 million to $71.0 million.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of June 30, 2026. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2026, our principal executive officer and principal financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) under the Exchange Act that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

We operate in an environment that involves a number of risks and uncertainties. Before making an investment decision you should carefully consider the risks described in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC on March 31, 2026. In assessing the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025, you should also refer to the other information included therein and in this Quarterly Report on Form 10-Q, including the supplemental risk factor below. In addition, we may be adversely affected by risks that we currently deem to be immaterial or by other risks that are not currently known to us. Due to these risks and uncertainties, known and unknown, our past financial results may not be a reliable indicator of future performance and historical trends should not be used to anticipate results or trends in future periods. The trading price of our common stock could decline due to any of these risks and you may lose all or part of your investment.

Our share repurchase program could affect the price of our common stock and increase volatility and may be suspended or terminated at any time, which may result in a decrease in the trading price of our common stock.

In November 2025, our Board of Directors authorized a share repurchase program to repurchase, from time to time, up to $100.0 million of our common stock in the open market or through privately negotiated transactions. The share repurchase program does not have a fixed expiration date, may be suspended or discontinued at any time, and does not obligate us to acquire any amount of our common stock. The timing, manner, price, and amount of any repurchases may be determined by us at our discretion and will depend on a variety of factors, including business, economic and market conditions, prevailing stock prices, corporate and regulatory requirements, and other considerations. As of August 12, 2026, approximately $90.1 million remained available to repurchase our outstanding shares of common stock under the share repurchase program.

Repurchases pursuant to our share repurchase program could affect our stock price and increase its volatility. The existence of a share repurchase program could also cause our stock price to be higher than it would be in the absence of such a program and could potentially reduce the market liquidity for our common stock. There can be no assurance that any repurchases will enhance shareholder value because the market price of our common stock may decline below the levels at which we repurchased our common stock. Although our share repurchase program is intended to enhance long-term shareholder value, short-term stock price fluctuations could reduce the share repurchase program’s effectiveness.