Hello. Welcome to the annual meeting of shareholders of Omeros Corporation. Please note that today's meeting is being recorded. During the meeting, we will have a question-and-answer session. Shareholders who registered with their 16-digit control number can submit questions or comments at any time by using the Ask a Question feature at the bottom left corner of the screen. It is now my pleasure to turn the meeting over to Dr. Gregory Demopulos, Chairman and CEO of Omeros Corporation. Dr. Demopulos, the floor is yours.
Thank you, operator. Welcome everyone to the 2026 annual meeting of shareholders of Omeros. I am Greg Demopulos, Chairman and CEO of Omeros. I will be presiding as chairman for this meeting. Peter Cancelmo, our Vice President and General Counsel, will act as secretary of the meeting. Also joining us today are members of our board of directors. Erica Fewel, a representative of Ernst & Young, our auditor, is also on the line. During the question-and-answer session at the end of today's event, Erica will be available to respond to appropriate questions. A representative of Broadridge Financial Solutions is also in attendance and has been appointed to act as Inspector of Elections. Peter, please take us through the rules of conduct and procedures.
Thanks, Greg. The link to the agenda for today's meeting is available by clicking on the Meeting Agenda link under Meeting Materials on the right side of your screen. You will also find under the Meeting Materials heading a link to the rules of conduct for this meeting. To conduct an orderly meeting, we ask that participants abide by these rules. Our agenda for today's event is divided into two parts. In the first part, we will address the formal business of the meeting. The second part will involve a brief management presentation, followed by a question-and-answer session. Should you desire to ask a question during the meeting, please use the Ask a Question feature on the bottom left corner of your screen and submit your question online. We will address your questions after the company presentation.
In order to get to as many questions as possible in the time allotted, each question should be succinct and limited to one topic. Questions on the same topic may be grouped, summarized, and answered together. Similar to our past shareholder meetings. As stated in the rules of conduct, we will not engage in questions or discussions that are irrelevant to our business or operations or are substantially repetitious of questions or statements from other shareholders. Thank you in advance for your cooperation. I would like to remind you that the management presentation and question-and-answer session will include statements that are 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 from expectations.
Please refer to the Risk Factors sections of the company's most recent annual report on Form 10-K and quarterly report on Form 10-Q for a discussion of these risks and uncertainties. We will now proceed with the formal business of our meeting.
Thank you, Peter. The secretary has delivered an affidavit of mailing establishing that notice for this meeting was duly given. All shareholders of record at the close of business on April 17, 2026, are entitled to vote at this meeting. Our first order of business is to determine whether a quorum for the purpose of transacting business before this meeting is present. Peter, do you have a report?
Yes. The shareholders list shows that holders of 72,168,330 shares of common stock are entitled to vote at this meeting. We are informed by the Inspector of Elections that there are represented in person or by proxy at this meeting approximately 58 million shares of common stock, or approximately 80% of all of the shares entitled to vote at the meeting.
Thank you, Peter. With a quorum present, I declare this meeting to be duly convened for purposes of transacting such business as may properly come before it. The next order of business is a description of the matters to be voted on at today's meeting. The first proposal before the shareholders is the election of three Class II directors, each to serve until the 2029 annual meeting of shareholders and until their respective successors are duly elected and qualified. The nominees for election as Class II directors are Thomas Cable, Dr. Peter Demopulos, and Dr. Diana Perkinson. No other persons having been nominated in accordance with the company's bylaws, the nominations are now closed. The second proposal before the shareholders is the approval of the non-binding advisory resolution on the compensation paid to our executive officers or the Say on Pay vote.
The third proposal before the shareholders is the approval of the amended and restated Omeros Corporation Omnibus Incentive Compensation Plan to increase the number of authorized shares and extend the term of the plan. The fourth and final proposal before the shareholders today is the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2026. The polls are open for online voting. If you have not yet voted or wish to change your vote, you may do so now. Any shareholder who has already voted and who does not want to change their vote does not need to take any further action. We will now pause briefly for voting to take place. The online voting will now be closed. Peter, as secretary, will you please report the results of the voting?
Thanks, Greg. Based on the preliminary review of the votes cast, Thomas Cable, Dr. Peter Demopulos, and Dr. Diana Perkinson have each been elected as Class II directors. The proposed Say on Pay resolution has been approved. The amended and restated Omnibus Incentive Compensation Plan has been approved, and the selection of Ernst & Young as our independent registered public accounting firm for the fiscal year ending December 31, 2026, has been ratified.
Thank you, Peter, and thank you all for attending today. This concludes the formal part of our meeting, and the annual meeting of shareholders is now adjourned. I'll now turn to the management presentation, after which we will have a brief question-and-answer period. Thank you again, and as I said, with the formal business completed, let's move on to the shareholder presentation. Over the past year, we've reestablished Omeros as a commercial-stage company, materially strengthened our balance sheet, and advanced a pipeline that continues to reflect the breadth of our science. Today, I'll focus on what changed in 2025, why it matters, and how we are positioned for the next phase of growth. Before beginning, I think the slides are a bit out of order, before beginning, I just want to remind everyone that today's presentation includes forward-looking statements. Peter mentioned this earlier.
With that, let's turn to the three developments that made 2025 transformational for Omeros. The first was the Novo Nordisk transaction for zaltenibart. This transaction monetized our clinical-stage MASP-3 asset on attractive economics, placed zaltenibart with a global leader, and validated Omeros' MASP-3 science. The structure of this transaction is meaningful. $240 million upfront, $100 million in near-term milestone potential, up to $1.71 billion in additional potential milestones and tiered royalties. Importantly, we retained selected MASP-3 opportunities, including our small molecule program and preclinical antibodies unrelated to zaltenibart. We monetized one asset, expanding its potential to access patients across a large number of indications while preserving additional platform opportunity. The second major development was FDA approval of YARTEMLEA. This was a defining milestone for Omeros and for patients with TA-TMA.
YARTEMLEA is the first and only FDA-approved therapy for this often fatal complication of stem cell transplantation and the first approved inhibitor of the lectin pathway. It is also our second commercial product following OMIDRIA, which generated over $1.1 billion in non-dilutive revenues and was sold to Rayner Surgical Group. As a team, we bring real commercial experience to this launch. YARTEMLEA is approved for adult and pediatric patients two years of age and older with TA-TMA. To our knowledge, it is the only systemically delivered complement inhibitor approved in the U.S. with no boxed warning, no REMS program, and no required vaccination. That differentiated label matters in a population that's already severely ill and immunocompromised. The third development, as you see here, was financial. Following the Novo Nordisk transaction, we moved quickly to reduce leverage and strengthen the balance sheet.
As shown here, we retired a substantial amount of debt, leaving only the 2029 convertible notes outstanding. As we announced this morning, we've entered into an agreement with holders of our 2029 notes to repurchase up to $16 million in principal amount. We also ended the quarter with substantial working capital. The result is a cleaner capital structure, greater operating flexibility, and a stronger foundation for the YARTEMLEA launch and our broader pipeline. We continue to target company-wide positive cash flow by mid-2027. Here you see our pipeline. Our pipeline remains really central to the Omeros story. This is not a single asset company. We're a company with multiple proprietary platforms rooted in deep internal science. Complement remains the core franchise. YARTEMLEA, OMS1029, MASP-2 small molecules, retained MASP-3 programs, and T-CAT. Beyond complement, we have programs in oncology, addiction, and GPCR-based discovery.
I'll begin today with YARTEMLEA, now the commercial anchor of Omeros. YARTEMLEA is, as I said earlier, the first and only approved therapy for TA-TMA. To understand the opportunity, we should start with the disease, what drives it, why it is so difficult to manage, and why selective MASP-2 inhibition matters. As you see here, TA-TMA begins with endothelial injury during the transplant journey. Transplant patients are exposed to multiple endothelial stressors, conditioning regimens, immunosuppressive agents, infection, graft versus host disease, and other inflammatory triggers. That injury collectively activates the lectin pathway. The result is more endothelial damage, platelet activation, microthrombi, and organ injury. The key point here is this. TA-TMA is a complement-mediated endothelial injury syndrome, and MASP-2 sits at a critical point in that biology. TA-TMA is not a single organ complication. It is systemic. It can affect the brain, lungs, heart, kidneys, gastrointestinal tract, and the vasculature.
Patients can deteriorate quickly once multiple organs are involved. As shown here, mortality risk is estimated to be up to five times higher in patients with TA-TMA than in those without TA-TMA. For those who survive, the burden also continues with persistent long-term organ damage. That is the clinical backdrop for YARTEMLEA. Several studies clearly making this obvious, it is a severe disease with acute mortality risk and lasting morbidity. The burden is also visible in healthcare utilization. TA-TMA patients spend longer in the hospital, are more likely to require mechanical ventilation, and have a markedly higher need for renal replacement therapy. In pediatric transplant patients with TA-TMA, ICU admission, as you see here, is common. This matters for patients, families, transplant centers, and payers. A therapy that changes the disease trajectory can affect both outcomes and system burden. Survival does not mean recovery.
TA-TMA survivors have markedly higher rates of chronic issues, kidney disease, hypertension, proteinuria, heart failure, GI bleeding, liver failure, and thrombosis. The treatment objective should not be viewed only as getting patients through the acute transplant period. The goal is to reduce the risk of lasting organ injury. That's why timely recognition and targeted treatment really matter. YARTEMLEA's mechanism is designed for this biology. Narsoplimab blocks MASP-2, as you see here. The effector enzyme of the lectin pathway, it inhibits lectin pathway activation upstream of C3 and C5. Also affects MASP-2 mediated coagulation-related processes. Really, MASP-2 sits at the nexus of the complement system and the coagulation cascade. The other key point here is what it preserves. narsoplimab doesn't block the classical pathway's lytic arm, an important component of host defense. In transplant patients, that distinction matters.
These patients are already immunocompromised, and the next slide shows why the site of complement inhibition is clinically important. This slide summarizes two independent studies evaluating eculizumab, a C5 inhibitor in TA-TMA. The adult retrospective study is shown on the left. In that study, the eculizumab-exposed cohort had decreased survival, and mortality was largely driven by infections. The pediatric matched case control study is shown on the right. In that study, eculizumab-exposed children had significantly higher infection rates than matched controls, and one-year infection-related mortality was sixfold higher, 39% versus, as you see here, 6.6%. Together, the adult and pediatric data point in the same direction. eculizumab exposure was associated with increased infection burden and infection-related mortality in TA-TMA. That finding is consistent with the mechanism of C5 inhibition, which blocks the lytic arm of the classical pathway, an important component of adaptive immunity and host defense.
The key point really here is simple. This distills down to where complement is inhibited matters, especially in an immunocompromised TA-TMA population. That brings us back to YARTEMLEA. The point of the preceding data is not simply that C5 inhibition has limitations in TA-TMA. The broader point is that in complement inhibition, the choice of target matters. YARTEMLEA selectively inhibits MASP-2, which is implicated in TA-TMA, and it does this while preserving the lytic arm of the classical pathway and the terminal pathway. The approved label is also broad and practical. YARTEMLEA is approved for adult and pediatric patients two years of age and older with TA-TMA. It is not limited to high-risk disease. It has, as you see here, no Box Warning, no REMS program, and no required vaccinations. Dosing is straightforward, with fixed dosing for patients over 50 kg and weight-based dosing for smaller patients.
For transplant centers, that combination is important. Clear eligibility, practical use, and a differentiated mechanism and label in a critically ill patient population. The clinical experience around YARTEMLEA is consistent across multiple data sources. The pivotal trial showed a 61% complete response rate and 73% 100-day overall survival from TA-TMA diagnosis. The Expanded Access Program showed similar response and survival outcomes in adults and pediatric patients. The external control analysis showed a three to fourfold lower mortality risk with YARTEMLEA treatment. Together, the evidence supported approval and provides a strong foundation for launch. Commercial sales began in the third week of January. We've built a focused commercial organization sized appropriately for this market, with direct engagement across U.S. transplant centers. Here you see the first quarter numbers, during which time YARTEMLEA became cash flow positive.
Reimbursement infrastructure is also advancing, with the J-code effective July 1 and NTAP expected October 1. The takeaway from this slide is straightforward. Early demand, focused execution, and improving reimbursement support our path to company-wide positive cash flow by mid-2027. This slide now brings the YARTEMLEA opportunity together. The product has the elements of a strong commercial opportunity. It is fast, and it is first and only approval. A broad and practical label, consistent clinical outcomes, and a concentrated prescriber base. The market is meaningful today and should expand as awareness and diagnostic consistency improve. We also have important ex-U.S. optionality with the EU MAA under review, orphan designation granted by EMA, and centralized review eligibility confirmed. The opportunity here is not defined only by the early U.S. launch. YARTEMLEA has the potential to become the foundation of a durable MASP-2 commercial franchise.
I will now move from the approved product to the broader complement inhibitor pipeline. The goal here is to extend our complement expertise across additional diseases, treatment settings, and delivery modalities. This slide is about the broader MASP-2 opportunity. YARTEMLEA gives us an approved product in TA-TMA, but the underlying biology is not limited to TA-TMA. MASP-2 inhibition may be relevant in a broad range of other diseases involving endothelial injury, lectin pathway activation, and thromboinflammation. We will evaluate those opportunities deliberately through investigator-initiated studies, case reports, and series, and clinical trials where appropriate. The franchise also has meaningful patent duration with protection expected to extend to at least 2042, exclusive of potential patent term extensions. The strategy is measure, expand where the biology and data support it, preserve flexibility, and evaluate ex-U.S. partnering where it can increase global value and shareholder value.
OMS1029 is our next-generation antibody in the MASP-2 franchise. It has completed phase I single and multiple ascending dose studies and was well-tolerated with no safety signal of concern. The intended profile is low volume, long-acting, quarterly administration, once every three months, either subcutaneously or intravenously. A profile well-suited, as you would imagine, to chronic indications. OMS1029 is ready to begin phase II evaluation. We are currently finalizing indication selection. The small molecule MASP-2 program adds another dimension to our MASP-2 franchise. An oral once-daily MASP-2 inhibitor would be also well-suited for chronic diseases where long-term administration and patient convenience are central. Candidate selection is underway, and the next step following that would be IND-enabling studies. The potential indication space overlaps with the broader MASP-2 biology. Here we see renal and neurodegenerative disorders involving endothelial injury, lectin pathway activation, and again, thromboinflammation.
This slide shows the breadth of potential MASP-2 franchise expansion. Here you see only some of the acute and chronic opportunities. The strategic point is clear. YARTEMLEA establishes the franchise. OMS1029 can extend it into long-acting chronic treatment, and small molecules may extend it further into oral chronic therapy. MASP-3 remains relevant to Omeros after the Novo Nordisk transaction. The transaction validated the science while allowing us to retain selected platform rights to our MASP-3 small molecule program and pre-clinical MASP-3 antibodies unrelated to zaltenibart. The current focus is selecting a small molecule drug development candidate and advancing it toward IND-enabling studies. We have no intention of competing with Novo Nordisk. That is not the objective. The plan instead is to pursue indications that do not fall into Novo Nordisk's longstanding areas of focus. That completes the complement inhibitor section. Let me now turn to oncology.
Beyond complement, we're advancing a differentiated oncology platform, and that really starts with our OncotoX-AML program. OncotoX-AML is our lead oncology program and the first major application of our broader oncology platform. The premise is straightforward but differentiated. Selectively target dividing cancer cells with a large molecule therapeutic while limiting damage to normal cells. We've selected AML as the lead indication because the disease remains so difficult to treat, outcomes are still poor in key patient groups, and our preclinical data support pursuing this indication. What is important, I think, at this stage, is the convergence of signals. Activity in AML models, preliminary tolerability support, a growing intellectual property estate, and guidance from leading external oncology experts. That combination supports our decision to continue advancing OncotoX-AML toward clinical development. This slide explains why AML is the right first indication for our OncotoX program.
AML remains an aggressive and often fatal hematologic malignancy. Even with currently available treatment options, outcomes remain poor for many patients. There has been progress. Intensive chemotherapy, venetoclax plus azacitidine, genotype-specific inhibitors, and transplant all have important roles. The limitations, despite all of this progress, those limitations are still substantial. Many patients are not eligible for transplant. Many relapse after treatment, and patients with relapsed or refractory disease, particularly TP53 mutant AML, continues to face very poor outcomes. The opportunity is not simply to add another AML therapy. The opportunity is to bring forward a differentiated mechanism that may address patient populations where current approaches remain inadequate. This slide explains why OncotoX-AML is mechanistically differentiated. The construct is designed to combine targeted delivery with a DNA-damaging payload. In that sense, it borrows important attributes from two established oncology modalities, ADC-like targeting and radiotherapy like DNA damage.
This is not a conventional ADC because it does not require chemical conjugation, and it's not radiotherapy because it doesn't involve radioisotopes or specialized handling. The goal, instead, is to deliver a toxic protein payload selectively to AML cells, particularly dividing cells, while using a targeting element directed to surface proteins highly expressed in AML. That combination, targeted delivery, intracellular access, and DNA damage in dividing cancer cells, is the rationale for starting in AML and potentially expanding from AML into related myeloid malignancies over time. This slide and this graphic here show the intended intracellular sequence for OncotoX-AML. The construct is designed first to bind surface receptors on AML cells and then to be internalized by the cancer cell. Once internalized, the delivery domain enables release of the toxic protein payload into the cytosol.
From there, the payload is designed to enter the nucleus and induce DNA damage, leading to cell cycle arrest and cancer cell death. The strategic point of all of this is that this is not a nonspecific cytotoxic approach. The program is built around targeted binding, intracellular delivery, and payload activity in dividing cancer cells. This is the mechanistic rationale behind the survival data shown on the next slides. This model is particularly important because TP53 mutant AML, as I mentioned earlier, is among really the most difficult AML populations. In this animal model, OncotoX-AML monotherapy improved survival compared both with vehicle and standard of care comparators. The combination arms showed prolonged survival with 100% survival through the study endpoint in the data shown. This slide now shows the survival signal in an AML animal model using only a short five-day treatment course after engraftment.
OncotoX-AML achieved 100% survival through the study endpoint. With the vehicle is azacitidine and venetoclax plus azacitidine comparator groups showing substantially shorter survival. The important point here is not only the magnitude of the survival separation, but that it was achieved at a low dose and against standard of care comparators. These data, again, support continued advancement of OncotoX-AML toward the clinic. This slide summarizes why OncotoX-AML is ready to keep moving toward the clinic. The recent primate data are important. One treatment course produced a marked selective reversible reduction in myeloid progenitor cells with no observed safety signals or meaningful blood chemistry changes that are often seen with current AML treatments. The program also has shown activity across multiple AML models, including models with TP53, NPM1, KMT2A, and FLT3 mutations, all associated with increased mortality.
IND-enabling studies and manufacturing development are ongoing, and we continue to target clinical trial initiation in late 2027. The takeaway is that the program has moved beyond concept. We have activity, translational support, and a defined path toward first-in-human evaluation. T-CAT is our targeted complement activation platform for infectious disease. It stands for targeted complement activation therapies. Unlike our inhibitor programs, T-CAT reverses what we do with inhibitors. T-CAT's designed instead to activate complement locally where it is needed, and in this case, on the pathogen surface. T-CAT extends our complement expertise in a very different direction. As I said, rather than inhibiting complement, T-CAT's really designed to activate complement locally on the pathogen surface. The goal is to create a differentiated anti-infective approach for life-threatening multi-drug resistant infections, one that works through immune-mediated pathogen killing rather than a conventional antibiotic mechanism.
The platform is advancing toward IND in the recent publication in "Science Translational Medicine" really provides the important external validation for the technology. Here, the strategic point is, again, pretty straightforward. T-CAT is not an incremental antibiotic program. It's a proprietary pathogen targeting platform that uses complement biology to attack serious infections in a wholly different way. It applies not only to bacteria, but to viruses, fungi, and parasites. Looking now at the slide on the screen, mechanistically, T-CAT combines a targeting antibody with a complement activating C1s domain. The antibody directs the molecule to the pathogen surface. The C1s domain then initiates local complement activation. That local activation is designed to promote pathogen killing and clearance through activation of the complement system. The strategy is intended to bypass pathogen immune evasion mechanisms by initiating that complement activation directly at the pathogen surface.
This is the slide that turns T-CAT from a platform concept into biological proof of principle. In a lethal Pseudomonas pneumonia model, the Pseudomonas T-CAT improved survival, drove bacterial clearance in both blood and lung, and reduced lung injury. That's the right profile for a serious infection therapy. It's not just reducing bacterial counts in one compartment, it's affecting survival, systemic spread, pulmonary burden, and tissue damage. The control antibodies did not reproduce that effect, as you see here. That's important. The T-CAT construct is doing something mechanistically distinct. It's directing complement activation to the pathogen surface and converting binding into killing. That's why we view T-CAT as a differentiated anti-infective platform. It's not just another antibiotic, but it's a way to use complement biology to attack pathogens that are increasingly difficult to treat.
I'll close the pipeline review today with OMS527, which is our oral PDE7 inhibitor, currently targeting cocaine use disorder as the lead indication. This program is different from our other programs I've discussed today, but it still fits Omeros' model. It's novel biology, it's a serious unmet need, and a development path that's being advanced with substantial external support. Cocaine use disorder remains an area with very limited treatment options. There's no approved medication that reliably changes the course of the disease, and relapse remains a major problem. OMS527 is designed to address the biology of addiction rather than substitute one addictive agent for another. It's intended to leave the reward system unaffected, which would be a tremendous advance in the addiction treatment arena. That's why the program has continued to receive support from NIDA.
We've completed the animal cocaine interaction studies needed to support the planned inpatient clinical evaluation in cocaine users. FDA requested additional non-clinical information before that study begins, and we're working with the agency to move the program quickly into that inpatient study. Our target remains to initiate that trial, that inpatient clinical trial, by year-end 2026, so by the end of this year. The takeaway here is simple. OMS527 is a capital-efficient, externally supported program with a truly novel mechanism in an area where patients and physicians have very few effective therapeutic options. That concludes the management presentation. Omeros entered 2026, as we've discussed, as a really materially different company. We reestablished ourselves as a commercial entity through YARTEMLEA. We are financially stronger, and we remain supported by a broad proprietary pipeline. We have YARTEMLEA launched, and TA-TMA as our second commercial product.
We have full ownership of our MASP-2 franchise. We've retained MASP-3 opportunities. OMS1029 is ready for phase II evaluation. The OncotoX-AML program is advancing rapidly toward the clinic, and our T-CAT program moving to an IND and OMS527 advancing toward that inpatient trial in cocaine use disorder. Across all of these programs, you see a number of near and midterm milestones. We'll stop there. We'll now take questions submitted through the virtual meeting platform. As a reminder, shareholders who registered to attend this meeting may submit questions through the platform using the 16-digit control number included with your proxy materials and using the Ask a Question feature on the bottom left corner of your screen. We'll read each question out loud.
As Peter had mentioned earlier, we may paraphrase longer questions or combine multiple questions on the same topic to get as many questions answered as we can. I'll take the questions. I may ask members of the team to address specific points where appropriate.
At this time, we would like to take any questions you might have for us today. To ask a question, type your question under Ask a Question and click on the Submit button to submit your question.
The first question is a relatively long one, but the question is, for the narsoplimab MAA at EMA, can you confirm whether an oral explanation with CHMP has been scheduled or held, and whether you have been formally notified which CHMP meeting is planned for discussion and opinion on the application? Also, can you confirm whether you previously communicated expectations for timing of that opinion remain unchanged, or if there has been any material changes to the status or expected timing compared with your previously communicated guidance? In answer to that, we expect that an oral explanation will take place during the June meeting of the CHMP, which is the Committee for Medicinal Products for Human Use. That June meeting week is scheduled for next week. Our meeting, we expect, will take place next week.
As mentioned during the presentation, we continue to expect a decision mid-year. The next question, why the sudden plunge in Omeros share price the morning of Friday, June 12, 2026? Look, we generally don't comment on day-to-day or short-term movements in our stock price. With respect to the drop observed on June 12, frankly, we don't know for certain whether one or more particular factors really drove that drop in the price. We've heard various theories on this. Some are more plausible than others, including relationship to option trading and exercise. For example, the upcoming quadruple witching. We've heard derivative trading activity. We've heard information on YARTEMLEA revenue sourced from third parties, as well as potential news in the TA-TMA therapeutic space. Other than that, I don't think there's much we can say to that. The next question is, does Omeros remain confident in the YARTEMLEA launch and its trajectory?
Is the company continuing to see positive commercial trends such as growth in adoption accounts, patient starts, or revenue, even if individual months fluctuate due to the market? Should investors view month-to-month variability as normal launch dynamics with stronger months offsetting softer months and supporting growth over the course of a Q? Has management observed any meaningful change in the trajectory since the 1Q 2026 call? There is a lot in that question. Look, we're early in the launch. In fact, we've not yet even reported a full quarter of sales. I would say that it is reasonable to expect some variability in day-to-day, week-to-week, and even month-to-month sales. That's why we've made clear that we really don't intend to provide guidance on YARTEMLEA sales or the expectations around those sales until we have a better understanding of the sales patterns.
Obtaining that understanding of those patterns is going to require some time. Let me see what else you asked here. We've stated in our last earnings call that we were pleased with our progress. We remain confident in the long-term adoption of YARTEMLEA. We certainly remain focused on growing YARTEMLEA sales. The next question is somewhat related, I think. Is competition from ULTOMIRIS, ravulizumab, its generic name, off-label still affecting sales of YARTEMLEA even though insurance shouldn't be covering it? Really, besides the fact that ravulizumab is not approved to treat TA-TMA, we don't see ravulizumab as a meaningful competitor to YARTEMLEA. Beyond YARTEMLEA's attributes, the fact that our drug is approved, it is an important factor, I think as you note, for insurance companies and for reimbursement. This question, this next one here, is again, somewhat related.
Although you haven't talked about it, I expect that Alexion relationships are tough to crack. I understand the transplant center reps could be loyal to Alexion and tough to dislodge. Are you expecting to be a second-line treatment for some patients? Well, look, we believe, and I'm sure you know, that physicians will make a choice as to which drug to use based on what they determine is best for their patients. Our belief, strongly, is that YARTEMLEA is that drug. For that reason, we're focused on educating the entire transplant team, the physicians, the pharmacists, the nursing staff. All of those are important in this process. Our objective here is clearly not to be second line. Our objective is to make YARTEMLEA the first-line standard of care for treatment of TA-TMA. It really is that simple. Let's see.
Can you please comment on the departures of the CMO and CCO? Who has assumed these responsibilities? The question ended with a thank you, so we appreciate that. Look, I have gotten questions about why press releases weren't issued around those, and the reason for that is that their departures were not material to our business. We've not missed a beat on either front. With respect to will we replace, of course, we'll hire these positions. But we really want to ensure to the extent possible that we bring on the right candidates for Omeros, for our people and for our business. Our search process has been deliberate, and we expect to complete at least one in the very near future. With respect to Nadia and Andreas, we appreciate their contributions, and we wish them well in their endeavors. Next question.
On October 15, Omeros announced the asset purchase and license agreement with Novo Nordisk for OMS906. The deal closed on December 1st. As part of that deal, Omeros is eligible to receive $100 million in near-term milestone payments, with emphasis on plural payments. It has now been over eight months since the announcement and over six and a half months since the deal closed with no announcement of achieving any of those near-term milestones. Can you quantify what is meant by near term? Look, this may be frustrating to some of you, but the disclosure regarding the timing of potential milestone events are subject to our confidentiality obligations under our agreement with Novo. So we are permitted to characterize the aggregate $100 million in milestones that we've referenced publicly only as near term as we did at the initial announcement of the transaction.
I understand that that might be unsatisfying to some shareholders, but we're just not permitted to provide more color. Frankly, a breach of confidentiality on our part really carries meaningful potential financial consequences for us. We've said what we're able to say. We really can say no more about that. Here's another. "Are you able to share information about how many patients are being treated with YARTEMLEA?" Again, this information we just don't have. For medical legal reasons, medical centers are rightfully protective of patient privacy, and patient related information is just not generally shared. We don't have the information on specific patient numbers, and we will not in the future have that information. Let's see. Next.
Can you provide an update on early launch metrics for YARTEMLEA, including the number of transplant centers that have added it to formulary, the pace of patient starts, and any color on gross to net dynamics?" With respect to the first part of that question, we've commented publicly as recently as May 15 on our P&T committee approvals, et cetera. I'm going to direct you to those public statements. With respect to your question on gross to net dynamics, as many of you know and understand, gross to net adjustments are made up of a number of things. It includes chargebacks, meaning governmental programs like the 340B program. It also includes bona fide service fees paid to our wholesale distributors. We're not planning to discount, which I think might be part of your question.
We're not planning to discount the drug, and we don't expect returned product to be a significant factor. We expect that the bulk of the gross to net adjustment will continue to be composed of those two things I mentioned, the chargebacks and the fees. We would expect over time that 340B participation will increase and that our gross to net adjustment accordingly would go up somewhat. We last reported that our gross to net was 11%, which is quite low. That was the gross to net for Q1. As I'm saying now, we would expect that to move somewhat upward from that benchmark. We certainly expect that it will remain in the teens even long term. Another question. "Thank you for keeping our share count in mind. Congratulations on retiring $16 million worth of your convertible debt.
Is the company continuing to actively buy back stock, or has this purchase affected that? The recent price action could have presented an opportunity." Thank you for those comments and your recognition of really how we are very focused on shareholder value, part of that is minimizing our outstanding share count. We don't telegraph and will not speak today about our plans to use or not to use our stock buyback program. These two programs, the stock buyback program and this bond repurchase that we announced today, are not so tightly tied. The repurchase today was undertaken as part of our broader capital management strategy. You noted, the stock price has been down, we identified an opportunity to retire a meaningful portion of our outstanding 2029 notes. Should we choose to replace those dollars spent, there are many options for us to do this.
Primarily, we could bring on replacement debt or some portion of that which would be unsecured or minimally secured and at much more favorable terms for the company should we choose to do that. We regularly evaluate all of our alternatives to optimize our capital structure while supporting our operating and our strategic pipelines. To be clear, though, we always look to strengthen our balance sheet and to create shareholder value. What we have done is part of that strategy. Question, "Is it safe to assume that given the new diagnostic protocols and your on-demand distribution system, that your YARTEMLEA patients will be treated much sooner in the course of their disease than patients from the clinical trials, and even more so in relation to patients in the expanded access program?
Have you seen evidence or expect that earlier treatment will generate better response and survival outcomes than experienced in the pivotal trial and EAP?" We certainly expect that the diagnosis rate of TA-TMA will increase. There is now a treatment for this disorder. As you understand, an effective treatment for a disorder will often drive the recognition of that disorder more broadly. Yes, we do expect that. With respect to the temporally upstream use of YARTEMLEA, we do hear anecdotally that physicians recognize that the earlier you jump on this really life-threatening complication, the more likely you are to have an outcome that you want, meaning saving the patient. I think your question makes sense, and we would expect that there certainly would be a desire on the physician's part to begin treatment sooner rather than waiting until they are catching a falling knife. Okay.
Anything else, Peter, that we "What factors affect your plans on potentially partnering YARTEMLEA in the EU and/or rest of world? What are you currently envisioning makes the most sense on these assets, and what is the current status of those plans?" We don't speak directly to our partnering plans. What we can say generally about that is that we have multiple options to partner outside the U.S. That could be YARTEMLEA specific and YARTEMLEA TMA specific. It could be broader around YARTEMLEA and related indications inclusive of TA-TMA. There is also the potential, obviously, to look at MASP-2, the target partnering ex-U.S. We've not made any decisions yet that we would like to discuss around that. Obviously, we're constantly evaluating our options and looking at what makes, again, the most sense for the company and the most sense for our shareholders.
Okay, we have time for one more. Is there another question, Peter, that you can "Can you please comment on the YARTEMLEA launch in relation to the Alexion TMA- 313 trial? Is there any indication surgical centers are waiting for these trial results before utilizing YARTEMLEA? Thank you." We, I think, have already addressed the issue of YARTEMLEA. I think this reference is to the YARTEMLEA adult study. The pediatric study, which was open label, already released those results which were not favorable for the drug, for ravulizumab. With respect to our focus on that, frankly, we're not. We will look to see when Alexion releases those ravulizumab data, and we'll be interested in those, as I'm sure you are as well. Okay. With that, operator, let me turn the call back.
That concludes our 2026 annual shareholder meeting. You may now disconnect.
Thank you, everyone, for joining us today and for your continued support. Have a good day.