Omeros (OMER) 10-Q 10 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 02, 2016
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1
Trading Symbol	OMER
Entity Registrant Name	OMEROS CORP
Entity Central Index Key	1,285,819
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		39,135,054

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 978	$ 1,365
Short-term investments	12,266	26,898
Receivables	6,646	6,517
Inventory	1,972	472
Prepaid expense	2,460	1,894
Total current assets	24,322	37,146
Property and equipment, net	898	951
Restricted cash and investments	10,679	10,679
Other assets	73	219
Total assets	35,972	48,995
Current liabilities:
Accounts payable	5,332	6,428
Accrued expenses	12,120	9,752
Current portion of notes payable	69	73
Total current liabilities	17,521	16,253
Notes payable, net	49,973	49,769
Deferred rent	$ 9,220	$ 9,207
Commitments and contingencies (Note 8)
Shareholders’ deficit:
Preferred stock, par value $0.01 per share, 20,000,000 authorized and none issued and outstanding at March 31, 2016 and December 31, 2015	$ 0	$ 0
Common stock, par value $0.01 per share, 150,000,000 authorized at March 31, 2016 and December 31, 2015; 39,119,154 and 38,040,891 issued and outstanding at March 31, 2016 and December 31, 2015, respectively	391	380
Additional paid-in capital	382,548	376,528
Accumulated deficit	(423,681)	(403,142)
Total shareholders’ deficit	(40,742)	(26,234)
Total liabilities and shareholders’ deficit	$ 35,972	$ 48,995

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2016	Dec. 31, 2015
Preferred stock, par value (USD per share)	$ 0.01	$ 0.01
Preferred stock, authorized shares	20,000,000	20,000,000
Preferred stock, Issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value (USD per share)	$ 0.01	$ 0.01
Common stock, authorized shares	150,000,000	150,000,000
Common stock, Issued shares	39,119,154	38,040,891
Common stock, outstanding shares	39,119,154	38,040,891

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Product sales, net	$ 7,246	$ 238
Grant revenue	173	150
Revenue	7,419	388
Costs and expenses
Cost of product sales	327	11
Research and development	15,434	9,318
Selling, general and administrative	11,110	8,989
Total costs and expenses	26,871	18,318
Loss from operations	(19,452)	(17,930)
Interest expense	(1,375)	(957)
Other income (expense), net	288	218
Net loss	(20,539)	(18,669)
Comprehensive loss	$ (20,539)	$ (18,669)
Basic and diluted net loss per share (USD per share)	$ (0.54)	$ (0.51)
Weighted-average shares used to compute basic and diluted net loss per share (shares)	38,317,084	36,483,559

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating activities:
Net loss	$ (20,539)	$ (18,669)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	53	55
Stock-based compensation expense	4,422	2,517
Non-cash interest expense	213	212
Changes in operating assets and liabilities:
Receivables	(129)	(146)
Inventory	(1,500)	0
Prepaid expenses and other noncurrent assets	(420)	725
Accounts payable and accrued expenses	1,272	(2,170)
Net cash used in operating activities	(16,628)	(17,476)
Investing activities:
Purchases of investments	(18)	(79,389)
Proceeds from the sale and maturities of investments	14,650	17,300
Net cash provided by (used in) investing activities	14,632	(62,089)
Financing activities:
Proceeds from issuance of common stock and pre-funded warrants, net	0	79,076
Proceeds upon exercise of stock options and warrants	1,609	1,576
Net cash provided by financing activities	1,609	80,652
Net (decrease) increase in cash and cash equivalents	(387)	1,087
Cash and cash equivalents at beginning of period	1,365	354
Cash and cash equivalents at end of period	978	1,441
Supplemental cash flow information
Cash paid for interest	$ 776	$ 745

Organization and Significant Ac

Organization and Significant Accounting Policies	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Organization and Significant Accounting Policies	Organization and Significant Accounting Policies Organization We are a biopharmaceutical company committed to discovering, developing and commercializing both small-molecule and protein therapeutics for large-market as well as orphan indications targeting inflammation, coagulopathies and disorders of the central nervous system. Our first drug product OMIDRIA was approved by the United States (U.S.) Food and Drug Administration (FDA) for use during cataract surgery or intraocular lens replacement. We broadly launched OMIDRIA in the U.S. in April 2015. Basis of Presentation Our condensed consolidated financial statements include the financial position and results of operations of Omeros Corporation (Omeros) and our wholly owned subsidiaries. All inter-company transactions have been eliminated and we have determined we operate in one segment. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The information as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 includes all adjustments, which include normal recurring adjustments, necessary to present fairly our interim financial information. The Condensed Consolidated Balance Sheet at December 31, 2015 has been derived from our audited financial statements but does not include all of the information and footnotes required by GAAP. The accompanying unaudited condensed consolidated financial statements and related notes thereto should be read in conjunction with the audited consolidated financial statements and related notes thereto that are included within our Annual Report on Form 10-K for the year ended December 31, 2015 , which was filed with the U.S. Securities and Exchange Commission (SEC) on March 15, 2016. Product Sales, Net We record revenue from OMIDRIA product sales when the product is delivered to our wholesalers. Product sales are recorded net of estimated chargebacks and rebates, wholesaler distribution fees and estimated product returns. Accruals or allowances are established for these deductions when revenue is recognized, and actual amounts incurred are offset against the applicable accruals and allowances. We reflect each of these accruals or allowances as either a reduction in the related accounts receivable or as an accrued liability, depending on how the accrual or allowance is settled. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant items subject to such estimates include revenue recognition, fair market value of investments, stock-based compensation expense and accruals for clinical trials and contingencies. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances; however, actual results could differ from these estimates. Liquidity and Capital Resources As of March 31, 2016 , we had $13.2 million in cash, cash equivalents and short-term investments. In addition, we have $ 10.0 million in restricted cash and investments that must be maintained in depository and investment accounts pursuant to the Loan and Security Agreement (the Oxford/EWB Loan Agreement) entered into in December 2015 with Oxford Finance LLC (Oxford) and East West Bank (EWB) as well as $679,000 used to secure a letter of credit for the Omeros Building lease. We expect to continue to incur losses until such time as OMIDRIA product sales, corporate partnerships and/or licensing revenues from products or programs are adequate to support our ongoing operating expenses and debt service. We are unable to predict if or when this may occur, and until it does occur, we will need to continue to raise additional funds through public or private equity securities sales, including under our At Market Issuance Sales Agreement (the ATM Agreement) with JonesTrading Institutional Services LLC (JonesTrading) (see Note 9 for further detail), through the incurrence of additional debt, through corporate partnerships, through asset sales or through the pursuit of collaborations and licensing arrangements related to certain of our products or programs. These conditions raise a substantial doubt about our ability to continue as a going concern. If we are unable to become cash-flow positive or to raise additional capital as and when needed, or upon acceptable terms, such failure would have a significant negative impact on our financial condition. The accompanying unaudited condensed consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The accompanying unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from uncertainty related to our ability to continue as a going concern. Recently Adopted Accounting Pronouncements For the year ended December 31, 2015 we adopted and applied retrospectively Financial Accounting Standards Board (FASB) Accounting Standards Update, or ASU, No. 2015-03, related to simplifying the presentation of debt issuance costs. This standard requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction to the liability. The adoption of ASU 2015-03 resulted in the reclassification of $226,000 of debt issuance costs in our March 31, 2015 Condensed Consolidated Statement of Cash Flows. Recent Accounting Pronouncements In February 2016, FASB issued ASU 2016-02 related to lease accounting. This standard requires lessees to recognize a right-of-use asset and a lease liability for most leases. This standard must be applied using a modified retrospective transition and is effective for all annual and interim periods beginning after December 15, 2018. Earlier adoption is permitted. We are evaluating how this new standard will impact the presentation of our financial statements and related disclosures. In March 2016, FASB issued ASU 2016-08 related to revenue recognition. This standard is an amendment to ASU 2014-09 relating to revenue from contracts with customers. This amendment clarifies an entity’s revenue recognition for a performance obligation based on principal versus agent considerations. This standard must be applied retroactively to each prior reporting period presented or retrospectively with the cumulative effect of applying the standard recognized in the period adopted. As amended, the standard is effective for interim and annual periods beginning after December 15, 2017 and cannot be adopted before that effective date. We are currently evaluating the impact that this standard may have on our financial statements once it is adopted. In March 2016, the FASB issued ASU 2016-09 that changes the accounting for certain aspects of share-based payments to employees. The guidance requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid in capital pools. The guidance also allows for the employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting and for making a policy election to account for forfeitures as they occur rather than on an estimated basis. The guidance is effective for interim and annual periods beginning after December 15, 2016 with early adoption permitted. We are currently evaluating the impact that this standard may have on our financial statements once it is adopted and the timing of adoption.

Net Loss Per Share

Net Loss Per Share	3 Months Ended
	Mar. 31, 2016
Earnings Per Share [Abstract]
Net Loss Per Share	Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and dilutive common share equivalents outstanding for the period, determined using the treasury-stock method. The basic and diluted net loss per share amounts for the three months ended March 31, 2016 and 2015 were computed based on the shares of common stock outstanding during the respective periods. Potentially dilutive securities excluded from the diluted loss per share calculation are as follows: March 31, 2016 2015 Outstanding options to purchase common stock 9,302,348 8,365,741 Warrants and pre-funded warrants to purchase common stock — 1,160,788 Total 9,302,348 9,526,529

Cash, Cash Equivalents and Inve

Cash, Cash Equivalents and Investments	3 Months Ended
	Mar. 31, 2016
Cash and Cash Equivalents [Abstract]
Cash, Cash Equivalents and Investments	Cash, Cash Equivalents and Investments As of March 31, 2016 and December 31, 2015 , all investments are classified as short-term and available-for-sale on the accompanying Condensed Consolidated Balance Sheets. We did not own any securities with unrealized loss positions as of March 31, 2016 or December 31, 2015 . Investment income, which is included as a component of other income (expense), consists of interest earned.

Fair-Value Measurements

Fair-Value Measurements	3 Months Ended
	Mar. 31, 2016
Fair Value Disclosures [Abstract]
Fair-Value Measurements	Fair-Value Measurements On a recurring basis, we measure certain financial assets at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability, an exit price, in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The accounting standard establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs, where available. The following summarizes the three levels of inputs required: Level 1—Observable inputs for identical assets or liabilities, such as quoted prices in active markets; Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3—Unobservable inputs in which little or no market data exists, therefore they are developed using estimates and assumptions developed by us, which reflect those that a market participant would use. Our fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis are as follows: March 31, 2016 Level 1 Level 2 Level 3 Total (In thousands) Assets: Money-market funds classified as non-current restricted cash and investments $ 10,679 $ — $ — $ 10,679 Money-market funds classified as short-term investments 12,266 — — 12,266 Total $ 22,945 $ — $ — $ 22,945 December 31, 2015 Level 1 Level 2 Level 3 Total (In thousands) Assets: Money-market funds classified as non-current restricted cash and investments $ 10,679 $ — $ — $ 10,679 Money-market funds classified as short-term investments 26,898 — — 26,898 Total $ 37,577 $ — $ — $ 37,577 Cash held in demand deposit accounts of $978,000 and $1.4 million is excluded from our fair-value hierarchy disclosure as of March 31, 2016 and December 31, 2015 , respectively. There were no unrealized gains and losses associated with our short-term investments as of March 31, 2016 or December 31, 2015 . The carrying amounts reported in the accompanying Condensed Consolidated Balance Sheets for receivables, accounts payable and other current monetary assets and liabilities approximate fair value because of the immediate or short-term maturity of these financial instruments.

Inventory (Notes)

Inventory (Notes)	3 Months Ended
	Mar. 31, 2016
Inventory Disclosure [Abstract]
Inventory	Inventory The components of inventory are as follows: March 31, 2016 December 31, 2015 (In thousands) Raw materials $ 104 $ 93 Work-in-process 1,692 158 Finished goods 176 221 Total inventory $ 1,972 $ 472 Work-in-process consists of manufactured vials of OMIDRIA which have not been packaged into finished goods.

Accrued Liabilities

Accrued Liabilities	3 Months Ended
	Mar. 31, 2016
Payables and Accruals [Abstract]
Accrued Liabilities	Accrued Liabilities Accrued liabilities consisted of the following: March 31, December 31, (In thousands) Contract research and development $ 3,260 $ 2,973 Consulting and professional fees 3,232 2,400 Employee compensation 2,544 2,590 Clinical trials 2,061 1,108 Other accruals 1,023 681 Total accrued liabilities $ 12,120 $ 9,752

Notes Payable

Notes Payable	3 Months Ended
	Mar. 31, 2016
Debt Disclosure [Abstract]
Notes Payable	Notes Payable In December 2015, we entered into the Oxford/EWB Loan Agreement pursuant to which we borrowed $50.0 million . We can also borrow an additional $20.0 million in two tranches of $10.0 million each through June 30, 2017, contingent upon the satisfaction of certain conditions including minimum net revenues from OMIDRIA. The Oxford/EWB Loan Agreement requires interest-only payments through July 1, 2017. Beginning in August 2017, principal and interest payments are due through the January 1, 2020 maturity date. The Oxford/EWB Loan Agreement contains covenants that require us to maintain $10.0 million in restricted cash and certain eligible term investments and limit or restrict our ability to enter into certain transactions. In addition, we are required to either meet an annual OMIDRIA net revenue minimum for 2016 of $70.0 million and quarterly OMIDRIA revenue minimums in 2017 and 2018, or maintain 50% of the then-outstanding note payable balance in restricted cash and certain eligible term investments. The Oxford/EWB Loan Agreement also includes provisions related to events of default, the occurrence of a material adverse effect (MAE) and changes of control. The occurrence of an event of default could result in the acceleration of the Oxford/EWB Loan Agreement and, under certain circumstances, could increase our interest rate by 5.0% per annum during the period of default. There was no event of default under the Oxford/EWB Loan Agreement as of March 31, 2016 . As of March 31, 2016 , the remaining unamortized discount and debt issuance costs associated with the debt were $3.6 million and $414,000 , respectively.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Development Milestones and Product Royalties We have retained control of worldwide commercial rights to OMIDRIA, to all of our product candidates and to our programs other than OMS103. We may be required, in connection with existing in-licensing or asset acquisition agreements, to make certain royalty and milestone payments and we cannot, at this time, determine when or if the related milestones will be achieved or whether the events triggering the commencement of payment obligations will occur. See Note 9 to our Consolidated Financial Statements for the year ended December 31, 2015 included within our Annual Report on Form 10-K as filed with the SEC on March 15, 2016. Litigation As described within Note 9 of the “Notes to Consolidated Financial Statements” included within our Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on March 15, 2016, we filed a patent infringement lawsuit against Par Pharmaceutical, Inc. and its subsidiary, Par Sterile Products, LLC (collectively, Par) following our receipt of a Paragraph IV Notice Letter from Par stating Par is seeking approval from the FDA to market a generic version of OMIDRIA. During 2016, we amended the lawsuit asserting an additional OMIDRIA patent, which was granted by the U.S. Patent and Trademark Office after Par filed its original Paragraph IV Notice Letter. We have filed suit against Par, thereby triggering a stay which is expected to remain in effect until January 2018 of the FDA’s final approval of Par’s ANDA. We continue to believe that the assertions in Par’s Paragraph IV Notice Letter do not have merit and we intend to prosecute vigorously our patent infringement claims against Par.

Shareholders' Equity

Shareholders' Equity	3 Months Ended
	Mar. 31, 2016
Equity [Abstract]
Shareholders' Equity	Shareholders’ Equity Common Stock At Market Issuance Sales Agreement - In January 2016, we entered into the ATM Agreement with JonesTrading pursuant to which we may direct JonesTrading to sell shares of our common stock with an aggregate offering price of up to $100.0 million directly on The Nasdaq Global Market, through a market maker other than on an exchange or in negotiated transactions. Any sales made under the ATM Agreement are based solely on our instructions and JonesTrading will receive a 1.7% commission from the gross proceeds. The ATM Agreement may be terminated by either party at any time upon 10 days ' notice to the other party or by JonesTrading at any time in certain circumstances including the occurrence of a material adverse effect to Omeros. Securities Offering - In February 2015, we sold 3.4 million shares of our common stock at a public offering price of $20.03 per share and sold pre-funded warrants to purchase up to 749,250 shares of our common stock at a public offering price of $20.02 per pre-funded warrant share. The public offering price for the pre-funded warrants was equal to the public offering price of our common stock, less the $0.01 per share exercise price of each pre-funded warrant. After deducting underwriter discounts and offering expenses of $4.9 million , we received net proceeds from the offering of $79.1 million . Warrants For the three months ended March 31, 2016 , we received cash proceeds of approximately $7,500 upon the cash exercise of our then-outstanding pre-funded warrants, which had a weighted average exercise price of $0.01 per share, that resulted in the issuance of 749,250 shares of our common stock. For the three months ended March 31, 2015, we received proceeds of $1.4 million upon the exercise of warrants to purchase approximately 126,000 shares of our common stock.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Mar. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Compensation	Stock-Based Compensation Stock-based compensation expense includes amortization of stock options granted to employees and non-employees and has been reported in our Condensed Consolidated Statements of Operations and Comprehensive Loss as follows: Three Months Ended 2016 2015 (In thousands) Research and development $ 2,155 $ 1,324 Selling, general and administrative 2,267 1,193 Total $ 4,422 $ 2,517 In February 2016, in connection with our annual employee review process, we granted qualified employees options to purchase approximately 1.3 million shares of our common stock with an exercise price of $10.27 . The fair value of each option grant to employees and directors is estimated on the date of grant using the Black-Scholes option-pricing model. The following assumptions were applied to employee and director stock option grants during the periods ended: Three Months Ended 2016 2015 Estimated weighted-average fair value $ 6.62 $ 13.49 Weighted-average assumptions Expected volatility 74 % 70 % Expected term, in years 5.7 6.0 Risk-free interest rate 1.44 % 1.51 % Expected dividend yield — % — % Stock option activity for all stock plans and related information is as follows: Options Outstanding Weighted- Average Exercise Price per Share Remaining Contractual Life (In years) Aggregate Intrinsic Value (In thousands) Balance at December 31, 2015 8,310,235 $ 7.97 Granted 1,349,055 10.31 Exercised (329,013 ) 4.87 Forfeited (27,929 ) 14.51 Balance at March 31, 2016 9,302,348 $ 8.40 6.54 $ 65,720 Vested and expected to vest at March 31, 2016 9,012,412 $ 8.30 6.46 $ 64,505 Exercisable at March 31, 2016 6,486,712 $ 7.09 5.50 $ 53,722 At March 31, 2016 , excluding non-employee stock options, the total estimated compensation expense to be recognized in connection with our unvested options is $16.6 million and 2,189,575 shares were available to grant.

Organization and Significant 16

Organization and Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2016
Accounting Policies [Abstract]
Organization	Organization We are a biopharmaceutical company committed to discovering, developing and commercializing both small-molecule and protein therapeutics for large-market as well as orphan indications targeting inflammation, coagulopathies and disorders of the central nervous system. Our first drug product OMIDRIA was approved by the United States (U.S.) Food and Drug Administration (FDA) for use during cataract surgery or intraocular lens replacement. We broadly launched OMIDRIA in the U.S. in April 2015.
Revenue Recognition	Product Sales, Net We record revenue from OMIDRIA product sales when the product is delivered to our wholesalers. Product sales are recorded net of estimated chargebacks and rebates, wholesaler distribution fees and estimated product returns. Accruals or allowances are established for these deductions when revenue is recognized, and actual amounts incurred are offset against the applicable accruals and allowances. We reflect each of these accruals or allowances as either a reduction in the related accounts receivable or as an accrued liability, depending on how the accrual or allowance is settled.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant items subject to such estimates include revenue recognition, fair market value of investments, stock-based compensation expense and accruals for clinical trials and contingencies. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances; however, actual results could differ from these estimates.
Basis of Presentation	Liquidity and Capital Resources As of March 31, 2016 , we had $13.2 million in cash, cash equivalents and short-term investments. In addition, we have $ 10.0 million in restricted cash and investments that must be maintained in depository and investment accounts pursuant to the Loan and Security Agreement (the Oxford/EWB Loan Agreement) entered into in December 2015 with Oxford Finance LLC (Oxford) and East West Bank (EWB) as well as $679,000 used to secure a letter of credit for the Omeros Building lease. We expect to continue to incur losses until such time as OMIDRIA product sales, corporate partnerships and/or licensing revenues from products or programs are adequate to support our ongoing operating expenses and debt service. We are unable to predict if or when this may occur, and until it does occur, we will need to continue to raise additional funds through public or private equity securities sales, including under our At Market Issuance Sales Agreement (the ATM Agreement) with JonesTrading Institutional Services LLC (JonesTrading) (see Note 9 for further detail), through the incurrence of additional debt, through corporate partnerships, through asset sales or through the pursuit of collaborations and licensing arrangements related to certain of our products or programs. These conditions raise a substantial doubt about our ability to continue as a going concern. If we are unable to become cash-flow positive or to raise additional capital as and when needed, or upon acceptable terms, such failure would have a significant negative impact on our financial condition. The accompanying unaudited condensed consolidated financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The accompanying unaudited condensed consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from uncertainty related to our ability to continue as a going concern. Basis of Presentation Our condensed consolidated financial statements include the financial position and results of operations of Omeros Corporation (Omeros) and our wholly owned subsidiaries. All inter-company transactions have been eliminated and we have determined we operate in one segment. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The information as of March 31, 2016 and for the three months ended March 31, 2016 and 2015 includes all adjustments, which include normal recurring adjustments, necessary to present fairly our interim financial information. The Condensed Consolidated Balance Sheet at December 31, 2015 has been derived from our audited financial statements but does not include all of the information and footnotes required by GAAP. The accompanying unaudited condensed consolidated financial statements and related notes thereto should be read in conjunction with the audited consolidated financial statements and related notes thereto that are included within our Annual Report on Form 10-K for the year ended December 31, 2015 , which was filed with the U.S. Securities and Exchange Commission (SEC) on March 15, 2016.
Recent Accounting Pronouncements	Recently Adopted Accounting Pronouncements For the year ended December 31, 2015 we adopted and applied retrospectively Financial Accounting Standards Board (FASB) Accounting Standards Update, or ASU, No. 2015-03, related to simplifying the presentation of debt issuance costs. This standard requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction to the liability. The adoption of ASU 2015-03 resulted in the reclassification of $226,000 of debt issuance costs in our March 31, 2015 Condensed Consolidated Statement of Cash Flows. Recent Accounting Pronouncements In February 2016, FASB issued ASU 2016-02 related to lease accounting. This standard requires lessees to recognize a right-of-use asset and a lease liability for most leases. This standard must be applied using a modified retrospective transition and is effective for all annual and interim periods beginning after December 15, 2018. Earlier adoption is permitted. We are evaluating how this new standard will impact the presentation of our financial statements and related disclosures. In March 2016, FASB issued ASU 2016-08 related to revenue recognition. This standard is an amendment to ASU 2014-09 relating to revenue from contracts with customers. This amendment clarifies an entity’s revenue recognition for a performance obligation based on principal versus agent considerations. This standard must be applied retroactively to each prior reporting period presented or retrospectively with the cumulative effect of applying the standard recognized in the period adopted. As amended, the standard is effective for interim and annual periods beginning after December 15, 2017 and cannot be adopted before that effective date. We are currently evaluating the impact that this standard may have on our financial statements once it is adopted. In March 2016, the FASB issued ASU 2016-09 that changes the accounting for certain aspects of share-based payments to employees. The guidance requires the recognition of the income tax effects of awards in the income statement when the awards vest or are settled, thus eliminating additional paid in capital pools. The guidance also allows for the employer to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting and for making a policy election to account for forfeitures as they occur rather than on an estimated basis. The guidance is effective for interim and annual periods beginning after December 15, 2016 with early adoption permitted. We are currently evaluating the impact that this standard may have on our financial statements once it is adopted and the timing of adoption.

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)	3 Months Ended
	Mar. 31, 2016
Earnings Per Share [Abstract]
Calculation of Historical Outstanding Dilutive Securities Not Included in Diluted Loss per Share	Potentially dilutive securities excluded from the diluted loss per share calculation are as follows: March 31, 2016 2015 Outstanding options to purchase common stock 9,302,348 8,365,741 Warrants and pre-funded warrants to purchase common stock — 1,160,788 Total 9,302,348 9,526,529

Fair-Value Measurements (Tables

Fair-Value Measurements (Tables)	3 Months Ended
	Mar. 31, 2016
Fair Value Disclosures [Abstract]
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis	Our fair value hierarchy for our financial assets and liabilities measured at fair value on a recurring basis are as follows: March 31, 2016 Level 1 Level 2 Level 3 Total (In thousands) Assets: Money-market funds classified as non-current restricted cash and investments $ 10,679 $ — $ — $ 10,679 Money-market funds classified as short-term investments 12,266 — — 12,266 Total $ 22,945 $ — $ — $ 22,945 December 31, 2015 Level 1 Level 2 Level 3 Total (In thousands) Assets: Money-market funds classified as non-current restricted cash and investments $ 10,679 $ — $ — $ 10,679 Money-market funds classified as short-term investments 26,898 — — 26,898 Total $ 37,577 $ — $ — $ 37,577

Inventory (Tables)

Inventory (Tables)	3 Months Ended
	Mar. 31, 2016
Inventory Disclosure [Abstract]
Schedule of Inventory, Current	he components of inventory are as follows: March 31, 2016 December 31, 2015 (In thousands) Raw materials $ 104 $ 93 Work-in-process 1,692 158 Finished goods 176 221 Total inventory $ 1,972 $ 472

Accrued Liabilities (Tables)

Accrued Liabilities (Tables)	3 Months Ended
	Mar. 31, 2016
Payables and Accruals [Abstract]
Accrued Liabilities	Accrued liabilities consisted of the following: March 31, December 31, (In thousands) Contract research and development $ 3,260 $ 2,973 Consulting and professional fees 3,232 2,400 Employee compensation 2,544 2,590 Clinical trials 2,061 1,108 Other accruals 1,023 681 Total accrued liabilities $ 12,120 $ 9,752

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Mar. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Compensation Expense	Stock-based compensation expense includes amortization of stock options granted to employees and non-employees and has been reported in our Condensed Consolidated Statements of Operations and Comprehensive Loss as follows: Three Months Ended 2016 2015 (In thousands) Research and development $ 2,155 $ 1,324 Selling, general and administrative 2,267 1,193 Total $ 4,422 $ 2,517
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions	The following assumptions were applied to employee and director stock option grants during the periods ended: Three Months Ended 2016 2015 Estimated weighted-average fair value $ 6.62 $ 13.49 Weighted-average assumptions Expected volatility 74 % 70 % Expected term, in years 5.7 6.0 Risk-free interest rate 1.44 % 1.51 % Expected dividend yield — % — %
Stock Option Activity and Related Information	Stock option activity for all stock plans and related information is as follows: Options Outstanding Weighted- Average Exercise Price per Share Remaining Contractual Life (In years) Aggregate Intrinsic Value (In thousands) Balance at December 31, 2015 8,310,235 $ 7.97 Granted 1,349,055 10.31 Exercised (329,013 ) 4.87 Forfeited (27,929 ) 14.51 Balance at March 31, 2016 9,302,348 $ 8.40 6.54 $ 65,720 Vested and expected to vest at March 31, 2016 9,012,412 $ 8.30 6.46 $ 64,505 Exercisable at March 31, 2016 6,486,712 $ 7.09 5.50 $ 53,722

Organization and Significant 22

Organization and Significant Accounting Policies (Detail) $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)segment	Mar. 31, 2015USD ($)
Increase (decrease) in prepaid expenses and other noncurrent assets	$ 420	$ (725)
Increase (decrease) in accounts payable and accrued expenses	$ 1,272	(2,170)
Number of operating segments | segment	1
Cash, cash equivalents and short-term investments	$ 13,200
Accounting Standards Update 2015-03
Increase (decrease) in prepaid expenses and other noncurrent assets		(226)
Increase (decrease) in accounts payable and accrued expenses		$ 226
Cash and Eligible Investments
Restricted cash and investments	10,000
Cash
Restricted cash and investments	$ 679

Net Loss Per Share - Calculatio

Net Loss Per Share - Calculation of Historical Outstanding Dilutive Securities Not Included in Diluted Loss Per Share (Detail) - shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Outstanding dilutive securities not included in diluted loss per share calculation	9,302,348	9,526,529
Outstanding options to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Outstanding dilutive securities not included in diluted loss per share calculation	9,302,348	8,365,741
Warrants and pre-funded warrants to purchase common stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Outstanding dilutive securities not included in diluted loss per share calculation	0	1,160,788

Fair-Value Measurements - Finan

Fair-Value Measurements - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total	$ 22,945	$ 37,577
Restricted Cash, Noncurrent
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Money-market funds, fair value disclosure	10,679	10,679
Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Money-market funds, fair value disclosure	12,266	26,898
Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total	22,945	37,577
Fair Value, Inputs, Level 1 | Restricted Cash, Noncurrent
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Money-market funds, fair value disclosure	10,679	10,679
Fair Value, Inputs, Level 1 | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Money-market funds, fair value disclosure	12,266	26,898
Fair Value, Inputs, Level 2
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total	0	0
Fair Value, Inputs, Level 2 | Restricted Cash, Noncurrent
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Money-market funds, fair value disclosure	0	0
Fair Value, Inputs, Level 2 | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Money-market funds, fair value disclosure	0	0
Fair Value, Inputs, Level 3
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total	0	0
Fair Value, Inputs, Level 3 | Restricted Cash, Noncurrent
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Money-market funds, fair value disclosure	0	0
Fair Value, Inputs, Level 3 | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Money-market funds, fair value disclosure	$ 0	$ 0

Fair-Value Measurements - Narra

Fair-Value Measurements - Narrative (Detail) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Fair Value Disclosures [Abstract]
Cash excluded from fair value hierarchy disclosure	$ 978,000	$ 1,400,000
Unrealized gain (loss) on investments	$ 0	$ 0

Inventory (Details)

Inventory (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Raw materials	$ 104	$ 93
Work-in-process	1,692	158
Finished goods	176	221
Inventory	$ 1,972	$ 472

Accrued Liabilities - Accrued L

Accrued Liabilities - Accrued Liabilities (Detail) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Payables and Accruals [Abstract]
Contract research and development	$ 3,260	$ 2,973
Consulting and professional fees	3,232	2,400
Employee compensation	2,544	2,590
Clinical trials	2,061	1,108
Other accruals	1,023	681
Total accrued liabilities	$ 12,120	$ 9,752

Notes Payable (Detail)

Notes Payable (Detail) - Oxford EWB Loan	12 Months Ended
	Dec. 31, 2015USD ($)	Mar. 31, 2016USD ($)tranche
Debt Instrument [Line Items]
Loan and security agreement, existing outstanding indebtedness	$ 50,000,000
Line of credit, accordion feature, limit increase		$ 20,000,000
Line of credit, accordion feature, number of tranches | tranche		2
Line of credit, accordion feature, increase per tranche		$ 10,000,000
Debt instrument, covenant compliance, restricted cash and certain eligible term investments	10,000,000
Debt instrument, covenant compliance, minimum annual net revenue requirements	$ 70,000,000
Debt instrument, covenant compliance, minimum restricted cash and eligible term investments as a percent of outstanding balance	50.00%
Potential additional default interest	5.00%
Unamortized balance of debt discount		3,600,000
Unamortized balance of debt issuance costs		$ 414,000

Shareholders' Equity (Detail)

Shareholders' Equity (Detail) - USD ($)	1 Months Ended	3 Months Ended
	Feb. 28, 2015	Mar. 31, 2016	Mar. 31, 2015	Jan. 31, 2016
Class of Stock [Line Items]
Stock issued during period	3,400,000
Share price (in USD per share)	$ 20.03
Shares of common stock to purchase by warrant	749,250
Exercise price of warrants (in USD per share)	$ 0.01
Offering expenses and underwriter discounts	$ 4,900,000
Proceeds from issuance of common stock and pre-funded warrants, net	$ 79,100,000	$ 0	$ 79,076,000
Proceeds from warrant exercises		$ 7,500	$ 1,400,000
Stock Issued During Period, Shares, Other		749,250
Warrants exercised during period			126,000
Pre-funded Warrants
Class of Stock [Line Items]
Share price (in USD per share)	$ 20.02
At The Market (ATM) Program [Member]
Class of Stock [Line Items]
Common Stock Value Authorized under Stock Offering Program				$ 100,000,000
Stock Offering Program, Commission Percent		1.70%
Stock Offering Program, Notice Period for Termination		10 days
Weighted Average
Class of Stock [Line Items]
Exercise price of warrants (in USD per share)		$ 0.01

Stock-Based Compensation - Narr

Stock-Based Compensation - Narrative (Detail) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	3 Months Ended
	Feb. 29, 2016	Mar. 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (shares)		1,349,055
Granted (USD per share)		$ 10.31
Unrecognized compensation expense		$ 16.6
Equity Incentive Plan 2008
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for future grants		2,189,575
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (shares)	1,269,055
Granted (USD per share)	$ 10.27

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total	$ 4,422	$ 2,517
Research and Development Expense
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	2,155	1,324
Selling, General and Administrative Expenses
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 2,267	$ 1,193

Stock-Based Compensation - Fair

Stock-Based Compensation - Fair Value of Employee Option Grant Estimated on Date of Grant (Details) - Equity Option - $ / shares	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated weighted-average fair value (USD per share)	$ 6.62	$ 13.49
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Expected volatility	74.00%	70.00%
Weighted Average
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology [Abstract]
Expected term, in years	5 years 8 months 26 days	6 years 18 days
Risk-free interest rate	1.44%	1.51%
Expected dividend yield	0.00%	0.00%

Stock-Based Compensation - Summ

Stock-Based Compensation - Summary of Stock Option Activity and Related Information (Detail) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016USD ($)$ / sharesshares
Options Outstanding
Beginning balance (shares) | shares	8,310,235
Granted (shares) | shares	1,349,055
Exercised (shares) | shares	(329,013)
Forfeited (shares) | shares	(27,929)
Ending balance (shares) | shares	9,302,348
Vested and expected to vest (shares) | shares	9,012,412
Exercisable (shares) | shares	6,486,712
Weighted-Average Exercise Price per Share
Beginning balance (USD per share) | $ / shares	$ 7.97
Granted (USD per share) | $ / shares	10.31
Exercised (USD per share) | $ / shares	4.87
Forfeited (USD per share) | $ / shares	14.51
Ending balance (USD per share) | $ / shares	8.40
Vested and expected to vest (USD per share) | $ / shares	8.30
Exercisable (USD per share) | $ / shares	$ 7.09
Weighted- Average Remaining Contractual Life
Balance (in years)	6 years 5 months 45 days
Vested and expected to vest (in years)	6 years 5 months 15 days
Exercisable (in years)	5 years 5 months 30 days
Aggregate Intrinsic Value
Balance | $	$ 65,720
Vested and expected to vest | $	64,505
Exercisable | $	$ 53,722