Omeros (OMER) 10-Q 9 Nov 17 2017 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Nov. 06, 2017
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q3
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		48,003,770

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 1,026	$ 2,224
Short-term investments	85,787	43,107
Receivables	24,571	12,037
Inventory	822	1,128
Prepaid expense	5,691	1,766
Total current assets	117,897	60,262
Property and equipment, net	1,785	1,181
Restricted cash and investments	5,835	5,835
Total assets	125,517	67,278
Current liabilities:
Accounts payable	3,680	2,519
Accrued expenses	20,261	13,252
Current portion of deferred rent	381	102
Current portion of lease financing obligations	368	198
Total current liabilities	24,690	16,071
Notes payable and lease financing obligations, net	82,778	79,512
Deferred rent	8,838	9,142
Commitments and contingencies (Note 8)
Shareholders’ equity (deficit):
Preferred stock, par value $0.01 per share, 20,000,000 shares authorized and none issued and outstanding at September 30, 2017 and December 31, 2016	0	0
Common stock, par value $0.01 per share, 150,000,000 authorized; 47,986,443 and 43,819,133 issued and outstanding at September 30, 2017 and December 31, 2016, respectively	480	438
Additional paid-in capital	515,548	432,002
Accumulated deficit	(506,817)	(469,887)
Total shareholders’ equity (deficit)	9,211	(37,447)
Total liabilities and shareholders’ equity	$ 125,517	$ 67,278

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
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	47,986,443	43,819,133
Common stock, outstanding shares	47,986,443	43,819,133

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income Statement [Abstract]
Product sales, net	$ 21,658	$ 11,289	$ 51,067	$ 28,539
Grant revenue	0	0	0	173
Total revenue	21,658	11,289	51,067	28,712
Costs and expenses
Cost of product sales	184	378	613	1,032
Research and development	14,835	12,492	40,212	38,157
Selling, general and administrative	11,749	10,457	40,016	31,942
Total costs and expenses	26,768	23,327	80,841	71,131
Loss from operations	(5,110)	(12,038)	(29,774)	(42,419)
Interest expense	(2,780)	(2,135)	(8,166)	(5,367)
Other income, net	408	211	1,010	673
Net loss	(7,482)	(13,962)	(36,930)	(47,113)
Comprehensive loss	$ (7,482)	$ (13,962)	$ (36,930)	$ (47,113)
Basic and diluted net loss per share (USD per share)	$ (0.16)	$ (0.34)	$ (0.83)	$ (1.19)
Weighted-average shares used to compute basic and diluted net loss per share (shares)	46,262,211	41,058,754	44,709,418	39,518,128

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Operating activities:
Net loss	$ (36,930)	$ (47,113)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	378	211
Stock-based compensation expense	9,449	9,566
Non-cash interest expense	3,056	1,195
Changes in operating assets and liabilities:
Receivables	(12,534)	(3,940)
Inventory	306	(924)
Prepaid expenses and other assets	(3,925)	685
Accounts payable, accrued expenses, and deferred rent	8,145	(321)
Net cash used in operating activities	(32,055)	(40,641)
Investing activities:
Purchases of property and equipment	(350)	(78)
Purchases of investments	(65,109)	(58,121)
Proceeds from the sale and maturities of investments	22,429	47,875
Net cash used in investing activities	(43,030)	(10,324)
Financing activities:
Proceeds from issuance of common stock	63,627	38,003
Proceeds from borrowings under notes payable	0	19,864
Payments on notes payable and lease financing obligations	(252)	(62)
Increase in restricted cash and investments	0	(156)
Proceeds upon exercise of stock options	10,512	2,248
Net cash provided by financing activities	73,887	59,897
Net decrease (increase) in cash and cash equivalents	(1,198)	8,932
Cash and cash equivalents at beginning of period	2,224	1,365
Cash and cash equivalents at end of period	1,026	10,297
Supplemental cash flow information
Cash paid for interest	5,110	3,629
Conversion of accrued interest to notes payable	2,467	0
Property acquired under capital lease	632	388
Issuance of warrants in connection with amendment to notes payable	$ 0	$ 758

Organization and Significant Ac

Organization and Significant Accounting Policies	9 Months Ended
	Sep. 30, 2017
Accounting Policies [Abstract]
Organization and Significant Accounting Policies	Organization and Significant Accounting Policies Organization We are a commercial-stage biopharmaceutical company committed to discovering, developing and commercializing small-molecule and protein therapeutics for large-market as well as orphan indications targeting inflammation, complement-mediated diseases and disorders of the central nervous system. Our first drug product, OMIDRIA, is approved by the United States (U.S.) Food and Drug Administration (FDA) and in the European Economic Area for use during cataract surgery or intraocular lens replacement. 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 September 30, 2017 and for the three and nine months ended September 30, 2017 and 2016 includes all adjustments, which include normal recurring adjustments, necessary to present fairly our interim financial information. The Condensed Consolidated Balance Sheet at December 31, 2016 has been derived from our audited financial statements but does not include all of the information and footnotes required by GAAP for audited annual financial information. 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 in our Annual Report on Form 10-K for the year ended December 31, 2016 , which was filed with the U.S. Securities and Exchange Commission (SEC) on March 16, 2017. Liquidity We have had a history of net losses and use of cash for operations ( $36.9 million and $32.1 million , respectively, for the nine months ended September 30, 2017 ). As of September 30, 2017 we had $86.8 million in cash, cash equivalents and short-term investments. In addition, we expect to collect the $24.6 million of accounts receivable outstanding as of September 30, 2017 and have the ability, at our election and subject to only customary closing conditions, to borrow an additional $45.0 million under our Term Loan Agreement, or the CRG Loan Agreement, with CRG Servicing LLC, or CRG, and the lenders identified therein, on or prior to March 21, 2018. We believe our assets and these incremental sources of funds are adequate to fund our future financial obligations as they become due through November 9, 2018 regardless of the outcome of the separate-payment status for Medicare patients treated with our commercial product, OMIDRIA. This pass-through status for Medicare patients is due to expire on January 1, 2018. Therefore we have determined that the conditions that raised substantial doubt about our ability to meet our financial obligations as they become due that existed in prior interim periods do not currently exist. This derived result may change in the future based on changes in conditions and/or events impacting our liquidity. Product Sales, Net We record revenue from product sales when the product is delivered to our wholesalers. Product sales to a wholesaler are not recorded if we determine that the wholesaler’s on-hand OMIDRIA inventory, based on sell-through and inventory information we regularly receive from our wholesalers, exceeds approximately eight weeks of projected demand. Product sales are recorded net of wholesaler distribution fees and estimated chargebacks, product returns, rebates and purchase volume discounts. Accruals or allowances are established for these deductions in the same period when revenue is recognized, and actual amounts incurred are offset against the applicable accruals or allowances. We reflect each of these accruals or allowances as either a reduction in the related account receivable or as an accrued liability, depending on how the amount is expected to be 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. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, (FASB), issued amended guidance related to revenue from contracts with customers. The amended guidance introduces a new principles-based framework for revenue recognition and disclosure. Since its issuance FASB has issued five Accounting Standards Updates, (ASUs), amending the guidance and effective date, and the SEC has rescinded certain related guidance. The current effective date of the guidance requires us to adopt the standard by January 1, 2018 using either a modified retrospective method or a full retrospective method of transition. We currently anticipate adopting the guidance January 1, 2018 under the modified retrospective method and do not anticipate a material impact on our revenue recognition practices as all of our revenue arrangements consists of a single performance obligation to transfer promised goods and we currently recognize revenue when the goods are transferred. In February 2016, the 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 method and is effective for all annual and interim periods beginning after December 15, 2018. Earlier adoption is permitted. While we are still in the process of evaluating the effect of adoption on our consolidated financial statements and are currently assessing our leases, we expect to adopt the standard January 1, 2019. The adoption will lead to an increase in the assets and liabilities recorded on our Condensed Consolidated Balance Sheets primarily due to the lease agreements for our office building and vehicle leases. In May 2016, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718), which effectively amends previous issued guidance and provides clarity and consistency in practice on the accounting for changes to the terms and conditions of stock-based payment arrangement. This standard is effective for all annual and interim periods beginning after December 15, 2017 and is applied prospectively to modifications occurring after the adoption date. Earlier adoption is permitted. We do not anticipate a material change upon adoption.

Net Loss Per Share

Net Loss Per Share	9 Months Ended
	Sep. 30, 2017
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. Common share equivalents are excluded from the diluted net loss per share computation if their effect is anti-dilutive. The basic and diluted net loss per share amounts for the three and nine months ended September 30, 2017 and 2016 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: September 30, 2017 2016 Outstanding options to purchase common stock 9,813,462 9,336,681 Outstanding warrants to purchase common stock 100,602 100,602 Total 9,914,064 9,437,283

Cash, Cash Equivalents and Inve

Cash, Cash Equivalents and Investments	9 Months Ended
	Sep. 30, 2017
Cash and Cash Equivalents [Abstract]
Cash, Cash Equivalents and Investments	Cash, Cash Equivalents and Investments As of September 30, 2017 and December 31, 2016 , all investments are classified as short-term and available-for-sale on the accompanying Condensed Consolidated Balance Sheets. Investment income, which is included as a component of other income (expense), consists of interest earned.

Fair-Value Measurements

Fair-Value Measurements	9 Months Ended
	Sep. 30, 2017
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: September 30, 2017 Level 1 Level 2 Level 3 Total (In thousands) Assets: Money-market funds classified as non-current restricted cash and investments $ 5,835 $ — $ — $ 5,835 Money-market funds classified as short-term investments 85,787 — — 85,787 Total $ 91,622 $ — $ — $ 91,622 December 31, 2016 Level 1 Level 2 Level 3 Total (In thousands) Assets: Money-market funds classified as non-current restricted cash and investments $ 5,835 $ — $ — $ 5,835 Money-market funds classified as short-term investments 43,107 — — 43,107 Total $ 48,942 $ — $ — $ 48,942 Cash held in demand deposit accounts of $1.0 million and $2.2 million is excluded from our fair-value hierarchy disclosure as of September 30, 2017 and December 31, 2016 , respectively. There were no unrealized gains or losses associated with our short-term investments as of September 30, 2017 or December 31, 2016 . The carrying amounts reported in the accompanying Condensed Consolidated Balance Sheets for receivables, accounts payable, other current monetary assets and liabilities and notes payable and lease financing obligations approximate fair value.

Inventory (Notes)

Inventory (Notes)	9 Months Ended
	Sep. 30, 2017
Inventory Disclosure [Abstract]
Inventory	Inventory The components of inventory are as follows: September 30, December 31, (In thousands) Raw materials $ 101 $ 101 Work-in-process 378 854 Finished goods 343 173 Total inventory $ 822 $ 1,128 Work-in-process consists of manufactured vials of OMIDRIA that have not been packaged into finished goods.

Accrued Liabilities

Accrued Liabilities	9 Months Ended
	Sep. 30, 2017
Payables and Accruals [Abstract]
Accrued Liabilities	Accrued Liabilities Accrued liabilities consist of the following: September 30, December 31, (In thousands) Contract research and development $ 7,726 $ 3,030 Sales rebates and discounts 5,242 1,335 Consulting and professional fees 2,289 2,223 Employee compensation 1,970 4,551 Clinical trials 1,350 1,167 Other accruals 1,684 946 Total accrued liabilities $ 20,261 $ 13,252

Notes Payable

Notes Payable	9 Months Ended
	Sep. 30, 2017
Debt Disclosure [Abstract]
Notes Payable	Notes Payable Notes payable and lease financing obligations consist of the following: September 30, December 31, 2016 (In thousands) Notes payable $ 82,983 $ 80,516 Lender facility fee payable upon maturity 4,149 4,025 Lease financing obligations 901 522 Notes payable, facility fee and lease financing obligations 88,033 85,063 Unamortized debt discount (3,644 ) (3,958 ) Unamortized debt issuance costs (1,243 ) (1,395 ) Current portion of lease financing obligations (368 ) (198 ) Non-current portion of notes payable and lease financing obligations, net $ 82,778 $ 79,512 In October 2016, we entered into the CRG Loan Agreement, which requires that we make interest-only payments through December 31, 2020. Subject to the achievement of certain milestones, this interest-only period potentially could be extended through the maturity date of September 30, 2022. In November 2016, we borrowed $80.0 million under the CRG Loan Agreement and repaid our then-outstanding notes payable. In October 2017, we and CRG amended the CRG Loan Agreement so that we will be permitted to borrow, at our sole discretion and subject to customary closing conditions, up to an additional $45.0 million available through March 21, 2018. The CRG Loan Agreement accrues interest at an annual rate of 12.25% ( 4.00% of which can be deferred at our option through December 31, 2020 by adding such amount to the aggregate principal amount). As of September 30, 2017, as allowed under the CRG Loan Agreement, we have deferred $3.0 million ( $2.5 million for the nine months ended September 30, 2017 ) of interest due by increasing the principal amount outstanding. The CRG Loan Agreement requires us to maintain cash and cash equivalents of $5.0 million during the term of the agreement which is recorded as restricted cash and investments in our Condensed Consolidated Balance Sheet. We are also required to pay a facility fee equal to 5.00% of the aggregate principal amount borrowed (including principal additions related to deferred interest) on repayment of the CRG Loan Agreement. The facility fee is being accreted to notes payable using the effective interest method over the term of the CRG Loan Agreement. We may prepay all or a portion of the outstanding principal under the CRG Loan Agreement at any time upon prior notice subject to a prepayment fee through September 30, 2019, with no prepayment fee being owed thereafter. In certain circumstances, including a change of control and certain asset sales or licensing transactions, we are required to prepay all or a portion of the loan, including the applicable prepayment premium on the outstanding principal to be prepaid. The CRG Loan Agreement requires us to achieve either (a) minimum net revenue amounts through the end of 2021, which are $55.0 million and $65.0 million for the 2017 and 2018 calendar years, respectively, or (b) a minimum market capitalization threshold equal to the product of 6.4 multiplied by the aggregate principal amount of loans outstanding under the CRG Loan Agreement, determined as of the fifth business day following announcement of earnings results for the applicable year. If we are unable to satisfy the minimum annual revenue requirement or the market capitalization threshold for any given year, we may avoid a related default by repaying the shortfall between actual revenues and the minimum revenue requirement for such year using proceeds generated by an equity or subordinated debt issuance. We anticipate achieving the minimum net revenue requirement of $55.0 million for the 2017 calendar year. The CRG Loan Agreement includes customary events of default (see Note 7 of the “Notes to Consolidated Financial Statements” included in our Annual Report on Form 10-K for the year ended December 31, 2016). If there is an event of default the lenders may have the right to accelerate all of our repayment obligations under the CRG Loan Agreement and to take control of our pledged assets, which consists of substantially all of our assets including our intellectual property. Under certain circumstances, a default interest rate of an additional 4.00% per annum will apply to all outstanding obligations during the existence of an event of default. There was no event of default under the CRG Loan Agreement as of September 30, 2017 .

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2017
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 8 to our Consolidated Financial Statements for the year ended December 31, 2016 included in our Annual Report on Form 10-K. Contracts We have various agreements with third parties that collectively require payment of termination fees totaling $3.8 million as of September 30, 2017 if we cancel work within specific time frames, either prior to commencing or during performance of the contracted services. This is in addition to fees associated with the CRG Loan Agreement (see Note 7) and within the Contractual Obligations and Commitments and Financial Condition - Liquidity and Capital Resources sections of Management’s Discussion and Analysis. Litigation As described within Note 8 of the “Notes to Consolidated Financial Statements” included in our Annual Report on Form 10-K for the year ended December 31, 2016 , we filed a patent infringement lawsuit against Par Pharmaceutical, Inc. and its subsidiary, Par Sterile Products, LLC (collectively, Par) in September 2015. A bench trial in the U.S. District Court for the District of Delaware was held on this matter on July 5-7, 2017 and on October 4, 2017 we entered into a settlement agreement and consent judgment with Par, pursuant to which Par acknowledged and confirmed the validity of our U.S. patents related to OMIDRIA. In accordance with the consent judgment, Par and its affiliates are prohibited from launching a generic version of OMIDRIA until the earlier of April 1, 2032 or a date on which we or a third party, through licensing or any future final legal judgment with respect to our U.S. OMIDRIA patents, is able to launch a generic version of OMIDRIA. Under the settlement agreement, Par is granted a non-exclusive, non-sublicensable license to make, sell and distribute a generic version of OMIDRIA between the permitted launch date and the latest expiration of our U.S. patents related to OMIDRIA ( i.e. , October 23, 2033). During this period, Par is required to pay us a royalty equal to 15% of Par’s net sales of its generic version of OMIDRIA. For more information regarding the settlement agreement and consent judgment, see Part II, Item 1, “Legal Proceedings.” In May 2017, we received Notice Letters from Sandoz Inc. (Sandoz) and Lupin Ltd. and Lupin Pharmaceuticals, Inc. (collectively, Lupin), respectively, that Sandoz and Lupin had each filed an ANDA containing a Paragraph IV Certification under the Hatch-Waxman Act seeking approval from the FDA to market a generic version of OMIDRIA prior to the expiration our patents covering OMIDRIA. On June 21, 2017, we filed a patent infringement lawsuit in the U.S. District Court for the District of Delaware and a patent infringement lawsuit in the U.S. District Court for the District of New Jersey against Sandoz and on June 22, 2017 we filed a patent infringement lawsuit in the U.S. District Court for the District of Delaware and a patent infringement lawsuit in the U.S. District Court for the District of New Jersey against Lupin. The Delaware lawsuits against Sandoz and Lupin were consolidated for all purposes by court order entered October 16, 2017, and the New Jersey lawsuits were dismissed by agreement of the parties on October 13, 2017. Sandoz has filed an answer to our Delaware lawsuit asserting defenses of patent invalidity. Lupin has filed an answer to our Delaware lawsuit asserting defenses and counterclaims for declaratory judgment of patent invalidity and non-infringement. The assertions raised in Sandoz’s and Lupin’s Paragraph IV Notice Letters and their answers to our lawsuits are substantially similar to those raised by Par in the above-described patent litigation matter against Par. For more information regarding these lawsuits, see Part II, Item 1, “Legal Proceedings.” We believe the assertions in the Sandoz and Lupin Paragraph IV Notice Letters and the answers to our lawsuits do not have merit, and we intend to prosecute vigorously our infringement claims against each of Sandoz and Lupin.

Shareholders' Equity

Shareholders' Equity	9 Months Ended
	Sep. 30, 2017
Equity [Abstract]
Shareholders' Equity	Shareholders’ Equity Securities Offering In August 2017, we sold 3.0 million shares of our common stock at a public offering price of $22.75 per share. After deducting underwriter discounts and offering expenses of $4.6 million , we received net proceeds from the transaction of $63.6 million . Common Stock For the nine months ended September 30, 2017 , we received proceeds of $10.5 million upon the exercise of stock options which resulted in the issuance of 1,167,310 shares of common stock. For the nine months ended September 30, 2016 , we received proceeds of $2.2 million upon the exercise of stock options and warrants which resulted in the issuance of 1,326,773 shares of common stock. We did not sell any shares of our common stock under the At Market Issuance Sales Agreement (the ATM Agreement) with JonesTrading Institutional Services LLC during the three or nine months ended September 30, 2017 and sold 64,565 shares at an average price of $11.41 per share and received net proceeds of $724,000 during the nine months ended September 30, 2016 . We are currently permitted to sell shares of our common stock having an aggregate offering amount of up to $50.0 million under the ATM Agreement. Warrants In connection with an amendment of the then-outstanding loan agreement with Oxford Finance LLC and East West Bank on May 18, 2016, we issued warrants to purchase an aggregate of 100,602 shares of our common stock. As of September 30, 2017 , these warrants remained outstanding and are exercisable through May 18, 2023 at an exercise price of $9.94 per share.

Stock-Based Compensation

Stock-Based Compensation	9 Months Ended
	Sep. 30, 2017
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 Nine Months Ended 2017 2016 2017 2016 (In thousands) (In thousands) Research and development $ 1,297 $ 1,156 $ 4,034 $ 4,530 Selling, general and administrative 1,744 1,379 5,415 5,036 Total $ 3,041 $ 2,535 $ 9,449 $ 9,566 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 Nine Months Ended 2017 2016 2017 2016 Estimated weighted-average fair value $ 13.66 $ 7.42 $ 8.38 $ 6.94 Weighted-average assumptions Expected volatility 74 % 73 % 74 % 74 % Expected term, in years 6.1 6.0 6.0 5.7 Risk-free interest rate 1.95 % 1.25 % 1.99 % 1.35 % 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, 2016 9,809,374 $ 9.66 Granted 1,734,890 12.70 Exercised (1,167,310 ) 9.01 Forfeited (563,492 ) 10.97 Balance at September 30, 2017 9,813,462 $ 10.19 6.91 $ 112,232 Vested and expected to vest at September 30, 2017 9,487,171 $ 10.12 6.84 $ 109,169 Exercisable at September 30, 2017 6,669,382 $ 9.33 5.95 $ 81,994 At September 30, 2017 , excluding non-employee stock options, the total estimated compensation expense to be recognized in connection with our unvested options is $20.5 million , and 3,529,300 shares were available to grant. 2017 Omnibus Incentive Compensation Plan - On June 16, 2017, our shareholders approved the Omeros Corporation 2017 Omnibus Incentive Compensation Plan (the 2017 Plan), which provides for the grant of incentive and non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, performance shares and other stock and cash awards to employees, directors and consultants and subsidiary corporations’ employees and consultants. The 2017 Plan replaces the Omeros Corporation 2008 Equity Incentive Plan (the 2008 Plan) and as a result we will not grant any new awards under the 2008 Plan. Any stock option awards granted under the 2008 Plan that were outstanding as of the effective date of the 2017 Plan remain in effect pursuant to their terms and, if the award terminates or is repurchased, the shares underlying such award become available for grant under the 2017 Plan. Under the 2017 Plan, stock options must be granted with exercise prices not less than the fair market value of the common stock subject to the stock option on the date of the grant (and, in some cases, not less than 110% of such fair market value). The term of stock options granted under the 2017 Plan may not exceed 10 years and, in some cases, may not exceed five years.

Organization and Significant 16

Organization and Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2017
Accounting Policies [Abstract]
Basis of Presentation	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 September 30, 2017 and for the three and nine months ended September 30, 2017 and 2016 includes all adjustments, which include normal recurring adjustments, necessary to present fairly our interim financial information. The Condensed Consolidated Balance Sheet at December 31, 2016 has been derived from our audited financial statements but does not include all of the information and footnotes required by GAAP for audited annual financial information. 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 in our Annual Report on Form 10-K for the year ended December 31, 2016 , which was filed with the U.S. Securities and Exchange Commission (SEC) on March 16, 2017.
Product Sales, Net	Product Sales, Net We record revenue from product sales when the product is delivered to our wholesalers. Product sales to a wholesaler are not recorded if we determine that the wholesaler’s on-hand OMIDRIA inventory, based on sell-through and inventory information we regularly receive from our wholesalers, exceeds approximately eight weeks of projected demand. Product sales are recorded net of wholesaler distribution fees and estimated chargebacks, product returns, rebates and purchase volume discounts. Accruals or allowances are established for these deductions in the same period when revenue is recognized, and actual amounts incurred are offset against the applicable accruals or allowances. We reflect each of these accruals or allowances as either a reduction in the related account receivable or as an accrued liability, depending on how the amount is expected to be 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.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, (FASB), issued amended guidance related to revenue from contracts with customers. The amended guidance introduces a new principles-based framework for revenue recognition and disclosure. Since its issuance FASB has issued five Accounting Standards Updates, (ASUs), amending the guidance and effective date, and the SEC has rescinded certain related guidance. The current effective date of the guidance requires us to adopt the standard by January 1, 2018 using either a modified retrospective method or a full retrospective method of transition. We currently anticipate adopting the guidance January 1, 2018 under the modified retrospective method and do not anticipate a material impact on our revenue recognition practices as all of our revenue arrangements consists of a single performance obligation to transfer promised goods and we currently recognize revenue when the goods are transferred. In February 2016, the 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 method and is effective for all annual and interim periods beginning after December 15, 2018. Earlier adoption is permitted. While we are still in the process of evaluating the effect of adoption on our consolidated financial statements and are currently assessing our leases, we expect to adopt the standard January 1, 2019. The adoption will lead to an increase in the assets and liabilities recorded on our Condensed Consolidated Balance Sheets primarily due to the lease agreements for our office building and vehicle leases. In May 2016, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718), which effectively amends previous issued guidance and provides clarity and consistency in practice on the accounting for changes to the terms and conditions of stock-based payment arrangement. This standard is effective for all annual and interim periods beginning after December 15, 2017 and is applied prospectively to modifications occurring after the adoption date. Earlier adoption is permitted. We do not anticipate a material change upon adoption.

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)	9 Months Ended
	Sep. 30, 2017
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: September 30, 2017 2016 Outstanding options to purchase common stock 9,813,462 9,336,681 Outstanding warrants to purchase common stock 100,602 100,602 Total 9,914,064 9,437,283

Fair-Value Measurements (Tables

Fair-Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2017
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: September 30, 2017 Level 1 Level 2 Level 3 Total (In thousands) Assets: Money-market funds classified as non-current restricted cash and investments $ 5,835 $ — $ — $ 5,835 Money-market funds classified as short-term investments 85,787 — — 85,787 Total $ 91,622 $ — $ — $ 91,622 December 31, 2016 Level 1 Level 2 Level 3 Total (In thousands) Assets: Money-market funds classified as non-current restricted cash and investments $ 5,835 $ — $ — $ 5,835 Money-market funds classified as short-term investments 43,107 — — 43,107 Total $ 48,942 $ — $ — $ 48,942

Inventory (Tables)

Inventory (Tables)	9 Months Ended
	Sep. 30, 2017
Inventory Disclosure [Abstract]
Schedule of Inventory, Current	The components of inventory are as follows: September 30, December 31, (In thousands) Raw materials $ 101 $ 101 Work-in-process 378 854 Finished goods 343 173 Total inventory $ 822 $ 1,128

Accrued Liabilities (Tables)

Accrued Liabilities (Tables)	9 Months Ended
	Sep. 30, 2017
Payables and Accruals [Abstract]
Accrued Liabilities	Accrued liabilities consist of the following: September 30, December 31, (In thousands) Contract research and development $ 7,726 $ 3,030 Sales rebates and discounts 5,242 1,335 Consulting and professional fees 2,289 2,223 Employee compensation 1,970 4,551 Clinical trials 1,350 1,167 Other accruals 1,684 946 Total accrued liabilities $ 20,261 $ 13,252

Notes Payable (Tables)

Notes Payable (Tables)	9 Months Ended
	Sep. 30, 2017
Debt Disclosure [Abstract]
Schedule of notes payable and lease financing obligations	Notes payable and lease financing obligations consist of the following: September 30, December 31, 2016 (In thousands) Notes payable $ 82,983 $ 80,516 Lender facility fee payable upon maturity 4,149 4,025 Lease financing obligations 901 522 Notes payable, facility fee and lease financing obligations 88,033 85,063 Unamortized debt discount (3,644 ) (3,958 ) Unamortized debt issuance costs (1,243 ) (1,395 ) Current portion of lease financing obligations (368 ) (198 ) Non-current portion of notes payable and lease financing obligations, net $ 82,778 $ 79,512

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2017
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 Nine Months Ended 2017 2016 2017 2016 (In thousands) (In thousands) Research and development $ 1,297 $ 1,156 $ 4,034 $ 4,530 Selling, general and administrative 1,744 1,379 5,415 5,036 Total $ 3,041 $ 2,535 $ 9,449 $ 9,566
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 Nine Months Ended 2017 2016 2017 2016 Estimated weighted-average fair value $ 13.66 $ 7.42 $ 8.38 $ 6.94 Weighted-average assumptions Expected volatility 74 % 73 % 74 % 74 % Expected term, in years 6.1 6.0 6.0 5.7 Risk-free interest rate 1.95 % 1.25 % 1.99 % 1.35 % 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, 2016 9,809,374 $ 9.66 Granted 1,734,890 12.70 Exercised (1,167,310 ) 9.01 Forfeited (563,492 ) 10.97 Balance at September 30, 2017 9,813,462 $ 10.19 6.91 $ 112,232 Vested and expected to vest at September 30, 2017 9,487,171 $ 10.12 6.84 $ 109,169 Exercisable at September 30, 2017 6,669,382 $ 9.33 5.95 $ 81,994

Organization and Significant 23

Organization and Significant Accounting Policies (Detail) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017USD ($)	Sep. 30, 2016USD ($)	Sep. 30, 2017USD ($)segment	Sep. 30, 2016USD ($)	Oct. 31, 2017USD ($)	Dec. 31, 2016USD ($)
Debt Instrument [Line Items]
Number of operating segments | segment			1
Net loss	$ 7,482	$ 13,962	$ 36,930	$ 47,113
Net cash used in operating activities			32,055	$ 40,641
Cash, cash equivalents and short-term investments	86,800		86,800
Accounts receivable outstanding	$ 24,571		$ 24,571			$ 12,037
CRG Loan | Subsequent Event
Debt Instrument [Line Items]
Additional borrowing capacity					$ 45,000

Net Loss Per Share - Calculatio

Net Loss Per Share - Calculation of Historical Outstanding Dilutive Securities Not Included in Diluted Loss Per Share (Detail) - shares	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Outstanding dilutive securities not included in diluted loss per share calculation	9,914,064	9,437,283
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	9,813,462	9,336,681
Outstanding 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	100,602	100,602

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	Sep. 30, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total	$ 91,622	$ 48,942
Restricted Cash, Noncurrent
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Money-market funds, fair value disclosure	5,835	5,835
Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Money-market funds, fair value disclosure	85,787	43,107
Level 1
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total	91,622	48,942
Level 1 | Restricted Cash, Noncurrent
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Money-market funds, fair value disclosure	5,835	5,835
Level 1 | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Money-market funds, fair value disclosure	85,787	43,107
Level 2
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total	0	0
Level 2 | Restricted Cash, Noncurrent
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Money-market funds, fair value disclosure	0	0
Level 2 | Short-term Investments
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Money-market funds, fair value disclosure	0	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Total	0	0
Level 3 | Restricted Cash, Noncurrent
Fair Value, Assets and Liabilities Measured on Recurring Basis [Line Items]
Money-market funds, fair value disclosure	0	0
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 ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Fair Value Disclosures [Abstract]
Cash excluded from fair value hierarchy disclosure	$ 1,000,000	$ 2,200,000
Unrealized gain (loss) on investments	$ 0	$ 0

Inventory (Details)

Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Inventory Disclosure [Abstract]
Raw materials	$ 101	$ 101
Work-in-process	378	854
Finished goods	343	173
Inventory	$ 822	$ 1,128

Accrued Liabilities - Accrued L

Accrued Liabilities - Accrued Liabilities (Detail) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Payables and Accruals [Abstract]
Contract research and development	$ 7,726	$ 3,030
Sales rebates and discounts	5,242	1,335
Consulting and professional fees	2,289	2,223
Employee compensation	1,970	4,551
Clinical trials	1,350	1,167
Other accruals	1,684	946
Total accrued liabilities	$ 20,261	$ 13,252

Notes Payable Schedule of Notes

Notes Payable Schedule of Notes Payable and Lease Financing Obligations (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Debt Disclosure [Abstract]
Notes payable	$ 82,983	$ 80,516
Lender facility fee payable upon maturity	4,149	4,025
Lease financing obligations	901	522
Notes payable, facility fee and lease financing obligations	88,033	85,063
Unamortized debt discount	(3,644)	(3,958)
Unamortized debt issuance costs	(1,243)	(1,395)
Current portion of lease financing obligations	(368)	(198)
Non-current portion of notes payable and lease financing obligations, net	$ 82,778	$ 79,512

Notes Payable (Detail)

Notes Payable (Detail) - CRG Loan	9 Months Ended
	Sep. 30, 2017USD ($)	Dec. 31, 2018USD ($)	Dec. 31, 2017USD ($)	Oct. 31, 2017USD ($)	Nov. 30, 2016USD ($)
Debt Instrument [Line Items]
Debt issued					$ 80,000,000
Accrued interest rate					12.25%
Deferred interest rate percentage					4.00%
Deferred debt costs	$ 3,000,000
Increase in principal amount of debt outstanding from deferred interest	$ 2,500,000
Debt instrument, covenant compliance, minimum restricted cash and cash equivalents					$ 5,000,000
Maturity fee, as a percent					5.00%
Debt instrument, covenant compliance, minimum market capitalization threshold multiplier					6.4
Increase in interest rate if an event of default occurs					4.00%
Scenario, Forecast
Debt Instrument [Line Items]
Debt instrument, covenant compliance, minimum net revenue amount		$ 65,000,000	$ 55,000,000
Subsequent Event
Debt Instrument [Line Items]
Additional borrowing capacity				$ 45,000,000

Commitments and Contingencies (

Commitments and Contingencies (Details) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Contract termination fees	$ 3.8
Net sales royalty percentage		15.00%

Shareholders' Equity (Detail)

Shareholders' Equity (Detail) - USD ($)	1 Months Ended	3 Months Ended	9 Months Ended
	Aug. 31, 2017	Sep. 30, 2017	Sep. 30, 2017	Sep. 30, 2016	May 18, 2016
Class of Stock [Line Items]
Stock issued during period			64,565
Proceeds from issuance of common stock			$ 63,627,000	$ 38,003,000
Proceeds upon exercise of stock options			$ 10,512,000	$ 2,248,000
Stock issued from exercise of stock options and warrants (in shares)			1,167,310	1,326,773
Oxford EWB Loan
Class of Stock [Line Items]
Shares of common stock to purchase by warrant (in shares)					100,602
Warrant exercise price (in USD per share)					$ 9.94
At The Market (ATM) Program
Class of Stock [Line Items]
Stock issued during period		64,565
Share price (in USD per share)		$ 11.41	$ 11.41
Proceeds from issuance of common stock			$ 724,000
Aggregate offering price for ATM program		$ 50,000,000	$ 50,000,000
Common Stock
Class of Stock [Line Items]
Stock issued during period	3,000,000
Share price (in USD per share)	$ 22.75
Offering cost	$ 4,600,000
Proceeds from issuance of common stock	$ 63,600,000

Stock-Based Compensation - Narr

Stock-Based Compensation - Narrative (Detail) $ in Millions	9 Months Ended
	Sep. 30, 2017USD ($)shares
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Unrecognized compensation expense | $	$ 20.5
Shares available for future grants | shares	3,529,300
2017 Omnibus Incentive Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of fair value	110.00%
Minimum | 2017 Omnibus Incentive Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term of stock options granted	5 years
Maximum | 2017 Omnibus Incentive Compensation Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term of stock options granted	10 years

Stock-Based Compensation - Stoc

Stock-Based Compensation - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total	$ 3,041	$ 2,535	$ 9,449	$ 9,566
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	1,297	1,156	4,034	4,530
Selling, general and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 1,744	$ 1,379	$ 5,415	$ 5,036

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		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Estimated weighted-average fair value (USD per share)	$ 13.66	$ 7.42	$ 8.38	$ 6.94
Weighted Average
Weighted-average assumptions
Expected volatility	74.00%	73.00%	74.00%	74.00%
Expected term, in years	6 years 1 month 6 days	6 years	6 years	5 years 8 months 12 days
Risk-free interest rate	1.95%	1.25%	1.99%	1.35%
Expected dividend yield	0.00%	0.00%	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	9 Months Ended
	Sep. 30, 2017USD ($)$ / sharesshares
Options Outstanding
Beginning balance (shares) | shares	9,809,374
Granted (shares) | shares	1,734,890
Exercised (shares) | shares	(1,167,310)
Forfeited (shares) | shares	(563,492)
Ending balance (shares) | shares	9,813,462
Vested and expected to vest (shares) | shares	9,487,171
Exercisable (shares) | shares	6,669,382
Weighted-Average Exercise Price per Share
Beginning balance (USD per share) | $ / shares	$ 9.66
Granted (USD per share) | $ / shares	12.70
Exercised (USD per share) | $ / shares	9.01
Forfeited (USD per share) | $ / shares	10.97
Ending balance (USD per share) | $ / shares	10.19
Vested and expected to vest (USD per share) | $ / shares	10.12
Exercisable (USD per share) | $ / shares	$ 9.33
Weighted- Average Remaining Contractual Life
Balance (in years)	6 years 10 months 27 days
Vested and expected to vest (in years)	6 years 10 months 2 days
Exercisable (in years)	5 years 11 months 12 days
Aggregate Intrinsic Value
Balance | $	$ 112,232
Vested and expected to vest | $	109,169
Exercisable | $	$ 81,994