Omeros Corporation
Q4 2018 Earnings Call Transcript

Published: 1 Mar 2019

[Operator:]

Good afternoon, and welcome to today's Conference Call for Omeros Corporation. At this time, all participants are in a listen-only mode. After the company’s remarks, we will conduct a question-and-answer session. Please be advised that this call is being recorded at the company’s request, and a replay will be available on the company’s website for one week from today. I'll turn the call over to Jennifer Williams, Investor Relations for Omeros.

[Jennifer Williams:]

Good morning, and thank you for joining the call today. I'd like to remind you that some of the statements that will be made on the call today will be forward-looking. These statements are based on management's beliefs and expectations as of today only and are subject to change. All forward-looking statements involve risks and uncertainties that could cause the company's actual results to differ materially. Please refer to the Risk Factors section of the company's quarterly report on Form 10-Q, which was filed today with the SEC, for a discussion of these risks and uncertainties. Dr. Greg Demopulos, Chairman and CEO of Omeros, will take you through a corporate update; and then Mike Jacobsen, our Chief Accounting Officer, will provide an overview of the our fourth quarter financial results. We have some time reserved for questions after the financial overview. Now, I would like to turn the call over to Dr. Demopulos.

[Gregory Demopulos:]

Thank you, Jennifer, and good morning, everyone. We appreciate you taking the time to join us today. I'd like to start the call by discussing OMIDRIA, our FDA approved ophthalmic product. Total revenues from OMIDRIA net sales reported in the fourth quarter were $22 million, our highest quarterly revenue mark to-date. This represents a 59% increase year-over-year compared to fourth quarter 2017, the last quarter before losing our pass-through status on January 1, 2018. 2018 included three quarters without pass-through separate payment for OMIDRIA and full year revenues totaled $29.9 million, a decrease of 54% from full year 2017. Our net loss for the fourth quarter of 2018 was $23.5 million or $0.48 per share. As of December 31, 2018 we had $60.5 million available for general operations. We have also received initial approval for an accounts receivable-based line of credit, which would allow us to borrow up to $50 million based on our available accounts receivable borrowing base. Of course we’re pleased that the fourth quarter of 2018, the first quarter of restored separate payment for OMIDRIA was our highest revenue quarter ever. But a look behind these numbers is even more encouraging. In the fourth quarter of 2018 sell-through, the number of units sold by wholesalers to ASCs and the hospitals during the quarter was also the highest for any quarter of OMIDRIA sales to-date. This record sell-through was not the result of increased OMIDRIA inventories. Inventories on hand and wholesalers as of December 31, 2018 were consistent with historical norms. Sales velocity continued to accelerate through the period and our annualized run rate of weekly net sales in December 2018 was approximately $100 million. So what's behind these numbers and what can be inferred from them? First and foremost, surgeons and facility administrators know that OMIDRIA significantly improves patient outcomes. It decreases complications, reduces the use of pupil expansion devices, prevents Intraoperative Floppy Iris Syndrome or IFIS and makes cataract surgery faster and safer. It also reduces both postoperative pain and use of pain medications, including opioids. An expanding body of peer-reviewed publications underscores these and other benefits that OMIDRIA provides to both surgeons and their patients. Data from one such important recent study were presented earlier this year at International Ophthalmic Surgery Conference. The study consisted of approximately 2,300 cataract procedures and compared OMIDRIA plus postoperative NSAID drops alone versus no OMIDRIA and what is considered the standard treatment following cataract surgery, specifically postoperative topical NSAIDs plus topical corticosteroids. The data showed that the use of OMIDRIA precluded the need for postoperative corticosteroids. The incidence of potentially devastating cystoid macular edema or CME was markedly lower in the OMIDRIA group than in either the standard topical postoperative regimen or in historical reported levels of CME for cataract surgery. Use of OMIDRIA also greatly reduced the incidence of rebound iritis as well as photophobia and pain when compared to the standard regimen of postoperative drops. A manuscript is currently in preparation. A second study by a different investigator this time in about 500 patients also shows that use of OMIDRIA eliminates the need for postoperative steroids following cataract surgery. The data has been accepted for podium presentation at the Annual Meeting of the American Society of Cataract and Refractive Surgery, after which a manuscript will be submitted for publication. The second thing that is clear from our fourth quarter record sales is that they are the direct result of surgeon and facility driven demand and not due to the distribution channel being overfilled. The high rate of sell-through drove replenishment orders and increased progressively throughout the quarter. As previously noted, wholesaler inventories kept pace with this growth and at year-end remained consistent with historical levels. Third, a large majority of our previous customers have returned and are ordering OMIDRIA and we continue to add a growing number of ASCs and HOPDs nationally as new customers. As an example of this expansion to new users, seven of the top 11 ophthalmic hospitals nationally now have OMIDRIA on formulary, including Bascom Palmer Eye Institute in Miami, the number one ranked ophthalmic hospital in the country. Fourth, in addition to growth of OMIDRIA sales in Medicare Part B patients, we saw increasing sales across veterans’ health, Medicare advantage and commercial plans. To-date our payer team at Omeros has achieved coverage for OMIDRIA from payers representing at least 80% to 85% of each of Med Advantage and commercial beneficiaries nationally. Now, let's briefly address at a high level what we've seen so far with respect to OMIDRIA sales in the first quarter of 2019. To-date in the first quarter, there has been low double-digit growth in sell-through over the corresponding weeks in the fourth quarter. This time period in January and February historically represents the lowest annual volume of cataract surgery procedures due to multiple concurrent ophthalmic surgery conferences and the resetting of insurance deductibles at January 1. The first quarter is historically the weakest of the year for OMIDRIA sales. So we’re pleased with the growth that we are seeing and we expect that the net sales in 2019 will be substantially increased over our annualized run rate of $100 million at year-end 2018. Our long-term strategy for OMIDRIA remains the same

[Michael Jacobsen:]

Thanks, Greg. As Greg noted OMIDRIA and total revenues for the fourth quarter were $22 million and our net loss was $23.5 million or $0.48 per share. This includes non-cash expenses of $4.9 million or $0.10 per share. As of December 31, 2018 we have $60.5 million of cash and cash equivalents and short-term investments available for general operations. Here are some specifics regarding the fourth quarter results. Our reported revenue for the fourth quarter increased from $4.6 million in the third quarter of 2018 to $22 million in the fourth quarter. As Greg mentioned earlier, the primary driver for the increase was the reinstatement of OMIDRIA pass-through effective October 1, 2018 and the associated strong demand from ASCs and hospitals. In fact, as we previously announced, our Q4 revenue or sell-in and our sell-through are while sold to our customers were both all-time highs. As of December 31, 2018, our overall inventory at the wholesalers when measured based on OMIDRIA sell-through volume remain consistent with those we experienced during 2017 when OMIDRIA had passed through status. GAAP reported cost and expenses, including non-cash expenses for the quarter, were $40.5 million, a $400,000 increase from the third quarter of this year. The primary drivers of our research and development expenses continue to be clinical and manufacturing expenses related to our stem cell TMA, IgA nephropathy and aHUS registration programs. In addition, our Phase 1 OMS527 trial contributed to our overall R&D costs. The primary drivers of SG&A costs continue to be the OMIDRIA sales and marketing efforts and general corporate expenses. Pre-commercialization activities for narsoplimab in stem cell TMA are also contributing to SG&A costs. Interest experience was $5.2 million for the quarter, reflecting an increase in our outstanding debt. In November, we issued 210 million of unsecured convertible senior notes with a 6.25% coupon due on November 15, 2023. We also purchased a cap call that effectively eliminates any dilution risk related to the convertible notes until Omeros stock is trading at or above $28.85 per share. Even at this point, we have the option of avoiding conversion to common stock by redeeming the notes using cash generated through for example, product sales, licensing revenues, or replacing the current convertible instrument. We used 146 million of net proceeds to pay off for previously existing notes payable to CRG and 33.2 million for the cap call. Upon payment to CRG we recorded a loss on extinguishment of debt of $13 million and an income tax benefit of $13 million related to the purchase of the cap call. In addition, we have received initial approval for an accounts receivable base line of credit which will allow us to borrow up to $50 million based on our available accounts receivable borrowing base. Now let's take a look ahead. As Greg referenced we have seen low double-digit growth in sell-through in the first quarter over the corresponding weeks in the fourth quarter. The first quarter is historically the weakest of the year for OMIDRIA sales and January and February historically represent the lowest volume of cataract surgery procedures. We’re encouraged by the growth in sell-through that we're seeing and we expect the net sales to grow substantially in 2019. During 2019, the majority of our research and development expenses are expected to be related to narsoplimab with OMS527, OMS906 and our GPCR program contributing lesser amounts. We expect research and development costs will increase in 2019 given our ongoing narsoplimab manufacturing scale up activities and our Phase 3 clinical programs. Timing of these expenses on a quarter-by-quarter basis can be inconsistent due to the timing of raw material purchases and the physical manufacturing of drug batches. Selling, general and administrative expenses for 2019 will also increase over the previous year, primarily due to pre-commercialization activities for narsoplimab. We will begin to incur some of these costs in the first quarter and they are expected to increase as the year progresses. Interest expense for the first quarter should be approximately $5.7 million, of which $2.2 million will be non-cash interest. The non-cash component is related to the amortization of the conversion feature and debt issuance costs of our convertible debt. With that, I'd like to turn the call back over to Greg. Greg?

[Gregory Demopulos:]

Thanks, Mike let’s open the call to questions.

[Operator:]

[Operator Instructions] And our first question comes from Jason McCarthy with Maxim Group. Your line is now open.

[Jason McCarthy:]

It’s nice to see OMIDRIA return to growth. So my first question I am going to do is related to narsoplimab and IgA nephropathy, specifically with the primary endpoint expansion. So, since the previously enrolled patients are not going to be impacted, I would like to see if you discuss how are you going to carry out this analysis, and whether you’re going to stratify the patients enrolled after the changes from the ones before? And then also, do you expect just having any impact from the powering the study or is that not going to be particularly significant?

[Gregory Demopulos:]

Good morning Jason and thanks. In answer to your first question, we don't intend to stratify. We also don't see any effect on powering. We expect that we are appropriately if not more than appropriately powered for the trial. So I think we’re in good shape there.

[Jason McCarthy:]

Alright, perfect. Thank you. And then …

[Gregory Demopulos:]

I am sorry, just to be clear. The expansion of that primary endpoint from 24 to 36 weeks, as you know, allows for repeat dosing of narsoplimab and we think that's beneficial to the overall program and to patients.

[Jason McCarthy:]

And then the next one is just related to the development strategy on OMS527, I know you guys are planning to initially targeting nicotine addiction but are there any other plans to expand to other forms of addiction in parallel or you’re going to wait till after the nicotine addiction trial is complete, especially as the anti-addiction spaces become particularly relevant with the opioid prices and opioid orals-related deaths overpassing car accidents?

[Gregory Demopulos:]

Yes, that’s very good point and it’s a good question. We’re focused initially on nicotine because there is a clear path there. Chantix has set the pathway. So we have something that's very clear to follow. Your point though about other indications is a good one, and as you would expect, one that we are continuing to consider seriously. Opioid addiction as you just pointed out, the number of opioid deaths has exceeded deaths from automobile accidents in the US and obviously the administration and FDA are focused on opioid addiction and potential new treatments for opioid addiction. We believe that OMS527 and PDE7 inhibitors in general could meet that need. So we’re again as you would expect seriously looking at those indications.

[Jason McCarthy:]

And then just a last quick one related to payer coverage on OMIDRIA. Could you talk about the total population of patients that are covered for OMIDRIA right now?

[Gregory Demopulos:]

Sure, I mean 100% of Med Part B patients are covered. So that’s roughly 45% to 50% above cataracts surgery patients. Then we've got about 80% to 85% of each net advantage, which represents 25% to 30% and 80% to 85% of commercial, which represents the remainder, which if I'm doing my math correctly would be about again 20% to 25%. So when you put all of that together, you’re well north of 85% to 90% of patients who are currently covered.

[Operator:]

Thank you. And our following question comes from Steve Brozak with WBB. Your line is now open.

[Steve Brozak:]

Let me go back here and start on the OMIDRIA questions that you’ve just been asked and answered on. Clinicians obviously have gotten it and patients obviously are the beneficiaries for it. What can we expect into the future as not so much in terms of sales guidance but in terms of how you would expect different things as OMIDRIA continues to grow in sales, in visibility and what guidance can you give us on that? And again, I'm not looking for sales guidance because obviously with any product launch, in this case re-launch it's difficult to do anything that gives you real-time information?

[Gregory Demopulos:]

Good morning, Steve. I understand the question I believe. I think that the answer to the question is, look what we saw in the fourth quarter was a very quick return to historical levels and frankly levels beyond what we have seen historically. In the early part of Q1 we have seen continued again, we all expect that Q1 is going to be overall the weakest quarter of the year for OMIDRIA. What we do expect is continued growth throughout 2019 and I think as we’ve pretty clearly stated, we expected that net sales in 2019 will substantially exceed the $100 million in the annualized run rate that we had at the end of 2018. In terms of road marks or map to kind of what growth could be, I think we’re looking at ASCs and we’re looking at hospitals. As you know we now have a dedicated hospital sales force of six individuals at Omeros, whose all full time full focus is on sales within the hospital systems and we’re seeing that payoff as we spoke during the prepared comments, we’ve seen most recently, Bascom Palmer and other large academic centers. We’re also seeing great success with our payer team which is relatively new addition or a new addition in 2018, and that group has also done really a phenomenal job of ensuring that net advantage and commercial payers are appropriately paying for OMIDRIA. And the results of that you see in the coverage that we now have around the drug. So I think all of those things continue to play into the growth that we expect to see. The publications that we have already out, those that will be coming, I think will further strengthen it. I think any question now about the clinical utility of the drug and the clinical need for the drug, I think those questions have been answered and answered resoundingly in the positive. So I think this is really now a question of continuing to penetrate facilities, expanding the number of facilities, but not only expanding, increasing our sales within given facilities so the depth of our sales within a given facility, but I think that's -- that pretty much sums up the majority of what we’re watching.

[Steve Brozak:]

Thank you for that kind of real world explanation. Now obviously everyone is looking now at narsoplimab and the unusual part of when you look at drug development is typically you've got one drug that’s being developed for one indication, and that's fairly straightforward in terms of everything, regulatory, clinical development, and then eventually approval. You’ve got proverbial three bites of the apple here which obviously doesn't explain itself well in a lot of what Wall Street and pharma look at in fulfillment. How would you describe it in terms of what you prosecuted, what the regulatory bodies have brought back to you. How would you go out there and explain it if we were looking at simplifying the model for investors? How would you do that? And I’ve got one follow-up after that on that.

[Gregory Demopulos:]

Well as you pointed out, Steve we have three bites of the apple. So this is not a rightful shot within our supplement. We have multiple shots on goal. From our perspective, really any indication that brings an approval for narsoplimab is great with us. Our current primary objective is to get narsoplimab across the finish line in stem cell TMA. We think that will be the first indication that will carry an approval for the drug. We believe that IgA will follow and we believe that aHUS will come across the finish line after IgA. So I think that you’ve summed it up nicely with really there are multiple shots on goal here for the drug but we see the drug not being limited to just these three indications. Ultimately, we see MASP-2 inhibitors narsoplimab being one of them, our small molecule drugs being others. That will have really broad applications within the complement system and within the immune system broadly. I think that that's clear when you look at ischemia reperfusion injuries, when you look at a host of other disorders that are increasingly being linked to the Lectin Pathway. Excuse me, I'm still recovering here a bit. So I apologize for my voice. But I think that, that is how we view the franchise of MASP-2 inhibition.

[Steve Brozak:]

And the last follow-up on that is, obviously you’ve been in touch and you do have plans as far as dealing with the prayers and against an unusual circumstance here. What have the payers giving you back considering in terms of feedback, what have they given you, given the fact that you are looking at an unusual situation and you do have the proverbial unmet needs here? So how would you give us any kind of clarity or color on what payer feedback has been? And then I will hop back in the queue. Thank you.

[Gregory Demopulos:]

Thanks Steve, I think it's premature to talk about our discussions with payers around, narsoplimab, other than to underscore that clearly stem cell TMA is an ultra orphan indication, it is an indication or let's refer to the disorder now, which is stem cell transplant associated TMA, that disorder in severe cases carries a high mortality rate and the cost to manage TMA. I’m not saying increased TMA. I'm saying the cost to currently manage because there is no approved treatment. That cost to manage those patients is extremely high. And the management is intensive. So I think let me stop there. As we move further along we will have more to say about pricing, but I think for now anything else would really be premature.

[Steve Brozak:]

Feel better obviously and thank you for answering these questions and congrats on obviously all the progress.

[Operator:]

And our next question comes from Liana Moussatos with Wedbush Securities. Your line is now open.

[Liana Moussatos:]

Can you talk about the activities going on now that could lead to permanent path to reimbursement for OMIDRIA? And do you think you can submit a BLA for steam cell TMAs in 2019 or is that more of a 2020 activity? Thanks.

[Gregory Demopulos:]

Hi, Liana. Good to hear from you. First question around the efforts for permanent or long-term separate payment for OMIDRIA. We continue the efforts that we’ve had underway for quite a while have really two arms, to that effort. One is administrative meaning CMS and the associated groups and also legislative, we had really unprecedented success with achieving the extension of pass-through in April of last year with the inclusion of the provision addressing pass-through in the Omnibus bill at that time. We believe that the 2019 OPPS final rule really again here provided two paths to permanent separate payment for OMIDRIA. The first is the non-opioid provision and by that I know you know, what I mean, but just so that others understand it. That is the provision by which CMS will pay separately or otherwise package non-opioid pain medications used during surgery. Clearly, OMIDRIA fits that definition, OMIDRIA is a non-opioid and it has an FDA approved indications for postoperative pain reduction. The other approach or avenue that was potentially laid out by the 2019 OPPS final rule was the statement by CMS that they would consider the separate payment for ophthalmic drugs that have a postoperative benefit. Again here OMIDRIA clearly meets that definition. We’re not standing still waiting for CMS to be good on either of the avenues that they laid out in the 2019 OPPS final rule. We continue discussions with CMS, we continue discussions with members and staffers on the help. We think that clearly, if you look at the benefits of OMIDRIA there is no question. The drug should be separately paid and I say that in good part because the benefits are clear. The reduction in costs are clear, but also there's no FDA approved alternative. The only alternative and it's a poor alternative in measure of efficacy, but the only potential alternative is really compounded products and I think the risks associated with those are very clear. One needs only look at the 68 patients who were blinded in Dallas through the use of compounded drugs and cataract surgery to understand that risk. So I think CMS understands these issues. I think clearly, Congress understands these issues, Congress send a clear message which was drugs like OMIDRIA need to be separately paid. I expect that CMS and would hope that CMS has heard that message and will respond accordingly.

[Liana Moussatos:]

And then will we be able to file the stem cell TMA BLA in 2019 or more like 2020?

[Gregory Demopulos:]

Yes. I understand that question very clearly as well. I think look, our objective is to get it filed as quickly as possible. And clearly the entire team is focused on that. The elimination of the need for an historical control not only really reduces the risk, we were ready to do an historical control and we were quite confident how that would end up, but there's always risk, with the unknown that unknown risk has now been eliminated. Not only does it eliminate the risk, it compresses the timeline, saves time, saves cost. So all of that I think bodes well for an earlier submission of our BLA. Let us get through the confirmation of the endpoint with FDA which we hope to have soon and follow thereafter with our analysis of the data. And I think over the coming months we will be making it very clear as to our timeline. I will just end that Liana with the answer that clearly we’re pushing to get it across the finish line fast and I think as things have played out, the stars are aligning for that submission to be accelerated. Q - Liana Moussatos Do you think it’s possible it would be after 2020?

[Gregory Demopulos:]

Let me be clear about that, no I don’t. I think again I’m not trying to sidestep the question. I just want to make sure that I’m not jumping the gun. Let us have the discussion with the FDA and confirm the endpoints, let us come back to you. Our objective is to have that filed rapidly, okay? And so let me hold, let me just stop there.

[Operator:]

And our follow on question comes from Ram Selvaraju with H.C. Wainwright. Your line is now open.

[Raghuram Selvaraju:]

With respect to OMIDRIA and the overall ophthalmology space as it pertains to Omeros. Two questions. Firstly I wanted to know whether you could comment at this time on what your updated expectations are for European sales, European commercialization or ex-US commercialization in general of OMIDRIA? And secondly, if you have any perspective strategically on whether at this time it might be advisable for Omeros to entertain the possibility of adding further ophthalmology focused products to the bag of the sales reps that you currently have? And then secondly, with respect to OMS906, I just wanted to make sure that I understood correctly that you don't anticipate this agent entering the clinic until 2020. And if that's the case, maybe you could describe what the gating items are to getting to that point that are likely to occur over the course of 2019. And finally with regard to the GPR174 program, if you could maybe provide us with some color at this point regarding what you anticipate could be potential lead indications within the context of immune-oncology for that arena of development? Thank you.

[Gregory Demopulos:]

Okay, I will try to remember all those and answer them in the order in which they were asked, Ram. Thanks. First with respect to OMIDRIA in Europe, our objective there remains unchanged. We want to develop strongly the US market and then follow with the European launch of the product. Pricing in Europe is always going to be a challenge if we create a stronger -- continue to create that stronger demand in the US that's only going to help us in Europe with respect to adoption than with respect to pricing. So our focus today and for the near term remains on building the US market and the US utilization of OMIDRIA. With respect to additional ophthalmic products, certainly, it makes sense to have more than one product in the bag of our sales force. So we continue to assess the opportunities for other ophthalmic products. Ideally those that would use the same call pattern but we are looking even more broadly at ophthalmic products to add to our ophthalmic franchise and allow our sales force, which we really believe is now at certainly one of the premier if not the premier sales force for HOPDs and ASCs in the ophthalmic space. What they have done with OMIDRIA and what they had to build with respect to a product that is very different than what -- than anything that had been there before I think has been quite remarkable. So it makes a lot of sense to add another product of the bag. We continue to look for that. With respect to 906, the expectation is first part of 2020. The milestones there are really quite clear. It’s the completion of the scale up of the antibody. It’s the pre-IND studies. It’s the submission of the IND or the CTA and then in the clinical trials. We do expect that the safety profile will be good. Again, there is no guarantee of that until we run the studies. But from all scientific evidence that we have, the inhibition of MASP-3 should leave the classical pathway wholly intact just as MASP-2 inhibition does and also as we talked about should be able to get the compartments of the body that other alternative pathway inhibitors cannot and inhibit MASP-3 systemically. So I think we’re in good shape there and we’re very excited to get that product into the clinic. I can tell you that our scientists are at least as excited about 906 and MASP-3 inhibition as they are around MASP-2 inhibition and our supplement that may be just that the novelty of MASP-2 inhibition is wearing off and MASP-3 is more novel. But there's a lot of excitement around that program and we’re looking forward very much to getting that into the clinic quickly. With respect to 174 and additional color there and potential indications, there is a lot of work going on here on 174. The data that we are amassing are, I will just characterize it as impressive. Impressive not only internally but impressive to external experts, who are reviewing those data. What we’re seeing, what we believe we’re seeing is a target that really controls a key or critical access in the cancer pathway and cancer broadly. So when you talk about indication it’s really not a specific indication as breast cancer or pancreatic cancer or lung cancer. Our initial read and I want to characterize that as initial but shared by external experts is that, that initial read is we’re really looking at potentially a treatment broadly for tumors, certainly solid tumors and potentially also liquid. So I think the applications here, if what we’re seeing in animals and in ex-vivo human studies hold and I frankly believe they will hold what we're going to see is something that is broadly applicable across cancers. And again something that will modulate one of those key axis in cancer. I think something frankly in that case unprecedented, but we will see. Let’s just see how that plays out. But right now that's our belief in fact, I probably make it a little stronger, that’s our guarded expectation.

[Raghuram Selvaraju:]

Thank you very much for that color. Just two other quick housekeeping items, maybe these are for both you and for Mike. Wanted to just clarify that we are not likely to see any further recurrence of the expense item entitled loss on early extinguishment of debt beyond the roughly 13 million that you recorded for the fourth quarter? And then also I just wanted some additional clarification on the accounts receivable related additional credit facility. If you could maybe give us an idea of how much is available to you as of right now given where receivables currently stand? And relative to the timeline to potential profitability on acceleration of sales of OMIDRIA, whether you can comment on the current sufficiency of cash resources to reach and extend beyond that point? Thank you.

[Gregory Demopulos:]

Sure, with respect to your first question around the 13 million that’s one-time. So we have accounted for it, and that’s correct and we are not going to see that recur. You’re second question, Ram remind me, I’m trying to blank on -- your first was, go ahead …

[Raghuram Selvaraju:]

Yes, it was just related to what you currently would have available to you under …

[Gregory Demopulos:]

Sure the AR line, yes, assuming we put that in place and as I said we’ve already been initially approved for that. And certainly one would think we qualify for that, it’s a $50 million loan, we think the initial qualification at this point based on our sales let’s just use our fourth quarter sales, but that would be probably an additional 20 million that we could access. Your other question was I believe timeline to profitability and look I don't want to guide specifically to that. Clearly we think of OMIDRIA sales are going to continue to grow. I can tell you our objective is to become at least cash flow neutral and ultimately profitable off of OMIDRIA and we’re looking at a relatively tight timeline to make that happen. So I think all of that distills down to what was your last question, which is gee, how are we standing with respect to cash and run room? Look I think when you look at what we’ve got, when you look at the sales of OMIDRIA, and again, this is going to be in large part dependent on the growth in the sales of OMIDRIA but you look at our ability to access the AR line. I think that we’re in good shape and our objective here would be able to run through 2019 without a need for additional capital, and then you see what happens with OMIDRIA. But remember too that we have other options. And we still have an additional 40 million that we had thought of first tying in with our convertible debt. There is always the ability to add to that, the bonds are trading well and we'll see how that goes. Not sure we want to do it. Not sure where are we going to need it. But certainly we have options.

[Operator:]

Thank you. I am showing no further questions at this time. I would now like to turn the call back to Dr. Demopulos for closing remarks.

[Gregory Demopulos:]

Alright. Well, now that wraps up the call for today. Thanks everyone for joining us. Thanks for listening in as you can see, we see things coming together very nicely for OMIDRIA, for narsoplimab and for the rest of our pipeline. As always we will keep you posted periodically on our progress. And with that, we wish all of you a good day.

[Operator:]

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone, have a great day.