Omeros Corporation (Nasdaq: OMER) announced today that it has secured agreements to restructure $80.5 million of its convertible debt, significantly improving the company's near-term financial position. The Seattle-based biopharmaceutical company will exchange $70.5 million of its 5.25% Convertible Senior Notes due 2026 for newly issued 9.50% Convertible Senior Notes due 2029, while converting an additional $10 million of notes into common stock.
The debt restructuring, expected to close around May 14, 2025, will substantially reduce Omeros' short-term financial obligations, decreasing potential debt repayment requirements over the next 12 months from $117.9 million to approximately $17.4 million.
Strategic Debt Restructuring Details
Under the exchange agreements, Omeros will issue new 9.50% Convertible Senior Notes due 2029 in a one-for-one exchange for $70.5 million of its existing 2026 Convertible Notes. The new notes will feature a conversion rate set at a 35% premium above the higher of the volume-weighted average price (VWAP) of Omeros' common stock on May 12, 2025, or $6.18.
In a separate transaction, the company has arranged for an investor to convert $10 million of 2026 Convertible Notes into common stock through what it terms an "Equitization Transaction." This conversion will occur in three approximately equal installments, with completion expected by September 15, 2025.
"This reduction in principal balance of the 2026 Convertible Notes outstanding will prevent the Company from being required to make a $20.0 million prepayment of the term loan outstanding under its 2024 Credit and Guaranty Agreement," the company stated in its announcement. The prepayment would otherwise have been due in November 2025.
Following these transactions, only $17.4 million of the original 2026 Convertible Notes will remain outstanding.
New Convertible Notes Structure
The new 2029 Convertible Notes will be senior, unsecured obligations with interest payable semi-annually at 9.50% per annum on June 15 and December 15, beginning December 15, 2025. The notes will mature on June 15, 2029, unless earlier converted, redeemed, or repurchased.
Holders of the new notes will have the option to convert them into Omeros common stock, cash, or a combination of both. Those who convert after six months will receive an interest make-whole payment. The company retains the right to redeem the notes on or after June 20, 2027, subject to certain conditions.
Moelis & Company LLC and Cantor Fitzgerald & Co. are serving as financial advisors for the transactions, with Covington & Burling LLP providing legal counsel.
Omeros' Pipeline and Focus Areas
Omeros is developing therapeutics for immunologic disorders, complement-mediated diseases, cancers, and addictive disorders. The company's lead candidate, narsoplimab, a MASP-2 inhibitor targeting the lectin pathway of complement, is currently under FDA review for the treatment of hematopoietic stem cell transplant-associated thrombotic microangiopathy.
Other pipeline assets include OMS1029, a long-acting MASP-2 inhibitor that has completed Phase 1 studies, and zaltenibart, a MASP-3 inhibitor in clinical development for paroxysmal nocturnal hemoglobinuria and complement 3 glomerulopathy. The company is also advancing OMS527, a phosphodiesterase 7 inhibitor for cocaine use disorder, with funding from the National Institute on Drug Abuse.
Financial Implications
The debt restructuring represents a significant improvement in Omeros' financial flexibility. By extending the maturity of $70.5 million in debt from 2026 to 2029 and converting $10 million to equity, the company has substantially reduced its near-term financial pressures.
The transactions will decrease Omeros' outstanding debt by $10 million and reduce potential debt repayment obligations over the next year by approximately $100.5 million, from $117.9 million to $17.4 million.
This financial restructuring may provide Omeros with additional runway to advance its clinical programs, particularly as it awaits FDA decisions on narsoplimab and progresses other pipeline candidates through clinical development.
