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Note 8 - OMIDRIA Royalty Obligation

6 Months Ended

Jun. 30, 2025

Note 8—OMIDRIA Royalty Obligation

In September 2022, we sold to DRI an interest in our future OMIDRIA royalty receipts and received $125.0 million in cash consideration, which was recorded as an OMIDRIA royalty obligation on our condensed consolidated balance sheet. DRI was entitled to receive royalties on OMIDRIA net sales between September 1, 2022 and December 31, 2030, subject to annual caps.

In February 2024, Omeros and DRI expanded their royalty purchase agreement under the Amendment, resulting in the elimination of previously existing annual caps on royalty payments and Omeros receiving an additional $115.5 million in cash consideration, which we accounted for as a modification of our existing debt from DRI. All royalties earned on OMIDRIA sales within the U.S. through December 31, 2031 are remitted by Rayner to an escrow account established by Omeros, from which payments are made to DRI.

We retain the right to receive all royalties payable by Rayner on any U.S. net sales of OMIDRIA after December 31, 2031 and on all royalties on global net sales of OMIDRIA payable from and after December 31, 2031. To date, international royalties have not been significant. DRI has no recourse to our assets other than its interest in OMIDRIA royalties.

We are also entitled to receive a milestone payment ranging between $10.0 million and $27.5 million if U.S. net sales of OMIDRIA reach applicable thresholds ranging between a total of $156.0 million and $160.0 million in the aggregate for any period of four consecutive quarters prior to January 1, 2026. We do not expect to receive this milestone payment. In addition, we are entitled to receive a separate milestone payment ranging between $8.0 million and $27.5 million if U.S. net sales of OMIDRIA reach applicable thresholds ranging between a total of $181.0 million and $185.0 million in the aggregate for any period of four consecutive quarters prior to January 1, 2028.

The changes in the OMIDRIA royalty obligation during the six months ended June 30, 2025 are as follows (in thousands):

Balance at December 31, 2024	$	216,257
Remeasurement on the OMIDRIA royalty obligation		(11,878	)
Principal payments		(6,701	)
Balance at June 30, 2025	$	197,678

The OMIDRIA royalty obligation is classified as a Level 3 liability as its valuation requires substantial judgment and estimation of factors that are not currently observable in the market. The fair value of the OMIDRIA royalty obligation is determined by calculating the net present value of our estimated future OMIDRIA cash flows using the interest rate at inception of our royalty purchase agreement with DRI, adjusted for the change in the prime rate through the measurement date. As of June 30, 2025 and December 31, 2024, the approximate fair value of our obligation was $191.9 million and $209.7 million, respectively.

Interest expense is comprised of the effective interest component of any cash payment remitted through an administrative agent to DRI, based on an implied effective interest rate of 10.27%, and any remeasurement adjustments taken during the period. Remeasurements are non-cash adjustments to the OMIDRIA royalty obligation reflecting changes in forecasted cash flows stemming from the OMIDRIA contract royalty asset. For the three and six months ended June 30, 2025 and 2024, interest expense is as follows:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2025			2024		2025			2024
	(In thousands)
Pass through interest remitted through administrative agent	$	5,069		$	5,701	$	10,286		$	9,646
Non-cash remeasurement adjustment		(8,506	)		728		(11,878	)		1,806
Interest (income)/expense on OMIDRIA royalty obligation	$	(3,437	)	$	6,429	$	(1,592	)	$	11,452

As of June 30, 2025, the expected scheduled principal and interest payments are as follows:


	Principal		Interest		Total
	(In thousands)
2025	$	8,799	$	9,416	$	18,215
2026		22,439		17,322		39,761
2027		25,654		15,004		40,658
2028		29,068		12,372		41,440
2029 and thereafter		111,718		17,645		129,363
Total scheduled payments	$	197,678	$	71,759	$	269,437