OMER 10-K & 10-Q changes, risk factors and insider trading

Risks Related to Our Products, Product Candidates, Programs and Operations

We have incurred cumulative operating losses since inception. If we are unable to raise additional capital when neededneeded, we may be unable to complete the development and commercialization of our products and product candidates or to continue our other preclinical development programs.

Our operations have consumed substantial amounts of cash since our incorporation, As of December 31, 2024,2025, we had cash, cash equivalents and short-term investments of $90.1$171.8 million. Our cash used in operations for the year ended December 31, 2025 was $148.8$116.1 million and our net loss for the year ended December 31, 20242025 was $156.8$3.4 million. Pursuant to a covenant in the Credit Agreement, we must maintain $25.0 million of unrestricted cash, cash equivalents and short-term investments at all times. We expect to continue to spend substantial amounts to:

● commercialize YARTEMLEA and launchany other product candidates for which we may receive regulatory approval.approval in the future;

We expect to continue to incur additional losses until such time as we generate significant revenue from the sale of YARTEMLEA or other commercial products or from our APLA with Novo Nordisk or other partnerships. We are unable to predict the extent of any future losses and cannot provide assurance that we will generate sufficient revenue from YARTEMLEA or commercial products in the future to fund our operations fully. If we are unable to generate sufficient revenue from YARTEMLEA or other commercialized products or partnership arrangements, we may never become and remain profitable and will be required to raise additional capital to continue to fund our operations. We cannot be certain that additional capital will be available to us on acceptable terms, if at all, when required. Adverse developments to our financial condition or business, as well as disruptions in the global equity and credit markets, may limit our ability to access capital. In addition, pursuing debt financings, certain equity offerings or other strategic transactions may result in mandatory prepayments of the Initial Term Loan. If we do not raise additional capital when needed through one or more funding avenues, such as debt or equity financings or corporate partnering, we may have to significantly delay, scale back or discontinue the development or commercialization of one or more of our product candidates or one or more of our preclinical programs or other research and development initiatives. In addition, we may be required to seek collaborators for one or more of our current or future products at an earlier stage than otherwise would be desirable or on terms that are less favorable than otherwise might be available or to relinquish or license on unfavorable terms our rights to technologies or products that we otherwise would seek to develop or commercialize ourselves. We also may have insufficient funds or otherwise be unable to advance our preclinical programs to a point where they can generate revenue through partnerships, collaborations or other arrangements. Any of these actions could limit the amount of revenue we are able to generate and harm our business and prospects.

In addition to our Credit Agreement, our otherOur indebtedness and liabilities and any future indebtedness could limit the cash flow available for our operations and expose us to risks that could adversely affect our business, financial condition and results of operations.

● diluting the interests of our existing stockholders as a result of issuing shares of our common stock upon any conversion of the 20262029 Notes or additional convertible notes that we may issue in the future;

Our ability to make scheduled payments of the principal of, to pay interest on, or to refinance our indebtedness depends on our future performance, which is subject to many factors, including economic, financial, competitive and other circumstances beyond our control. Our business may not generate sufficient funds, and we may otherwise be unable to maintain sufficient cash reserves, to pay amounts due under our indebtedness and our cash needs may increase in the future. In addition, future indebtedness that we may incur may contain financial and other restrictive covenants that further limit our ability to operate our business, raise capital or make payments under our other indebtedness. If we fail to comply with these covenants or to make payments under our indebtedness when due, then we would be in default under that indebtedness, which could, in turn, result in that and our other indebtedness becoming immediately payable in full.

Failure to obtain and maintain regulatory approval in the U.S.EU or inother foreign jurisdictions would prevent us from commercializing and marketing ourYARTEMLEA productor candidates.future commercialized products.

We also intend to market outsideYARTEMLEA the U.S.and any of our product candidates that are approved in the future.future outside the U.S. In order to market our products in non-U.S. jurisdictions, we or our partners must obtain separate regulatory approvals and comply with numerous and varying regulatory requirements. The regulatory approval procedure varies among countries and can involve additional testing and data review. The requirements governing marketing authorization, the conduct of clinical trials, pricing and reimbursement vary from country to country. Approval by FDA does not ensure approval by the EMA, and approval by one foreign regulatory authority does not ensure approval by regulatory agencies in other foreign countries or by FDA. The time required to obtain regulatory approval outside the U.S. and EU may differ from that required to obtain FDA or EU approval. The foreign regulatory approval process may include all of the risks associated with obtaining FDA approval discussed in these “Risk Factors” and weWe may not obtain foreign regulatory approvals on a timely basis, or at all. In addition, even if we were able to obtain regulatory approval for a product in one or more foreign jurisdictions, we may need to complete additional requirements to maintain that approval and our ability to market the product in the applicable jurisdiction.

● the extent and magnitude of certain payments to which we may be entitled based on Rayner’s net sales of OMIDRIA by Rayner Surgical, Inc. (“Rayner”) depend on Rayner’s ability to successfully market and sell OMIDRIA and may be affected by the extent of coverage and reimbursement for OMIDRIA, market acceptance of the product and Rayner’s ability to execute an effective sales strategy;

● the timing, cost and level of investment in our research and development activities as well as expenditures we may incur to acquire or develop additional technologies, products and product candidates, or in preparation for potential commercialization of our product candidates; and

Significant changes to the size, structure, powers and operations of the U.S. federal government, as well as recent policy actions by the U.S. federal government, may cause economic disruptions or changes in the regulatory environment that could, in turn, adversely impact our business, results of operations and financial conditions.condition.

The newcurrent U.S. administration has begun to implementimplemented significant changes to the size and scope of the federal government to achieve stated goals including reducing the federal budget deficit and national debt, improving the efficiency of government operations, and promoting innovation and economic growth. To date, these efforts have been carried out through a mix of executive actions aimed at eliminating or modifying federal agency and federal program funding, reducing the size of the federal workforce, reducing or altering the scope of activities conducted by, and possibly eliminating, various federal agencies and bureaus. If implemented, theseThese changes may have varied effects on the economy that are difficult to predict. For instance, the delivery of government services and the distribution of federal program funds and benefits may be disrupted or, in some cases, eliminated as a result of funding cuts, recasting of federal agency mandates or a substantial reduction of the federal workforce. We rely on the availability, predictability and efficiency of federal agencies including FDA, NIDA and others in connection with the operation of our business and programs. Our business, financial condition and results of operations could be materially and adversely affected by disruptions affecting these or other agencies in areas relevant to our programs and operations.

In addition, recent policy actions by the new U.S. administration, including thebroad imposition of new tariffs on imported materials and goods from certain foreign countries, including Canada, Mexico and China, and the temporary freeze on federal grants and loans,tariffs, may have an adverse impact on our business. Increased tariffs on critical raw materials, components, and finished goods could raise our production costs, disrupt our supply chain, and reduce our competitiveness in the marketplace. Additionally, the administration's halt on certain federal research grants may negatively impact our industry. Any prolonged reductions in such funding could slow innovation, delay collaborations, and limit the adoption of new technologies that contribute to our business growth. If these or similarother policy changes continue or expand, we may face increased costs. Although we cannot predict the full extent of these impacts, any prolonged disruption could adversely affect our business, financial condition, and results of operations.

Obtaining FDA approval of our product candidates requires substantial time, effort and financial resources and may be subject to both expected and unforeseen delays, and there can be no assurance that any approval will be granted on any of our product candidates on a timely basis, if at all. As was the case with our BLA for narsoplimab in TA-TMA, with respect to which FDA issued a CRL, evenEven after collaborating closely with FDA or regulators with corollary responsibilities in jurisdictions outside the U.S. regarding the contents of a marketing application a regulator may decide that the design of our clinical trials or clinical data collection protocols as actually run, or our resulting data, are insufficient for approval of our product candidates. FDA or other regulators may require us to run additional preclinical, clinical or other studies or perform additional work related to chemistry, manufacturing and controls. In addition, we, FDA or an independent institutional review board or ethics committee may suspend or terminate human clinical trials at any time on various grounds, including a finding that the patients are or would be exposed to an unacceptable health risk or because of the way in which the investigators on whom we rely carry out the trials. We are subject to extensive government regulation of the testing of our investigational products, including the requirement that we conduct all of our clinical trials in accordance with FDA’s GCP requirements and similar requirements outside of the U.S. If we are unable to comply with these requirements, if we are required to conduct additional trials or to conduct other testing of our product candidates beyond that which we currently contemplate for regulatory approval, if we are unable to complete our clinical trials or other testing successfully, or if the results of these and other trials or tests fail to demonstrate efficacy or raise safety concerns, we may face substantial additional expenses, be delayed in obtaining marketing approval for our product candidates or may never obtain marketing approval.

We are aan clinical-stageinnovative, biopharmaceuticalcommercial-stage biotechnology company committedthat to discovering, developingdiscovers and commercializingdevelops first-in-class small-moleculeprotein and proteinsmall-molecule therapeutics for large-market as well asand orphan indicationsindications, targetingwith immunologicparticular emphasis on complement-mediated diseases, including complement-mediated diseasescancers, and cancers related to dysfunction of the immune system, as well as addictive andor compulsive disorders.

Lectin Pathway / MASP 2MASP-2

The lead product and product candidate in our pipeline of complement-targeted therapeutics is narsoplimab (OMS721), a proprietary, patented human monoclonal antibody targeting MASP-2, the key activator of the lectin pathway of complement. Our lead lectin pathway inhibitor YARTEMLEA® (narsoplimab-wuug) is FDA-approved and commercially available in the U.S. for the treatment of TA-TMA in adult and pediatric patients aged two years and older. An MAA for YARTEMLEA in TA-TMA is currently under review by the EMA. Clinical development of narsoplimab is currentlyanticipated focusedto primarilycontinue onto expand the approved label in TA-TMA and to develop the drug in additional indications. Clinical development efforts arehave alsopreviously been directed to ARDS, including severe acute COVID-19, ARDSwhich andcan result in PASC. We are also developing OMS1029, our long-acting antibody targeting MASP-2MASP-2, which we expect will be well-suited to indications requiring long-term, chronic administration. In addition, we arehave advancingdirected ourefforts orallytowards administeredthe development of small-molecule MASP-2inhibitors inhibitorof throughMASP-2, IND-enablingdesigned studies.for oral administration. For more information, see Part I, Item 1 in this Annual Report on Form 10-K under the heading “Complement Inhibitor Programs: MASP-2 Program – Lectin Pathway Disorders”.

AlternativeSale Pathwayof Zaltenibart / MASP-3

OurOn pipelineNovember of25, clinical-stage2025, complement-targetedwe therapeuticcompleted candidatesthe alsoTransaction includespursuant to our APLA with Novo Nordisk for our candidate drug zaltenibart (formerly OMS906),. Zaltenibart is a proprietary,first-in-class, patentedlate-stage clinical humanized monoclonal antibody targeting MASP-3, the most upstream and key activator of the alternative pathway of complement.the Wecomplement believesystem. zaltenibartZaltenibart has theshown multiple potential toadvantages treat a wide range of alternative pathway-related diseases and that its attributes favorably differentiate zaltenibart fromover other marketed and in-development alternative pathway inhibitors.inhibitors in development and on the market.

PDE7Other InhibitorDevelopment Programs

Our PDE7 inhibitor program, which we refer to as OMS527, comprises multiple PDE7 inhibitor compounds and is based on our discoveries of previously unknown links between PDE7 and any addiction or compulsive disorder, and between PDE7 and any movement disorders. In April 2023, we were awarded a grant from the National Institute on Drug Abuse,NIDA, part of the National Institutes of Health, to develop our lead orally administered PDE7 inhibitor compound, for which we have successfully completed a Phase 1 study, for the treatment of cocaine use disorder (“CUD”).disorder. With NIDA funding, we successfully completed preclinical cocaine interaction/toxicology studies to assess safety of the OMS527 compound when co-administered with cocaine. BasedFDA onsubsequently requested additional preclinical information prior to initiating the successfulclinical outcomein-patient ofstudy thein preclinicalcocaine studies,users. Together with our collaborators at NIDA, we haveare initiated,scheduled andto NIDA has confirmed availability of grant funding for, an in-patient, placebo-controlled clinical study evaluating the safety and effectiveness of OMS527 in adultsmeet with CUDFDA whoto receivediscuss concurrentthat intravenous cocaine.request. For more information, see Part I, Item 1 in this Annual Report on Form 10-K under the heading “Other ClinicalDevelopment Programs: PDE7 Inhibitor Programs – OMS527”.

Preclinical Programs - Oncology PlatformOncotoX-AML

We previously developed and commercialized OMIDRIA® (phenylephrine and ketorolac intraocular solutions) 1%/0.3%, which is approved by FDA for use during cataract surgery or intraocular lens replacement (“IOL”) to maintain pupil size by preventing intraoperative miosis (pupil constriction) and to reduce postoperative ocular pain. We marketed OMIDRIA in the U.S. from the time of its commercial launch in 2015 until December 2021.

As a result of the OMIDRIA divestiture, we recorded an OMIDRIA contract royalty asset on our consolidated balance sheet. The results of OMIDRIA activities are classified as discontinued operations in our consolidated statements of operations and comprehensive income (loss) and excluded from continuing operations for all periods presented. See Part II, Item 8, “Note 78 — Discontinued Operations – Sale of OMIDRIA” to our Consolidated Financial Statements in this Annual Report on Form 10-K.

On September 30, 2022, we soldentered tointo a Royalty Purchase Agreement (the “Original Agreement”) with DRI anHealthcare interestAcquisitions LP (“DRI”) under which we received $125.0 million in exchange for a portion of ourthe futureroyalties OMIDRIA royalty receipts for $125.0 millionto which we recordedwere asentitled anfrom Rayner under the Asset Purchase Agreement on global net sales of OMIDRIA royaltybetween obligationSeptember 1, 2022 and December 31, 2030, subject to certain annual caps on ourthe consolidatedroyalty balanceamounts sheet.payable to DRI. DRI was entitled under that arrangement to receive royalties on OMIDRIA net sales between September 1, 2022 and December 31, 2030, subject to certain annual caps.

PaymentRepayment onat Maturity of 2023 Notes

2024 Term Loan and Repurchase of 2026 Notes for Cash

In November 2025, our boardBoard of directorsDirectors authorized a share repurchase program to repurchase, from time to time, up to $100.0 million of our common stock in the open market or through privately negotiated transactions. The share repurchase program does not have a fixed expiration date, may be suspended or discontinued at any time, and does not obligate us to acquire any amount of our common stock. The timing, manner, price, and amount of any repurchases may be determined by us at our discretion and will depend on a variety of factors, including business, economic and market conditions, prevailing stock prices, corporate and regulatory requirements, and other considerations. As of MayAugust 11,12, 2026, approximately $95.9$90.1 million remained available to repurchase our outstanding shares of common stock under the share repurchase program.

We are an innovative, commercial-stage biotechnology company that discovers and develops first-in-class protein and small-molecule therapeutics for large-market and orphan indications,indications. withOur particulardrug emphasisproduct YARTEMLEA® (narsoplimab-wuug) is commercially available in the U.S. for the treatment of hematopoietic stem cell transplant-associated thrombotic microangiopathy (TA-TMA) in adult and pediatric patients two years of age and older. Our diverse pipeline of development programs is focused on the treatment of complement-mediated diseases, cancers, and addictive or compulsive disorders.

The complement system plays a role in the body’s inflammatory response and becomes activated as a result of tissue damage or trauma or microbial pathogen invasion. Inappropriate or uncontrolled activation of the complement system can cause diseases characterized by serious tissue injury. Three main pathways can activate the complement system: classical, lectin, and alternative. We are focused on development of therapeutics to treat diseases associated with the lectin and/or alternative pathways of complement. We are developing antibodies as well as small-molecule inhibitors of key enzymes known to be centrally involved in the in activation of the targeted pathway of complement.

SaleAlternative of ZaltenibartPathway / MASP-3

At the closing of the Transaction, we received an upfront cash payment of $240.0 million. In addition, we are eligible to receive (i) up to $510.0 million in one-time milestone payments upon the first achievement by Novo Nordisk or its affiliates or sublicensees of each of the development and approval milestone events as set forth in the APLAAPLA, including $100.0 million in aggregate one-time milestone payments that we expect to be achievable in the near term, and (ii) up to $1.3 billion in one-time milestone payments upon the first achievement by Novo Nordisk or its affiliates or sublicensees of certain sales-based milestone events as set forth in the APLA. We are also eligible under the APLA to receive tiered royalties on annual net sales of products at percentage rates ranging from high single digit to high teens, subject to reduction in certain circumstances, as set forth in the APLA. In total, we have received and are eligible to receive up to an additional $1.8$2.1 billion in potential development and commercial milestones, plus tiered royalties on net sales.

Pursuant to the APLA, we sold and transferred, and Novo Nordisk purchased zaltenibart and certain related assets, and the parties agreed to grant and receive certain intellectual property licenses to facilitate the continued development and commercialization activities of both companies. We retain rights to our entire MASP-3 small-molecule program unrelated to zaltenibart,program, including the ability to develop and commercialize small-molecule MASP-3 inhibitors, across a range of therapeutic areas, including, but not limited to, ophthalmology, neurology, gastrointestinal disorders, dermatology, musculoskeletal diseases, and oncology. We also retain rights to our “grandfathered” MASP-3 antibodies, with temporal and indication restrictions on commercialization and for use in advancing our small-molecule therapeutics.

Our PDE7 inhibitor program, which we refer to as OMS527, comprises multiple PDE7 inhibitor compounds and is based on our discoveries of previously unknown links between PDE7 and any addiction or compulsive disorder, and between PDE7 and any movement disorder. In April 2023, we were awarded a grant from the National Institute on Drug Abuse (“NIDA”), part of the National Institutes of Health, to develop our lead orally administered PDE7 inhibitor compound, for which we have successfully completed a Phase 1 study, for the treatment of cocaine use disorder. With NIDA funding, we successfully completed preclinical cocaine interaction/toxicology studies to assess safety of the OMS527 compound when co-administered with cocaine. FDA subsequently requested additional nonclinical information prior to initiating the clinical in-patient study.trial. FollowingWe aare meetingcommencing withthe FDAnonclinical study, and we expect to discussbe that request, we are working with FDAable to streamlinestart theenrollment path to initiatein the in-patient clinical trial, which which is targeted for initiationtrial by year-end 2026.

Preclinical Program - OncotoX-AML (OMS805)

We continue to progress preclinical studies within our novel oncology program, which is focused on developing novel, proprietary large molecule therapeutics designed to selectively target and kill dividing cancer cells. We have completed selection of a drug development candidate, and IND-enabling studies are underway for this program, which we refer to as OncotoX-AML.OncotoX-AML or OMS805. Acute myeloid leukemia (“AML”), an aggressive and highly fatal bone marrow and blood cancer, is the lead indication for development. The effectiveness of current AML treatments, such as chemotherapeutics and antibody-drug conjugates, is limited by a number of factors, including high relapse rates and substantial side effects.

In April 2025, we established the Omeros Oncology Clinical Steering Committee to help advance our OncotoX-AML program. The clinical steering committee is comprised of leaders in AML treatment and research at premier cancer centers. Together with this steering committee, we are designing our first in-human clinical trial.trial, which we are targeting to initiate in late 2027.

ExchangeRepurchase of 2026 Notes for 2029 Notes

On February 17, 2026, we repaid the remaining $17.1 million aggregate principal balance outstanding on our 5.25% convertible senior notes (the “2026 Notes”) in full upon maturity.

We have an “at the market” (“ATM”) facility agreement under which we have the capability to sell shares of our common stock from time to time, through an ATM equity offering program. On November 14, 2025, the Company filed a shelf registration statement and prospectus supplement renewing the ATM program for an aggregate offering price up to $150.0 million. We did not sell any shares under the ATM program during the three or six months ended MarchJune 31,30, 2026.

On November 29, 2025, the Board of Directors approved a share repurchase program under which we are permitted to repurchase from time to time up to $100.0 million of our common stock in the open market or through privately negotiated transactions. During the three months ended MarchJune 31,30, 2026, we repurchased and retired 0.40.5 million shares of common stock pursuant to our share repurchase program, at an average cost of $11.70 per share, for an aggregate purchase price of $4.2$5.7 million. During the six months ended June 30, 2026, we repurchased and retired 0.8 million shares of common stock pursuant to our share repurchase program, at an average cost of $11.70 per share, for an aggregate purchase price of $9.9 million.

As of MarchJune 31,30, 2026, we had cash, cash equivalents and short-term investments of $135.3$132.0 million. For the three months ended MarchJune 31,30, 2026, company-wide our cash provided by operations was $4.1 million. For the six months ended June 30, 2026, our cash used in operations was $14.5$10.4 million.

Distribution and sales of our only commercial product, YARTEMLEA, commenced in January 2026. Product sales, net for the three months ended March 31, 2026 were $9.9 million, compared to no product revenue for the same period in the prior year. Revenue in the current period reflects initial sales of YARTEMLEA to wholesalers in the U.S.

We record YARTEMLEA product sales net of estimated chargebackschargebacks, distribution fees and distributionreturns, fees, or(collectively, gross-to-net deductions.deductions). Gross-to-net deductions are estimates based on contractual terms and expected utilization and require some judgment. For the three and six months ended MarchJune 31,30, 2026, no chargebacks were recorded related to Medicaid claims. AsBecause thisYARTEMLEA representsremains in the initialearly periodstages of commercial sales,commercialization, these estimates arecontinue preliminaryto be based on limited historical experience and are subject to change as additional information becomes available. A summary of our gross-to-net related accruals for the threesix months ended MarchJune 31,30, 2026 is as follows:

Cost of product sold for the period was low, primarily reflecting the sale of inventory manufactured prior to regulatory approval, for which the associated manufacturing costs were expensed as research and development in prior periods. Accordingly, thisThis inventory carries a low or no cost basis, resulting in lower cost of product sold and higher gross margin during the initial commercialization period. Accordingly, cost of product sold for the three and six months ended June 30, 2026 primarily reflects stability testing, storage and royalty payments on our product sales.

Our research and development expenses can be divided into three categories: direct external expenses, which include clinical research and development and preclinical research and development activities; internal overhead and other expenses; and stock-based compensation expense. Direct external expenses consist primarily of expenses incurred pursuant to agreements with third-party manufacturing organizations prior to receiving regulatory approval for a product candidate,organizations, contract research organizations, clinical trial sites, collaborators, licensors and consultants.consultants prior to receiving regulatory approval for a product candidate. Preclinical research and development includesinclude costs prior to beginning Phase 1 studies in human subjects. Internal overhead and other expenses primarily consist of costs for personnel, overhead, rent, utilities and depreciation. Our accounting policy is to expense all manufacturing costs related to product candidates until regulatory approval is reasonably assured in either the U.S. or EU.

For the three and six months ended MarchJune 31,30, 2026, clinical research and development expenses decreased $7.2$5.9 million and $13.2 million, respectively, as compared to the prior year period as a result of reduced expenditures on OMS906 due to the sale of zaltenibart to Novo Nordisk. InternalFor the three and six months ended June 30, 2026, internal overhead and other expenses decreased $2.8$2.2 million and $4.9 million, respectively, as compared to the prior year period primarily due to Novo Nordisk reimbursing the Company for hours worked under the Transition Services Agreement and decreased employee compensation costs.

We expect research and development expenses in the secondthird quarter of 2026 to be higher than in the firstsecond quarter of this year, driven primarily by increased investment in our YARTEMLEA and broaderour lectinother pathwayMASP-2 inhibitor programs as well as inand our OncotoX-AML program, including costs associated with manufacturing and related activities, clinical development efforts, and regulatory support for our YARTEMLEA MAA in Europe.activities.

At this time, we are unable to estimate with certainty the longer-term costs we will incur in the continued development of our product candidates due to the inherently unpredictable nature of our preclinical and clinical development activities. Clinical development timelines, the probability of successsuccess, and development costs can differ materially as new data become available and as expectations change. Our future research and development expenses will depend, in part, on the preclinical or clinical success of each product candidate as well as ongoing assessments of each program’s commercial potential. In addition, we cannot forecast with precision which product candidates, if any, may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

TotalFor the three and six months ended June 30, 2026, total selling, general and administrative expenses, excluding stock-based compensation, increased $2.6$3.7 million forand the$6.3 threemillion, months ended March 31, 2026, compared to the three months ended March 31, 2025,respectively, primarily due to the build-out of our U.S. commercial organization, including the hiring of a sales force and increased marketing and market access activities in support of the YARTEMLEA launch.

We expect selling, general and administrative expenses in the secondthird quarter of 2026 to be higher than in the firstsecond quarter of 2026, driven primarily by increased selling and marketing activities associated with YARTEMLEA.

Interest expense, net of premiums, discounts, issuance costscosts, and remeasurement adjustments is shown below:

Contractual interest expense is comprised of cash interest paid during the year and the net change in accrued interest. Amortization of debt discounts, premiums and issuance costs are reflected as non-cash interest expense. Debt discounts on the 2026 Notes and 2029 Notes are accretive whereas the premium on the Credit and Guarantee Agreement with funds managed by Athyrium Capital Management LP and funds managed by Highbridge Capital Management, LLC, as lenders (the “Term Loan”) is deducted from contractual interest expense.

For the three months ended MarchJune 31,30, 2026, interest expense increased $2.2$7.6 millionmillion, compared to the same period in 2025. The increase primarily relates to incurring a fullremeasurement quarterchange of interest on our 2029 Notes, which were not yet issued in the same periodoccurring in the prior year,year and to a lesser extent a non-cash remeasurement of our OMIDRIA royalty obligation. These increases are partiallyoffset by decreases in interestperiod related to the remainderOMIDRIA ofroyalty ourobligation 2026due Notes,to whicha were repaidchange in Februaryforecasted 2026,royalties andfrom the Term Loan, which was repaid in November 2025.Rayner.

For further informationdetails, please see “Note 6 — Debt” and “Note 8 – OMIDRIA Royalty Obligation” in the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

We expect interest expense for the secondthird quarter of 2026 to be higherlower than in the firstsecond quarter of 2026, assumingdriven noprimarily remeasurement adjustment toby the OMIDRIAdecreased contractaggregate royaltyprincipal obligation.amount of 2029 Notes outstanding.

Interest and other income increased $0.4$3.4 million and $3.7 million, respectively, for the three and six months ended MarchJune 31,30, 2026 as compared to the same period in 2025 primarily due to thereimbursement receiptfrom ofNovo $0.7Nordisk millionfor ofinventory additionalwhich investmentwe incometransferred as a result of holding higher average cash and investment balances than induring the prior year period, partiallyoffset by decreased sublease income of $0.3 million for laboratory space.quarter.

We expect interest and other income for the secondthird quarter of 2026 to be higherlower than in the firstsecond quarter of 2026.2026, reflecting the completion of planned transfers of zaltenibart inventory to Novo Nordisk.

Net Gain (Loss) on Change in Fair Value of Financial Instruments

Our embedded derivatives comprise interest make-whole and conversion options related to our 2029 Notes as well as call and put options related to the Term Loan. We repaid our Term Loan on November 25, 2025, thereby eliminating the Term Loan embedded derivative in the current year. The net gain of $11.4 million and $84.6 million on the 2029 Notes derivative for the three and Termsix Loan.months Asended ofJune March 31,30, 2026, the $73.1 million net gain on the embedded derivativesrespectively, reflects marking to market the option of the holders of the 2029 Notes to convert their notes into shares of common stock, cash or a combination thereof. As of March 31, 2026, we no longer have the derivative on our Term Loan as it was repaid on November 25, 2025.