Omer initiation

Maxim Group LLC 405 Lexington Avenue New York, NY 10174 – www.maximgrp.com

SEE PAGES 47 – 49 FOR IMPORTANT DISCLOSURES AND DISCLAIMERS

EQUITY RESEARCH INITIATION

Biotechnology

Closing Price (05/07/12): $9.0212-Month Target Price: $2352-Week Range: $3.00-$11.00Market Cap (MM): $202Shares O/S (MM): 22.4 Float (MM): 13.9Avg. Vol. (000) 107Debt (M) $20Dividend/Yield: $0.00/0.00%Risk Profile:

FYE: December GAAP EPS P/E2011A ($1.28) n.a.2012E ($1.31) n.a.2013E ($1.26) n.a.

Omeros Corporation (OMER)

Source: Bigcharts.com (as of of May 7, 2012)

Jason Kolbert (212) [email protected]

May 7, 2012

High

Initiation Buy Omeros (OMER – NASDAQ – $9.02)

Do the Math – It’s a Buy! We are initiating coverage of Omeros Corporation with a Buy Rating and a 12-month price target of $23. Omeros is a unique blend of specialty pharma and true drug discovery with multiple catalysts that should play out favorably, in our opinion.

Ophthalmological surgery, OMS302, is the major driver. OMS302 is made up of two components – phenylephrine and ketorolac – added to the standard irrigation solution used during intraocular lens replacement procedures to maintain intraoperative mydriasis (pupil dilation) and reduce postoperative pain. A phase III trial met its primary endpoint (P<.00001). A second Phase III trial is enrolling with data expected in 2H12 and a potential launch in early 2014. Conservatively speaking, global sales could reach north of $300 million by 2017.

Arthroscopy represents upside. Omeros’ stock fell sharply when a Phase III trial of OMS103HP (a combination of Ketoprofen, Amitrptyline, and Oxymetazoline) failed to hit its endpoint in a trial evaluating its efficacy in Anterior Crucial Ligament (ACL) repair last year. We believe the failure may have more to do with “non-random randomization” (for which it was impossible to control) rather than a lack of efficacy. A Phase III trial in Meniscectomy is now underway with a second planned to follow. The Phase II meniscectomy trial did hit p-values, and we are hopeful that this trial will replicate those results. However, we have not factored success into our EPS or FCF models, so good data could provide upside to our forecast. Omeros phase 2 clinical trial results for OMS103HP in the knee meniscectomy surgery trial were excellent. Initially, the trial was stopped early (at n=143 patients), still achieving statistical significance across all three domains assessed (function, pain, and range of motion). The functional measurement criteria – the endpoint in the meniscectomy trial (KOOS, a validated, patient-reported outcomes measure) – was entirely different than the functional endpoint in the ACL trial (a set of functional tests commonly used following ACL reconstruction). As such, comparing these trials does not make sense.

GPCR program: misunderstood and poorly valued by the street. Omeros has thus far successfully unlocked 37 Orphan GPCRs; 30%–40% of drugs today target only 46 GPCRs. Our valuation metrics for Omeros are based on several models including FCFF, DCF EPS, and Sum of the Parts models. These metrics all suggest a substantially higher target (in the low $20s). We select a 20% discount rate for our EPS and FCFF models given the high p-values that were demonstrated in the ophthalmology trial. One critical note, however, is the inability of these metrics to forecast the outcome of a clinical trial event. These metrics assume a positive outcome for the second OMS302 ophthalmological surgery trial.


Maxim Group LLC 2

CORPORATE PROFILE Omeros Corporation (OMER) 1420 Fifth Avenue, Suite 2600 Seattle, WA 98101 Web Site: www.omeros.com

Senior Management: Greg Demopulos, MD, Founder and CEO. Dr. Demopulos leads the team, many of whom are the same folks that brought Cialis to the marketplace. Dr. Demopulos started his career as a practicing surgeon at Stanford University. At that time, he had a vision of the practical application of therapeutics for better outcomes as part of the surgical paradigm. This vision has now been extended to multiple areas from ophthalmology to arthroscopy, as well as a pipeline of robust therapeutics that address large markets.

Company description. Omeros Corporation (OMER) has active programs in ophthalmologic, arthroscopic knee, and other related surgical procedures. The platform is based on the application of low-dose combinations of existing therapeutic agents, delivered directly to the surgical site throughout the duration of the procedure to preemptively inhibit inflammation and other problems caused by surgical trauma. Beyond the PharmacoSurgery platform, the company has very active R&D efforts focused on several blockbuster areas in CNS, such as schizophrenia, Parkinson’s disease, and addiction. The company also has an active program in inflammation (its plasmin program) with the potential to fill a hole created when Trasylol was pulled from the U.S. markets. In addition, OMER has a MASP-2 program with the potential to address the same markets in which Alexion’s (ALXN-$86.39-NR) Solaris is sold. These efforts compliment the company’s research in its G-protein coupled receptors (GPCR) program.

Fundamental Risks: • Outcome of the second

Ophthalmology clinical trial could fail as could the Menisectomy trial.

• Company may raise capital. • Early stage pipeline (PLEASE SEE PAGES 40-42 FOR A MORE

DETAILED OUTLINE OF OUR “INVESTMENT RISKS”)

Institutional Ownership: 10.0% Insider Ownership: 12.0% Shares Short: 0.4M Balance Sheet Summary: $MM (As of Dec 31, 2011) Cash & Restricted Cash: $24 Long-Term Debt: $20 Quarterly Burn Rate $8

Analysts Following the Co.: 6 (Excluding Maxim Group)


Maxim Group LLC 3

INVESTMENT SUMMARY AND CONCLUSION

We are initiating coverage of Omeros Corporation (OMER) with a Buy recommendation and a 12-month target price of $23. Omeros is an unusual combination of specialty pharmaceuticals and biotechnology drug discovery. On the specialty pharma side, we see great value in the ophthalmological surgery program. While we believe in the arthroscopic surgery platform, we are staying on the conservative side and not including positive results in our FCF or EPS models.

RECENT PERFORMANCE/FINANCIAL HIGHLIGHTS

Financials. Omeros has financed operations primarily through private and public placements of equity securities for proceeds totaling $139.2 million, as well as through two debt facilities with loan proceeds totaling $37.0 million ($9.0 million of which was used to pay off the remaining balance of the first facility). The GPCR program was partially monetized through a funding agreement with Vulcan pursuant for which the company received $20.0 million in capital, as well as an additional $5 million of funding from Washington State’s Life Sciences Discovery Fund. As of December 31, 2011, Omeros had $24.6 million in cash, cash equivalents, and short-term investments. Additionally, the company stands to receive a $3.0 million cash lease incentive payment in the first quarter of 2012 related to new office space and a laboratory lease.

We expect that the company will need to raise capital again this year, presenting a potential near-term overhang on the stock. We are modeling OMS302 to generate revenues in 2014. Several other variables can impact the company’s need to raise capital, including the company’s ability to out-license or partner one of the early-stage preclinical programs.

August 2010: Omeros secured a CEFF. The company secured a committed equity financing facility (CEFF) under which it may sell up to $40 million of its shares of common stock to Azimuth Opportunity, Ltd. (the "investor") over a 24-month period. Omeros is not obligated to use the facility and remains free to enter into and consummate other equity, debt, and non-dilutive financing transactions. Omeros paid Azimuth a $100,000 fee to secure the facility. Reedland Capital Partners will act as placement agent and receive a fee for its services equal to 0.5% of the aggregate dollar amount of common stock purchased by Azimuth upon settlement of each draw under the facility. The actual amount of funds that can be raised under this facility will depend on the number of shares sold under the agreement and the market value of Omeros' stock during the pricing period of each sale. Bull case. Omeros is highly undervalued as the market is failing to appreciate the potential value of just OMS302 alone in Ophthalmological (lens replacement surgery) indications alone. P-values of 0.0001, (Omeros reported p-values for both mydriasis and pain as <0.00001 but also pointed out that p-values were even better that’s four zero’s which tell us this is not chance!). With greater than 3.6 million cataract/lens replacement procedures in the U.S. alone (similar numbers in Europe and twice that in the rest of the world, the potential here is great). Add in premium lens replacement procedures ((0.6 million U.S. >0.2 Million EU, 0.4 Million rest of world (ROW)) and we see an even larger market opportunity with no competition. OMS302 promises to change the treatment paradigm. Now factor in the value for the Arthroscopy franchise (which even

Valuing Omeros on the Ophthalmological surgery program alone, we see upside.


Maxim Group LLC 4

greater potential), the pipeline such as PDE7: (Addiction & Compulsive behaviors), PDE10 (Huntington’s Disease, Schizophrenia, Cognitive disorders, Parkinson’s) & Plasmin (safe replacement for Trasylol a $500 million product a decade ago), MASP-2 Program (a more effective version of Solaris Alexion – not rated) as well as the value of license deals associated with the GPCR platform. All of these programs have data readouts and associated catalysts. Bulls will see the potential for Omeros technology to be transformative powered by specialty pharma division that can generate revenues and pay the bills. Bear case. Omeros got into trouble right from its IPO where the stock was over-priced and fell sharply; now two years later it’s still below its IPO price. Bears see the PharmacoSurgery platform as fatally flawed and will be quick to point to the missed primary endpoint in the ACL trial last year, proving that phase II data does not portend the phase III outcome, as such the phase III ophthalmological surgery trial is an unpredictable binary event that could miss sending Omeros stock to low single digits. Some bears will still point to a flawed factorial analysis that presents regulatory risk (this specifically refers to the FDA’s concerns regarding a mixture of products re-tasked for a new indication. How does the mixture compare to the individual components in humans (i.e. rat data will not suffice for approval), however, the bears forget that Omeros did complete a full-factorial P2 human clinical trial for OMS302. As for the earlier stage pipeline the bears see management as misreading the value of the pre-clinical, phase 1 products in large potential indications that require more resources than Omeros can muster. Many have tried and failed indications like Huntington’s Disease, Schizophrenia, Cognitive disorders, Parkinson’s. Cubist experienced a spectacular failure with Dyax’s (DYAX-$1.49-NR) Kalbitor for CABG (as a replacement for Trasylol). The MASP-2 Program makes sense on a diagram but that’s a long way off from having a drug. The GPCR platform sounds great but where are the big license deals. Omeros is burning through its cash, has debt and need to raise capital before any products can reach the marketplace. The CEFF also remains an over-hang in front of investors. Our take. We view Omeros’ PharmacoSurgery platform as new and novel. For OMS302, we see the outcome of the second Phase III trial as presenting relatively low clinical risk and a high potential for rapid adoption once approved. The market may be under-appreciating the size and scope of both the cataract surgery and refractive lens exchange (RLE) opportunities, in our opinion. We also believe in the arthroscopy product – the OMS103HP – and are very hopeful that the meniscectomy pivotal data will be good. With that said, we do not include any market share in our model, making a point that Omeros can stand alone without it. We see the opportunity for significant news flow in the year ahead. The company’s multiple drivers include OMS302 (ophthalmological surgery), OMS103HP (arthroscopy), and a lot of phase 1 data from the PDE7, PDE10, Plasmin, and MASP programs, as well as from the G-PCR technology platform. We acknowledge that financing risk and the CEFF may limit near-term performance, but we believe once out of the way (likely during the next six months), the stock will rebound and surpass current levels based on data from catalyst events. As such, we advise aggressive investors to accumulate positions now in anticipation of the year ahead.


Maxim Group LLC 5

COMPANY OVERVIEW

Omeros was founded by Greg Demopulos, MD. As a practicing surgeon at Stanford University, Dr. Demopulos envisioned the practical application of therapeutics for better outcomes as part of the arthroscopic surgical paradigm. That vision has now been extended to multiple areas: The company has active programs in ophthalmologic and arthroscopic knee surgery, and the urological program has completed its phase II and is being evaluated. The platform is based on the application of low-dose combinations of existing therapeutic agents delivered directly to the surgical site throughout the duration of the procedure to preemptively inhibit inflammation and other problems caused by surgical trauma. Beyond the PharmacoSurgery platform, the company has very active R&D efforts in place, focused on several blockbuster areas in CNS such as schizophrenia, Parkinson’s disease, and addiction. The company also has an active program in inflammation. These efforts further compliment the company’s research in its G-protein coupled receptors (GPCR) program. We expect to see positive news flow from these programs and the GPCR platform in the years ahead, providing a longer-term value proposition beyond the PharmacoSurgery platform. Exhibit 1: Upcoming catalysts for OMER Product Indication Event Timeline Impact

ArthroscopyOMS103HP Menisectomy Indication PIII Menisectomy Indication US Trial- data 2H-2012 +++OMS103HP Menisectomy Indication PIII Menisectomy Indication EU Trial Begins 1H-2013 +OMS103HP Menisectomy Indication PIII EU Trial completes enrollment 1H-2014 +OMS103HP Menisectomy Indication PIII EU Trial Reports Data 2H-2014 +++OMS103HP Menisectomy Indication File for Approval 1H-2015 +OMS103HP Menisectomy Indication Commercial launch 1H-2016 ++OMS103HP Menisectomy Indication EU & ROW Filing 1H-2017 ++OMS103HP Menisectomy Indication EU & ROW Commercialization 2H-2018 ++OphthalmologyOMS-302 Ocular Lense Surgery Phenylephrine Phase II dose-ranging trial results 1Q-2010 COMPLETEDOMS-302 Ocular Lense Surgery PII Program Start 2H-2010 COMPLETEDOMS-302 Ocular Lense Surgery Phase III Trial (n=405) 3.2012 COMPLETEDOMS-302 Ocular Lense Surgery Data from 2nd PIII Trial (n=400) 2H-2012 +++OMS-302 Ocular Lense Surgery File for Approval 1H-2013 +OMS-302 Ocular Lense Surgery Commercial launch 1H-2014 ++UrologyOMS-201 Urological Surgery Complete Phase I/II 2H-2010 COMPLETEDOMS-201 Urological Surgery Sttart Phase II/III Study 1H-2011 COMPLETEDOMS-201 Urological Surgery Continue to Next Step of Clinical Development ? tbdPipelinePPAR (OMS 403) Opoid Addiction, Alcohol, Nicotine P2 Study 2012 +MASP-2 (OMS721) Atypical Hemolytic Uremic Sundrome (aHUS) P1 Safety Study Data 1Q-2013 +MASP-2 (OMS 616) Cardiovascular Surgery Prevention of Blood Loss (CABG) - P1 Safety Study Data 1H-2013 +PDE10 (OMS 284) Schizophrenia P1 Safety Study Data 4Q-2012 +PDE7 (OMS 527) Cocaine Addiction P1 Safety Study Data 1H-2013 +GPCR Platform Identify Receptors linked to CNS Discovery & Research ongoing +

Stock Signif icance Scale: + of moderate importance; ++ higher level; +++ highly

Source:Maxim Forecasts and Company reports.


Maxim Group LLC 6

Omeros has an exciting pipeline: 1.) OMS824 (PDE10): schizophrenia and/or cognitive and multiple other disorders; phase 1 data expected in 2012. 2.) OMS527 (PDE10): cocaine addiction; phase 1 studies are expected to begin later this year. 3.) OMS616 (Plasmin): prevention of blood loss related to cardiac surgery; phase 1 trials are expected to begin in 1H13 (efficacy equal to Trasylol by human ex vivo data; no meaningful off-target activity at Kallikrein or factor Xia). 4.) OMS721 (MASP-2 antibody): atypical hemolytic uremic syndrome (aHUS), PNH, AMD and more; trials expected to begin in by 1Q13 (promising clinical candidate as the MASP-2 antibody specifically blocks the Lectin pathway; note that MASP-2 inhibition prevents microvascular thrombosis). Exhibit 2: Omeros’ development pipeline (abbreviated)

Preclinical Phase I Phase II Phase III Market

OMS-103 HP 505(B)(2):Arthroscopy: Ketoprofen/Amitriptyline/Oxymetazoline

Inflammation/Pain - Arthroscopic ACL Surgery * (program on hold)

Inflammation/Pain - Arthroscopic Meniscectomy Complete 1st PIII (2013)OMS-302 505(B)(2) Opthalmic: Ketorolac/Phenylephrine Complete 2nd PIII (2013/4)OMS-201 505(B)(2) Urological: Ketoprofen/Nifedipine Start P2 (?)

MASP-2 Program - IND & Move to clinic Inflammation:

Plasmin (coagulopathies) Surgery - Blood Loss

PDE7 Program Parkinson's Disease & Addiction

PPAR -γ Addiction

PDE10 Program Schizophrenia

GPCR Program - de-orphanization CNS Disordres

Source: Omeros* Will not be pursued

Product Development Stage

Source: Maxim and Omeros

Omeros’ intellectual property. The PharmacoSurgery platform uses therapeutics that are well known and, today, generically available. As a result, Omeros does not hold any NCE (new chemical entity) patents. Recognizing this, the company created an extensive patent estate focused on both composition and method of use patents, covering the combinations of products represented in its PharmacoSurgery platform. Patent protection for OMS103HP should extend through 2019, providing seven years of exclusivity. In addition, we expect OMS302 to be extended out to 2023 (and, pending applications, potentially 2033) and OMS201 to 2026. As of February 15, 2012, Omeros owned or held worldwide exclusive licenses to a total of 35 issued or allowed patents and 41 pending patent applications in the United States, as well as 134 issued or allowed patents and 144 pending patent applications in foreign markets. These patents are related to therapeutic compositions and methods related to the company’s PharmacoSurgery platform, GPCR program, and preclinical development programs. The patent portfolio for the PharmacoSurgery technology is directed to locally delivered compositions and treatment methods using agents selected from broad therapeutic classes. These patents cover combinations of agents, generic and/or proprietary to the company or others, delivered locally and intra-operatively to the site of any medical or surgical procedure. As of February 15, 2012, the patent portfolio included 15 U.S. and 35 foreign issued or allowed patents, as well as 7 U.S. and 20 foreign pending patent applications, related to the PharmacoSurgery product candidates and development programs. The issued PharmacoSurgery patents have terms that will expire as late as September 24, 2022 for OMS103HP and, assuming issuance of currently pending patent applications, August 4, 2032, for OMS103HP, July 30, 2023 for OMS302 and March 17, 2026 for OMS201. The company plans to intend to file additional patent applications directed to OMS302 which, if issued, are expected to provide patent terms ending 2033 or later.


Maxim Group LLC 7

The initial issued patents in the PharmacoSurgery portfolio are directed to combinations of agents, drawn from therapeutic classes such as pain and inflammation inhibitory agents, spasm inhibitory agents, restenosis inhibitory agents, and tumor cell adhesion inhibitory agents. Omeros expanded their initial patent position with a series of patent applications directed to what the company believes are the key physiological and technical elements of selected surgical procedures and to the therapeutic classes that provide opportunities to improve clinical benefit during and after these procedures. Accordingly, the pending PharmacoSurgery patent applications are directed to combinations of agents, drawn from therapeutic classes such as pain and inflammation inhibitory agents, spasm inhibitory agents, vasoconstrictive agents, mydriatic agents, and agents that reduce intraocular pressure. These are preferred for use in ophthalmologic procedures including intraocular procedures, arthroscopic procedures, and urologic procedures including ureteroscopy (for OMS302, OMS103HP and OMS201, respectively), as well as covering the specific combinations of agents included in each of these product candidates. OMS302: Ophthalmology. OMS302 is encompassed by the PharmacoSurgery patent portfolio. The relevant patents and patent applications in this portfolio cover combinations of agents, generic and/or proprietary to the company or others, drawn from therapeutic classes such as pain and inflammation inhibitory agents, mydriatic agents, and agents that reduce intraocular pressure, delivered locally and intra-operatively to the site of ophthalmological procedures, including cataract and lens replacement surgery. As of February 15, 2012, Omeros owned one pending U.S. Patent Application, as well as 11 issued patents and nine pending patent applications in foreign markets (Australia, Canada, China, Europe, Hong Kong, and Japan) that cover OMS302. OMS103HP: Arthroscopy. OMS103HP is encompassed by the PharmacoSurgery patent portfolio. The relevant patents and patent applications in this portfolio cover combinations of agents, generic and/or proprietary to the company or others, drawn from therapeutic classes such as pain and inflammation inhibitory agents and vasoconstrictive agents, delivered locally and intra-operatively to the site of medical or surgical procedures, including arthroscopy. As of February 15, 2012, Omeros owned five issued U.S. Patents, three pending U.S. Patent Applications, and 32 issued patents and three pending patent applications in foreign markets (Australia, Brazil, Canada, China, Europe, Hong Kong, Japan, Mexico, Norway, Russia, Singapore, and South Korea) that cover OMS103HP. OMS201: Urology. OMS201 is encompassed by the PharmacoSurgery patent portfolio. The relevant patents and patent applications in this portfolio cover combinations of agents, generic and/or proprietary to the company or others, drawn from therapeutic classes such as pain and inflammation inhibitory agents and spasm inhibitory agents, delivered locally and intra-operatively to the site of medical or surgical procedures, including uroendoscopy. As of February 15, 2012, Omeros owned three issued U.S. Patents, two pending U.S. Patent Applications, and an additional 22 issued patents and 12 pending patent applications in foreign markets (Australia, Brazil, Canada, China, Europe, Hong Kong, India, Japan, Mexico, Norway, Russia, Singapore, and South Korea) that cover OMS201. PPAR γ program: OMS403. As of February 15, 2012, Omeros owned two pending U.S. Patent Applications and 22 pending patent applications in foreign markets (Australia, Brazil, Canada, China, Europe, India, Japan, Mexico, New Zealand, Russia, South Korea, and International Patent Cooperation Treaty) directed to the recently discovered link between PPARg and addictive disorders.


Maxim Group LLC 8

PDE10 program: OMS824. As of February 15, 2012, Omeros owned one issued patent and four pending patent applications in the United States, and nine pending patent applications in foreign markets (Australia, Canada, China, Europe, India, Japan, and New Zealand) that claim proprietary PDE10 inhibitors. PDE7 program: OMS527. As of February 15, 2012, Omeros owned two pending U.S. Patent Applications, as well as one issued patent and 21 pending patent applications in foreign markets (Australia, Brazil, Canada, China, Europe, India, Japan, Mexico, New Zealand, and Russia) directed to the link between PDE7 and movement disorders, as well as two pending U.S. Patent Applications and one international Patent Cooperation Treaty Patent Application directed to the link between PDE7 and addiction and compulsive disorders. Additionally, under a license from Daiichi Sankyo, the company exclusively controls rights to two issued U.S. Patents and one pending U.S. Patent Application, as well as 13 issued and 11 pending patent applications in foreign markets (Australia, Brazil, Canada, China, Europe, Hong Kong, Hungary, India, Japan, Korea, Mexico, New Zealand, and Russia) that claim proprietary PDE7 inhibitors. MASP-2 program: OMS721. Omeros holds worldwide exclusive licenses to rights in connection with MASP-2, the antibodies targeting MASP-2, and the therapeutic applications for those antibodies from the University of Leicester, Medical Research Council at Oxford University, and Helion Biotech ApS. As of February 15, 2012, the company exclusively controlled four issued patents and nine pending patent applications in the United States, as well as nine issued patents and 40 pending patent applications in foreign markets (Australia, Brazil, Canada, China, Hong Kong, Europe, India, Indonesia, Japan, Mexico, New Zealand, Russia, and South Korea) related to the MASP-2 program. Plasmin program: OMS616. Omeros holds worldwide exclusive licenses to a series of antifibrinolytic agents from The Regents of the University of California. As of February 15, 2012, the company exclusively controlled one issued patent and one pending patent application in the United States and four pending patent applications in foreign markets (Australia, Canada, Europe, and Japan) that are directed to these proprietary agents. GPCR program. As of February 15, 2012, Omeros owned three issued patents and four pending patent applications in the United States, as well as 42 issued patents and seven pending patent applications in foreign markets (Australia, Canada, China, Europe, Hong Kong, India, Japan, Macao, Mexico, New Zealand, and Russia), which are directed to previously unknown links between specific molecular targets in the brain and a series of CNS disorders.


Maxim Group LLC 9

PRODUCT DESCRIPTIONS

OMS302: Ophthalmology. OMS302 is the company’s lead PharmacoSurgery platform product. It is being developed for use during ophthalmologic procedures, including cataract and other lens replacement surgery. It is a proprietary combination of an anti-inflammatory agent and a mydriatic agent (which causes pupil dilation). Each component has well-known safety and pharmacologic profiles. Like OMS103HP, the individual FDA-approved drugs containing each of these active agents have been used in ophthalmologic clinical practice for more than 15 years, and both agents are contained in generic, FDA-approved drugs. Exhibit 3: Graphic representation of OMS302 being used during the cataract/refractive Lens exchange (RLE) procedure. OMS302 represents a proprietary combination of a mydriatic agent with an anti-inflammatory. Like OMS103HP, it will require no change to the surgical procedure, and it will be pre-packaged in a single vial use, pre-dosed and pre-formulated. There are estimated to be 3.6M US and 20M worldwide lens replacement procedures (in 2012), growing at approximately 3-4% annually.

Source: Omeros Why is mydriasis important? "Maintenance of mydriasis throughout the procedure is essential for the safety of lens replacement surgery," states Mark I. Rosenblatt, MD, PhD, associate professor of ophthalmology at Weill Cornell Medical College. "A constricted pupil decreases the surgeon's operative field, which can make the procedure more difficult to perform and potentially increases the rates of complications, including rents in the lens capsule or the retention of cortical lens material with more frequent posterior capsular opacification or lens dislocation. And, as a side note, the addition of pain relief from this drug combination improves the surgical experience for the patient and assists the surgeon in pain management during the critical early postoperative period." Clinical data for OMS302: Ophthalmology. OMS302 is Omeros’ second most advanced product candidate. Like OMS103HP, 302 is a proprietary combination of an anti-inflammatory and a Mydriatic (pupil dilation) agent in a standard irrigation solution for use during ophthalmic lens replacement surgery (cataract and refractive lens). Phase II study results. The company recently completed a phase 2b clinical study of OMS302 (N=221-patients). Patients who were treated with OMS302 demonstrated statistically significant (p<0.0001) and clinically meaningful maintenance of mydriasis throughout the cataract procedure. If mydriasis is not maintained throughout the procedure, the risk of injuring structures within the eye increases and the required operating time is often prolonged. Of equal clinical relevance, OMS302 also significantly decreased (p=0.0418) pain in the early postoperative period and reduced the frequency of complaints of moderate and severe pain (2.5 times more complaints in the vehicle-treated patients). The drug product was safe and well tolerated in this study.


Maxim Group LLC 10

Phase III study: P-values significant (p<0.00001). In March, Phase III data was reported from the pivotal trial evaluating OMS302 in patients undergoing intraocular lens replacement surgery. OMS302 met its primary endpoint by demonstrating statistically significant (p<0.00001) maintenance of intraoperative mydriasis (pupil dilation). OMS302 also demonstrated statistical superiority (p<0.00001) over the placebo in reduction of pain in the early postoperative period. The data for both endpoints are clinically meaningful. The trial was a multi-center, double-blind evaluation of 405 patients randomized 1:1 to receive either OMS302 or the placebo. The primary endpoint was the maintenance of intraoperative mydriasis (pupil dilation), which is critical to the safety and surgical ease of lens replacement surgery. Pupil constriction during surgery increases the risk of injury to intraocular structures and can substantially prolong surgical time. In addition to statistical superiority over the placebo in maintenance of mydriasis and the secondary endpoint of reduced postoperative pain, OMS302 achieved p values of less than 0.05 in a series of other clinically relevant measures. The most common adverse events were those related to surgery, specifically eye pain, eye inflammation, headache and increased intraocular pressure. The incidence of these adverse events was similar between OMS302 and placebo-treated patients. Exhibit 4: OMS302 Phase 3 ILR Surgery: Clinical Need for Consistent Dilation (Intraoperative Pupillary Miosis (Constriction)

Source: Omeros


Maxim Group LLC 11

Exhibit 5: OMS302 Phase 3 ILR Surgery Intraoperative Change in Pupil Diameter (Pupil Size Relative to Start Time of Irrigation)

Source: Omeros Phase III results (summarized): The study showed a clinically meaningful improvement in the maintenance of mydriasis and the prevention of miosis as well as benefits in less postoperative pain. In fact, 590% more placebo patients compared to OMS302 patients experienced a pupil size of < 6 mm at cortical clean-up and 70% more OMS302 patients (compared to placebo patients_ also reported no pain in the early postoperative period. Potential advantages of OMS302: Maintain pupil dilation; ease surgical procedure; decrease risk of surgical trauma; manage floppy iris syndrome; reduce postoperative inflammation and pain; and improve postoperative visual acuity. Next clinical steps for OMS302. The Second Phase 3 trial has already begun enrolling with data expected 2H12. NDA and MAA in preparation, and submissions are expected during the first part of 2013. Launch is expected during the first part of 2014. Exhibit 6: OMS302 Phase 3 ILR Surgery: Mydriasis (pupil dialation) vs. Miosis (pupil constriction)

Cortical Clean-Up Lens Implantation End

Source: Omeros


Maxim Group LLC 12

Exhibit 7: OMS302 Annual Revenue Model: (Please see our model assumptions later in this report).

U.S. OMS-302 (Cataract): 2012 2013 2014 2015 2016 20173.6 MLN "Cataracts" at baseline (-0.6 PL) : annual procedures (2012) 3,032,180 3,121,518 3,217,265 3,320,004 3,430,381 3,549,119

Market Size Growth (Annual) 2.9% 3.1% 3.2% 3.3% 3.5%Market Share Penetration (302) 0.0% 0.0% 4.3% 9.5% 13.5% 17.5%

Number of Procedures 0 0 137,445 315,733 463,459 621,4811.0 1.0 1.0 1.0 1.0 1.0 1.0

Price per procedure 250$ 250 250$ 250.0 250$ 250$ Price Growth 0% 0% 0% 0% 0%

U.S. Annual Sales -$ -$ 34$ 79$ 116$ 155$ % Growth (qtrly) 130% 47% 34%

U.S. OMS-302 (Premium Lens): 2012 2013 2014 2015 2016 2017600k "premium lens replacement at baseline: (2012) 621,919 686,816 764,636 858,735 973,548 1,115,003


Number of Procedures 0 0 35,099 112,283 224,709 346,632Units Per Procedure 1.0 1.0 1.0 1.0 1.0 1.0Price per procedure 250$ 250 250$ 250.0 250$ 250$

Price Growth 0% 0% 0%U.S. Annual Sales -$ -$ 9$ 28$ 56$ 87$

% Growth (qtrly) 220% 100% 54%

Western Europe (Cataract) 2012 2013 2014 2015 2016 20173.3 MLN "Cataracts at baseline: annual procedures (2012) 3,022,955 3,086,374 3,153,773 3,225,465 3,301,790 3,383,123


Number of Procedures 0 0 0 80,868 214,862 355,490Units Per Procedure 1.0 1.0 1.0 1.0 1.0 1.0Price per procedure 200$ 200 200$ 200.0 200$ 200$

Price Growth 0% 0% 0%Western Europe QTRLY Sales ($) -$ -$ -$ 16$ 43$ 71$

EU OMS-302 (Premium Lens): 2012 2013 2014 2015 2016 #REF!300k "premium lens replacement at baseline: (2012) 314,009 355,116 403,585 461,019 529,432 611,364


Number of Procedures 0 0 0 23,442 96,231 177,856Units Per Procedure 1.0 1.0 1.0 1.0 1.0 1.0Price per procedure 200$ 200 200$ 200.0 200$ 200$

Price Growth 0% 0% 0%EU QTRLY Sales ($) -$ -$ -$ 4.7$ 19$ 36$

% Growth (qtrly) #DIV/0! 311% 85%

International OMS-302 (Premium / Refractive Lense): 2012 2013 2014 2015 2016 20170.4 MLN "Refractive Lense" at baseline: annual procedures (2012) 406,101 422,758 440,098 458,149 476,940 496,502


Number of Procedures 0 0 0 6,930 29,887 52,195Units Per Procedure 1.0 1.0 1.0 1.0Price per procedure -$ 150$ 200$ 200.0 200$ 200$

Price Growth 0% 0% 0%International Annual Sales -$ -$ -$ 1$ 6$ 10$

World Wide Cataract Revenues -$ -$ 34.4$ 95.1$ 158.8$ 226.5$ % Growth (qtrly) 177% 67% 43%

World Wide Opthalmic Revenues -$ -$ 43.1$ 124.6$ 221.0$ 323.6$ % Growth (qtrly) 189% 77% 46%

Totol US Opthalmic Revenues -$ -$ 43.1$ 107.0$ 172.0$ 242.0$ % Growth (qtrly) 148% 61% 41%

Total International Opthalmic Revenues -$ -$ -$ 18$ 49$ 82$ % Growth (qtrly)

Grand Total ALL Opthalmic Revenues -$ -$ 43$ 125$ 221$ 324$ % Growth (qtrly) 189% 77% 46%

Source: Maxim Estimates & Based on Market Scope, Comprehensive Report on the Global IOL Market, 2011.


Maxim Group LLC 13

Clinical data for OMS103HP. OMS103HP has resulted in a lot of volatility for Omeros shares and a lot of confusion regarding the efficacy of the product. The initial phase III trial (which took several years to complete enrollment) missed its primary endpoint last year in ACL repair. As a result, the stock fell sharply as investors lost confidence in the company and the PharmacoSurgery platform. Since that time, the ophthalmology program has reported solid data. Where does that leave OMS103HP? Initially being developed around anterior crucial ligament repair of the knee and now with a failed phase III trial, investors have given up – but not the company. Currently, OMS103HP is in a phase III trial for the repair of meniscectomy injury. In the phase II study, significant results were reported. Investors are acutely aware that OMS103HP missed its primary endpoint in the anterior Cruciate ligament (ACL) phase III study last year. However, in the ACL trial, patients were evaluated by raters comprised of physical therapists. There were imbalances observed among the physical therapists, which created a confounding effect on the scores and subsequent results. Contrast this with the results in the meniscectomy trial. The primary endpoint for this trial was the performance on the symptoms domain of the Knee Injury and Osteoarthritis Outcome Score or KOOS. KOOS is a validated patient-reported outcome measure already used in the successful Phase 2 meniscectomy trial. KOOS consists of five subscales: pain, other symptoms, function in daily living (ADL), function in sport and recreation, and knee-related quality of life. The primary endpoint would focus only in the “symptoms” relief reported by the patients. Next clinical events: Phase III enrollment; data is expected 2H-2012. The U.S. trial is expected to have data in the second half of 2012. The European trial (a combination of US & EU sites) could begin next year. The trial was based on a phase 2 study that was vehicle-controlled, randomized, double-blinded and a multi-center study (10 U.S. sites) with two arms: OMS103HP and vehicle 90-day postoperative follow-up. Key endpoints included knee function, range of motion, and pain as well as a consistent improvement over 90 day period (KOOS Outcomes scores). Exhibit 8: OMS302: Excellent Phase II Data: OMS103HP: Meniscectomy Trial showed consistent improvement across all KOOS subscales.

Source: Omeros


Maxim Group LLC 14

Exhibit 9: Graphic Representation of OMS103HP Being Used During Arthroscopy: Note the addition of OMS103HP requires no change to the surgical procedure, and it will be pre-packaged in a single vial use, pre-dosed and pre-formulated.

Source: Omeros Exhibit 10: Annual Revenues - Arthroscopy Model: OMS103HP Note: We do not include these revenues in the model for the sake of conservatism and to make the point that arthroscopy only represents upside for the company.

U.S. OMS-103HP (Meniscetomy): Knee 2012 2013 2014 2015 2016 20172.0 MLN "KNEE" at baseline: annual arthroscopies (2011) 2,011,952 2,043,372 2,074,018 2,103,891 2,132,995 2,161,333

Market Size Growth (Annual) 1.6% 1.5% 1.4% 1.4% 1.3%Market Share Penetration (103-HP) 0.0% 0.0% 0.0% 2.3% 7.5% 11.5%

Number of Procedures 0 0 0 47,494 160,064 248,641 Units Per Procedure 3.0 3.0 3.0 3.0 3.0 3.0

Price per Unit -$ 0 -$ 101.1 104$ 107 Price Growth 3% 3%

U.S. Annual Sales -$ -$ -$ 15$ 50$ 57$ % Annual Growth 245% 15%

Western Europe OMS-103HP (Menisectomy): Knee 2012 2013 2014 2015 2016 20171.8 MLN "KNEE" at baseline: annual arthroscopies (2011) 1,905,221 1,934,675 1,963,399 1,991,395 2,018,666 2,045,216

Market Size Growth (Annual) 1.5% 1.5% 1.4% 1.4% 1.3%Market Share Penetration (103-HP) 0.0% 0.0% 0.0% 2.3% 7.5% 11.5%

Number of Procedures 0 0 0 44,953 151,484 235,282 Units Per Procedure 3.0 3.0 3.0 3.0 3.0 3.0

Price per Unit -$ 0 -$ 101.1 104$ 107 3% 3%

International Annual Sales -$ -$ -$ 14$ 47$ 54$ Source: Maxim estimates.

The market Opportunity for meniscectomy is significant. We assume that at least 2 mln meniscectomy procedures performed in the US alone in 2011. In our model, we assume no sales in this indication for the sake of conservatism. With that said we would normally model a modest growth rate in the number of procedures today (1.5%) and a product launch in 2015 at pricing of $100 per unit with an average of 3 units used per procedure. Our market share assumptions would normally include an initial share in the low single digits (2016) rising. We should also include “International” sales (primarily EU based) in the future. As such, any good news from this program is upside to the company.


Maxim Group LLC 15

OMS201: Urology. OMS201 is the company’s earliest-stage PharmacoSurgery platform product. It is being developed for use during urological surgical procedures, including bladder endoscopy, cystocopy, minimally invasive prostate surgery, and ureteroscopy. OMS201 consists of a proprietary combination of an anti-inflammatory agent (ketoprofen, an NSAID) and a smooth muscle relaxant (nifedipine, a calcium channel blocker). As is true with the more advanced PharmacoSurgery products, the two components are generically available, FDA-approved drugs with solid profiles. OMS201 is intended to be delivered directly to the surgical site during uroendoscopic procedures to inhibit surgically induced inflammation, pain, and smooth muscle spasms. Potential clinical benefits include improved renal stone passage, the ability to facilitate the placement of a ureteral access sheath, and the reduction of the need for ureteral stents, to reduce postoperative pain, frequency, and dysuria. Exhibit 11: The Ureteroscopic Procedure: The physician passes an ureteroscope through the urethra and bladder into the ureter. The physician pilots the scope through the ureter until it reaches the target (in this diagram, a kidney stone). No cuts are made in the body.

Source: http://www.med.nyu.edu/cgi-bin/healthwise/healthwise.cgi?popup=1&hwid=zm6114 The benefits of OMS201. A key benefit of OMS201 is the prevention or inhibition of the surgically induced inflammation and smooth muscle spasm that is often seen during these procedures, complicating them. In fact, surgeons routinely place uretal stents in patients following ureteroscopy to prevent ureteral strictures and occlusion. Many surgeons commonly place an uretal access sheath (UAS) to protect the lining of the urethra and ureter. OMS201 could facilitate the placement of the UAS by reducing the inflammation associated with the procedure, which then reduces downstream surgical complications, such as the placement of uretal stents.


Maxim Group LLC 16

Clinical Data of OMS201: Urology In 2008, Omeros conducted a Phase I study on OMS201. The study was a randomized, double-blind, vehicle controlled and parallel-assigned trial to evaluate the systemic absorption and safety of patients receiving primary treatment for endoscopic removal of urinary stones. The results demonstrated minimal absorption levels of drugs (systemically) with no serious events. The data from this trial then led to a second more advanced Phase I/II trial, which found that OMS201 was safe and well tolerated in the study. The incidence of adverse events was similar in the two OMS201-concentration arms and the group receiving the vehicle. No adverse events were considered treatment-related by investigators. There were no deaths or discontinuations for adverse events. Only one serious adverse event was reported, and it occurred in a vehicle-treated patient. The trial also gave some insight into which endpoint might be used in a larger study, such as “directed to ease surgery,” including the size of the uretal access sheath (UAS) that can be used during the surgical procedure, the time to complete the procedure, and the overall surgical outcome (during the first post-operative week), post-operative pain, pain medications used, and lower urinary tract symptoms. For now, the program is on hold as the company evaluates its financial resources and prioritizes the most promising programs.

COMPETITION

The pharmaceutical industry is highly competitive and characterized by a number of established, large pharmaceutical companies, as well as smaller companies like Omeros. With that said, we are not aware of any products that directly compete with Omeros PharmacoSurgery product candidates that are approved for intra-operative delivery in irrigation solutions during surgical procedures. It is expected that the company’s PharmacoSurgery product candidates could compete with preoperative and postoperative treatments for mydriasis, pain, and inflammation. If approved, Omeros expects that the primary constraint to market acceptance of the PharmacoSurgery product candidates will be surgeons who continue with their respective current treatment practices and do not adopt the use of these product candidates, as well as the level of reimbursement surgeons receive for the administration of these product candidates. It is also important to note that premium ILRs (lens replacements) do not rely on insurance reimbursement and tend to be out of pocket. The company’s clinical and preclinical product candidates face competing products. For example, in the PDE10 inhibitors space (for use in the treatment of schizophrenia and other diseases that affect cognition) there are others in development. On the Plasmin front, Bayer HealthCare Pharmaceuticals is currently authorized to market Trasylol® in Canada for patients undergoing coronary artery bypass graft surgery, and any product Omeros develops in this space for such indication would directly compete with Trasylol® in Canada as well any other countries in which Trasylol® is authorized to be marketed. We also know that there are other companies attempting to de-orphanize orphan GPCRs. If any of these companies is able to de-orphanize an orphan GPCR before Omeros, it may be difficult to establish an exclusive or commercially valuable intellectual property position around that orphan GPCR.


Maxim Group LLC 17

TECHNOLOGY PLATFORM AND PIPELINE

Preclinical and discovery programs: MASP-2. Omeros is developing MASP-2 (Mannan-binding lectin Associated Serine Protease-2) antibody therapy, OMS721. MASP-2 represents a novel pro-inflammatory protein target present in the complement system. MASP-2 is downstream of MBL in the lectin-complement pathway and upstream of the C2-C5 cascade. Omeros believes that MASP-2 plays a significant role in macular degeneration, ischemia reperfusion injury, transplant surgery, and renal disease, as well as aHUS, PNH, TTP and HUS. Exhibit 12: Graphic Representation of the Lectin-Induced Complement Pathway

Source: Biocarta: Lectin Induced Complement Pathway The complement cascade of proteolytic factors involved in cellular lysis can be initiated by several different factors, including antibody-dependent and antibody-independent recognition of infectious organisms (see classical and alternative complement pathways). In the lectin-induced complement cascade, carbohydrates on the surface of microbial cells activate the complement cascade by binding to mannan-binding lectin (also called the mannan-binding protein, Mbl/Mbp). Mbp is an acute phase serum protein whose expression is induced by microbial infection. The binding of Mbl to microbial ligands activates the Mbl associated serine proteases MASP-1 and MASP-2, triggering the cleavage of C2 and C4 to create C4bC2a, a C3 convertase that cleaves large numbers of C3. MASP-1 and MASP-2 are similar to the C1 protease in the classical complement pathway. Once formed the C3 convertase cleaves and activates the remaining complement factors leading ultimately to formation of a pore in the bacterial membrane by the membrane attack complex (MAC) that lyses the bacterial cell. The lectin-induced pathway also appears to play an important role in the activation of phagocytotic cells by infection. Although the initiating event activating the complement cascade is distinct in the lectin-induced pathway, from the C3 convertase onward the lectin induced complement pathway is the same as the classical complement pathway. Since antibodies are not required in the lectin-induced pathway, this aspect of the immune response is part of the innate immune response. The importance of this pathway to the immune response has been demonstrated by the identification of children and adults with little or no Mbl who lacked normal phagocytotic responses and are highly susceptible to infection.


Maxim Group LLC 18

Exhibit 13: Early Experiments in Mouse Models of Age-Related Macular Degeneration Suggest MASP-2 Plays a Pivotal Role. Systemic administration of MASP-2 antibodies to mice produced a dose-dependent reduction of the growth of blood vessels with a maximal effect of a 50% inhibition of CNV (choroidal neovascularization).

Source: Omeros Exhibit 14: Effect of a Single Dose of Systemically Delivered MASP-2 Antibody on Laser-Induced Choroidal Neovascularization (CNV). MASP-2 antibody (1mg/kg) reduced choroidal neovascularization in the mouse model of AMD (Newman-Keuls; p < 0.01)

Source: Omeros

Choroidal Neovascularization (CNV)

VEGF Induction


Maxim Group LLC 19

Exhibit 15: The Myocardial Ischemia-Reperfusion (MIRP) Injury Mouse Model Also Suggests MASP-2 Is Highly Active.

Source: Omeros The potential of the Omeros MASP-2 antibody is significant, in our opinion. MASP-2 is the only protein unique to, and required for, the function of the lectin complement pathway. This science relates directly to the immune response (classical pathway, alternative pathway, and the lectin dependent pathway). Omeros compares MASP-2 to Alexion’s Soliris (see the next exhibit). Exhibit 16: Only One Complement Agent on the Market Today: Soliris (eculizumab). Soliris is a humanized monoclonal antibody that blocks the activation of terminal complement at C5, preventing the formation of C5a and the terminal complement complex, C5b-9. On the mechanism of action slide below, note that OMS721 works upstream of Soliris in this pathway.

Source: Omeros & Hematology, October 2007; 12(5): 371-376


Maxim Group LLC 20

Exhibit 17: Mechanism of Action for OMS721: A Human Monoclonal Antibody that Inhibits MASP-2 and Blocks the Lectin Pathway of Complement

Source: Omeros Soliris (eculizumab). Soliris is the brand name for the antibody eculizumab, which is currently approved in the United States and Europe, as well as a number of other major markets for the treatment of the rare blood disorder paroxysmal nocturnal hemoglobinuria (PNH). Since initial commercialization in 2007, Soliris has generated over $400 million in worldwide sales – and sales are still growing. Soliris is one of the most expensive commercially approved drugs at approximately $400,000 per patient per year. The drug works by targeting a component of the immune system that causes PNH and is administered as a 35-minute intravenous infusion. Dosing begins at 600 mg every week for four weeks followed by 900 mg every two weeks. The first series of clinical studies of eculizumab was in patients with rheumatoid arthritis, and in patients with lupus nephritis as far back as 1998. A series of other indications (including membranous nephritis, psoriasis, dermatomyositis and bullous pemphigoid), was examined over the years. The most compelling clinical results came in studies of patients with PNH, a rare blood disorder in which the host immune system attacks red blood cells (RBCs). This program took precedent over other indications and eventually led to Soliris’ approval. Today, Soliris has changed the treatment paradigm for patients with PNH. This success of Soliris creates an interesting question: What is the value of the Omeros MASP-2 program? In comparison to Soliris, MASP-2 acts at the top of the lectin-dependent pathway and has no interference with the classical pathway (antibody-dependent classical complement activation). Indications for MASP-2 range from age-related macular degeneration (AMD) to ischemia reperfusion injury (which typically follows organ transplant, myocardial infarction, coronary artery bypass grafts, aortic aneurysm repair, stroke, and gastro-intestinal vascular injury as well as aHUS, PNH, TTP and HUS). Other favorable attributes relate to the potential to deliver MASP-2 antibodies systemically, a therapeutic potential at a low effective dose, and a low cost of goods. A MASP-2 candidate (OMS721) has been selected for clinical development this year (2012).


Maxim Group LLC 21

Plasmin program: OMS-616 antifibrinolytic agent: Omeros is developing an antifibrinolytic agent for the control of blood loss during surgery or resulting from trauma. Excessive bleeding during cardiac surgery is known to increase overall morbidity and mortality. In an attempt to control this bleeding, patients undergoing cardiac and other extensive surgery often receive antifibrinolytic compounds. These drugs inhibit plasmin, an enzyme present in blood that degrades fibrin clots. Because plasmin degrades fibrin clots, an agent that inhibits plasmin may have potential utility for reducing blood loss due to trauma or surgery. Prior to withdrawal from the market in 2008 for safety concerns, the antifibrinolytic Trasylol (aprotinin) had been shown in a number of studies to be more effective at reducing blood loss than the other two most commonly used antifibrinolytics on the market today, tranexamic acid and epsilon aminocaproic acid. While Trasylol is a potent inhibitor of plasmin, it is non-selective. In addition to plasmin, it significantly inhibits kallikrein and Factor XIa, two enzymes important in promoting clotting, and their inhibition can increase bleeding. Trasylol was found to be associated with a number of safety issues, including increased mortality. Further, it is a bovine protein associated with anaphylactic reactions. While the specific cause of increased death remains unknown, an often-cited explanation is the lack of specificity of Trasylol. Omeros’ proprietary agents also inhibit plasmin but, unlike Trasylol, they do not significantly inhibit kallikrein and Factor XIa. Additionally, these agents are derived from human protein, which may reduce immunological side effects. The properties of these proprietary agents are described in a peer-reviewed article titled "Engineering Kunitz Domain 1 (KD1) of Human Tissue Factor Pathway Inhibitor-2 to Selectively Inhibit Fibrinolysis: Properties of KD1-L17R Variant" that was published in the February 11, 2011 issue of the Journal of Biological Chemistry. We believe the efficacy and improved selectivity of these agents can provide a novel approach to the control of bleeding from surgery and trauma. Next Steps: Manufacturing scales up and the potential start of a phase 1 trial by 1H-2013. Exhibit 18: OMS616 Is a Potent Inhibitor of Plasmin. It is a single amino acid mutation of the first Kunitz domain (KD1) of tissue factor pathway inhibitor 2 (TFPI-2). It is believed to be highly selective and a potent inhibitor of plasmin activity and selectivity significantly reduces off-target inhibition of kallikrein and Factor XIa and associated anticoagulant activity. It is a significantly more selective antifibrinolytic agent than Trasylol.

Source: Omeros


Maxim Group LLC 22

Exhibit 19: OMS616 Comparison with Other Antifibrinolytics

Source: Omeros Exhibit 20: OMS616 Inhibits Plasmin with Potency Equal to Trasylol (top charts) and Is Selective for Plasmin (bottom charts).

Source: Omeros


Maxim Group LLC 23

Central Nervous System Programs Addiction programs: (PPAR-γ (OMS403)/PDE7 inhibitors (OMS527). Omeros is developing proprietary compositions that include PPAR-γ (peroxisome proliferators-activated receptor) for the treatment and prevention of addiction to substances such as opioids, nicotine, alcohol, and amphetamines, as well as other compulsive behaviors. OMS403 is such a candidate. PPARγ is expressed in adipose tissue, macrophages, brain tissues (lateral hypothalamus, paraventricular nucleus of the hypothalamus, arcuate nucleus, and ventral tegmental area). This link between PPAR-γ and substance abuse was previously unknown and, as such, the company has filed patent applications claiming the use of PPAR-γ agonist alone and in combination with other agents. A pre-clinical rat model of alcohol and nicotine addiction demonstrated that administration of a PPAR agonist significantly reduced the voluntary intake of alcohol and nicotine, stress-induced relapse to alcohol and nicotine seeking behavior, and the associated withdrawal symptoms. Exhibit 21: PPAR-γ Agonist in Animal Model of Alcohol Addiction

0 1 2 3 4 5 6 7

Etha

nol I

ntak

e (g

/kg)

0

1

4

5

6

7

Days

8

* * * * **

*

Vehicle

PPa 30mg/kg

Vehicle

PPa 30mg/kg

8

Alcohol Intake

N: 9 msP rats/group

*P<0.05; **P<0.01

Source: Omeros European pilot study design – alcohol addiction: The trial is a three-arm (four patients per arm), 11-month-long, open label study. Arm 1: 30mg/day pio; Arm 2: 50mg/day naltrexone; Arm 3: counseling. Patients were matched for age, status, education, and alcohol addiction years. An AUDIT (Alcohol Use Disorders Identification Test) score was used. Results:

• Arm 1: Complete abstinence after three months of treatment. All four patients are no longer receiving the drug, but they are under counseling. After more than five months into this “pioglitazone-free” phase, all remain abstinent. Amelioration of co-morbid depression and anxiety was seen. All patients were compliant (four patients in treatment for 11 months).

• Arm 2: Two patients failed to reach abstinence, and they were switched to gammahydroxybutirrate (substitution therapy). The other two individuals dropped out of the study between weeks 22 and 24.

• Arm 3: No significant reduction of daily ethanol consumption and craving for alcohol. All subjects dropped out of the study after the initial two months.


Maxim Group LLC 24

Exhibit 22: PPARγ Agonist Administration Study in Rats. The results showed a reduction of nicotine self-administration, a reduction of stress-induced relapse to nicotine seeking, and a reduction of nicotine withdrawal symptoms.

Num

ber

of r

espo

nses

(2h

r)

Veh PPa 30mg/kg0

5

10

15

20

25

30

*

Nicotine self-administration

N: 9 Long Evans rats/group

*P<0.05

Source: Omeros European pilot study design – nicotine addiction: The trial consists of three groups with three to four patients in each group. Patient-entry criteria includes that the patients were smoking, on average, 30 cigarettes/day for over 23 years. Three arm study: PPARγ agonist: Four patients, 15mg/day (1st month); 30mg/day (2nd month) versus Varenicline (VAR: Chantix): Three patients, dose titrated from 0.5 to 2.0 mg/day and versus Bupropion: Three patients, 150 mg/kg. The outcome following two months of treatment: Smoking cessation was achieved in both the PPa and VAR groups; however, the PPA group showed none of the side effects associated with VAR. Exhibit 23: Smoking cessation was achieved in both the PPa and VAR groups

Smoking Reduction (%)

DO*4540BUP

9394100VAR

759698100PPa

P4P3P2P1

Smoking Reduction (%)

DO*4540BUP

9394100VAR

759698100PPa

P4P3P2P1

Source: Omeros * patient dropped out


Maxim Group LLC 25

Exhibit 24: OMS527’s Efficacy in an Animal Model of Parkinson’s Disease of a PDE7 Inhibitor. This shows that a representative PDE7 inhibitor is equally effective as (and greater than 50x more potent to) L-DOPA. Sub-therapeutic doses of both a PDE7 inhibitor and L-DOPA in combination resulted in efficacy greater that the expected sum of the effects of the individual agents, demonstrating the potentiation of L-DOPA’s effect.

5.00

5.50

6.00

6.50

7.00

7.50

Control MPTP 1mg / kgL-DOPA

5mg / kgL-DOPA

0.01mg / kgOMS181869

0.05mg / kgOMS181869

0.1mg / kgOMS181869

1mg / kgL-DOPA +

0.05mg / kg OMS181869

Theoretical Additive1mg / kg

L-DOPA +0.05mg / kg OMS181869

50 to 100x More Potent Than L-DOPA

AND PotentiatesIts Activity

StrideLength(Cm)

Source: Omeros In a murine (MPTP) model, mice are trained to walk across a sheet of paper with inked paws and stride length is measured. MPTP administration causes extensive damage in dopaminergic neurons. Following administration of MPTP, stride length is measurably decreased. Stride length is fully restored by clinically effective agents (L-DOPA, dopaminergic agonists). Stride length is fully restored by PDE7 inhibitors (five distinct chemical classes), including Omeros’ lead compound PDE7 inhibitors also enhancing the effect of low dose L-DOPA. Exhibit 25: OMS527 May Have Utility in Parkinson’s (PDE7 inhibition restores stride length).

Source: Omeros PDE7 inhibitors may provide an alternative to L-DOPA or related drugs, or they may allow dose reduction of these drugs, reducing the associated side effects. The Michael J Fox foundation is supporting this research. In exchange, the foundation receives access to data.


Maxim Group LLC 26

Exhibit 26: OMS527 for Addiction: Heroin Acquisition in Animal Model. The figure on the left demonstrates the effects of treatment with OMS824 (PPARγ) in rats. The untreated group continued to self-administer heroin, while the treated group showed complete ablation of heroin acquisition. The figure on the right demonstrates a positive control. The same animals tested for heroin acquisition were tested for self-administration of food. The PPARγ did not affect the animal’s food acquisition. As such, we can conclude that the agonists effect in heroin reduction was not a result of cognitive, memory or function impairments.

N: 10 Wistar rats/group

*P<0.05; **P<0.01

0 1 2 3 4 5 6 7 80 1 2 3 4 5 6 7 80

50

100

150

Day

*

*

*

**

**

**

mg

of h

eroi

n/ra

t

OMS182428

Vehicle

OMS182428OMS182428

VehicleVehicle

Heroin self-administration

Source: Omeros Exhibit 27: Chronic Effect of PDE7 Inhibition on Cocaine Self-Administration. Data supports that chronic PDE7 inhibition reduces cocaine self-administration.

Source: Omeros

N: 10 Wistar rats/group

*P<0.05; **P<0.01

Food self-administration

Num

ber

of r

ewar

ds (

30 m

in)

Day

0 1 2 3 4 5 6 7 8

1 2 3 4

Treatment

0

50

100

150

200 Pre-treatment

Treatment day

Food self-administration

Num

ber

of r

ewar

ds (

30 m

in)

Day

0 1 2 3 4 5 6 7 80 1 2 3 4 5 6 7 8

1 2 3 4

Treatment

0

50

100

150

200

0

50

100

150

200 Pre-treatment

Treatment day


Maxim Group LLC 27

Exclusive license agreement with Daiichi Sankyo. Under an agreement with Daiichi Sankyo Co., Ltd. (DSKYF-NR $16.98) (successor-in-interest to Asubio Pharma Co., Ltd.) Omeros holds an exclusive license to PDE7 inhibitors claimed in certain patents and pending patent applications owned by Daiichi Sankyo for use in the treatment of movement disorders and other specified indications, such as the treatment of addiction and compulsive disorders. Under the agreement, Omeros will make milestone payments to Daiichi Sankyo of up to an aggregate total of $30.2 million upon the achievement of certain events. However, if only one of the two target indications advanced through the milestones, the total milestone payments are less ($23.5 million). The milestone payment events include successful completion of preclinical toxicology studies; dosing of human subjects in Phase 1, 2 and 3 clinical trials; receipt of marketing approval of a PDE7 inhibitor product; and reaching specified sales milestones. In addition, Daiichi Sankyo is entitled to receive from the company a low single-digit percentage royalty of any net sales of a PDE7 inhibitor licensed under the agreement by Omeros or its sublicensee(s), provided that if the sales are made by a sublicensee, then the amount payable by us to Daiichi Sankyo is capped at an amount equal to a low double-digit percentage of all royalty and specified milestone payments received by Omeros from the sublicensee. Next clinical steps. The company selected OMS527 in cocaine addiction to move forward into the clinic. Phase 1 data is now expected in 1H13. We note that there are currently no approved therapies to treat cocaine addiction. As you can tell from the previous series of pre-clinical data, Omeros believes that the PDE7 target broadly controls addiction disorders and compulsive behaviors. In addition, Omeros will also conduct a phase 1 study in patients with Parkinson’s disease and collect “finger-tapping” efficacy data. If positive, the plan is to advance clinical development (in Parkinson’s disease). PDE10 Program: (OMS824) Treatment of schizophrenia and cognitive disorders. PDE10 is an enzyme that is expressed in areas of the brain that are strongly linked to schizophrenia and other psychotic disorders. Preclinical studies have shown that PDE10 inhibitors may address some of the limitations of currently used anti-psychotic drugs, such as weight gain, improved cognition, and a reduced risk of sudden cardiac death. Omeros acquired the PDE10 program as part of the Nura acquisition (2006). Pre-clinical development of this program is supported by funds from the Stanley Medical Research Institute (SMRI). Should a product be commercialized, the company will pay royalties back to SMRI to a maximum capitated amount. Funding agreement with The Stanley Medical Research Institute. Omeros development is supported by funds from The Stanley Medical Research Institute, or SMRI, a non-profit corporation that supports research on the causes and treatment of schizophrenia and bipolar disorder. Under the agreement, Omeros receives grant and equity funding upon achievement of product development milestones through Phase 1 clinical trials totaling $9.0 million, subject to the mutual agreement with SMRI. Through December 31, 2011, Omeros had received $5.7 million from SMRI, $3.2 million of which was recorded as equity funding and $2.5 million of which was recorded as revenue. Omeros also agreed to pay royalties to SMRI based on any net income the company receives from sales of a PDE10 product. Based on the amount of grant funding received as of December 31, 2011, the maximum amount of royalties payable to SMRI was $12.8 million.


Maxim Group LLC 28

Exhibit 28: PDE10: A Replacement for Atypical Antipsychotics with Reduced Side Effects

Prepulse Inhibition (%)

0102030405060708090

73 dB 76 dB 79 dB 82 dBPrepulse Levels

VehiclePDE10 Inhibitor


0102030405060708090



0102030405060708090


VehiclePDE10 InhibitorVehiclePDE10 Inhibitor

Source: Omeros

No BodyWeight

Increase

IncreasedCognition:

Novel ObjectRecognition

% of Time Exploring Novel Object

40

45

50

55

60

65

70

75

Vehicle PCP PCPPDE10 Inh

PCPOlanzapine

8486889092949698

100102104

Vehicle PDE10 Inh Olanzapine

% of Initial Weight

… WITHOUT the Side Effects

No BodyWeight

Increase

IncreasedCognition:



40

45

50

55

60

65

70

75


PCPOlanzapine

IncreasedCognition:



40

45

50

55

60

65

70

75


PCPOlanzapine

40

45

50

55

60

65

70

75

40

45

50

55

60

65

70

75


PCPOlanzapine

8486889092949698

100102104


% of Initial Weight

8486889092949698

100102104

8486889092949698

100102104


% of Initial Weight

… WITHOUT the Side Effects

Source: Omeros A rational for PDE10 in Huntington’s disease. It appears as though PDE10 is expressed in brain regions that are relevant to disorders involving striatum and cortico-striatal signaling. PDE10 inhibition in vivo increases striatal cGMP and enhances cortico-striatal glutamatergic transmission. PDE10 inhibitors are effective in models of cognitive disorders involving fronto-striatal signaling. They appear to:

• Reverse phencyclidine (PCP) disruption of attentional set shifting • Reverse PCP disruption of novel object recognition (NOR) • Reverse PCP disruption of auditory gating (pre-pulse inhibition) • Reduce PCP-induced hyperactivity • Reduce conditioned avoidance response (CAR)

PDE10 inhibitors prolong survival and delay the signs and symptoms in the R6/2 Huntington’s model.


Maxim Group LLC 29

Exhibit 29: PDE10 is Expressed in Caudate Nucleus and Putamen. It is expressed most prominently in the cell bodies and terminals of striatal medium spiny neurons (human, monkey, dog, rat, mouse). Immunohistochemistry shows staining of rat striatum and globus pallidus and of nerve terminals in rat substantia nigra pars reticulate.

Source: Coskran et al. J Histochem Cytochem. (2006); 54(11):1205-1213. Exhibit 30: TP10 Significantly Prolongs Survival in the R6/2 Model of Huntington’s Disease (p < 0.0001). The development of the clasping sign is also delayed (*p < 0.01), while the decline in body weight is not affected (not shown). Open field activity is significantly preserved (not shown).

Source: Giampa et al. PLoS ONE. 2010; 5(10): e13417. doi:10.1371. Next steps. PDE10 inhibition could expand efficacy and improve safety for the treatment of schizophrenia, Huntington’s disease, and cognitive disorders. Omeros has identified lead compounds that possess a high target potency and selectivity, oral efficacy, a favorable PK with no significant off-target interactions, and no initial toxicology concerns. IND-enabling studies are ongoing. Huntington’s disease may be the lead indication. The compound scale up is complete and GMP clinical material production is underway. We anticipate Phase 1 data later this year.


Maxim Group LLC 30

PHARMACEUTICAL LANDSCAPE & OPPORTUNITY FOR OMEROS A substantial proportion of medicines prescribed in the clinic today by physicians target G-Protein Coupled Receptors (GPCRs), mostly discovered before the advancements in technology as well as molecular biology. GPCRs play a significant role in many essential physiological processes. They have been linked to regulation of behavior and mood through GPCRs found in the brain, inflammation through receptors in the immune system, and metabolic processes, among others. The majority of drug development is focused on discovering chemical compounds that influence the ability of the ligand to bind with the GPCR, in effect inhibiting or accelerating intracellular processes. The high degree of specificity and affinity associated with GPCRs has contributed to them becoming the largest family of drug targets against a variety of diseases. It is estimated that worldwide annual drug sales in 2007 exceeded $700B, with more than $50B being spent on drug R&D. According to Insight Pharma Reports, of the 324 total targets for marketed drugs, 46 are GPCRs and they account for 30-40% of all drugs sold worldwide. Exhibit 31: List of GPCR-Targeting Drugs Class Drug IndicationAdrenoreceptor

Alpha-1 Hytrin, Alfuzosin Benign prostatic hyperplasia, High blood pressureAlpha-2 Catapres High blood pressure

Beta-1

Zebeta, Brevibloc, Kerlone, Sectral, Toprol XL, Lopressor, Tenormin High blood pressure

Beta-2 Ventolin, Albuterol Asthma/bronchospasm

Beta-1/Beta-2

Inderal, Corgard, Blocadren, Levatol, Betapace, Visken, CoReg, Normodyne, Trandate High blood pressure

Calcitonin Calcimar Osteoporosis Dopamine

D2 Reglan Heartburn, Slow gastric emptyingD2 Haldol, Zyprexa SchizophreniaD2 Requip, Mirapex Parkinson’s disease, Restless legs syndromeD1/D2 L-dopa (Sinemet) Parkinson’s disease, Restless legs syndrome

Histamine H1 Claritin, Zyrtec, Seldane AllergiesH1 Dramamine Motion sicknessH2 Tagamet, Zantac Heartburn/Ulcers

Serotonin (5-HT) 5-HT1B Desyrel Anxiety, Depression5-HT1D Imitrex Migraine headaches

Opioid Mu Morphine, Codeine, Fentanyl, Pain

MeperidineMu/Kappa Oxycontin, Percodan Pain

CysLT1 Montelukast (Singulair) AsthmaEndothelin Receptor Letaris, Bosentan Pulmonary artery hypertensionAcetylcholine Receptors

M1, M2, M3, M4 and M5 Tolterodine Overactive bladderM1, M2, M3, M4 and M5 Atropine PoisoningM1 Scopolamine Motion sickness, Diarrhea

Angiotensin II receptor Losartan, Valsartan Congestive heart failureGLP-1 Byetta Type 2 diabetesSomatostatin Receptors Octreotide Acromegaly, TumorsProstaglandin E2 receptors Misoprostol Gastric ulcers

Source: Omeros


Maxim Group LLC 31

The opportunity for Omeros. Company scientists believe that, based on available data, there are 363 non-sensory GPCRs of which most are non-orphans (ligands exists that bind to the target) and 119 orphans (refer to exhibit below). A non-orphan GPCR is one for which there is a known naturally occurring or synthetic molecule, or ligand, (we might think of it as a key that exists to the lock) that binds the receptor, while an orphan GPCR has no known ligand (no known key). Without a known ligand, there is no template from which medicinal chemistry efforts can be readily initiated, nor a means to identify the GPCR's signaling pathway and, therefore, drugs cannot easily be developed against orphan GPCRs. This gave birth to reverse pharmacology, deorphanization, a strategy to identify ligands that bind orphan GPCRs uncovering new cellular pathways and leading to development of product candidates that can act at these new potential drug targets. Omeros believes (based on available data) that 128, or almost 50%, of the non-orphan GPCRs are targeted by either marketed drugs or drugs in development. Applying that same percentage to the 119 orphan GPCRs, approximately 50 are eligible to be drug-targets once the ligand is identified. "Unlocking" these orphan GPCRs could lead to the development of drugs that act at or on these new targets. Having spent time with the senior scientists at the company, we do believe the company’s high-throughput technology has the capability of uncovering compounds for many more GPCRs. To date, Omeros and others have discovered novel GPCRs for Alzheimer’s disease, mood disorders, obesity, schizophrenia, and cancer (refer to the exhibit below), and the company is uniquely positioned to discover compounds for many of them. Exhibit 32: GPCRs as Potential Drug Targets

Promising Targets, but Drug Discovery Difficult

363 Non-Sensory GPCRs

30-40% of All Marketed Drugs Target Only 46

GPCRs

TODAYMarketed

Drugs

Ligand Required for Assay DevelopmentSignaling Pathway Not KnownLaborious Fractionation for Natural Ligand IdentificationCurrent Technologies Limited Only to Agonist Screening

The Challenge

The Opportunity

Up to 50+ New Drug Targets

119

116

82

No KnownLigands

KnownLigands

244

“Orphans”

Not Yet DrugTargets

In Development

Marketed Drugs

Source: Omeros


Maxim Group LLC 32

Exhibit 33: Examples of Orphan GPCR Targets

Source: Omeros

G-PROTEIN COUPLED RECEPTORS (GPCRs) GPCRs go by several names such as the seven-transmembrane domain receptors, 7TM receptors, heptahelical receptors, serpentine receptors, and G protein-linked receptors (GPLR) (refer to exhibit below). They represent one of the largest transmembrane proteins spanning the cell surface interacting with molecules intracellular (inside) and extracellular (outside) of the cell. Molecules, called ligands, located outside the cell interact with transmembrane receptors activating signal transduction pathways inside the cell, elucidating cellular responses. This ligand-receptor interaction was the first classical model for drug design. The ligands that bind and activate these receptors (activating the GPCR by allowing it to bind with a G protein and setting off a series of events within the cell) include a wide range of compounds such as neurotransmitters, peptides, glycoprotein hormones, and chemokine receptors, to name a few. Exhibit 34: The Seven-Transmembrane α-Helix Structure of a G-Protein-Coupled Receptor

Source: http://structbio.vanderbilt.edu/sanders/Research.htm GPCRs are further divided into sensory, referred to as chemosensory GPCRs (csGPCRs) and non-sensory, referred to as endogenous GPCRs (endoGPCRs). Chemosensory GPCRs are sensory receptors with signals from an exogenous source involved in the perception of light, odors, taste, and sexual attractants. Endogenous GPCRs respond to endogenous signals involved in metabolism, behavioral regulation (serotonin, dopamine, GABA, and glutamate), reproduction, development, hormonal homeostasis, and the autonomic nervous system (sympathetic and parasympathetic). GPCRs are known to be involved in many disease processes and, as such, a large percentage of drugs under development are targeting G-protein-coupled pathways. This is a major medicinal target for drug design.


Maxim Group LLC 33

GPCR drug targets are more commonly endoGPCRs, and the full complement of these was first identified and characterized in mice and humans at Omeros (Vassilatis et al. PNAS 2003). They represent targets for about half of all currently used drugs today (refer to the Pharmaceutical Landscape section), and until recently scientists hadn’t clearly understood the mechanism pharmaceuticals use to turn on or off these receptors. GPCR repertoires of human and mouse. Published in the April 15, 2003 issue Proceedings of the National Academy of Sciences, Omeros revealed a high level of evolutionary as well as phylogenetic, predictive of ligands, and relationship of human and mouse endoGPCRs. Vassilatis et al. identified 367 human and 392 mouse endoGPCRs, and, using sequence alignment, they discovered that 343 endoGPCRs are common for both species. This important finding signifies that mice can be used as a model system for humans in studying GPCRs. RT-PCR analysis first revealed that endoGPCRs were expressed in multiple, diverse cell types and tissues throughout the body. Furthermore, endoGPCRs were mostly, being 94%, expressed in the brain. A substantial percentage of these GPCRs were localized in 10 brain areas and 18 peripheral tissues (refer to exhibit below). In situ hybridization confirmed the results generated by RT-PCR by demonstrating localization of 192 GPCRs in brain (refer to exhibit 5B below) Exhibit 35: Expression of endoGPCRs in the Brain

5A

5BSource: Vassilatis DK, Hohmann JG, Zeng H, Li F, Ranchalis JE, Mortrud MT, Brown A, Rodriguez SS, Weller JR, WrightAC, et al. The G protein-coupled receptor repertoires of human and mouse (2003). PNAS Vol. 100(8), 4903-4908.

The mechanism of action behind GPCRs. The receptor exists in equilibrium between active and inactive states. Before binding of the ligand, GPCRs exist as heterodimers, three subunits of a G protein (αβγ) bound together. Ligands are mainly either agonists that activate the receptor or antagonists that inhibit it. When bound to their ligands (first messenger), GPCRs are stabilized in an active conformation causing interaction between GPCR and the G protein. The interaction of the receptor with agonist results in dissociation of G protein into α and βγ subunits that can then interact with downstream effectors, triggering an intracellular cascade of signaling events. Effectors including adenylyl cyclase, phospholipases, and ion channels regulate the production of second messenger molecules, which elicit cellular responses by activating a number of signaling pathways. G protein-coupled receptors were originally known as metabotropic receptors, because of the downstream process in which something has to be metabolized, specifically turnover of lipid. An important protective mechanism of GPCRs is desensitization – that is turning off the signal, eliciting no cellular response, despite continuous agonist stimulation. Mechanistically, desensitization may occur through: (1) receptor phosphorylation; (2) receptor internalization; and (3) receptor down-regulation.


Maxim Group LLC 34

Exhibit 36: Summary of GPCR Signaling. System has minimum of three components: Ligand binds Receptor → activates G protein → effector.

Source: Howard A. Rockman, Walter J. Koch and Robert J. Lefkowitz. Seven-transmembrane-spanning receptors and heart function (2002). Nature 415, 206-212.

OMEROS GPCR DISCOVERY & DEVELOPMENT PLATFORM Exhibit 37: Basic outline of Omeros’ GPCR discovery and development platform

Identify orphan GPCR targets with compelling biology(KO mice, literature)

Discover small molecules against target orphan GPCRsusing Cellular Redistribution Assay (CRA)

Determine signaling pathway affected by target orphan GPCRs andidentify nature of interacting small molecules (agonists, antagonists)

Optimize compounds through medicinal chemistry

Demonstrate efficacy in cell- and/or animal-based disease models

Establish intellectual property and advance compoundswith desired properties through clinical development

Source: Maxim and Omeros


Maxim Group LLC 35

Omeros has access to a unique deorphanization technology platform, CRA. The company has an exclusive option to acquire all patent and other intellectual property rights to this cellular redistribution assay, or CRA, from Patobios. The company has tested and optimized and believes this technology can be used in a high-throughput screen to identify synthetic molecules, including antagonists, agonists and inverse agonists, which, following optimization, can be clinical candidates targeting orphan GPCRs. In essence, a machine that finds the keys to the locks. A normal GPCR is localized in the cellular membrane (shown in exhibit below). A mutated, modified, GPCR is localized in the interior of the cell unless bound to its ligand. Ligands are then introduced; the one that matches the orphan receptor will cause the GPCR to integrate into the cell membrane. Confocal microscopy further validates the CRA ligand-dependent receptor redistribution to the cell surface. Green fluorescence represents mutated GPCR. In the untreated group, the GPCRs are distributed throughout the cell. As you increase concentration of ligand, from 0.1 nM to 2 nM, mutated receptor is localized to the cell membrane as seen as a green circular outline in the 2 nM concentration. Exhibit 38: Deorphanization Technology: Cellular Redistribution Assay (CRA)

Norm al GPCR

G P CR

C e llM e m b ran e

G P CR

Ce llM e m b ran e

M odified GPC R

G P CR

Ce llM e m b ran e

Lig an d

M odified GPCR + L igand

N LS in h e lix 8

A B C

Source: Omeros Exhibit 39: Ligand-Dependent Receptor Redistribution to Cell Surface

Untreated 0.1 nM 1 nM 2 nM Source: Omeros (Butaclamol) In conjunction with CRA, Omeros has developed additional tools, including a proprietary rapid mouse gene knock-out platform technology. The company published this impressive technology in the September 4, 2007 issue of the Proceedings of the National Academy of Sciences (Vol. 104, No. 36: pp. 14406-14411), to create 61 different GPCR-specific strains of knock-out mice, and it has established a battery of behavioral tests that allows the characterization of these knock-out (KO) mice to identify candidate drug targets. In conjunction with this platform, the company utilizes CRA to identify synthetic molecules, as opposed to naturally occurring ligands, to bind orphan GPCR. To date, 61 different GPCR-specific strains of knock-out mice have been generated and 25 different GPCR knock-out strains have been phenotyped.


Maxim Group LLC 36

Exhibit 40: Generate Mutated GPCR Mice Based on Omeros’ Rapid Gene KO Technology

Mutate GPCRs in ES cells with proprietary virus

Create libraries of mutant ES cells

Identify ES cells with mutations in specific GPCRs

Generate mice from mutant GPCR ES cells

Source: Omeros & Gragerov et al. Large-scale, saturating insertional mutagenesis of the mouse genome.Proc Natl Acad Sci 2007 Sep; 104(36): 14406-14411.

Screen DNA isolated from library pools by Polymerase Chain Reaction (PCR)• Target gene of interest are amplified and analyzed on agarose gel• Bands on gel represent retroviral integration event• Piece is sequenced to determine precise insertion site within the targeted gene

STEP 2

Identify and isolate ES cell clones with mutations in specific genes of interest from the constructed library

STEP 3

Apply selection to the gene families of GPCRs and nuclear receptors, whom are a challenging target for insertional mutagenesis because almost half of the GPCR-

encoding genes are lacking introns

STEP 4

Construction of a large library (10 million) of mutant embryonic stem (ES) cells generated by retroviral insertions

STEP 1

Identify and isolate mutant GPCR ES cell clonesSTEP 5Blastocyst injection to produce chemeric mice with target gene expression

significantly reduced or eliminated STEP 6

Generate 61 different mutant GPCR-specific strains of KO miceSTEP 7Source: Omeros & Gragerov et al. Large-scale, saturating insertional mutagenesis of the mouse genome.Proc Natl Acad Sci 2007 Sep; 104(36): 14406-14411.

To date, Omeros has successfully unlocked numerous orphan GPCRs (33 as of April 2012), and we believe several are very exciting. For example, one is linked to obesity, one to appetite, and a third to cancer. Each receptor was screened against a portion (less than 40%) of its small molecule library of 320,000 compounds, specifically 300,000 being of a diverse library and 20,000 GPCR-focused libraries. Omeros owns multiple issued U.S. patents, with more pending. All are related to previously unknown links between specific molecular targets in the brain and a series of CNS disorders, as well as to research tools that are used in the GPCR program described above.


Maxim Group LLC 37

Exhibit 41: Orphan and Recalcitran Non-Orphan GPCRs Unlocked to Date

Source: Omeros

DIFFERENT APPROACHS IN DRUG DISCOVERY OF ORPHAN GPCRs Structure-based drug discovery (SBDD). GPCR structure based on X-ray crystallography or Nuclear Magnetic Resonance (NMR) creates a structural based design to discover, optimize, and identify novel ligands for orphan-GPCRs rather than screen through random high-throughput assays. Structural design could be used in conjunction with random screening. The first structure to be solved by x-ray crystallography, relevant to GPCRs, was rhodopsin. The primary shortcoming of structure-based drug discovery for GPCRs is that crystallization of a receptor that crosses seven times the cell membrane is technically quite challenging; to this date, only three GPCRs have been crystallized and their structure deciphered. In addition, a crystal is static whereas receptor-ligand interaction in biology is dynamic. This is especially the case for GPCRs that can exist in a number of different states based on molecular interactions. Allosteric modulation. A GPCR ligand can bind at the receptor at an orthosteric site (the site where the natural ligand binds) or at a distant site, other than the active one, known as an allosteric site. The majority of currently marketed drugs compete with the naturally occurring endogenous ligand to bind the active site. Allosteric modulators are non-competitive based on its binding at a different site, other than the active site, even while the natural endogenous ligand is already bound. Modulators may bind the allosteric site strongly and enhance the cell signaling cascade, known as an allosteric activator or Positive Allosteric Modulator (PAM) or inhibiting its activity, known as allosteric inhibitor or Negative Allosteric Modulator (NAM). Allosteric modulation has potential advantages in terms of selectivity, side effects and toxicity, tolerability, and desensitization compared to conventional therapies currently targeting orthosteric modulation. Orthosteric ligands compete with natural ligands for the same binding site to stimulate the receptor. The modulator often is given in potent concentrations to overpower existing natural ligands circulating in surplus. The competitive forces to overcome the binding of the natural ligand result in selectivity issues, primarily desensitization, triggered by stimulation of a receptor in high concentrations for a prolonged period of time resulting in receptor down regulation and eliciting no response, tachyphylaxis. Allosteric modulators do not induce tachyphylaxis since they do not target the same binding site as the natural ligand, but the


Maxim Group LLC 38

allosteric site and only stimulates when the receptor is already bound to the natural ligand. This is significantly beneficial, characteristically being very selective with a reduced toxic side effect profile avoiding desensitization. Since the allosteric modulator binds to a different site, high dosage is no longer necessary and medicinal compounds can be administered in low concentrations, expanding tolerability among the patient population and reducing its adverse side effect profile. Furthermore, novel compounds can be developed to elicit or block a partial response rather than a full response. An example would be a partial negative allosteric modulator, with the ability to block the effect of a receptor to a certain degree. Allosteric modulation may represent a novel drug and is gaining popularity in deorphanization of GPCRs, so much so that most companies have active programs in allosteric modulation far more than SBDD, dimerization, or other areas in development for GPCRs. Major pharmaceuticals, such as GlaxoSmithKline (GSK- $46.58-NR), Pfizer (PFE-$22.45-NR), Boehringer Ingelheim (Private), and others have already designed screening technology to identify allosteric as well as orthosteric hits. Exhibit 42: Allosteric Modulation

Source: Addex Pharmaceuticals Role of GPCR dimers and oligomers. GPCRs are capable of forming paired protein complexes, known as dimers, with other GPCRs at the cell membrane. Two identical GPCRs can pair up, known as homodimers, or two different GPCRs can form together, known as heterodimers. The majority of GPCRs exists and functions as homodimers. The binding of an agonist molecule to a homodimer may cause activation and internalization, resulting in alteration of the binding of a second molecule. Dimerization is interesting as it presents a novel drug target yet to be explored, but it is still is in its early stages and not sought after as aggressively as allosteric modulation. Functional selectivity. Pharmaceuticals are interested in selecting the direction of cell signaling down one cascade versus another. Since receptors have the ability to couple to more than one G protein, it is possible to influence signaling via a specific G protein cascade based on ligand.


Maxim Group LLC 39

VALUATION – MODEL ASSUMPTIONS (PHARMACOSURGERY)

Ophthalmology surgery program: Cataract and reflective lens exchange (RLE) 1. We assume that OMS302 receives FDA approval and is commercialized in 1Q14 2. We assume on average 1 units at $250 per unit are used per procedure in the United

States, and $200 in Europe and Rest of World (ROW). 3. We assume a COGS (manufacturing) of 2%. 4. Our data source for incidence and prevalence comes from Market Scope, Comprehensive

Report on the Global Market, 2011. 5. 3.6 million cataract procedures in the United States and 3.3 million in Western Europe

(2011), with a 3-4% annual growth rate in the United States and 2-3% for Western Europe. We factor in modest international sales (which may be overly conservative) as the international market is significant.

6. Omeros will initially target the cataract/premium lens and RLE marketplace. 7. The premium ILR (intra ocular lens replacement) market is growing at 16% year. 8. We assume a large build out for Sales & Marketing, and our numbers may be too high –

but for conservatism, we assume such. It is likely that Omeros will utilize an external sales force to commercialize and regionally partner, but we have modeled a rise in Sales and Marketing to cover these costs.

Arthroscopy surgery program: Meniscectomy and off-label (ACL, shoulder, wrist, hip, and ankle) 1. We assume a market size of 1.75 million meniscectomy-related knee arthroscopic

procedures per year by 2012. (We know from conversations with thought leaders that approximately 2/3 of knee-related arthroscopic procedures are in fact meniscectomy-related).

2. For conservatism, we have not modeled any market share in our EPS or FCF models. If we did, we would assume that the product could be on the market by late 2014 or early 2015.

3. We make similar assumptions for the international marketplace in 2014. 4. As we are not including revenues in our model, we do not include G&A for this area. It is

likely that Omeros can leverage its distribution/sales efforts for OMS302 for 103HP. 5. We have modeled other arthroscopies such as shoulder, elbow/wrist/hip, and ankle. We

would expect some off-label use in these areas, but we do not present those models in this report.

6. For meniscectomy, we assume 3 units per procedure versus ACL repair (4 units) and others (2 or 1 unit).

Arthroscopy surgery program: Urology (we assume no revenues through 2017 until next clinical steps are prioritized)

1. We provide a market model and price and share assumptions for urology platforms; however, for the sake of conservatism, we also do not include these revenues in our income statement. We hope at some point to see Omeros reactivate the urology platform.

2. Our model is extended through 2017 to reflect the potentials of the PharmacoSurgery platform, which should be evolving over the next five years.

Other relevant modeling assumptions 1. We assume a modest ramp in the tax rate beginning in 2015 as a result of accumulated

tax credits (NOLs). 2. We build into the model several assumptions that the company will need to raise

additional capital; however, we see only modest dilution and forecast a share count of approximately 30 million by 2015 versus today’s 22 million.

3. We do not include in our model any revenues from license agreements from the company’s early-stage pipeline products and/or GPCR platform. We model this way for the sake, again, of conservatism.


Maxim Group LLC 40

VALUATION

Our valuation metrics for Omeros are based on several models including Free Cash Flow (FCF), DCF, EPS, and Sum of the Parts. We equal weight each of these metrics to arrive at an average for our 12-month target price of $23. Where our model may differ from consensus is in our use of a 20% discount rate for the EPS and FCF models. We believe that 20% is justified given the high p-values that were demonstrated in the ophthalmology trial. One critical note, however, is the inability of these metrics to forecast the outcome of a clinical trial event. These metrics all assume a positive outcome for the second OMS302 ophthalmological surgery trial. Valuation models like these can be helpful in understanding the leverage that exists around a products commercial success. In the case of Omeros ophthalmological platform, the low cost of goods of the product has the potential to translate into biotechnology (high) margins. As such, we see a lot of leverage on success of OMS302. EPS and FCF also fail to take into account the early stage pipeline value and the potential that it creates for partnerships and; therefore, revenue generation into the firm. Our share count is a year-end estimate that assumes the company raises capital.

Average of Metrics (Target) 23$

FCF Price Target 17$ Year 2012

DCF Valuation Using FCF (mln): 2012 2013 2014 2015 2016 2017

units (millions - $) 2012E 2013E 2014E 2015E 2016E 2017EEBIT (34,015) (37,960) (22,480) 50,501 141,001 237,223 Tax Rate 0% 0% 0% 5% 10% 18%EBIT(1-t) (34,015) (37,960) (22,480) 47,976 126,901 194,523 CapEx (2,755) (2,783) (2,811) (2,839) (2,867) (2,896) Depreciation 452 470 489 509 529 550 Change in NWCFCFF (36,318) (40,272) (24,802) 45,646 124,563 192,177

PV of FCFF (30,265) (27,967) (14,353) 22,013 60,071 77,232

Discount Rate 20%Long Term Growth Rate 1%

Terminal Cash Flow 1,021,574 Terminal Value YE2017 410,548

NPV 497,279 NPV-Debt 19,446 Shares out (thousands) 27,453 4Q12ENPV Per Share 17$ Source: Maxim estimates Current Year 2012Year of EPS 2017 2017 EPSEarnings Multiple 10 25.9 5% 10% 15% 20% 25% 30%Discount Factor 20% 0 $0.00 $0.00 $0.00 $0.00 $0.00 -$ Selected Year EPS 6.44$ 5 $25.25 $20.01 $16.02 $12.95 $10.56 8.68$ NPV 25.90$ 10 $50.50 $40.02 $32.04 $25.90 $21.12 17.36$ Source: Maxim estimates 15 $75.74 $60.03 $48.06 $38.85 $31.68 26.04$

20 $100.99 $80.03 $64.08 $51.80 $42.24 34.72$ 25 $126.24 $100.04 $80.11 $64.75 $52.80 43.39$ 30 $151.49 $120.05 $96.13 $77.70 $63.35 52.07$ 35 $176.74 $140.06 $112.15 $90.65 $73.91 60.75$

Discount Rate and Earnings Multiple Varies, Year is Constant

Earnings Multiple


Maxim Group LLC 41

Omeros Sum of the Parts LT Gr Discount Rate Yrs. to Mkt % Success Peak Sales MM's Term ValOMS 103HP "arthro" 1% 20% 3 50% $500 $2,632NPV $8.32OMS302 "opto" 1% 15% 2 75% $350 $2,500NPV $15.49OMS201 "uro" 1% 15% 5 20% $100 $714NPV $0.78PreClinical Pipeline 1% 20% 8 10% $500 $2,632NPV $0.67GPCR Platform 1% 20% 6 50% $150 $789NPV $1.44Other (s) 1% 20% 2 90% $0 $0NPV $0.00Net Margin 30%MM Shrs OS 27Total $27Source: Maxim estimates

FUNDAMENTAL RISKS

Omeros is an early-stage biotechnology company and, therefore, subject to a number of financial and development risks. We believe the key near-term risk investor’s face is the outcome of the current Phase III trials that are evaluating the safety and efficacy of OMS302. Delays in trial results and clinical efficacy that meet or exceed prior published results are key areas where investors are focused. Longer term, risks include product commercialization and market forecasts, as well as the advancement of early stage PharmacoSurgery products and development of pre-clinical pipeline candidates forward. Development risk: Early in 2011, Omeros disclosed negative results for OMS103HP from two pivotal (Phase 3) trials in the ACL knee surgery setting. Variability in rater assessment (RA) appears to have led to uninterruptable results. The trials also took several years to enroll the requisite number of patients, which may have led to additional variability. Omeros previously reported strong data with OMS103HP in meniscectomy, and the program has now moved to a pivotal stage. Regulatory risk: Like most biotechnology/pharma companies who develop new compounds, Omeros is bound to face FDA approval risks. The PharmacoSurgery program is novel and lacks clear precedent, which adds to the regulatory risk profile. However the components of PharmacoSurgery are approved therapeutics. The current studies have shown a synergy that exists between the constituents of each product in the PharmacoSurgery platform, and that either component individually, or any permutation of the two component, does not generate the equivalent anti-inflammatory effect compared to the triple combination. The FDA may place additional data requirements for such combination drugs. Commercial risk: Omeros is developing new and novel pharmaceuticals for a wide range of indications. Some represent an unmet medical need while others represent a clinical improvement. In today’s cost-conscious world of healthcare, it may be difficult to justify added expenses unless a clear benefit is shown. Generic substitution risk: Omeros’ leading programs (PharmacoSurgery platform) represents combinations of existing generic drugs, which is added to an irrigation solution. Although we believe that surgeons would prefer not to take the risk of using a compounded version of PharmacoSurgery, it is possible that some compounding pharmacies may decide to combine these drugs themselves.


Maxim Group LLC 42

Discovery risk. Omeros is engaged in drug development. In particular, the company has an active GPCR discovery platform that utilizes high throughput screening of compounds in order to identify ligands that bind GPCR (G-Protein Coupled Receptor) targets. While the company has been successful in identifying candidate molecules, high throughput screening carries a risk that even if the compounds are identified by the initial screen, they may not be suitable pharmaceutical agents for various reasons. Partnering: Omeros presently fully owns all of its programs, with the exception of the PDE7 program, which was licensed from Asubio Pharma (Private, Not Rated). The company is expected to partner some programs or compounds given the breadth of compounds currently in development, as well as the cost of moving these compounds through clinical development. Additionally, partnerships may bring non-dilutive financing, which may be utilized for the advancement of non-partnered programs. Omeros may not be successful in finding partners on favorable terms or at all. Financing risk: Omeros is a development-stage pharmaceutical company with multiple programs in clinical development. The company presently does not generate revenue, beyond grant funding, and may need capital to advance its clinical program and to launch the PharmacoSurgery product if approved by the FDA. Omeros ended 2011 with ~$24MM on the balance sheet, and we estimate the company’s cash burn at $35 million this year.


Maxim Group LLC 43

Exhibit 43: Omeros (quarterly) Model: OMS302

U.S. OMS-302 (Cataract): Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-173.6 MLN "Cataracts" at baseline (-0.6 PL) : annual procedures (2012) 795,077 801,164 807,359 813,664 820,082 826,616 833,267 840,039 846,934 853,955 861,105 868,387 875,804 883,360 891,057 898,898

Market Size Growth - qtrly 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.8% 0.9% 0.9% 0.9% 0.9%Market Share Penetration (302) 0.0% 4.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 13.0% 14.0% 15.0% 16.0% 17.0% 18.0% 19.0%

Number of Procedures 0 32,047 48,442 56,957 65,607 74,395 83,327 92,404 101,632 111,014 120,555 130,258 140,129 150,171 160,390 170,791Units Per Procedure 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0Price per procedure 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$

Price Growth 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%U.S. QTRLY Sales ($) 0.0 8.0 12.1 14.2 16.4 18.6 20.8 23.1 25.4 27.8 30.1 32.6 35.0 37.5 40.1 42.7

% Growth (qtrly) 51% 18% 15% 13% 12% 11% 10% 9% 9% 8% 8% 7% 7% 6%

U.S. OMS-302 (Premium Lens): Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17600k "premium lens replacement at baseline: (2012) 183,292 188,371 193,695 199,279 205,138 211,291 217,755 224,550 231,697 239,220 247,141 255,489 264,291 273,579 283,385 293,746


Number of Procedures 0 7,535 11,622 15,942 20,514 25,355 30,486 35,928 46,339 52,628 59,314 66,427 74,002 82,074 90,683 99,874Units Per Procedure 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0Price per procedure 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$ 250$

Price Growth 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%U.S. QTRLY Sales ($) 0.0 1.9 2.9 4.0 5.1 6.3 7.6 9.0 11.6 13.2 14.8 16.6 18.5 20.5 22.7 25.0

% Growth (qtrly) 54% 37% 29% 24% 20% 18% 29% 14% 13% 12% 11% 11% 10% 10%

Western Europe (Cataract) Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-173.3 MLN "Cataracts at baseline: annual procedures (2012) 781,962 786,239 790,581 794,991 799,470 804,020 808,641 813,335 818,103 822,948 827,869 832,870 837,951 843,115 848,362 853,695


Number of Procedures 0 0 0 0 7,995 16,080 24,259 32,533 40,905 49,377 57,951 66,630 75,416 84,311 93,320 102,443Units Per Procedure 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0Price per procedure 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$

Price Growth 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%Western Europe QTRLY Sales ($) 0.0 0.0 0.0 0.0 1.6 3.2 4.9 6.5 8.2 9.9 11.6 13.3 15.1 16.9 18.7 20.5

% Growth (qtrly)

EU OMS-302 (Premium Lens): Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17300k "premium lens replacement at baseline: (2012) 96,032 99,183 102,470 105,900 109,479 113,217 117,122 121,201 125,464 129,922 134,584 139,462 144,567 149,912 155,510 161,375


Number of Procedures 0 0 0 0 2,190 4,529 7,027 9,696 15,056 20,788 26,917 33,471 37,587 41,975 46,653 51,640Units Per Procedure 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0Price per procedure 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$

Price Growth 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%EU QTRLY Sales ($) 0.0 0.0 0.0 0.0 0.4 0.9 1.4 1.9 3.0 4.2 5.4 6.7 7.5 8.4 9.3 10.3

% Growth (qtrly) 107% 55% 38% 55% 38% 29% 24% 12% 12% 11% 11%

International OMS-302 (Premium / Refractive Lense): Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-170.4 MLN "Refractive Lense" at baseline: annual procedures (2012) 108,371 109,466 110,572 111,688 112,816 113,956 115,107 116,269 117,444 118,630 119,828 121,038 122,261 123,496 124,743 126,003


Number of Procedures 0 0 0 0 0 1,140 2,302 3,488 4,698 7,118 8,388 9,683 11,003 12,350 13,722 15,120Units Per Procedure 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0Price per procedure 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$ 200$

Price Growth 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%International QTRLY Sales ($) 0.0 0.0 0.0 0.0 0.0 0.2 0.5 0.7 0.9 1.4 1.7 1.9 2.2 2.5 2.7 3.0

% Growth (qtrly)World Wide Cataract Revenues -$ 8$ 12$ 14$ 18$ 22$ 26$ 30$ 34$ 38$ 42$ 46$ 50$ 54$ 59$ 63$

% Growth (qtrly) 51% 18% 26% 21% 18% 15% 13% 12% 11% 10% 9% 9% 8% 8%

World Wide Opthalmic Revenues -$ 9.9$ 15.0$ 18.2$ 23.1$ 28.4$ 33.8$ 39.3$ 46.1$ 52.2$ 58.2$ 64.4$ 70.8$ 77.4$ 84.2$ 91.2$ % Growth (qtrly) 52% 21% 27% 23% 19% 16% 17% 13% 12% 11% 10% 9% 9% 8%

Total U.S. Opthalmic Revenues -$ 9.9$ 15.0$ 18.2$ 21.5$ 24.9$ 28.5$ 32.1$ 37.0$ 40.9$ 45.0$ 49.2$ 53.5$ 58.1$ 62.8$ 67.7$ % Growth (qtrly) 52% 21% 18% 16% 14% 13% 15% 11% 10% 9% 9% 8% 8% 8%

Total International Opthalmic Revenues -$ -$ -$ -$ 2$ 3$ 5$ 7$ 9$ 11$ 13$ 15$ 17$ 19$ 21$ 24$ % Growth (qtrly)

Grand Total ALL Opthalmic Revenues -$ 10$ 15$ 18$ 23$ 28$ 34$ 39$ 46$ 52$ 58$ 64$ 71$ 77$ 84$ 91$ % Growth (qtrly) 52% 21% 27% 23% 19% 16% 17% 13% 12% 11% 10% 9% 9% 8%

Total U.S. Opthalmic Units Sold - 39,581 60,063 72,899 86,120 99,750 113,812 128,332 147,972 163,642 179,869 196,685 214,130 232,245 251,074 270,664 Average Price per Unit 250.0$ 250.0$ 250.0$ 268.6$ 284.5$ 296.7$ 306.1$ 311.6$ 319.0$ 323.8$ 327.6$ 330.7$ 333.2$ 335.3$ 336.9$

Source: Omeros and Maxim Jason Kolbert [email protected]


Maxim Group LLC 44

Omeros Corporation Income Statements

(In thousands, except per share data) Omeros, Inc. Income Statement ($ '000)OMER: YE Dec. 31 2007A 2008A 2009A 2010A 2011A 1Q12E 2Q12E 3Q12E 4Q12E 2012E 2013E 2014E 1Q15E 2Q15E 3Q15E 4Q15E 2015E 2016E 2017ERevenue (000's)Grant Revenue 1,923 1,170 1,444 2,105 4,524 250 250 250 250 1,000 500 500 125 125 125 125 500 500 500 % ChgOMS-103 HP (Arthroscopy Indications: knee + other): WW - - - - - - - - % ChgOMS-302 (Occular Lense - cataracts & premium ) US , EU, ROW - - 43,136 23,129 28,382 33,765 39,287 124,563 220,992 323,565 % Chg - -OMS-201 Urological Surgeries% Chg - -PreClinical GPCR Platform - Pipeline% Chg - -Total Product Sales 1,923 1,170 1,444 2,105 4524 250 250 250 250 1,000 500 43,636 23,254 28,507 33,890 39,412 125,063 221,492 324,065 ExpensesCOGS - Assume 2% (high) and conservative - - - 5 5 5 20 10 873 465 570 678 788 2,501 4,430 6,481 COGS % Sales - 0% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%R&D 15,922 17,850 16,929 23,465 23,718 5,750 5,750 5,750 5,750 23,000 26,450 27,244 7,015 7,015 7,015 7,015 28,061 28,060.81 28,061 R&D % Rev's 23 23 23 2300% 2300% 5290% 62% 30% 25% 21% 18% 22% 13% 9%Sales & Marketing - - - - - - 25,000 7,500 7,500 7,500 7,500 30,000 33,000 36,300 Sales & Marketing % 32% 26% 22% 19%G&A 10,398 7,845 5,273 8,746 8,216 3,000 3,000 3,000 3,000 12,000 12,000 13,000 3,500 3,500 3,500 3,500 14,000 15,000 16,000 G&A % Rev's 1200% 1200% 1200% 1200% 1200% 2400% 30% 15% 12% 10% 9% 11% 7% 5%

Stk Optn's 1,494 1,900 2,090 575 575 575 575 2,299 2,345 2,392 610 610 610 610 2,440 2,489 2,538 Non-GAAP, Adj. 1,494 - - - - - - - - - - - - - - - - Total expenses 26,320 25,695 22,202 32,211 31934 8,750 8,755 8,755 8,755 35,020 38,460 66,116 18,480 18,585 18,693 18,803 74,562 80,491 86,842 Oper. Inc. (Loss) (24,397) (24,525) (20,758) (30,106) (27,410) (8,500) (8,505) (8,505) (8,505) (34,015) (37,960) (22,480) 4,774 9,921 15,197 20,609 50,501 141,001 237,223 Oper Margin NM NM NM NM NM NM NM NM NM NM 21% 35% 45% 52% 40% 64% 73%Investment Income 661 214 167 51 34 35 60 99 228 884 1,297 355 370 386 405 1,516 1,516 1,516 Interest Expense (335) (2,202) (1,831) (1,884) - - - - - - - - - - - - - - Other Income (expense) 1,306 372 1,657 2,519 697 - - - - - - - - - - - - - - Pre-tax income (23,091) (23,827) (21,089) (29,251) (28546) (8,466) (8,470) (8,445) (8,406) (33,787) (37,076) (21,184) 5,129 10,291 15,584 21,014 52,017 142,518 238,740 Pretax Margin NM NM NM NM NM NM NM NM NM NM 22% 36% 46% 53% 42% 64% 74%Taxes - - - - - - - - - 256 515 779 1,051 2,601 14,252 42,974 Tax Rate - 0% 0% 0% 0% 0% 0% 0% 0% 0% 5% 5% 5% 5% 5% 10% 18%GAAP NI (23,091) (23,827) (21,089) (29,251) (28546) (8,466) (8,470) (8,445) (8,406) (33,787) (37,076) (21,184) 4,872 9,777 14,805 19,964 49,418 128,267 195,768 Net Margin NM NM NM NM NM NM NM NM NM NM 21% 34% 44% 51% 40% 58% 60%GAAP-EPS (1.70) (1.67) (2.92) (1.37) (1.28) (0.38) (0.34) (0.28) (0.31) (1.31) (1.26) (0.70) 0.16 0.32 0.49 0.66 1.63 4.23 6.44 Non GAAP EPS (dil) (2.71) (1.37) (1.28) (0.38) (0.34) (0.28) (0.31) (1.31) (1.26) (0.70) 0.16 0.32 0.49 0.66 1.63 4.23 6.44 Wgtd Avg Shrs (Bas) - '000s 13,550 14,276 7,219 21,421 22,212 22,379 24,901 27,426 27,453 25,540 29,399 30,144 30,219 30,249 30,280 30,310 30,264 30,333 30,374 Wgtd Avg Shrs (Dil) - '000s 13,550 14,276 7,219 21,421 22,212 22,379 24,901 29,926 27,453 25,540 29,399 30,144 30,219 30,249 30,280 30,310 30,264 30,333 30,374 Source: Company reports and Maxim Source: Company reports and Maxim Group LLC estimates.

Jason Kolbert [email protected]


Maxim Group LLC 45

Omeros Corporation Statements of Cash Flow

(In thousands, except per share data) Omeros (OMER) Cash Flow Statement ('000) 2009A 2010A 2011A 1Q12E 2Q12E 3Q12E 4Q12E 2012E 1Q13E 2Q13E 3Q13E 4Q13E 2013E 1Q14E 2Q14E 3Q14E 4Q14E 2014E 1Q15E 2Q15E 3Q15E 4Q15E 2015E 2016E 2017ECash flows from operating activities:Net income (loss) (21,089) (29,251) (28,546) (8,466) (16,937) (25,381) (33,787) (33,787) (9,345) (18,640) (27,885) (37,076) (37,076) (15,881) (22,055) (23,199) (21,184) (21,184) 4,872 14,649 29,454 49,418 49,418 128,267 195,768 Adjustments to reconcile net loss to net cash (operating activities)Depreciation and amortization 451 472 435 113 226 339 452 452 118 235 353 470 470 122 245 367 489 489 127 254 382 509 509 529 550 Stock Based Compensation 1,494 2,178 1,927 575 1,150 1,724 2,299 2,299 586 1,172 1,759 2,345 2,345 598 1,196 1,794 2,392 2,392 610 1,220 1,830 2,440 2,440 2,489 2,538 Change in fair value of preferred stock warrant values and success fee liability (848) Non cash interest expense 253 174 352 Loss on extinguishment of debt 296 Loss on sale of investment securities 34 33 Write-off of deferred public offering costsAcquired in process research and developmentOther than temporary im[pairment loss on investmentsChanges in operating assets and liabilities, net of effect from nura acquistion in 2006Grant and Other receivables (41) (1,231) 2,254 PrePaid Expenses and other current and non-current assets 42 (87) (201) Deferred public offering costs - - Accounts payable and accrued expenses 207 1,462 339 Deferred revenue 470 11,452 (2,228) Net Cash Used in Operating Activities (19,027) (14,502) (25,668) (7,779) (15,561) (23,318) (31,036) (31,036) (8,641) (17,232) (25,773) (34,260) (34,260) (15,161) (20,614) (21,038) (18,302) (18,302) 5,610 16,123 31,665 52,366 52,366 131,285 198,857 Changes in assets and liabilities:Net Cash Used in Operating Activities (19,027) (14,502) (25,668) (7,779) (15,561) (23,318) (31,036) (31,036) (8,641) (17,232) (25,773) (34,260) (34,260) (15,161) (20,614) (21,038) (18,302) (18,302) 5,610 16,123 31,665 52,366 52,366 131,285 198,857 Cash flows from investing activities:Purchase of property and equipment (279) (807) (1,241) (689) (1,378) (2,066) (2,755) (2,755) (696) (1,391) (2,087) (2,783) (2,783) (703) (1,405) (2,108) (2,811) (2,811) (710) (1,419) (2,129) (2,839) (2,839) (2,867) (2,896) Purchase of Patbios IP Assets (7,631) Reimbursement of Patbios IP assets 7,631 Purchase of investments (64,207) (57,765) (9,000) Proceeds from the sale of investments 11,045 78,173 27,150 - - - - - - - Proceeds from the maturities of investments 1,039 323 Cash paid for acquistion of nura, net of cash acquired of $87Net cash provided by investing activities (52,402) 19,924 16,909 (689) (1,378) (2,066) (2,755) (2,755) (696) (1,391) (2,087) (2,783) (2,783) (703) (1,405) (2,108) (2,811) (2,811) (710) (1,419) (2,129) (2,839) (2,839) (2,867) (2,896) Cash flows from financing activities:Proceeds from borrowings under note payable, net of loan origination costs - 9,742 9,942 Payments on notes payable (4,120) (13,005) (1,051) Proceeds from issuance of common stock and exercise of stock options 61,840 299 595 - 26,485 54,322 54,640 54,640 350 34,221 34,643 35,087 35,087 490 1,005 1,546 2,114 2,114 628 1,287 1,981 2,709 2,709 3,472 4,449 Proceeds from the repayment of related party notes receivableProceeds from issuance of convertible preferred stock, net of issuance costs 1,851 Issuance of Series E convertible preferred stock for $5.00 per share concurrent with acquistion of nuraRepurchase of Series A convertible preferred stock and unvested common stock (48) Net cash provided by financing activities 59,523 (2,964) 9,486 - 26,485 54,322 54,640 54,640 350 34,221 34,643 35,087 35,087 490 1,005 1,546 2,114 2,114 628 1,287 1,981 2,709 2,709 3,472 4,449

Net increase (decrease) in cash and cash equivalents (11,906) 2,458 727 (8,467) 9,546 28,938 20,848 20,848 (8,986) 15,597 6,783 (1,956) (1,956) (15,373) (21,015) (21,600) (18,999) (18,999) 5,527 15,991 31,517 52,237 52,237 131,890 200,410 Cash paid for interest 1,947 820 Vesting of early exercised stock options 5

Cash and equivalents, beginning of period 12,726 820 3,278 4,005 4,005 4,005 4,005 4,005 24,853 24,853 24,853 24,853 24,853 22,897 22,897 22,897 22,897 22,897 3,899 3,899 3,899 3,899 3,899 56,135 188,025 Cash and equivalents, end of period 820 3,278 4,005 (4,462) 13,551 32,943 24,853 24,853 15,867 40,451 31,636 22,897 22,897 7,524 1,882 1,297 3,899 3,899 9,426 19,890 35,415 56,135 56,135 188,025 388,435 Source: Company reports and Maxim

Jason Kolbert [email protected] Source: Company reports and Maxim Group LLC estimates.


Maxim Group LLC 46

Omeros Corporation Balance Sheet

(In thousands, except per share data) Omeros, Inc. Balance Sheet ($'000)Assets 2007A 2008A 2009A 2010A 1Q11A 2Q11A 3Q11A 4Q11A 2011 1Q12E 2Q12E 3Q12E 4Q12E 2012E 1Q13E 2Q13E 3Q13E 4Q13E 2013E 2014E 2015E 2016E 2017ECash and Cash Equivilents $5,925 $12,726 $820 $3,278 $3,921 $4,159 $4,888 $4,005 $4,005 ($4,462) $13,551 $32,943 $24,853 $24,853 $15,867 $40,451 $31,636 $22,897 $22,897 $3,899 $56,135 $188,025 $388,435Short Term Investments 18,157 7,256 59,485 38,715 39,715 32,715 27,965 20,565 20,565 20,565 20,565 20,565 20,565 20,565 20,565 20,565 20,565 20,565 20,565 20,565 20,565 20,565 20,565 Grant & Other Receivables 190 207 248 1,479 1,295 2,460 776 876 876 876 876 876 876 876 876 876 876 876 876 876 876 876 876 Prepaid Expenses 189 289 111 282 346 333 210 502 502 502 502 502 502 502 502 502 502 502 502 502 502 502 502 Total current assets $24,461 $20,478 $60,664 $43,754 $45,277 $39,667 $33,839 $25,948 $25,948 $17,481 $35,494 $54,886 $46,796 $46,796 $37,810 $62,394 $53,579 $44,840 $44,840 $25,842 $78,078 $209,968 $410,378Deffered Offering Costs 1,462 - - - - - - - - - - - - - - - - - - - - - - PP&E, net 839 918 1,086 1,622 2,127 952 833 739 739 1,315 1,890 2,466 3,042 3,042 3,620 4,198 4,776 5,354 5,354 7,676 10,005 12,343 14,689 Intangible Assets 164 60 - - - - - - - - - - - - - - - - - - - - - Restricted Cash 209 193 193 193 193 193 193 193 193 193 193 193 193 193 193 193 193 193 193 193 193 193 193 Other Assets 27 32 119 135 156 136 119 102 102 102 102 102 102 102 102 102 102 102 102 102 102 102 102 Total assets $27,162 $21,681 $62,062 $45,704 $47,753 $40,948 $34,984 $26,982 $26,982 $19,090 $37,680 $57,647 $50,133 $50,133 $41,725 $66,887 $58,650 $50,490 $50,490 $33,812 $88,379 $222,606 $425,362Liabilities:Accounts Payable 2,567 1,229 2,620 2,398 1,639 814 1,647 2,002 2,002 2,002 2,002 2,002 2,002 2,002 2,002 2,002 2,002 2,002 2,002 2,002 2,002 2,002 2,002 Accr'd Expenses and Other 2,296 3,764 2,837 5,067 3,899 3,018 2,611 5,340 5,340 5,340 5,340 5,340 5,340 5,340 5,340 5,340 5,340 5,340 5,340 5,340 5,340 5,340 5,340 Preferrred Stock Warrant Liability 1,562 1,780 - - - - - - - - - - - - - - - - - - - - Deffered Revenue 500 232 702 8,014 7,283 6,788 6,282 5,748 5,748 5,748 5,748 5,748 5,748 5,748 5,748 5,748 5,748 5,748 5,748 5,748 5,748 5,748 5,748 Current Portion of Notes Payable 1,010 16,556 4,931 395 2,202 3,719 5,275 5,895 5,895 5,895 5,895 5,895 5,895 5,895 5,895 5,895 5,895 5,895 5,895 5,895 5,895 5,895 5,895 Total current liabilities $7,935 $23,561 $11,090 $15,874 $15,023 $14,339 $15,815 $18,985 $18,985 $18,985 $18,985 $18,985 $18,985 $18,985 $18,985 $18,985 $18,985 $18,985 $18,985 $18,985 $18,985 $18,985 $18,985Notes Payable Less Current Portion 118 7,827 9,360 18,058 16,594 15,092 13,551 13,551 13,551 13,551 13,551 13,551 13,551 13,551 13,551 13,551 13,551 13,551 13,551 13,551 13,551 13,551 Convertible Preffered Stock 89,168 89,168 - - - - - - - - - - - - - - - - - - - - - Total liabilities $97,103 $112,847 $18,917 $25,234 $33,081 $30,933 $30,907 $32,536 $32,536 $32,536 $32,536 $32,536 $32,536 $32,536 $32,536 $32,536 $32,536 $32,536 $32,536 $32,536 $32,536 $32,536 $32,536Stockholders' equity:Pf'd Stk $0.001 ParC/S $0.001 Par 29 30 213 219 221 222 223 224 224 224 224 224 224 224 224 224 224 224 224 224 224 224 224 Paid In Capital 3,466 6,150 161,227 167,838 168,580 169,213 169,786 170,355 170,355 170,930 197,989 226,401 227,294 227,294 228,230 262,687 263,696 264,726 264,726 269,232 274,381 280,341 287,328 Accum. & Other Income (4) (99) 41 - - - - - - - - - - - - - - - - - - - - Accum. Deficit (73,432) (97,247) (118,336) (147,587) (154,129) (159,420) (165,932) (176,133) (176,133) (184,599) (193,070) (201,514) (209,920) (209,920) (219,265) (228,560) (237,805) (246,996) (246,996) (268,180) (218,762) (90,495) 105,274 Total Equity (69,941) (91,166) 43,145 20,470 14,672 10,015 4,077 (5,554) (5,554) (13,446) 5,144 25,111 17,597 17,597 9,189 34,351 26,114 17,954 17,954 1,276 55,843 190,070 392,826 Total Liab & Equity $27,162 $21,681 $62,062 $45,704 $47,753 $40,948 $34,984 $26,982 $26,982 $19,090 $37,680 $57,647 $50,133 $50,133 $41,725 $66,887 $58,650 $50,490 $50,490 $33,812 $88,379 $222,606 $425,362Shares Iss'd (000) 21,286 21,526 21,548 22,168 22,246 22,379 22,379 22,379 24,901 27,426 27,453 27,453 27,481 30,008 30,038 30,068 30,068 30,189 30,310 30,431 30,553 Shares Out (000) - 21,286 21,526 21,548 22,168 22,246 22,379 22,379 22,379 24,901 29,926 27,453 27,453 27,481 30,008 30,038 30,068 30,068 30,189 30,310 30,431 30,553 Treasury StockCommon Authz'd 60,000 60,000 150,000 150,000 150,000 150,000 150,000 150,000 150,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 75,000 Source: Company reports and Maxim Source: Company reports and Maxim Group LLC estimates. Jason Kolbert [email protected]


Maxim Group LLC 47

DISCLOSURES

Maxim Group LLC Stock Rating System As of: 5/7/2012% of Coverage % of Ratings

Universe for which Firm provided

Expected Performance* with Rating Banking Services in the last 12 months

Buy Expected total return of 15% or more over next 12 months 67.0% 10.4%

Hold Expected total return of plus or minus 14% over next 12 months 22.0% 4.5%

Sell Expected total negative return of at least 15% over next 12 months 11.0% 0.0%* Relative to Nasdaq Composite. An Under Review (UR) rating represents a stock that the Firm has temporarily placed under review due to a material change.

Maxim Group expects to receive or intends to seek compensation for investment banking services

from Omeros Corporation in the next 3 months.

I, Jason Kolbert, attest that the views expressed in this research report accurately reflect my personal views about the subject security and issuer. Furthermore, no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report. The research analyst(s) primarily responsible for the preparation of this research report have received compensation based upon various factors, including the firm’s total revenues, a portion of which is generated by investment banking activities. Valuation Methods: Our 12-month price target is based on triangulation of three metrics which include FCF, Discounted EPS and sum of the parts models. Price Target and Investment Risks: Aside from general market and other economic risks, risks particular to our price target and rating for Omeros Corporation include: 1) The ability to maintain favorable relationships with suppliers and customers impacts the company; 2) Changes in federal or state legislation in regard to the use and procurement of allograft bone tissue could impair the company’s performance; 3) Legal proceedings arising from government regulations, class action litigation, or individual litigation could negatively impact bottom-line growth; 4) New business wins or client retention could be less than expected; 5) Revenues, which are reliant on the collection and reimbursement from public and private insurers and national health systems, could contract if budgetary cutbacks are implemented; 6) Increased price competition could cause margins to contract; 7) Material weakness in its internal control systems could adversely affect its ability to record, process, summarize and report certain financial data; and 8) If the company misses our revenue and EPS estimates and/or Street consensus during any given time period the stock price could be negatively impacted.


Maxim Group LLC 48

RISK RATINGS

Risk ratings take into account both fundamental criteria and price volatility. Speculative – Fundamental Criteria: This is a risk rating assigned to early-stage companies with minimal to no revenues, lack of earnings, balance sheet concerns, and/or a short operating history. Accordingly, fundamental risk is expected to be significantly above the industry. Price Volatility: Because of the inherent fundamental criteria of the companies falling within this risk category, the price volatility is expected to be significant with the possibility that the investment could eventually be worthless. Speculative stocks may not be suitable for a significant class of individual investors. High – Fundamental Criteria: This is a risk rating assigned to companies having below-average revenue and earnings visibility, negative cash flow, and low market cap or public float. Accordingly, fundamental risk is expected to be above the industry. Price volatility: The price volatility of companies falling within this category is expected to be above the industry. High-risk stocks may not be suitable for a significant class of individual investors. Medium – Fundamental Criteria: This is a risk rating assigned to companies that may have average revenue and earnings visibility, positive cash flow, and is fairly liquid. Accordingly, both price volatility and fundamental risk are expected to approximate the industry average. Low – Fundamental Criteria: This is a risk rating assigned to companies that may have above-average revenue and earnings visibility, positive cash flow, and is fairly liquid. Accordingly, both price volatility and fundamental risk are expected to be below the industry.


Maxim Group LLC 49

DISCLAIMERS

Some companies that Maxim Group LLC follows are emerging growth companies whose securities typically involve a higher degree of risk and more volatility than the securities of more established companies. The securities discussed in Maxim Group LLC research reports may not be suitable for some investors. Investors must make their own determination as to the appropriateness of an investment in any securities referred to herein, based on their specific investment objectives, financial status and risk tolerance. This communication is neither an offer to sell nor a solicitation of an offer to buy any securities mentioned herein. This publication is confidential for the information of the addressee only and may not be reproduced in whole or in part, copies circulated, or disclosed to another party, without the prior written consent of Maxim Group, LLC (“Maxim”). Information and opinions presented in this report have been obtained or derived from sources believed by Maxim to be reliable, but Maxim makes no representation as to their accuracy or completeness. The aforementioned sentence does not apply to the disclosures required by NASD Rule 2711. Maxim accepts no liability for loss arising from the use of the material presented in this report, except that this exclusion of liability does not apply to the extent that such liability arises under specific statutes or regulations applicable to Maxim. This report is not to be relied upon in substitution for the exercise of independent judgment. Maxim may have issued, and may in the future issue, other reports that are inconsistent with, and reach different conclusions from, the information presented in this report. Those reports reflect the different assumptions, views and analytical methods of the analysts who prepared them and Maxim is under no obligation to ensure that such other reports are brought to the attention of any recipient of this report. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. Information, opinions and estimates contained in this report reflect a judgment at its original date of publication by Maxim and are subject to change without notice. The price, value of and income from any of the securities mentioned in this report can fall as well as rise. The value of securities is subject to exchange rate fluctuation that may have a positive or adverse effect on the price or income of such securities. Investors in securities such as ADRs, the values of which are influenced by currency volatility, effectively assume this risk. Securities recommended, offered or sold by Maxim: (1) are not insured by the Federal Deposit Insurance Company; (2) are not deposits or other obligations of any insured depository institution; and 3) are subject to investment risks, including the possible loss of principal invested. Indeed, in the case of some investments, the potential losses may exceed the amount of initial investment and, in such circumstances, you may be required to pay more money to support these losses.

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST

Maxim Group LLC 405 Lexington Avenue New York, NY 10174 – www.maximgrp.com

EQUITY RESEARCH DEPARTMENT CAPITAL MARKETS / SYNDICATE

Anthony Vendetti Christopher Fiore 212-895-3743Director of Research 212-895-3802 President & Head of Capital Markets

AEROSPACE & AIRLINES Paul LaRosa 212-895-3695Ray Neidl 212-895-3571 Senior Managing Director - Chief Market Technician

Andrew Rosen 212-895-3685ALTERNATIVE ENERGY Senior Vice PresidentSolar Power & LEDsAaron Chew 212-895-3568 INSTITUTIONAL SALES & INSTITUTIONAL SALES TRADING

CHINA Jamie Barker 212-895-3755Echo Yinghui He Ph.D., M.D. 212-895-3718 Managing Director - Institutional Equity Sales & Sales Trading

HEALTHCARE INSTITUTIONAL SALES 800-628-4005Healthcare IT, Services & Medical DevicesAnthony Vendetti 212-895-3802 Eric Brous 212-895-3635

Ian Burgess 212-895-3548Healthcare & Life Sciences Ken Epstein 212-895-3872Bryan Brokmeier, CFA 212-895-3845 Michael Fenton 212-895-3698

William Haynsworth 212-895-3639Biotechnology Seitaro Kuno 212-895-3880Jason Kolbert 212-895-3516 Tim Manning 212-895-3527

David Markel 212-895-3534Biotechnology Erik Moquist 561-465-2496Echo He Ph.D., M.D. 212-895-3718 Anthony Musto 212-895-3824

Gene Napolitano 212-895-3827INDUSTRIALS & INFRASTRUCTURE Amanda Nozaki 212-895-3570William D. Bremer 212-895-3835 Rodney Plasket 212-895-3615

Jason Sardo 212-895-3630MEDIA Jeff Sklar 212-895-3780John Tinker 212-895-3735 Dirk van Erp 925-954-1194

TECHNOLOGYAshok Kumar, CFA 650-823-4745 INSTITUTIONAL SALES TRADING 800-628-4005

Research Associates Todd Bodine 212 895-3806 Benjamin Black 212-895-3509 Phil Buchanan 212-895-3746Francesco Citro, Ph.D. 212-895-3809 Robert Benedickson 732-784-1903Nirav Modi 212-895-3595 George Brown 212-895-3757Victor Zajdel 212-895-3814 Adam Cheek 212-895-3878

Jon Huzarsky 212-895-3629Supervisory Analyst/Research Assistant Peter Kaufman 561-465-2493Nikki Reed 212-895-3736 Josh Levy 212-895-3897

Rich Levy 212-895-3820Mitch Martin 212-895-3831Mike Massimino 212-895-3544Joseph Matura 212-895-3892Dennis Natika 213 895-3758 Michael Pizzo 213 895-3643Eugene Polt 732-784-1906Alex Povalski 732-784-1904Alessandro Profita 212-895-3795Richard Reda 212-895-3849Hany Sabet 650 587 8585Clint Schoen 212-895-3893Ed Shopkorn 212-895-3601 Brian Schroetter 732-784-1918Kevin Schweitzer 516-396-3012Gary Tritto 212-895-3842Richard Vaughn 212-895-3676Cass Waller 212-895-3740Reed Werbit 212-895-3634

Energy Sector SpecialistEliecer Palacios 212-895-3608Retail Sector SpecialistRick Snyder 212-895-3674

FIXED INCOME TRADING EQUITY TRADING

Jamie Terranova 212-895-3875 Bill Vitale 732-784-1905Jon Good 212 895 3607 Keith Arner 212-895-3891Pierre Grant 212 895 3582 Ricardo Barquero 212-895-3781Jon Kattouf 212-895-3573 Ralph Calabro 212-895-3586Justin Rabinowitz 212-895-3839 William Doyle 212-895-3724David Kamiya 212-895-3641 Robert Lynch 732-784-1910Anthony Marciano 212-895-3613 Joseph Matura 212-895-3892Frantisek Kovac 212-895-3606 Jared Rabinowitz 212 895 3729

Robert Sayegh 212-895-3680GLOBAL EQUITY TRADING Bryan Tomasulo 212-895-3671

John Viteritti 212-895-3541Bryan Chalk 804-441-6106Charles Ferrera 212-895-3770Tom Giordano 212 895-3837 Peter Murgolo 212-895-3612John Palmieri 732-784-1929Eric Skibo 212-895-3776Jackson Platsky 212-895-3561Chris Valvo 732-784-1916Rory Gourlay 732-784-1936

INSTITUTIONAL OPTIONS TRADING

Leonard Greenbaum 212-895-3791 WEALTH MANAGEMENT

PRIME BROKERAGE John Garrity Kristi Marvin 212-895-3769 Executive Managing Director 212-895-3624

CORPORATE FINANCE

Clifford A. Teller Director of Investment Banking 212-895-3773

Omer initiation

Investor Relations

Transcript of Omer initiation