Organization and Significant Accounting Policies	3 Months Ended
Mar. 31, 2015
Organization and Significant Accounting Policies	Organization and Significant Accounting Policies Organization We are a biopharmaceutical company committed to discovering, developing and commercializing both small-molecule and protein therapeutics for large-market as well as orphan indications targeting inflammation, coagulopathies and disorders of the central nervous system. Our first drug product Omidria has been approved by the U.S. Food and Drug Administration (FDA) for use during cataract surgery or intraocular lens (IOL) replacement. We commenced a controlled launch of Omidria to a small number of ambulatory surgery centers (or ASCs) in the U.S. in February 2015. During the controlled launch, our sales were made on a direct, non-return basis and the majority of the patients were covered under Medicare Part B. In early April 2015, we initiated the broad U.S. launch of Omidria and we have begun to sell the product to wholesalers who will, in turn, sell to ASCs and hospitals. Basis of Presentation Our condensed consolidated financial statements include the financial position and results of operations of Omeros Corporation and our wholly owned subsidiaries. All inter-company transactions have been eliminated. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The information as of March 31, 2015 and for the three months ended March 31, 2015 and 2014 includes all adjustments, which include normal recurring adjustments, necessary to present fairly our interim financial information. The Condensed Consolidated Balance Sheet at December 31, 2014 has been derived from audited financial statements but does not include all of the information and footnotes required by GAAP. The accompanying unaudited condensed consolidated financial statements and notes to condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto that are included in our Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission (SEC) on March 16, 2015. Revenue Recognition Our revenues are comprised of product sales of Omidria and amounts earned for services under grants from the National Institutes of Health (NIH). Revenue is recognized when there is persuasive evidence that an arrangement exists, product has been shipped to the customer or the service has been provided, the price is fixed or determinable and collection is reasonably assured. We recorded product revenue when title and risk of loss passed to the ASCs, which occurred upon shipment of Omidria. Product sales were made on a direct, non-return basis and as of March 31, 2015, we have not signed any contracts that would create deductions against these sales. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant items subject to such estimates include revenue recognition, fair market value of investments, stock-based compensation expense and accruals for clinical trials and contingencies. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances; however, actual results could differ from these estimates. Liquidity and Capital Resources As of March 31, 2015, we had $70.1 million in cash, cash equivalents and short-term investments. We believe that our existing cash, cash equivalents and short-term investments and anticipated future sales from Omidria together with capital that we may have the opportunity to raise through public or private equity securities sales, through the issuance of additional debt, through corporate partnerships, through asset sales or through the pursuit of collaborations and licensing arrangements related to certain of our programs will be sufficient to fund our anticipated operating expenses, capital expenditures and interest and principal payments on our outstanding notes for at least the next 12 months. If we are unable to raise capital as and when needed, or upon acceptable terms, such failure would have a significant negative impact on our financial condition. Inventory Inventory is stated at the lower of cost or market determined on a specific identification basis in a manner which approximates the first-in, first-out (FIFO) method. Costs include amounts related to third-party manufacturing, transportation and internal labor and overhead. Capitalization of costs as inventory begins when the product candidate receives regulatory approval in the U.S. or the EU, which for Omidria began upon U.S. regulatory approval in May 2014. We expense inventory costs related to product candidates as research and development expenses prior to regulatory approval in the respective territory. Inventory is reduced to net realizable value by reserving for excess and obsolete inventories based on forecast demand. As of March 31, 2015, all inventory is finished goods for Omidria. Segments We operate in one segment. Management uses cash flow as the primary measure to manage our business and does not segment our business for internal reporting or decision-making. Recent Accounting Pronouncements In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-03 related to simplifying the presentation of debt issuance costs. This standard requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction to the liability. This standard is effective for interim and annual periods beginning after December 15, 2015 and early adoption is permitted. We are currently evaluating in which period we will transition and the presentation of the debt liability on our balance sheet following such transition, as well as how related disclosures will be impacted. The disclosures required are those applicable for a change in accounting principle. In August 2014, the FASB issued ASU No. 2014-15 related to disclosure of an entity’s ability to continue as a going concern. This standard requires management to evaluate whether substantial doubt exists regarding the entity’s ability to continue as a going concern at each reporting period for a duration of one year after the date the financial statements are issued or available to be issued. The standard establishes certain required disclosures if substantial doubt exists. This standard must be applied prospectively and is effective for interim and annual periods beginning after December 15, 2016. We will review the impact of the standard upon our disclosures, if applicable, beginning in 2017. In May 2014, the FASB issued ASU No. 2014-09 related to the recognition of revenue that supersedes existing guidance. This standard clarifies the principles for recognizing revenue utilizing a five-step process. This standard must be applied retroactively to each prior reporting period presented or retrospectively with the cumulative effect of applying the standard recognized in the period adopted. On April 1, 2015, the FASB voted to approve a one-year deferral of the original effective date. This standard is now effective for interim and annual periods beginning after December 15, 2017 and cannot be adopted before that effective date. We are currently evaluating the impact that this standard may have on our financial statements once it is adopted.

Organization and Significant Accounting Policies

Organization

We are a biopharmaceutical company committed to discovering, developing and commercializing both small-molecule and protein therapeutics for large-market as well as orphan indications targeting inflammation, coagulopathies and disorders of the central nervous system. Our first drug product Omidria has been approved by the U.S. Food and Drug Administration (FDA) for use during cataract surgery or intraocular lens (IOL) replacement. We commenced a controlled launch of Omidria to a small number of ambulatory surgery centers (or ASCs) in the U.S. in February 2015. During the controlled launch, our sales were made on a direct, non-return basis and the majority of the patients were covered under Medicare Part B. In early April 2015, we initiated the broad U.S. launch of Omidria and we have begun to sell the product to wholesalers who will, in turn, sell to ASCs and hospitals.

Basis of Presentation

Our condensed consolidated financial statements include the financial position and results of operations of Omeros Corporation and our wholly owned subsidiaries. All inter-company transactions have been eliminated. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The information as of March 31, 2015 and for the three months ended March 31, 2015 and 2014 includes all adjustments, which include normal recurring adjustments, necessary to present fairly our interim financial information. The Condensed Consolidated Balance Sheet at December 31, 2014 has been derived from audited financial statements but does not include all of the information and footnotes required by GAAP.

The accompanying unaudited condensed consolidated financial statements and notes to condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto that are included in our Annual Report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission (SEC) on March 16, 2015.

Revenue Recognition

Our revenues are comprised of product sales of Omidria and amounts earned for services under grants from the National Institutes of Health (NIH). Revenue is recognized when there is persuasive evidence that an arrangement exists, product has been shipped to the customer or the service has been provided, the price is fixed or determinable and collection is reasonably assured. We recorded product revenue when title and risk of loss passed to the ASCs, which occurred upon shipment of Omidria. Product sales were made on a direct, non-return basis and as of March 31, 2015, we have not signed any contracts that would create deductions against these sales.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant items subject to such estimates include revenue recognition, fair market value of investments, stock-based compensation expense and accruals for clinical trials and contingencies. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances; however, actual results could differ from these estimates.

Liquidity and Capital Resources

As of March 31, 2015, we had $70.1 million in cash, cash equivalents and short-term investments. We believe that our existing cash, cash equivalents and short-term investments and anticipated future sales from Omidria together with capital that we may have the opportunity to raise through public or private equity securities sales, through the issuance of additional debt, through corporate partnerships, through asset sales or through the pursuit of collaborations and licensing arrangements related to certain of our programs will be sufficient to fund our anticipated operating expenses, capital expenditures and interest and principal payments on our outstanding notes for at least the next 12 months. If we are unable to raise capital as and when needed, or upon acceptable terms, such failure would have a significant negative impact on our financial condition.

Inventory

Inventory is stated at the lower of cost or market determined on a specific identification basis in a manner which approximates the first-in, first-out (FIFO) method. Costs include amounts related to third-party manufacturing, transportation and internal labor and overhead. Capitalization of costs as inventory begins when the product candidate receives regulatory approval in the U.S. or the EU, which for Omidria began upon U.S. regulatory approval in May 2014. We expense inventory costs related to product candidates as research and development expenses prior to regulatory approval in the respective territory. Inventory is reduced to net realizable value by reserving for excess and obsolete inventories based on forecast demand. As of March 31, 2015, all inventory is finished goods for Omidria.

Segments

We operate in one segment. Management uses cash flow as the primary measure to manage our business and does not segment our business for internal reporting or decision-making.

Recent Accounting Pronouncements

In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-03 related to simplifying the presentation of debt issuance costs. This standard requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction to the liability. This standard is effective for interim and annual periods beginning after December 15, 2015 and early adoption is permitted. We are currently evaluating in which period we will transition and the presentation of the debt liability on our balance sheet following such transition, as well as how related disclosures will be impacted. The disclosures required are those applicable for a change in accounting principle.

In August 2014, the FASB issued ASU No. 2014-15 related to disclosure of an entity’s ability to continue as a going concern. This standard requires management to evaluate whether substantial doubt exists regarding the entity’s ability to continue as a going concern at each reporting period for a duration of one year after the date the financial statements are issued or available to be issued. The standard establishes certain required disclosures if substantial doubt exists. This standard must be applied prospectively and is effective for interim and annual periods beginning after December 15, 2016. We will review the impact of the standard upon our disclosures, if applicable, beginning in 2017.

In May 2014, the FASB issued ASU No. 2014-09 related to the recognition of revenue that supersedes existing guidance. This standard clarifies the principles for recognizing revenue utilizing a five-step process. This standard must be applied retroactively to each prior reporting period presented or retrospectively with the cumulative effect of applying the standard recognized in the period adopted. On April 1, 2015, the FASB voted to approve a one-year deferral of the original effective date. This standard is now effective for interim and annual periods beginning after December 15, 2017 and cannot be adopted before that effective date. We are currently evaluating the impact that this standard may have on our financial statements once it is adopted.