Omeros Made Errors on NIH Grant, But Feds Accepted Internal Investigation Saying They Weren’t Overbilled

10/5/09Follow @xconomy

Omeros, the Seattle biotech company accused by its former chief financial officer of filing false time records on grant work for the National Institutes of Health, disclosed late last night in a federal court filing that it alerted the government to its internal mistakes, and that the NIH accepted the results of an internal investigation that concluded the company didn’t overbill the government.

Omeros, which is defending itself while simultaneously seeking to raise as much as $80 million in an initial public offering this week, provided a detailed response to charges raised in U.S. District Court on Sept. 21 by Richard J. Klein, its former finance chief. Omeros acknowledged it made mistakes in keeping track of how much time its scientists spent working on an NIH grant to search for new targets for anxiety treatments, but the company spotted the errors and corrected them before it submitted bills to NIH, according to a letter from Omeros general counsel Marcia Kelbon to a federal compliance officer dated May 14. The company ended up underbilling the federal government by $55,000 after it discovered the mistakes in keeping track of its employees’ time.

An assistant compliance officer at NIH, Kathy Hancock, appeared satisfied with Omeros’s summary of what had happened, according to documents disclosed in federal court late last night.

“This email confirms NIH’s review of the report and our acceptance of the corrective actions taken by Omeros,” Hancock wrote in an e-mail on June 29, which was attached in the Omeros federal court filing. “We appreciate you calling this error to our attention.” Hancock added, “We commend your organization for its actions taken to address this issue and to ensure compliance with federal requirements.”

A spokesman for Omeros declined to comment, citing an ongoing “quiet period” mandated by the Securities and Exchange Commission for companies preparing to go public. The NIH’s Hancock and an attorney for Klein didn’t immediately respond to requests for comment.

The letter from Omeros’s Kelbon to the NIH describes what happened with the company’s timekeeping practices in more significant detail … Next Page »

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