Omeros Corporation (NASDAQ:OMER) announced recent highlights and developments as well as financial results for the second quarter ended June 30, 2017, which include:

  • 2Q 2017 total and OMIDRIA® revenues were $17.2 million. Revenues from OMIDRIA sales rose 40% from 1Q 2017 and 71% from the prior year’s second quarter.
  • OMIDRIA units shipped by wholesalers (“sell-through”) increased 34% over 1Q 2017 and 113% over 2Q 2016.
  • Net loss in 2Q 2017 was $14.4 million, or $0.33 per share, which included $4.3 million ($0.10 per share) of non-cash expenses. Net loss in the prior year’s second quarter was $12.6 million or $0.32 per share, which included $3.2 million ($0.08 per share) of non-cash expenses.
  • FDA granted OMS721 breakthrough therapy and orphan drug designations in immunoglobin A (IgA) nephropathy.
  • Initiated OMS721 Phase 3 clinical program in IgA nephropathy; Phase 3 trial is expected to begin later this year.

“OMIDRIA posted a strong quarter as revenues continue to grow across all sectors of our market – ASCs, community hospitals and academic centers – and from both new and existing accounts,” said Gregory A. Demopulos, M.D., chairman and chief executive officer of Omeros. “This was also a watershed quarter for OMS721, our MASP-2 inhibitor, and the Omeros team is highly focused on securing regulatory approval for the first of multiple indications and making this drug available to patients as quickly as possible. OMS721 was granted breakthrough therapy and orphan drug designations from FDA in IgA nephropathy, which joined aHUS as a Phase 3 clinical program. OMS721 in patients with stem cell transplant-associated TMA has generated impressive data and is slated to enter Phase 3 later this year. On top of our clinical trial successes for OMS721, we are excited about the progress of our other pipeline programs, including the near-term prospects for our PDE7 inhibitor OMS527 for addictions and compulsive disorders, which is planned to enter the clinic in early 2018.”

Second Quarter and Recent Highlights and Developments

  • Highlights and developments regarding OMS721, Omeros’ lead human monoclonal antibody in its mannan-binding lectin-associated serine protease-2 (MASP-2) programs for the treatment of thrombotic microangiopathies (TMAs), including atypical hemolytic uremic syndrome (aHUS) and hematopoietic stem cell-associated TMA (HSCT-TMA), and for the treatment of complement-related renal diseases, including IgA nephropathy, include:
    • In June, Omeros announced that the FDA granted breakthrough therapy designation to OMS721 for the treatment of IgA nephropathy. Breakthrough therapy designation was granted based on data from Omeros’ Phase 2 clinical trial evaluating OMS721 in patients with IgA nephropathy and other kidney diseases. In August, the company announced that the FDA granted orphan drug designation to OMS721 for the treatment of IgA nephropathy. In addition, in Europe the company is pursuing orphan designation and Priority Medicines (PRIME) designation for the treatment of IgA nephropathy.
    • Omeros is pursuing from the FDA breakthrough therapy designation for OMS721 in HSCT-TMA and accelerated approval for OMS721 in one or more of the indications in development, including aHUS. The FDA has already granted fast track designation for OMS721 in patients with aHUS and orphan designation for OMS721 in patients with complement-mediated TMAs, including aHUS and HSCT-TMA.
    • The company reported data from its Phase 2 clinical trial of OMS721 for the treatment of IgA nephropathy and other kidney diseases at the 54th European Renal Association-European Dialysis and Transplant Association (ERA-EDTA) Congress in Madrid, Spain.
    • Following a successful meeting with FDA regarding positive OMS721 Phase 2 clinical data in patients with IgA nephropathy, Omeros initiated its Phase 3 program for OMS721 in this indication. Discussions are ongoing with FDA and the Phase 3 clinical trial is expected to begin later this year.
  • Omeros filed an OMIDRIA supplemental NDA (sNDA) to the FDA to fulfill the Agency’s post-marketing requirement for a pediatric clinical trial. By successfully completing the trial and filing the sNDA, Omeros expects to expand the drug’s indication and label to include use of OMIDRIA in children and to receive an additional six months of marketing exclusivity for OMIDRIA.

Financial Results

For the quarter ended June 30, 2017, total revenues were $17.2 million, all relating to sales of OMIDRIA. This compares to OMIDRIA revenues of $10.0 million for the same period in 2016. On a sequential quarter-over-quarter basis, OMIDRIA revenue grew $4.9 million, or 40%, and units sold by the company’s wholesalers to ambulatory surgery centers and to hospitals (“sell-through”) increased 34%. The quarter-over-quarter increases in OMIDRIA revenue and units sold are due to both an increase in the number of customers purchasing OMIDRIA and increased penetration into existing customer accounts.

Total costs and expenses for the three months ended June 30, 2017 were $29.1 million compared to $20.9 million for the same period in 2016. The increase in the current year quarter was primarily due to increased clinical research and development costs associated with OMS721, Omeros’ MASP-2 product candidate in Phase 3 and Phase 2 clinical programs, and the filing fee required upon the company’s submission of the supplemental NDA associated with Omeros’ post-marketing OMIDRIA pediatric trial to the FDA. Legal costs associated with the Par lawsuit and increased employee-related costs also contributed to the increase.

Interest expense for the three months ended June 30, 2017 was $2.7 million as compared to $1.9 million in the prior year second quarter. The increase is due to incremental funds borrowed by the company in 2016.

For the three months ended June 30, 2017, Omeros reported a net loss of $14.4 million, or $0.33per share, which included non-cash expenses of $4.3 million ($0.10 per share). This compares to the prior year’s second quarter where Omeros reported a net loss of $12.6 million, or $0.32 per share, which included non-cash expenses of $3.2 million ($0.08 per share).

As of June 30, 2017, the company had $29.7 million of cash and cash equivalents available for operations, a decrease of $4.0 million from March 31, 2017, and $5.8 million in restricted cash. Omeros has the ability to borrow an additional $25.0 million at its election, and potential access to an additional $20.0 million, from the company’s existing lender.

Shares of Omeros climbed nearly 4% to $22.50 in after hours Tuesday. OMER has a 1-year high of $27.09 and a 1-year low of $7.20. The stock’s 50-day moving average is $21.76 and its 200-day moving average is $15.85.

On the ratings front, Omeros has been the subject of a number of recent research reports. In a report issued on August 2, Maxim analyst Jason Kolbert reiterated a Buy rating on OMER, with a price target of $24, which represents a potential upside of 8% from where the stock is currently trading. On June 13, Cantor’s Elemer Piros reiterated a Hold rating on the stock and has a price target of $15.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Jason Kolbert and Elemer Piros have a yearly average loss of -13.9% and a return of 0.0% respectively. Kolbert has a success rate of 31% and is ranked #4587 out of 4628 analysts, while Piros has a success rate of 44% and is ranked #3265.

Overall, one research analyst has assigned a Hold rating and 3 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $40.25 which is 80.6% above where the stock opened today.

Omeros Corp. operates as a biopharmaceutical company committed to discovering, developing, and commercializing small-molecule and protein therapeutics for large market as well as orphan indications targeting inflammation, coagulopathies and disorders of the central nervous system.