H.C. Wainwright Shares Two Cents on Omeros (OMER) Following Q1’18 Update

Omeros (NASDAQ:OMER) shares are soaring today after the drug maker reported quarterly results, and there’s a lot more fuel in the tank to propel it even higher, at least according to H.C. Wainwright analyst Ram Selvaraju.

In a research note issued this morning, Selvaraju reiterated a Buy rating on OMER stock, with a price target of $34, which implies an upside of 88% from current levels. (To watch Selvaraju’s track record, click here)

Omeros reported Q1 with $1.6 million from Omidria revenues. The decrease from $13.8 million was largely attributed to the loss of pass-through status on January 1 (which will be reinstated in October). Omeros reported a net loss for the quarter of $30 million, and a cash balance of $73 million, which does not include $45 million from the credit facility which Omeros has requested.

Selvaraju commented, “We continue to anticipate that OMIDRIA revenues should gradually rise in the second and third quarters, before accelerating markedly in the final couple of months of 2018 when reimbursement resumes. The company recorded a net loss of $0.62 per share, precisely in line with our forecast. We have modestly revised our estimates for 2018, which are now at a loss per share of $2.22 vs. the prior loss per share of $2.24. Our 2019 earnings estimate now stands at $0.21 vs. the prior $0.02 per share, reflecting our expectation that Omeros should turn cash flow-positive in 2H19 along with our projection that revenue from sales of OMS721 could begin next year if the FDA were to agree to grant accelerated approval in the HSCT-TMA indication.”

“We believe investors should focus on the fact that Omeros closed the first quarter with a solid cash and short-term investments position of $72.8M, and that the company has indicated its draw-down of the remaining $45M loan facility tranche with CRG this month, further bolstering its resources. Based on our projections, we believe Omeros could reach cash flow-positive status next year without requiring significant additional capital,” the analyst added.

Overall, according to TipRanks, a site that tracks and ranks analysts on their predictions, Wall Street seems to be divided on the stock as 3 recommend buying shares of Omeros, while 3 remain on the sidelines. The average 12-month price target between these 6 analysts is $54.40, marking a 84% potential upside from current levels.


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