Omeros Corporation (OMER): Omidria Can Now Stage a Comeback to Former Sales Gains, Says Jason McCarthy

With new hope for a two-year reimbursement extension for Omidria, Jason McCarthy now bets on 58% in return potential for the stock.


It’s a great day to be an Omeros Corporation (NASDAQ:OMER) investor, as shares rocket almost 36%.

Smarter Analyst’s bull of the day may have just garnered a two-year Medicare reimbursement extension from Congress for cataract surgery drug Omidria should the spending bill pass. Considering that in the company’s fourth quarter, this drug experienced a massive drop in sales from $21.7 million in the third quarter down to $13.8 million, the Street welcomes this comeback in valuation today. For a company that thought the question of reimbursement dragged first quarter sales, investors are celebrating that this pass-through status has not fallen through the cracks.

Maxim analyst Jason McCarthy takes the resolution of OMER’s near-term reimbursement overhang in stride as terrific news and is out boosting his target expectations today as a result.

On back of the excitement circling this federal spending package, the analyst reiterates a Buy rating on OMER stock while bumping up the price target from $24 to $25, which implies a 58% upside from current levels. (To watch McCarthy’s track record, click here)

Even though the company posted underwhelming Omidria sales in its fourth quarter, the analyst notes that this was “despite the number of units shipped remaining the same” and adds, “This was largely due to a revenue recognition issue triggered by reimbursement uncertainty.”

“With pass through status likely to be reinstated, we expect Omidria to return to its previous trend of growing sales,” cheers McCarthy.

All the same, the analyst continues to see OMS721 as the ultimate moneymaker for Omeros: “That said, we still maintain that Omidria is the ‘means’ to what we see as the ‘ends’, OMS721. As such while we expect Omidria revenue to continue to grow, the real value in Omeros lays in OMS721. The complement inhibitor is in P3 trials for three indications: IgA Nephropathy (IgAN), Stem Cell Transplant TMA (HCT-TMA), and aHUS. Each of these indications represents an unmet medical need and a significant opportunity for Omeros and patients alike.”

TipRanks showcases a drug maker that may have the Street split between the bulls and the bears, but sentiment that is incredibly optimistic. Out of 4 analysts polled in the last 3 months, half are bullish on OMER stock’s opportunity and half are sidelined. Yet, notably, the 12-month average price target stands tall at $24.67, marking a 57% upside from where the stock is currently trading.