Stock Update (NASDAQ:OMER): Omeros Corporation Reports Fourth Quarter and Year-End 2014 Financial Results


Omeros Corporation (NASDAQ:OMER), 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, today announced recent highlights and developments as well as financial results for the fourth quarter and year ended December 31, 2014, which include:

  • Net loss in 4Q 2014 of $20.7 million or $0.61 per share and, for the full year of 2014, a net loss of $73.7 million or $2.22 per share
  • Operating expenses in 4Q 2014 were $20.2 million including $4.2 million of non-cash expenses and, for the full year of 2014, were $70.5 million including non-cash expenses of $11.7 million
  • Center for Medicare and Medicaid Services (CMS) granted FDA-approved Omidria(phenylephrine and ketorolac injection) 1%/0.3% transitional pass-through reimbursement status in October 2014, effective January 1, 2015
  • Closed equity financing in February 2015, receiving $79.1 million in net proceeds

“2014 was a year of many important achievements for Omeros, transitioning us from a solely R&D to a commercial company with FDA’s approval of Omidria,” said Gregory A. Demopulos, M.D., chairman and chief executive officer of Omeros. “Receipt of pass-through status from CMS, we expect, will accelerate our commercial success. The controlled launch of Omidria began in February and the feedback from those surgeons using Omidria has been uniformly positive. The broad launch of Omidria is planned for early April, which will coincide nicely with the product’s increased visibility at the annual meeting of the American Society of Cataract and Refractive Surgery later that month. Our pipeline programs also made substantial progress, most notably resulting in positive preliminary data in the Phase 2 clinical trial evaluating OMS721, our proprietary MASP-2 antibody currently in development for the treatment of TMAs.”

Fourth Quarter and Recent Highlights

  • CMS granted Omidria pass-through reimbursement status, effective January 1, 2015. Pass-through status allows for separate payment for new drugs and other medical technologies that meet well-established criteria specified by federal regulations governing Medicare spending.Omeros expects pass-through to remain in effect until December 31, 2017, near which time CMS will evaluate utilization of Omidria and will re-assess its reimbursement status. CMS has set the reimbursement rate for Omidria under Medicare Part B at the product’s wholesale acquisition cost (WAC) of $465 plus six percent (6%) per single-use vial for the second and third quarters of 2015 after which the rate will be based on average selling price (ASP) plus six percent (6%). Based on Omeros’ discussions with CMS, the company expects this pass-through reimbursement to be effective as of January 1, 2015.
  • Continued preparations for the full-scale U.S. launch of Omidria in early April 2015, which was preceded in February by a controlled product launch targeting all regions across the U.S. Activities included deploying additional field sales representatives, bringing the total number of representatives to 40, developing distribution and access strategy, publishing product advertisements in trade journals and building a presence at key ophthalmologic conferences and within the ophthalmic surgery community.
  • Announced that the company had completed dosing of the low-dose cohort of patients in its Phase 2 clinical trial evaluating the efficacy and safety of OMS721, the lead human monoclonal antibody for the company’s mannan-binding lectin-associated serine protease-2 (MASP-2) program, in treating thrombotic microangiopathies (TMAs), including atypical hemolytic uremic syndrome (aHUS). All patients in this study cohort received OMS721 and improvements were observed across TMA disease markers. Experts in this disease field, including the study investigators, believe that the patients’ improvements were clinically meaningful and directly related to treatment with OMS721. Based on the clinical results, a European investigator also has requested that Omeros provide extended access to OMS721 for compassionate use in patients with TMAs. This request is subject to approval by the applicable regulatory authority.
  • Reported positive data in nonclinical studies of OMS721 or its derivative (1) in an ex vivopathophysiologic system of aHUS for inhibition of thrombus formation and (2) in a well-established animal model of stroke to reduce size of brain infarction and to protect against neurological deficits.
  • Continued evaluation of data from a single nonclinical rat study in the company’s OMS824 program. Omeros is finalizing the package of nonclinical materials requested by the FDA to allow re-initiation of the OMS824 programs, and the company looks forward to re-activating enrollment in its Phase 2 clinical programs in the near future.
  • Closed a public equity offering in February 2015 by which the company received net proceeds of approximately $79.1 million.

Financial Results
For the quarter ended December 31, 2014, Omeros reported a net loss of $20.7 million or $0.61per share, including non-cash expenses of $4.2 million or $0.12 per share. This compares to a net loss of $1.8 million or $0.05 per share, including non-cash expenses of $2.6 million or $0.09 per share, for the same period in 2013. The 2013 period includes a $12.5 million or $0.41 per share reduction of our net loss related to receiving a nonrecurring payment upon settlement of litigation. Excluding the litigation settlement, the loss for the fourth quarter of 2013 would have been $14.3 million or $0.47 per share.

For the full year 2014, Omeros reported a net loss of $73.7 million or $2.22 per share, including non-cash expenses of $11.7 million or $0.35 per share. This compares to a net loss of $39.8 millionor $1.39 per share in 2013, including non-cash expenses of $10.6 million or $0.37 per share. Excluding the litigation settlement, the 2013 net loss would have been $52.3 million or $1.83 per share.

Operating expenses for the three months ended December 31, 2014 were $20.2 million compared to $14.1 million for the same period in 2013, an increase of $6.1 million. The increase was primarily related to preparing for the U.S. commercial launch of Omidria, to non-cash expenses related to stock-based compensation, to increased employee costs and to the U.S. pediatric clinical trial evaluating Omidria, which began during 2014. These increased expenses were partially offset by lower clinical research and development expenses due to the timing of clinical trials evaluating OMS824.

Operating expenses for the year ended December 31, 2014 were $70.5 million, an increase of$18.4 million compared to $52.1 million in 2013. The 2014 increase related primarily to preparing for the U.S. commercial launch of Omidria, to clinical trials evaluating OMS824 and OMS721, to Phase 3 clinical trials for Omidria, and to increased employee costs and non-cash expenses related to stock-based compensation. These increased expenses were partially offset by lower preclinical activity on the PDE7 program.

Revenue for the quarter ended December 31, 2014 was $180,000 compared to $169,000 for the same period in 2013. For the year ended December 31, 2014, revenue was $539,000 compared to$1.6 million in 2013. The decrease for the full year 2014 was due to lower revenue recognized from the GPCR program funding agreements with Vulcan and LSDF, and the company will not recognize any additional revenue under these agreements in future periods.

At December 31, 2014, the company had cash and cash equivalents and short-term investments of $6.9 million. In February 2015 the company sold 3,444,831 shares of common stock at a public offering price of $20.03 per share and sold pre-funded warrants to purchase up to 749,250 shares of common stock at a public offering price of $20.02 per warrant share, each warrant share having an exercise price of $0.01. After deducting underwriting discounts and other offering expenses,Omeros received net proceeds of approximately $79.1 million.

2015 Guidance
For 2015, the company anticipates that operating expenses will be in the $110 million to $120 million range with non-cash expenses of approximately $15 million. This guidance is largely based on the continued preparations for the full-scale U.S. launch of Omidria as well as the continued development of the company’s product pipeline.

(Original Source)

Shares of Omeros opened today at $25.32 and are currently trading down at $24.079. OMER has a 1-year high of $27.64 and a 1-year low of $9.76. The stock’s 50-day moving average is $22.18 and it’s 200-day moving average is $19.06.

On the ratings front, Omeros (NASDAQ: OMER) has been the subject of a number of recent research reports. In a report issued on March 13, MLV & Co. analyst Ram Selvaraju maintained a Buy rating on OMER, with a price target of $38, which represents a potential upside of 50.1% from where the stock is currently trading. Separately, on February 20, Maxim Group’s Jason Kolbert reiterated a Buy rating on the stock and has a price target of $30.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Ram Selvaraju and Jason Kolbert has a total average return of 12.1% and 11.3% respectively. Selvaraju has a success rate of 51.3% and is ranked 348 out of 3516 while Kolbert has a success rate of 48.7% and is ranked 236

In total, 4 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 $25.32 which is 56.0% above where the stock opened today.

Omeros Corp is engaged in the discovery, development and commercialization of pharmaceutical products for inflammation, coagulopathies and disorders of the central nervous system.

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