On the 11/19 conf call, someone should ask about the following recent post on peHUB.com:
Lawsuit Against Omeros Drags On Posted on: November 10th, 2009
Seattle-based biotech company Omeros went public in October, after raising nearly $110 million in venture capital and delaying its IPO for nearly two years. Since then, it’s watched the price of its shares tank. Today they’re trading at around $6.44, down over 35% from the IPO price of $10, making Omeros one of the worst performing IPOs of 2009, according to Renaissance Capital. David Weild, the former vice chairman of NASDAQ who co-authored Grant Thornton’s reports proclaiming an IPO crisis, told peHUB that Omeros’ performance shows how structural flaws in the stock market can undermine the performance of small-cap companies, since Omeros — whose product speeds recovery from surgery — is trading “at a discount to total money invested plus new money raised. There’s nothing in this business to represent the years of work and human equity that’s gone into it.” But Omeros has other problems too. Less than a month before its IPO, the company and its directors were sued by its former Chief Financial Officer, Richard Klein, who claims, among other things, defamation and wrongful termination. Klein was fired in January after he acted as a whistleblower and reported that Omeros had falsified claims to the National Institutes of Health on work done for its NIH grant. Omeros says Klein’s firing was unrelated to the problems with the NIH grant. Also, the NIH decided after an investigation that Omeros had not falsified claims. Still, the lawsuit continues, with claims, counter-claims and counter-counter-claims. Below is the complaint and Omeros’ response — we’ll dispense with the proposed motions, orders, responses etc. Omeros did warn in its Prospectus that defending this lawsuit “may consume our time and resources, harm our reputation and the reputations of our current and former directors, and materially negatively affect our financial position and cause our stock price to decline” — possibly even further. Omeros’ quiet period ends on November 16, so the company may have more to say about its performance then.
Why would NIH perform an investigation if there were no potential improprieties??? CFO's rarely file lawsuits against companies - especially those about to IPO - makes one wonder about what's really going on there at OMER.
OR maybe, just maybe, Omeros was right about this CFO and got rid of him despite the pending IPO. Both Deutsche Bank and Canaccord initiated coverage of Omeros today with price targets of $15 and $13, respectively. Reading their coverages they seem to have little concern about Omeros' "failure to execute". Go figure.