Wedbush Says Buy Omeros (OMER) on Weakness from Mixed OMS103HP Phase 3 Results
December 28, 2012 7:21 AM EST
Wedbush is telling clients to buy Omeros Corp. (NASDAQ: OMER) on weakness in light of mixed OMS103HP Phase 3 results which has pressured shares 7 percent in extended trading. The firm said the results still warrant continued development and OMS302 is still on track for NDA filing in the 1st-half of 2013.
"Although the primary endpoint of Knee Injury and Osteoarthritis Outcome Score (KOOS) Symptoms subscale trended positively, it failed to show statistical significance in this first of two planned Phase 3 trials testing OMS103HP treatment to control inflammation and pain during arthroscopic meniscectomy knee surgery. However, an important secondary endpoint of inflammatory pain did achieve statistical significance (visual analog score or VAS at day 1, p=0.0001) and was consistent with other inflammatory endpoints. The company plans to initiate a second Phase 3 trial in H1:13 using inflammatory pain as the primary endpoint."
The firm also notes Omeros is not a one-trick pony. "Recall that OMS103HP is Omeros second drug candidate and the lead, OMS302 for eye surgery, has already passed two Phase 3 trials and the company is on track for NDA filing in H1:13. Not only is OMS302 the company’s lead drug candidate but we project gross peak annual sales worldwide could reach over $600 million versus about $250 million for OMS103HP in meniscectomy. With two positive Phase 3 trials under their belt for OMS302 and a planned NDA filing in Q1 2013, we could see potential FDA approval in late 2013/early 2014. In addition, the company has multiple earlier stage candidates to reduce clinical risk."
The firm reiterated an Outperform rating and price target of $20.00.
Interesting comments - I always thought the market for OMS302 was questionable in size and much less than what the market for OMS103 would be? Hard to imagine if the market for OMS302 is $500M+ and the results from the Phase III trial were so clean that the market cap has slid to below $150M since they announced the results?