In a report published Friday, Deutsche Bank reiterated its Buy rating on Omeros Corporation (NASDAQ: OMER [FREE Stock Trend Analysis]), but lowered its price target from $13.00 to $10.00.
Deutsche Bank noted, “After the market close on Thursday, Omeros announced mixed results from a 344 patient Ph 3 trial for OMS103HP – the company's product candidate for use in arthroscopic surgery. And despite what now appears to be a more challenging pathway to commercialization, we continue to see OMS103HP as a viable candidate and rate the company's shares Buy given 1) the significant peak sale potential for the PharmacoSurgery platform (OMS302 ophthalmic NDA filing in early 2013), 2) its diverse clinical pipeline, and 3) and a still very modest valuation ($150M market cap).”
Canaccord Genuity reiterated its Buy rating on Omeros Corporation (NASDAQ: OMER [FREE Stock Trend Analysis]) but lowered its price target from $15 to $13.
Canaccord Genuity noted, "Reiterate BUY, lowering target to $13 on slightly increased clinical risk/lower probability of success, later launch of OMS103 in meniscectomy, but our confidence in OMS302 approval, revenue in cataract surgery remains. OMS302 is in development for pupil dilation maintenance in lens surgery, where dilation is key for lens placement and recovery. 302 is OMER's second PharmacoSurgery asset after OMS103, now in Ph3 for meniscectomy surgery. Our $14 target is based on pNPV analysis."
Dooper - Minyanville also reported that Burrill reiterated an Outperform, but took the price target down from $19 to $16. Not that the market is paying attention, but it is good to see some legitimate analysts with targets 2.5-3X the current price. While I believe the company has a rational position to move from the KOOS endpoint to the pain/inflammation endpoint for the second OMS103 trial, it will be a cloud over the clinical path for OMS103 for some time - i.e. even if the second trial is successful in having a very robust p-value on the pain/inflammation endpoint, there will still be skepticism on whether the FDA will accept this shift in primary endpoints - so, the potential value of the OMS103 program will not be reflected in the stock price until 2014 at the earliest. At this point, the question becomes will they partner OMS302 (or some other program) in order to avoid dilution until they get OMS302 approved and start generating revenue? Any guesses?