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Omeros Corporation Message Board

tredleon 53 posts  |  Last Activity: Jul 11, 2016 5:46 PM Member since: Sep 21, 1999
  • Reply to

    $1M Revenue Miss = $100M Market Cap Reduction?

    by tredleon May 10, 2016 10:19 AM
    tredleon tredleon May 10, 2016 12:52 PM Flag

    I agree - the Q1 sales miss is incidental, but the rest are valid issues. He has actually been bragging about the GPCR platform for more than 2 years - they supposedly have a patented lock on numerous drug targets, but have no licensing for any of them? Omidria has been approved for sale in Europe since May of last year - you can argue that it takes time to negotiate foreign marketing deals, but they should have been pursuing partners while it was being reviewed. I'm not sure how large the EU opportunity for Omidria is, but if you go through all the expense and time to get a drug approved and then just let it sit for a year (as the patent clock ticks away), that is not a good sign for management competence.

  • tredleon tredleon May 10, 2016 11:50 AM Flag

    Per their quarterly financials they burned through $16M in the quarter and have $13M of unrestricted cash left. Assuming they generate $4M of increased sales in Q2, they will be essentially tapped out, so they will definitely need to. Their breakeven revenue number is probably $7M+ per month, which I'm guessing they won't hit until mid-Q4?

  • Obviously, the issue is cash/potential dilution. Ideally, they will partner something in the pipeline for some up-front money and avoid any ATM transactions, but the "market" is not going to wait and see - they are bailing out.

  • tredleon tredleon May 10, 2016 8:19 AM Flag

    So, Q2 sales will probably come in around $12M - then in order to hit the current annual revenue estimate of $49M, they need to do $30M of sales the rest of the year, which should be no problem - 20% sequential growth from $12M would be $14.4M in Q3 and $17.3M in Q4. I wish they would have put a stake in the ground and confirmed an annual number - saying that the run rate is $45M-$50M in Q2 without any further growth may give the impression they are not counting on significant growth going forward?

  • Reply to

    It's All About the Debt

    by tredleon May 6, 2016 10:25 AM
    tredleon tredleon May 6, 2016 12:12 PM Flag

    I was going off Yahoo's key stats table - they report Debt of $8+B and TTM EBITDA of less than $1B? I didn't see any EBITDA reported in the earnings release, but then the narrative speaks to a 4X ratio? Did they have a big acquisition in the past 12 months that would distort the TTM EBITDA number?

  • Reply to

    It's All About the Debt

    by tredleon May 6, 2016 10:25 AM
    tredleon tredleon May 6, 2016 11:14 AM Flag

    By comparison, Valeant's Debt/EBITDA ratio is only about 6-times - debt of $30B vs EBITDA of $5B. A ratio of 6X is considered high - 9X is negligent!

  • Their Debt/EBITDA ratio is 9+ times - that may be sustainable when everything is rosy, but any kinks in the revenue or profitability outlook will make that ratio look dangerous - the shares are basically an option at this stage.

  • Reply to

    Biotech has taken a HUGE hit recently

    by investor73498 May 4, 2016 6:30 PM
    tredleon tredleon May 5, 2016 8:11 AM Flag

    A lot of redemptions going on in the hedge fund industry recently, most likely in funds that were long biotech - those that have been short since the beginning of the year have some happy investors. The political environment created by Valeant, Shrekl, etc. certainly hasn't helped - even if your company isn't part of the the acquire and gouge business model, it will still get caught up in the downdraft.

  • Based on early experience by the hospitals, it is becoming clear that they are trusting the T2 to make decisions about treatment - the one hospital tests the patients twice - once to determine if anti-fungal treatment is needed and second to see if the infection has been cleared. Initially, the company was very hesitant in their speculation on whether T2 would replace blood culture, but it is clear from the experiences they are hearing from the hospitals using T2 that blood culture will ultimately be replaced by T2. The bad thing is that some of the hospitals (15%-20%) are waiting for the bacteria panel to be available before they commit to the system. It is understandable to wait 6-9 months to avoid separate approval and implementation efforts, but how much money and how many lives will be wasted in the interim?

  • Reply to

    Critical Marketing Productivity Metric

    by gordonanderson844 Apr 28, 2016 9:56 AM
    tredleon tredleon May 3, 2016 12:01 PM Flag

    No doubt - "we will see" is the operative word in the biotech world these days - most of the speculative value has been wrung out of the market. I am still hopeful NVDQ will ratchet the growth rate up in the 2nd half, but Arun needs to show he can start producing or they need to bring in someone else.

  • Reply to

    CFO Retiiring?

    by aeishh May 3, 2016 9:48 AM
    tredleon tredleon May 3, 2016 11:00 AM Flag

    When CFO's leave "abruptly" to join another company, it may be a sign of bad things about the company, when a CFO retires before his contract is up, it is usually due to health/family issues - who knows, his wife may be sick and he is retiring to be spend more time with her. Did you listen to the earnings call, what possibly do you think they are hiding - that they closed only 4 contracts in Q1 vs the 5 that were reported?

  • Reply to

    CFO Retiiring?

    by aeishh May 3, 2016 9:48 AM
    tredleon tredleon May 3, 2016 10:52 AM Flag

    Relax, sparky - the guy is 65+ years old - he may have some health issues that he needs to deal with and does not want them disclosed publicly. You can fault the BOD for hiring someone that old, but I doubt he signed a contract thinking he was going to retire in 8 months or even if he was thinking about retiring, I'm sure he told them differently. Either way, the CFO leaving is not a big deal to a company at this stage of their life cycle.

  • Reply to

    Critical Marketing Productivity Metric

    by gordonanderson844 Apr 28, 2016 9:56 AM
    tredleon tredleon May 3, 2016 10:38 AM Flag

    GSA - Are you trying to model what you think is going to happen to the sales number if the metrics hold or are you looking for flaws in their marketing program?

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