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Omeros (OMER) Hits New 52-Week High on Positive FDA Decision

Zacks Equity Research

Omeros Corporation OMER shares hit a new 52-week high of $22.80 on Thursday before eventually closing at $22.15.

Shares of the company rose almost 30% since the announcement that the FDA has granted breakthrough therapy designation to its lead pipeline candidate OMS721, which is being evaluated for the treatment of Immunoglobulin A nephropathy (IgAN). IgAN is a disease, which affects the ability of the kidneys to filter wastes from the blood. In fact, shares of the company hit fresh highs for three consecutive days since the announcement of the news.

In-fact, Omeros’ year-to-date share price movement shows that the stock has massively outperformed the Zacks classified Medical - Products industry, having surged 123.3% during this period, while the industry gained 19.5%.

We note that the breakthrough therapy designation is granted by the FDA to expedite the development and review of drugs that are intended to treat serious diseases so that patients can access the drug as soon as possible.

We are encouraged by the FDA’s decision. Per the press release, there are an estimated 120,000 to 180,000 patients with IgAN in the U.S., among which 40% develop end-stage renal disease, a life-threatening condition.

Moreover, there is no approved drug for the treatment of IgAN and OMS721 is the only candidate in this indication that has been granted this designation.

The breakthrough therapy designation was granted based on data from a phase II study evaluating OMS721 for the treatment of IgAN and other kidney diseases. The data showed an average reduction of 77% in urine albumin-to-creatinine ratios as well as a 73% mean reduction in 24-hour urine protein levels after 12 weeks of treatment. Also, unprecedented improvement was seen in proteinuria, an important marker for disease progression in patients with IgAN in the same period.

Omeros is also developing the candidate in other indications and reported positive results from the studies in its first-quarter earnings release. The candidate has also been granted orphan drug status for the prevention of complement-mediated TMAs and fast track designation for the treatment of patients with atypical hemolytic uremic syndrome (aHUS).

Meanwhile, the company’s only marketed drug, Omidria is approved for cataract surgery and lens replacement procedures to maintain pupil size in both the U.S. and Europe. The drug recorded sales of $12.3 million, up almost 69% year over year, showing strong growth.

Omeros Corporation Price and Consensus

Omeros Corporation Price and Consensus | Omeros Corporation Quote

Zacks Rank & Stocks to Consider 

Omeros currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the health care sector include VIVUS, Inc. VVUS, MEI Pharma, Inc. MEIP and Geron Corporation GERN. VIVUS and Mei Pharma sport a Zacks Rank #1 (Strong Buy) while Geron carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

VIVUS’ loss per share estimates have narrowed from 50 cents to 39 cents for 2017 in the last 60 days. The company delivered positive earnings surprises in the four trailing quarters, with an average beat of 233.69%.

MEI Pharma’s estimates have moved up from loss per share of 1 cent to earnings per share of 1 cent for 2017 in the last 60 days. The company delivered positive earnings surprises in three of the four trailing quarters, with an average beat of 66.56%.

Geron’s loss per share estimates have narrowed from 10 cents to 9 cents for 2017 over the last 60 days. The company delivered positive earnings surprises in each of the four trailing quarters, with an average beat of 27.98%.

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