NEW YORK (AP) -- Shares of drug developer Omeros surged Monday after an analyst took a more positive view of the company's experimental ophthalmology drug OMS302.
THE SPARK: Wedbush analyst Liana Moussatos noted that eye care specialists believe the Food and Drug Administration is becoming stricter about the sterilization of drugs used in lens replacement surgeries. She said cataract surgeons report that the agency is requiring them to use separate bottles of different medications and barring them from mixing medications themselves. The changes effectively make current medications more costly and would make OMS302 seem less expensive, she said.
Moussatos rates Omeros shares "Outperform" and she raised her price target to $28 per share from $18.
THE BIG PICTURE: Omeros Corp. does not have any approved drugs. The Seattle company asked the FDA to approve OMS302 in August, and it filed for European Union marketing approval in September.
OMS302 is a combination of two topical drugs that are used in lens replacement surgeries for cataracts and other conditions. One component causes pupil dilation and the other is an anti-inflammatory drug intended to reduce pain and irritation after surgery. Moussatos says she thinks annual sales of OMS302 could reach $479 million a year at their peak.
The company's other experimental drugs include OMS103HP, which is intended to reduce early pain after arthroscopic surgery, and OMS201, an anti-inflammatory drug and muscle relaxant intended for use during urology procedures.
SHARE ACTION: Shares of Omeros climbed $3.47, or 68 percent, to close at $8.56. The shares peaked earlier at $8.64, their highest price in 2013. In April the shares traded as low as $3.65.