Why This Seattle Biotech's Stock Has More Than Doubled in 8 Months

June 8, 2017
By Mark Terry, BioSpace.com Breaking News Staff

Seattle-based Omeros has had a terrific year in terms of its , climbing from $7.34 on October 14, 2016 to a current price of $15.15. David Liang, writing for The Motley Fool, takes a close look takes a close look at what’s going on with the company.

The company’s first commercialized product is Omidria. It is an injectable drug that maintains dilation of the pupil as well as to cut pain after eye surgery. Liang writes, “While sales of Omidria were shaky at launch, the combination of a volume discount plan as well as a physician education program have served to boost sales to an annual run-rate of just under $50 million. With an average list price of $465 per vial and an estimated 3.6 million cataract/intraocular lens surgeries performed in the U.S. annually, sales could have much more room to grow.”

Although sales of Omidria are growing, most recently by 14 percent in the first quarter of this year, Liang is most intrigued by the company’s pipeline, specifically focusing on OMS721.

OMS721 is a monoclonal antibody that targets MASP-2. OMS712 potentially can control the body’s immune response, which has significant implications for treatment of autoimmune diseases.

On May 17, Omeros announced it had completed the IgA nephropathy cohort and showed additional positive results from the first stage of its Phase II trial of OMS721 to treat serious kidney disorders. The diseases being studied or IgA nephropathy, membranous nephropathy, lupus nephritis, and complement component 3 (C3) gluomerulopathy.

“I have never seen the clinical responses that I’ve observed in IgA nephropathy patients treated with OMS721,” said Geoffrey Block, director of Clinical Research at Denver Nephrology and principal investigator of the trial, in a statement. “All of these patients had significant renal impairment when they entered the trial and each patient dramatically improved. The improvements in these patients continued to increase after the end of treatment and persisted following completion of the trial. As an active clinical investigator, given the strength of these data, I am working hard to move this promising drug through the clinical trial process.”

Liang notes that the only currently approved treatment for hemolytic uremic syndrome (aHUS) is Alexion Pharmaceuticals ’ Soliris. A very rare disease with only about 300 patients in the U.S., it nonetheless brought in $2.8 billion in revenue in 2016 across all its approved indications, partly because of a $543,000 price tag.

In March, Omeros announced positive results from its Phase I dose-ranging trial of OMS721 in aHUS. Liang writes, “In this seven-patient study, researchers found a significant, dose-dependent increase in the number of blood platelets for patients taking OMS721 (aHUS patients tend to have low blood platelet counts due to the immune system attacking the platelets). Omeros has moved OMS721 into a Phase III study with the intent to recruit 40 patients.”

Liang’s analysis is that Omidria sales were $12.3 million in the most recent quarter, but it appears to be increasing. Projects for peak sales by 2019 are for $500 million. He notes, “However, should OMS721 succeed as a treatment for aHUS or a host of other autoimmune diseases, the company would be sitting on a potential billion-dollar blockbuster—and shares could skyrocket from today’s levels. For the risk-tolerant investor, as we get closer to the Phase III data readout for aHUS, I believe Omeros could have more room to run.”