The blood-letting continues.
Shareholders have been suffering since late February.
Here are the only 2 Press Releases from Omeros during the time the stock turned negative:
Mar 01, 2021 Omeros Corporation Reports Fourth Quarter and Year-End 2020 Financial Results
Feb 25, 2021 Omeros Corporation to Announce Fourth Quarter and Year-End Financial Results on March 1, 2021
The decline continued despite the company announcing dosing in the I-SPY trial in late March
Mar 23, 2021 Omeros and Quantum Leap Announce First Patients Dosed with Narsoplimab in the I-SPY COVID-19 Trial
Of course, the stock plunged when the delay to the BLA PDUFA was announced
May 20, 2021 Omeros Announces Extension of FDA Review Period for Narsoplimab in HSCT-TMA
And it continued despite the release of the data on treatment of more severely ill Covid-19 patients.
May 28, 2021 Omeros Announces Preliminary Results from Additional Critically Ill COVID-19 Patients Treated with Narsoplimab
It is apparent that the market gives no credibility, no valuation, to the ability of Omeros to get narsoplimab approved to be used to treat CV19 patients.
What else has been announced that could move the needle and stop the decline since May?
Jun 09, 2021 Omeros Announces Preliminary Results from Phase 1 Clinical Trial of OMS906
Only a Phase 1 trial, so that almost never moves the needle unless the company that announced this is a Market favorite, and Omeros is the poster child for not being a market favorite.
Jun 10, 2021 Omeros Announces Publication Detailing the Mechanism of Action of PDE7 In Nicotine Addiction
Again, this is only a Phase 1 trial and no value is given by any analyst for the potential revenue to come from the eventual approval of OMS527 in addictive behaviors, because Omeros has
- never promoted it
- never had the money to advance it quickly
- has other priorities
- refuses to do a deal to jump start the program with a partner
- never hinted it would try to monetize if by selling it
There has been no news to stop the decline.
There has been no attempt by Omeros to somehow get more things going, or convince the market there are monetization opportunities ahead.
There hasn't even been more Phase 2 projects for narsoplimab, most likely because the company needs even more narso supply if it ever hopes to supply the Critical Care CV19 market, should it be successful in getting a EUA within the next 6 months to a year.
Meanwhile, the delayed PDUFA is costing the company at least $15 million in administrative costs because it geared up for narso approval 3 months early... and now the revenue will start, we presume (the shorts don't) 3 month later.
What can stop the bleeding before the October PDUFA date?
- For normal companies, increased buying ahead of a PDUFA often increases the share price, so perhaps that will kick in in late August or in September. Of course, the share price could decline a buck or more so that the eventual pre-PDUFA only brings the price back to $15-$17. And then we cannot predict whether profit taking after a positive PDUFA decision will lead to profit-taking or, finally, buying. Given Omeros history, expecting the most likely is to expect a rally that will be cut short by profit-taking and shorting....
The positive-case scenario probably requires some excellent analyst upgrades and higher price targets, perhaps along with Initiation Of Coverage by JPM.
- The I-SPY trial results could be very positive and announced.
This alone may do nothing at all, if Omeros doesn't announce an intention to get a EUA ASAP.
It could also be a bust if I-SPY (or Omeros) announces the results on I-SPY Primary and Secondary Endpoints, without other data and/or commentary asserting that the results show that narsoplimab is the best treatment for severely-ill CV19 patients. Remember, the I-SPY Endpoints are not the optimal ones for narsoplimab, as I explained in my latest article, which has 500 hits since published on July 7th.
A positive market reaction to I-SPY data can be ruined by a modest and dry scientific PR. I can be enhanced with the right PR and a commitment to submit ASAP for a EUA, preferably with a time-line that indicates
- they have been preparing the EUA all along
- the I-SPY and CUP data are already processed
- they are not going to spend months and months triple checking everything
- that FDA wants to expedite this to save lives ASAP
- they have enough narso to provide treatment to save the lives of patients
When will the I-SPY results happen?
Will Omeros break with their pattern and do something that will get the Market excited?
Will Omeros have Cantor use the ATM and hurt any substantive move higher for the share price?
If so, then it will POTENTIALLY be up to the
- possibility of a large revenue increase announced for Omidria in the August Q2 report.
- the eventual announcement of the narsoplimab pricing for HSCT-TMA
- the eventual significant increase in revenue from HSCT, which will almost surely not come during Q4'21, which only would be announced in March 2022, unless Omeros starts giving revenue estimates/guidance and data out more frequently and freely than they have recently.
- Q1'22 could be the big revenue boost, and that is only reported officially in May 2022. That is 10 months from now.
All of this can be derailled by a careless and/or inept and/or desperate-looking use of the ATM to raise money and/or by another share and/or Notes issue instead of using the ATM.
This can be turned around, with the share price moving up smartly by some unexpected positive development(s), like
- a deal with the Govt. to buy Narso for CV19 and/or manufacturing help by the Govt. to provide narso supply
- 1 or more partnerships or JVs for 1 or more pipeline drugs or GPCRs, which bring in money
- sale of Omidria the eliminates the money problem, for good
Disaster follows failure of the FDA to approve narsoplimab for HSCT-TMA and/or I-SPY ending the narso trial arm for "futility"... both low probability, but you never should be 100% confident when you have no control over outcomes.
There are a number of ways to contend with what is going to happen to the share price, of course. It runs the gamut from being so confident that you do not look at the share price for 5 years... to selling everything now and never looking at Omeros again.
I am confident that Greg believes that, if he makes fundamental progress, the Market will eventually recognize it.
Looking at the share price, he has little stock price data to point to as justification for this, in the Omeros history, compared to his peers. For years he's been urged to do more market-friendly things but has not gone far enough to succeed. This is not an opinion as much as something illustrated by the chart above... although a longer chart is useful about now:
There has been no sustained progress since 2014.
But there has been numerous trading opportunities that therefore explain why people buy around $10 to $15 and sell around $20-$25, thereby capping every advance. And the way Omeros chooses to run its business, with
- no partnerships that speed progress on secondary pipeline candidates
- too frequent, too small money raises
- too clever/foolish (convertible Notes and Capped calls) money-raising that encourages shorting and/or takes quick advantage of a rare piece of good news, helping the traders and shorts to knock down every price rise to date in the last 7 years.
- As much as I like modesty, science, and not being overly promotional, when I see the price rises on companies that successfully leveraged work on CV19 to get much higher share prices for months, which gave them the ability to raise money at much higher prices, I have to rate the Omeros effort of news suppression and modesty to be a significant failure... so far. This failure has resulted in ZERO extra valuation for CV19 in the share price, anyway. And the missed opportunity to raise lots of cash at high valuation has exacerbated much of the company's other problems with the lack of cash to advance the pipeline and convince investors that yet another money raise will not make the stock plunge another few dollars, again.
I'd like to have Greg respond to my commentary and tell me where I am wrong.
I don't want to hear it was the right thing to do this or that.
I'd like to hear how/if he'd change what he did, or did not do, now that he has seen how things have turned out since 2014.
I'd then want to hear, how, in the light of this, he is changing what he does going forward.
I wonder if he learned something about over-pricing Omidria, and thereby giving up the market outside the US and not having enough market penetration. Did he learn that it is more profitable going with high prices and lower volume?
Because this seems like a similar trade-off for narso if it is used for HSCT and CV19 (and hopefully IgAN).
I WANT YOU TO RESPOND TO THIS ARTICLE if you read it.
If I am to continue with TIPS I need more feedback.
Do you agree? Are you considering how to play this?
What would you like to know?
What do you think I am wrong about.
original content ©2020 to 2021 by Alan Robert Ross
Founder, Trust Intelligence
The foregoing is not investment advice.