Another positive SA article.
Is this an indicator?
The only thing that appears interesting is that the author says BTD was granted for treatment AND PREVENTION. I have not verified that.
OMER is not really seeking approval for prevention, or even treatment for mild TA-TMA. They targeted severe, life threatening TMA. If the doctors are allowed by Medicare or Insurers they will start to use it earlier and earlier instead of waiting for mild TMA to become severe and terminal. Can an infusion of narso PREVENT TMA? Probably. Will insurers pay to treat 2 to 3 times the people, earlier, even before they show signs of TMA?
Probably depends on cost-benefit analysis.
This is very related to Narso in CV19.
Can Narso given earlier eliminate progression to a severe case... just like it seems to prevent sequelae in treating people with severe Covid?
If you want to see the illustrations you have to go to the site before they put it behind a pay wall:
https://seekingalpha.com/article/439375 … dy-to-pick
Omeros: A Ripening Fruit Ready To Pick
Dec. 9, 2020 4:02 AM ET|2 comments | About: Omeros Corporation (OMER)
Deep Value, Biotech, long-term horizon, Growth
Omeros is unique. It's different from other clinical-stage biotechs in that it has an FDA-approved drug (Omidria) in the market generating revenue to fund ongoing clinical developments.
Now, the Omidria reimbursement overhang is gone after CMS confirmed a separate payment mechanism, which partially derisked the business.
After years of struggle and almost no return to shareholders, Omeros finally sees the light at the end of the tunnel.
The submitted narsoplimab BLA and upcoming approval could provide much higher upside potential.
Omeros (OMER) has been in my watch list for many years - since the initial investors' excitement about the FDA approval of Omidria and projected sales potential. Long-term investors have endured harsh results in their investment, as there has been almost no return. However, the fundamentals for Omeros have substantially changed recently due to the following facts, and now, it is a company worth considering.
Omidria - Continuous revenue to fund Omeros' operations
Omidria is the first and only approved drug both in the US and in Europe to prevent miosis in cataract surgery and to reduce postoperative pain. The drug was widely welcomed by eye surgeons because it reduces the risk of complications during and after surgery and the legal risk on compounding. There are so many eye doctors being enthusiastic about this drug. Interested investors can look up some videos on YouTube about their personal experience using the drug. Its value to eye doctors cannot be understated. On the insurance payers' side, however, not so much - possibly due to its cost. In recent years, Omidria revenue had experienced decent growth quarter by quarter, clearly proving its clinical benefits and growing demand from eye physicians. However, that growth had been disrupted by the setbacks in CMS reimbursement (see graph below).
Omidria historic quarterly revenue trend (complied from Omeros quarterly earnings reports)
Omidria quarterly revenue since launch based on Omeros quarterly reports
The Centers for Medicare & Medicaid Services (CMS) has just confirmed separate payment in ambulatory surgery centers (ASCs) for Omidria. Now, the overhang of Omidria is gone. Omidria will continue to grow revenue and fund its ongoing operations. Therefore, Omeros is partially derisked. The stock price jumped to over $14 right after the news (chart below). This will likely be a gap-up breakaway rally to over $30 considering investors are anticipating FDA decision on the company's recently submitted BLA on narsoplimab (formerly OMS721), a potential blockbuster orphan drug (discussion below).
Weighing on narsoplimab's upcoming FDA decision
Omeros has a deep pipeline of products in development, but I will ignore early clinical candidates and only consider the drug at the most advanced stage - narsoplimab - just to be less speculative. Long-time investors of Omeros are very familiar with narsoplimab (formerly OMS721). The company has spent many years and tens of million dollars developing this drug, mainly for indications in hematopoietic stem cell transplant-associated TMA (HSCT-TMA), IgA nephropathy (IgAN) and atypical hemolytic uremic syndrome (aHUS). Let's forget about the latter two, since it appears it is taking the management forever to complete phase 3 trials (one of my complaints about this management).
The bright spot here is that Omeros has completed submission of a BLA for the indication of HSCT-TMA. So, an FDA decision will come soon. For this indication, narsoplimab was designated by the FDA as:
1) A breakthrough therapy;
2) Orphan Drug designation for the prevention (inhibition) of complement-mediated TMAs; and
3) Orphan Drug designation for the treatment of HSCT-TMA.
Considering the above, narsoplimab is expected to be on fast-track/priority review by the FDA, and a decision will come soon.
The likelihood of narsoplimab approval is very high
The likelihood of approval is very high because:
1) Late-stage clinical results far exceeded criteria set between Omeros and the FDA. I will not repeat clinical results in this article. Interested investors can dig into the results here.
2) HSCT-TMA is a life-threatening and unmet condition with no existing treatment. The mortality rates in patients who develop severe TMA are in excess of 80%. Therefore, it would be difficult for the FDA not to approve, provided the data is sufficient for its efficacy.
3) Dr. Demopulos (CEO) and his team have successfully brought a developmental candidate (Omidria) to the market. So, experience does matter a lot here, which reduces the chance of FDA setbacks (such as potential FDA requests for more information or re-submission, etc. that often happen to new biotechs).
Potential blockbuster sales of narsoplimab
According to Omeros' own estimate, annual allogeneic HSCT cases are 25,000-30,000 in the US and the EU. The incidence of TMA in this population is approximately 40%. Let's say annual TMA cases are at 10,000. As an orphan drug for a life-threatening condition and due to the similarity, we can use Alexion Pharmaceuticals' (ALXN) hefty price tag for its drug Soliris of $500,000/year as a reference point. On the conservative side, let's put narsoplimab at $200,000/year - that's $2 billion/year in revenue. Remember, narsoplimab was given Orphan Drug designation not only for the treatment of TMA but also for the prevention of it, and the number of patients taking this drug could be far more than 10,000. Based on that, Omeros can easily be a $20 billion company in market cap. The reward-to-risk is highly favorable now.
Omeros did a common stock offering recently, and it just ended Q3 with $153.5 million in cash. The risk of near-term dilution is reduced. The company's revenue growth will likely continue. This will further reduce quarterly cash burn.
After so many years of struggling and investors' frustration over no share price appreciation, Omeros' big moment is likely coming. The FDA's decision on narsoplimab will be the biggest catalyst for the share price in 2021. Omidria has taken the company to this stage and has helped reduce dilution to some extent. Omidria will be the nice sprinkles on the sundae, but the sundae will be narsoplimab. With optimism around Omeros, this author does want to warn investors that FDA decisions are binary events. Considering its risk, it is only worth a portion of your portfolio, but it absolutely deserves a portion, especially for young and risk-tolerant investors.
original content ©2020 to 2021 by Alan Robert Ross
Founder, Trust Intelligence
The foregoing is not investment advice.