Another SA article on OMER
https://seekingalpha.com/article/443773 … pportunity
Here is the text without the illustrations.
Omeros: PDUFA Delay Presents An Opportunity
Jul. 03, 2021 10:45 AM ETOmeros Corporation (OMER)4 Comments2 Likes
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Omeros has had its PDUFA delayed by three months.
The reason is that the FDA needs additional time to review data it had asked for.
This represents a buying opportunity.
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I left off Omeros (OMER) in February 2019. At that time, it was running a phase 3 trial in HSCT-TMA for OMS721/narsoplimab, and was in ongoing discussions with the FDA about whether it could abandon historical controls or comparative data and simply look at response-based primary endpoints for its trial. A few months down the line, the FDA approved a response-based primary endpoint. Then, in September 2019, the company started a rolling BLA application with the FDA under a priority review. In August, OMER jumped 50% after reporting positive data from a trial of narsoplimab in Covid-19 patients with ARDS. The rolling BLA was finally completed in November 2020, a month after producing final efficacy and safety data from the pivotal trial. In January, the FDA accepted the company’s BLA and set a PDUFA date of July 17, 2021.
However, then everything got stuck. In May, the FDA extended the PDUFA date to October 17 to review additional material the company had presented in response to questions asked by the FDA. We do not know the nature of these questions. The stock currently trades at $15, and its 52-week high is $24. Is it a buy?
I came across a quote from the BofA report, source unverified, as follows:
"Recall that the narsoplimab rolling BLA was submitted at the request of FDA, with the understanding that data from the 28 patients treated was sufficient as a pivotal study. Given that the data were very strong, we don’t see the delay as likely to be due to any specific issue with narsoplimab, rather in our view it is more likely a consequence of FDA being thorough in the review as narsoplimab would be the first treatment approved in this indication."
Although the source is unverified, the logic makes sense. The FDA were very agreeable with Omeros throughout, agreeing to a response-based endpoint, agreeing to cut enrollment short after positive data from already-enrolled patients, approving a rolling BLA, approving a single arm phase 2 trial to become pivotal, and so on. BofA has been consistently bullish on Omeros over the years, but what this says here does make sense.
Management, too, sounded confident. They generally do, until calamity strikes; sometimes even afterwards. However, here’s what the CEO said:
“We’re pleased with our ongoing interactions with FDA on the narsoplimab BLA,” said Gregory A. Demopulos, M.D., chairman and chief executive officer of Omeros. “Omeros views the information provided in response to FDA’s information request as further supporting the application, and we look forward to making narsoplimab available to HSCT-TMA patients and their physicians as soon as possible.”
The FDA has also not shown any indication of holding an advisory committee meeting, which, given the delay, is actually a positive signal. It is my reading that the FDA prefers to hold these meetings in controversial situations. I don’t want to use the word “slam dunk,” however the FDA would have held an adcomm if it had doubts about the BLA, and if such doubts had led to the information request.
Quickly recall the data in these two charts:
I have discussed historical and comparative data in my previous coverage. There are no approved treatments, and this is a very high risk, severely ill population of patients. In this population, such a dataset is outstanding. The drug was also well-tolerated.
The size of the addressable market is decent. There are 25,000-30,000 allogeneic HSCT patients in the US and EU combined, every year. The following chart from the company’s Corporate Presentation shows how the market lies:
HSCT-TMA causes extensive hospital stays, and is often fatal; this represents a high burden on the healthcare system. As I wrote in my previous article:
Between the US and the EU, over 60,000 HSCT treatments are performed every year (2015 figures, see Omeros Corporate Presentation). 40% of these, or 24,000, develop TMA, and 80% of that, or 19,200, have high-risk features. Out of these 19,200, 17,280 or 90% could be looking at mortal complications; even those that survive may develop ESRD or end-stage renal disease. This is the target market for OMS721 in HSCT-TMA. The US has about 4,000 patient incidence rate for HSCT-TMA per year.
Current treatment options are not FDA approved, and do not target the disease. “Some of the currently used treatment options include removing the calcineurin inhibitors (CNIs, used during HSCT), controlling the associated complications without directly targeting the disease, as well as therapeutic options like plasma exchange, defibrotide, rituximab and eculizumab (soliris).” The nearest competition seems to be from Alexion’s (ALXN) ravulizumab, which is running a phase 3 trial in the indication, to be completed in mid-2023.
OMER has a market cap of $925mn, a cash reserve of $100mn, debt of $300mn and a short interest of 21%. The company has a moderate institutional/fund presence, who own about 60% of the stock. However, funds have generally been bullish, increasing positions or new funds adding the stock to their portfolios:
Major holders are:
However, like before, insiders have not been buying:
OMER has always been a beleaguered stock. The high short interest, and the general chatter on social media, proves that. The stock is trading quite low right now, and given the upcoming catalyst, the large market, the high unmet burden, and solid data, this looks like a cautious buying opportunity.
original content ©2020 to 2021 by Alan Robert Ross
Founder, Trust Intelligence
The foregoing is not investment advice.