Needham & Company Upgrades Omeros Corp. (OMER) to Buy on Valuation

December 4, 2012 7:50 AM EST
Get Alerts OMER Hot Sheet
Price: $9.05 -1.84%

Rating Summary:
    10 Buy, 0 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 23 | Down: 34 | New: 34
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Needham & Company upgraded Omeros Corp. (NASDAQ: OMER) from Hold to Buy with a price target of $10.00 citing valuation.

The firm comments, "Omeros is expected to announce results of a Phase 3 trial of OMS-103HP in meniscectomy surgery in the near future, presumably in Dec 2012. Although Omeros previously announced positive results from a Phase 2 trial in this indication, we have been concerned by Phase 3 trial failures with OMS103HP in ACL surgery in early 2011. Our essentially neutral sentiment towards the outcome of the Phase 3 OMS103HP trial is unchanged. However, we are adopting a more favorable overall view towards the stock given the announcement last month of positive results from a second Phase 3 trial of OMS302 in eye surgery and the recent drop in share price, leading to the current relatively low ~$175M EV. We do not believe the commercial opportunity for OMS302 in eye surgery is particularly large, but it may present a floor in case of a negative OMS103HP outcome. Consequently, we are upgrading to BUY. Our $10 price target is based on 25x our 2017 EPS estimate,
discounted 15%."

For an analyst ratings summary and ratings history on Omeros Corp. click here. For more ratings news on Omeros Corp. click here.

Shares of Omeros Corp. closed at $7.29 yesterday.

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