Maxim Group Comments on Omeros (OMER) Following New Omidria Supply Agreement

Maxim Group affirms Omeros (Nasdaq: OMER) at Buy with a price target of $24 following news that the company and Hospira Worldwide entered into a Commercial Supply Agreement, pursuant to which Hospira will act as a non-exclusive supplier of Omeros’ product Omidria for commercial sale in the United States and the European Union.

Analyst Jason Kolbert commented:

• Omidria has been approved and we currently assume OMS302 (intraocular lens replacement surgery) we will see a full launch in 4Q2014, with some modest sales having occurred in 3Q2014. Our valuation parameters still point to a $24.00 per share target price.
• OMS302 is the company’s lead PharmacoSurgery platform product. OMS302 is a proprietary combinatio of an anti-inflammatory and a Mydriatic (pupil dilation) agent in a standard irrigation solution for use during ophthalmic lens replacement surgery (cataract and refractive lens).
• We believe global sales could reach north of $300 million by 2017 for OMS302. In fact, we may see expansion beyond refractive lens exchange (RLE) to other procedures, such as vitrectomy (surgical procedure). Over 600,000 vitrectomies were performed last year worldwide. We have not factored this into our model. We see substantial upside possible with this product, which should now be in a position to generate free cash flow to Omeros and help the company drive its exciting early stage PI/II clinical assets forward. In particular, we are excited for the (MASP-2) and (PDE10) programs.
• Omeros recently announced positive data using OMS721, the lead human monoclonal antibody in Omeros' mannan-binding, lectin-associated, serine protease-2 (MASP-2) program. OMS721 in ex vivo studies of endothelial activationrelevant to the pathophysiology of human atypical hemolytic uremic syndrome (aHUS), a form of thrombotic microangiopathy (TMA).
• PDE10 Program (OMS824): For the treatment of schizophrenia and cognitive disorders, and Huntington’s disease. PDE10 is an enzyme that is expressed in areas of the brain that are strongly linked to schizophrenia and other psychotic disorders. Preclinical studies have shown that PDE10 inhibitors may address some of the limitations of currently used anti-psychotic drugs, such as weight gain, improved cognition, and a reduced risk of sudden cardiac death. PI/II data thus far has been encouraging.
• Valuation Metrics: Our 12-month price target of $24.00 is based on FCF, discounted EPS, and sum-of-the-parts models, equally weighted and averaged. We use our 2017 EPS estimate of $4.26 and a 15% discount rate.

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

Omeros Corp. closed at $12.80 yesterday.

You May Also Be Interested In

• Viking Holdings (VIK) PT Raised to $82 at Mizuho
• Advance Auto Parts (AAP) PT Lowered to $48 at DA Davidson Following 25% Selloff Post Q2 Results
• Deere (DE) PT Lowered to $728 at UBS as Agricultural Machinery Cycle Gets Closer