MLV & Co Sees 250% Upside For Omeros Corporation' Shares

In a research note issued on Thursday, MLV & Co reiterated coverage with a "BUY" rating on Omeros Corporation OMER, and a one year price target of $14 a share, representing a premium of approximately 250% to OMER stock closing price of $3.94.

The firm analysts view the recent Orphan Drug Application filing as an expected but important milestone for Omeros's OMS721 program that also indicates that company will file a Clinical Trial Application (CTA) in the E.U. in this quarter as guided. Omeros also guided to filing for an Orphan Drug designation in the E.U.

OMS721 is the lead human monoclonal antibody in Omeros' mannan-binding lectin-associated serine protease-2 (MASP‑2) program, for use in the treatment of atypical hemolytic uremic syndrome (aHUS).

The analysts points out that the OMS721 promises an improved safety profile over Alexion's Soliris, currently the only approved therapy for the treatment of aHUS. Soliris is currently marketed in the U.S. with a restrictive "black box" warning with an associated REMS (Risk Evaluation and Mitigation Strategies) program due to an increased risk of serious meningococcal infections resulting from its inhibition of the common pathway of the complement cascade by binding to C5. In contrast, OMS721 inhibits only the upstream lectin pathway by binding to and inhibiting MASP-2 (mannan-binding lectin-associated serine protease-2) without affecting activation of the classical pathway by infectious organisms.

Given the potential advantages that OMS721 may have over Soliris, the analysts conservatively estimates OMS721 to capture at least 10% of the $1 billion global aHUS market in 2020 (at least $100 million in international sales revenue), about 18-24 months after
its projected approval in 2018.