Analysis focus: OMER
Omeros (NASDAQ:OMER) is moving towards a rolling BLA submission for OMS721. On this good news, and despite tepid Q1 results, investors are becoming increasingly bullish the stock, as seen by its sudden 23% spike on the news of the BLA submission.
OMS721 is in trials for HSCT-TMA. This indication has roughly 2000-2500 patients per year in the US. 721 is also in trials for IgAN, which we have discussed extensively in our articles. Despite competition, which details we presented in these columns earlier, theres a strong case to be made for the drug to be a billion dollar blockbuster for Omeros. For a company with a market cap of less than $1bn at present, this is a major opportunity.
However, the stock had remained depressed for a long time based on uncertainties surrounding Omidria sales. That uncertainty has now been resolved with Omidria now receiving a two-year extension on its pricing package, and this should help the market focus on Omeros pipeline, where the real value lies.
With multiple breakthrough therapy designations, fast track designations and now a clear path towards BLA submission, this may the last time we will see this stock at these low prices.
OMS721 has accelerated approval for this indication, and the FDA has asked for further characterization of patients treated with OMS721, additional information on the historical control population and an analysis plan to assess biomarker data. With accelerated approval, none of these will delay the launch of the drug. While the company will continue with confirmatory studies prior to full approval, we really do not expect these to impact the drugs progress.
Omeros also has a long tailed pipeline after OMS721. The company has access to about $145mn in cash as of now, and Omidria sales are also adding to that amount now that the pass-through status issue has been resolved. Overall, we continue to remain bullish OMER and have conservatively valued OMER at $35 based on three indications of OMS721 and Omidria.
Stocks in News: Analysis of SGYP
Synergy Pharma down 10% premarket on soft Trulance sales in Q1
Discussion: Synergy Pharma (NASDAQ:SGYP), with its best in class Trulance drug approved in CIC and IBS-C, has not managed to take off as well as it should, and we have once again the numbers to prove it. Trulance sales stood at $8.6mn, down 8.5% sequentially, however, up 16.9% sequentially if you recognize deferred sales of $2.1mn from the previous quarter. The company has been facing a so-called shareholder activism for about a month or so now; although what that will lead to, if anything, is anybodys guess. One must also consider that Ironwood, SGYPs competitor, also had a bad quarter, missing on both revenue and EPS.
Trump drug pricing plan
Discussion: President Donald Trump provided few concrete specifics in his much-anticipated speech on drug pricing plans of the new administration, somehting that had been a major part of his campaign rhetoric. But there were some interesting aspects, like the ending of the 180-day exclusivity for new generics. This will alone help stave some of the generic competition for branded drugs because generic companies will have less incentive now to race to the finishing line. On the other hand, his plan asks the FDA to accelerate approval process for generics and biosimilars. However, the market is somewhat relieved that despite the strong rhetoric on drug pricing, nothing concrete and direct has been done in that regard.
In other news
Agenus (NYSE:AGN) is down after it entered an at-the-market sales deal covering up to 20M shares.
Novartis (NYSE:NVS) Gilenya has been approved in the pediatric population for patients with relapsing multiple sclerosis who are at least 10 years old. Previously, it was approved in the U.S. for patients at least 18 years of age.
AstraZenecas (NYSE:AZN) asthma med Fasenra (benralizumab) in patients with moderate-to-severe chronic obstructive pulmonary disease (COPD) failed to demonstrate a statistically valid decrease in exacerbations, the primary endpoint. There is another ongoing phase 3 trial, and the company will assess the future of the drug after receiving results from that study.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.