Shareholders of Seattle-based biopharmaceutical company Omeros Corporation (NASDAQ:$OMER) are definitely celebrating today thanks to the almost-17% rise in Omeros’ share price. The sudden spike is largely in response to the company’s announcement that the U.S. Food and Drug Administration (FDA) had recently deemed its latest drug, the OMS721, to be breakthrough therapy. OMS721 is a drug developed to treat a rare and at times life-threatening kidney disease called Immunoglobulin A (IgA) nephropath. The drug is set to start its second phase 3 trial later this year.
OMS721’s designation as breakthrough therapy by the FDA was determined based on the data and records collected in the drug’s phase 2 trial. Results showed an average 73% reduction in 24-hour urine protein levels after just 12 weeks of administering the drug. The designation could give the OMS721 a better chance of retaining FDA approval to market the drug to the general public. As of today at 3:43 PM EDT, Omeros’ shares have settled down to a 15.8% gain.
What’s the Big Deal?
Omeros currently only have one commercial product — Omidria — on the market today. Omidria has been growing in sales over the last several quarters. The drug is used for two eye surgeries and procedures. While the growth in sale is a good sign, the company has a debt-to-assets ratio that goes beyond 100%, making investors nervous that Omeros isn’t growing fast enough to avoid the company’s crushing debt.
However, aside from the slow delivery from Omidria, the biopharmaceutical company currently has many research projects and trials that is full of potential. OMS721 is one of the most prominent examples — and its recent breakthrough therapy designation has left investors more confident in the company. Besides the OMS721, Omeros has recently finished a phase 2 trial of a treatment for hematopoietic stem cell transplant-associated TMA.
What to Consider Now
OMS721’s breakthrough therapy designation remains to be good news in the medical field as well as for investors. Breakthrough therapy designation is always quite helpful when it comes to drug development, and with the designation, Omeros has a chance to improve its current financial situation at a much faster rate.
While the immediate impact of the news will not be significant, in the long-term the news could allow for more sales, better finance, and even more of a rising stock.
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