Can Omeros Top-Line Growth Continue?

Omeros Corporation OMER shares are on a tear, the catalyst being the release of its third-quarter results.

The Analyst

Cantor Fitzgerald's Elemer Piros, Ph.D, reviewed Omeros' quarterly results.

The Rating

The firm maintained its Neutral rating and 12-month price target of $19.

The Thesis

Omeros experienced a nice revenue growth in Q3 but the moot point is whether the revenue growth will continue, Piros said in a note.

Reviewing the results, the analyst said sales jumped 26 percent sequentially, supported by 26 percent volume growth. Omeros has continued to demonstrate impressive quarterly revenue growth over 2018, but investors focus is on its ability to delay or adequately address expiration of pass-through reimbursement, Piros said.

Citing the uncertainty, Piros lowered his 2018 revenue estimate from $106 million to $97 million.

Given the better-than-expected OMIDRIA sales, Cantor Fitzgerald adjusted its model to reflect flat growth but upped its revenue forecast for 2017 from $67 million to $74 million.

Omeros has three emerging Phase 3 programs in atypical hemolytic uremic syndrome, or aHUS, immunoglobulin A (IgA) nephropathy, and hematopoietic stem cell-associated thrombotic microangiopathy, Piros said, delving on the company's pipeline. Among these, the analyst expects the study on IgA nephropathy to be initiated in the fourth quarter of 2017.

The Price Action

At last check, shares of Omeros were up 33.94 percent to $18.87, with the year-to-date gains being 87 percent.

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