Omeros Elevated By Medicare Reimbursement And OMS721 Progress, Says Maxim

Extended Medicare reimbursement for Omeros Corporation OMER’s OMIDRIA, along with the company’s increased focus on OMS721 trials, will act as solid short- and long-term drivers, according to Maxim Group.

The Analyst

Jason McCarthy of Maxim Group maintained a Buy rating on Omeros and modestly raised the stock’s price target from $24 to $25.

The Thesis

Omeros shares spiked on news that the Medicare reimbursement period for OMIDRIA — which is used to maintain pupil size during cataract surgery — would be extended two years, McCarthy said in a Thursday note. 

While Omeros reported lower OMIDRIA sales in the fourth quarter, revenue recognition issues were largely to blame, the analyst said. The extended Medicare reimbursement period should lead to continued sales growth for OMIDRIA, he said. 

“With pass through status likely to be reinstated, we expect OMIDRIA to return to its previous trend of growing sales."

While this news alleviates the short-term overhang on OMIDRIA, the “real value” lies in the complement  inhibitor OMS721, McCarthy said. 

OMS271 is in trials of IgA Nephropathy, HCT-TMA and aHUS patients.

“Each of these indications represents an unmet medical need and a significant opportunity for Omeros and patients alike," McCarthy said. 

Price Action

At the time of publication, shares of Omeros were jumping 32.65 percent to $15.44. 

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