IPO Overview: Omeros' IPO a Capital Effort for Its PharmacoSurgery Product Candidate

Omeros (OMER), a biotech company that develops drugs for the treatment of surgery-related inflammation and pain, is expected to go public this week. The company plans to spend the proceeds of its IPO on Phase 3 trials for its lead PharmacoSurgery product candidate.

Business Overview (from prospectus)

We are a clinical-stage biopharmaceutical company committed to discovering, developing and commercializing products focused on inflammation and disorders of the central nervous system. Our most clinically advanced product candidates are derived from our proprietary PharmacoSurgery^tm platform designed to improve the clinical outcomes of patients undergoing arthroscopic, ophthalmological, urological and other surgical and medical procedures. Our PharmacoSurgery platform is based on low-dose proprietary combinations of therapeutic agents delivered directly to the surgical site throughout the duration of the procedure to preemptively inhibit inflammation and other problems caused by surgical trauma and to provide clinical benefits both during and after surgery. We currently have four ongoing PharmacoSurgery clinical development programs: two in arthroscopy, one in ophthalmology and one in uroendoscopy. The most advanced of these, OMS103HP for use in arthroscopy, is in Phase 3 clinical trials. In addition to our PharmacoSurgery platform, we have leveraged our expertise in inflammation and the central nervous system, or CNS, to build a pipeline of preclinical programs targeting large markets. By combining our late-stage PharmacoSurgery product candidates with our deep and diverse pipeline of preclinical development programs, we believe that we create multiple opportunities for commercial success. For each of our product candidates and programs, we have retained all manufacturing, marketing and distribution rights.

Offering: 6.8 million shares at $10 - $12 per share. Net proceeds of approximately $68.4 million will be used to complete Phase 3 clinical trials and to submit the related NDA(s) for lead PharmacoSurgery product candidate, OMS103HP.

Lead Underwriters: Deutsche Bank (DB), Wedbush PacGrow

Financial Highlights:

Revenue was $568,000 for the six months ended June 30, 2009 compared with $488,000 for the six months ended June 30, 2008...Research and development expenses were $8.6 million for the six months ended June 30, 2009 compared with $8.0 million for the six months ended June 30, 2008... General and administrative expenses were $2.9 million for the six months ended June 30, 2009 compared with $2.9 million for the six months ended June 30, 2008.

Competitors:

The pharmaceutical industry is highly competitive and characterized by a number of established, large pharmaceutical companies, as well as smaller companies like ours. If our competitors market products that are less expensive, safer or more effective than any future products developed from our product candidates, or that reach the market before our approved product candidates, we may not achieve commercial success. We are not aware of any products that directly compete with our PharmacoSurgery product candidates that are approved for intra-operative delivery in irrigation solutions during surgical procedures. If approved, we expect that the primary constraint to market acceptance of our PharmacoSurgery product candidates will be surgeons who continue with their respective current treatment practices and do not adopt the use of these product candidates. Adoption of our PharmacoSurgery product candidates, if approved, may reduce the use of current preoperative and postoperative treatments.

Additional Resources:

• Company website
• Online roadshow
• FierceBiotech: 'Omeros hopes to raise up to $81.6M in IPO'

Comments

[stockmail07:]

Is this one worth going in on IPO?

Oct 07 04:15 PM

[SunsetKid:]

My broker sent me this prospectus but I stay away from any initial IPO where the holders are selling their stock. This is the case with OMER. I will watch this IPO and am willing to bet it will close below the offering price.

Oct 07 05:45 PM