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Omeros Corporation: What The Recent Credit Facility Amendment Foretells

Apr. 12, 2018 2:01 AM ETOmeros Corporation (OMER)ALXN10 Comments


  • Omeros is making an aggressive comeback to reward investors. Pass-through status for Omidria is solidified with the latest regulatory development.
  • Omidria’s revenues stream will continue to power further pipeline innovation.
  • Recent credit facility amendment strengthened the company’s cash position and decimated any concern regarding cash constraint.

There is a complicating factor that makes the handling of investment mistakes more difficult. This is the ego in each of us. - The Father of Growth Investing (Philip Fisher)

Omeros Corporation (NASDAQ:NASDAQ:OMER) - a company that focuses on the therapeutics innovation to treat both prevalent as well as rare diseases - has been undergoing robust fundamentals improvements. In turns, the share price is rebounding aggressively in the past month. On April 11, 2018, the common shares exchanged hands $1.29 higher at $14.67 for more than 9% profits. In the past 2-weeks, the shares appreciated by 30%. In this research, we’ll elucidate the recent corporate developments that strengthened the Omeros’s fundamentals as a long-term investment.

Figure 1: Omeros stock chart. (Source: StockCharts).

Fundamental Analysis

Headquartered in Seattle WA, Omeros specializes in the development and commercialization of medicines to treat inflammation, complement-mediated diseases, and central nervous system disorders. Omidria (phenylephrine and ketorolac 1%/0.3%) is an approved medicine to maintain pupil size during cataract surgery and to reduce postoperative pain. There was a recent controversy that Omeros will falter due to the loss of the pass-through status that, in and of itself, enables surgeons to charge $492 (on top of the $992 standard reimbursement for the said procedure). Consequently, the stock lost roughly half of its value due to such concerns. Shareholders who did not sell out have been enjoying the drastic comeback. As alluded to, the underlying catalyst for the said share price appreciation is the approval of a bill that granted the two-year extension of the pass-through status reimbursement for Omidria by the Centers for Medicare and Medicaid Services (“CMS”).

Figure 2: Omidria (Source:Omidria.com)

That’s not all! The company, today, disclosed that it entered into an amendment for the credit facility with a healthcare-focused investment firm (“CRG LP”). Under the covenant, it was

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