Why Omeros Shares Vaulted Higher

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Omeros (NASDAQ: OMER  ) , a clinical-stage biopharmaceutical company focused on developing therapies to treat inflammation and central nervous system disorders, advanced as much as 11% today after announcing the initiation of a mid-stage trial for OMS824, the company's phosphodiesterase 10, or PDE10, inhibitor for the treatment of stable schizophrenia.

So what: To understand why shareholders are so excited today, we have to look back exactly a week ago to when Omeros reported positive early stage results from OMS824, pointing to the drug being well-tolerated in even its highest dosage and with only mild side effects. The early-stage trial results, according to Omeros' press release, would predict that OMS824 would effectively inhibit PDE10 -- an enzyme found in the brain that can affect cognition in conjunction with diseases like Hungtinton's disease and schizophrenia -- in the brain. The current phase 2 study will examine dosing over a two-week period for the experimental drug as a monotherapy and a combination therapy in schizophrenic patients.

Now what: Another factor playing into Omeros' recent pop was a huge price target upgrade to $28 from $18 by Wedbush Securities on Monday. By this token, Wedbush expects Omeros' share price to more than triple from its current levels! The more immediate factor on investors' minds, though, is OMS302, the company's experimental ophthalmic drug that combines pain relief and pupil dilation to treat patients that have undergone intraocular lens replacement surgery. Omeros has already submitted a new drug application filing for OMS302 and could have word of its approval or rejection by mid-2014. Based on the fact that OMS302 met its primary co-endpoints in a November late-stage study, an approval seems more likely than not. This, more than OMS824, appears to be the catalyst you'll want to keep your eye on. Definitely keep OMS824 on your radar, but I wouldn't get too excited until we have some concrete phase 2 data in our hands.

A tried-and-true strategy you can get excited about
It's no secret that biotech stocks like Omeros have been soaring recently, but the best investment strategy is to pick great companies and stick with them for the long term. The Motley Fool's free report "3 Stocks That Will Help You Retire Rich" not only shares stocks that could help you build long-term wealth, but also winning strategies that every investor should know. Click here to grab your free copy today.

Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2645716, ~/Articles/ArticleHandler.aspx, 9/29/2016 9:42:01 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,339.24 110.94 0.00%
S&P 500 2,169.82 -1.55 -0.07%
NASD 5,318.55 0.00 0.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/28/2016 4:00 PM
OMER $11.52 Down +0.00 +0.00%
Omeros CAPS Rating: **