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What: Shares of Omeros Corporation (NASDAQ:OMER), a Seattle-based biopharma,(NASDAQ:OMER)fell by more than 13% today after the company announced a $40-million underwritten public offering of its common stock at a price of $11.50 per share. Per its press release, the company expects the offering to close on or about Aug. 16 of this year. 

So what: This secondary offering is somewhat of a letdown for investors who may have been hoping that Omeros could start to fund its clinical pipeline primarily through the growing sales of the cataract surgery or intraocular lens replacement medicine Omidria. After all, Omidria's sales rose by a healthy 220% in the second quarter, relative to a year ago, to $10 million, and by a noteworthy 38% from just the first quarter of 2016. In short, Omidria's fledgling commercial launch is starting to pick up steam.

Now what: The problem, though, is that despite Omidria's rising sales, Omeros still reported a net loss of $12.6 million in the second quarter. Making matters worse, the biopharma exited the three-month period with a mere $21.2 million in cash, cash equivalents, and short-term investments. Omeros, therefore, isn't quite at the point where it can cut the cord on issuing sizable secondary offerings -- especially with the experimental drug OMS721 making steady progress as a possible treatment for complement-related renal disorders in its broad clinical program. 

Omidria's sales are forecast to continue growing at a breakneck pace over the next 16 months, edging the company closer toward becoming a cash-flow positive operation. Until the company's financial situation actually improves, though, risk-averse investors should probably shy away from this small-cap drugmaker.

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