What happened

The market is pushing up shares of Omeros Corporation (NASDAQ:OMER) again today. As of 10:50 a.m. EDT on Wednesday, the stock was 11.1% higher after the company reported more encouraging data for its lead rare-disease drug candidate.

So what

Urine protein levels are the latest piece of encouraging news surrounding Omeros Corporation's lead new drug candidate, OMS721 for the treatment of several rare diseases involving kidney function. The novel candidate is currently being tested in a registrational trial intended to support an application for atypical hemolytic uremic syndrome (aHUS), and today's data drop will most likely lead to another registrational trial for the treatment of immunoglobulin A (IgA) nephropathy.

Excited man in front of an upward-sloping chart.

Image source: Getty Images.

Plenty of different conditions can lead to a buildup of IgA in places it shouldn't be. Because the immune system tends to cause permanent kidney damage while cleaning up the mess, one hallmark of kidney damage is increased levels of protein in the urine. This is why the market is pleased with results that show IgA patients excreted 77% less protein after OMS721 treatment.

Now what

Omeros estimates 1 in 1,400 Americans will eventually develop IgA nephropathy, and about 40% of these patients will progress to end-stage renal disease. At the moment there aren't any therapies available for this rare disease, but Soliris from Alexion Pharmaceuticals earned a label expansion for the treatment of aHUS in 2011.

Soliris is one of the world's most expensive therapies, and last year it generated about $2.8 billion in sales for Alexion. If OMS721 eventually earns approvals for aHUS and IgA nephropathy, a peak sales estimate above $1 billion annually seems conservative.

While I'm excited about OMS721, it's not the only reason Omeros is on a list of biotech stocks I'd buy now. The company also boasts an approved drug expected to bring the company to sustainable, positive cash flow while it swings for the fences with its rare-disease candidate.

Cory Renauer has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.