Please ensure Javascript is enabled for purposes of website accessibility

Here's Why Omeros Corporation Is Gaining More Ground Today

By Cory Renauer - Updated Dec 12, 2017 at 12:31PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Pediatric exclusivity is a bigger deal than you might expect for a drug used during cataract surgeries.

What happened

Shares of Omeros Corporation (OMER -3.48%) rose as high as 10.8% this morning after the biotech announced a U.S. Food and Drug Administration approval that expands its commercial-stage drug to the pediatric population, extending its period of market exclusivity in the process. The stock has since settled down to a more modest gain of 3.2% as of 11:20 a.m. EST on Tuesday.

So what 

Each year eye surgeons perform millions of cataract removal and lens replacement procedures that would probably go much more smoothly with the use of Omeros Corporation's Omidria. It's the first drug specifically approved to prevent pupils from contracting during these common procedures, and today's announcement means it's also available for U.S. pediatric patients.

Upward sloping chart drawn on a chalkboard.

Image source: Getty Images.

Today's stock movement has a lot more to do with exclusivity periods than patient populations. Patents can be disputed, but the FDA pediatric exclusivity extension is an ironclad guarantee the regulator won't approve a generic competitor for any of the drug's approved indications until a specified time.

Now what

Omeros recently fought off a patent challenge for Omidria, and the settlement agreement will probably result in limited generic competition from privately held Par Pharmaceutical entering the U.S. market in April 2032. With the freshly granted pediatric extension, it looks like all others will have to wait until April 2034.

Third-quarter Omidria sales surged 92% higher than the same period last year, but they still have a lot of room to grow as they march toward the $1 billion mark. At an annualized run rate of around $87 million, there's still a lot of room to grow.

Today's pediatric extension increases the odds this revenue stream will continue growing into the long term. Add a potential blockbuster in clinical-stage development and this stock looks like the best buy in biotech right now.

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

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Omeros Corporation Stock Quote
Omeros Corporation
$7.20 (-3.48%) $0.26

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/11/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.