What happened
Shares of the small-cap biopharma Omeros Corporation (OMER 2.52%) were up by a healthy 11.4%, on moderate volume, as of 1:48 p.m. ET Friday afternoon. The biotech's double-digit move higher is particularly noteworthy in light of the fact that the industry as a whole is losing ground today.
The closely watched SPDR S&P Biotech ETF, for instance, fell by as much as 2.75% during Friday's mid-afternoon trading session. Omeros' stock is defying this general downward trend in response to the news that the Food and Drug Administration (FDA) granted the company's early-stage paroxysmal nocturnal hemoglobinuria (PNH) drug candidate, OMS906, orphan drug designation .
So what
PNH is already a multibillion-dollar-a-year drug market. What's more, this indication is forecast to see compound annual sales growth in excess of 11%, on average, over the next three consecutive years, according to a report by Grand View Research.
Nonetheless, there is still a need for better pharmaceutical options for PNH. Omeros, for its part, is hoping that OMS906 will fill this unmet medical need. Today's regulatory news is an important step toward realizing this key operating goal.
Now what
Is Omeros' stock a buy this regulatory update? Although an orphan drug designation for OMS906 is definitely a positive bit of news, the drug is still years away from reaching the market. Omeros, in fact, has yet to even advance the drug into mid-stage trials for this indication. Investors, in turn, may want to wait for a more robust catalyst before buying shares.
