What happened
Shares of Omeros Corporation (OMER 0.66%) skyrocketed 40.5% higher as of 11:12 a.m. ET on Monday. The huge gain came after the company announced that Rayner Surgical paid a $200 million milestone payment. This payment is related to Omeros' sale of its ophthalmology product Omidria to Rayner in December 2021.
Omeros received an upfront payment of $125 million with the sale of Omidria. However, the agreement included a commercial milestone payment of $200 million. That commercial milestone was met in late December 2022.
So what
Omeros had around $195 million available to fund its operations at the end of 2022. The $200 million payment from Rayner puts the company in a much stronger financial position. Omeros chairman and CEO Gregory Demopulos said that the milestone payment should fund operations "well into at least 2025."
The only downside to the commercial milestone payment is that Omeros will now receive lower royalties from Rayner on sales of Omidria. Under the terms of their agreement, royalties on U.S. net sales of the ophthalmology product decrease to 30% from 50% after the milestone payment. Omeros will continue to receive 15% royalties on sales of Omidria outside of the U.S. on a country-by-country basis.
Now what
There could be more catalysts for the biotech stock on the way later this year. Although the U.S. Food and Drug Administration issued a complete response letter for naroplimab in hematopoietic stem cell transplant-associated microangiopathy, Omeros still has a path for resubmitting its biologics license application. The company also expects to report clinical study data from several pipeline programs in 2023.
