Saturday, January 5, 2013

Omeros slumps after knee surgery drug study

NEW YORK -- Shares of Omeros Corp. fell Friday after the biopharmaceutical company said its knee surgery drug did not meet its main goal in a late-stage clinical trial.

THE SPARK: The drug OMS103HP is designed to improve surgical outcomes, reducing pain and improving joint function following surgery. In the trial Omeros tested the drug in patients who had had arthroscopic surgery on the meniscus of the knee. The company said the drug reduced pain following surgery, but it was not more effective than standard treatments in reducing problems like knee swelling, clicking, catching, and stiffness.

THE BIG PICTURE: The trial involved 344 patients. Omeros said there were other positive results from the trial, as patients who took OMS103HP used less pain medication than patients in the control group. They also had fewer inflammatory problems, didn't use their crutches as often, and were able to walk without crutches sooner. The Seattle company said it still plans to start a second late-stage trial of OMS103HP in the first half of 2013.

Omeros is also studying a drug called OMS302 for use in ocular replacement surgeries. The company plans to file for marketing approval of both products in early 2013.

THE ANALYSIS: Cowen & Co. analyst Simos Simeonidis kept an "Outperform" rating on the stock, saying he expects OMS302 to be on the market in 2014, and the approval of its first product will reduce the risks the company faces.

SHARE ACTION: Omeros stock fell 64 cents, or 11 percent, to $5.20 in midday trading. The shares have lost 49 percent of their value since Oct. 18 but are still up more than 30 percent in the year to date.


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