Today, one of the biggest losers in the market is Omeros (NADSAQ:OMER). Indeed, a decline of 40% in a given day is noteworthy news. And today, OMER stock is unfortunately on the wrong end of delivering some poor news to investors today.
Today’s move is a large one for any stock. However, for a commercial-stage biopharma company, such a drop is unusually large. The company’s existing product portfolio includes a number of drugs that are either approved or in the early stages of being approved. Among the key drugs investors have focused on with Omeros is the company’s OMIDRIA product, which has gained market share in the cataract surgery space.
However, today’s news surrounding the company’s Biologics License Application (BLA) for its Narsoplimab treatment has taken shares on a downward spiral. Let’s dive into what was announced and why this has led to such a sharp selloff.
OMER Stock Down on Regulatory Update
Today, Omeros announced that the Food and Drug Administration (FDA) has noted deficiencies with Narsoplimab that “preclude discussion of post-marketing requirements/commitments at this time.” In other words, the commercialization prospects and timeline for this drug remain uncertain right now.
Any company that gets this close to the final approval stage, only to have the rug pulled, is likely to see a selloff. Indeed, today’s 40% decline represents the level of risk various biopharma stocks present. However, the degree to which the selloff represents the true long-term impact of today’s announcement remains to be seen.
All hope is not yet lost for Omeros’ hematopoietic stem cell transplant-associated thrombotic microangiopathy (that’s a mouthful). The company notes that the FDA approved the BLA for Narsoplimab earlier this year under the Priority Review program. Additionally, both parties are working toward resolving this issue. Omeros has stated the company is awaiting next steps for this drug.
However, the key issue investors are pricing in is the fact that as a result of this notification, Omeros is unlikely to meet the Oct. 17 target date specified under the Prescription Drug User Fee Act. While a final decision on the information under review has not yet been given, this is not a good sign.
Accordingly, it appears investors are erring on the side of caution today.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.