A Phase III trial of a product in development to prevent complications during delicate intraocular lens replacement surgery met its primary and secondary endpoints, Omeros Corp. reported Tuesday.

The drug, OMS302, is designed to prevent constriction of the pupil during surgery, which is associated with risk of injury to the eye and a lengthier surgery. Omeros' stock (NASDAQ:OMER) surged more than 33.8 percent on the news, closing at $10.22, up $2.58.

The news comes as a relief less than a year after a Phase III failure of its other lead product, OMS103HP, which drove its stock price at the time down to the low $5 range. (See BioWorld Today, April 4, 2011.)

About 3.6 million intraocular lens replacement procedures are carried out annually in the U.S., and 20 million worldwide, with a projected growth rate of 3 percent to 4 percent per year.

"Both we and our ophthalmology experts believe these data are quite clinically meaningful and the product could well become standard of use," said Gregory A. Demopulos, chairman and CEO of Seattle-based Omeros.

The trial was double-blinded, enrolling 405 patients randomized to OMS302 or placebo during eye surgery. Its primary endpoint was maintenance of intraoperative mydriasis, or pupil dilation during intraocular lens replacement surgery.

In that surgery, the original lens of the eye is replaced with an artificial intraocular lens, and it is performed to correct cataracts or a refractive error of the lens. The drug is administered by adding it to the standard irrigation solution used during the surgery and delivered intracamerally (into the chamber of the eye).

OMS302 is a combination of a ketoralac, an anti-inflammatory, and phenylephrine. The drugs have been used in ophthalmology for more than 15 years, and are on the market in the form of generics.

The new Phase III results reinforce results from earlier studies. In a Phase IIb study enrolling 221 patients, OMS302 achieved co-primary endpoints of maintaining pupil dilation and decreasing postoperative pain.

Omeros confirmed those results in the pivotal Phase III trial. It is running one more Phase III trial, this one designed like the Phase IIb, with co-primary endpoints instead of a single endpoint.

The unusual strength of the statistical analysis gave Omeros the confidence to proceed with a Phase III trial using co-primary endpoints, even though such trials are usually more risky. Demopulos said the firm was unable to precisely calculate the "p" value for its maintenance of mydriasis endpoint, because it was so low. "We're not really sure what the "p" value is, because we are at least 14 zeroes to the right of the decimal place," he explained.

The company reported a "p" value of less than 0.00001 for maintenance of intraoperative mydriasis and less than 0.00001 for reduction of pain in the early postoperative period.

"Given the strong results, it makes a lot of sense to assess those key endpoints as co-primaries again, similar to the design of the Phase IIb trial," Demopulos said.

Because its previous Phase III trial enrolled and completed quickly – that study enrolled its first patient in October 2011 – Omeros said it may have data from the second Phase III trial as early as the second half of 2012. It plans to submit marketing applications in the U.S. and Europe for OMS302 in the first half of 2013.

Investors and analysts have taken the news as an unequivocal positive. "We believe OMS302 could be widely used by eye surgeons," wrote Elemer Piros, an analyst with Rodman and Renshaw. "We believe that Omeros could be valued at par with the average of a comparable group of drug developers which trade at an enterprise value of approximately $291 million."

Omeros has a diversified pipeline with compounds in a number of indications. Its PharmacoSurgery platform is based on adding approved drugs to irrigation solutions used during surgical procedures. The active pharmacological ingredients are intended to prevent inflammation.

Omeros's second lead product, OMS103HP, is in Phase III for arthroscopic meniscectomy, assessing safety and efficacy for postoperative joint function and reduction of pain. The company is running two randomized, double-blind trials in North America and Europe.

That same product had inconclusive results in a trial in anterior cruciate ligament, but Omeros contended it will succeed in meniscectomy.

It also has a platform for discovery of G protein-coupled receptor (GPCR) modulators, plus preclinical programs in addiction, schizophrenia and more. It recently announced it had identified compounds that interact selectively with five orphan GPCRs, bringing the total number of Class A orphan GPCRs unlocked by the company to 23, or 30 percent.

Those targets were linked to arterial stiffness, acute inflammation, hepatocellular carcinoma and cognitive impairment.