Here's Why Omeros Corporation Fell as Much as 14.8% Today

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What happened

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Shares of small cap biopharma Omeros Corporation (NASDAQ: OMER) fell nearly 15% Wednesday as they continued to cool down following monthly gains that peaked at 77% a few days ago. Wednesday's slide is the fourth consecutive day the stock has shed value. Shares have fallen from about $27 per share to just $21 in that time, or a loss of about 28%.

Even with Wednesday's losses the stock has more than doubled since the beginning of 2017. Investors are still looking forward to the initiation of and data readouts from multiple phase 3 trials for Omeros Corporation's lead drug candidate, OMS721, for treating various diseases. As of 3:18 p.m. EDT, the stock had settled to a 9.7% loss.

So what

Omeros Corporation stock hit all-time highs earlier this month after announcing that the U.S. Food and Drug Administration had granted OMS721 the coveted Breakthrough Therapy Designation for treating Immunoglobulin A (IgA) nephropathy, a rare kidney disease. The drug candidate's phase 2 data demonstrated an impressive ability to reduce protein levels in the blood and kidneys, a hallmark of IgA nephropathy with debilitating health effects, for which there are no approved treatments available.

Investors are rightfully excited about the FDA's decision for the developmental drug. Omeros Corporation estimates that 10% to 20% of all dialysis patients, and at least 120,000 individuals in the United States, suffer from the disease.

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Additionally, OMS721 will also begin its second phase 3 trial later this year (for treating a rare immune disease) and is currently being evaluated in a phase 2 trial (for treating a rare disease that affects blood vessels in vital organs).

Now what

Volatility is often the name of the game when it comes to small cap biopharma stocks. Wednesday's slide shouldn't cause investors to panic nor feel any differently about the company's prospects than they did a few weeks ago. What really matters for Omeros Corporation is the long-term performance of its budding drug pipeline.

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Maxx Chatsko has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.