Glaukos and STAAR Drive OIS Index into Record Territory

Glaukos and STAAR Drive OIS Index into Record Territory

The OIS Index of ophthalmic stocks surged to new highs in August, driven by two of the highest-weighted stocks in the index. The OIS Index gained 16.3% in August, while the overall US stock market, as measured by the Russell 3000 Index gained 3.3%, the NASDAQ Biotechnology Index gained 4.8%, and a composite of US medical device stocks gained 5.6%.

Although index performance in August was driven primarily by two key stocks, the strength was broad-based. Advancing stocks outnumbered declining stocks 24 to 10, with one stock unchanged and 11 stocks gaining more than 20%. As a result of these recent gains, the OIS Index has now outperformed its key market benchmarks over the past three, six, and 12 months.

Top Performers

The largest contributor to OIS Index performance in August was Glaukos Corp. (+4.6% contribution to index performance, stock up 64.3%). The stock surged following the announcement by Alcon that the company was voluntarily withdrawing the CyPass Micro-Stent from the global market. This decision on the part of Alcon, which was based on an analysis of five-year post-surgery data from the COMPASS-XT long-term safety study, removed from the market a primary competitor to the Glaukos iStent and iStent Inject for micro-invasive glaucoma surgery.

The second largest contributor to index performance last month was STAAR Surgical (+4.0% contribution to index performance, stock up 54.6%). The stock has tripled in value since May 1, when STAAR reported strong Q1 revenue growth for the EVO Visian ICL intraocular lens in key international markets and raised the overall revenue outlook for 2018. On August 1, STAAR reported another strong quarter and again raised its full-year revenue forecast. On August 10, the company closed a stock offering with gross proceeds of $78 million.

Other top performers during August, but with a smaller impact on the OIS Index due to lower weighting within the index, include KalVista Pharmaceuticals (+81.5%), which provided a positive company update and raised $14.6 million in a registered direct stock transaction, and Adverum Biotechnologies (+61.7%), which reported progress in three of its gene therapy programs, including submission of an Investigational New Drug (IND) application to initiate a Phase I study in wet age-related macular degeneration.

Several additional stocks posted strong gains of between 20% and 30% last month, including Imprimis Pharmaceuticals, Unity Biotechnology, MeiraGTx, Omeros, Ocular Therapeutix, Aldeyra Therapeutics, and Nightstar Therapeutics.

Negative Contributors

Interestingly, two of the most prominent negative milestones within the OIS Index last month involved non-ophthalmic development programs.

The largest negative contributor to OIS Index performance in August was Spark Therapeutics (–1.5% contribution to index performance, stock down 19.7%). The decline in the stock was driven by disappointing results in a Phase I/II study of the company’s gene therapy candidate for hemophilia A. The stock with the largest percentage decline in August was Realm Therapeutics (–70.1%), impacted by disappointing results from a Phase II trial in atopic dermatitis.

The OIS Index is a composite of ophthalmic growth stocks that tracks the investment performance of our sector. Our goal is to highlight ophthalmology investment performance, in absolute terms and compared with broader biotech and medical device industries, as well as the overall stock market. The OIS Index was launched with an initial value of 1,000 on October 1, 2016; as of September 1, 2018, the OIS Index stood at 1,169.63.