Major Ophthalmic Pipeline Developments Drive OIS Index in July

OIS Index

In October, we launched the OIS Index, a composite of ophthalmic growth stocks, to track 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 stock market as a whole.The OIS Index was launched with an initial value of 1,000 on October 1; as of the market close on July 31, the OIS Index stood at 880.74.

One month ago, in our OIS Index six-month recap, we highlighted three companies with important upcoming milestones with the potential to impact index performance during the second half of 2017. In July, two of those companies provided such index-moving headlines.

On the positive side, the largest contributor by far to OIS Index performance in July was Spark Therapeutics (stock up 18.3%). As reported on OIS.net on July 26, Spark was boosted by two rounds of good news over the past month. On July 13, the company announced publication in The Lancet of positive Phase III clinical trial data for LUXTURNA (voretigene neparvovec), an investigational, potential one-time gene therapy candidate for the treatment of patients with vision loss due to confirmed biallelic RPE65-mediated inherited retinal disease (IRD). A few days later, Spark announced that the Food and Drug Administration (FDA) had granted priority review status for the LUXTURNA Biologics License Application (BLA), putting the company on track for possible FDA approval in January.

The largest percentage gainer in the OIS Index in July was TearLab Corp. (stock up 49.1%), driven by European regulatory clearance of its next-generation TearLab Discovery System.

On the negative side, Ocular Therapeutix (stock down 35.4%) experienced a setback in its quest to gain FDA approval for DEXTENZA (dexamethasone intracanalicular insert) for the treatment of ocular pain following ophthalmic surgery. On July 11, the company announced that it had received a Complete Response Letter (CRL) from the FDA, citing deficiencies in manufacturing processes and analytical testing. According to Ocular, the FDA’s letter did not identify any efficacy or safety concerns with respect to DEXTENZA clinical data,nor any need for additional clinical trials for approval.

The largest percentage loser in the OIS Index in July was Inotek Pharmaceuticals (stock down 50.0%), driven by another disappointing announcement regarding trabodenoson clinical trial results, this time in a Phase II study in combination with latanoprost.

Overall, the OIS Index lost ground relative to its benchmark indices in July, declining 1.6%. The NASDAQ Biotechnology Index (+2.9%) and the overall US stock market, as measured by the Russell 3000 Index (+1.8%), both finished the month in positive territory. A composite of US medical device stocks declined 1.3% in July. Although the OIS Index declined modestly in value during the month, there were equal numbers of advancing and declining stocks in the index.

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About The Author

Michael Lachman

Michael Lachman is President of EyeQ Research, which provides market research, analytics, and strategic advisory to ophthalmic companies and investors. Previously, he was a healthcare investment research analyst with Hambrecht & Quist, ThinkEquity Partners, and SAC Capital, and worked in business development, marketing, and R&D for Johnson & Johnson and Baxter.

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