The OIS Index of ophthalmic stocks solidly outperformed its market benchmarks in the first quarter of 2019, gaining 37.1%. During Q1, the overall US stock market, as measured by the Russell 3000 Index, gained 12.8%. The NASDAQ Biotechnology Index gained 15.4%, and a composite of US medical device stocks gained 15.9%.
For the OIS Index, this Q1 2019 performance represented a strong rebound from Q4 2018, when it declined by 28.4% and underperformed its market benchmarks. Advancing stocks in the OIS Index outnumbered declining stocks 23 to 11 during Q1.
The list of ophthalmic stocks that delivered stellar returns during Q1 is a long one, with nearly half of the stocks in the OIS Index – 15 out of 34 – gaining 30% or more.
The two largest contributors to index performance were gene therapy companies that received acquisition offers during the quarter. Spark Therapeutics (+191%) accounted for 13.4% of the 37.1% gain in the OIS Index in Q1, driven by the February 25 announcement of an acquisition offer from Roche. The second largest contributor was Nightstar Therapeutics (+4.5% contribution to index performance, stock up 120%) following the March 4 announcement of an acquisition by Biogen.
Four additional companies each contributed 3% to Q1 performance of the OIS Index. Apellis Pharmaceuticals advanced 47.8%, driven by an announced development collaboration with SFJ Pharmaceuticals in a non-ophthalmic program. Omeros (+55.9%), Glaukos (+39.5%), and Bausch Health (+33.7%) all moved steadily higher on positive news flow and financial results during the quarter.
Other top performers in Q1, but with a smaller impact due to lower weighting within the OIS Index, included:
- Eyenovia (+110%), which moved higher on positive results in the MicroStat MIST-1 Phase III registration study for mydriasis using the company’s patented piezo-print delivery technology, and Food and Drug Administration acceptance of an Investigational New Device (IND) application for MicroPine to reduce the progression of myopia.
- MeiraGTx (+78.7%), driven by an announced gene therapy collaboration with Johnson & Johnson’s Janssen Pharmaceuticals unit and an $80 million private placement.
Only one stock, Unity Biotechnology (–50.1%) contributed as much as 3% to the downside to the OIS Index in Q1. The stock has been particularly volatile since the company’s initial public offering (IPO) nearly one year ago, trading as high as 44% above the IPO price in September but finishing Q1 at 50% below the IPO price.
The OIS Index is a composite of ophthalmic growth stocks and 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 April 1, 2019, the OIS Index stood at 1,100.80.
Michael Lachman can be reached at Michael@EyeQResearch.com.