OIS Index Follows Market Downward During a Rocky February

OIS Index Follows Market Downward During a Rocky February

The OIS Index declined by 4.2% in February, tracking stock market benchmarks during a volatile month. The NASDAQ Biotechnology Index suffered a slightly larger decline of 5.4%, while a composite of US medical device stocks and the overall US stock market as measured by the Russell 3000 Index declined by 3.9%. During February, both the OIS Index and the Russell 3000 declined by as much as 10% off their late-January highs. Among the 32 stocks in the OIS Index, there were eight advancing and 23 declining stocks during the month, with one stock unchanged.

OIS Index Drivers

The largest positive contributor to OIS Index performance in February was Apellis Pharmaceuticals (+0.6% contribution to index performance, stock up 10.4%). The stock moved higher on a report of favorable 18-month data from the Phase II trial (FILLY) of its complement C3 inhibitor, APL-2, in patients with geographic atrophy (GA) associated with age-related macular degeneration (AMD). The 18-month results support the positive effect seen at 12 months, and no changes in the safety profile were observed between 12 and 18 months. For more, read the recent OIS Weekly report on Apellis’ APL-2 candidate.

Other top performers during February, but with a smaller impact on the OIS Index due to lower weighting, were Alimera Sciences (+11.1%), Realm Therapeutics (+10.5%), and Aldeyra Therapeutics (+10.4%). Realm’s stock advanced following a clinical and business update, and Aldeyra’s stock responded favorably to the announcement of a collaborative research agreement with the Janssen unit of Johnson & Johnson to advance novel immune-modulating drugs for systemic inflammatory diseases.

OIS Index Detractors

The largest negative contributor to OIS Index performance in February was Omeros Corp. (-1.9% contribution to index performance, stock down 37.6%). This follows a 16.7% decline in January. Medicare pass-through status for Omeros’ OMIDRIA (phenylephrine-ketorolac injection for use during cataract/IOL surgery) expired at the end of 2017, and the resulting impact on company revenues has driven the 48% year-to-date decline in the stock.

Eyegate Pharmaceuticals (stock down 45.2%) experienced the largest percentage decline among OIS Index stocks in February, driven by disappointing top-line results from a Phase IIb study of EGP-437 combination product for pain and inflammation in patients having cataract surgery. Although EGP-437 demonstrated a higher rate of success compared to vehicle at all time points, the vehicle group response was better than anticipated and the co-primary endpoints did not show statistical significance.

The OIS Index is a composite of ophthalmic growth stocks which tracks the investment performance of our sector. Our goal is to highlight ophthalmology investment performance, in absolute terms and compared to 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 March 1, 2018, the OIS Index stood at 840.41.

Michael Lachman can be reached at michael@lachmanconsulting.com.

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