OIS Index Delivers Small Gain, But Lags Benchmarks in January

OIS Index

In January, the OIS Index scratched out a small gain, but underperformed its relevant benchmarks. The OIS Index gained 0.3%, compared with gains of 7% for the NASDAQ Biotechnology Index, 10.2% for a composite of US medical device stocks, and 5.2% for the overall US stock market as measured by the Russell 3000 Index.

Check out the 1-year and 3-month performance trends: https://ois.net/ois-index/

Among the 32 stocks in the OIS Index, advancers and decliners were split evenly.

The Leaders

The largest positive contributor to OIS Index performance for the month was Adverum Biotechnologies (+2.3% contribution to index performance, stock up 109%). After trading in a range of about $2.50 to $4 per share during 2017, the stock climbed to over $7 in January. Possible drivers include:

  • The 2018 outlook that Adverum provided on January 4.
  • The company’s announcement on January 25 that it had extended its research collaboration with Editas Medicine.
  • The recent start of the company’s Phase I/II clinical trial for ADVM-043 in patients with alpha-1 antitrypsin (A1AT) deficiency.
  • Growing investor interest in gene therapy following the recent US Food and Drug Administration (FDA) approval of LUXTURNA (voretigene neparvovec) from Spark Therapeutics.

Spark itself was a large positive contributor to the monthly OIS Index performance (+0.7% contribution to index performance, stock up 9%). During the month, Spark announced US pricing of $425,000 per eye for one-time LUXTURNA treatment, and a licensing and supply agreement with Novartis Pharmaceuticals to develop and commercialize voretigene neparvovec outside the US.

Glaukos Corp. (+1% contribution to index performance, stock up 17%) announced an Investigational Device Exemption (IDE) submission to the FDA for its iStent infinite Trabecular Micro-Bypass System for refractory glaucoma, and reported positive results from an interim cohort of patients in the Phase II clinical trial of the iDose Travoprost intraocular implant.

Other top performers during January, but with a smaller impact on the OIS Index due to lower weighting within the index, were AGTC (+37.5%), ThromboGenics (+24.8%), and Ocular Therapeutix (+22.9%).

The Laggards

The largest negative contributor to OIS Index performance in January was Apellis Pharmaceuticals (-1.6% contribution to index performance, stock down 23.5%). Apellis was added to the OIS Index on January 1 following the company’s November initial public offering. The IPO was priced at $14 per share and the stock traded as high as $25 in January, but dropped back to $16.60 by month-end.

The second largest negative contributor to OIS Index performance in January was Ohr Pharmaceutical (-1.2% contribution to index performance, stock down 82.9%). Ohr was a top performer within the index in November (+39%) and December (+119%), driven by high expectations for squalamine for wet age-related macular degeneration (AMD). However, hopes for squalamine were dashed on January 5 when Ohr reported top-line data from the MAKO study, which evaluated the efficacy and safety of topically administered squalamine in combination with monthly Lucentis (ranibizumab, Roche/Genentech) injections for the treatment of wet AMD. The study did not meet its primary efficacy endpoint, and Ohr announced that it would evaluate strategic alternatives to maximize shareholder value.

Kala Pharmaceuticals (-1.1% contribution to index performance, stock down 17.7%) declined following the announcement of top-line results from two Phase III trials, STRIDE 1 and STRIDE 2, evaluating KPI-121 0.25% in patients with dry eye disease. In STRIDE 1, statistical significance was achieved for the primary sign and symptom endpoints, and for a second pre-specified primary symptom endpoint. In STRIDE 2, statistical significance was achieved for the primary sign endpoint, but not for the primary symptom endpoint of ocular discomfort severity, although a positive treatment effect was observed. It is not yet known whether the FDA will require an additional trial.

The OIS Index is a composite of ophthalmic growth stocks that tracks the investment performance of the 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 February 1, the OIS Index stood at 876.93.

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