OIS Index Lags Market Benchmarks in July

The OIS Index of ophthalmic stocks declined by 1.1% in July, against a strong overall market backdrop. During the month, the overall US stock market as measured by the Russell 3000 Index gained 3.9%, while the NASDAQ Biotechnology Index gained 8.6% and a composite of US medical device stocks gained 4.7%. Within the index, declining stocks outnumbered advancing stocks 19 to 15, with one stock unchanged.

Top Performers

Only one stock, Carl Zeiss Meditec (+1.2% contribution to index performance, stock up 11.9%), impacted the OIS Index by more than +1% in July. The second largest contributor to the index in July was Omeros (+0.8% contribution to index performance, stock up 13.4%). Omeros provided several positive business updates in July, including initial sales of Omidria (phenylephrine and ketorolac intraocular injection) in Europe, and resolution of an Omidria patent dispute with a third potential generic challenger that could clear a path for US market exclusivity through 2031.
Other top performers during July, but with a smaller impact on the OIS Index due to lower weighting within the index, included Ellex Medical Lasers (+24.2%), Iridex (+22.4%), and EyePoint Pharmaceuticals (+22.0%).

Negative Contributors

The largest negative contributor to OIS Index performance in July was Apellis Pharmaceuticals (–1.2% contribution to index performance, stock down 17.7%). The stock has declined steadily since the company’s R&D Day event on June 26. Apellis has been a particularly volatile stock within the OIS Index since it was added on January 1: it was among the most positive contributors to index performance in February and March, and was the largest negative contributor in January, May, and July.

The second largest negative contributor to OIS Index performance in July was MeiraGTx (–0.7% contribution to index performance, stock down 22.7%). The stock has declined steadily since it began trading on June 12 following the company’s IPO and is currently trading about 40% below its IPO valuation.

Ocular Therapeutix (–0.6% contribution to index performance, stock down 23.2%) declined in July despite the resubmission of the new drug application for Dextenza (dexamethasone insert) to the Food and Drug Administration. Dextenza is for the treatment of ocular pain following ophthalmic surgery.

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 August 1, 2018, the OIS Index stood at 1,006.09.

Michael Lachman can be reached at Michael@EyeQResearch.com.