OIS Index Outperforms Biotechs but Lags Devices and Broader Market in October

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 November 1, 2017, the OIS Index stands at 878.30.

In October, the OIS Index declined 2.5%, which represents outperformance relative to the NASDAQ Biotechnology Index, which declined 5.8% during the month. The OIS Index underperformed two other benchmarks during October: the overall US stock market, as measured by the Russell 3000 Index, which gained 2.1%, and a composite of US medical device stocks, which gained 3.3%. Among the 31 stocks in the OIS Index, declining stocks outnumbered advancing stocks 20 to 11 during the month.

The largest positive contributor to OIS Index performance in October was Aerie Pharmaceuticals (+2.2% contribution to index performance, stock up 27.1%). On October 13, an FDA advisory committee voted nearly unanimously in favor of Rhopressa (netarsudil ophthalmic solution 0.02%) for open-angle glaucoma and ocular hypertension. The stock made its biggest move two days before the advisory committee meeting, when the FDA posted its review of Rhopressa.

The second-largest positive contributor to the OIS Index in October was KalVista Pharmaceuticals (+1.0% contribution to index performance, stock up 91%). On October 10, the company announced a collaboration with Merck involving its investigational drug candidates for diabetic macular edema (DME). The deal involved a $37 million up-front fee plus potential milestone payments and royalties, and a separate private placement of $9.1 million for a 9.9% ownership stake.

Other top performers during October, but with a smaller impact on the OIS Index due to lower weighting within the index, include Realm Therapeutics (+38.1%), which completed a $26 million financing on October 12, and ThromboGenics (+20.3%), which has recently regained non-US rights from Alcon to JETREA for vitreomacular adhesion.

The two largest negative contributors to OIS Index performance reported positive news in October. Omeros Corp. (-2.2% contribution to index performance, stock down 27.1%) reported a patent settlement involving OMIDRIA, along with clinical data for a non-ophthalmic pipeline drug in the field of hematopoietic stem cell transplantation. Kala Pharmaceuticals (-1.8% contribution to index performance, stock down 29.7%) submitted a new drug application (NDA) to the FDA for INVELTYS (KPI-121, 1%), a topical twice-a-day product candidate for the treatment of inflammation and pain following ocular surgery.