The OIS Index of ophthalmic stocks made a strong comeback in Q4-2019, following a rough Q3. The index gained 16.2% in Q4, slightly underperforming the NASDAQ Biotechnology Index (+21.1%) but outperforming the overall US stock market as measured by the Russell 3000 Index (+8.6%) and a composite of US medical device stocks (+6.9%).
For the full year 2019, the OIS Index (+41.2%) outperformed all three of these market benchmarks, driven by the acquisition of Spark Therapeutics by Roche, which was announced in February and finally closed in December.
Advancing stocks in the OIS Index outnumbered declining stocks by a margin of 25 to 10 during Q4, reversing the ratio seen in Q3.
The largest positive contributor in Q4 was Bausch Health (+2.9% contribution to index performance, stock up 36.9%). The company announced several developments during Q4, including increased revenue guidance for 2019 and licenses of investigational drugs from Novaliq and Clearside Biomedical, which itself was of the highest percentage gainers in the OIS Index in Q4 (+360%).
Adverum Biotechnologies was the second largest positive contributor (+2.6% contribution to index performance, stock up 111%), doubling in value in Q4 after declining by 54% in Q3. The company reported additional clinical data from a Phase 1 study of its gene therapy candidate for wet AMD.
STAAR Surgical (+2.2% contribution to index performance, stock up 36.4%) moved higher following a report of strong quarterly sales and cash generation.
IVERIC bio (+2.1% contribution to index performance, stock up 666%) broke out following a report that Zimura, a complement factor C5 inhibitor, met its primary endpoint and reached statistical significance in a Phase 2b trial in geographic atrophy secondary to dry AMD.
Another top performer in Q4, but with a smaller impact due to lower weighting within the OIS Index, was GenSight Biologics (+105%), which reported findings that support the clinical benefits of LUMEVOQ in patients with Leber Hereditary Optic Neuropathy (LHON).
Year-End Index Updates
The following stocks have been removed from the OIS Index:
- Avedro, which was acquired by Glaukos.
- NovaBay Pharmaceuticals, which has fallen to a market cap of under $20 million.
The following stocks have been added to the OIS Index:
- Santen Pharmaceutical Co. – Santen, based in Japan, posted $2.1 billion in FY2019 revenues. The company markets a broad range of ophthalmic pharmaceutical products in Japan and other markets outside of North America. With a market cap of $7.6 billion, Santen has the fifth highest valuation within the OIS Index.
- Oyster Point Pharmaceuticals – Oyster Point Pharma completed a successful IPO in October, and the stock has gained 50% since then. The company is developing novel therapies to treat ocular surface diseases.
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 January 1, 2019, the OIS Index stood at 1,133.82.