Dog Days of Summer: OIS Index Posts Modest Decline in August

Last October, we launched the OIS Index, a composite of ophthalmic growth stocks, to track 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 stock market as a whole.The OIS Index was launched with an initial value of 1,000 on October 1; as of the market close on August 31, the OIS Index stood at 867.42.

In August, the OIS Index lost ground relative to its benchmark indices, declining 1.5% after a similar 1.6% decline in July. The NASDAQ Biotechnology Index (+4.5%) significantly outperformed the OIS Index in August. A composite of US medical device stocks posted a more modest 0.9% gain, and the overall US stock market, as measured by the Russell 3000 Index, was flat in August. Among the 32 stocks in the OIS Index, declining stocks outnumbered advancing stocks 18 to 13 during the month, with one stock unchanged.

For the second month in a row, the largest positive contributor to OIS Index performance by far was Spark Therapeutics (+2.1% contribution to index performance, stock up 23.6%, following a gain of 18.3% in July). At the beginning of the month, Spark announced encouraging preliminary initial data from the Phase I/II dose-escalation trial for SPK-8011, a novel bioengineered adeno-associated viral (AAV) vector, being investigated as a potential one-time therapy for hemophilia A. This follows positive news in July related to LUXTURNA (voretigene neparvovec), an investigational, potential onetime gene therapy candidate for the treatment of patients with vision loss due to confirmed biallelic RPE65-mediated inherited retinal disease (IRD). The Food and Drug Administration (FDA) had granted a rare pediatric disease designation and priority review status for LUXTURNA, with a PDUFA date set for January 12.

The largest percentage gainers in the OIS Index in July were Escalon Medical (+34.3%), Ophthotech (+27.3), Presbia (+23.1%), and Ohr Pharmaceutical (+19.6%).

On the negative side, Nicox (–1.5% contribution to index performance, stock down 22.3%) was impacted by news of a setback for VYZULTA (latanoprostene bunod ophthalmic solution) for glaucoma and ocular hypertension. On August 7, the company’s marketing partner, Bausch + Lomb (subsidiary of Valeant Pharmaceuticals) announced receipt of a Complete Response Letter from the FDA related to a Current Good Manufacturing Practice (CGMP) inspection at B+L’s manufacturing facility. The FDA did not identify efficacy or safety concerns with respect to the VYZULTA regulatory submission.

The largest percentage loser in the OIS Index in August was TearLab (-49.8%), more than reversing a 49% gain in July. Other stocks with large declines were Imprimis Pharmaceuticals (-26.8%) and Eyegate Pharmaceuticals (-18.9%).