OIS Index Rallies Back from COVID-Driven Decline

The OIS Index of ophthalmic stocks staged a strong comeback in Q2, gaining 21.4%, in line with the overall US stock market as measured by the Russell 3000 Index. This follows a 21.2% decline in Q1, which was also in line with the broader US market. Biotech stocks have been particularly strong, with the NASDAQ Biotechnology Index gaining 26.7% in Q2 and hitting an all-time high in late June. US medical device stocks (+17.5%) also rebounded from Q1 declines.

During both the Q1 coronavirus-driven market sell-off and the Q2 rebound, ophthalmic stocks have more closely tracked the broader US stock market than either the biotech or medical device sectors.

Advancing stocks in the OIS Index outnumbered declining stocks by a margin of 29 to 6 during Q2.

Positive Contributors

The largest positive contributor to index performance in Q2 was STAAR Surgical (+6.4% contribution to index performance, stock up 90.8%). After the end of the quarter, the company announced CE mark approval of the EVO Viva presbyopia correcting extended depth-of-focus implantable Collamer lens (ICL).

The second largest positive contributor in Q2 was Adverum Biotechnologies (+4.3% contribution to index performance, stock up 114%). In early May, Adverum reported positive interim data from its OPTIC Phase I intravitreal gene therapy trial in wet age-related macular degeneration, demonstrating both efficacy and a dose response.

Other big gainers in Q2, but with less impact on OIS Index performance due to lower weighting, include:

• Aerpio Pharmaceuticals (+127%) and Aldeyra Therapeutics (+68.8%), which posted large gains based on development efforts directly targeting treatment of COVID-19.
• Applied Genetic Technologies Corporation (+68.9%), which announced publication of positive preclinical data in support of its ongoing gene therapy clinical program in patients with X-linked retinitis pigmentosa.
• Ocular Therapeutix (+68.3%), which reported positive top-line results from its Phase III trial of DEXTENZA for the expanded indication of ocular itching associated with allergic conjunctivitis, and then dosed the first patients in a Phase I trial of OTX-CSI (cyclosporine intracanalicular insert) for dry eye.
• GenSight Biologics (+56%), which reported progress in clinical development of gene therapies for Leber hereditary optic neuropathy and retinitis pigmentosa.

Negative Contributors

The largest declines within the OIS Index in Q2 included:

• EyePoint Pharmaceuticals (–25.8%), following a 34.2% decline in Q1, driven by the impact of COVID-19 on customer demand and business operations.
• Oyster Point Pharma (–17.5%), which reported positive clinical data but gave back some of the gains (+43.2%) that made the stock the top contributor to OIS Index performance in Q1.
• Molecular Partners (–16.1%), which along with development partner Allergan, an AbbVie company, announced that it had received a Complete Response Letter to the Biologics License Application (BLA) for abicipar pegol, an investigational DARPin therapy for treatment of wet AMD.

Mid-Year Updates

As of July 1, Ellex Medical Lasers was removed from the OIS Index due to its acquisition by Quantel Medical, a division of Lumibird Group. EyeGate Pharma, which was removed from the OIS Index one year ago because its market cap fell to $11 million and it was facing possible NASDAQ de-listing, was added back to the index based on compliance with NASDAQ listing requirements.

The OIS Index is a composite of ophthalmic growth stocks that tracks the investment performance in 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 July 1, 2020, the OIS Index stood at 1,085.40.