Ophthalmic Stocks’ Rally Rolls Through April

The OIS Index gained 5.2% in April, on the heels of a 4.4% gain in March. Ophthalmic stocks have far outperformed key market benchmarks over the past one and three months.

The NASDAQ Biotechnology Index declined 3% in April, while the overall US stock market as measured by the Russell 3000 Index gained 0.3% and a composite of US medical device stocks gained 1.8%. For the three months ended April 30, the OIS Index gained 5.3%, whereas all three market benchmarks declined. Among the 33 stocks in the OIS Index, 18 advanced by an average of 18% during the month, and 15 declined by an average of 10%.

Boosting the Index

The largest positive contributor to OIS Index performance in April was Omeros Corp. (+1.7% contribution to index performance, stock up 28.5%). After falling by 48% during the first two months of 2018, the stock has recovered half of its lost value since March 1. Catalysts in April included extension of Medicare pass-through status for OMIDRIA (phenylephrine and ketorolac injection for use during cataract/intraocular [IOL] surgery), addition of OMIDRIA to the Veterans Administration National Formulary, and amendment of the company’s credit facility.

Spark Therapeutics (+1.2% contribution to index performance, stock up 14.6%) was the second largest contributor to the index in April. Investor’s Business Daily reported on April 10 that the stock advanced in response to the announced acquisition of AveXis by Novartis, which also boosted stocks of other gene therapy companies.

Other top performers during March, but with a smaller impact on the OIS Index due to lower weighting within the index, include EyePoint Pharmaceuticals (+102%). EyePoint was introduced at the end of March as a rebranding of pSivida Corp., following the company’s acquisition of Icon Bioscience and financing from Essex Woodlands Healthcare Partners. During April, EyePoint announced notices of allowance for two US patents related to DEXYCU, the company’s long-acting intraocular product for postoperative inflammation, and announced ARVO presentations of Phase III data related to YUTIQ for posterior segment uveitis. EyeGate Pharmaceuticals (+39.2%) moved higher following completion of a public stock offering.

Negative Contributors

The largest negative contributor to OIS Index performance in April was GenSight Biologics (-0.9% contribution to index performance, stock down 44.1%), following announcement of top-line results from the REVERSE Phase III clinical trial of a single intravitreal injection of GS010 (rAAV2/2-ND4) in 37 subjects with visual loss due to 11778-ND4 Leber hereditary optic neuropathy. The trial did not meet its primary efficacy endpoint due to unexpected visual acuity improvement in sham-treated contralateral eyes.

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 May 1, the OIS Index stood at 923.35.

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