While biotech investments have seen a surge of interest in areas like obesity drugs, with Morgan Stanley Research recently increasing its 6-year market forecast by a staggering $39 billion, a quieter revolution is taking place in ocular research, institutional investors, and hedge funds, including the notable Armistice Capital, are turning their attention – and their assets under management (AUM) – towards companies spearheading vision– and eye-related condition treatments.
The first quarter of this year saw a flurry of activity in the ophthalmic sector. MarketBeat reported significant movements among institutional investors and hedge funds regarding their holdings in Eyenovia, a commercial-stage ophthalmic company. American International Group Inc. debuted in the arena, securing a new $32,000 stake in Eyenovia during the second quarter of 2023. Not to be outdone, Financial Management Network Inc. followed suit in the subsequent quarter, acquiring a stake valued at $128,000.
However, Armistice Capital’s move truly caught the eye of market watchers. According to a Form 13F filing with the Securities and Exchange Commission (SEC), Armistice Capital purchased a new position in Eyenovia, Inc. in the third quarter of 2023. This wasn’t a tiny bet – the fund added a substantial 3,087,021 shares of the company’s stock, amounting to approximately 8.08% ownership. This significant allocation of Armistice’s AUM underscores the fund’s confidence in Eyenovia’s potential.
Eyenovia’s appeal lies in its innovative approach to ophthalmic treatments. The company is commercializing MydCombi, a novel tropicamide and phenylephrine hydrochloride ophthalmic spray used for eye exam pupil dilation and in pharmacologic mydriasis applications for ocular surgery. Additionally, they’re developing the Optejet device, a cutting-edge tool for various ophthalmic applications, including pediatric progressive myopia treatment.
But Armistice Capital’s ocular interests continue beyond Eyenovia. The fund also participated in a private placement for Outlook Therapeutics, a biopharmaceutical company developing a groundbreaking formulation to treat retina disease. Alongside other notable investors like Great Point Partners, LLC and Woodline Partners, Armistice Capital contributed to the upfront gross proceeds of approximately $60 million.
Outlook Therapeutics is pioneering the first approval for an ophthalmic formulation of bevacizumab, a medication traditionally used to treat various forms of cancer. Their ONS-5010/LYTENAVA therapy aims to address wet age-related macular degeneration, the leading cause of severe vision loss. This condition occurs when abnormal blood vessels grow beneath the retina, leading to fluid leakage and potentially creating a large blind spot in the center of one’s visual field.
In May, the ocular research landscape saw another significant development when GenSight Biologics announced a private placement offering shares to shareholders, including Armistice Capital. GenSight is at the forefront of developing gene therapies for retinal neurodegenerative diseases and central nervous system disorders. Their focus includes a gene therapy product for Leber hereditary optic neuropathy (LHON), a rare genetic disease affecting the optic nerves that can lead to vision loss.
GenSight’s CEO, Laurence Rodriguez, expressed gratitude for the continued support from investors like Armistice Capital. The net proceeds from this deal are earmarked for funding corporate expenses, manufacturing operations, and regulatory procedures associated with their gene therapy product, LUMEVOQ.
The strategic deployment of Armistice Capital’s AUM into these ocular research ventures signals a recognition of the immense potential in this field. As vision-related conditions continue to affect millions worldwide, the need for innovative treatments grows more pressing. By directing their resources towards companies like Eyenovia, Outlook Therapeutics, and GenSight Biologics, Armistice Capital is not just making a financial investment – they’re investing in the future of eye care.
This trend of increased investment in ocular research paints a promising picture for those affected by eye conditions. As more AUM flows into this sector, we anticipate accelerated development of novel treatments, potentially revolutionizing the landscape of ophthalmic care in the years to come.