Healthcare was the standout industry in OC in 2018.
The sector’s largest public companies had the biggest stock gains of any industry, led by Edwards Lifesciences Corp., Glaukos Corp. and others.
Expanding medical device and healthcare providers completed some of the area’s biggest office leases and property buys (see related story on AltaMed, page 1).
And OC’s initial public offering scene was a one-sector act.
Here’s an overview of the top five healthcare stories we covered, chosen from nearly a dozen potential candidates:
Edwards Expansion
Shares of OC’s largest publicly traded company, Edwards Lifesciences (NYSE: EW), continued its upward trajectory, increasing over 40% this year. It has a $34 billion market cap, more than double the value of any other OC-based public company.
Its stock’s biggest boost came in September, when Wall Street reacted to rumors of an acquisition bid by Johnson & Johnson that never materialized.
The Irvine-based heart valve maker specializes in minimally invasive transcatheter valves. Several new products in the product line got regulatory approvals this year. It also has a growing critical-care business.
A surge in job growth at Edwards is in the works for the next few years. The company snapped up land next to its Irvine headquarters on Red Hill Avenue, and filed plans to construct several buildings that could boost employment there by the hundreds.
IPO Hub
Orange County’s initial public offering market was a one-industry affair.
Newport Beach-based medical aesthetics company Evolus Inc. (Nasdaq: EOLS) and three Irvine-based companies—bioprosthetic implants maker Hancock Jaffe Laboratories Inc. (Nasdaq: HJLI), drugmaker Urovant Sciences Ltd. (Nasdaq: UROV) and device maker Axonics Modulations Technologies Inc. (Nasdaq: AXNX) were the only OC-based firms to go public via a traditional IPO, together raising nearly $330 million.
Axonics was the biggest listing of the four, taking in $120 million in its November IPO, which was upsized from an earlier-announced $86 million target.
It develops minimally invasive sacral neuromodulation technology, mild electrical pulses to stimulate sacral nerves for treatment of overactive bladder, fecal incontinence and urinary retention. The company is valued at about $460 million; shares are up modestly over its IPO price.
Next step for Axonics: Food and Drug Administration clearance for a product treating overactive bladder.
Stentmaker Surge
Glaukos Corp. (NYSE: GKOS), whose iStent products are used to treat glaucoma, a major cause of blindness, couldn’t have asked for a much better year.
Shares in the 17-year-old company, trading at about $27 early this year, currently trade at approximately $66 for a nearly $2.4 billion market cap.
Part of the increase resulted from rising sales of iStent and new related products. In June, the San Clemente-based device maker received FDA clearance of iStent Inject Trabecular Micro-Bypass System, a new version of its core product.
Shares were most impacted in September, when Alcon, its main competitor in the sector, pulled its product off the market, citing safety issues.
To cap off the year, Glaukos announced plans last month to move to much bigger headquarters in Aliso Viejo to add jobs and put it closer to South County’s base of medical device employers.
Botox Battle
Allergan PLC’s no longer the only game in town when it comes to Botox-like products. Still, the company—whose medical aesthetics division is largely run from Irvine—showed this year that it’s willing to pay handsomely to keep its hold on the drug best known for treating frown lines and other signs of aging.
In September, it announced it would pay $195 million for Bonti Inc., a startup clinical-stage biotechnology company in Newport Beach, not far from Allergan’s local campus.
Bonti was formed about three years ago by executives who left Allergan in 2015 after its $70.5 billion sale to Parsippany, N.J.-based Actavis PLC.
Its main product, EB-001, is similar to Botox, but with key differences. It’s characterized by faster onset of effects and has a shorter duration.
Another area company with a Botox-like product in development is Newport Beach-based Evolus, which hopes its DWP-500 product will get FDA approval next year.
This year it tapped David Moatazedi—Allergan’s top Irvine executive at the time of his departure—as chief executive.
REIT Reinventions
Real estate investment trusts HCP Inc. (NYSE: HCP) and Sabra Health Care REIT Inc. (Nasdaq: SBRA), both among OC’s 10 largest public companies by market value, ended the year looking far different—and much stronger—than when they started it.
HCP made the biggest moves, restructuring operations into a private-pay-focused portfolio comprised of senior housing, medical office and life sciences. It’s now focused on growing the latter two.
HCP has a nearly $14 billion market cap, up about 11% for the year.
It likely made the most profitable real estate deal in California this year, selling an office campus in Silicon Valley to Google for $1 billion, making $700 million on the transaction.
— Sherry Hsieh
