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OCGN Stock Paytience Pays or Delta Dud?

With the rise in Omicron cases around the world, Ocugen (NASDAQ: OCGN) has been a particular favorite among investors. Clearly, the company’s ongoing efforts to develop and market the Covaxin around the world have proven successful given that WHO recently approved the vaccine for emergency use. OCGN has been building since mid October but a sharp dip on the 26th shook some shareholders. While it currently trades at a lower price, the company’s recent study confirms the efficacy of its booster dose on both Omicron and Delta cases – leading to a 36% uptick on the news.

OCGN Stock News Today

OCGN is the co-developer of the Covid-19 drug Covaxin whose EUA approval was delayed after the WHO requested additional information from Bharat Biotech International Ltd. – the drug’s developer. According to the agreement between Ocugen and Bharat Biotech, the former is allowed to market Covaxin in the U.S. and Canada while the latter has the rest of the global market. This agreement was announced in December 2020 when OCGN intended to begin manufacturing Covid-19 vaccines in the US. However, the approval process in the US and Canada has been treacherous for Ocugen despite the drug’s development in India.

OCGN started the rolling review process, or New Drug Submission for COVID-19, with Health Canada in July. This allows companies to test Covaxin and submit safety and efficacy information to Health Canada along the way. In theory this will speed up Health Canada’s review process which is beneficial for OCGN, but till then the company will be unable to market Covaxin in Canada. According to OCGN’s CEO – Shankar Musnuri – the company has “updated the FDA and Health Canada, and in the case of Health Canada, they were more open to the global experience; they are watching the WHO and they agreed to accept a full filing with the data we have.”

Although the WHO’s EUA for Covaxin is definitely a key piece of OCGN stock news, it does not mean Covaxin will be approved in Canada or the US without the standard review process.

In June, OCGN received feedback from the FDA which led it to pursue a standard Biologics License Application rather than an Emergency Use Authorization. The company has since begun the review process for Covaxin in the US and submitted its IND application to the FDA on October 27th. Although its proving to be a lengthy process, this FDA approval will facilitate OCGN’s Phase 3 clinical trial as a comparison to the results of a similar trial conducted in India.

According to the results of Bharat Biotech’s Phase 3 clinical trial, Covaxin demonstrated 77.8% efficacy against overall COVID-19 disease and 93.4% efficacy against severe COVID-19 disease. Even when tested against the Delta variant, the drug proved effective with 65.2% efficacy.

Already, 50 to 75 million doses have been supplied in India as well as other countries which has given Covaxin a promising track record so far. However, OCGN’s trial study will need time for not only approval but application as well. With that in mind, the company intends to complete its study during H1 2022.

Meanwhile, OCGN stock could give shorts a run for their money as the WHO’s announcement drove the stock into pre-market action. Of the company’s 198.76 million outstanding shares, roughly 56.3 million are held by the OCGN’s 143 institutional holders. This means about 28.32% of its shares are owned by institutions. Groups like Cambridge Investment Research Advisors, Inc. and SG Americas Securities, LLC have opened new positions on the company based on the announcement as well.

*Updated December 28th, 2021

Since the initial EUA announcement, OCGN stock has seen some general backsliding after November 3rd’s high of $18.77. But OCGN stock price today is $6.24 which has led many investors to ask – why did OCGN stock drop?

Why did OCGN stock drop?

Based on OCGN stock latest news, the company has lost momentum because the FDA will likely require the company to complete a new phase 3 trial for Covaxin despite the EUA. This means that OCGN – which will already be competing with major vaccine companies like Pfizer and Johnson & Johnson – will have a smaller share of the already cramped market. Additionally, the FDA put OCGN’s investigational new drug application for Covaxin on hold, leaving OCGN and its shareholders anxiously waiting to discover the cause of this pause.

On top of this, OCGN’s CEO sold 115,000 of his shares on December 16th for $600,300. While many mundane things could explain the CEO’s decision, from an investor’s perspective this move from the CEO is definitely less than encouraging.

However, OCGN has other things going for it after a third-party study showed a “promising immune response of up to 6 months” when using Covaxin against Covid’s variants. The treatment is currently being tested against the Omnicron variant as well and Covaxin could prove more adept than mRNA vaccines in combatting the variants spread.

In addition to this, some investors are bullish on Covaxin’s potential to become a booster shot through secondary markets. According to Musunuri, “Based on how the vaccine works, we believe it would be a great booster, because it delivers a broad immune response.” OCGN is “considering all options and working with the FDA” based on the possibility that this pandemic will last for several years which may mean “some of the efficacy is waning with the existing vaccines,” and a booster with broad protection would be “ideal”.

Others are hopeful that given how ineffective Pfizer’s vaccine has been on children, Covaxin could prove to be a potential solution. However, the stock’s $1.06 billion market cap is mostly inflated by its vaccine’s potential and if it fails to deliver on this expectation, OCGN may continue to backslide.

Still, investors may be interested in OCGN’s degenerative eye disease treatment, OCU-400, which is moving forward thanks to FDA approval of its IND. Although OCGN has several gene therapies in its pipeline, these are still in the pre-clinical phase which means OCGN is likely a long-term hold for bullish investors unless its used as a meme stock trading opportunity.

*Updated February 2nd 2022

Recently, OCGN is stirring talks among investors once again with the release of its study results. The study was done on parties who received a booster dose of candidate vaccine COVAXIN six months after getting a primary two-dose series of COVAXIN neutralized the covid-19 variants – Omicron and Delta .

The results show 100% of serum samples successfully neutralizing the Delta variant and over 90% neutralizing the Omicron variant. Taking into consideration the global impact of COVID-19 variations, Musunuri believes these results demonstrate “the value of COVAXIN as a primary and booster vaccine and show how a broad-spectrum vaccine has the potential ability to address ever-shifting public health challenges such as new variants and mutations.”

Krishna Ella, Chairman and Managing Director of Bharat Biotech, has assured investors that the company is in a “continuous state of innovation and product development for COVAXIN.” – which is evident given the positive neutralization responses from the recent study. Ella emphasized the company’s ultimate goal is to market COVAXIN as a global vaccine against COVID-19 for both adults and children.”

To achieve this, OCGN recently signed an LOI with with Liminal BioSciences, Inc (NASDAQ: LMNL) to acquire a vaccine manufacturing site in Ontario – which could potentially bring new capabilities to Ocugen’s medicine portfolio of Canadian and US companies.

This acquisition could expand OCGN‘s manufacturing as well as R&D capabilities to support its pipeline, which includes the manufacture of COVAXIN. Through this facility, the company could capitalize on the demand for vaccines and medical innovation in Canada. OCGN’s CEO is bullish that “establishing a manufacturing and R&D hub for the company’s biotechnology platform is the right investment”. In fact, the manufacturing facility serves as a stepping stone in the company’s global expansion plans. In light of this, investors are anticipating news from the company in the near future.

OCGN Stock Forecast

Clearly, OCGN has the potential to capture two very lucrative markets with Covaxin’s approval, however this will require a great deal of patience from its shareholders. The WHO’s approval will permit Covaxin’s use in 60 countries – which are participating in the COVID-19 Vaccines Global Access initiative – in addition to the 17 countries which had previously approved its use. With this in mind, time appears to be the name of the game for OCGN – which will only benefit once the FDA and Health Canada approve Covaxin. 

Media Sentiment

Investors like @stockplaymaker1 are holding OCGN for the next few months anticipating an uptick after the study’s positive results.

OCGN Stock: Technical Analysis

OCGN Stock Chart

Currently trading at $3.85, OCGN stock shows a primary support at 3.44 and a secondary support near 2.96. The stock has a primary resistance at 4.2 and a secondary resistance at 4.38. The RSI is at 68 indicating the stock is extremely overbought. Similarly, accumulation is trending upwards and the MACD is bullish to the upside indicating investors’ confidence in OCGN is restored.

OCGN Stock Chart

These indicators highlight investors’ bullish sentiment. With this in mind, OCGN could be well-positioned to return to its higher PPS with progress from the FDA or Health Canada regarding Covaxin’s approval. Considering that biotech companies like Ocugen move primarily on binary catalysts like commercialization and approval for clinical trials, its not surprising that OCGN saw a dip after the FDA put its IND on hold. But this study seems to have put some of the wind back in Covaxin’s sails.

Should you Buy?

OCGN stock appears to be a case of “paytience” for most long term investors. Investors willing to wait for the FDA and Health Canada’s approval could see a major return on their investment with analysts projecting $408 million in revenue for OCGN by 2023. Even if the Covid vaccine catalyst fizzles, Ocugen has begin clinical trials for one of its gene therapies and has two more projects at the preclinical stage.

Whether, Covaxin becomes a booster shot thanks to its wide ranging applicability remains to be seen. But Ocugen’s $1.06 billion market cap may not be justified if it fails to deliver on these catalysts. In that case, OCGN could continue to backslide to where it traded before the Bharat Biotech agreement near a $1 PPS.

If you have questions about OCGN stock and where it could be heading next feel free to reach out to us in our free alerts room!


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