Shares of Ocugen (NASDAQ:OCGN) stock are up by nearly 100% in the last month. Ordinarily, that would be cause for celebration.
But when you’re talking about a stock that was at $180 per share just two summers ago and is now struggling to reach 50 cents, there’s not a lot of reason to pop champagne corks.
Let’s face it. Ocugen’s time has come and gone, and an investment in OCGN stock doesn’t make a lot of sense right now.
OCGN Stock at a Glance
Ocugen is a Pennsylvania-based biopharmaceutical company that works to develop and commercialize therapies for disorders that cause blindness. That’s a noble cause, to be sure.
It currently has three drugs in its platform, but all are in early stages of development.
OCU400 is for treatment of inherited retinal disorders. It recently received its fourth orphan drug designation from the Food & Drug Administration. This is notable because Ocugen uses what it calls a modifier gene therapy program that would allow researchers to address multiple diseases with one product.
Ocugen CEO Shankar Musunuri described it during a recent conference call with analysts:
“We continue to be really excited about our modified gene therapy platform, which has the potential to treat a variety of inherited retinal diseases with a single gene therapy product. One of the biggest advantages of our modified gene therapy platform is that it has the potential to eliminate the need for individual gene replacement and gene editing strategies, and may therefore be highly differentiated from traditional gene therapy for eye diseases.”
Other Ocugen therapies making their way through the pipeline are OCU410, which is for the treatment of dry age-related macular degeneration, and OCU200, which is for the treatment of neovascular disorders.
Unlike research for the novel coronavirus that is absolutely flying through Phase 1, 2 and 3 testing in hopes of releasing a vaccine by the end of the year, testing for Ocugen’s therapies is going to take a long, long time.
And there are no guarantees. For instance, Ocugen had great hopes for its therapy to treat chronic ocular graft versus host disease (oGVHD). That’s a complication found in anywhere from 40% to 60% of patients who have undergone allergenic haematological stem cell transplantation or bone marrow transplants.
Ocugen got FDA approval in 2017 to study the possibility using OCU300 to treat the disease and the research continued for three years. But on June 1 of this year, Ocugen announced it was ending its Phase 3 trials.
Q2 Results For OCGN Stock
Not surprisingly, Ocugen stock popped by about 50% after the FDA granted the fourth orphan drug status for OCU400, moving from about 46 cents per share to 70 cents. But those gains were short-lived, and OCGN stock is back below 50 cents per share, again.
The company reported second-quarter results that included revenue for the quarter of $42,000 and operating expenses of $3.4 million, for a total loss for the quarter of $3.6 million, or a loss of 19 cents per share.
The company reported $1.6 million in research expenses and $1.8 million in general and administrative expenses.
A year ago in the same quarter, the company lost $3.5 million, or 58 cents per share.
Cash and cash equivalents totaled $15.1 million, which is an improvement from $7.9 million at the beginning of the year.
The Bottom Line
This penny stock is speculative, at best. With no revenue to speak of and no products within years of even Phase 3 testing, it’s no wonder that OCGN stock is in danger of delisting from the Nasdaq.
Investors would be much better served putting their money into a low-cost index fund rather than take a flyer on OCGN stock. There’s no money to be made here, at least for a very, very long time.
Patrick Sanders is a freelance writer and editor in Maryland, and from 2015 to 2019 was head of the investment advice section at U.S. News & World Report. Follow him on Twitter at @1patricksanders. As of this writing, he did not hold a position in any of the aforementioned securities.
