Are you feeling a bit of whiplash? If you follow Ocugen (NASDAQ:OCGN), chances are that recent price action has you a bit dizzy. After gaining more than 50% yesterday, OCGN stock is plunging on Wednesday. Here is what you need to know about the Covid-19 vaccine play now.
To start, investors should know that OCGN stock has not always been a Covid-19 vaccine play. In fact, Ocugen actually specializes as a clinical-stage developer of therapies for blindness.
However, since a late-December announcement, Ocugen has been gaining on big vaccine hopes. That is because Indian firm Bharat Biotech chose Ocugen as its partner to develop and commercialize COVAXIN. Bharat is known for its vaccine experience in India, with more than a dozen different vaccines in its pipeline. With this in mind, the company stepped up to the challenge of producing a vaccine for Covid-19. Importantly, Bharat has already received an emergency-use authorization in India for its COVAXIN vaccine. It also is in the midst of a Phase 3 trial that involves 25,800 patients.
That news sent OCGN stock up more than 100%, and a big update sent shares climbing on Tuesday. Why? Bharat and Ocugen announced that they had signed a definitive agreement outlining their relationship. As a result, Ocugen will co-develop and commercialize COVAXIN in the United States, and it will share the profits with Bharat. That agreement works out so that Ocugen will walk away with 45% of the profits.
Beyond the moneymaking potential, two other things stand out. The first is that Ocugen will be able to receive its first batch of COVAXIN doses as soon as it receives U.S. approval. The second is that Bharat believes COVAXIN neutralizes the United Kingdom variant of Covid-19.
Why OCGN Stock Is Plunging Today
So that is all good news, right? Why then is OCGN stock plunging today?
First off, there is good reason to believe that this is just a simple pullback after the sugar high of good news. Ocugen shares rallied from an opening price of $2.08 yesterday to an intraday high of $3.73. Now, trading just above $2.70, investors might be finding new footing to move forward. Plus, the last few days have brought great volatility to the markets. In the wake of the r/WallStreetBets rally, essentially the entire stock market is looking for new footing.
The second reason is that OCGN stock, despite the good news, is still speculative. The company needs COVAXIN to clear regulatory hurdles in the United States, which is not a sure bet. Plus, as InvestorPlace contributor David Moadel highlighted, the Covid-19 vaccine uses more traditional technology. Instead of using mRNA like vaccines from Moderna (NASDAQ:MRNA) and Pfizer (NYSE:PFE), COVAXIN is an adjuvanted inactive virus.
Maybe the pullback today comes as investors more closely evaluate COVAXIN. Or, maybe it comes simply as a refresh after a wild day in the markets. Either way, OCGN stock and its vaccine news should be on your radar here.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.