Ocugen Stock Has a Big Pullback Coming, and That Will Be Your Chance

When markets realized that Ocugen (NASDAQ:OCGN) has a vaccine that is effective against Covid-19 in India, shares surged. OCGN stock joins a list of hopeful biotechnology firms seeking to supply Covid-19 vaccines worldwide.

A hand holding a Covid-19 vaccine vial and a needle.
Source: Shutterstock

For now, speculation is lifting Ocugen’s prospects. The company still needs durable laboratory data to support its claims.

More importantly, India, which is facing devastating infection rates from the double-mutant variant, needs Ocugen’s home-grown vaccine to work.

OCGN Stock Breaks Out

Ocugen shares gained one-third in value last week when markets found out the vaccine is effective against the new mutant strain.

This development contradicts the lack of data presented in January. At the time, India granted Bharat Biotech emergency approval for COVAXIN.

It faced questions from industry experts and opposition lawmakers over the lack of efficacy data.

That was in January.

On April 28, Bharat Biotech researchers and ICMR carried out a study.

“The study found that the neutralising capacity against the double mutant (B.1.617) variant was found to be good in both groups — people who have received the vaccine and those who have recovered from COVID-19,” Dr. Samiran Panda, a senior scientist at ICMR, said.

The results align with an earlier study that Covaxin neutralizes the B.1.1.7 variant, a strain first found in the United Kingdom.

OCGN stock is a compelling opportunity even at current levels. It did not lose support like Inovio Pharmaceuticals (NASDAQ:INO) did recently.

Its market capitalization is comparable to that of Sorrento Therapeutics (NASDAQ:SRNE). The difference is that SRNE stock did not move by much despite announcing positive results on April 20.

The company said that all 10 patients were discharged from the hospital within three days after their last COVI-MSC infusion.

Ocugen is late in running up like the other Covid-19 vaccine and treatment stocks did before that. Investors need to consider OCGN stock may lose its buying momentum in the next few trading sessions.

Related Investments

Moderna (NASDAQ:MRNA) traded at close to all-time highs recently. Its market capitalization is dozens of times bigger than that of OCGN shares.

Similarly, BioNTech (NASDAQ:BNTX) soared throughout the last month. If the production of Ocugen’s vaccine ramps up because of its efficacy against the double-mutant strain in India, its stock could rise, too.

On April 28, Ocugen closed a $100 million direct offering. The company will use the net proceeds for general corporate purposes, capital expenditures, working capital, and other general expenses.

The timing of the offering benefits both shareholders and the company. Ocugen will have enough funds to commercialize its vaccine.

Fair Value for OCGN Stock

Ocugen scores poorly on several metrics, including value.
Click to Enlarge

On Wall Street, the average price target is $12.50 (per Tipranks).

The limited upside suggests that investors should hold off aggressively buying shares.

Similarly, the stock scores poorly on value.

Until the biotech firm sells millions of vaccine doses, the stock’s quality and growth score of below 30 (not shown in the chart) may deter investors.

Moderna and BioNTech are the leading mRNA vaccine suppliers to the world. Moderna is increasing the global supply for the vaccine to up to 3 billion doses in 2022.

So, the longer Ocugen takes to commercialize its product, the smaller its addressable market.

Both mRNA vaccine suppliers may attack the variant in India by supplying it to the region.

Ocugen sought to sell 100 million doses in the U.S. back in March. The optics do not look good if it has an opportunity to concentrate on the Indian market instead.

Besides, Moderna and BioNTech are the dominant vaccine suppliers in the U.S.

Your Takeaway

Ocugen shares risk pulling back at an unknown time. The short float of 19% could have led to the stock’s break-out from below $6.00.

Bullish investors may want to wait for a few weeks to let the dust settle first. That would lower the risk of buying the stock on a spike only to see shares fade steadily to the downside.

Disclosure: On the date of publication, Chris Lau did not have (either directly or indirectly) any positions in the securities mentioned in this article.


Article printed from InvestorPlace Media, https://investorplace.com/2021/05/ocugen-stock-has-a-big-pullback-coming-and-that-will-be-your-chance/.

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