Today, speculative growth plays are once again in focus for investors. Indeed, biopharma stocks such as Ocugen (NASDAQ:OCGN) have taken off today on this surge in positive retail investor sentiment. Currently, OCGN stock is up more than 18% at the time of writing on today’s price action.
Accordingly, growth investors may once again flock to such momentum names in this environment. Ocugen’s relatively high short interest is a key driver of this move. Currently, approximately 20% of the company’s float is currently being sold short. Given the outsized interest highly shorted stocks are getting today, it’s unsurprising to see OCGN stock on the move.
However, there happens to be another key driver of OCGN stock. Let’s take a look at the COVAXIN news driving this stock higher today.
Expansion of COVAXIN Rights Boosting OCGN Stock
Ocugen’s COVAXIN Covid-19 vaccine is getting more hype in recent days.
Last Thursday, the company announced the intention to expand its commercialization rights to include Canada. As Bharat Biotech’s (the Indian company which initially developed the COVAXIN vaccine) U.S. arm, this expansion of rights opens up an entirely new market for Ocugen. Accordingly, investors have seen an increase of more than 25% from Wednesday’s lows, at the company’s current stock price above $10 per share.
Indeed, investors may wonder why this announcement is worth such a dramatic valuation increase for Ocugen. After all, Canada is a relatively small market, compared to the U.S.
Well, Ocugen presents a relatively simple statistical conundrum for investors. The company’s stock price reflects the risks of the binary outcome its pending emergency-use authorization application provides. On the one hand, this stock could skyrocket if an EUA is granted for COVAXIN. On the other hand, this stock presents some probability it will crater, if the FDA does not grant EUA. Bringing a new market into the mix lessens the binary dynamics of Ocugen’s North American marketing prospects.
Canada’s vaccine rollout has been much slower than that of the U.S. Currently, only approximately 6% of Canadians have been fully vaccinated. That compares with roughly 41% of Americans that have received two doses. There’s a lot of ground Canada will be looking to make up on its developed market peers. Accordingly, COVAXIN could find a nice home in such a market.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.