Whenever events occur that benefit vaccine makers, Ocugen (NASDAQ:OCGN) and the owners of OCGN stock should not take comfort from these occurrences, and no one should buy Ocugen based on such news.
That’s because, in all likelihood, Ocugen will not generate any profits from its partnership with Bharat Biotech, an India-based vaccine maker.
Bharat has developed Covaxin, a vaccine for the novel coronavirus. Under the deal that Bharat and Ocugen signed, the latter company will receive 45% of any profits that Covaxin generates in the U.S. and Canada.
Still No Movement on a U.S. Trial or Data
In my July 22 column on OCGN stock, I quoted FDAnews, a news outlet that specializes in covering the agency, as reporting that, “the {FDA} told Ocugen it needs to see results from an additional U.S. trial of the two-dose vaccine and said it will assess the {company’s application for full approval on Covaxin} based on data from that study.”
In an Aug. 10 e-mail to InvestorPlace, Beth Belton, FDAnews’ editorial director, wrote, “Our understanding is that the FDA would require U.S. data for approval of the vaccine. So we’re not implying that the FDA was requiring an ‘additional’ trial but that there would have to be U.S. data submitted.”
During Ocugen’s second-quarter earnings call on Aug. 6, Ocugen CEO Shankar Musunuri said, “The data requirements for Covaxin are still being evaluated. While we anticipate a need for an additional clinical trial, we are confident in our ability to navigate and address the FDA’s process and requirements.”
During the question-and-answer portion of the call, however, Musunuri appeared less certain about a potential FDA requirement for additional data on Covaxin. Asked by an analyst about “the trigger point” for a submission and whether the company has most of the data, Musunuri said, ” We are still discussing the regulatory path for the BLA, what is required, if any additional studies.”
Late last month, an Ocugen representative declined to answer a question from InvestorPlace about whether the FDA was requiring a new trial and what steps, if any, the company was taking to launch such a trial.
Based on all of the information, along with my research and experience, I’m fairly sure that the FDA is requiring, at minimum, additional data from American patients on Covaxin as a condition for approving the shot. But because I’ve never heard of the agency using data gathered outside the framework of a trial as a basis for approving a drug and since Musunuri, actually said this month that, “we anticipate a need for an additional clinical trial.” I believe that the agency is requiring or will require an additional, U.S.-based clinical trial before approving Covaxin.
Yet more than two months after the FDA rejected Ocugen’s application for an emergency use authorization for Covaxin, the company shows no signs of initiating such a trial. (And as I pointed out in my last column on OCGN stock, the process of initiating and conducting a trial and then waiting for FDA approval of it is likely to take years).
The fact that Ocugen, seemingly, has failed to even begin the process of launching a trial of Covaxin or gathering additional data on the shot raises the possibility that it has, in reality, given up on getting the FDA to approve Covaxin.
More Doubts on the Need for Another Vaccine
According to the CDC, of the more than 166 million Americans who had been fully vaccinated as of Aug. 9, 8,054 had either been hospitalized or died. Of those hospitalizations and deaths, over 2,000 were either asymptomatic or not related to Covid-19, the agency reported.
But based on the 8,054 total, 0.005% or about 1 in 20,000 people who have received all doses of a vaccine have either been hospitalized or died. And about 10 times more Americans people died during the 2017-2018 flu season than the number of fully vaccinated Americans who have been hospitalized or died from Covid-19.
Meanwhile, Pfizer (NYSE:PFE) recently stated that, “People who received a third dose of the Pfizer-BioNTech coronavirus vaccine elicited a stronger immune response to the delta variant compared to those who only completed the two-dose regimen,” the Washington Examiner reported last month.
The Bottom Line on OCGN Stock
Given the FDA’s rejection of Ocugen’s EUA application for Covaxin, Ocugen’s apparent failure to prepare for another trial of the vaccine, and the very low death and hospitalization rates for fully vaccinated Americans, I continue to see virtually no chance of Covaxin ever getting approved by the FDA. And without FDA approval, I highly doubt whether Canada will approve the jab.
Meanwhile, Ocugen’s other drugs are multiple years away from generating Phase 3 results. So, while OCGN stock can continue to get short-term boosts from positive news for other companies with ties to vaccines for the coronavirus, including Bharat, I’m convinced that its shares will crash over the longer term.
Consequently, I continue to see the shares as an excellent target for short sellers.
On the date of publication, Larry Ramer held a short position in OCGN.
Larry has conducted research and written articles on U.S. stocks for 14 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Among his highly successful contrarian picks have been solar stocks, Roku, and Snap. You can reach him on StockTwits at @larryramer. Larry began writing columns for InvestorPlace in 2015.
