We should never underestimate the power of speculation when it comes to driving stocks up suddenly, particularly in the age of meme stocks and social media investing. We’ve seen it many times, and it looks as though it may be happening today. Shares of clinical-stage biotech producer Ocugen (NASDAQ:OCGN) enjoyed a day of steady growth following a significant spike this morning.
What Happened With OCGN Stock
Shares of OCGN have spiked since markets opened today, rising to as much as $8.75 up from $7.36. The stock closed out the day higher by 15.8%.
Prior to the start of the Covid-19 pandemic, Ocugen was primarily invested in the development of treatments for blindness-inducing illnesses. When the pandemic began, its focus pivoted toward vaccine development. Though OCGN stock has not benefitted from regulatory approval like Pfizer (NYSE:PFE) or Moderna (NASDAQ:MRNA), recent reports have indicated that one of Ocugen’s partners may soon receive international approval for its Covid-19 vaccine. In turn, this could provide the long-awaited catalyst for Ocugen and its shareholders.
Why It Matters
Ocugen’s partnership is with India-based biopharmaceutical producer Bharat Biotech, the developer of Covaxin, garnered considerable media attention today after a handful of Indian publications announced Bharat expected to receive full emergency-use listing (EUL) from the World Health Organization (WHO) before the end of the month.
Although the vaccine is manufactured in India, the partnership between Bharat Biotech and Ocugen will enable the latter to help commercialize and distribute the vaccine on U.S. soil. Before it does, however, Covaxin will need to secure regulatory approvals in the U.S. With this in mind, media buzz surrounding a potential WHO approval has plenty of investors speculating as to what this means for OCGN stock.
As of now, almost everything remains uncertain.
What’s Next for OCGN Stock
Any type of emergency-use authorization would certainly be good news for Bharat, and likewise for any of its partners.
That said, it doesn’t mean that we should regard OCGN stock as having any guaranteed long-term potential for growth, even if the authorization were to pass tomorrow. The WHO approval would certainly boost investor confidence that the U.S. Food and Drug Administration would follow suit, but there is no guarantee. There are already plenty of vaccine alternatives that have been faster to gain approval from regulatory agencies.
It is also worth noting that Covaxin is not Ocugen’s drug, it is one that the company would be distributing for an international partner, essentially playing the middle man.
Developments such as these can lead to quick and constant speculation as to what the future looks like for players such as OCGN stock, but that doesn’t mean we should confuse superficial growth with long-term sustainability. Keep an eye on this story — any update from the WHO is sure to get OCGN moving again.
On the date of publication, Samuel O’Brient 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.