This weekend brought plenty of ominous headlines as Covid-19 cases continued to spike across the U.S. Therefore, with holiday travel and gatherings underway, vaccines are really in the spotlight. At least briefly on Monday morning, this meant that vaccine stocks were gaining. Ocugen (NASDAQ:OCGN) stock popped as much as 12% thanks to multiple factors.
What’s Happening With OCGN Stock
OCGN stock has been on a wild ride this morning, gaining attention among retail investors. Shares moved steadily upward in the first hour of trading, climbing as high as 12%. However, the stock is now in the red for the day, although there is still chance for a turnaround. This comes after a difficult month for Ocugen, with shares down 32%.
This morning’s patterns have led to some questions regarding what is driving OCGN stock. It seems there were at least two reasons investors were keen on Ocugen this morning. Firstly, Bharat Biotech announced that the Central Drugs Standard Control Organisation (CDSCO) has extended the shelf life of Covaxin to 12 months.
Secondly, today also brought the news that Bharat Biotech, which developed Covaxin, is seeking approval for a booster of its intranasal Covid-19 vaccine.
Why It Matters
As is the case with any popular stock, even smaller announcements can be enough to drive shares up. While these types of gains can be enticing to investors in the short term, they should be evaluated with caution. As we have seen this morning, momentum can change course without much warning.
The way it looks from here, that’s exactly what we’re seeing today. While the extended shelf life for Covaxin will certainly help reduce vaccine waste, it’s unlikely to prove significant unless the company can make progress gaining wide approval for the vaccine in larger markets. As InvestorPlace contributor Thomas Niel noted, OCGN stock could fade in the new year without further progress.
Additionally, it’s common for a stock like OCGN to move on the momentum caused by an announcement from one of its partners. While Bharat Biotech may be making advancements, the intranasal booster is not directly connected to its deal with Ocugen. Therefore, its American partner is not likely to benefit in the long run. It’s also unclear just how close the Indian biopharma producer is to actually obtaining the regulatory approval it seeks for the booster.
What It Means
Mornings like this can be exciting, particularly as vaccine stocks have shot up. That doesn’t mean, though, that every company is created equal. Ocugen has represented an underdog play in the vaccine race. For investors still bullish on OCGN stock, the future rests on further updates from U.S. regulators.
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.