Down, but not out, may be the best way to describe the situation with Ocugen (NASDAQ:OCGN). Since early November, when OCGN stock was trading for as much as $16.28 per share, the clinical-stage biotech play briefly fell to penny stock levels (under $5 per share) a few days back, before bouncing back to around $5.50 per share.
Mostly, because investors have lost confidence in the company’s Covid-19 vaccine catalyst. For about a year, Ocugen has been a hot play among traders, thanks to the deal it made with India’s Bharat Biotech to bring its Covid-19 vaccine, Covaxin, to the U.S. and Canadian markets. News of this sent it from trading for well under $1 per share, to a double-digit stock price. Yet, as it makes little progress bringing the vaccine to market, fears that it’s “game over” for this catalyst are rising.
However, does this perception of OCGN stock does not exactly line up with the facts. It is true that getting this candidate through the approval process hasn’t exactly gone as planned. But at the same time, it still has a chance to reap some sort of benefit from this vaccine. Furthermore, there’s potential with the many non-Covid-19 candidates in its pipeline.
There’s no question it’s a risky play. As long as Covaxin’s approval is up in the air, expect volatility to continue. So, what does that mean in terms of buying it or not? Let’s dive in and find out.
The Latest on OCGN Stock
Since last writing about it earlier this month, we have seen a few developments Ocugen. Sure, it may not seem like a lot’s changed here. After all, Covaxin’s application for FDA approval is still on hold. Still, some positive news, like encouraging results from a recent study of the vaccine candidate, have helped it break out of penny stock levels once again.
Also, there’s the omicron factor. Hope that Covaxin could find success as a booster shot for this latest variant may be also sparking renewed interest in OCGN stock. However, it may be through secondary markets that this vaccine finds success stateside, and in Canada. Besides possible use as a booster, there’s also the potential that it gets approved as a Covid-19 vaccine for children.
With this, it’s premature to say Ocugen is out of the running with Covaxin. Outside of its vaccine catalyst, the company has also made some progress with the non-Covid-19 portion of its pipeline. OCU400 is one of several gene therapies the company has in development to treat rare eye-related diseases.
On Dec. 9, the company announced the FDA approved its Investigational New Drug (IND) application for OCU400. This will enable it to proceed with clinical trials for this candidate. Further developments with OCU400, as well as with the other candidates it’s working on, further demonstrates why the situation
Why a Longer-Term Approach Is Best With Ocugen
With a lot more going for it than its critics suggest, OCGN stock looks like a buy. But does that mean you should get in at $5.50 per share, only to “take the money and run” if/when it next surges in price?
Not so fast.
With its reputation as a meme stock, you may see this as simply a trading vehicle. But if you focus on this angle, you may miss out on its true long-term potential. Covaxin for now is still its main catalyst. Most of its market capitalization (around $1.1 billion) is based upon the perceived potential of this vaccine.
However, while regarded as “secondary catalysts,” there’s high potential with OCU400 and its other eye and vision-related treatments, like OCU200 and OCU410. Between the high per unit price typically charged for gene therapies, along with the demand for these types of life-changing treatments,
Having said all this, keep in mind that all three treatments remain far from reaching the approval stage. OCU400 is only now going into clinical trials. OCU200 and OCU410 are in the preclinical stage. So, even if Covaxin happens to fizzle out as a catalyst, there are a few other treatments in play that could result in long-term appreciation for shares.
The Verdict on OCGN Stock
Earning a “B” rating in Portfolio Grader, it’s premature to say it’s “game over” for Ocugen. Covaxin remains in the running to enter the U.S. and Canadian market. Even in the event the vaccine catalyst disappears, further news/progress with its gene therapy candidates could help sustain (or grow) OCGN stock’s price.
Keep in mind it works better as a long-term play than a short-term trade. But if you handle possible future volatility, you may want to buy OCGN stock, as it starts to recover from its recent big drop in price.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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