It wasn’t too long ago that Ocugen (NASDAQ:OCGN) stock was riding high on optimism over its massive Covid-19 vaccine deal.
However, after an unfortunate turn of events, OCGN stock has tanked from its highs earlier in the year.
Ocugen hopes to cash in on the recent surge in coronavirus cases with its Covaxin vaccine, but its approval in the U.S. seems uncertain. Hence, it’s clearly too late for the party at this stage.
OCGN stock shot up more than 500% in just a few weeks after the announcement of its vaccine deal. Ocugen signed an agreement to co-commercialize the Indian variant of the Covid 19 vaccine in the U.S. developed by Bharat Biotech.
Moreover, the deal also included Canada. However, Ocugen has struggled to get the vaccine out into its target markets, which is why it’s still stuck in the mud.
Despite being snubbed by the FDA a few months ago, it still found a pathway into the North American market. However, at this point, it seems unlikely to make a breakthrough.
Ocugen is in a race against time to commercialize its Covid 19 vaccine. It is among the biotechnology companies that haven’t been able to bypass the regulatory roadblocks in advancing their respective vaccine candidates.
Investors are quickly losing their patience with OCGN stock.
What’s more frustrating is that Covaxin has shown efficacy against the delta variant. The third phase of its clinical trials has yielded incredible efficacy numbers. However, it’s all to no avail, as it’s far from making a late entry into the coronavirus vaccine market.
Unfortunately for Ocugen, the pandemic has now moved into a new variant in omicron. If Covaxin proves to be efficacious in treating the new variant, there may be some hope for revenue generation down the line.
You also have to consider the booster opportunity. However, the FDA’s approval process is remarkably stringent and usually takes a lot of time. Hence, it’s tough to say whether it could bring any revenues in the short run.
Beyond the Coronavirus Vaccine
With its Covid 19 vaccine progress in the doldrums, it’s imperative to look at other programs in its pipeline. Ocugen currently has three programs in its preliminary stages of development.
These therapies target age-related macular degeneration, genetic retinal diseases, and diabetic macular edema and retinopathy.
The company is partnering with CanSino Biologics for manufacturing purposes for these programs. Though these therapies may take several years to reach the commercialization stage, they target highly lucrative markets that could pay many dividends in the future.
Hence, Ocugen’s best bet for a source of revenue in the short run relates to its coronavirus vaccine. However, with no revenue-generating products, it is at a major risk of accumulating sizeable losses in the coming quarters.
It has already racked up a hefty third-quarter loss of $10.8 million, of which a major portion relates to research and development costs. Ocugen boasts a healthy market valuation of over $1 billion despite the losses.
Bottom Line on OCGN Stock
Ocugen was once dubbed a promising new entry in the burgeoning coronavirus vaccine market. It hasn’t released its vaccines in its target markets to date and is unlikely to do so for the foreseeable future.
In the meantime, it continues to lose money and severely compromise its liquidity positioning. Hence, OCGN stock has a tough road ahead and is a strong sell at this stage.
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On the date of publication, Muslim Farooque 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
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.