- Ocugen (OCGN) recently received bad news from the the U.S. Food and Drug Administration (FDA).
- However, Ocugen has made recent progress in other ways, both financially and clinically.
- Investors with a strong tolerance for risk should add shares of Ocugen stock while they’re still inexpensive.
Pennsylvania-based biopharmaceutical company Ocugen (NASDAQ:OCGN) is primarily known for is codeveloping proposed Covid-19 vaccine Covaxin with India-based Bharat Biotech. Currently, OCGN stock is a risky asset to hold but if you’re willing to accept the volatility, it’s worth a small position.
What investors sometimes forget is that, along with Covid-19, Ocugen also seeks to treat a range of underserved diseases. These include wet age-related macular degeneration, diabetic macular edema and diabetic retinopathy.
On top of all that, Ocugen is working diligently on a gene therapy program — and let’s not assume that the company has completely failed on the Covid-19 vaccine front. All in all, you might find that Ocugen is worth your investment capital as a dark horse among biotech bets.
What’s Happening with OCGN Stock?
The resistance level to observe with OCGN stock is $15. In February, May and November of 2021, the Ocugen share price surged to $15 before declining sharply.
More recently, Ocugen shares have traded between $3 and $4. Another pop to $15 could provide four times returns — or the stock could keep sinking.
Since OCGN stock is news-sensitive (as many biotechnology stocks tend to be) and because it’s low-priced, it’s likely to remain volatile. Hence, please don’t pour your life savings into this one stock.
Here’s an example of how an undesired news item can impact a small biotech stock. Not long ago, Ocugen provided an update on its emergency use authorization (EUA) request to the FDA for Covaxin to vaccinate two-to-18-year-olds against Covid-19.
To put it bluntly, that EUA request was declined. Ocugen “intends to continue working with FDA” on this, but it’s still disappointing news for the company and its stakeholders.
As you might expect, OCGN stock got slammed after this news was announced. Does this mean it’s time for the loyal shareholders to cut and run, then?
A Setback, Not a Deal-Breaker
A piece of bad news can cause an investor to reevaluate their position on a stock. Not every development should be considered a deal-breaker, though.
The denial of the EUA request isn’t the end of the road for Ocugen, nor does it negate the progress that the company has made so far.
On the financial front, for example, Ocugen ramped up its cash, cash equivalents and restricted cash total from $24.2 million at the end of 2020, to $95.1 million at the end of 2021.
Also, Ocugen reported a seven cent net loss per share for the three months ended Dec. 31, 2021. That’s not a deep loss if the shares are roughly $3 or $4.
On the clinical side, Ocugen’s been riding in the fast lane. First of all, the FDA lifted its clinical hold on Ocugen’s investigational new drug (IND) application for Covaxin.
Second, Ocugen submitted comprehensive responses to a Notice of Deficiency from Health Canada pertaining to Ocugen’s New Drug Submission (NDS) for Covaxin.
Additionally, Ocugen initiated a Phase 1/2 clinical trial for OCU400 (a modifier gene therapy candidate for the treatment of certain cases of retinitis pigmentosa) this year.
What You Can Do Now With OCGN Stock
The point here is setbacks will happen in the realm of biotechnology. On the whole, Ocugen is moving forward with leading-edge science and maintains a solid capital position.
Therefore, it is appropriate for investors to take on a small position in OCGN stock now. Just be aware that regulators can be unpredictable, and the Ocugen share price could wobble before (hopefully) eventually moving up.
On the date of publication, David Moadel 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.