Shares of Ocugen (NASDAQ:OCGN) are in the red this morning by about 5% following a negative development from the U.S. Food and Health Administration (FDA). Shares of OCGN stock have had a volatile year. Indeed, the stock has a 52-week high of $17.65 and a 52-week low of $2.16. That represents a staggering range of 717%. Ocugen is a biopharmaceutical company that is developing Covaxin, a vaccine candidate for coronavirus. With that in mind, let’s jump into the details of why Ocugen is down today.
Why Is OCGN Stock Down Today?
The FDA announced that it has placed a clinical hold on the Phase 2/3 study of Covaxin. Ocugen stated the reason for the hold was the “result of its decision to temporarily pause dosing participants in the study while it evaluates World Health Organization (WHO) statements following their inspection of Bharat Biotech International Ltd.’s manufacturing facility.” Bharat Biotech is responsible for developing Covaxin and is headquartered in Hyderabad, India.
On April 2, the WHO suspended the supply of Covaxin “through UN procurement agencies” and recommended that other countries using the vaccine should follow in its footsteps. The WHO also stated that the supply of Covaxin “will be interrupted for the foreseeable future.”
The WHO invoked the suspension after it inspected Bharat’s manufacturing facility and discovered several problems. These problems included the need for general process and facility upgrades, as well as “deficiencies in good manufacturing practices (GMP).”
Bharat has stated that it will address these problems and create an action plan to submit to the Drugs Controller General of India (DCGI) and WHO. In the meantime, the company has suspended production of Covaxin for export.
What’s Next For Ocugen?
On the bright side, the suspension has nothing to do with Covaxin itself. With the data provided to WHO, the agency has stated that “the vaccine is effective and no safety concerns exist.” If the WHO and DCGI approve Ocugen’s action plan, then the company should be able to continue manufacturing Covaxin.
On top of that, the FDA declined to issue Ocugen an emergency use authorization (EUA) in March. However, Ocugen will continue to work with the FDA to “evaluate the regulatory pathway for the pediatric use of Covaxin.”
On the date of publication, Eddie Pan did not hold (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.