There’s a tug-of-war going on today with Ocugen (NASDAQ:OCGN) stock between the buyer and sellers. The sellers have taken the lead, however, despite apparently positive news. Reportedly, the Food and Drug Administration (FDA) approved Ocugen’s “proposed control and overall design for the Phase 3 study” of a regenerative cell therapy.
The product is called NeoCart, and it’s intended to repair “full-thickness lesions of the knee cartilage in adults.” Ocugen’s Phase 3 study will involve test subjects with articular cartilage defects.
This isn’t Ocugen’s first regulatory success with NeoCart. The company already earned a regenerative medicine advanced therapy (RMAT) designation for NeoCart from the FDA. Now, Ocugen can move on to the next phase of advancement for this product.
All of this should prompt a huge rally in the Ocugen share price, right? Don’t make any hasty assumptions, as Wall Street often does the complete opposite of what you might expect.
What’s Happening With OCGN Stock?
OCGN stock started off at $1.55 this morning but quickly headed lower, dropping to $1.38 by 11:00 a.m. With the Ocugen share price nearly 5% in the red, it was evident that the sellers were fully in control.
This might seem irrational, given the apparently positive news about the FDA approving Ocugen’s Phase 3 study of NeoCart. Plus, there’s more to the story. Ocugen is building what it calls a “Good Manufacturing Practice cell therapy manufacturing facility” for NeoCart.
In addition, there may be another regulatory milestone for NeoCart. Ocugen intends to file an Investigational New Drug (IND) amendment to initiate a Phase 3 clinical trial for NeoCart in late 2023 or early 2024.
Getting IND approval from the FDA could really kick-start NeoCart’s path to commercialization. Building a production facility should also help get the product to market quickly — if it’s fully approved, that is.
And, that’s the final piece of the puzzle that’s not been established yet. There’s no guarantee that NeoCart will receive full approval from regulators. So, for today at least, it looks like the prevailing sentiment surrounding OCGN stock is anxiety as Ocugen still has hurdles to clear when it comes to NeoCart.
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.