Ocugen Is Two Strikes in With a Third in the Books
InvestorPlace - Stock Market News, Stock Advice & Trading Tips Ocugen has tried repeatedly to bring drugs to market, first as Histogenics and later under its current name. The post...
Ocugen (NASDAQ:OCGN) stock plunged after the Food and Drug Administration (FDA) declined to give its COVID-19 vaccine candidate, Covaxin, a pediatric emergency use authorization (EUA). As a result, OCGN stock has plummeted over 30% since.
The decision was a surprise. Covaxin already has EUAs in 20 countries. It was developed in India with Bharat Biotech and is one of the most popular vaccines there.
OCGN stock is currently sitting around $2.26. That's down from $18 less than a year ago.
But this is not Ocugen's first failure.
Ocugen was originally Histogenics, which came public in 2014 to create cell-based therapies for orthopedics. It peaked at a split-adjusted price of $778 soon after the public offering but fell below $1 after a failed phase three trial.
Histogenics then bought Ocugen, which was privately held, and changed its name to Ocugen. It also engineered a reverse stock split of 60:1. On its first day of trading that stock over 70%. Ocugen, as the name implies, focused on rare eye diseases. But like Histogenics, it was unable to bring products to market, relying on research grants, cash and its stock to stay alive.
I have long compared biotech companies to oil wildcatters in 1930s Texas. Think of their drugs as wildcat oil wells, their expenses as drilling costs and their potential as gushers. By 2019 this company had two dry holes.
The Vaccine Play
The latest emergence began as Ocugen began looking outside the country for cash and potential drugs it might bring to market.
After first seeking a standard EUA, Ocugen filed to study Covaxin in the U.S., and for a pediatric EUA, based on a study done in India.
What Is Covaxin
Covaxin is called a "whole virion, inactivated vaccine." That means it contains the actual virus, just an inactive version. The genetic material has been stripped away by heat, chemicals or radiation so it can't replicate. But such vaccines can still generate an immune response.
This is the same strategy used for vaccines against seasonal flu. One big advantage is that the resulting vaccine doesn't require special storage or refrigeration, making it easier to transport and distribute. A Harris survey sponsored by Ocugen also found that 73% of those polled preferred a COVID vaccine built with this traditional method.
The latest FDA decision looks like a firm no on Ocugen's strategy. Ocugen said it lost $58 million, 30 cents per share, during 2021 and ended the year with about $95 million in cash. The stock's market cap is $469.5 million.
The Bottom Line
Ocugen has enough cash to go another year, but time is running out.
The company has tried to get to market three times. First it had cell-based orthopedics, then a treatment for rare eye diseases, now a COVID-19 vaccine. The first two were dry holes, as an old wildcatter might say. The third looks like it might be one as well.
Zacks recently dropped the hammer on Ocugen, lowering its rating to sell, although there are others who are more hopeful and the average rating remains a "hold."
Ocugen has always been a gambler's stock, with projections based entirely on hope for untried treatments. Covaxin is its third strike. Whether or not they play baseball this year, it's still three strikes and you're out.
On the date of publication, Dana Blankenhorn 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.
More From InvestorPlace
- Get in Now on Tiny $3 "Forever Battery' Stock
- It doesn't matter if you have $500 in savings or $5 million. Do this now.
- Stock Prodigy Who Found NIO at $2… Says Buy THIS
- Early Bitcoin Millionaire Reveals His Next Big Crypto Trade "On Air"
The post Ocugen Is Two Strikes in With a Third in the Books appeared first on InvestorPlace.
Entrepreneur Editors' Picks
Tory Burch Built a Brand Around Empowering Women. Now Her Foundation Is Furthering Her Mission: 'How Do We as a Company Have a Positive Impact on Humanity?'
This Founder Had to Play College Basketball in Men's Shorts and Shoes, So She Launched an Athletic Clothing Company Named After the Now 50-Year-Old Title IX Act
Is Beyoncé's 'Break My Soul' the Theme Song of the Great Resignation?
You're Probably Falling for All of Amazon Prime Day's Psychological Sales Tactics. A Marketing Professor Reveals Them — and How You Can Actually Get the Best Deal.
Comedian Paul Virzi: 'If You're Not Authentic, You Have Nothing'
Struggling to Come Up With Creative Ideas? Try Doing This.
Picking a Winning Emerging Brand Is How You Get Rich in Franchising. Here's How to Spot One.