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Quick summary: Ocugen has historically been known as an eye pharmaceutical company, but shocked the investment world with an agreement to distribute an Indian-made COVID vaccine. Questions remain on if this former penny stock has the capability to execute a wide-scale vaccine rollout, or even if the vaccine will ultimately be authorized in the US or Canada. Its share price remains elevated on these hopes.
Ocugen: Key Metrics & Data
- Stock ticker: OCGN
- Location: Malvern, PA, USA
- Sector: Biotech, Pharmaceutical
- Exchange: NASDAQ
- Market Cap: 1.33B (small-cap)
- CEO: Shankar Musunuri (Since Sept 2019)
- Investor relations link: Investor Relations | Ocugen, Inc.
- Robinhood categories: 100 Most Popular, Pennsylvania, Pharma
What is Ocugen?
From Ocugen’s corporate profile on their investor relations page:
Ocugen, Inc. is a biopharmaceutical company focused on discovering, developing and commercializing transformative therapies to treat rare and underserved eye diseases. Our breakthrough modifier gene therapy platform has the potential to treat multiple retinal diseases with one drug – “one to many” and our novel biologic product candidate aims to offer better therapy to patients with underserved diseases such as wet age-related macular degeneration, diabetic macular edema and diabetic retinopathy.
While the description above is a fair representation of how the company was viewed pre-2021, it is is safe to say that Ocugen has become one of the poster children for COVID-19 “story” stocks. The company has pivoted from its unsuccessful eye disease therapy line to become a potential distributor of an Indian-made COVID vaccine, including distribution rights in the USA.
Ocugen’s future as a viable company (and profitable stock) now rely on its ability to execute as a vaccine distributor in the US, assuming that the Bharat vaccine is approved for use in the United States. If not, Ocugen will have to look to other markets or pivot in some other direction.
Ocugen Stock Overview
Since announcing its agreement with Bharat Pharmaceuticals, Ocugen soared from penny stock levels (trading as low as $0.25 per as recently as late 2020) to ascending above $18 at the height of its vaccine news euphoria. Since then, the stock has been extremely volatile and now trades between $6 – 7 at the time of writing. Even at current levels and losing more than half its value from its high, holders of the stock are still up more than 1,200% from a year ago.
However, on a longer time horizon, Ocugen investors have fared very, very badly. The stock at one point traded at an incredible $705 per share and the full chart of the stock on Yahoo Finance shows a total investment loss of more than 99% for those who have held the stock since inception. OCGN had notable collapses from 2015 – 2016 and then again in late 2018, when the stock went from flirting with $200 per share all the way down to the 20s, en route to being a penny stock by 2019 and throughout most of 2020 (see Barchart stock chart for OCGN below).
Ocugen Stock: Strategy & Potential Catalysts
As mentioned above, Ocugen’s stock is a bet that the Bharat vaccine (Covaxin) produced in India will receive Emergency Use Authorization either as a full vaccine or booster shot for use in the United States.
The last part is critical, as Ocugen’s distribution agreement with Bharat is only relevant to US distribution, as far as has been announced, although the company is also forging ahead with seeking approval in Canada.
For traders and speculative investors, understanding the likelihood of whether this EUA is likely to lead to a positive announcement is key to being involved with this stock. If the EUA is granted, it’s not hard to see that this would at least be a temporary and potentially huge boost for the stock.
For longer-term investors, the EUA is a just a starting point. Ocugen, a company with less than 20 employees, still has to prove it is capable of standing up a national vaccine distribution strategy and maintain profit margins while doing so. Very little that we can see in the company’s history suggests it has the background to do so, although with a surging stock price and recent share offerings raising significant sums of capital, the company at least now has some of the resources to potentially make a go of it.
On the positive side, Ocugen has recently announced a manufacturing partnership with a privately held pharmaceutical manufacturing company to distribute the vaccine (if approved) in both the US and Canada. Additionally, there continues to be good news about the Covaxin vaccine, including some characteristics that may make it more appealing to “vaccine holdouts” in the US (see analyst comment below). So most of the elements of the “story” for OCGN in its current incarnation remain in place.
It’s important to note that while OCGN is well off its highs from earlier in the year and positive catalysts such as the EUA could potentially move the stock higher, if the vaccine authorization and execution of the distribution strategy fails, there is little in the way to prevent Ocugen from rejoining the ranks of penny stocks, which would be yet another extremely painful decline for investors who bought the stock at current levels.
Below are some other opinions of the stock.
OCGN Stock Analysis
Please note: The below is a collection of recent various published opinions on OCGN stock. Many are not from professional stock analysts. They are designed only to give you a lay of the land on both bullish and bearish opinion of the stock and form the basis to start your own research. Things change very quickly in the stock market and many of the opinions below may be outdated or otherwise not suitable for making an investment decision by the time you read them here.
- “Some may still have hopes its secondary catalyst, getting EUA in Canada, saves the day here. Yet that too looks like a dim prospect. So, with the story here unchanged, even as Covid-19 goes from recovery mode back to panic mode, what’s the best play? Avoid it if you don’t own it. If you own it? Throw in the towel, as it’s more likely than not set to continue heading lower.” –Investorplace, August 2021
- “The stock has cooled down somewhat since it became apparent Covaxin’s path to market won’t be as straight- forward as hoped for, but Noble analyst Robert LeBoyer still senses big opportunity, noting Covaxin has ‘important features that could make it part of the effort against COVID-19…We see its manufacture through the older, established whole-killed virus technology, rather than through the newer methods using messenger RNA, as a point that may overcome hesitation to be vaccinated,’ the 5-star analyst said. ‘The combination of efficacy, safety, and ease of distribution should make it a viable competitor for continued vaccinations and long-term protection.’” –TIPRANKS, July 2021
- “A failed roll-out of testing kits for one county does not bode well for ambitions to potentially roll out millions of vaccines for an entire country.” –Seeking Alpha, July 2021
- “OCGN has a very high current ratio of 12.0 and a debt-to-equity ratio of 0.1. The company has had negative recent earnings and estimates for more negative earnings until 2022…Based on its price-to-book ratio of 29.4, the stock looks overvalued compared to the industry average.” –Entrepreneur, July 2021
- “This has all the markings of a wildly speculative stock and you need to participate in that at your own risk with a healthy dose of realism. It seems implausible that the company could sell 100 million doses of Covaxin in the U.S unless it was used specifically as a booster vs. variants or for a wide spectrum of young people. More likely Ocugen will somehow be involved in the vaccination of other countries with Covaxin.” –The Last Futurist, April 2021
- “First of all, this tiny ophthalmic company has no real distribution channels for the drug in the U.S. and isn’t big enough to dedicate staff to run a national distribution operation.” –InvestorPlace, April 2021
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Ocugen remains a popular stock with Robinhood investors, currently grouped in Robinhood’s “100 Most Popular” collection on the app. After reading this article, it is hopefully clear that this stock is a highly volatile and high risk play, especially for those investors buying into its story now after the stock has gained more than 1200% in the past year.
We will endeavor to keep this article updated as critical news on OCGN stock becomes available but you should rely on apps and news sources such as Yahoo Finance, Morningstar and Barchart for the most current news and analysis on the stock.