Traders in Ocugen (NASDAQ:OCGN) at first of the 12 months have purpose to cheer. The inventory has gained greater than 260%. And those that bought their shares on the February excessive posted a acquire of 763%. The inventory has been flying excessive amid optimism a couple of deal to co-commercialize a possible coronavirus vaccine within the U.S.
Now, the query is whether or not it is too late to get in on this story — or if Ocugen’s share positive factors are solely simply starting. Let’s take a more in-depth take a look at what’s occurred to date and what lies forward.
A cope with Bharat Biotech
Ocugen is growing gene remedy for the remedy of eye ailments that trigger blindness. All of those candidates are in pre-phase 1 phases of growth. However a significant step is forward. The corporate plans on launching 4 part 1/2 trials in 2021 and 2022.
Earlier this 12 months, Ocugen confirmed its involvement in a very totally different space: coronavirus vaccine growth. The corporate signed a cope with India’s Bharat Biotech to co-develop and co-commercialize Bharat’s Covaxin within the U.S.
Bharat is testing Covaxin in a part 3 trial. And India has already approved the vaccine for emergency use. As a part of the Ocugen-Bharat settlement, Ocugen will obtain 45% of U.S. earnings.
This week, Bharat introduced the most recent batch of outcomes from its trial, which confirmed 78% efficacy within the prevention of delicate, reasonable, and extreme COVID-19. It demonstrated 100% efficacy within the prevention of extreme illness alone. The trial enrolled greater than 25,000 contributors. And the information are primarily based on the accrual of 127 symptomatic instances of COVID-19.
It is troublesome to check Bharat’s information to the early outcomes of market leaders Pfizer (NYSE:PFE) and Moderna. When Pfizer and Moderna generated preliminary experiences, variants of concern hadn’t but gained floor. And India — the place Bharat’s trial is happening — is the brand new coronavirus epicenter. The nation is even house to a brand new variant. Nevertheless, we are able to check out a newer information report from certainly one of right now’s leaders.
Early this month, Pfizer introduced trial information up to date by March 13. By this time, 927 symptomatic instances of coronavirus had accrued. The vaccine confirmed 91.3% efficacy in opposition to COVID-19. Efficacy in opposition to extreme illness was 95.3% as outlined by the U.S. Meals and Drug Administration (FDA). And in South Africa, the place the South African variant of concern is prevalent, the vaccine demonstrated 100% efficacy. To this point, Pfizer could have an edge in relation to efficacy.
Greater than the bar
That stated, the FDA set a bar at 50% efficacy for Emergency Use Authorization (EUA). Covaxin clearly surpasses that stage. Ocugen final month stated it is in discussions with the FDA to develop a regulatory pathway for Covaxin within the U.S.
We nonetheless do not know if the FDA would require a U.S.-based scientific trial or if it’ll base an EUA choice on information from the Indian trial. In both case, Ocugen is extra more likely to take part in a later spherical of vaccinations reasonably than an preliminary rollout — just because the U.S. has already ordered sufficient vaccine doses proper now from market leaders.
However Ocugen additionally will face main competitors at that time. Rivals Pfizer and Moderna will proceed to dominate the market if their efficacy and security efficiency stays excessive. And potential newcomers like Novavax could take market share. Novavax already has an order from the U.S. authorities for 110 million doses.
It will likely be troublesome for Ocugen to carve out market share until its vaccine stands out not directly. And proper now, Pfizer, Moderna, and others are testing boosters to focus on variants and aiming to broaden their audiences to kids. So, Ocugen’s choices are restricted.
Does this imply it is too late to purchase Ocugen inventory?
For essentially the most aggressive short-term traders — in all probability not. They might acquire from positions on this biotech inventory within the months to return. Every time Ocugen experiences constructive information about Covaxin, the shares soar.
I like Ocugen’s concept of having access to a close-to-market product. That approach, the corporate generates income because it continues growth of its core early-stage packages.
However I am involved about Ocugen’s means to generate vital income from Covaxin — and the shares’ means to steadily improve over time. And that is why, for long-term traders, it is truly too early to purchase Ocugen inventory. I am enthusiastic about seeing how potential Covaxin gross sales gasoline growth of its gene remedy program.
So, for now, it is best to keep watch over Ocugen — and go for different coronavirus shares.
This text represents the opinion of the author, who could disagree with the “official” suggestion place of a Motley Idiot premium advisory service. We’re motley! Questioning an investing thesis — even certainly one of our personal — helps us all suppose critically about investing and make selections that assist us turn out to be smarter, happier, and richer.