COVAXIN vile and Ocugen and Jubilant HollisterStier logos
Source: Ocugen Twitter

Ocugen Partners With Jubilant HollisterStier, Stock Outlook Uncertain

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Jun. 16 2021, Published 10:19 a.m. ET

On June 15, Ocugen announced that it's partnering with Jubilant HollisterStier to manufacture COVAXIN in the U.S. Ocugen stock jumped by 2 percent on this announcement. What is Ocugen's stock outlook after its partnership with Jubilant HollisterStier?

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Ocugen is a clinical-stage biopharmaceutical company that focuses on discovering, developing, and commercializing therapies to treat diseases that cause blindness. Lately, the company has been getting global attention for its joint development of the COVID-19 vaccine COVAXIN with its Indian partner, Bharat Biotech. According to the agreement between Ocugen and Bharat Biotech, Ocugen will keep 45 percent of COVAXIN profits in the U.S. and Bharat will keep the rest. 

Ocugen Jubilant HollisterStier news

Ocugen has selected Jubilant HollisterStier as its manufacturing partner for its COVID-19 vaccine candidate COVAXIN for the U.S. and Canadian markets. According to Ocugen's Senior Vice President, Manufacturing and Supply Chain, J.P. Gabriel, “Securing US-based manufacturing capability is a critical step as we prepare to submit our regulatory submissions to the FDA and Health Canada.”

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ocugen covaxin partnership
Source: Ocugen Twitter

The announcement from Ocugen was met with enthusiasm from investors. The stock went up by more than 19 percent on June 15 before closing the day 2 percent higher. However, the increase didn't do much to recoup the losses the stock has suffered over the last few days.

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FDA recommends Ocugen change EUA to BLA

Ocugen planned to take EUA (emergency use authorization) for COVAXIN from the FDA. However, as the company was finalizing its EUA application, the FDA recommended on June 10 that the company change the EUA to a BLA (Biologics License Applications) submission. BLA is a much more time-consuming process than a EUA. The FDA can take 6–10 months to approve a BLA.

The FDA’s decision might have to do with a recent study by endocrinologist Dr. Awadhesh Kumar Singh. The study showed that Ocugen-Bharat's COVAXIN didn't stack up against a competing vaccine developed by the Serums Institute of India’s Covishield. Bharat Biotech questions the study’s validity since it isn't peer-reviewed. The company said that the study is designed to reflect an ad hoc analysis.

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The FDA’s recommendation caused Ocugen stock to crash by nearly 28 percent on June 10. Investors hoped that the company would get EUA from the FDA. A lot of that optimism was already priced into the stock. The conversion of application to BLA has increased the timeline and the uncertainties. Even if Ocugen gets approval for COVAXIN down the line, say in a year or so from now, it's difficult to say how will the market dynamics be for COVID-19 vaccines.

ocugen covaxin
Source: Bharat Biotech Facebook
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Is Ocugen stock a good buy now?

There are still concerns about the efficacy of COVAXIN compared to other vaccines. While the final Phase III data still isn't available, COVAXIN has an efficacy rate of 78 percent overall, according to the second interim results of Bharat Biotech's Phase III clinical trial. The efficacy rates for Moderna and Pfizer are much higher, both of which have been already approved in the U.S.

Even after the recent loss, Ocugen stock has gained 242 percent YTD. Its stock price has priced in a lot of optimism from COVAXIN’s commercial success even though the Phase III final data still isn't available. The FDA’s recommendation has shown how uncertain the approval process can be. After the stock’s recent loss, it's more accurately pricing in its risk-reward dynamics. However, given the uncertainties, it still isn't wise to buy the stock at this stage.

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