Ocugen (OCGN) stock more than tripled on Monday after reports that it sold shares to institutional investors at a massive premium. OCGN has now gained over 6,000 percent since December. The rally has many WallStreetBets Redditors debating about the stock. What’s the prediction for Ocugen stock? Is it a good COVID-19 vaccine stock to buy?
Such volatility isn't uncommon for clinical-stage pharma stocks like OCGN. After positive trial results, such stocks tend to rise. In Ocugen’s case, its stock rose after the company entered into an agreement with an Indian company to commercialize its COVID-19 vaccine in the U.S. Its product is still in the clinical stage.
Ocugen’s agreement with Bharat Biotech
Ocugen and Bharat Biotech entered an agreement to co-develop an inactivated vaccine candidate, Covaxin, for the U.S. market. OCGN stock soared after the agreement was announced on Dec. 22.
While the vaccine candidate had positive results in its Phase 1 and Phase 2 trials, its Phase 3 trials are ongoing. The vaccine is being administered despite having no Phase 3 data, which has sparked criticism. Adding to the controversy are reports of side effects and ethical violations during the trials.
As part of its agreement with Bharat Biotech, Ocugen will have the rights for Covaxin in the U.S., where it will be responsible for the vaccine's clinical development, registration, and commercialization. Ocugen is set to retain 45 percent of the profit from vaccine sales, while the remaining will be shared with Bharat Biotech.
The COVID-19 vaccine could be a big deal for OCGN
Costing the Indian government around $4 per dose, Bharat Biotech’s COVID-19 vaccine candidate is much cheaper than Moderna's and Pfizer's. That said, while Pfizer and Moderna reported over 90 percent efficacy for their COVID-19 vaccines, we don’t yet have data for Bharat Biotech's vaccine.
Ocugen has initiated discussions with the U.S. administration for emergency use authorization. If Covaxin gets the go-ahead, Ocugen's market capitalization could grow even more from its current $2.5 billion.
OCGN stock on Reddit
OCGN stock is being discussed heavily on WallStreetBets. The Redditors are optimistic about the stock, as Covaxin has much less stringent storage requirements than the Pfizer and Moderna vaccines, which need to be stored at extremely cold temperatures. This requirement is what stoked the rally in dry ice stocks in 2020—markets expected strong dry ice demand for the COVID-19 vaccine supply chain.
Is Ocugen a good COVID-19 vaccine stock to buy?
Ocugen stock looks like it could soon join Pfizer and Moderna in the COVID-19 vaccine group, as it has exclusive rights for Covaxin in the U.S. market.
That said, is Ocugen a good COVID-19 vaccine stock? The stock's price has ballooned and is now almost double the price at which Ocugen offered shares to institutional investors. OCGN stock was down in premarket trading this morning, Feb. 9, and I expect it to correct further this week. At a lower price, OCGN could be a good play on the COVID-19 vaccine story.