Shares of Ocugen (OCGN) are falling sharply on Wednesday and were down by 15% as of 12:27 p.m. EST after plunging by as much as 21.2% earlier today. The company did not report any news, but after the stock skyrocketed by about 80% on Tuesday, today's losses could be due to investors taking some profits after yesterday's furious rally.
Yesterday, Ocugen announced a definitive deal to develop and commercialize Covaxin, a coronavirus vaccine candidate, with India-based Bharat Biotech. Ocugen will hold the rights to market Covaxin in the U.S. Investors reacted to the news with enthusiasm, but today is another day for Ocugen. With that said, day-to-day changes in the prices of stocks shouldn't matter too much, at least not to long-term investors. Focusing on the company's investment thesis is a much more fruitful exercise.
How do Ocugen's prospects look? The company currently has no products on the market, and if Covaxin is approved in the U.S., the revenue it will generate as a result could send its stock price soaring.
The vaccine has already earned emergency use authorization (EUA) in India, and it is also undergoing a phase 3 clinical trial in that country. Ocugen is exploring with regulatory authorities the path forward for the candidate in the U.S. These factors prompted Cantor Fitzgerald analyst Kristen Kluska to raise her price target on Ocugen stock to $4, up from $1. The analyst also kept an overweight rating on the stock. Kluska sees a big opportunity for Covaxin despite the fact that some vaccines have already been approved, and others will likely get the nod from regulators soon.
Despite the opportunity that presents itself to Ocugen in the U.S. COVID-19 vaccine market, none of the company's other candidates have even made it to a late-stage clinical trial yet. As such, this healthcare stock is a risky bet, and most investors should probably watch how things unfold from the sidelines.