Please ensure Javascript is enabled for purposes of website accessibility

Why Ocugen Stock Is Dropping Today

By Prosper Junior Bakiny - Feb 3, 2021 at 12:38PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company's stock is losing altitude despite bullish sentiments from a Wall Street analyst.

What happened?

Shares of Ocugen (OCGN 8.74%) 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.

So what

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.

Doctor holding glass vial labeled COVID-19 vaccine.

Image source: Getty Images.

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.

Now what

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Ocugen, Inc. Stock Quote
Ocugen, Inc.
$2.24 (8.74%) $0.18

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/20/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.