You might not have heard of Ocugen (OCGN) and Zomedica (ZOM -4.33%) a few months ago. But in recent weeks, their share price performances have prompted investors to sit up and take notice. The stocks have soared more than 450% and 860%, respectively, year to date.

There's a reason for the excitement. Both companies are moving toward the commercialization of a product -- Ocugen in the COVID-19 vaccine space and Zomedica in veterinary diagnostics. At this point, you might be wondering if these stocks represent a buy for the long-term investor -- and which of the two would be the best bet. Let's take a closer look at both of these recent stock market stars.

An investor uses his cell phone to make a trade.

Image source: Getty Images.

Ocugen

Ocugen's specialty is gene therapy for the treatment of diseases causing blindness. So you may be surprised to find out its closest-to-market candidate is a coronavirus vaccine. Ocugen recently signed a deal with Indian company Bharat Biotech to co-develop and commercialize Covaxin, Bharat's investigational vaccine, in the U.S. India has already granted Covaxin emergency authorization, and a phase 3 trial in that country is ongoing.

Now, Ocugen is talking with the U.S. Food and Drug Administration (FDA) to establish a pathway to possible Emergency Use Authorization (EUA). We don't yet know how long it might take to bring Covaxin to market in the U.S., but if the FDA authorizes the vaccine candidate, Ocugen would retain 45% of the U.S. profits and Bharat would pocket the rest.

Beyond Covaxin, Ocugen has three candidates in the pipeline for eight indications. The most advanced -- for gene mutation-associated retinal degeneration -- have completed preclinical studies. So the next step is phase 1 clinical trials.

Zomedica

The veterinary diagnostics company Zomedica has reached an exciting moment, planning to launch its first product on March 30. Zomedica aims to begin selling its Truforma assay system for the in-office detection of thyroid and adrenal problems in dogs and cats.

Zomedica will first release the Truforma instrument and three assays in a limited geographic area, and then it will add on two more assays and possibly expand its geographic reach later in the year. The company said it's being cautious, because it isn't sure how the coronavirus pandemic may affect the distribution of its products.

The company has successfully performed verification studies for its assays and validation studies are still underway. Zomedica hasn't released information regarding those, so it's unclear if a potential hiccup could put the product release date in jeopardy.

Zomedica faces competition from companies like Siemens Healthineers AG and IDEXX Laboratories. But the companion animal diagnostics market, growing at a compound annual growth rate (CAGR) of nearly 10%, is expected to reach $3 billion by 2025, according to a Markets and Markets report. So there should be room for more than one player.

Should you bet on the COVID-19 vaccine or veterinary tests?

Zomedica and Ocugen have both raised money to fund their hopeful soon-to-market programs. Zomedica recently reported gross proceeds of about $173 million in a share offering. Ocugen raised $23 million in a direct offering to institutional investors. But if we look at their overall cash positions as reported in the companies' most recent earnings reports, Zomedica's is stronger. And Ocugen's debt has been rising.

OCGN Cash and Equivalents (Quarterly) Chart

OCGN Cash and Equivalents (Quarterly) data by YCharts

As mentioned above, Zomedica is operating in a growing market. That's a plus. As for Ocugen, I'm concerned about its chances to succeed in the U.S. coronavirus vaccine market, which is pretty much owned by Moderna (MRNA -0.58%) and Pfizer (PFE 2.40%) in the near term. President Joe Biden just purchased enough vaccine doses from both companies to vaccinate nearly every American. So that means any newcomers will have to arrive with a stronger product that the government will want to order next year and into the future.

If I had to choose between Zomedica and Ocugen today, I would opt for Zomedica. I like the company's cash position and market opportunity. That said, my preferred move would be to hold off on buying both of these healthcare stocks right now. The pace of recent share gains makes me worry about room for further increases. And it also makes me worry about a sharp decline following any possible disappointment. Cautious investors are better off watching these companies from the sidelines for now.

This article represents the opinion of the writer, who may disagree with the "official" recommendation position of a Motley Fool premium advisory service. We're motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.