Please ensure Javascript is enabled for purposes of website accessibility

Why Ocugen Stock Surged Today

By Joe Tenebruso - Mar 3, 2021 at 5:03PM

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

Promising clinical trial data bodes well for the biotech's potential entry into the U.S. coronavirus vaccine market.

What happened

Shares of Ocugen (OCGN 9.95%) jumped on Wednesday after the biopharmaceutical company announced positive results from a phase 3 trial of Covaxin, a COVID-19 vaccine candidate. 

By the close of trading, Ocugen's stock price was up 9% after rising as much as 46% earlier in the day.

So what 

On Feb. 2, Ocugen struck a deal with India-based vaccine developer Bharat Biotech to commercialize Covaxin in the U.S. Under the terms of the agreement, Ocugen will receive a 45% share of the profits, with Bharat Biotech receiving the rest. 

A stock chart that rises sharply and then begins to fall.

Ocugen's stock rose sharply on Wednesday. Image source: Getty Images.

Today, Bharat Biotech said an interim analysis of its phase 3 study of Covaxin showed the vaccine to have 81% efficacy in preventing COVID-19 after the second dose. Ocugen CEO Dr. Shankar Musunuri believes the data from this trial in India could help the biotech obtain emergency use authorization (EUA) for Covaxin from the Food and Drug Administration (FDA). 

"These results, which in part suggest significant immunogenicity against the rapidly emerging UK variant, represent an additional step toward outlining the regulatory pathway for EUA and approval in the United States," Musunuri said in a press release. 

Now what

Although this data is certainly promising, the FDA may require Ocugen to conduct clinical trials in the U.S. before considering the drug for EUA. Moreover, even if Ocugen does eventually receive EUA for Covaxin, it's likely to face stiff competition from the likes of Pfizer (PFE -0.93%) and Moderna (MRNA 5.95%).

While it's not an apples-to-apples comparison, since their clinical trials were conducted at times when new coronavirus variants were less prevalent, Pfizer  and Moderna's vaccines demonstrated efficacy of more than 90% against COVID-19.

Thus, Ocugen's stock remains a relatively higher-risk investment compared to these other COVID-19 vaccine developers, albeit one with potentially more upside due to its smaller market capitalization.

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.
$2.10 (9.95%) $0.19
Pfizer Inc. Stock Quote
Pfizer Inc.
$49.92 (-0.93%) $0.47
Moderna, Inc. Stock Quote
Moderna, Inc.
$137.91 (5.95%) $7.74

*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 05/16/2022.

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.