What happened

Shares of Ocugen (OCGN 1.18%) 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 -1.82%) and Moderna (MRNA -1.75%).

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.