Ocugen (OCGN -8.33%) recently announced encouraging results from studies that indicated the potential for COVID-19 vaccine Covaxin to be effective against coronavirus variants. In this Motley Fool Live video, recorded on May 5, 2021, Motley Fool contributors Keith Speights and Brian Orelli discuss whether or not Covaxin's success against emerging variants could help make Ocugen a big winner in the U.S. market.

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Keith Speights: There's another story as well on the COVID-19 front. Ocugen, O-C-G-N is the ticker there. The company announced this week some studies that showed that the COVID-19 vaccine Covaxin appears to be effective against three of the new coronavirus variants. Ocugen stock soared on this news. How significant is this for the biotech?

Brian Orelli: Yeah. The studies are looking at serum from people that were vaccinated with Covaxin. They took the antibodies and looked at whether they could neutralize the different variants and that was able to neutralize the Brazil variant, the UK variant, and the India double mutant variant.

It's certainly good news and it will likely translate into protection of humans, but there's no way to know unless you run a prospective study and then look and see how many people that got placebo got infected with the different variants, and then how many people who got the vaccine were infected with the variants and show that there is a difference there. Beyond that, you can't really claim that it's protection. It's just a laboratory experiment that suggests that there should be protection.

Investors, I think, should be way more focused on Ocugen's plan to gain approval than actually worrying about the protection of the variants although obviously, it's good news. They licensed this drug from Bharat Biotech in India, but we still don't know whether the FDA will accept the study that was run by Bharat Biotech to gain emergency use authorization in the US, and that's the only place where Ocugen and it's still an open question. I think it's a much bigger issue for the evaluation of Ocugen and whether the vaccine can protect against the variants.

Speights: Yeah. You and I have spoken before about some of the challenges that Ocugen could have in getting that FDA authorization. Although over the longer term, a vaccine that can be effective against variants could have a shot anyway, no pun intended, could have a shot at being a success in the U.S. market.

Orelli: Yeah. I don't think the FDA is going to accept serum laboratory experiments as proof that the vaccine protects against the variants.

Speights: Right. The threshold is much higher and more definitive studies will definitely be needed.