Ocugen (OCGN 2.25%) became an unlikely player in the COVID-19 vaccine race in December 2020. The small biotech, which previously focused only on pre-clinical candidates targeting eye diseases, struck a deal with Bharat Biotech, a drugmaker in India, to market the COVID-19 vaccine Covaxin in the U.S.
Investors created a buying frenzy that has caused the biotech stock to skyrocket more than 2,700% since the collaboration with Bharat was announced. They fully expected that Ocugen would be able to work with the Food and Drug Administration to establish a relatively quick path to Emergency Use Authorization (EUA) for Covaxin.
Last week, though, the agency issued revised EUA guidelines for COVID-19 vaccines. Did the FDA just slam the door on Ocugen's chances of winning authorization for Covaxin?
Much ado about nothing?
The FDA's revised guidance states that the agency can turn down reviews of any EUA requests for COVID-19 vaccines "other than those for vaccines whose developers have engaged in an ongoing manner with the Agency." There's no need to worry about this, according to Ocugen.
One day after the FDA released its new guidance, Ocugen announced plans to file its EUA submission for Covaxin in June. CEO Shankar Musunuri said, "Since we have been in discussions with the FDA since late last year, we do not believe that the FDA's recently revised guidance regarding EUAs raises any concerns about our ability to submit the EUA for Covaxin as planned."
Indeed, Ocugen has stated on several occasions that it has been talking with the FDA about a path to EUA for Covaxin. The company has already submitted to the FDA a master file with data on chemistry, manufacturing, and controls (CMC) as well as data from pre-clinical and clinical studies conducted by Bharat.
In Ocugen's press release detailing its EUA submission plans, acting medical officer Bruce Forrest seemed to dismiss the FDA's guidelines as irrelevant to Ocugen. He stated that the "FDA's guidance refers specifically to vaccines based on the spike protein." Forrest then explained that Covaxin uses an inactivated version of the whole coronavirus with an adjuvant -- a different approach than what is used by COVID-19 vaccines that have already won EUA.
More to the story
So there's nothing for investors to worry about, right? Not so fast. There's more to the story with the FDA's revised guidance.
Let's first address the question as to whether or not the FDA's revised EUA guidance even applies to Ocugen since Covaxin isn't based on the spike protein. To be sure, the agency's document includes recommendations that, the FDA stated, "are specifically tailored to pandemic COVID-19 vaccines that express the S protein."
However, these recommendations were included in an appendix about specific CMC, clinical, and pre-clinical data to include in an EUA filing. There is no reason to think that the FDA's decision to potentially decline to review EUA filings from drugmakers that it hasn't worked closely with is only aimed at those with vaccines based on the spike protein.
What about Ocugen's belief that its EUA for Covaxin will be reviewed because the company has been in discussions with the FDA since late last year? In this case, it's important to note the exact wording of the FDA's revised guidance.
The FDA specifically stated that it could decline to process EUA requests "other than those for vaccines whose developers have engaged in an ongoing manner with the Agency during the development of their manufacturing process and clinical trials program." The agency added, "These COVID-19 vaccine developers will have had the benefit of FDA feedback early and throughout the development process." [Italics added.]
While Ocugen has talked with the FDA over the last few months, neither it nor Bharat have worked closely with the agency during the development of the manufacturing process and clinical trials for Covaxin. In Ocugen's press release announcing its intention to file for EUA in June, the company said that it's "awaiting feedback" from the FDA on its master file submission. That doesn't sound like "FDA feedback early and throughout the development process."
Does this mean that the FDA has clearly slammed the door on EUA for Covaxin? Not necessarily. Note that the agency said that it "may decline" to review further EUA requests from companies that haven't worked closely with it -- and not that it will automatically decline such requests.
However, an objective and thorough reading of the FDA's revised guidance seems to point to an uphill climb for Ocugen. Even if Covaxin wins EUA, Ocugen could have a serious late-mover disadvantage in the U.S. market. The small biotech does have a chance at success with Bharat's COVID-19 vaccine, but it's definitely no slam dunk.