Please ensure Javascript is enabled for purposes of website accessibility

Why Ocugen Plummeted by Nearly 30% Today

By Eric Volkman – Jun 10, 2021 at 6:32PM

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

The company won't be getting emergency use authorization for Covaxin after all.

What happened

Thursday morning, Ocugen (OCGN -1.11%) announced that it is no longer pursuing emergency use authorization (EUA) from the FDA for the Covaxin coronavirus vaccine candidate; instead it will seek more formal approval for the jab. This didn't sit well at all with investors, who traded the stock down by more than 28%.

So what

Ocugen is following a recommendation from the FDA, which in feedback to Covaxin data urged the biotech to file for a biologics license application (BLA) instead of the EUA. The regulator also requested additional data and information on the vaccine candidate.

Child wincing as he receives a vaccination shot.

Image source: Getty Images.

In its press release on the matter, Ocugen admitted that data from a new clinical trial will likely be necessary to support a BLA submittal. 

One major difference between an EUA and full FDA approval is speed; in an emergency like the coronavirus pandemic, the regulator can quickly issue the former to a vaccine or drug given sufficient evidence of efficacy. The approval process is longer and more detailed.

Nevertheless, Ocugen signaled its determination to bring Covaxin to the American market eventually, with its CEO and co-founder Shankar Musunuri describing it as "a critical tool to include in our national arsenal."

Now what

But Musunuri is saying that at a time when both coronavirus cases and deaths are in sharp decline throughout the U.S. So there was an understandable "missing the boat" feeling among investors Thursday, particularly considering that the vaccine tested exceedingly well in a phase 3 clinical trial earlier this year.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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.
$1.78 (-1.11%) $0.02

*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 analyst team.

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 10/01/2022.

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.