What happened

Thursday morning, Ocugen (OCGN 0.52%) 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.