Three COVID-19 vaccines have already won Emergency Use Authorization (EUA) from the U.S. Food and Drug Administration. However, winning EUA could be off the table for some drugmakers with the FDA's revised process announced recently. In this Motley Fool Live video recorded on June 2, Motley Fool contributors Keith Speights and Brian Orelli talk about the biggest losers from the FDA's COVID-19 vaccine authorization changes.

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Keith Speights: One of the biggest news over the last several days was that the FDA announced some changes to its Emergency Use Authorization process for COVID-19 vaccines. These changes could make it more difficult for some companies to win EUA for their COVID-19 vaccine. Brian, I know you've looked at some of these. What are the highlights of the FDA's changes and which stocks could be the biggest losers from this new direction.

Brian Orelli: Yeah. One of the things the agency did was they reserved the right to decline to review Emergency Use Authorizations for any companies that haven't already engaged with the agency. That's probably not that big of a deal for any companies because companies tend to engage pretty early in developments in pre-clinical. But certainly, by the time we get to phase 1, you've already engaged with them.

If you're that far behind, that you're in pre-clinical, you're probably going for a post-pandemic approval anyway. I'm not sure that that change will affect that many companies in any major way. The bigger issue is probably they seem to be making the process more stringent, which makes sense. When you have an emergency, you'll overlook some things that you won't necessarily overlook if there's not an emergency. Like manufacturing, they're going to look for at product quality a lot more than they were before. Then for clinical trials, they are going to be more stringent on the data integrity than they have been in the past.

For manufacturing, it's typically a black box for investors, so users don't know that there's a manufacturing problem until it's too late, unfortunately. Like we know Novavax (NVAX -3.74%) had some manufacturing issues. But those seem to be more on the level of raw ingredients, not on quality. I am not sure that that Novavax is necessarily going to have any more problems than anybody else.

Companies manufacturing outside the U.S. might have a problem. Especially if the FDA can't go and inspect the manufacturing site because of the FDA's travel restrictions. Although one would imagine that those would start getting lifted pretty soon. Again, the nitty-gritty on details on clinical trials. It's hard for investors to see. We typically get top-line results, but we don't get how well the clinical trial was run. There's no way for us to audit that sort of thing. But again, companies running clinical trials outside the U.S. might have issues.

I'm thinking maybe Ocugen (OCGN -7.02%), there ticker is OCGN. They're trying to gain Emergency Use Authorization for a vaccine that was developed by Bharat Biotech in India, and so I'm pretty sure the clinical trials will run in India there. Ocugen might not have enough data or the right data that the FDA wants to know. But again, I'm just speculating here. There's really no way for investors to know whether there's going to be a problem until it's too late, unfortunately.

Speights: Yeah. You mentioned Ocugen. The company came out, I think the next day, I think the FDA announced their new guidance for the EUA process. The next day Ocugen came out with a press release and said, "Hey, we plan to file for EUA for Covaxin in June. We don't think the FDA's changed guidance really impacts our filing at all." They said, "Hey, we've been talking with the FDA since late 2020. We've been interacting with the agency like the agency said that it wanted."

But if you look at what the FDA's revised guidance actually stated, it said that they could choose to decline to review EUA filings of companies who had not been interacting with the agency early enough to get feedback on their manufacturing process, on their clinical trial development and design. It seems to me that maybe Ocugen wasn't quite early enough with their interaction with the agency to meet that particular criterion. [Editor's note: After this video was recorded, Ocugen announced that it would not seek EUA for Covaxin after receiving feedback from the FDA and would instead pursue a path for full FDA approval of the vaccine. Ocugen's shares fell sharply on the news.]

Orelli: Yeah. Well, certainly the clinical trials had already been run by the time they licensed the drug if I'm not mistaken.

Speights: Yeah. I can't remember the exact timing, but Covaxin won authorization in India close to around the same time that the deal between Bharat Biotech and Ocugen was announced. This is going to be interesting. I think the main thing is the FDA did include some wiggle words in there. I think it said it may decline to review.

Orelli: Right.

Speights: Well, they may decline to review any EUA, right? I think this is going to be harder for some companies that aren't as far along. But you're right, Brian, with what you said earlier that I think a lot of these companies knew they might miss the boat on EUA and they were really angling for post-pandemic approval.

Orelli: Yeah, I don't think it's still that much more work to get full approval than in an Emergency Use Authorization. You're going to have to do that anyway regardless. Eventually, you're not going to get full approval anyway. [inaudible] I'm not sure it's that big of a deal for investors or other companies that are developing COVID treatments.