What happened 

Ocugen (NASDAQ:OCGN) shares are up 19.89% on heavy volume to $8.57 apiece as of 1:41 p.m. EDT. Today, sources told Indian news agency Asian News International that the World Health Organization will likely grant emergency use listing for Indian coronavirus vaccine Covaxin this week. 

So what 

An EUL from the WHO would give credibility for more regulatory agencies around the world to approve Covaxin. In clinical trials, the vaccine demonstrated 77.8% effectiveness against symptomatic COVID-19, including those cases caused by variant strains. India-based Bharat Biotech owns the worldwide commercialization rights to Covaxin except in the U.S. and Canada, where it licensed them to Ocugen. 

Healthcare worker prepping a syringe.

Image source: Getty Images.

Now what 

While the WHO development is good news, keep in mind that Ocugen is a research-stage biotech with no late-stage pipeline candidates, and it does not even own Covaxin. To make matters worse, the company has been seeking a Biologic License Application with the U.S. Food and Drug Administration for approval since June, which would take a very long time and also need an additional clinical trial to support the application. If that weren't enough, half of all profits from this venture would go to Bharat Biotech.

The company's market cap has soared to $1.5 billion -- even though it only plans to sell 100 million doses of Covaxin in the states. At a time when there is an abundance of approved alternatives available, it's best to be careful around Ocugen's stock. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.