What happened

Shares of Ocugen (OCGN -1.69%) were skyrocketing 41.4% this week as of the market close on Thursday, according to data from S&P Global Market Intelligence. There were several factors behind this huge gain.

More than 27% of the biotech's stock float was sold short as of the end of September. Ocugen has been a meme stock popular with online investors for months. Any good news, therefore, was likely to provide a major catalyst.

Ocugen received two pieces of good news this week. On Tuesday, India gave Emergency Use Authorization (EUA) to COVID-19 vaccine Covaxin for children ages two to 18. The next day, India's NDTV reported that the vaccine was likely to soon receive a green light from the World Health Organization, according to inside sources. 

Gloved hand holding a syringe with needle next to a COVID-19 vaccine vial in front of an Indian flag.

Image source: Getty Images.

So what

Covaxin was developed by Indian drugmaker Bharat Biotech. Ocugen is partnering with Bharat on commercializing the vaccine in the U.S. and Canada. 

Why would positive developments for Covaxin in India and potentially with the WHO help Ocugen? Perhaps some investors think those regulatory wins could improve the chances that the vaccine secures EUA in Canada and eventual approval in the U.S. However, Ocugen probably won't really benefit from Bharat's good news this week.

It seems that a short squeeze could be underway. But it's one that doesn't appear to be warranted.

Now what

The primary substantive catalyst to watch for with Ocugen is Health Canada's decision on EUA for Covaxin. It's uncertain how quickly the agency will make that decision, though. Ocugen also has another less important milestone on the way. The company expects to advance OCU400 into two phase 1/2a clinical studies in the U.S. later this year.