Ocugen (OCGN -6.58%) has been a huge winner so far this year. However, the stock is down more than 40% from its recent high. In this Motley Fool Live video recorded on Nov. 3, 2021, Motley Fool contributors Keith Speights and Brian Orelli discuss what needs to happen for Ocugen stock to be a screaming buy.

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Keith Speights: Brian, there's one more COVID-19 story I wanted to bring up. A World Health Organization technical advisory group is meeting today to determine whether or not to recommend emergency use listing for COVID-19 Covaxin.

I think I just saw that the group did give a positive recommendation. I thought I saw that fly across the feed not long ago. We've discussed in the past that why this EUL really doesn't matter all that much for Ocugen. And rather than rehash all of that, here's another question for you: What would need to happen in your view for Ocugen to be the screaming buy that some investors apparently think it already is?

Brian Orelli: Canadian Emergency Use Authorization would certainly make Ocugen more valuable and the company has rights in Canada and the US. It's already submitted an application in Canada, but we haven't got a lot of update since the 2nd quarter earnings call when management said that they were ready to answer questions from regulators at Health Canada, which besides that, we don't have any other updates. We don't know exactly what the regulators are thinking of the application.

Then the other big thing is obviously understanding the requirements for what's needed for approval by the FDA. Ocugen has submitted an IND, which is Investigational New Drug application. You have to do that before you start a clinical trial and so they want to run a Phase 3 bridging study.

Unvaccinated people would also look at people who were due for a booster because they had an mRNA vaccine in six months or more ago. Then they just want to look at immune response, so it'd be antibody levels and then compare that to the original study in India and use that data that showed that it protected people from COVID-19. If you're getting equal levels of antibodies in people in India that were in the study and people in the US in this bridging study, then presumably, the FDA will hopefully say, that shows that this should work in the US.

The big question is, will the FDA accept it? It wasn't really clear to me from Ocugen's press release that it said that it is submitted the IND, that the FDA had actually signed off on this bridging study. I feel like we're still a little bit in wait-and-see mode. But if that's all the FDA needs, this should be a fairly quick clinical trial. I think they should go finish it up in the early part of next year and then apply.

The only other issue is that they're going to have to submit a complete BLA, biological license application. That would be a standard thing. They wouldn't be applying for emergency use authorization and so that means that they would have to wait either six months, or eight months and 12 months, depending on whether they get priority review or not and so that would push it into potentially launching in 2023.

Speights: Obviously, even if they get that full FDA approval, the big question is, would the US buy the vaccine?

Orelli: At that point, the US may not be buying any vaccine.

Speights: That's true.

Orelli: At some point, we're going to switch to the way flu vaccines are sold and they just get sold directly probably to a middleman and then to pharmacies and then the pharmacies bill your insurance company and that's the way it will go down from here. I think by the time we hit 2023, I think that's where we're going to be at. I don't think they have to necessarily worry about getting government contracts.

Speights: That will be interesting to see. I think either EU, for example, have made some deals with other companies that go into 2023. The US has not so far to my knowledge. That'll be an interesting thing to see, will the US government continue buying vaccines into 2023 or wash its hands of it.

We'll see, and we'll see how this impacts Ocugen. By the way, I was looking to see, Ocugen stock actually jumped in pre-market trading, but as of right now, it's down double digits, down around 11 percent or so.

Orelli: I think it was up quite a bit yesterday, buy the rumor, sell the news, I guess.

Speights: That's exactly what it seems we're seeing here: buy the rumor, sell the news.