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Why Ocugen Shot 8% Higher on Friday

By Eric Volkman – Nov 19, 2021 at 6:17PM

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There was some highly encouraging news about coronavirus vaccines, but not the one the company is associated with.

What happened

Ocugen (OCGN -4.76%), one of the more talked-about meme stocks in the biotech sector, closed out this week on a high note. The company's shares flew more than 6% higher, on the back of generally positive developments for coronavirus vaccines, and perhaps some fresh news about employee incentives.

So what

On Friday, the Food and Drug Administration (FDA) granted authorization for booster shots of the coronavirus vaccines from both Moderna and the partnership of pharmaceutical sector mainstay Pfizer and BioNTech to all adult Americans. It had previously turned on the green light for a booster of Johnson & Johnson's one-shot jab.

Stethoscope atop $100 bills and pennies.

Image source: Getty Images.

Note that Ocugen is not on that list. The company holds the commercial rights to a vaccine called Covaxin, which has been developed by India-based company Bharat Biotech. While Covaxin has done well in late-stage clinical testing -- particularly against the delta variant -- it is not yet authorized or approved for use by the FDA.

Regardless, many in the meme stock crowd are excited about Covaxin's prospects, considering it to be somewhat of a dark horse contender in the coronavirus vaccine space. 

Also on Friday, Ocugen announced that the compensation committee of its board of directors approved the company's granting of stock options. In the company's words, this covers "an aggregate of 93,000 shares of its common stock and restricted stock units (RSUs) covering an aggregate of 15,600 shares of common stock to six hired employees."

It did not specify who those employees are, although it's safe to assume they're in the highest tiers of company management.

Now what

Ocugen bulls are eager to leap on any scrap of good news, and these two items qualify as scraps. Yes, the FDA is eager to get shots in arms as quickly as possible, however Covaxin still has some distance to go before it reaches that stage... plus, there's no guarantee that the FDA will give it a nod, no matter how encouraging its performance in trials may be.

And the stock options are a nice incentive and morale booster, but they likely won't make or break Ocugen's success as a business or a stock.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends Johnson & Johnson and Moderna Inc. The Motley Fool has a disclosure policy.

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