What happened
Shares of Ocugen (OCGN) were falling 7.8% as of 11:15 a.m. ET on Tuesday. The decline is a continuation of the sell-off that began last week after Ocugen announced the Food and Drug Administration (FDA) rejected Emergency Use Authorization (EUA) for the pediatric use of COVID-19 vaccine Covaxin.
So what
This sustained downswing for Ocugen is understandable. The company's fortunes hinge largely on the prospects for Covaxin. Ocugen now has a much longer road ahead to be able to market the vaccine in the U.S. after the FDA slammed the door on an EUA pathway in immunizing kids.
However, there's a pretty good case to be made that Ocugen's valuation never should have risen as much as it did. The company had already hit a dead end last year with a potential EUA pathway in the U.S. for Covaxin in immunizing adults. The chances that the FDA would have a different perspective with the vaccine in pediatric use never appeared to be very high.
Image source: Getty Images.
Now what
Ocugen will probably have to move forward with another clinical study to have a shot (no pun intended) at winning full FDA approval for Covaxin in kids. An even more pressing priority, though, is to begin a phase 2/3 study of the vaccine in adults. Ocugen stated in its fourth-quarter update that it expects to kick off this study "as soon as possible."
Perhaps Ocugen's prospects will be better in Canada. The company has responded to Health Canada's notice of deficiency with its regulatory filing for Covaxin. It now awaits a decision by the agency. A thumbs-up in Canada would likely provide a spark for the beaten-down biotech stock.
