What happened

Shares of Ocugen (OCGN 10.00%) were sinking 4.8% lower as of 11 a.m. ET on Tuesday after falling as much as 7.1% earlier in the day. The company didn't announce any news. Instead, today's decline appears to be due to short-term profit-taking after Ocugen jumped late last week after a positive regulatory development in India for COVID-19 vaccine Covaxin.

So what

It's really not all that surprising that Ocugen's momentum didn't last long. The biotech stock surged close to 13% last Friday on news that didn't directly benefit Ocugen itself. 

India's National Technical Advisory Group on Immunization Standing Technical Sub-Committee recommended Covaxin for use in kids ages five to 12. This was definitely good news for Ocugen's partner, Bharat Biotech, which markets the vaccine in India. However, the development doesn't really impact Ocugen very much.

Ocugen holds the rights to market Covaxin in the U.S., Canada, and Mexico. But decisions by Indian regulators don't help the company in bringing the COVID-19 vaccine to these North American markets.

The bottom line is that investors probably overreacted to the story last week. Today's decline, combined with Ocugen's 11% drop on Monday, seems to reflect that this realization prompted a sell-off as investors attempted to lock in the temporary profits from the move on Friday.

Now what

Ocugen continues to await a decision by Canadian regulators for Covaxin. It's also moving forward with phase 2/3 clinical studies in the U.S. for the vaccine.

There's still a possibility that Covaxin could eventually generate significant revenue for Ocugen. For now, though, the stock remains highly risky. Any stories related to Covaxin in markets outside of North America could provide catalysts for Ocugen, but the effects are likely to be only temporary.