Buying stocks shouldn't be like buying lottery tickets, but sometimes it can make sense to bet on a long shot. On that note, Ocugen (OCGN -0.63%) stock is down by more than 65% this year as the small biotech has struggled to commercialize a coronavirus vaccine.

But could that just be the preamble to eventual triumph? Let's see.

The challenging road ahead

Right now, the company doesn't make a cent of revenue as it has no products on the market. To remedy that issue, it's licensing a coronavirus vaccine called Covaxin from Bharat Biotech, an Indian pharmaceutical business. But regulators at the Food and Drug Administration (FDA) are requiring it to perform clinical trials to prove Covaxin's safety and efficacy, so the shot isn't approved for sale yet in the U.S.

While it's already approved in India, the chances of Ocugen successfully commercializing Covaxin in the U.S. remain a question mark. If Covaxin is approved, it probably won't be able to compete with the billions and billions of vaccine sales of competitors like Moderna. Still, if the company can go from zero revenue to at least some revenue, it would force the market to reevaluate its share price in the process.

Ocugen also has a long-shot opportunity. The vaccines produced by Moderna and Pfizer are great at preventing severe disease, but not at preventing people from getting infected with the coronavirus in the first place. The problem is that the shots don't beef up the immune system's defenses at the place where they're most likely to encounter the virus in the wild: in the mouth and nose. But an intranasal spray formulation of a vaccine might be able to succeed in blocking viral transmission where intramuscular jabs are failing. 

And that's precisely what Ocugen's collaborator Bharat Biotech is testing at the moment. It just got permission from regulators in India to conduct a phase 3 clinical trial to test its intranasal formulation of Covaxin in a head-to-head comparison with the intramuscular jab formulation that was already proven effective. The company could get regulatory approval in India for using the spray as a primary series vaccination before the end of August, per its managing director, Krishna Ella. And it's also testing the spray as a booster dose too.

If Ocugen were to license Bharat Biotech's intranasal version of Covaxin, assuming it's actually capable of preventing infection -- and if the FDA were to approve it -- it would have a major edge over the jabs currently on the market, almost certainly driving rapid adoption. And that would doubtlessly help shareholders. Of course, getting the intranasal formulation approved in the U.S. might take time, but the payoff could be worth the wait.

The clock's ticking

Aside from Covaxin, none of Ocugen's pipeline programs are anywhere close to hitting the market, and most are in early stage trials or pre-clinical testing. That means it's in a race against time to commercialize whatever it can before it runs out of runway and has to close up shop for lack of money. Right now, management contends that its $115 million in cash is enough to keep chugging along as normal through the second quarter of 2023. Given that it reported a net loss of around only $37.4 million in the first six months of this year, that estimate should be in the ballpark of being correct, assuming its expenses don't increase by very much in the second half of this year.

Approval and commercialization of the intramuscular formulation of Covaxin could possibly provide enough income to extend that horizon, potentially by enough to finish developing a licensed intranasal version of it.

Still, investors should recognize that this is a risky stock, and it isn't right for everyone. There's always a chance of getting delayed or derailed with clinical trials, and its intramuscular jab would be entering a market where powerful and increasingly entrenched competitors are dominant. And at the moment, there's no plan to try to license Bharat Biotech's intranasal vaccine. So the prospect of growing by a massive amount before 2024 is a long shot at best.

On the other hand, if you want exposure to the possibility of 10x growth over the next few years, you may want to consider the pros and cons of taking on the risk.