What happened
Shares of clinical-stage biotech Ocugen (OCGN 1.00%) are on fire today. Specifically, the biopharma's stock was up by a healthy 13.7%, on higher-than-normal volume, as of 2:46 p.m. ET Wednesday afternoon.
What's sparking this double-digit spike in Ocugen's share price? Mizuho Securities analyst Uy Ear reportedly initiated coverage on the biotech yesterday with a 12-month forward-looking price target of $5 per share. This stately price target implies a near-100% upside potential relative to Tuesday's closing price.
So what
Mizuho's analyst noted that Ocugen's shares are only currently being valued at the commercial potential of its COVID-19 vaccine known as Covaxin. Covaxin is presently commercially available for adults in Mexico and it is being reviewed by regulatory authorities in Canada. Ocugen is co-commercializing the vaccine in North America with its developer Bharat Biotech of India.
NASDAQ: OCGN
Key Data Points
Mizuho, in short, thinks the market is overlooking the deep value proposition of the biotech's eye disease candidate, OCU400. OCU400 is a modifier gene therapy in early- to mid-stage development for RHO-related retinitis pigmentosa. If approved, it could one day generate several hundred million in sales for this high-value indication.
Now what
Is Ocugen's stock a buy in the wake of this analyst upgrade? It all depends on your comfort with risk. Ocugen's shares probably are undervalued in light of its opportunities in both COVID-19 and retinal disorders. Yet the company still has a lot of work to do to make Covaxin a commercial success in North America. What's more, OCU400 is likely two to three years away from a regulatory filing. This biotech growth stock, in turn, is probably best suited for investors with a high tolerance for risk.
