Vaccine maker Ocugen (OCGN 9.58%) has had a tumultuous past 18 months on the stock market. The company's shares soared as it sought to make good on its intentions to enter the COVID-19 vaccine space, but with the delays it has encountered in this area, investors have largely given up.

Except those on Robinhood, the popular trading app. Ocugen features on the list of the 100 most held stocks on the platform. Perhaps that's because, on average, Wall Street analysts have set a price target of $5.83 for the stock (according to Yahoo! Finance), which represents a substantial 217% upside from its current levels.

So is this penny stock worth investing in?

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What's going on with Ocugen?

Ocugen primarily focuses on developing therapies for eye-related diseases. But the company decided to pursue opportunities within the lucrative coronavirus vaccine market. Ocugen entered into an agreement with Bharat Biotech, an India-based biotech company that has developed and marketed a coronavirus vaccine called Covaxin in its home country. 

Under the terms of the agreement, Ocugen is responsible for commercializing Covaxin in all of North America. However, the eye disease specialist will only keep 45% of the profits associated with the vaccine.

Still, for a company like Ocugen, with a market cap of nearly $400 million, generating revenue of even $100 million from Covaxin would be decent. But there are challenges. Ocugen had planned on earning Emergency Use Authorization in the U.S. and Canada for Covaxin (it has already won that designation in Mexico).

However, authorities in Canada have been sitting on the company's application for more than a year. That sends a major signal: Regulators in Canada are in no hurry to authorize Covaxin. It could be that there is no urgent need for a new vaccine in the country, or Covaxin hasn't proven its safety and efficacy to the standards they demand in the country. 

There are other possibilities. Ocugen's application could suffer from some deficiencies. That was the case initially: Canadian authorities flagged some (unnamed) problems with the biotech regulatory submission, but Ocugen claims to have addressed them. Even if there are issues with Ocugen's application, if the situation were more urgent -- and Covaxin was a highly promising candidate -- Canadian regulators likely would have tried to resolve the issue much more quickly.

In the U.S., health industry authorities requested that Ocugen seek full approval for Covaxin. The company is currently running a phase 2/3 clinical trial in the country to support its application. Even though Covaxin proved about 77% overall effective in a clinical trial in India, we'll have to wait for the results of its study in the U.S. to know more about its chances of approval in the country.

But there's another problem for Ocugen. Some leaders in the COVID-19 vaccine market have been under pressure lately because the market thinks the demand for vaccines will drop substantially starting next year. If that happens, it further complicates things for Ocugen. The company is having a hard enough time launching its vaccine where it matters right now; what will things look like in one year?

But Ocugen isn't giving up. On Sept. 28, the company announced an agreement with Washington University in St. Louis, Missouri to develop and commercialize the latter's intranasal COVID-19 vaccine candidate in the U.S., Europe, and Japan. This vaccine has already earned authorization in India. Ocugen plans to work with various agencies to speed up the commercialization of this vaccine where it matters for its purposes.

It's difficult to predict how things will work out for Ocugen with this new addition to its portfolio. But considering the probable state of the vaccine market starting next year and the stiff competition it will face, things don't look too promising for the biotech.

It's best to look elsewhere

Ocugen does have another advanced candidate called NeoCart. It is a three-dimensional "disc of new cartilage" manufactured using the patient's chondrocytes, which are cells that help promote cartilage health. According to the company, NeoCart could help rebuild a patient's damaged knee cartilage while preventing osteoarthritis.

NeoCart is undergoing late-stage studies. It could still be a very long time before it earns approval if it does at all. And Ocugen's other candidates are still much earlier in their development stages.

Meanwhile, the company generates little to no revenue and is consistently unprofitable. It ended the second quarter with $115 million in cash and cash equivalents.

The company thinks its current cash balance is enough to last until the second quarter of 2023, or roughly nine months. At this rate, investors should expect dilutive forms of financing for Ocugen within a year. The company last raised funds through a public offering of common stock in February. Ocugen's average price target of $5.83 looks ambitious, given the current state of the company.

True, biotech stocks of this size can soar on positive clinical or regulatory news, but they also come with substantial downside potential. Any roadblock could sink Ocugen's stock and leave investors with practically worthless shares. That's why it's not worth investing in this company right now, as there are plenty of other biotech stocks to consider.