Ocugen ticker symbol OCGN. You saw the posts. You heard the VXRT naysayers saying dump the stock and switch to OCGN. Ocugen this and OCGN that. Overvalued and overhyped, people in fear of losing out on a supposed bull run jumped on the OCGN bandwagon and got another lesson in buy the news, sell the hype. For more on OCGN stay tuned.
Welcome to Money Talk Sundayz. Hit the like button if you will on your way in the door. I’ll give you a few moments to get that out the way. While you’re there go ahead and subscribe and click that notification bell depending on the platform you’re tuning in. Let’s talk Ocugen.
Out the gate let me say I opened a put option on OCGN Wednesday and I’m currently up 28%. Why the put option despite all the hype that was swirling online about Ocugen? The signs. One thing I picked up along the way since I’ve begun this investing journey is how to differentiate news from hype.
Ocugen (NASDAQ:OCGN) is a small biotech firm. For years, it tried unsuccessfully to commercialize therapies for eye diseases. However, in 2020, it ended a Phase 3 trial on that front and pivoted to Covid-19. Its first effort in that regard, Covid-19 testing, totally failed to take off. The company is nothing if not persistent, however, and has now tried to get into the Covid-19 vaccine race. OCGN stock has been volatile based on these events.
To help with their lofty goals of wining their vaccine race, OCGN partnered with an Indian firm that had already developed a Covid-19 vaccine. Ocugen is supposed to obtain Food and Drug Administration (FDA) approval for the vaccine and launch it in North America. But the FDA didn’t give Ocugen the green light yet, and the company ended up getting sued by shareholders.
Similar to Vaxart, OCGN made lofty vaccine claims that they couldn’t back up. In March, the company said it intended to advance its vaccine’s development toward an emergency use authorization and ultimately a biologics license in the United States.
In June, however, it said that based on feedback from the U.S. Food and Drug Administration, it was no longer pursuing an emergency use application and was instead pursuing a biologics license application, which required an additional clinical trial and “will extend our timelines.”
The lawsuit charges the company knew its statements had been “materially false and misleading” and that it violated federal securities law.
Demand for a vaccine is starting to wane some. Ever since Merck announced it had developed a highly-effective therapeutic for treating Covid-19, vaccine stocks have been in freefall. Moderna (NASDAQ:MRNA), for example, has tumbled from $497 to just $310. There’s also been a good deal of uncertainty around the merits of booster shots of the vaccines. Add the two up, and traders have been quickly taking profits in the vaccine names. Let’s not forget that Ocugen’s product, however, hasn’t yet found commercial success in North America. Additionally, it’s gotten embroiled in scandal overseas.
OCGN is in hot water now that its partner on the vaccine, Bharat, has run into a legal logjam. It has been alleged that Bharat bribed Brazilian officials to win distribution for the vaccine in Brazil. This came after Brazil questioned the vaccine due to its rushed approval process.
Brazil’s organized crime investigation unit has already gotten involved, and some politicians have suggested this could be an impeachable offense against that country’s president. Regardless, it’s not a good look for a vaccine that is struggling to gain commercial traction to get embroiled in this sort of controversy. What vaccine-skeptical person who passed on vaccines from credible firms will rush to take this one instead?
Additionally Ocugen’s bad luck with the FDA continues with the regulatory agency pushing back on Ocugen’s attempts to launch the Covaxin vaccine in the U.S.
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