Ocugen Inc (NASDAQ: OCGN) is a US based bio-pharma which has focused on developing a cure for blindness disease. However, the company has since shifted its efforts to develop a COVID-19 vaccine with partner Bharat Biotech. Ocugen’s CEO Shankar Musunuri has made it clear the company strategises to disrupt the current COVID-19 vaccine market with Covaxin. As a result, the OCGN stock price has seen a 2,200% gain over the past year of trading. The price movement of OCGN has been highly volatile as the company closes in on its EUA submission to the US FDA. This article will breakdown everything investors need to know about Ocugen stock ahead of the EUA review.
Table of contents
Ocugen and Bharat Biotech’s COVID-19 Vaccine
Firstly, the company recently announced that an Emergency Use Authorization (EUA) pathway with United States is currently in the works. If approved by the FDA, this allow for Covaxin to enter the US market and challenge the current COVID-19 vaccine leaders. The recent data from Bharat Biotech’s second interim trial illustrates effectiveness against both severe and asymptomatic cases of the COVID-19 disease.
In addition, the Indian Council of Medical Research (ICMR)-National Institute of Virology have also released data supporting that Covaxin has demonstrated potential effectiveness against the Brazil variant along with UK variant and India double mutant variant.
“COVAXIN continues to show strong results in all the studies conducted to date. We continue to believe this vaccine is a critical tool to include in our national arsenal to fight this pandemic. The Ocugen team submitted a comprehensive drug master file with the FDA and is currently diligently preparing the EUA application,”said Dr. Shankar Musunuri, Chairman of the Board, Chief Executive Officer, and Co-founder of Ocugen.
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Is Wallstreet bullish on OCGN stock?
Firstly, across the board of Wallstreet analysts the general consensus is a Buy. The average 12 month price target from analysts is at $7.88 a share according to MarketBeat data. Prior to the companies COVID-19 vaccine developments, the companies average price target was around $0.98 a share. This suggests analysts can see the upside in the companies shift of resources towards Covaxin. Here are the most recent price targets from this year from institutional analysts:
HC Wainwright 6/11/2021 – Analyst Swayampakula Ramakanth lowered the companies 12 month price target to $10 a share. However, the firm maintains a Buy rating on the stock.
Roth Capital 6/10/2021 – Analysts Zegbeh Jallah lowered the firms 12 month price target to $6 a share. In addition, Roth Capital downgraded their rating on the stock to Neutral. the analyst previously noted that to investors that “Ocugen believes it has sufficient information to support EUA filing in the U.S. If granted, this could lead to a significant revenue generating opportunity for Ocugen.”
Chardan Capital 6/10/2021 – Analysts at Chardan Capital lowered their 12 month price target to $4.50 a share with a neutral rating.
Cantor Fitzgerald 5/13/2021 – Kristen Kluska lowered the firms 12 month price target from $15 to $11 a share. Cantor Fitzgerald also downgraded their rating from overweight to neutral. This suggests analysts are practising caution with the stocks current valuation.
Revenue outlook for Ocugen over the next year
Ocugen’s agreement with Bharat Biotech states Ocugen will receive 45% cut of the sales made in the US and Canada if approved by the FDA. The risk is that Ocugen does not receive FDA emergency approval and the revenue outlook for the company will be worth a lot less. With this in mind, Analysts expect OCGN to generate $373.53 million in revenue in 2021, according to Yahoo data.
This suggests an YOY increase of over 800,000% which is mind blowing. The sharp growth is expected to continue into 2022, with analysts expecting $953.85 Million in revenue. It can be difficult to comprehend the extreme increase in revenue YOY but this ofcourse is in the case OCGN commercialises Covaxin in the US. The steep revenue outlook is an example of the lucrative COVID vaccine market which is expected to grow to $75 billion in 2021 according to Brandessence Market Research.
Risks involved with Ocugen stock
As we have seen over the past month of trading, Ocugen has been highly susceptible to volatility. However, the high volatility is not new to the COVID vaccine industry. The main driver is the vast speculation from investors regarding the performance of the vaccine.
Ocugen is yet to submit their EUA to the United States FDA for Emergency Use, which is a primary focus for the company right now. Therefore, the overall outlook on the companies vaccine efforts in 2021-22 is still unknown. Ocugen has also expanded their commercialisation rights in Canada and will simultaneously seek authorisation under interim order for emergency use in Canada.
Ocugen Stock Forecast Summary
In conclusion, the momentum is building behind Ocugen as they prepare to submit an EUA for commercialisation in the United States. Furthermore, the companies COVID-19 vaccine data suggests a niche within the market, addressing the global concern over COVID variants. However, as discussed the involved risks associated with the evolving COVID-19 vaccine market will play a influential role in the sustainability of the current valuation.
The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
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