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 3,248% gain over the past year of trading. The price movement of OCGN has been highly volatile as the company recently disclosed they will no longer pursue a US Emergency Use Authorization (EUA) for Covaxin after advice from the FDA. However, Ocugen did recently announce a rolling submission to Health Canada. Health Canada will begin a review of the safety and efficacy of COVAXIN in recent trial data. With many questions to be answered, this article will breakdown everything investors need to know about the Ocugen stock forecast.
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Ocugen and Bharat Biotech’s COVID-19 Vaccine
Firstly, the company recently announced that the anticipated EUA submission is no longer on the cards, with the FDA recommending that Ocugen pursues a biologics license application (BLA) instead. If approved, this allow for Covaxin to enter the US market and challenge the current COVID-19 vaccine leaders. The recent data from Bharat Biotech’s Phase 3 trial shows an overall efficacy of 77.8% against COVID-19. The trial data also illustrated a 65.2% efficacy against the new delta variant that is spreading across the UK and Australia.
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.
“As we brace ourselves for the potential next wave of COVID-19 outbreaks from the Delta variant, reporting of the final efficacy analysis from this Phase 3 study comes at a crucial time. We expect these efficacy and safety outcomes, along with demonstrated efficacy against emerging variants of concern, will support our initiatives to bring COVAXIN™ to the US and Canadian markets,” said Dr. Shankar Musunuri, Chairman of the Board, Chief Executive Officer, and Co-founder of Ocugen.
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 distribution in the US and Canada. 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.
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 the BLA is approved. The risk is that Ocugen does not receive approval and the revenue outlook for the company will be worth a lot less. In addition, the application for the BLA is going to push the potential revenue back further. With this in mind, Analysts expect that Ocugen will not generate any revenue for the remainder of this year.
By 2022, analysts forecast OCGN to generate $153 Million in revenue. It is important to note prior to the companies decision to pursue a BLA, analysts expected OCGN to generate upwards of $900 Million by 2022. The steep revenue downgrade is a bi-product of the delays that will be issued as a result of the BLA route the company is taking after FDA advice.
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 stock suffered a large hit after the EUA was not submitted, which was a primary focus for the company. 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 use in Canada.
In addition to the EUA concerns, the company is now facing lawsuits as a result. The Thorton law firm noted in a statement that Ocugen failed to advise or mislead investors that (i) the information that Ocugen submitted to the U.S. Food and Drug Administration (“FDA”) was insufficient to support an Emergency Use Authorization (“EUA”); and (ii) Ocugen would not file an EUA with the FDA.
Ocugen Stock Forecast Summary
In conclusion, the momentum has decayed after the announcement of the BLA pathway. However, the companies COVID-19 vaccine data suggests a niche within the market, addressing the global concern over COVID variants. As discussed the involved risks associated with the evolving COVID-19 vaccine market and the outstanding lawsuits against the company 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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