Ocugen stock (NASDAQ: OCGN) has been given a boost from Wallstreet over the past week after the company submitted an Investigational New Drug application with the U.S FDA to evaluate the COVID-19 vaccine candidate, Covaxin. The IND application caught the attention of Noble Financial analyst, Robert LeBoyer who reiterated the firms coverage on Ocugen sticking with their $15 price target.
Analyst reiterates Ocugen Stock Price Target at $15
Earlier this year, LeBoyer noted “Ocugen has in-licensed Covaxin, a whole-virion vaccine for Covid-19 that has advantages over the the current vaccines in use today” according to theFly. Despite the recent set backs, the analyst maintains an upside just shy of 30% on OCGN stock.
LeBoyer’s target remains Wallstreets highest after Ocugen stock received multiple downgrades over the past 6 months. For example, H.C Wainwright analyst Swayampakula Ramakanth dropped the firms 12 month price target in June from $12 to $10. The downgrade came after Ocugen was advised to apply for a Biologics Licensing Application (BLA) instead of an EUA. This of course would extend the timeframe of approval hence dismissing any 2021 revenue opportunities.
However, after discussions with the FDA the company will pursue a IND application that will assess the effectiveness on healthy US citizens. The data from this trial, if approved will be compared with Bharat’s recent Phase 3 trial in India. The company will aim to prove that Covaxin is effective, and its effects are consistent with Phase 3 data in India.
How is Ocugen tracking with Covaxin approval in the US
The price movement of OCGN has been highly volatile over the past few months. This is due to the company disclosing they will no longer pursue a US Emergency Use Authorization (EUA) application for Covaxin after advice from the FDA. Ocugen is now pursuing an IND to establish effectiveness of Covaxin across the US. The trial proposed in the US, if approved will examine the antibody response from the administration of Covaxin in comparison to a recently completed Phase 3 efficacy trial in India.
Removal of an EUA opportunity lands a right hook to the companies revenue outlook. This is because an EUA would have allowed for immediate use in the United States. Instead, the company will need to obtain approval via the traditional route, which can cause significant delays atleast from the investors perspective.
In other news, Ocugen investors are still waiting for WHO’s decision on whether Covaxin should be listed under an EUL. This listing will give Covaxin a stamp of approval and will be recognised by the WHO as an effective COVID vaccine. To date, only 6 vaccines have achieved this listing with the WHO.
How will Ocugen generate revenue from Covaxin if approved?
Ocugen is partners with Bharat Biotech who originally created the Covaxin vaccine. The agreement between the companies states Ocugen will receive 45% cut of the sales made in the US and Canada. Analysts revenue expectations were slashed to zero for 2021 as the removal of the EUA option in the US will take longer to approve and commercialise than the original EUA plan. Nevertheless, Ocugen remain confident they can secure the BLA and bring Covaxin into the US and Canadian market.
“We are very excited to take this next step in the development of COVAXIN™, which we hope will bring us closer to introducing a different type of COVID-19 vaccine to the American public. We are hopeful that the study conducted under the IND, if allowed to proceed, will help demonstrate that the data from India will be applicable to the U.S. population.”said Dr. Shankar Musunuri, Chairman of the Board, Chief Executive Officer, and Co-Founder of Ocugen.
The Bottom Line – Analyst reiterates Ocugen Stock Price Target
Overall, the current IND approach for approving Covaxin in the United States is a long term play. The IND application will need to be approved by the FDA prior to any trials taking place in the US. However, Ocugen investors see the proposed on-shore Covaxin trial as the golden stamp of approval in demonstrating Covaxin’s antibody effect. US based trials are expected to finalise in the first half of 2022, if approved to go ahead.
As for analysts, Noble Financial maintains their $15 valuation despite the above concerns. We will see how the remainder of Wallstreet views the companies IND approach in the United States.
The information above is strictly for informational purposes only and is not financial advice nor does it constitute a recommendation. 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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