I should know better than to make price predictions about biotech stocks like Ocugen (NASDAQ:OCGN). Clearly, I don’t have a clue where OCGN stock is headed. 

In early May, I wrote a piece about the Covid-19 vaccine candidate, suggesting that it looked ready to blow through $18 a share. It had just doubled in price during April. Things were going well for Bharat Biotech, its Indian partner. The U.S. potential looked real, if not as explosive as once thought. 

In my defense, I did finish my May 5 article by providing a major caveat.

“For me, uncertainty still lingers. Thus, if you’re a speculative investor, I would try to see if OCGN stock comes back to single digits before pulling the trigger,” I wrote.

“Of course, I thought it was nothing more than a penny stock less than two months ago, so what do I know?”

Given it has come back to single digits, I ought to be prepared to make it a speculative buy at this point of the proceedings. So, why can’t I?

Well, as the headline states, it seems when it comes to OCGN, I’m damned if I do, and I’m damned if I don’t. 

With that in mind, let’s look at both arguments.

OCGN Stock Is a Buy in Single Digits

Ocugen announced on June 3 that Bharat Biotech had extended its co-development, supply and commercialization agreement for Covaxin to include Canada as well as its existing rights for the U.S. market. 

“As we work towards the submission of the emergency use application in the US, we will simultaneously seek authorization under interim order for emergency use in Canada,” Ocugen’s press release stated.

“We believe COVAXIN has the potential to play a key role in saving lives from COVID-19 in the US and Canada, as well as across the globe, due to the strong immune response it generates against multiple antigens.”

In a similar arrangement to its U.S. deal, Ocugen will pay Bharat Biotech an upfront payment, another payment upon the first sale of Covaxin in Canada, and then will share 55% of the future profits from the vaccine’s sale in Canada. 

I always wondered why Canada wasn’t included in the original agreement. The two countries are working together on a vaccine-sharing plan. Should the U.S. Food and Drug Administration (FDA) grant Covaxin emergency use authorization (EUA), Canada would fall into line shortly thereafter.

Should Ocugen win EUA approval in the U.S., Canada would be like gravy. 

On May 26, Ocugen said it was on track to submit its EUA application in June. Once submitted, it will undertake further pre-biologics license application (BLA) discussions with the FDA. 

In the case of Moderna (NASDAQ:MRNA), the vaccine maker submitted its EUA application on Nov. 30. It was approved on Dec. 18 for emergency use on people aged 18 or older. So, it took slightly less than three weeks. 

Assuming the FDA is now more efficient at approving vaccines for EUA, let’s assume it takes two weeks to approve Covaxin. That means it will be approved for use no later than mid-July. 

That’s excellent news.

It’s Headed Back to Penny Stock Status

The biggest problem that Ocugen has right now is that the FDA has moved the goal line. By that, I mean it’s revised its guidelines for EUA approval. 

The Motley Fool’s Keith Speights, who writes about healthcare for the publication and consults and has worked in the sector for many years, believes that these new guidelines bring into real question whether or not the FDA will even consider it Ocugen’s EUA application. 

“In Ocugen’s press release announcing its intention to file for EUA in June, the company said that it’s ‘awaiting feedback’ from the FDA on its master file submission. That doesn’t sound like ‘FDA feedback early and throughout the development process,’” Speights wrote on June 3. 

If I were to recommend speculative investors buy shares at current prices near $9 and the FDA closed the door on a quick EUA approval process, anyone who followed my recommendation would almost certainly be looking at a share price near or at penny stock status. 

Back in March, I discussed Novavax (NASDAQ:NVAX) in relation to Ocugen, pointing out that Novavax expected EUA approval sometime in May. However, as we now know, Novavax pushed its timeline back to the third quarter or sometime between July and September. 

So, what’s to say Ocugen won’t do the same? I’d say the odds are high we won’t see a EUA application until at least July. 

Why? Because Ocugen knows it’s only got one shot (pardon the pun) to get it right with the FDA. 

The Bottom Line

At this point, I have no idea whether Ocugen will get the green light from the FDA this summer. Or at all, for that matter.  

What I do know is that I can’t in good conscience recommend OCGN stock anywhere above $5 at this point because, with every passing day, it becomes less likely Ocugen will be successful.

As I said at the top, I’m damned if I do, and I’m damned if I don’t. 

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.