Ocugen Inc (NASDAQ:OCGN) is a clinical-stage biopharmaceutical company. A penny stock in 2020, shares neared the $16 level in early February. At that point, OCGN stock had posted an eye-popping gain of 5,352% between then and mid-December 2020.
As you’ve no doubt guessed, that massive stock growth is all about a Covid-19 vaccine candidate — in this case, Covaxin. Ocugen is working on other gene therapies, including a treatment to cure diseases causing blindness. But the market is largely focused on the progress of its Covid inoculation.
The latest surge in OCGN stock was triggered by news that Covaxin has been granted emergency use approval for children ages two through 18 in India.
Ocugen and its partner, Bharat Biotech, have yet to win approval from the U.S., Canada or the World Health Organization (WHO). However, this approval is definitely an important stepping stone.
Even if U.S. approval remains elusive, India itself is a huge market. Ocugen has filed the paperwork necessary for WHO approval, and that application is now winding its way through the system.
The Market for Covid Vaccines Remains Massive
There are downsides to not being the first to market with a Covid-19 vaccine. Rich countries are already well into their programs and administering the early arrivals to their citizens.
At this point in the pandemic, nearly 56% of U.S. citizens have been fully vaccinated. Globally, 6.7 billion doses have been administered and almost 48% of the world’s population has received at least one dose.
Pessimists look at that data and don’t invest in biopharmaceutical groups that are still working on Covid-19 vaccines. To them, these companies have been beaten to the punch.
After all, there’s no guarantee new vaccines will reach the approval stage. Even if they do, there are production and distribution logistics to deal with. By then, everyone who wants a shot will have had one — at least, according to the naysayers.
However, the shots administered so far have actually been low-hanging fruit for investors. It could take years for everyone around the world to be fully vaccinated.
The Booster Shot Factor for OCGN Stock
Even if the world is fully vaccinated, booster shots will likely be needed to deal with waning effectiveness over time. Reformulated vaccines could also be needed to deal with new variants of the virus.
Dr. Albert Shaw is an infectious diseases expert at the Yale School of Medicine. In an interview, he spoke about the possible need for Covid-19 booster shots:
“Right now, there is uncertainty about boosters. Is it possible you’ll need one at some point? Sure, especially if more people don’t get vaccinated and other variants emerge that are worse than what we have now and can possibly evade the protections of the current vaccines.”
The point is, it’s too early to put down OCGN stock because the company was not in the first wave of Covid-19 vaccines.
Just how big is the market for vaccines? According to data published by the World Economic Forum, pharmaceutical companies stand to generate as much as $150 billion in revenue for Covid-19 treatments in 2021 and 2022 alone.
That is a lot of revenue to go around. Even if it’s late to the party, Ocugen stands to grab a chunk of that.
The Bottom Line on OCGN Stock
Is this Portfolio Grader “B” rated stock a lock for long-term growth? Even with its recent Covid-19 vaccine emergency approval in India, I can’t say that for certain.
In fact, investment analysts polled by CNN Business have a median 12-month price target of $10 for OCGN stock. They’re not convinced this company is ready to become a big player in the global Covid-19 vaccine market — at least, not any time in the next year.
With shares surging through Oct. 14, it’s clear many investors were feeling much more optimistic about Ocugen’s prospects. However, OCGN stock has been sliding since Friday, suggesting second thoughts are kicking in.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (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.
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