The latest news that Ocugen (NASDAQ:OCGN) is moving closer toward emergency use authorization for its Covid-19 vaccine candidate is moving its stock. On May 25 the company submitted its master file to the Food and Drug Administration as part of the emergency use authorization (EUA) process. 

But many obstacles remain for Ocugen. The first of which is that the FDA might have already shut down Ocugen’s attempt to grant emergency use status to Covaxin. That is, Ocugen’s master file submission may simply be for naught. 

FDA Might Nix Covaxin

Ocugen submitted its master file to the FDA on May 25. This was done on the same day that the FDA announced that it may decline new emergency use requests for Covid vaccines. However, Ocugen had submitted notice to the SEC of the move days earlier, on May 19. 

In its May 25 announcement, the FDA stated that it “may decline EUA requests from developers that have not yet met with the agency to discuss their vaccines.” 

Ocugen believes that it does meet the criteria laid out by the FDA under its new submission model, stating: 

Since we have been in discussions with the FDA since late last year, we do not believe that the FDA’s recently revised guidance regarding EUAs raises any concerns about our ability to submit the EUA for Covaxin as planned, which is currently in process and which we expect to submit to the FDA in June. We believe that the FDA’s new guidance confirms that Ocugen continues to meet all criteria for submission of an EUA.

Reading closely, Ocugen says it has been in discussions with the FDA. The FDA said it may deny the requests of those who haven’t yet met with the agency to discuss their vaccines. Ocugen is clearly in the gray area as it doesn’t mention anything about having met with the FDA. Rather, it has had discussions. 

So that is a clear obstacle which may simply leave Ocugen dead in the water in regard to its hope to commercial Bharat Biotech’s Covaxin vaccine in the U.S. That endeavor raises another question. 

Competition in the U.S. 

Assuming Ocugen overcomes the regulatory hurdles of EUA approval, the issues of marketability and profitability will arise. 

Remember, Ocugen’s plan is to sell Bharat Biotech’s Covaxin vaccine in the U.S. In exchange, Ocugen would receive 45% of the profits from that endeavor. The issue here is what kind of market truly exists for Covaxin in the U.S., and when, if ever, might sales and profitability materialize?

Even as far back as the end of April it was clear that the U.S. wasn’t in need of further vaccine supplies. That article from April 30 laid out the fact that vaccine supply exceeded demand a month ago. 

The idea that Ocugen can make money by selling Covaxin into the U.S. market has been a persistent issue. There is absolutely no reason to believe that has changed to any degree. In fact, it seems that the window of marketability and profits is narrowing quickly. 

There would have to be real evidence that Ocugen has demand for Covaxin before anyone should realistically consider purchasing OCGN stock. Otherwise, the argument becomes about OCGN stock from the perspective of quick trading. I’m sure it has merits there, but from the perspective of a long-term investment things look bleak despite the recent announcements. 

Price Direction

Let’s hypothesize that Ocugen gets its emergency use approval. If I’m correct, then it won’t sell many vials of Covaxin very soon. That means real revenue materializes sometime in 2022 perhaps. And perhaps it never materializes. 

That indicates share prices ought to trend down. They’ll move up on any positive FDA news, but the longer term is bleak.

I don’t see how it wins even if it does win emergency use authorization. And as I mentioned, it could be dead in the water already. 

On the date of publication, Alex Sirois 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.