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Ocugen Q2 Earnings Preview: What’s in Store?
Stock Analysis & Ideas

Ocugen Q2 Earnings Preview: What’s in Store?

Ocugen Inc. (OCGN) is scheduled to report second-quarter 2021 earnings on August 6, before the market open.

Ocugen is a biopharmaceutical business specializing in the development of gene treatments for blindness. In February, the company partnered with Bharat Biotech and shifted its efforts to develop COVAXIN, an advanced-stage whole-virion inactivated COVID-19 vaccine candidate, for the U.S. market.

In the wake of that move, shares have gained 271% year-to-date and 1,376% over the past year.

A strong set of numbers should give the stock further drive upward, so let’s take a closer look at what analysts on the Street are expecting.

Q2 Expectations

For Q2, the Street expects Ocugen to report a loss of $0.03 per share.

Meanwhile, the Earnings Whisper number, or the Street’s unofficial view on earnings, stands at a loss of $0.04 per share. (See Ocugen Dividend Date and History on TipRanks)

Ocugen’s Prior Quarter Snapshot

Over the past few quarters, Ocugen’s performance has remained dismal. The company incurred a loss of $0.04 per share in Q1, narrower than the loss of $0.07 per share in the year-ago quarter.

With no approved products, the company did not report any revenues during the first quarter. 

Moreover, research and development expenses increased 73.8% year-over-year to $2.9 million, while general and administrative expenses increased 83.8% from the year-ago period to $4.2 million.

Factors to Note

Ocugen is unlikely to have generated any revenue in the second quarter because it does not have any marketed drugs in its portfolio.

Investors can take note of the announcements made by the company during the second quarter.

On July 2, 2021, Bharat Biotech, Ocugen’s co-development partner, publicized the long-awaited results of the Phase-3 trial of Covaxin that involved nearly 25,798 volunteers, spanning 25 hospitals across the country.

In trials, the vaccine was found to be 77.8% effective against symptomatic COVID-19. Covaxin also showed 65.2% protection against the B.1.617.2, a Delta strain, according to Bharat Biotech.

As Covaxin has demonstrated high efficacy in Phase 3 testing, the drug could come to the market any time soon. Due to Ocugen’s sole commercial rights to Covaxin in the United States, the company could soon start turning losses into profits. (See Healthcare Stock Comparison on TipRanks)

On June 15, Ocugen announced that it has selected Washington-based contract manufacturer Jubilant HollisterStier as its manufacturing partner for its COVID-19 vaccine candidate, Covaxin, in the United States and Canada. Presently, the vaccine is not authorized or approved in either country.

On June 10, Ocugen announced that it will submit a biologics license application (“BLA”) for its COVID-19 vaccine candidate, Covaxin, in the United States. Instead of seeking an Emergency Use Authorization (“EUA”) for the vaccine candidate, the business will now need to seek more formal clearance for Covaxin.

Following the announcement, Ocugen stock suffered a large hit, as the BLA process is lengthier and therefore Covaxin could take more time to reach the market.

Ocugen is confident in its ability to obtain the BLA and deliver Covaxin to the U.S. market.

Ocugen CEO Dr. Shankar Musunuri said, “Although we were close to finalizing our EUA application for submission, we received a recommendation from the FDA to pursue a BLA path. While this will extend our timelines, we are committed to bringing COVAXIN™ to the US.”

During the second-quarter conference call, investors will be looking for more clarity on how Ocugen has been tracking its COVID-19 vaccine developments.

Analyst Recommendations

Ahead of the second-quarter earnings announcement, Robert LeBoyer of Noble Financial initiated coverage of the stock with a Buy rating and a price target of $15 (120.9% upside potential).

Following the announcement of final Phase 3 results for Covaxin, on July 6, Zegbeh Jallah of Roth Capital reiterated a Hold rating on the stock with a price target of $6 (11.6% downside potential).

The Wall Street community is cautiously optimistic about the stock, with a Moderate Buy consensus rating, based on 2 Buys and 3 Holds. The average OCGN price target of $9.30 implies 37% upside potential from the current levels.

TipRanks data shows that financial blogger opinions are 42% Neutral on OCGN, compared to a sector average of 71%.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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