Shares of biopharmaceutical company Ocugen, Inc. (NASDAQ: OCGN) plummeted 23.1% on Friday to close at $2.53 a piece. The fall in price followed the U.S. Food and Drug Administration’s (FDA) denial for granting emergency use authorization (EUA) for COVAXIN. The COVID-19 vaccine was developed by the company’s Indian partner Bharat Biotech, for use in individuals aged 2 to 18 years.
The application seeking an EUA was submitted last November, and jolted up the stock price momentarily.
Nevertheless, Ocugen will remain in discussions with the FDA to evaluate the shortcomings for getting the approval for the pediatric use of COVAXIN.
Ocugen and Bharat Biotech inked a deal in late 2020, under which the company is liable to develop, supply, and commercialize COVAXIN for the U.S. market.
Unfortunately, the vaccine candidate which is widely accepted in India is not being approved for any age group in the U.S. Despite its recent rejection, COVAXIN has an emergency use listing from the World Health Organization (WHO).
Wall Street’s Take
Following the FDA’s refusal, Roth Capital analyst Zegbeh Jallah maintained a Hold rating and a price target of $6 (137.15% upside potential) on the stock.
According to Jallah, the FDA’s denial was not a complete surprise but he believes that it “completely takes off the table” the possibility of COVAXIN entering into the U.S. market this year.
The rest of the Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 2 Buys and 1 Hold. The average Ocugen price target of $9.67 implies 282.21% upside potential. Shares have lost 70.7% over the past year.
According to the new TipRanks Risk Factors tool, the Ocugen stock is at risk mainly from three factors: Tech & Innovation, Finance & Corporate, and Legal & Regulatory, which contribute 23, 18, and 18 risks, respectively, to the total 77 risks identified for the stock.
Given Ocugen’s high-risk profile compared to other companies in its industry and current stock movements, investors should be cautious before adding this stock to their basket, despite the recent sell off.
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