Ocugen (OCGN) stock forecast: Awaiting regulatory approval
Stock in Ocugen, the biopharmaceutical company, has gone on the march in the last week or so rising 70% to be priced at $3.72 today (23 March).
It would seem there are two factors behind this. Firstly a growing number of covid cases around the world. Ocugen only holds the licence for the Covaxin shot in north America but perhaps the market sees that renewed burst of infections eventually hitting the US.
The second factor may just be a return of market sentiment for high tech stocks which had taken a pounding in recent weeks.
It will come as some relief to investors who have taken some big hits recently that left the stock price reeling as low as $2.17 (8 March) over 40% off its February high.
The first came in February when it announced an underwritten public offering of nearly 16 million shares of its common stock to raise $53m and its price dropped 19% overnight. It is planning to spend the cash on "general corporate purposes, capital expenditures, working capital and general and administrative expenses".
Its second body blow came on 4 March when it revealed that the Food and Drug Administration (FDA) had declined to issue an Emergency Use Authorisation for its covid vaccine for children. The company, and its investors, had been pinning a lot of their hopes for the future on the drug's approval and the stock plunged a further 27% when the markets opened.
In between these two shots, the FDA lifted its clinical hold on the drug allowing trials to continue - resulting in a strong surge in the stock. It also announced its fourth quarter results which showed a $0.07 net loss per share for the fourth quarter of 2021 compared to a $0.02 net loss per share for the same period in 2020.
Ocugen holds the rights to distribute the Covaxin shot, developed with Bharat Biotech, in Canada and the US. In early November 2021, the World Health Organization (WHO) authorised the vaccine for emergency use.
At the end of December, Ocugen announced that Covaxin was effective in provoking an immune response in children. Two weeks later, it reported strong trial results for the use of Covaxin boosters against Omicron.
Can the company bounce back from these disappointments?
Ocugen stock analysis: Down from November peak
Ocugen came to the market via a merger with Histogenics, trading since October 2019 as OCGN. Just over a year earlier, Histogenics had reported a failed phase 3 clinical trial for a knee cartilage treatment, which led to a sharp drop in its share price. The stock continued to decline following its merger with Ocugen. By December 2019, its share price was below $1, and its Nasdaq listing was at risk.
But in December 2020, Ocugen announced that it would work with Bharat Biotech to develop Covaxin for the US market. A late-April company press release reported that the vaccine offered 100% protection against severe disease in phase 3 trials. The share price climbed, surpassing $15 (£10.65) in May 2021.
After dipping to around $7 over the summer, the Ocugen share price topped $13 in late October after the company released a statement that it was applying for FDA approval for Covaxin.
Ocugen stock news came to the fore in November 2021, amid significant share price volatility. On 3 November, Covaxin received WHO approval for emergency use. The news triggered a drop in Ocugen’s share price, which went from a high of $17.46 to $12.30 in a single day, highlighting how sensitive the share price is to evolving news.
The stock’s value continued to track downwards over the course of the month. It fell by almost 10% on 26 November as news broke that the FDA had issued a clinical hold on Ocugen’s new drug application due to as yet undisclosed deficiencies.
Despite releasing positive results for trials of Covaxin in children at the end of 2021 and the efficacy of the Covaxin booster against Omicron announced on 12 January, the share price has failed to recover lost ground. At the time of writing, 23 March 2022, it stands at $3.84.
In terms of OCGN the sentiment is bearish and the recommendation is a strong buy with 15 bullish and six bearish daily indicators according to Investing.com. In its technical analysis the relative strength index (RSI) for Ocugen was neutral at 57.73 as of 23 March. A move in the RSI below 30 signals the asset is being oversold and undervalued. Meanwhile, a level of 70 or above would indicate an overvalued or overbought condition.
Although Ocugen shares spent much of 2020 hovering above this threshold, the current level does not suggest the stock is about to see another upward breakout. RSI approached 70 in October 2021, but its value no longer signals that the Ocugen share price will fall.
Latest results reveal losses
Ocugen announced third-quarter results on 9 November 2021, reporting a net loss of $0.05 a share for the three months up to 30 September, compared to a $0.07 net loss per share for the same quarter the previous year.
The results missed analysts’ expectations - the consensus earnings per share (EPS) was -$0.04 per share on 9 November 2021.
The quarter’s research and development expenses were $6.3m, up from $1.5m in the same year-ago quarter. Administrative expenses were also up significantly: $4.5m against $1.7m.
Can boosters give the stock a lift?
As the battle against Omicron intensifies, so does the race to deliver booster jabs. On 19 November 2021, the FDA announced that all individuals aged 18 or older would be eligible for a booster. This was further extended to include children aged 12-15 in January 2022.
The most recent trial results showed that a booster dose of Covaxin delivered a robust neutralising antibody response against both Delta and Omicron variants. Under FDA rules, booster jabs can be a different vaccine type to the primary immunisation, meaning that there is a huge potential US market for Ocugen’s Covaxin booster.
A bumpy road to regulatory approval
But despite positive trial results, Ocugen’s has not yet achieved crucial North American regulatory approval.
In late October 2021, Ocugen filed an application with the FDA to begin trials for its vaccine. This hold has now been lifted allowing trials to continue.
Following WHO approval, it also submitted an emergency use request for children aged 2-18 years. Ocugen revealed on 4 March 2022 that this had been declined.
Ocugen has also initiated discussions with Health Canada for regulatory approval and is pursuing expedited authorisation for Covaxin under the country’s Interim Order for Covid-19 drugs.
Health Canada has not yet reached a decision. In November 2021, the US FDA put a clinical hold on Ocugen’s application as it evaluates the drug outside the US and tries to identify specific deficiencies.
A missed opportunity?
And as Ocugen waits for North American regulatory approval, vaccine coverage is climbing steadily upwards in North America: 63% of the US population is now fully vaccinated, and 24% have had a booster dose.
The figures in Canada are 79% and 32% respectively. With an estimated 1.3m doses administered every day in the US, could eventual regulatory approval come too late for Ocugen?
Revenue risk
Any share price gains Ocugen has seen recently have likely been driven by the hope of North American approval for its Covid-19 vaccine. But in addition to Covaxin, the pharma company has a Modifier Gene Therapy Platform in the pipeline and a Novel Biologic treatment for targeting eye problems.
As part of its third-quarter results announcement on 9 November, Ocugen also announced that it had fapplied to the FDA to commence a phase 1/2 clinical trial for a treatment for patients with retinal degeneration.
Yet as things stand, Ocugen’s non-Covaxin assets are at such an early stage that they are yet to report trial results and are unlikely to generate revenue in the short term. Predictable future revenue streams could be a growing concern for those looking to invest in Ocugen.
On 27 January Ocugen announced that it has signed a non-binding letter of intent (LOI) with Liminal BioSciences, a Canadian public company with shares listed on NASDAQ, to buy its manufacturing site in Belleville, Ontario, for an undisclosed amount.
Ocugen (OCGN) stock price forecast: Wall Street view
As of 23 March Wall Street analysts rated Ocugen as a consensus ‘hold’. The five analysts were split in their views: two suggested buying the stock, while three advised holding. None advocated selling the stock according to MarketBeat data.
Ocugen Inc stock predictions for the next twelve months vary from a low of $4.00 to a high of $15, with an average price target of $7.50.
Five analysts have covered Ocugen over the past year. Chardan Capital lowered Ocugen stock price target from $8 to $4.50 in June, representing a 37.5% downside, at the time of the report.
Not all analysts were so bearish, however. Following WHO approval in November 2021, Robert LeBoyer of Noble Financial reiterated his buy rating on Ocugen stock and maintained a price target of $15, representing a 56.41% upside on the price on the day of the report.
On 2 November, Roth Capital and Cantor Fizgerald both reiterated their ratings, maintaining ‘hold’ and ‘neutral’ ratings, respectively, in light of Ocugen’s application to begin FDA clinical trials.
It’s worth remembering that analysts’ forecasts can be wrong. Forecasts shouldn’t be used as a substitute for your own research. Always conduct your own due diligence before investing. And never invest or trade money that you cannot afford to lose.
Long-term Ocugen stock forecast 2022-2025
Algorithm-based forecasting service Wallet Investor gave a positive OCGN stock price forecast. The site predicted that the share price could climb over the next year, to $7.2 by March 2023. Over the longer term, Wallet Investor’s forecasts saw the share price reaching $20.6 by March 2027, though with significant fluctuations along the way.
Wallet Investor’s forecasts use historical price movements to predict future prices. Note that algorithm-based predictions are often wrong and past performance cannot guarantee future results.
Forecasts shouldn’t be used as a substitute for your own research. Always conduct your own due diligence before investing. And never invest or trade money you can't afford to lose.
FAQs
Will Ocugen stock go up or down?
According to MarketBeat, the consensus price target for Ocugen was $7.50, based on five analysts’ views. This suggested a potential upside against the current share price of around $2.49 on 8 March.
Note that analyst predictions are often wrong. Forecasts shouldn’t be used as a substitute for your own research. Always conduct your own due diligence before investing. And never invest or trade money you cannot afford to lose.
Is OCGN a good stock to buy?
Analysts have rated Ocugen stock a consensus ‘hold’, with two ‘buy’ ratings, three ‘holds’ and zero ‘sells’ according to data from MarketBeat. Price targets vary from the low of $4 to the high of $15.
Note that predictions are often wrong. You should always conduct your own research before making any investment or trading decision.
How high will Ocugen stock go?
According to data from MarketBeat on 23 March, price targets for Ocugen range from $4 to $15, with a consensus target of $7.50. Longer-term predictions from WalletInvestor suggested the Ocugen stock price could exceed $20 by March 2027.
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