There’s an previous saying on Wall Street — virtually definitely correct, as yesterday’s information exhibits — that when Wall Street analysts say “buy,” they imply purchase; once they say “hold,” they imply promote; and once they say “sell,” they imply “it’s already too late — you should have sold yesterday.”
Well, Chardan analyst Keay Nakae solely reiterated its Neutral, or Hold score on Ocugen (OCGN) — and never solely does that most likely really imply “sell,” but it surely additionally most likely would have been finest if buyers had offered the inventory — earlier than Ocugen suffered a 28% drop in value yesterday.
On Thursday morning, you see, Ocugen revealed that its Covaxin coronavirus vaccine candidate, which was developed by Indian biotechnology firm Bharat Biotech and which carried out nicely in part Three scientific trials earlier this yr, is being withdrawn from consideration for Emergency Use Authorization (EUA) by the U.S. Food and Drug Administration, and must take the lengthier route of present process a Biologics License Application (BLA) as a substitute.
This wasn’t Ocugen’s concept, by the best way, however an motion really helpful by the FDA. It does, nonetheless, make sense provided that (1) coronavirus instances within the U.S. are presently in decline; (2) various coronavirus vaccines from Pfizer and Moderna appear to be performing very nicely; and (3) demand for vaccines on the whole seems to have been largely satiated within the United States, decreasing the situation of “emergency” that could be a sine qua non in Emergency Use Authorizations.
And this is the actually dangerous information: Ocugen “anticipates that data from an additional clinical trial will be required to support the submission,” and warns that “this will extend our timelines.” Although the corporate reiterated its intention to convey Covaxin to market, it seems it has missed the boat. As a consequence, the corporate — which did lower than $50,000 in income over the previous yr — most likely can not rely on any new income coming from Covaxin, or not anytime quickly no less than.
It was this information that prompted Nakae to — not downgrade Ocugen inventory precisely, however slash his value goal on the inventory practically by half, from $eight a share to $4.50 per share. The new determine implies a 31% draw back from present ranges. (To watch Nakae’s monitor report, click here)
“We estimate that a BLA submission will occur in early 2022, with potential FDA approval around the end of 2022,” defined Nakae (leaving out the potential for FDA rejection, most likely as a result of the information is already grim sufficient as-is). And this actually is a crying disgrace for buyers within the firm, as a result of scientific research main as much as the now-pulled EUA utility had proven the vaccine to be 100% efficient at stopping extreme instances of COVID-19, and 78% efficient at stopping even gentle or average instances.
Despite outcomes which might be arguably on par with and even superior to outcomes from the now historic Pfizer and Moderna trials, Ocugen’s vaccine could now by no means see the sunshine of day. There is, in spite of everything, a non-zero probability that, by the point Covaxin will get permitted, the coronavirus pandemic may have handed and there will likely be no want for it in any respect.
Overall, OCGN has Four current analyst rankings, together with 3 Holds and 1 Buy. Share are promoting for $6.50, and the $7.88 common value goal suggests a 22% upside. (See OCGN stock analysis on TipRanks)
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Disclaimer: The opinions expressed on this article are solely these of the featured analyst. The content material is meant for use for informational functions solely. It is essential to do your individual evaluation earlier than making any funding.