OCGN Stock Forecast: Covaxin’s FDA Status Marks the Future

This OCGN stock forecast article was written by Maria Grishaev, Analyst at I Know First.

Executive Summary

  • Ocugen had a good year in 2020 – The stock price went up by 239.52% despite the COVID-19 pandemic.
  • A deal to commercialize Covaxin in the U.S. was signed with Bharat Biotech can have an impact on revenue if the FDA will give the vaccine an Emergency Use Authorization.
  • Quantitative analysis results indicate bullish signals after stock price topped out the moving average line.
  • OCGN deserves a one-year target price of $13, representing potential revenue growth.
Source: Ocugen

Overview

Ocugen Inc. is a clinical-stage biopharmaceutical company that focuses on developing gene therapies to cure blindness diseases. Last month Ocugen announced that its co-development partner, Bharat Biotech International Limited shared positive results from the second interim analysis of its Phase 3 clinical trial of Covaxin showing 78% overall efficacy against COVID-19 disease, 100% efficacy against severe COVID-19 disease (including hospitalization), and 70% efficacy against asymptomatic COVID-19 infection, indicating the potential to significantly reduce virus transmission.

In addition, Ocugen is currently in discussions with the FDA regarding the development of Covaxin and has submitted key information and data to date as a Master File for FDA review prior to a planned EUA application once additional data is received from Bharat Biotech from the ongoing Phase 3 clinical trial. Ocugen is additionally in discussions with the Biomedical Advanced Research and Development Authority, regarding the U.S. government’s support of Covaxin.

Moreover, OCGN announced that it has closed a direct offering with healthcare-focused institutional investors for the sale of an aggregate of 10 million shares of its common stock at a purchase price of $10 per share. The stock price surged in total by 381.69% YTD in comparison to a 9.57% rise of the S&P500.

OCGN stock forecast history
Source: Yahoo Finance

More Opportunities and Strengths for OCGN Stock in 2021

In order to estimate my target stock price, I’ll conduct SWOT analysis for the company:

Strengths
  • Strong financial ratios and low debt.Proved capabilities to conduct a clinical trial.
Weaknesses
  • COVID-19 vaccines market share.
  • Can market the Covaxin only in the U.S, if approved.
Opportunities
  • Moving experimental therapy into phase 1/2 clinical trials later this year.
  • 2 preclinical programs in the pipeline for INA
Threats

Uncertainty if the FDA approves to submit the COVID-19 vaccines for Emergency Use.

From one side, the company has very strong financial metrics. The company recently raised $100 million in gross proceeds through a public stock offering. Ocugen’s cash equivalents total around $46.6 million as of Feb. 28, 2021. Based on the company’s current rate of cash burn, it can probably fund operations into 2022 before more cash will be needed.

In addition to the COVID-19 vaccines, the company’s R&D focuses on two genetic eye diseases that might advance to experimental therapy into phase 1/2 clinical testing later this year. Two other preclinical programs focused on the treatment of eye diseases are in the pipeline as well. These different programs show the company’s capabilities in clinical evaluation and regulations.

On the other side, there is an uncertainty if the FDA approves to submit the COVID-19 vaccines for Emergency Use Authorization based on Bharat’s previous clinical studies. The FDA may not be in a hurry to authorize newcomers since it already has authorized three coronavirus vaccines. Also, the deal to commercialize Covaxin is for the U.S. market only and Ocugen will only keep 45% of the profits if approved. An additional question is the potential of the market demand for Covaxin in the U.S when the U.S government bought enough vaccine doses from Pfizer and Moderna to cover most of the U.S. population.

OCGN Stock Indicators Show a Strong BUY Signal

OCGN stock forecast history
Source: Yahoo Finance

As we can see in the chart, the most recent time that the stock price crossed above the moving average for 200 days (the purple line) was in late December and it signaled a potential change in trend. That was indeed the case as the stock rose from there. We can also see that the moving average for 50 days (the red line) crosses above the moving average for 200 days also in late December and it also indicates that the trend is shifting up. This is the known “golden cross” that gives us a buy signal.

The Bollinger Bands® squeeze also indicated a potential opportunity. A squeeze signals a period of low volatility and is considered by traders to be a potential sign of future increased volatility and possible trading opportunities. This can be seen happening here from January to February. The peak outside the bands in July and October corresponds with the announcements of the quarterly financial results.

OCGN yahoo finance
Source: Yahoo Finance

The Yahoo Finance coverage for the company is performed by 4 analysts, with the majority of whom took the buy position on the stock.

Based on the fact that the vaccine has proven the formula has proven to be quite effective against coronavirus and is effective against the mutant variants, the weaknesses and dangers have a smaller effect on the stock price. So, it’s my estimation that the stock price will continue to rise and place my target price at $13, making it 44% premium over the current market price.

Conclusion

I take the buy-side on OCGN stock because it has strong potential, especially with regards to the Covid-19 vaccine partnership with Bharat Biotech. It is reasonable to expect further growth of OCGN stock price as the advancement in clinical trials and the Covaxin deal will have a direct impact on the revenue.

Please note that the stock-picking AI of I Know First has a high signal on the one-year market trend forecasts. Also, the light green in the short time horizons is a mildly bullish signal while the dark green in the one-year time horizon is a strong bullish signal.

Past Success with OCGN Stock Forecast

I Know First noticed the upward trend of OCGN and has been bullish with the price since December until now. On December 31st, 2020, the I Know First algorithm recommended OCGN as one of the Aggressive Stocks Forecast package. The AI-driven OCGN stock forecast was successful on a 3-month horizon resulting in a 244.67% gain since the forecast date.

Moreover, on April 25th, 2021, the I Know First algorithm also recommended OCGN as one of the Biotech Stocks Forecast package. The AI-driven OCGN stock forecast was successful on a 7-days horizon resulting in a 62.82% gain since the forecast date.

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Please note-for trading decisions use the most recent forecast.