If you put $10,000 into Ocugen (OCGN) shares in 2020, that money would now be worth over $275,000 today. That is an astonishing ROI, but many people are hoping that Ocugen stock will go even higher. Ocugen has partnered with India’s Bharat Biotech to create its covid vaccine, COVAXIN. And recently, COVAXIN proved the ability to provide protection against all three U.K., Brazil, and Indian covid variants.


During an interim phase 3 trial, the vaccine showed 100% efficacy against severe COVID-19 cases. The vaccine is already approved for use within India. Ocugen plans to sell its vaccines in the U.S., but is coming up against roadblocks. Will Ocugen succeed and give investors another awesome ROI?

What’s the roadblock? 

Ocugen has all its eggs in one basket. The firm does not own COVAXIN — it just owns its U.S. only licensing rights. Therefore, the company’s success hinges on if it can sell the vaccine in time. It has no revenue otherwise, and its gene therapy candidates are only in their preclinical phase.

Biden has announced the nation is on track for a 70% vaccination rate by July 4. However, vaccination in certain states have fallen (or stayed low) because of concerns about the vaccine’s possible long-term side effects. Over 46% of people have already got one dose, and 32% are now fully vaccinated. 

Because of this, there is now an oversupply of covid vaccines in the country. So it is highly unlikely that Ocugen will sell 100 million doses as expected. COVAXIN is also not receiving Emergency Use Authorization (EUA) from the U.S. FDA. As of May 7, the company was still “preparing” its application for this authorization. The firm also does not have a manufacturer to produce the vaccine.

There is hope

But there is one path that could lead Ocugen to better territory. The company is in discussions with the Biomedical Advanced Research and Development Authority (BARDA). A covid vaccine that showed efficacy against all strains of the virus would definitely be helpful for national defense reasons. If the firm does get EUA, it intends to start researching the vaccine in children older than six months.

But then again, Ocugen gets just 45% of the profits from selling its vaccine, with the rest being sent to Bharat Biotech. Covid vaccines usually have a pre-tax profit margin of 30%. If you do the math, you can see that the company would earn just $0.11 for every $10 dose it sells (or $71 million for every 100 million doses). We also don’t know if its contracts will be a single one-time event or recurring.

The conclusion

Ocugen is simply too expensive with a value of $1.73 billion. If the company does succeed in selling hundreds of millions of doses of its product or goes on to validate its other candidates in trials, it might be a good buy. Investors are currently thinking too much about vaccine targets that might not happen. Leaving them disappointed.


Author: Scott Dowdy

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