In the race to bring a Covid-19 vaccine to the U.S. market, Pennsylvania-based biopharmaceutical company Ocugen (NASDAQ:OCGN) wasn’t the first. Not by a long shot. As a result, OCGN stock lost its luster in the eyes of the investing community.
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It’s possible, though, that Wall Street judged Ocugen too soon, and too harshly. Sometimes, it feels as if investors have completely dismissed the vaccine-market progress that Ocugen has made.
That being said, the chatter about OCGN stock being just a meme stock may have some merit to it. As we’ll see in a moment, the stock exhibits some of the trappings of a typical short-squeeze target.
As the meme-stock hype fades, however, investors must now consider Ocugen based on the company’s merits. Just maybe, the data can show that there’s room for a provider of alternative vaccine options – which is precisely what Ocugen does.
A Closer Look at OCGN Stock
It’s not every day that we’ll find a stock with such clearly defined resistance level as OCGN stock.
The level to watch here is definitely $15. That’s because in February, May and November of 2021, the Ocugen share price spiked to $15 before declining sharply.
The support level for OCGN stock isn’t quite as well-defined. However, the stock has held $3 pretty well this year so far. Still, a support level isn’t a hardwood floor and there’s no guarantee that the stock won’t go lower.
An intermediate level to watch is $7.50, which the Ocugen share price clung to for much of 2021. Therefore, if the buyers can push the stock through $7.50, this could clear a quick path to $15.
Big Hub Buyout
Before we proceed, let’s catch everyone up to speed. To start off, Ocugen’s Covid-19 vaccine candidate is known as Covaxin.
Ocugen is co-developing Covaxin with India-based Bharat Biotech, and is advancing the drug in the U.S. and Canadian markets.
Granted, Ocugen also seeks to treat a range of underserved diseases. These include wet age-related macular degeneration, diabetic macular edema and diabetic retinopathy.
Let’s not kid ourselves, though. Wall Street is watching to see if Ocugen is successfully approved and commercialized, plain and simple.
To help make this happen, Ocugen just announced a major, upcoming addition to the company’s vaccine-production infrastructure. Specifically, the company signed a non-binding letter of intent to acquire a manufacturing site in Ontario, Canada, from Liminal BioSciences (NASDAQ:LMNL).
The acquisition price, for the time being, is undisclosed. Still, it’s an encouraging development as the site is expected to serve as both a manufacturing plant and a research-and-development hub.
“This site, after transformation into a state-of-the-art hub, with the support of the regional talent pool can help bring our innovative products… to the patients we will serve globally,” said Ocugen co-founder, Chairman and CEO Shankar Musunuri.
Amenable To an Alternative
Augmenting the company’s operational infrastructure is all fine and good, but it begs the question: is there actually a market for Covaxin?
To answer this query, we can avail ourselves of the data, which was just recently provided by Ocugen. Or, more accurately, the data is derived from a survey of more than 2,000 U.S. adults, conducted online by The Harris Poll from Feb. 3-7.
Here’s the key finding that works in Ocugen’s favor. According to the survey, 40% of parents whose children under age 18 are not yet vaccinated, said that they would be more likely to vaccinate their children if there were a new Covid-19 vaccine developed from a more traditional method.
Moreover, 38% of the surveyed parents with children 5 and under said that they definitely/probably will not get their children vaccinated for Covid-19 with the existing vaccines if/when they are eligible.
The implication, of course, is that these parents may be amenable to an alternative such as Covaxin to the currently available vaccines.
The Bottom Line
Does the survey data guarantee that there’s an army of parents that will gladly vaccinate their children with Covaxin?
Certainly not. However, at least there appears be an identifiable target market for Ocugen’s Covid-19 vaccine candidate.
Furthermore, it’s encouraging that Ocugen is preparing to acquire a site for production as well as research and development.
Wall Street isn’t impressed yet, but that’s perfectly fine. In due time, the OCGN stock price should match the true value of this ambitious vaccine maker.
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On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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