Ocugen results preview: What lies ahead for the biopharma?

• Ocugen, Inc (Nasdaq: OCGN) share price drops to US$9.58 per share
• The biopharma play will announce its earnings on Friday morning in the US
• The stock has lost 38.9% in the past few days despite encouraging updates
• Analysts were still largely bullish, targeting the shares to reach US$12.50
• Buy and sell US stocks with an IG account

Ocugen’s stock stays volatile

Shares of biopharmaceutical firm Ocugen continued to slide on Thursday (06 May 2021), shedding 12.2% day-on-day to finish at US$9.58, ahead of a pre-market earnings announcement on Friday (07 May 2021).

The counter had tumbled 38.9% since Monday’s close, despite several encouraging updates on a Covid-19 vaccine candidate, Covaxin, as well as the company’s pipeline efforts.

Ocugen develops and commercialises gene therapies to cure blindness diseases. It is also developing Covaxin, Bharat Biotech’s Covid-19 vaccine candidate, for the US market. Covaxin was recently found to be effective against three key variants of the coronavirus.

OCGN’s stock has been hugely volatile since late December. After finishing at US$0.29 per share on 21 December 2020, OCGN has shot up by more than 3,000%.

Ocugen’s 1Q 2021 results: What to expect

Before the market opens on Friday, the drug developer will report its financial results for the first quarter of 2021.

Analysts forecast that its earnings per share could come in at US$0.26 for 1Q 2021, reversing from the loss per share of US$0.022 in 4Q 2020, according to estimates compiled by Bloomberg.

Revenue could also stand at about US$156 million for the latest quarter, compared to zero revenue previously, research teams predicted.

Ocugen may post a net profit of US$52 million, analysts said, versus a net loss of US$3.8 million in the final quarter of 2020.

Three out of the four analysts covering OCGN shares gave ‘buy’ ratings, while one said to ‘hold’. Their average 12-month target price stood at US$12.50 as of Thursday, Bloomberg data showed.

Just this week, Roth Capital Partners’ research team gave a ‘buy’ call with a US$10 target price, and Cantor Fitzgerald recommended ‘overweight’ alongside a US$15 target.

Covaxin proves effective against multiple Covid-19 variants

After the latest Covaxin trial results, Ocugen was one of the most talked-about stocks on Reddit’s online investor forum WallStreetBets this week, Reuters said.

In a new study, Covaxin demonstrated potential effectiveness against the Brazil variant of SARS-CoV-2, Ocugen announced this week.

Another study in India had also suggested that the vaccine candidate was effective against the UK variant and the India double mutant variant, Ocugen noted.

Roth Capital analyst Zegbeh Jallah said Covaxin’s other differentiating advantages included its potential use in younger patients and immunocompromised patients.

Moreover, the product does not require cool temperatures for transport or storage; it can be stable at room temperature for up to three months. It can also be stored in constant-temperature refrigerators for up to two years, which means it can be stockpiled, Jallah added.

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