Can COVID vaccine delay Ocugen beat Pfizer and Moderna?

Several days ago Ocugen (NASDAQ: OCGN) was an early stage biotechnology company that focused on gene therapy to cure eye diseases. And then everything changed. Suddenly, investors started building up in stocks, and the company joined the center of the stock market scene with people like Pfizer (NYSE: PFE) and Moderna (NASDAQ: mRNA).

That’s because Ocugen has finalized a deal to co-develop and market the experimental late-stage coronavirus vaccine from Indian company Bharat Biotech in the United States. The biggest gain, however, did not follow the announcement. It came after Ocugen raised $ 23 million with a hefty premium to fund the project. As a result, the stock climbed more than 200% in a trading session. Now the question is whether the efficacy of the Ocugen / Bharat vaccine candidate can beat that of today’s vaccines – those from Pfizer and Moderna. Let’s take a closer look.

Image source: Getty Images.

A smart financial movement

Ocugen’s decision probably came as a surprise to many, given that he is not a player in the infectious disease arena. But from a payoff standpoint, it’s smart. That’s because the deal will generate product revenue in the short term – if the US Food and Drug Administration (FDA) grants the vaccine candidate an Emergency Use Clearance (EUA). Ocugen will take 45% of US profits, and the remaining 55% will go to Bharat, under the terms of the deal.

Without such a transaction, Ocugen would have to wait years for product revenue. Ocugen’s candidates are all at the preclinical stage. The company plans to begin Phase 1 studies for one candidate this year – for mutation-associated retinal degeneration.

Financial conditions are also positive. In the recent offer of Ocugen common stock to institutional investors, he sold the shares at a premium of 46% over the previous day’s closing price. This shows investor confidence in Ocugen’s future. The company’s stock price and market value surged within days.

OCGN Chart

OCGN given by YCharts

Expertise and logistics also look great. Ocugen has assembled a Vaccine Scientific Advisory Board comprising six industry and research experts to help it successfully navigate the clinical and regulatory path. If the FDA clears the vaccine, Bharat will provide the initial doses. But Ocugen is discussing possible vaccine production with U.S. manufacturers after launch.

Ocugen has not said when he will apply for an EUA. But he has started discussions with the FDA “to develop a regulatory path towards the EUA”.

Covaxin against his rivals

So let’s now focus on the most important point of all: Covaxin, the Ocugen / Bharat candidate, versus the vaccines from Pfizer and Moderna. While the Indian government has granted emergency clearance to Covaxin, Bharat has yet to complete phase 3 trials or generate interim data. The president of Bharat expects to release the data by March.

The vaccines from Pfizer and Moderna focus on the coronavirus spike protein. The problem is, if the spike protein mutations multiply, these vaccines may not offer protection. So far, both companies say their vaccines can treat emerging strains of coronavirus in the UK and South Africa. But White House medical adviser Dr Anthony Fauci said these vaccines are likely less effective against mutated strains than they are against the original coronavirus – and potential new strains in the future. represent a threat.

Covaxin induces immune responses to several coronavirus proteins, not just the spike protein. It may therefore be more effective than more advanced rivals in protecting against today’s strains and future variants. This is a big plus. Another advantage is that it can be stored at refrigerator temperature. The same goes for Moderna – but Pfizer’s vaccine requires ultra-low temperatures which make it a challenge to transport and store.

Considering these two elements, Covaxin may be a stronger vaccine than those from Pfizer and Moderna. But only phase 3 data can confirm this. If the efficacy is low or the adverse events are high, the bigger picture may change. So, for now, it’s best to be cautiously optimistic about Covaxin.

And that is why I would be so cautiously optimistic about Ocugen, but with an emphasis on the “cautious”. If the Phase 3 data for Covaxin is strong, the Ocugen share price could rise. But if the test results are not convincing, the shares of this biotechnology company could crash – especially given the recent increase. For most investors, it is best to look at this story from the side for now.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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