OCGN Stock: Ocugen Shorts Are Running for Cover

Ocugen Inc (NASDAQ: OCGN) is screaming for the top in the market this morning. However, if you’re looking for SEC filings or press releases, you’ll be hard pressed. The company hasn’t issued any news today. Nonetheless, there’s a good reason for the run. Here’s what’s going on with OCGN stock:

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The Excitement Stems From a Vaccines Scientific Advisory Board

Last week, Ocugen announced that it has appointed a vaccines scientific advisory board. The Board is composed of leading academic and industry experts in the vaccine field. 

In the release, OCGN explained that these experts will evaluate the clinical and regulatory path to approval in the United States market for Bharat Biotech’s COVAXIN. COVAXIN is a whole-virio inactivated COVID-19 vaccine candidate that’s being co-developed by Ocugen and Bharat Biotech for the United States Market. 

The scientific advisory board consists of:

  • Satish Chandran, PhD. Dr. Chandran has held positions at Wyeth Vaccines, Pfizer, Nucleonics, and Somahlution. Today, Dr. Chandran has nearly 30 years of experience in leadership positions in the vaccines space. 
  • David Fajgenbaum, MD, MBA, MSc, FCPP. Dr. Fajgenbaum holds a position in Translational Medicine & Human Genetics at the University of Pennsylvania. OCGN also said that Dr. Fajgenbaum is the Founding Director of the Center for Cytokine Storm Treatment & Laboratory. 
  • Bruce Forrest, MB, BS, MD, MBA. Dr. Forrest has held leadership positions at Wyeth Vaccines and Pfizer. He has worked in the pharmaceuticals, vaccines, and biological drugs industry for more than 25 years. 
  • Catherine Pachuk, Ph.D. Dr. Pachuk is the Chief Scientific Officer at Marizyme. She has also held positions at Wyeth Vaccines, Pfizer. 
  • Dr. Harvey Rubin, MD, PhD. Dr. Rubin is the Professor of Microbiology and Infectious Diseases at the University of Pennsylvania. He has been part of more than 100 peer-reviewed papers. 
  • Susan Weiss, PhD. Dr. Weiss is the Professor of Microbiology at the University of Pennsylvania. She is also the Co-Director of the Coronavirus Research Center and a world-renowned Coronavirologist. 

Management Commentary

In a statement, Dr. Shankar Musunuri, Chairman, CEO, and Co-Founder at OCGN, had the following to offer:

We are thrilled to welcome this group of esteemed thought leaders to the Ocugen team to assist in our co-development with Bharat Biotech of COVAXIN™. This unique yet traditional vaccine candidate is different from other options currently available in the US market with potentially broader coverage against multiple protein antigens of the virus.

A Short Squeeze In Play

The news released by Ocugen last week proved to be overwhelmingly exciting, and a late reaction to the news due to the holiday seems to be the catalyst behind the move we’re seeing today. At least, the excitement started the news. 

What we’re seeing right now looks to be a short squeeze. The fact of the matter is that OCGN stock trades with a pretty tiny float and heavy short interest. When you mix those two with positive news, the stock begins to tick up, leading to losses for the shorts. As a result, shorts race to cover, resulting in tremendous volume and price appreciation. 

That looks to be what’s going on in the premarket this morning. 

Analyst Opinions of OCGN Stock

According to TipRanks, analysts have a relatively positive opinion of OCGN stock. At the moment, there are four analysts covering the stock, three of which rate it a Buy and one who rates it a Hold. No analysts currently rate the stock as a sell. 

While the ratings on OCGN stock are promising, the price targets are not. The low forecast on the stock is $0.70 with a high of $1.00 and a median price target of $0.90. 

While these price targets suggest that declines are ahead, they are largely outdated. When these analysts reassess the stock, I’m expecting for price targets to be lifted in a big way. 

Risks to Consider Before Buying OCGN Stock

If you’re buying a stock, any stock, you’re accepting risk. At the end of the day, risk is part of investing. Before investing in Ocugen, investors should consider the following risks. 

  • The Company Doesn’t Make Money. Ocugen is a clinical stage biotechnology company, meaning that it doesn’t have products on the market. As a result, it’s not generating any revenue and must rely on the money it has in the bank to survive. Should those funds not be enough, the company will likely look toward capital markets to raise funds through newly-issued shares, diluting value for existing shareholders. 
  • Penny Stock Risks. OCGN is a penny stock. This means that it trades with high levels of volatility and has a relatively unproven business model along with other general penny stock risks. 
  • Clinical-Stage Risks. Finally, as a clinical stage biotechnology company, increased risks are present. Failures of clinical trials or a rejection from regulatory authorities could send the stock for significant declines. 

Final Thoughts

While Ocugen stock does come with risk, they all do, and the potential for gains here is incredible. One of the biggest issues in the COVID-19 space at the moment is mutations. The company’s vaccine candidates have shown promise, not only on the main strain of COVID-19, but mutations that have been popping up. 

Considering this, the company is an important player in the COVID-19 vaccines space and could quickly become a cornerstone in the effort to push the virus back. All in all, OCGN stock is one to watch closely.