OGEN Stock: Oragenics Climbs On Material Transfer Agreement

Oragenics Inc (NYSEAMERICAN: OGEN) is rocketing in the premarket hours this morning, and for good reason. The company announced that it has entered into a material transfer agreement surrounding a potential COVID-19 vaccine. Here’s what’s going on:

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Oragenics Announces a Material Transfer Agreement

In the press release, Oragenics said that it entered into a material transfer agreement with Adjuvance Technologies Inc. The agreement surrounds the use of the adjuvant TQL1055 in the company’s Terra CoV-2 vaccine for COVID-19. 

In the release, the company said that Adjuvants are added to vaccines to enhance their immunogenicity. Moreover, OGEN explained that TQL1055 is a novel, rationally designed, semi-synthetic analogue of the saponin adjuvant QS-21 with improved attributes. In particular, the improved attributes include stability and manufacturing efficiency. 

In the release, the company explained that under the initial agreement, TQL1055 will be used in preclinical animal studies  in order to support the FDA IND application. The animal studies are expected to take place in the current quarter. 

If all goes well, the company may enter into a licensing agreement to include human trials that are expected to begin later in 2021. 

As far as the animal studies are considered, OGEN said that the Terra CoV-2 vaccine plus the TQL1055 adjuvant will be studied in hamster viral challenge studies, mouse immunogenicity studies, and the rodent toxicology study required for the IND filing. 

Management Commentary

In a statement, Alan Hoslyn, Ph.D., President and CEO at OGEN, had the following to offer:

The execution of this material transfer agreement is an important step in the ongoing development of our Terra CoV-2 vaccine. Following our Type B Pre-IND meeting with the FDA, we were asked to conduct additional preclinical animal testing for inclusion in our IND filing. Access to TQL1055 will permit us to generate the data necessary to continue development of the vaccine along our currently expected timelines.

Because our vaccine uses an adjuvant, we anticipate a more intense immune response from our prefusion stabilized spike protein with a lower antigen dose. We also believe that our vaccine may have application to other coronaviruses that emerge or strengthen in the future. We recognize that COVID-19 vaccines are now becoming available in the U.S. and worldwide with more vaccines expected to be available in the future, given the scope of the pandemic and the mutation of the virus, we believe there will be demand for the Terra CoV-2 vaccine once development is completed. Of note, the Terra CoV-2 vaccine permits storage and distribution at normal refrigerated temperatures which should aid in its distribution.

The above statement was followed up by Dr. Tyler Martin, CEO at Adjuvance Technologies. Here’s what he had to say:

We are delighted to be partnering with Oragenics and believe that our adjuvant, TQL1055, will provide the increased immune response necessary for a successful and widely available coronavirus vaccine.

Why Investors Are So Excited

While vaccines are starting to hit the market, the COVID-19 pandemic is far from over. In fact, with a new strain of the ailment making its rounds, many believe that this will be a long-term issue. 

As such, there is an urgent medical need for as many vaccines as possible, especially vaccines that can fight, not only the original strain of COVID-19, but mutations of the virus. 

Should all go well with the preclinical animal studies and the in-human clinical studies, OGEN may be onto something big. So, it’s no surprise to see that investors are excited. 

It’s also worth mentioning that the excitement seems to have triggered a short squeeze. First and foremost, the company has a relatively small float. Then, you add in the high level of short interest the stock has been experiencing lately. When the positive news came out, shorts began running for cover, leading to a squeeze that’s sending OGEN stock for the top. 

Risks to Consider Before Buying OGEN Stock

If you make an investment, you’re accepting risk. It’s all part of the investing process. OGEN is no different. Before buying Oragenics stock, investors should consider the following:

  • Development & Regulatory Risk. As a clinical-stage biotechnology company, Oragenics must perform well in the clinic and among regulatory authorities. Should a clinical trial fail or regulatory authorities find holes in the data, significant losses could be the result. 
  • Penny Stock Risk. OGEN is a penny stock. So naturally, it comes with increased levels of risk. In particular, the stock experiences quite a bit of volatility, making entrances and exits difficult to time. Furthermore, the company’s business model is largely unproven. 
  • Capital Risk. Finally, the company is far from profitable. As such, it must survive on the money it has in the bank. If it is unable to make it to profitability with the money it has in the bank, it may look to capital markets as a way to raise funds, leading to dilution for existing shareholders. 

Final Thoughts

While there are risks to consider before buying OGEN stock, there are risks with any investment you make. Nonetheless, an investment in Oragenics may be a lucrative move. 

At the end of the day, the COVID-19 pandemic is far from over, and the company is working to bring another vaccine to market to combat the pandemic. Moreover, based on the fact that the virus is mutating and new strains are emerging, there’s a strong probability that vaccines will need to be an annual occurrence moving forward, creating a larger opportunity for OGEN stock. All in all, this is one to watch.