Ocugen (NASDAQ:OCGN) makes a big move on Friday, with the OCGN share up more than 20%. To investors calling the red-hot biotechnology name, there seem to be two reasons for the rise. What is it then? And what else do you need to know?
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To begin with, investors should know that the company specializes primarily in rare conditions that cause blindness. In fact, its leading candidate OCU400 reached a new milestone earlier this week. The European Commission has chosen to expand the use of orphan drugs for their potential as a treatment for two rare genetic conditions. The OCGN share was slightly higher.
However, many investors like Ocugen for his newer role as a Covid-19 play. The company is a partnership with Bharat Biotech, an Indian firm specializing in vaccines. Through the agreement, Ocugen will handle the development and commercialization of the COVAXIN vaccine in the United States.
So why are OCGN shares moving today? It seems that COVAXIN is to be thanked… and that there are two separate stories that are worth watching.
The first comes from Brazil. Bharat Biotech confirmed last night that it has entered into an agreement with the Brazilian Ministry of Health. In the contract, Brazil buys 20 million doses of COVAXIN, which will be delivered between March and May. The Ministry of Health also confirmed that the transaction is worth approximately 1.6 billion reais. At the time of writing this is about $ 290,000.
For those unfamiliar, Bharat Biotech operates on an emergency basis in India and is also working to ensure that the COVAXIN is reached more widely. Although Ocugen is primarily used in the United States, it is a good sign that other countries are signing up.
Why OCGN stocks soared today
Importantly, there is one more reason that OCGN shares are going up today. And in fact, it joins the role of COVAXIN in the US
A new article from Fool contributor Adria Cimino suggests today that Ocugen could be near the finish line in the US, so to speak. In other words, Cimino thinks the U.S. Food and Drug Administration may be almost ready to grant it permission for emergency use. If he does, Ocugen could take market share as the country increases its vaccination of vaccines and tries to cover its population.
What should investors make of this news? The company’s last update on its COVAXIN in the US took place in early February. At the time, Ocugen announced that he was in talks with the FDA and the Biomedical Advanced Research and Development Authority (BARDA) to prepare an emergency authorization. Further updates on this front will be a major boost for OCGN shares.
Cimino recommends that investors keep this biotechnology game on their radar, and it feels like a wise move here. The road ahead is not necessarily smooth, but the Bharat Biotech agreement with Brazil is cause for optimism.
At the date of publication, Sarah Smith (directly or indirectly) held no positions in the securities mentioned in this article.
Sarah Smith is a web content producer at InvestorPlace.com.