Ocugen shares lose momentum after US$100m offering
Biopharmaceutical firm Ocugen’s shares rallied following positive clinical trial results for its Covid-19 vaccine candidate, but retreated after a share offering.
- Ocugen Inc (Nasdaq: OCGN) share price drops to US$11.21 per share
- Its vaccine development partner said Covaxin showed 78% overall efficacy
- Separately, Ocugen sold US$100 million of shares to institutional investors
- Buy and sell Ocugen shares with an IG account
Ocugen stock price hits two-month high
Shares of Ocugen - a gene therapy firm that aims to cure blindness and is also working on a new coronavirus vaccine - pulled back by 3.9% to finish Wednesday at US$11.21.
Despite the day-on-day decline, that is still the stock’s strongest close since early February 2021.
Over the past week, OCGN shares had nearly doubled from US$5.64 at last Monday’s close, thanks to encouraging results for its potential Covid-19 vaccine.
Year-to-date, the counter has shot up by over 500%, from US$1.83 at the end of 2020.
Among four analysts, three had ‘buy’ calls on OCGN shares while one recommended ‘hold’, as of Wednesday. Their average 12-month target price was US$12.50, according to Bloomberg data.
Ocugen closes US$100 million direct offering at premium
Last Friday, Ocugen said it would sell 10 million shares at US$10 apiece directly to healthcare-focused institutional investors.
The offer price was at a 7.6% premium to OCGN’s closing price of US$9.29 last Thursday.
Ocugen this Wednesday announced it has closed the offering with US$100 million in gross proceeds raised.
Net proceeds of US$93.4 million will go into general corporate purposes, capital expenditures, working capital, and general and administrative expenses.
HC Wainwright & Co acted as the exclusive placement agent. Analysts at HC Wainwright & Co gave a ‘buy’ call and US$12 target price on OCGN shares.
Positive data for Ocugen’s potential Covid-19 vaccine
Ocugen is co-developing Covid-19 vaccine candidate Covaxin with India’s Bharat Biotech, for the US market.
Last Wednesday, Ocugen said the second interim analysis of Bharat Biotech’s Phase 3 clinical trial of Covaxin yielded ‘positive’ results. The news sent OCGN shares soaring 42.9% the next day.
The product demonstrated 78% efficacy against mild, moderate, and severe Covid-19 disease, as well as 100% efficacy against severe Covid-19 disease alone.
With these ‘competitive’ results, Ocugen believes it has sufficient information to support an Emergency Use Authorization (EUA) filing in the US, noted Roth Capital analyst Zegbeh Jallah.
If EUA is granted and Covaxin can be sold in the US, ‘this could lead to a significant revenue generating opportunity for Ocugen’, Jallah added. He has a ‘buy’ call and US$10 target on OCGN.
Covaxin appears to be effective against novel mutants and has storage advantages, as it can be stored at normal refrigerator temperatures. Given this, Roth Capital maintained its ‘conviction on positive outlook on the market opportunity’.
Bruce Forrest, a member of Ocugen’s vaccine scientific advisory board, said the safety and efficacy were ‘remarkable’ considering the prevalence of several coronavirus variants circulating at the time of the trial.
The company plans to consider clinical development in special populations such as children, Forrest said.
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