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Ocugen share price: what can we expect ahead of Q3 earnings?

Ocugen’s share price has fallen close to 16.0% over the past week. What can we expect ahead?

When does Ocugen report earnings?

Ocugen is set to release its third quarter (Q3) financial results on 4 November 2021, before market opens.

Ocugen earnings – what to expect

Ocugen has not delivered any revenue over the past four quarters, therefore its upcoming earnings figure would possibly take on less importance in determining its fundamentals. Market participants may be more on the lookout for any progress on the World Health Organisation’s (WHO) Emergency Use Listing (EUL) for Covaxin, a Covid-19 vaccine in partnership with Bharat Biotech, to drive share prices. That will put the 26 October timeline on watch, where an approval decision by the WHO may be discussed.

However, Ocugen’s exclusive rights to sell the vaccines in US and Canada, with a 45% split of the revenue, raises some concerns. Both countries currently have a vaccinated population of 65.2% and 77.8% respectively. As vaccination rates remain on the rise and Ocugen’s approval process continues to drag on, the question of Ocugen’s eventual addressable market will emerge.

When it comes to vaccine comparison, efficacy or price are potential important factors in attracting demand. The Phase 3 clinical trial results for Covaxin conducted in India demonstrated a 77.8% efficacy against overall Covid-19 disease, which may not be a competitive figure when faced with Pfizer and Moderna efficacy of above 90%. Therefore, Ocugen may have to compete through lower pricing, thus possibly pointing towards lower margins. This could be a probable headwind to watch ahead.

Based on Bloomberg data, short interest for Ocugen stands at 27.34% of its float at the time of writing. Therefore, any strong gap-up in share price could potentially fuel a short squeeze but a significant catalyst is needed for it to play out.

That said, a recent sell transaction in October from the company’s director does not seem to portray a sign of longer-term confidence from the management. The overall transaction amounts to $1.7 million, which is fairly significant by accounting for close to 18% of his overall shareholdings before the transaction. Other instances of share sales transactions in early May and June this year seem to be in line with some of the share price’s peaks. This could possibly raise some questions on whether subsequent upside for share price may also be met with some selling pressure.

Ocugen shares – technical analysis

Overall price action for Ocugen seems to trade within a descending triangle pattern, with a series of lower price highs since February this year. A previous attempt to break above the downward trendline last week was once again met with resistance and its share price would perhaps have to see a break above the downward trendline in order to point towards more sustained upside. Near-term support may potentially be at $6.50, a level where share prices have been largely consolidating over the past few months.

This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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