Even after new data was unveiled for the Covaxin vaccine that caused Ocugen (NASDAQ:OCGN) stock to rally slightly on July 6, the outlook for OCGN stock actually continues to remain extremely bleak.
In fact, with data indicating that Covaxin is not meaningfully more effective at combating the Delta variant or the original novel coronavirus, and growing doubt about whether most Americans will be required to get third vaccine shots anytime soon, Ocugen’s outlook has deteriorated further since my last article about the company was published on June 29.
Under agreements signed between Ocugen and Bharat Biotech, the India-based maker of Covaxin, Ocugen will receive 45% of any profits generated by the vaccine in the U.S. and Canada.
Despite the recent news and a one-day rally, OCGN stock is down 12.8% since my last analysis.
Latest Data Was Nothing Extraordinary
On July 2, Ocugen announced that, in a Phase 3 trial, Covaxin was found to have been 93.4% protective against severe symptomatic COVID-19, 77.8% effective against mild, moderate, and severe COVID-19 disease, and 65.2% effective against the Delta variant.
On April 1, Pfizer (NYSE:PFE) reported that its coronavirus vaccine had 91.3% efficacy against Covid-19 overall and was” 100% effective in preventing severe disease as defined by the U.S. Centers for Disease Control and Prevention and 95.3% effective in preventing severe disease as defined by the U.S. Food and Drug Administration.”
According to The Jerusalem Post, in the month that ended July 5, Pfizer’s vaccine was “proven to be 64% effective against symptomatic infection by the Delta variant” in Israel. Moreover, the newspaper reported that, “since the beginning of the new outbreak (of the Delta variant), the increase in serious morbidity has been minimal.”
Meanwhile, in the U.S., daily deaths from the coronavirus are coming in at 200-400 in recent weeks, down from the 400-600 range in the preceding weeks. So in both the U.S. and Israel, it appears that the existing vaccines are keeping death rates from the coronavirus quite low, despite the onset of the Delta variant.
What’s more, the data I cited earlier suggests that Pfizer’s vaccine is, at minimum, not inferior to Covaxin when it comes to blocking coronavirus infection in general, preventing severe infections, or preventing infection from the Delta variation.
Given all of these points, the latest information continues to show that there is no good reason for the U.S. to take the time and expense needed to utilize Covaxin. Canada, which, by the end of this month is expected to have enough vaccines to give shots to all Canadians over the age of 12, appears to be in a similar situation.
Doubts on New Shots Need
In a July 1 article with the headline, “The jury’s still out on whether anyone will need COVID booster shots,” Axios suggested that individuals would only need additional shots if the current shots don’t stop a variation of the virus or if evidence emerges that the vaccines’ protection weakens over time.
And it pointed out that, even if a new variant infects vaccinated people, the variant would not necessarily cause a meaningful number of them to become very sick or die. Finally, the website reported that, so far, data indicates that only “some immunocompromised people” will be meaningfully helped by an additional shot. Axios concluded the article by stating that “there’s no data-based answer as to when a booster would be necessary.”
Taken together, the information suggests that, for the vast majority of people, booster shots may not be required for a long time, possibly years, and that additional shots may never be required for most individuals.
Since 67% of adults in the U.S. were vaccinated as of the July 4 weekend and it appears that every American adult who wanted a vaccine could have gotten one, it’s clear that there’s not much of a market for any vaccine, let alone Covaxin, in the country presently. That situation may not change for years. And within a month or two, Canada’s status will likely be similar.
Bottom Line on OCGN Stock
OCGN stock remains vastly overvalued and is still an excellent stock to short. The evidence is simple to understand:
The U.S. FDA rejected Ocugen’s efforts to obtain an emergency use authorization for Covaxin, and it appears there will be little need or demand for another vaccine in the U.S. or Canada anytime soon.
Further, there’s no data indicating, let alone proving, that Covaxin is more effective in any way than the vaccines that are already in use in the U.S. Finally, there’s be no indication that the FDA is in any way interested in approving Covaxin.
O869n the date of publication, Larry Ramer held a short position in Ocugen. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Larry Ramer has conducted research and written articles on U.S. stocks for 14 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been GE, solar stocks, Ford, Exxon, and Snap. You can reach him on StockTwits at @larryramer.