Stock Market

There are some investments that you are tempted to simply laugh off because of their perceived ludicrousness. Ocugen (NASDAQ:OCGN) is one such name. A biotechnology firm that specializes in gene therapy to address blindness diseases, Ocugen certainly is pursuing a noble goal. But that alone isn’t enough justification for investors to consider OCGN stock.

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Invariably, some have been drawn into this narrative. But then they look at the chart and that’s where you see the dichotomy between the investor and the speculator. Over the years, OCGN stock has been falling off one precipitous cliff after another. From late 2019 until December 2020, shares were mired in the less-than-a-dollar menu.

Arguably most investors who have been around the game avoid spending too much time with penny stocks. These low-volume assets can occasionally spike once in a blue moon. But knowing when, or if, that spike will occur is the key. While you’re waiting for that profitability boom that might never come, you could end up losing a ton of money.

Splashy Partnership Looks Risky

However, Ocugen made a huge splash when it announced a partnership with India’s Bharat Biotech, which is developing a novel coronavirus vaccine. As InvestorPlace contributor Mark Hake pointed out, the partnership is risky.

Moreover, on Jan. 19, Bharat Biotech issued a warning about its Covid-19 vaccine. According to Seeking Alpha, the company said that people with weaker immunity and other medical conditions should consult a doctor before getting the shot. In addition, they said if possible avoid the vaccine.

Further, we already have many promising vaccines or vaccine candidates from major international pharmaceutical firms. Yes, there is a more-the-merrier argument considering that we’re still struggling to contain the pandemic. However, this is a serious situation — you don’t want to just take any vaccine.

Therefore, it’s hard to think anything of OCGN stock as anything but a cynical, perhaps desperate play. Yet shares have exploded higher so what’s the deal with that?

Is OCGN Stock a Side Show or the Real Deal?

On the surface, OCGN stock screams speculation. Frankly, upon closer inspection, I still believe that Ocugen shares are equivalent to legal gambling. Sometimes, you end up getting one over against the house, so that’s the allure. But is there a fundamental case — no matter how far-reaching — for OCGN?

Initially, I thought there was. Back in September 2020, I noted that Ocugen’s flagship product OCU400 utilizes an adeno-associated viral vector to facilitate targeted retinal therapy. Viral vectors are one of the advanced approaches vaccine developers have used to protect against Covid-19. Notable examples include AstraZeneca (NASDAQ:AZN) and Johnson & Johnson (NYSE:JNJ).

Therefore, my thinking was that Ocugen can partner with a biotech firm to develop a viral-vector Covid-19 vaccine. Perhaps it may not come to fruition. However, the research and knowledge gained from the collaboration could spark organic synergies toward using viral vectors in retinal therapies, Ocugen’s core business. If that were the case, maybe OCGN stock makes some sense.

However, what confuses me is that the Bharat Biotech partnership involves developing Covaxin, an inactivated vaccine. True, Bharat is also working on a viral-vector vaccine with Thomas Jefferson University, per The Washington Post. But Ocugen is definitely working on Covaxin — it says so on its website.

Which is interesting because inactivated virus vaccines are basically traditional vaccines — you receive an inactivated/weakened form of the virus, which “teaches” your immune system to respond effectively in case of future infection. It’s the most trusted approach because it has a long history of success. But it also takes a considerable amount of time to develop relative to the other, more advanced approaches.

That’s all secondary. What confuses me is the apparent lack of synergy. Since Ocugen deals with advanced gene therapies, shouldn’t it collaborate on an advanced vaccine platform?

Do Your Due Diligence on Ocugen

As my critics consistently remind me, I am hardly one to talk about gene therapies since I need therapy myself for severe intellectual deficiencies. Indeed, many people have marveled at how someone so stupid like me can write for InvestorPlace. Doesn’t it have standards for goodness sake?

Yes, it does. And what can I say? It’s one of life’s greatest mysteries.

Anyways, because I’m a low IQ individual, you may be tempted to dismiss everything I said above. Just do me a favor — look at the sources that I included. Chances are, you’ll come to the conclusion that OCGN stock is a cynical investment that may not be sustainable.

Still, I’ll leave you with this: the market has gone absolutely bonkers. So it’s well within possibility that OCGN stock can move higher. If you are going to take a shot, make sure you do so as a gamble and nothing more.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.