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Why the Coronavirus May Have Disrupted Ocugen

Josh Enomoto

Under ordinary circumstances, most investors would likely ignore Ocugen (NASDAQ:OCGN). While the underlying science is a compelling one – proposing treatments for under-served rare eye diseases – OCGN stock is hardly confidence-inspiring. Once commanding a hefty price tag, shares have consistently disappointed stakeholders. And with the unit price of the equity falling to around 30 cents, a delisting seems inevitable.

An illustration of the novel coronavirus second wave.
An illustration of the novel coronavirus second wave.

Source: Shutterstock

Still, this is no ordinary period. We’re talking about the new normal. At the time when the novel coronavirus pandemic first shut down our nation, millions of people were left either working from home or collecting a pretty sweet unemployment benefits package. Further, with no live sports and other social events obviously closed, people turned to Wall Street for fun and profitability.

Sure enough, some crazy speculative names like OCGN stock briefly dominated the headlines. And because the allure of extreme riches is technically present due to the low-ticket price, many are still interested in gambling. Looking deeper into the science, Ocugen isn’t an utterly hopeless case.

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One of its flagship pre-clinical products is OCU400, a novel gene therapy candidate designed to restore retinal integrity across a range of inherited retinal diseases. To accomplish this task, Ocugen delivers its gene therapy to targeted cells via an adeno-associated viral vector (AAV) or carrier.

Nowadays, it’s understandable that people have an immediate gut reaction to the word “viral” or “virus.” But the beauty of viral vectors is that scientists leverage the infectiousness of viruses for positive health outcomes. Imagine if you will a computer virus that put money into your bank account rather than siphon it.

While this sounds like science fiction, this is the heart of the story driving OCGN stock.

The Coronavirus May Cause a PR Headache to OCGN Stock

If you’re thinking that viral vectors have other benefits, such as vaccine development, you’re absolutely right. In fact, one of the leading coronavirus vaccine candidates is a recombinant viral vector vaccine produced by AstraZeneca (NYSE:AZN) and the University of Oxford.

One of the advantages of viral vectors is their facilitation of mass production; hence, this surely played a role in AstraZeneca’s decision to go with the platform. At the same time, this innovation is a relatively new one and can lead to unforeseen results.


Unfortunately, AstraZeneca found that out the hard way when it paused human clinical trials after one participant developed an unexplained illness. This resulted in the World Health Organization calling the race to a vaccine a “wake-up call.”

Now, I don’t know about you, but I don’t want any wake-up calls regarding my eyes. Therefore, AstraZeneca’s setback may negatively impact OCGN stock due to sudden questions about the safety of viral vectors.

But let me be fair. AZN specifically utilized an adenovirus carrier. With Ocugen’s OCU400, the company is incorporating an adeno-associated viral vector. On the surface, these two appear similar and they are. However, a key distinction is that AAVs are typically non-inflammatory and non-pathogenic.

Also, while AAVs are associated with immune responses (neutralizing antibody production), clinical trials show no such effect on the retina, according to researchers Shyam Daya and Kenneth I. Berns, contributors for the American Society of Microbiology. As a retinal disease play, this is obviously a positive for OCGN stock.

However, we’re still talking about an experimental gene therapy solution. As AstraZeneca’s coronavirus trial demonstrated, sometimes you just don’t know what you don’t know. And that lack of knowledge can bite you in the rear.

Ocugen Is Scientifically Intriguing but Financially Repulsive

Nevertheless, the overriding advantage driving OCGN stock is that Ocugen is serving extremely rare eye diseases. Given that patients have few if any options, they might be willing to take a chance. Indeed, your vision is worth throwing everything you have to save it.

Moreover, Ocugen has a leg up with its AAV-based gene therapies. From a bird’s eye perspective, its OCU400 is designed to address the “breakdown and loss of cells in the retina.” According to Robert MacLaren, professor of ophthalmology at the University of Oxford, certain retinal diseases are more appropriate for present gene therapy technologies. MacLaren stated:

…the diseases that are due to deficiencies of genes are probably easier to treat than those in which the genes are causing detrimental effects…This is because we know a little bit more about gene replacement than gene knockout.

As I mentioned above, this dynamic benefits OCGN stock. Ocugen is in the business of replacing genes, not overhauling the entire system.

Still, I wouldn’t go too crazy on OCGN stock. Yes, the narrative does get more attractive when you perform a deep-dive into the science. But at the end of the day, this is a penny stock with a long history of disappointing shareholders.

Perhaps one day, it will be worth a shot. For now, most investors should stay on the sidelines, especially given the bad PR toward viral vectors.

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.

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