Ocugen, Inc. (OCGN) stock prices were down 6.02% as of market close on April 16th, 2021, settling in at USD$5.78. Subsequent pre-market fluctuation saw a dip to USD$5.30, a drop of 7.09%.
Ocugen and Bharat Biotech Collaborate
In December of 2020, Ocugen announced its collaboration with the India-based Bharat Biotech to facilitate the development of Covaxin, a vaccine for the COVID-19 pandemic that has taken the world by storm. Already having been authorized for use in India, Covaxin is setting the stage for its entry into the U.S. market.
Entering the U.S. Market
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With an efficacy rate of 81% according to the results from a late-stage study, Ocugen is hoping to receive Emergency Use Authorization from the U.S. regulatory authorities, with whom it is currently working with. Should they be granted approval, Ocugen will receive 45% of the profits from Covaxin sales in the U.S.
Hope for U.S. Distribution
While there are competing vaccines that have already entered the U.S. market and boast a higher efficacy rate, the sheer demand for COVID vaccines suggests Covaxin could still capitalize on its potential U.S. presence. This is especially the case since the U.S. government halted the distribution of the COVID vaccine developed by Johnson & Johnson.
Covaxin in India
Given how the world is working towards universal immunization as a means to end the ongoing pandemic, all eyes are on producers of various vaccines for COVID. Covaxin comprises 4 million monthly doses of the cumulative 64 million doses being manufactured in India on a monthly basis. To effectively curb the pandemic through comprehensive vaccinations, sustained production of vaccines is absolutely essential for at least the next several months.
Bureaucratic Red Tape
With the patenting of vaccines conflicting with the need to urgently vaccinate entire populations, there are increasing calls for the WTO to temporarily waive intellectual property rights for COVID-19 vaccines. In 2020, India and South Africa argued for the need to waive certain provisions of the Trade-Related Aspects of Intellectual Property Right (TRIPS) agreement.
Call to Waive TRIPS Agreement
This joint proposal has gained steam since then, with more developing countries opting to co-sponsor the joint proposal. There are indications that the World Trade Organisation’s General Council will convene on May 5th of 2021 to discuss this proposal. On April 16th, 2021, U.S. President Biden was urged by a team of Democratic Senators, headed by Bernie Sanders, to support the proposal to temporarily waive intellectual property barriers that were impeding a resolution to this pandemic.
What does this Mean for Ocugen?
Should this proposal go through, it could be financially subversive for the companies that have developed and patented their COVID vaccines. In ordinary circumstances, the development of a new drug grants the producing company 20 years of security through patenting. With that security in question, some shareholders are having reservations about the profitability of Ocugen over the course of the foreseeable future.