Ocugen’s Valuation Deserves a Haircut, Says Analyst

Ocugen (OCGN) has been a 2021 success story, as the eye disease specialist has decided to moonlight in the lucrative world of coronavirus stocks. The company has inked a deal Read More... The post Ocugen’s Valuation Deserves a Haircut, Says Analyst appeared first on TipRanks Financial Blog.

Ocugen’s Valuation Deserves a Haircut, Says Analyst

Ocugen () has been a 2021 success story, as the eye disease specialist has decided to moonlight in the lucrative world of coronavirus stocks.

The company has inked a deal with Bharat Biotech to bring the India-based company’s Covid-19 vaccine Covaxin to the U.S. It’s a gamble that has paid off handsomely so far, particularly in the stock market’s eyes; even after pulling back since the beginning of May, the stock’s year-to-date performance shows gains in the 455% ballpark.

Does the rally have more legs? According to Chardan analyst Keay Nakae, the stock might have used up all the fuel in the tank already.

Nakae’s skeptical analysis follows on from Ocugen’s recent quarterly report. Being a pre-revenue company, the bottom-and top-line results are of less importance. More pertinently, investors wanted to get an update regarding Covaxin’s progress, and right now, the company’s target of getting the FDA to issue an EUA for Covaxin has stalled (Covaxin has already been granted an EUA in India).

Ocugen has commenced discussions with the regulatory body, and a Master File containing vital information and data to date (including preclinical studies, CMC, and clinical studies) has already been submitted. However, there has been a delay in obtaining additional data from Bharat that is required to complete the EUA submission, due to the current surge in COVID-19 cases in India.

And according to Nakae, time is running out.

“The Covid-19 vaccine landscape in the U.S. remains fast changing, moving in a direction that we believe is reducing the potential market advantages that COVAXIN may offer,” the 5-star analyst said. “Compared to just a month ago, the U.S. is no longer supply-constrained.”

Moreover, in their respective development efforts to combat emerging variants and show their vaccines are suitable to younger patients, both Moderna and Pfizer-BioNTech are making progress.

These are issues which need to be considered when mulling an investment in OCGN, says Nakae, who concludes, “We believe that investors should weigh these developments against the attractive features of COVAXIN's inactivated intact virion design…”

Ultimately, Nakae’s advice is to say on the sidelines. The analyst reiterates a Neutral (i.e. Hold) rating for the shares, while reducing the price target from $13 to $8. The reduced figure implies ~23% downside from current levels. (To watch Nakae’s track record, )

Looking at the consensus breakdown, analysts are split right down the middle when it comes to OCGN. 2 Buys vs 2 Holds lend itself to a ‘Moderate Buy’ Street consensus. With an average price target of $10.25, the analysts think OCGN is liable to remain range-bound for now. (See OCGN stock analysis on TipRanks)

To find good ideas for healthcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

The post Ocugen’s Valuation Deserves a Haircut, Says Analyst appeared first on TipRanks Financial Blog.

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Is Chemocentryx Stock a Buy Right Now? This Is What You Need to Know

Investing in biotechs is a risky business, something those backing Chemocentryx’ (CCXI) success know all too well following last week’s shenanigans. The stock started the week trading at $48.49 per Read More... The post Is Chemocentryx Stock a Buy Right Now? This Is What You Need to Know appeared first on TipRanks Financial Blog.

Is Chemocentryx Stock a Buy Right Now? This Is What You Need to Know

Investing in biotechs is a risky business, something those backing Chemocentryx’ () success know all too well following last week’s shenanigans.

The stock started the week trading at $48.49 per share. Heading off to the weekend, the shares were changing hands for a 78% discount - the result of two brutal sessions.

So, what happened? Tuesday saw the release of briefing documents from an advisory committee reviewing the application for avacopan, Chemocentryx’ autoimmune disease drug to treat anti-neutrophilic cytoplasmic autoantibody (ANCA)-vasculitis - a rare disorder which causes inflammation of small blood vessels. The documents showed there were reservations regarding the design of the main study. Following which, the shares tanked by 44%.

Then things got worse.

Following the advisory committee’s Thursday meeting, the shares nosedived by another 62%, after the committee voted 10-8 in favor of approval regarding the treatment’s key benefit/risk equation. There were other key questions for the panel to consider. One regarding whether the drug’s efficacy data was robust enough to support approval – here the panel was split 9 vs. 9. On the safety profile, the committee also voted 10-to-8 in favor.  

With the way the market reacted, you would think the drug was wholeheartedly rejected. That said, while the overall reaction was slightly positive, the level of skepticism was enough to scare off investors who are evidently less confident the drug will cut the mustard when the decisive FDA review comes around. A PDUFA date is slated for July 7. The FDA is not required to follow the advisory committee’s recommendation, but it often does so.

Investors’ lack of confidence is mirrored by Raymond James’ Steven Seedhouse, who now has “reduced conviction” the drug will make the grade. That’s not to say all hope is lost, because Seedhouse actually thinks that if approved, avacopan is a “blockbuster drug and will be adopted as standard of care in ANCA vasculitis.” It’s just that now its chances of success are akin to a “pure coin flip.”

“Avacopan should be approved and we think certain AdCom panelists were unreasonable and unprepared (e.g., wanted larger safety database, more trials, unrealistic trial designs for this serious and rare disease),” the analyst said. “But a 10-8 vote favoring avacopan on the key risk/benefit question (with one yes qualifying her answer as meaning yes in context of a confirmatory trial) informs our new coin flip model.”

While Seedhouse doesn’t alter the drug’s projected peak unadjusted U.S. sales of $1.9 billion, the analyst gives avacopan a 50% probability of success now compared to 100% beforehand.

To this end, Seedhouse rates CCXI an Outperform (i.e. Buy) along with a $51 price target. Investors stand to pocket a 365% gain, should the target be met. (To watch Seedhouse’ track record, )

Going by the rest of the Street’s take, there’s plenty of upside projected too – at $44.29, the average price target suggests one-year gains of 304%. Overall, the stock has a Moderate Buy consensus rating based on 4 Buys, 2 Holds and 1 Sell. (See CCXI stock analysis on TipRanks)

To find good ideas for biotech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

The post Is Chemocentryx Stock a Buy Right Now? This Is What You Need to Know appeared first on TipRanks Financial Blog.

Source : Tip Ranks More   

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