Ocugen (NASDAQ: OCGN) stock price has been one of the best-performing companies in Wall Street this year. It has jumped by more than 218% in 2024, beating some of the best-known brands like Nvidia and Amazon. This surge has boosted its total market cap to over $469 million.
Why Ocugen shares are soaringOcugen became a highly popular company during the Covid-19 pandemic, thanks to its vaccine innovations. Its goal of becoming a major player in the vaccine industry failed amid rising competition, leading to a major lawsuit by shareholders. This lawsuit was dismissed by a judge in March.
The most important reason why Ocugen stock price jumped sharply on Friday was that the company advanced its trial for the OCU410 drug. Its trial will move to an advanced dose after showing signs of tolerability as the current phase showed no adverse signs.
OCU410 is a drug meant to treat the eye disorder geographic atrophy (AMD), a common illness that affects millions of people in the United States. If approved, the drug will compete with others like Soyfovre and Izervay which Apellis Pharma and Astellas Pharma manufacture. The company anticipates full approval of the drug in the fourth quarter.
Investors believe that Ocugen is a high-risk and high-reward investment. If its eye disorder drugs work out, the company can get a strong market share in an industry that has millions of potential customers.
Still, I believe that the biggest risk for Ocugen shareholders is dilution. The company last diluted its shareholders in 2023 when it boosted its outstanding shares from 226 million to 256 million. As such, it could take advantage of the strong stock performance to raise cash.
The most recent financials showed that Ocugen had $39.5 million in cash and short-term investments as of December 31st. It had $90.9 million in December 2022. These funds will last until Q4 of this year, meaning that fundraising is possible. As part of its cash raising, the management is considering partnerships for gene therapies.
Ocugen could also benefit from the multi-billion dollar NIAD project for its OCU500 drug, which will enter clinical trials later this year.
Ocugen stock price forecast
The daily chart shows that the OCGN share price has been in a strong bull run this year. It jumped from a low of $0.3460 in December to a high of $2.11, its highest level since September 2022. The stock formed a golden cross pattern in January, which explains the current jump.
The Percentage Price Oscillator (PPO) has remained above the neutral point. Therefore, the outlook for the stock is mildly bullish, with the next level to watch being at $2.11. If this happens, it will form a double-top pattern whose neckline is at $1.3. In this case, bulls needs to push it above the double-top level to invalidate the bearish outlook.
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