Ocugen (NASDAQ: OCGN) stock price has done well in the past few months as investors remain optimistic about its product pipeline. It jumped to a high of $1.60 on Thursday, the highest point in more than 52 weeks. At its peak this week, the stock was up by more than 368% from its lowest point in 2023.

Ocugen share price surged hard on Thursday after a court in the US upheld its win in an investor lawsuit. A group of investors had sued the company of misleading its investors about the possibility that its Covid-19 vaccine would receive an accelerated approval by the FDA.

The drug, Covaxine, did not receive this fast-track approval as the company failed to follow the FDA process. As a result, the stock reversed most of the gains it made during the pandemic when it surged to $18.76. It retreated to a low of $0.38 in 2023.

Therefore, winning in the appeals court means that the company will not be liable to make substantial payments to these payments. It also means that Ocugen can continue with its research process. 

Ocugen has moved past the Covid-19 vaccine hype and is now focusing on other vaccines. Its most important one is OCU 400 vaccine which is in phase ½ and is slowly progressing to phase 3 with its orphan drug designation.

This gene therapy will be used to treat inherited eye diseases like retinitis pigmentosa and autosomal dominant retinitis pigmentosa. In the last earnings call, the management noted that the company had seen encouraging results in testing. 83% of the subjects have seen stabilisation or improvement of the eye.

If Ocugen is successful, it means that the company will be in a strong position in an industry that is expected to grow. For one, the RHO mutation affects more than 10,000 patients in the US alone and many more around the world.

The biggest risk for Ocugen is that of potential dilution. The company ended the last quarter with $53.5 million in cash and equivalents, a sharp drop from $90.9 million in December 2022. Ocugen is burning substantial sums of money. It had a net loss of $14.2 million in the last quarter.

OCGN chart by TradingView

The daily chart shows that the OCGN share price surged to a high of $1.60 on Thursday. It then pulled back sharply and closed at $1.34. The current price is much higher than last week’s low of $0.3838. 

The stock has remained much higher than the key point at $1.30, its highest swing on February 20th. It has formed a shooting star candlestick pattern, which is characterised by a small body and a long upper shadow.

Therefore, the outlook for the stock is mildly bearish as long as it is below this week’s high of $1.60. If this happens, the stock could drop to $1.20. A break above the key resistance point at $1.60 will point to more upside.

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