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The purchases and sales of insiders of Ocugen, Inc. (NASDAQ: $OCGN) were reviewed today. Ocugen is a biopharmaceutical company focused on discovering, developing, and commercializing transformative therapies to cure blindness diseases. Their modifier gene therapy platform has the potential to treat multiple retinal diseases with one single drug.
“Insiders can sell their shares for a variety of reasons, but they buy them for one reason only:
Peter Lynch
they think the price will go up.”
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When insiders buy shares this often means the company performs well and results in an increasing share price. When insiders sell their shares this is mostly an indication that the company is facing difficult times. Such transactions are in most cases exposed to the market – as this is mandatory in most countries. Shareholders can therefore keep a close eye on these developments, or should they not? Perhaps it’s just as changeable as the weather, and let’s be honest: how often is the weatherman wrong?
The insiders of ocugen look hopeful
In the past twelve months, Ocugen’s insiders bought shares but didn’t sell. Based on the previous paragraph, this would mean a clear blue sky with a lot of sunny days, but that seems to be a bit too short-sighted. In total, 1,429,578 shares were purchased and traded by insiders for a total sale amount of US $668,700 dollars. One trade took place in the past three months. Independent director Kirsten Castillo paid US $23,000 dollars for shares, which equated to 75,000 shares. Founder Shankar Musunuri is responsible for the largest insider purchase in the past 12 months. The transaction equates to US $108,000 dollars of stock at a price of US $0.41 dollars per share. From this it can be concluded that the insiders have confidence in the future of Ocugen. Especially since it concerns purchases far below the current share price, even though it is only three purchases of not very large proportions.
Another matter interesting to keep track of is the coordination between the leaders of a company by looking at how many shares each person owns. A high share of insider information presumably means that Ocugen’s leadership takes the interests of shareholders into account. Currently Ocugen insiders own about 3.4% of the shares, which is equivalent to about US $2.2 million dollars. This number is a bit on the low side at the moment.
We see opportunities and risks going both ways
There are also risks that have emerged from Simply Wall Street’s risk analysis. For example, Ocugen has less than one year of cash runway, holds less than US $1 million dollars in revenue, knows a very volatile share price in the past quarter and its market capitalization of US $64 million dollars is below average. Despite these warnings, the company has a healthy character with still sufficient potential.
Strengths and opportunities can be set against this. By evaluating the growth of the company over the past 5 years and for the following 5 years, it can be determined that the annual profit growth over the past 5 years is +50.6% – earnings growth for 2020 is determined on +89.6%.
The interesting pipeline of Ocugen
Developed for modifying gene therapy, the Ocugen platform offers a unique approach in ophthalmology by addressing multiple diseases with a single gene therapy product called OCU400 (AAV-NR2E3). In August 2020, Ocugen received its fourth FDA designation, which brings the company another step closer to treating a major hereditary retinal disease in the near future. Ocugen has two parallel Phase I / II clinical trials on the agenda for 2021, targeting two unique IRDs. The product has the potential to restore retinal integrity and function in a range of genetically diverse inherited retinal diseases. Various professors of ophthalmology and experienced oculists have indicated that they are enthusiastic about the current developments that Ocugen is going through and are curious about the results of the upcoming clinical studies and Phase I / II clinical trials.
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