Ocugen's BLA for COVID-19 Vaccine Leads to Class Action Lawsuit

Lawsuit

Pomerantz LLP, a law firm with offices in New York, Chicago, Los Angeles, Paris and Tel Aviv, has filed a class-action lawsuit against Ocugen over violations of the U.S. federal securities law. Ocugen, based in Malvern, Pennsylvania, is the U.S. partner of Hyderabad, India-based Bharat Biotech, maker of Covaxin, a whole virion inactivated COVID-19 vaccine candidate.

The lawsuit alleges that Ocugen made “materially false and misleading statements” about its operations and compliance policies. It was filed in the U.S. District Court for the Eastern District of Pennsylvania and represents anyone who bought or acquired Ocugen securities between February 2, 2021, and June 10, 2021.

The lawsuit states that Ocugen “failed to disclose that the information submitted to the (US) Food and Drug Administration (FDA) was insufficient to support an EUA, Ocugen would not file an Emergency Use Authorization with the FDA, (and) as a result of the foregoing, the Company’s financial statements, as well as defendants’ statements about Ocugen’s business, operations, and prospects, were false and misleading or lacked a reasonable basis.”

The two companies inked an exclusive licensing deal on February 2, 2021, for U.S. rights to Bharat Biotech’s Covaxin. At the time, Ocugen shares jumped from $1.81 to $3.26, or about 80.1%. 

A few days later, according to Pomerantz, Ocugen made an investor presentation arguing that the Covaxin vaccine and its characters filled an “unmet need in the United States” and planned for an EUA to the U.S. Food and Drug Administration (FDA). Then on June 10, Ocugen announced plans to instead submit for a full Biologics License Application (BLA) instead of the EUA. Share prices then plunged from $9.31 on June 9 to $6.69 on June 10, or about 28.14%.

On June 2, Ocugen and Bharat Biotech announced results from their Phase III trial of the vaccine. It appeared to show efficacy in mild, moderate and severe COVID-19 of 77.8% and efficacy of 93.4% against severe disease. The vaccine is in use in India under a restricted emergency use authorization. Ocugen said it plans to file for approval in the U.S. and Canada.

Under agreements between Ocugen and Bharat Biotech, Ocugen acquired 45% of profits in the U.S. and Canada, if approved. An ongoing question is if there is any market for this vaccine in the U.S. or Canada. 

There are three vaccines approved in the U.S., Pfizer-BioNTech, Moderna and Johnson & Johnson, and as of July 18, 49.2% of the population has been fully vaccinated. In Canada, that figure is 51%. Another 7.4% has been partially vaccinated in the U.S. and another 20% in Canada.

An analysis of the Phase III data by InvestorPlace suggested the data was “nothing extraordinary,” especially compared to the existing Pfizer-BioNTech and Moderna vaccines, which demonstrated about 91.3% efficacy against COVID-19 overall and about 100% effective in preventing severe disease as defined by the U.S. Centers for Disease Control and Prevention (CDC) and 95.3% as defined by the FDA.

However, if it is determined that booster shots will be necessary, and if any vaccine can be used for it, rather than the same vaccine received earlier, there may be a larger market for Covaxin in the U.S. and Canada. In the U.S., there’s a much higher percentage of adults who have been vaccinated — as of July 4, it was 67%. Although numerous public relations efforts to get even more people vaccinated, it seems that almost all U.S. adults who want a vaccine have already received it. Canada had a slower vaccine rollout but is expected to have enough vaccines for all Canadians over the age of 12 by the end of July.

Covaxin has received EUAs in other countries, including Mexico, Philippines, Iran, Paraguay, Guatemala, Nicaragua, Guyana, Venezuela, Botswana, Zimbabwe, and others. But the deal between Bharat Biotech and Ocugen is for the U.S. and Canada.

The vaccine was developed in partnership with the Indian Council of Medical Research (ICMR) – National Institute of Virology (NIV). Covaxin is a highly purified, inactivated vaccine manufactured by way of a Vero cell-manufacturing platform.

Covaxin is currently being reviewed by the World Health Organization (WHO) over its submission for Emergency Use Listing (EUL). The WHO has granted EULs to Pfizer, AstraZeneca, Moderna, Johnson & Johnson, Sinovac, and Sinopharm.

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