Ocugen (OCGN – Research Report), the Healthcare sector company, was revisited by a Wall Street analyst yesterday. Analyst Michael Okunewitch from Maxim Group maintained a Buy rating on the stock and has a $4.00 price target.
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Michael Okunewitch has given his Buy rating due to a combination of factors surrounding Ocugen’s strategic moves and potential growth opportunities. The recent announcement of a spinout transaction involving Ocugen’s NeoCart platform, held under its OrthoCellix subsidiary, is a significant factor. This transaction, structured as a reverse merger with Carisma Therapeutics, is expected to close soon, allowing OrthoCellix to emerge as the surviving entity. This strategic move is designed to advance the NeoCart platform without additional financial burden on Ocugen, as it involves a concurrent private placement aimed at raising $25 million to fund the Phase 3 study of NeoCart.
Furthermore, the spinout allows Ocugen to retain a substantial 90% ownership in the newly formed entity, providing an implied valuation of $135 million. This transaction is seen as a value-creating opportunity for Ocugen, enabling the company to focus on its core modifier gene therapy platform while maintaining exposure to the promising cell therapy platform. The NeoCart platform itself, being Phase 3 ready, offers a regenerative cell therapy solution that has demonstrated potential in previous clinical studies to enhance cartilage repair, reduce pain, and improve durability compared to existing treatments. This combination of strategic positioning and potential therapeutic benefits underpins the Buy rating for Ocugen’s stock.
In another report released yesterday, Noble Financial also reiterated a Buy rating on the stock with a $8.00 price target.