Ocugen, Inc. (NASDAQ:OCGN) is a clinical-stage biopharmaceutical company struggling to find a direction and a bottom in 2022 as the pandemic persists. Investors looking to buy OCGN stock have several tough questions to ask and need straightforward answers to evaluate its shares.

I have written three articles on OCGN stock. I covered two “what-if” scenarios for its future, its reliance on the Covid-19 crisis and the irrational excitement surrounding the stock.

This will likely be my last article on Ocugen, as I like to cover new stocks with regularity. But the bottom line is that in all of these previous articles, I was bearish on OCGN stock. I am still skeptical about Ocugen, and there are several factors to support my analysis.

Why I’m Bearish on OCGN Stock

First of all, the company saw zero revenue between 2018 and the third quarter of 2021, with one exception — it saw marginal revenue of $42,620 in 2020.

Next, shareholders have been diluted in the past year, with total shares outstanding growing by 22.9%. Additionally, OCGN stock has a Piotroski F-Score of 3. This is low, which implies its business operations are poor.

In terms of its balance sheet, Ocugen has a continuous cash burn problem, with negative free cash flow. The company has also seen negative operating income for years.

On a trailing 12-month (TTM) basis, Ocugen has seen a return on assets of negative 69.53%. Its return on equity was a loss of 78.29% TTM, and its TTM return on invested capital was negative 73.99%.

Finally, the company reported a net loss to common stockholders of $10.8 million for the third quarter. Ocugen’s research and development costs reached a staggering $28 million in the nine months ended Sep. 30, 2021 compared to $4.8 million for the prior-year period.

Ocugen’s Third-Quarter Results

Ocugen reported cash of $107.3 million on its balance sheet in Q3 2021 and a free cash flow loss of $8.3 million. In theory, it has plenty of borrowed time on which to survive. However, a recent announcement could impact its cash supply:

“[Ocugen] has signed a non-binding letter of intent (LOI) with Liminal BioSciences, Inc. a Canadian public company with shares listed on NASDAQ   for the acquisition of their manufacturing site in Belleville, Ontario, for an undisclosed amount.”

This facility will help Ocugen further develop gene therapies and serve as a research and development hub. However, I am trying to understand two main points of this announcement that have hidden importance.

First, the deal is non-binding. Second, the number of capital expenditures was not disclosed. It seems like a cheap game to buy some extra media coverage on a lack of catalysts.

The main catalyst in favor of OCGN stock would be a Food and Drug Administration (FDA) approval for its Covid-19 vaccine to be used in the U.S. market. I urge investors to start thinking this might not materialize any time soon.

Putting all efforts into just one product, no matter what it is, is too dangerous in business. The fundamentals are very weak, and it is funny to consider when OCGN stock will reach its bottom — which is too far away with no sales.

Where OCGN Stock Can Go From Here

Ocugen has a few options going forward. In addition to the two potential futures I explored in my previous articles, I’ll add one more scenario. The company might focus on its gene therapies rather than just hoping for approval of its Covid-19 vaccine any time soon.

I believe the move to buy the dormant facility signals management’s acceptance that it can’t rely on its Covid-19 vaccine. It’s time for Ocugen to explore other options for profit.

OCGN stock remains too risky and overvalued. Waiting for an FDA approval of its vaccine is costly, both in terms of time and money for the firm. If it hasn’t happened already, Ocugen needs to let go of its vaccine hopes and face reality.

On the date of publication, Stavros Georgiadis, CFA  did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Stavros Georgiadis is a CFA charter holder, an Equity Research Analyst, and an Economist. He focuses on U.S. stocks and has his own stock market blog at thestockmarketontheinternet.com/. He has written in the past various articles for other publications and can be reached on Twitter and on LinkedIn.