Popular with retail traders last year, the bubble has long since popped for Ocugen (NASDAQ:OCGN). A Covid-19 vaccine play, you may recall how OCGN stock, once trading for well under a dollar, briefly made its way above $15 per share not once, but twice. Yet, since hitting a high of $17.65 in November, shares of this clinical-stage biotech have fallen 80% to less than $3.50.

Investors should not take the big drop in OCGN stock and its low share price to mean it’s a bargain. Far from it. Shares still sport a valuation that prices in growth that’s not likely to arrive. In other words, this “cheap” stock could get much cheaper in the months ahead.

How cheap? As I’ve discussed before, it wouldn’t be a surprise if OCGN fell to between $2 and $3 per share. If that happens, shares may be worth a second look, mainly due to non-Covid-19 catalysts. Until then, however, you should stay away from OCGN stock.

Ocugen’s Covid-19 Vaccine Hopes Doused

In December 2020, Ocugen decided to throw its hat into the Covid-19 vaccine ring. Previously, the biotech firm’s focus was on developing eye disease treatments. The plan was to codevelop India-based Bharat Biotech’s COVID-19 vaccine candidate, Covaxin, and market it in the U.S. and Canada (in the event it received authorization).

Prior to the announcement, OCGN stock was trading for around 30 cents per share. The vaccine news kicked off a massive rally. In early May, shares hit a high of $16.20, up more than 5,400%.

But OCGN stock quickly fell, dropping back below $10 and remaining well below that level for most of the summer and into the fall. Then, in late October, shares spiked, hitting a high of $17.65 in early November before again turning lower.

The spikes in the price of OCGN stock were likely exacerbated by the meme stock phenomenon. As the months progressed, it became clear that Ocugen was not living up to the hype.

Although Covaxin got an emergency use listing (EUL) from the World Health Organization (WHO), it has not secured authorization in North America. Canada is still reviewing Covaxin for an EUL, while the U.S. Food and Drug Administration (FDA) put a clinical hold on a Phase 3 trial in November.

With the majority of Americans and Canadians vaccinated against Covid-19 and resistance to vaccine mandates, by the time Covaxin hits the North American market, there will be little demand for it.

OCGN Stock Has More Room to Fall

Since early November, OCGN stock has been on a downward trajectory, falling around 80%. While some may take this to indicate investors have accepted Covaxin will not move the needle for the company, I don’t think that reality is fully priced into shares just yet.

At today’s price, Ocugen has a market capitalization of $689.2 million. Keep in mind that this is a pre-revenue company with a  slim chance of generating any sort of material revenue from its vaccine candidate. While shares may not sell off suddenly from current levels, I do think they will continue to meander to a far lower price.

Rather than give back all of its pandemic-related gains, I expect OCGN stock to find a floor in the low-single digits for two reasons. The first is its cash position of $107.4 million, which it raised during its brief time in the sun. The second is the potential of its drug pipeline outside of Covaxin.

The company has made some progress recently with a treatment for inherited retinal degeneration, and it has two other treatments in pre-clinical trials. Their combined potential isn’t enough to maintain today’s valuation, but they could make shares attractive at a much lower price.

The Bottom Line on OCGN Stock

Ocugen may be in a complex business, but the story behind its shares is pretty easy to understand.

Throughout 2021, traders priced the stock as if the company was going to generate billions in sales from Covaxin in the U.S. and Canada. In recent months, as it became increasingly clear Ocugen was unlikely to see any sales in either country, investors started to adjust their valuation of OCGN stock.

“Started” is the key word here. In time, OCGN stock will move to a price where its vaccine candidate is a nonfactor.

The loss of the Covid-19 catalyst may not send shares back to 30 cents. Yet, with the likelihood of more downside ahead, the best thing to do with OCGN stock is to avoid it.

On the date of publication, Thomas Niel 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.

Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.