Ocugen, Inc. (OCGN) delivered some encouraging news Thursday about its eye gene therapy, but investors weren't buying it. The company shared preliminary phase 2 results for OCU410, a gene therapy designed to treat geographic atrophy, a progressive form of age-related macular degeneration that leads to vision loss.

A Meaningful Reduction in Vision Damage

The early data from the ArMaDa clinical trial showed a 46% reduction in lesion growth compared to the control group after 12 months. But here's where it gets interesting: the medium dose of OCU410 performed even better, achieving a 54% reduction in lesion size. The high dose came in at 36%, which suggests that more isn't always better when it comes to gene therapy dosing.

What makes this particularly compelling is the safety profile. Across both phase 1 and phase 2 trials, no serious adverse events were reported. For a gene therapy, that's exactly what you want to see alongside efficacy data.

Geographic atrophy affects millions of people worldwide, and current treatments require frequent injections. A one-time gene therapy that could slow disease progression by this magnitude would represent a significant advancement in how we treat this condition.

Ocugen plans to release complete phase 2 data later this quarter and aims to launch a phase 3 trial in 2026. If everything stays on track, the company is eyeing a Biologics License Application filing for OCU410 in 2028.

Expanding the Pipeline

The company has been busy beyond just the geographic atrophy program. Earlier this week, Ocugen announced that phase 1 trial results for OCU410ST, a modifier gene therapy for Stargardt disease, were published in Nature Eye. The peer-reviewed publication included 12-month safety, tolerability, and exploratory efficacy data from the first-in-human trial, with the company reporting robust outcomes that support continued development.

Last September, Ocugen also signed a licensing deal with Kwangdong Pharmaceutical, granting exclusive Korean rights to OCU400, another modifier gene therapy, this one targeting retinitis pigmentosa.

Technical Signals Flash Warning Signs

Despite the positive clinical news, OCGN shares dropped 9.08% to $1.71 on Thursday, even as the broader market rallied with the S&P 500 up 0.64% and the Nasdaq gaining 1.07%.

The technical picture tells an interesting story. The stock is trading 15.2% above its 20-day simple moving average and 28% above its 50-day SMA, showing considerable short-term strength. Over the past year, shares have surged 138.56% and are positioned much closer to their 52-week highs than lows.

The RSI currently sits at 71, putting the stock in overbought territory. Meanwhile, the MACD remains above its signal line, suggesting bullish momentum. This combination indicates strong buying interest but also raises the possibility of a pullback if investors start taking profits. Key resistance sits at $1.96, with no clear support level identified below current trading levels.

The disconnect between positive clinical data and negative price action isn't uncommon in biotech. Sometimes the market needs time to digest results, or perhaps expectations were running even higher than what the data delivered.