Replimune Group (NASDAQ:REPL) shares fell roughly 63% following the company’s disclosure that it received a Complete Response Letter (CRL) from the US Food and Drug Administration, effectively blocking the approval of its lead melanoma therapy RP1 in combination with nivolumab.
The decision represents a significant setback for the biotechnology company, which had been seeking approval based on data from its IGNYTE clinical program in patients with advanced melanoma who had progressed on prior anti-PD-1 therapy.
Replimune said the study showed a 34% response rate and a median duration of response of 24.8 months, alongside what it described as a favorable safety profile.
The company said it disagrees with the FDA’s conclusion and argued that prior regulatory interactions supported the potential adequacy of its dataset under the accelerated approval pathway.
Replimune also said it plans no further development of RP1 without timely accelerated approval, and warned of significant operational consequences, including workforce reductions and scaling back of US manufacturing operations.
Following the update, analysts at Jefferies wrote that they see a “tough road ahead” for Replimune, cutting their price target to $2 from $13 and downgrading the stock to ‘Hold’ from ‘Buy.’ The firm said it expects a downward move of more than 50% as investors reassess the company’s prospects.
Jefferies also wrote that Replimune’s management expressed surprise and frustration with the FDA decision, including concerns about limited communication during the review process and the appointment of a new review team during the resubmission.
According to the analysts, management characterized the outcome as evidence of a “broken” regulatory process and questioned whether additional engagement with the agency would be productive.
The firm added that Replimune’s cash runway extends into the first quarter of 2027, but warned that funding may not be sufficient to support the company through key future clinical milestones, including a potential overall survival analysis from the ongoing IGNYTE-3 study, expected in 2027.
The analysts also noted uncertainty around whether the company will pursue further regulatory meetings or alternative filing strategies.
Jefferies highlighted that Replimune does not plan to advance RP1 without a path to accelerated approval and that the company is evaluating its next steps with advisors.
The firm also flagged uncertainty over the clinical and regulatory strategy ahead, including whether additional data from IGNYTE-3 would be used in future submissions.