By Mackenzie Tatananni
Shares of Replimune Group continued their downward spiral on Monday after the biotechnology company cautioned that it was facing mass layoffs and cutbacks in its manufacturing operations after regulators twice rejected an application for an experimental cancer therapy.
The stock ended Friday's session down more than 19% at $4.76, its lowest level since mid-October. Replimune cratered another 64% on Monday to $1.68, on pace for a record closing low.
The selloff began after the Food and Drug Administration declined to approve Replimune's immunotherapy candidate, RP1, in combination with Bristol Myers Squibb's Opdivo for the treatment of advanced melanoma.
In a letter viewed by Barron's, regulators echoed concerns from a prior communication with the biotechnology company, largely pertaining to the study design and lack of "evidence of effectiveness."
Replimune hit back at the FDA's decision after the closing bell Friday. CEO Sushil Patel, who has held the role for two years, asserted the rapid development and commercialization of a treatment was imperative to address the thousands of deaths from melanoma each year.
"The country's foremost melanoma specialists stood behind the RP1 data," Patel said. "Patients and caregivers pleaded for urgency. All of it was met with inconsistent communication and a fragmented and slow-moving regulatory process which clearly puts U.S. innovation at risk."
The FDA rejected an earlier Biologics License Application in July, two months after Vinay Prasad was appointed to lead the agency's Center for Biologics Evaluation and Research. The BLA was resubmitted and accepted for consideration in October.
Replimune pushed back on the FDA's claims that feedback had been consistent, saying the agency contradicted several of the points it raised at a meeting last year in its latest letter.
A different review team was appointed for the resubmission, and while the FDA styled the decision as an attempt to eliminate potential bias, Replimune maintains that this team never met with the company through the review process.
"A treatment desperately needed by patients will not be available," Patel said on Friday. "Not because the medicine failed. Because the system did."
What followed was a series of stock downgrades. J.P. Morgan analyst Anupam Rama downgraded shares to Underweight from Neutral, writing that the second complete response letter for RP1 was "disappointing" and that the firm "thought the totality of data for RP1 warranted an approval."
In a note downgrading shares to Underperform from Market Perform, BMO Capital Markets analyst Evan Seigerman cited an apparent "lack of alignment" between Replimune and the FDA that seemed to span the entire clinical development process.
Jefferies analyst Roger Song didn't mince words in his own note over the weekend, writing that the company faces "a tough road ahead." Song rates the stock at Hold, down from Buy, with a $2 price target, down from $13.
Song met with members of management following the publication of the FDA's letter and Replimune's "strongly worded press release." In that meeting, Replimune doubled down on statements it made publicly and confirmed that RP1 "would not be further developed without timely accelerated approval," Song said.
The company said it plans to cut jobs and scale back its U.S. manufacturing operation as it determines a path forward. Song anticipates that Replimune's current cash runway will last the company until the first quarter of 2027.
Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 13, 2026 11:52 ET (15:52 GMT)
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