Replimune Group received Food and Drug Administration clearance for its experimental skin cancer drug, concluding a saga that saw regulators twice deny its application. The stock was falling anyway.
The FDA late Thursday approved the drug, Tudriqev, in combination with Bristol Myers Squibb's Opdivo for advanced melanoma. With the agency's sign-off, Replimune has achieved commercial status, paving the way for the company to begin generating revenue.
However, shares were sliding on Friday as investors appeared to sell the news. Replimune stock tumbled 5.4% as the Russell 3000 -- of which Replimune is a component -- rose 0.7%.
The biotechnology company for months had been locked in a fierce standoff with regulators, raising doubts over its ability to get a product to market and keep itself afloat. In April, following the second rejection, Replimune warned of potential mass layoffs and manufacturing cuts.
Just last week, a FDA advisory committee gave the drug its stamp of approval. The panel voted 10-3 on the question of whether data from a late-stage study were "valuable and clinically meaningful."
However, Tudriqev's fate wasn't sealed just yet. While the agency usually follows the advice of outside expert panels, it isn't bound by their recommendations, leaving the final decision up to regulators themselves.
Replimune CEO Susil Patel -- who previously accused the FDA of not working quickly enough to get a life-saving drug to patients -- described the approval as "a transformative moment" for the company that capped off years of research. "Replimune is now focused on critical activities to deliver Tudriqev to as many patients as possible," Patel said.
Jefferies analyst Roger Song noted that investor attention now shifts to the product's launch, with the first shipment expected in the coming two months.
Conversations with management indicate the initial launch will target around 200 early-adopter hospital accounts to cover roughly 30% of eligible patients. Over months nine through 12 of the rollout, Song wrote, the company plans to expand to high-volume accounts before eventually scaling out to moderate-volume accounts.
Although the approval hasn't boosted the stock yet, Song considers the milestone a "big win" for the company. In his view, the drug's broad label -- which permits direct injection into deeper, internal tumors -- offers a distinct competitive and practical edge over existing melanoma therapies from Amgen and Iovance Biotherapeutics.
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