Replimune melanoma therapy rejected by FDA, shares plunge

Replimune Group (NASDAQ:REPL) shares fell roughly 63% after the company disclosed that it received a Complete Response Letter (CRL) from the US Food and Drug Administration, effectively blocking approval of its lead melanoma therapy RP1 in combination with nivolumab.

FDA decision blocks lead melanoma therapy

The CRL represents a setback for Replimune as it sought approval for RP1 plus nivolumab 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 IGNYTE study showed a 34% response rate and a median duration of response of 24.8 months, along with what it described as a favorable safety profile.

Company disputes FDA conclusion

Replimune said it disagrees with the FDA’s conclusion. The company argued that prior regulatory interactions supported the adequacy of its dataset under the accelerated approval pathway.

The company also stated it plans no further development of RP1 without timely accelerated approval. It warned that the decision could have significant operational consequences, including workforce reductions and scaling back of US manufacturing operations.

Analyst reaction: “tough road ahead”

After the update, Jefferies said it sees a “tough road ahead” for Replimune. The firm cut its price target to $2 from $13 and downgraded the stock to “Hold” from “Buy,” adding that it expects a downward move of more than 50% as investors reassess the company’s prospects.

Jefferies reported that 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.

Cash runway and upcoming milestones

Jefferies said Replimune’s cash runway extends into the first quarter of 2027. However, the firm warned that available 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 highlighted uncertainty around whether Replimune will pursue further regulatory meetings or alternative filing strategies, noting that the company does not plan to advance RP1 without a path to accelerated approval and is evaluating next steps with advisors.

Jefferies further flagged uncertainty regarding the clinical and regulatory strategy ahead, including whether additional data from IGNYTE-3 would be used in future submissions.