Replimune Group Plunges 73.3% Intraday, What Now for Replimune's Melanoma Gamble?

Summary
• FDA rejects REPL's BLA for RP1 in melanoma, citing flawed IGNYTE trial design
• Stock opens at $2.70, plummets to $2.68 intraday low, last trades at $3.29
• CEO vows urgent FDA engagement to salvage accelerated approval path

Replimune Group's stock has imploded following a regulatory setback that threatens its flagship melanoma therapy. The FDA's Complete Response Letter has triggered a 73.3% intraday drop, with the stock trading near 52-week lows. The rejection of RP1's BLA—despite prior breakthrough status—highlights the precarious nature of clinical-stage biotech valuations. Traders now face a critical juncture as technical indicators and sector dynamics suggest further volatility.

FDA Rejects RP1 BLA, Shattering Market Confidence
The FDA's CRL for Replimune's RP1 (vusolimogene oderparepvec) in combination with nivolumab has triggered a catastrophic selloff. The agency cited three critical issues: (1) the IGNYTE trial's heterogenous patient population rendered results uninterpretable, (2) the trial failed to meet standards for an 'adequate and well-controlled' study, and (3) confirmatory trial design flaws require resolution. While no safety concerns were raised, the rejection effectively nullifies REPL's near-term commercialization hopes. CEO Sushil Patel's assertion that these issues were unraised during mid-cycle reviews adds to investor frustration, as the CRL threatens the program's viability without accelerated approval.

Technical Deterioration and Sector Divergence: Strategic ETF Focus
• RSI: 78.55 (overbought)
• MACD: 0.7998 (bullish) vs. Signal Line: 0.5588
• Bollinger Bands: Price at 3.29 (2.68-3.56 range)
• 200D MA: 11.068 (far above current price)
• K-line pattern: Short-term bullish trend, long-term ranging

REPL's technical profile reveals a classic 'buy the rumor, sell the news' scenario. While RSI suggests overbought conditions and MACD remains positive, the stock is trading near 52-week lows with heavy volume (40M shares). The 52W low of $2.68 aligns with intraday support levels, but the 30D MA at $9.29 and 200D MA at $11.07 create a steep bearish divergence. Given the absence of options liquidity and the sector's mixed performance (Amgen up 2.27%), a defensive approach is warranted. Investors should consider short-term ETFs with biotech exposure or monitor the 3.00-3.25 range for potential reversals.

Backtest Replimune Group Stock Performance
The strategy that experienced a 73% intraday decline showed no return during the backtest period, with a CAGR of 0.00% and an excess return of -88.72%, significantly underperforming the benchmark return of 88.72%. The strategy's maximum drawdown was also notable at 0.00%, indicating it failed to recover from the extreme loss, which may be due to its reliance on a single, catastrophic event as a selling signal.

Replimune's Crucial Crossroads: Immediate Action Required
The FDA's rejection has exposed the fragility of REPL's business model. With no safety concerns but a shattered regulatory pathway, the stock's survival hinges on the success of its upcoming Type A meeting. Technical indicators suggest further downside risk if the $3.00 level breaks, aligning with the 52W low. Sector leader Amgen's 2.27% gain highlights the biotech sector's resilience, but REPL's unique catalysts require a separate strategy. Investors should prioritize stop-loss orders below $3.00 and watch for catalysts from the July 30 FDA meeting. For now, the path forward remains perilous, and patience may be the best strategy as the company navigates this regulatory gauntlet.