Replimune Group Plunges 28.75%, Can the Bearish Momentum Reverse Before the FDA Deadline?

Summary
• Replimune Group (REPL) plummets to $5.415, down 28.75% from $7.6
• FDA rejects RP1 skin cancer therapy amid internal agency turmoil
• Class-action lawsuit filed over alleged IGNYTE trial misrepresentation

Replimune Group’s stock has imploded intraday, trading as low as $5.0 amid a regulatory tempest. The 36% premarket collapse from STAT’s FDA rejection report has morphed into a 28.75% intraday drop, with volume surging to 14.98M shares. The Biotechnology sector remains unshaken, but REPL’s legal and clinical setbacks have ignited a liquidity crisis. Traders must assess whether the $5.5 strike price options can act as a lifeline or if the $2.68 52W low looms as a grim endgame.

FDA Rejects Replimune’s RP1, Triggers 36% Premarket Plunge
Replimune’s 36% premarket drop and subsequent intraday freefall were catalyzed by STAT’s report revealing the FDA’s top cancer regulator intervened late in the review of RP1, overriding internal support for the therapy. The rejection, attributed to the agency’s leadership chaos and a last-minute decision by a senior official (not Vinay Prasad), has shattered investor confidence. Compounding the damage, the class-action lawsuit alleges Replimune overstated IGNYTE trial results, leading to FDA deeming the trial 'inadequate.' The stock’s 52W high of $17 now feels like a distant memory as the -1.70x dynamic P/E and 23.74% turnover rate signal a liquidity vacuum.

Options Playbook: Capitalizing on Bearish Momentum with High-Leverage Puts
• MACD: -1.0745 (bearish crossover), Signal Line: -0.9576 (aligning with downtrend), Histogram: -0.1169 (divergence)
• RSI: 39.75 (oversold but bearish momentum intact)
• Bollinger Bands: $15.85 (upper), $8.29 (middle), $0.74 (lower)—price near lower band
• 200D MA: $10.75 (far above current price), 30D MA: $8.66 (resistance ahead)

Top Options Contracts:
1. REPL20250808P5.5 (Put):
• Strike: $5.5, Expiry: 2025-08-08, IV: 152.99%, Delta: -0.4711 (moderate), Theta: -0.0138 (time decay), Gamma: 0.4055 (high sensitivity), Turnover: 18,946
• Payoff (5% downside): $5.415 0.95 = $5.144 → $5.5 - $5.144 = $0.356 gain
• This put offers high leverage (13.70%) and gamma to capitalize on a short-term rebound to $5.5. Ideal for aggressive bearish bets ahead of 8/8 expiry.

2. REPL20250919P5 (Put):
• Strike: $5, Expiry: 2025-09-19, IV: 118.66%, Delta: -0.3296 (moderate), Theta: -0.0068, Gamma: 0.1551, Turnover: 4,271
• Payoff (5% downside): $5.415 0.95 = $5.144 → $5.144 - $5 = $0.144 gain
• This longer-dated put (8.43% leverage) balances time decay with liquidity, ideal for a mid-term bearish play on potential legal and clinical catalysts.

Hook: Short-term bears target REPL20250808P5.5 for 8/8 expiry; mid-term bears allocate to REPL20250919P5 ahead of the 9/19 FDA response deadline.

Backtest Replimune Group Stock Performance
The backtest of the market's performance after an intraday plunge of -29% shows a positive impact, with the market experiencing a maximum return of 0.87% on the date following the event. This suggests that while significant downturns can be unsettling, they often pave the way for recovery and potential growth.

Urgent Bearish Setup: Act Before Expiry and Legal Deadlines
Replimune’s bearish momentum is entrenched, with technicals and fundamentals aligning for a continuation below $5.0. The $5.5 strike price puts (e.g., REPL20250808P5.5) offer high leverage and gamma to exploit short-term volatility, while the $5 put (REPL20250919P5) serves as a mid-term hedge. Sector leader Amgen (AMGN) remains resilient with a 0.387% gain, but Biotechnology’s broader rally won’t offset REPL’s legal and clinical headwinds. Act now: Target the 8/8 expiry for REPL20250808P5.5 and monitor the 9/22 lead plaintiff deadline for the class-action lawsuit. If $5.5 breaks by 8/8, the 52W low of $2.68 may follow.