Replimune Group Plunges 72.41% Intraday, Can the Biotech Rebound from FDA Rejection?

Summary
• Replimune (REPL) slumps to $3.4, down 72.41% from previous close of $12.325
• FDA issues Complete Response Letter rejecting RP1 melanoma therapy BLA
• Stock trades between $2.68 (52W low) and $3.4 intraday
• Turnover surges to 26 million shares at 41.73% of float

Replimune Group’s stock has collapsed on news of regulatory rejection for its lead oncology candidate. The FDA’s CRL for RP1—a breakthrough-designated therapy—has triggered a catastrophic sell-off, with shares now trading near 52-week lows. As the biotech sector grapples with mixed signals, investors must weigh the company’s path forward against technical indicators and options market sentiment.

FDA Rejects RP1 BLA, Citing Flawed Trial Design and Heterogeneous Data
The FDA’s Complete Response Letter (CRL) for Replimune’s RP1 melanoma therapy has shattered investor confidence. The agency cited three critical flaws: the IGNYTE trial was deemed insufficiently controlled, patient population heterogeneity obscured results, and confirmatory trial design questions remain unresolved. Despite no safety concerns raised, the rejection undermines the drug’s viability for accelerated approval. CEO Sushil Patel’s surprise at unraised issues during mid-cycle reviews and warnings of program obsolescence without approval have amplified panic selling.

Biotech Sector Mixed as Amgen Leads Gains; Replimune Plunges
While Amgen (AMGN) rose 1.35% as sector leader, Replimune’s collapse highlights regulatory risk in biotech. Sector peers like Scancell (cancer vaccine advances) and Sanofi (RSV acquisition) show resilience, but REPL’s 72% drop underscores the fragility of clinical-stage companies dependent on single-product candidates. The broader biotech index remains range-bound, with REPL’s collapse creating a stark outlier.

Options and Technicals: Navigating the Bearish Breakdown in REPL
• MACD: 0.80 (bullish divergence from signal line 0.56)
• RSI: 78.55 (overbought territory)
• Bollinger Bands: $13.05 (upper) vs. $7.85 (lower), price at $3.4 (near lower band)
• 200D MA: $11.07 (price far below)

Replimune’s technicals confirm a breakdown. The RSI at 78.55 suggests overbought conditions, while the MACD histogram (0.24) hints at fading momentum. Bollinger Bands show price near 52W low ($2.68), with 200-day average ($11.07) offering no support. The REPL20251121P2.5 put option stands out: 680% leverage, 28.84% IV, and 819 turnover. A 5% downside (to $3.23) would yield $0.73/share payoff (max(0, 3.23-2.5)). While delta (-0.02) is suboptimal, high leverage and liquidity make it a speculative play for aggressive bears. No ETFs are available for leveraged exposure. Watch for a breakdown below $2.68 or regulatory updates post-Type A meeting.

Backtest Replimune Group Stock Performance
The strategy that experienced a 72% 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 72% Drop Signals Crisis—Act on Short-Term Options or Exit Exposure
Replimune’s stock price collapse reflects a regulatory crisis with no near-term reprieve. The FDA’s CRL has invalidated RP1’s commercial potential, and technical indicators (overbought RSI, divergent MACD) suggest further downside. Aggressive short-sellers may target the REPL20251121P2.5 put for 5% downside, but liquidity risks remain. Long-term bulls should watch for a $10.45 (middle Bollinger Band) rebound, though 200D MA at $11.07 is distant. With Amgen (AMGN) rising 1.35%, the sector’s resilience contrasts sharply with REPL’s freefall. Immediate action: Exit long positions or short via the 2.5 put; monitor FDA meeting outcomes.