Replimune Plunges 76.26% Intraday, What Lies Behind the FDA's CRL Rejection?

Summary
• Replimune's (REPL) stock nosedived 76.26% to $2.925, collapsing from a 52-week high of $17 to near its 52-week low of $2.68.
• The FDA issued a Complete Response Letter (CRL) rejecting REPL's BLA for RP1 in melanoma due to insufficient trial evidence.
• Intraday turnover surged 110%, with a dynamic PE of -0.91, signaling acute bearish pressure.
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Replimune's 70%+ intraday freefall has sent shockwaves through the biotech sector, driven by the FDA's rejection of its lead candidate. The stock's collapse from $12.325 to $2.925—its lowest level since early 2025—reflects a regulatory crisis that threatens the company's viability. With a 78.55 RSI and overbought MACD divergence, the technicals align with the fundamental catalyst.

FDA CRL Sparks Regulatory Uncertainty for Replimune's Lead Candidate
The FDA's CRL for Replimune's RP1 melanoma therapy represents a catastrophic regulatory setback. The agency cited the IGNYTE trial's failure to demonstrate 'substantial evidence of effectiveness' and criticized its heterogeneous patient population. While no safety concerns were raised, the CRL's focus on study design flaws—particularly the lack of a confirmatory trial—has rendered RP1's accelerated approval path uncertain. CEO Sushil Patel's frustration over unraised issues during prior reviews and the warning that further development may be 'unviable' have compounded investor panic.

Biotech Sector Volatility Amid Regulatory Hurdles
The biotech sector has seen recent regulatory turbulence, with Sarepta (SRNE) also facing FDA scrutiny over Elevidys and Ultragenyx (UG) receiving a CRL for Sanfilippo syndrome. While Amgen (AMGN) remains a sector leader with a 2.92% intraday gain, smaller biotechs like Replimune face existential risks when key programs fail to meet FDA standards. The sector's mixed performance underscores the fragility of clinical-stage companies reliant on single-product pipelines.

Options Playbook: Capitalizing on High Volatility and Leverage
• RSI: 78.55 (overbought)
• MACD: 0.7998 (signal 0.5588, histogram 0.2410)
• 200D MA: $11.068 (far above current price)
• Bollinger Bands: Upper $13.05, Middle $10.45, Lower $7.85
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REPL's technicals show extreme bearish momentum, with RSI in overbought territory and MACD divergence indicating exhaustion. The stock is trading near its 52-week low, with no immediate support levels visible. A 5% downside scenario to $2.78 (current price $2.925) would test critical levels. While leveraged ETFs are absent, options remain the primary speculative vehicle.
• REPL20251121P2.5: Put option with 116.4% IV, -0.2745 delta, and $2.5 strike. Projected payoff: $0.22 (K - ST = 2.5 - 2.78). High liquidity (550k turnover) and 600% price change ratio suggest strong short-term bearish potential.
• REPL20260220P2.5: Put option with 117.39% IV, -0.2553 delta, and $2.5 strike. Projected payoff: $0.22. Longer-dated option with 41k turnover provides downside protection against prolonged bearish trends.
Aggressive bears should prioritize REPL20251121P2.5 for immediate exposure, while REPL20260220P2.5 offers a hedging option. If $2.5 breaks, these puts could deliver 8-10x returns in a 3-6 month horizon.

Backtest Replimune Group Stock Performance
The strategy that experienced a 76% 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 CRL Crisis: Immediate Playbook for Traders
Replimune's stock is in freefall, with no near-term catalysts to restore investor confidence. The FDA's rejection of RP1 has created a binary event risk—either the company secures a Type A meeting and redesigns its trial, or the stock remains in bearish consolidation. Technical indicators suggest further downside, with RSI overbought and MACD diverging. Sector leaders like Amgen (AMGN, +2.92%) remain resilient, but small-cap biotechs face heightened volatility. Traders should monitor the $2.5 support level and the FDA's response to Replimune's Type A meeting request. If $2.5 breaks, put options like REPL20251121P2.5 could deliver outsized returns.