Replimune Group Soared 20.32%—What’s Fueling This Biotech Surge?

Summary
• Replimune Group (REPL) surged 20.32% intraday, trading at $3.375 after opening at $2.74.
• The stock hit a high of $3.85 and a low of $2.71, with a turnover of 40.4 million shares.
• An RSI oversold signal and high volume suggest algorithmic rebalancing or short-covering.
• The FDA’s Complete Response Letter (CRL) for RP1 raised regulatory uncertainty.
Replimune’s 34% intraday jump defies a clear fundamental catalyst, driven by technical factors like RSI oversold and high volume. The absence of sector-wide movement underscores a stock-specific rebound, likely fueled by automated trading or short-covering pressures.

Regulatory Rejection Sparks Technical Rebound
Replimune’s 34% surge follows an FDA Complete Response Letter (CRL) rejecting its BLA for RP1, a melanoma treatment. The CRL criticized the IGNYTE trial’s design and patient heterogeneity, triggering a sharp post-announcement selloff. However, the stock rebounded as the RSI reached oversold levels, attracting algorithmic buying and short-covering activity. High turnover (40.4 million shares) and a lack of sector movement (BEEM -6.19%, ATXG -8.23%) suggest the move is driven by technical factors, not broader biotech momentum.

Options Playbook: Leverage Rebound with High-Volatility Contracts
• 200-day MA: $11.02 (far above current price)
• RSI: 28.41 (oversold)
• MACD: 0.054 (bullish divergence)
• Bollinger Bands: $5.85–$14.40 (current price near lower band)
Replimune’s technicals signal a short-term rebound from oversold RSI levels, supported by high volume. The stock lacks a clear fundamental catalyst, making it a volatile, short-term trade. Two options stand out:

• REPL20250815C3.5: Call option with 7.43% leverage, 149.47% IV, and $3.5 strike. Projected 5% upside yields $0.26 payoff (max(ST - 3.5, 0)).
• REPL20250919C3: Call option with 4.08% leverage, 123.62% IV, and $3 strike. Projected 5% upside yields $0.17 payoff.

Aggressive bulls should target REPL20250815C3.5 for a 5% move above $3.5, while conservative traders may use REPL20250919C3 for a safer, longer-dated play. Watch for a breakdown below $3.00 to trigger bearish momentum.

Backtest Replimune Group Stock Performance
The performance of Replimune (REPL) after a theoretical 20% intraday surge on July 22, 2025, can be analyzed as follows:1. Impact of FDA Response Letter: On July 22, 2025, Replimune announced receiving a Complete Response Letter (CRL) from the FDA regarding its Biologics License Application (BLA) for RP1. This news led to a significant drop in the stock price, with some reports indicating a decline of over 75%.2. Intraday Surge Scenario: If we hypothetically assume a 20% surge in the stock price during the trading hours on that day, the impact would be mitigated but not reversed by the subsequent FDA news. Such a surge would temporarily increase the stock price but would not alter the fundamental issues that led to the FDA's rejection.3. Post-Surge Performance: After the hypothetical 20% surge, the stock would still be vulnerable to the negative news. The FDA CRL would still be the overriding factor, and the stock would likely decline further once the market processed the FDA's comments on the IGNYTE trial's inadequacy.4. Leerink Downgrade: Additionally, Replimune had recently been downgraded from Outperform to Market Perform by Leerink, with a price target set at $3. This downgrade would further contribute to investor uncertainty and potential selling pressure.In conclusion, while a 20% intraday surge might temporarily boost the stock price, it would not change the underlying issues that led to the FDA's rejection. The stock would likely experience a significant decline after the FDA news and the downgrade, as the market adjusted to the reality of the FDA's concerns and the potential delays in RP1's approval.

Replimune’s Surge: A Short-Term Play or Regulatory Rebound?
Replimune’s 20.32% rebound is a technical bounce, not a sustainable trend. Traders should monitor the FDA meeting (30-day window) for clarity on RP1’s path forward. The stock’s RSI oversold signal and high volatility make it a high-risk, high-reward trade. Meanwhile, Amgen (AMGN) leads the biotech sector with a 0.83% gain, signaling broader market stability. Investors should lock in profits above $3.50 or target a breakdown below $3.00 for directional clarity. Watch for regulatory updates or sector rotation into biotech to extend the rally.