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Investing.com - Barclays (LON:BARC) downgraded Replimune Group (NASDAQ:REPL) from Overweight to Equalweight and significantly reduced its price target to $3.00 from $17.00. The biotech company, currently valued at $216.6 million, has seen its stock trading near 52-week lows, according to InvestingPro data.
The rating change follows what Barclays described as a "surprising" Complete Response Letter (CRL) issued by the Food and Drug Administration for Replimune’s RP1+PD1 combination therapy.
The FDA rejection has created "a high degree of uncertainty" around Replimune’s lead asset and subsequent pipeline candidates, according to Barclays.
The investment bank expressed particular concern that many of Replimune’s other drug candidates utilize the same technology, process, or trial design as the rejected therapy.
The substantial price target reduction from $17.00 to $3.00 represents an 82% decrease, reflecting Barclays’ diminished outlook for the biotechnology company following this regulatory setback.
In other recent news, Replimune Group faced significant developments following a Complete Response Letter (CRL) from the FDA concerning its RP1 therapy for anti-PD-1-failed melanoma patients. The FDA’s rejection of the Biologics License Application cited issues with the Phase II IGNYTE trial, which was deemed not "adequate and well-controlled." This decision led to multiple analyst downgrades, with Leerink Partners reducing its rating from Outperform to Market Perform and cutting the price target from $21.00 to $3.00. Similarly, Wedbush downgraded Replimune from Outperform to Neutral, adjusting the price target from $19.00 to $4.00. Cantor Fitzgerald also downgraded the stock from Overweight to Neutral due to the FDA’s concerns about the trial’s clinical investigation. Despite these downgrades, Jefferies maintained a Buy rating but lowered its price target significantly from $31.00 to $6.00. The analysts highlighted the surprise element in the FDA’s decision, as the cited issues were not previously raised during the review process. These recent developments have placed Replimune under scrutiny as it navigates the challenges posed by the FDA’s feedback.
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