Barclays maintains Replimune stock with $17 target

On Tuesday, Barclays (LON:BARC) reaffirmed its positive stance on Replimune Group (NASDAQ:REPL), maintaining an Overweight rating and a $17.00 price target, representing significant upside from the current price of $11.66. The endorsement comes as the firm anticipates potential FDA approval of Replimune's lead candidate, RP1, for the treatment of advanced melanoma.

The FDA has accepted the Biologics License Application (BLA) for RP1 with priority review, a signal of the treatment's potential to offer significant improvements over existing therapies. According to InvestingPro analysis, REPL is currently showing signs of being oversold, with analyst targets ranging from $14 to $31, suggesting potential upside opportunities.

Barclays analysts highlighted that the FDA has not identified any review issues and has not scheduled an Advisory Committee (AdCom) meeting, which they interpret as positive signs for the approval process. The firm's confidence is further bolstered by their updated financial model, which now extends through the fiscal year 2026 and maintains initial launch estimates. While InvestingPro data shows the company is quickly burning through cash, it maintains a strong liquidity position with a current ratio of 10.11 and more cash than debt on its balance sheet.

Replimune's approach using viral oncolytics is considered differentiated and could potentially improve the effectiveness of current checkpoint inhibitors used in cancer therapy. Barclays sees the acceptance of RP1's BLA for priority review as a significant de-risking event for the therapy's path to market.

The potential success of RP1 is not the only factor in Barclays' optimistic outlook. The firm also notes possible further upside from Replimune's pipeline programs. These developments could provide additional support to the company's share price, according to Barclays.

The maintained price target of $17.00 reflects Barclays' belief in the long-term value of Replimune, considering both the immediate prospects of RP1 in advanced melanoma and the broader potential of the company's innovative oncology treatments. As Replimune awaits the FDA's decision, investors and patients alike will be watching closely for the outcome of RP1's regulatory review.

In other recent news, Replimune Group has seen significant advancements in its clinical developments. The biotech company's Biologics License Application (BLA) for RP1, a treatment for advanced melanoma, has been accepted by the FDA, with a decision expected by 2025. The company has also proposed a public offering of $125 million in common stock and pre-funded warrants. Replimune has additionally amended its Sales Agreement with Leerink Partners, reducing the maximum aggregate offering from $100 million to $89 million.

Analysts from firms such as Jefferies, BMO Capital Markets, H.C. Wainwright, and Roth/MKM have maintained their Buy ratings on Replimune. Jefferies has increased its price target for the company to $19, while BMO Capital Markets has raised its target to $18.

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