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Investing.com - BMO Capital downgraded Replimune Group (NASDAQ:REPL) from Outperform to Underperform and slashed its price target to $2.00 from $27.00 following a Complete Response Letter (CRL) from regulators. The stock has already fallen nearly 78% in the past week, trading close to its 52-week low of $2.68.
The significant downgrade comes after Replimune announced it had received a CRL, a communication from the FDA indicating that an application cannot be approved in its current form.
BMO Capital noted that while it still considers Replimune’s RP1 product a "real drug," the company will likely need to conduct new clinical studies to secure regulatory approval.
The research firm expressed concern about Replimune’s financial position, suggesting the company may not have sufficient cash reserves to fund the additional studies required for approval, with limited financing options available.
BMO Capital expects Replimune will need to provide more clarity on its path forward and implement significant restructuring, predicting the stock will underperform compared to its peer group in the meantime.
In other recent news, Replimune Group has faced significant challenges following a Complete Response Letter (CRL) from the Food and Drug Administration (FDA) regarding its RP1 therapy in combination with nivolumab for melanoma treatment. This development has led to a series of downgrades from major analyst firms. Barclays (LON:BARC) downgraded Replimune from Overweight to Equalweight and reduced its price target to $3.00. Similarly, Leerink Partners downgraded the stock from Outperform to Market Perform, also setting a price target of $3.00. Wedbush followed suit by downgrading the stock to Neutral and adjusting its price target to $4.00. Jefferies, while maintaining a Buy rating, significantly lowered its price target from $31.00 to $6.00. The FDA’s rejection cited inadequacies in the Phase II IGNYTE trial, which was not deemed "adequate and well-controlled" to provide substantial evidence of effectiveness. These recent developments have prompted analysts to reassess their positions on Replimune Group.
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