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Investing.com - Jefferies has reduced its price target on Replimune Group (NASDAQ:REPL) to $8.00 from $10.00 while maintaining a Buy rating on the stock. The new target represents the high end of analyst expectations, with targets ranging from $2 to $8. Currently trading at $5.29, the stock has declined nearly 59% over the past six months, according to InvestingPro data.
The price target adjustment follows a Complete Response Letter (CRL) from the FDA regarding Replimune’s RP1 treatment for melanoma a few weeks ago.
Jefferies notes that the FDA has experienced significant turmoil recently, including leadership changes and regulatory shifts that could impact drug development processes, particularly for vaccines and cell/gene therapies.
The firm points to recent developments including an "abrupt" departure and subsequent reinstatement of Vinay Prasad at the FDA’s Center for Biologics Evaluation and Research (CBER).
These regulatory uncertainties could represent a "double-edge sword" for companies like Replimune in the near term, as evidenced by several CRLs and review delays during Prasad’s initial three-month tenure as CBER head.
In other recent news, Replimune Group has faced significant challenges following the FDA’s rejection of its skin cancer therapy, RP1. The decision was influenced by a senior FDA official, despite initial internal support for the treatment. This led to a Complete Response Letter (CRL) from the FDA, indicating that the application could not be approved in its current form. In the wake of this, several analyst firms have adjusted their ratings for Replimune. Cantor Fitzgerald upgraded Replimune’s stock from Neutral to Overweight, citing changes in FDA leadership as a positive factor. Conversely, BMO Capital downgraded the stock to Underperform, while Barclays (LON:BARC) and Leerink Partners also lowered their ratings, citing the unexpected CRL. Barclays reduced its price target to $3.00, and BMO Capital slashed its target to $2.00. These developments highlight the mixed reactions from analysts regarding Replimune’s future prospects.
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