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Investing.com - Leerink Partners downgraded Replimune Group (NASDAQ:REPL) from Outperform to Market Perform and slashed its price target to $3.00 from $21.00 following a Complete Response Letter (CRL) from the FDA. The stock, currently trading at $2.98, has seen its market cap decline to $229 million, though InvestingPro data shows the company maintains a strong balance sheet with more cash than debt.
The downgrade comes after the FDA rejected Replimune’s application for RP1 (vusolimogene oderparepvec) in combination with nivolumab for treating anti-PD-1-failed melanoma patients.
Leerink analyst Jonathan Chang removed the RP1 opportunity in anti-PD-1 failed melanoma from the firm’s valuation model, citing significant uncertainties about the path forward for the treatment.
The research firm noted that Replimune expects to hold a Type A meeting with the FDA in August to discuss potential amendments to the confirmatory trial.
Leerink is taking a conservative approach by removing the melanoma opportunity from its valuation until there is more clarity on regulatory requirements and the company’s development strategy.
In other recent news, Replimune Group has faced significant developments following a Complete Response Letter (CRL) from the U.S. Food and Drug Administration (FDA). The CRL was issued for Replimune’s RP1 therapy in combination with nivolumab for the treatment of anti-PD-1-failed melanoma, citing inadequate and poorly controlled clinical trials. This regulatory setback has led Jefferies to lower its price target for Replimune from $31.00 to $6.00, although the firm maintained a Buy rating. Additionally, Wedbush downgraded Replimune from Outperform to Neutral and adjusted its price target to $4.00 from $19.00. Cantor Fitzgerald also downgraded Replimune from Overweight to Neutral, noting the lack of adequate clinical investigation in the company’s application. Leerink Partners, however, reiterated an Outperform rating with a $17.00 price target, despite the FDA’s decision. The CRL represents a notable hurdle for Replimune, which had been anticipating approval of its Biologics License Application. Mizuho (NYSE:MFG) analysts commented on the stock’s decline following the FDA’s rejection. These developments highlight the challenges Replimune faces in gaining regulatory approval for its melanoma treatment.
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