Jefferies cuts Replimune price target to $2 after FDA rejects melanoma drug

Jefferies cut its rating on Replimune Group Inc. to Hold and slashed the price target to $2 after the U.S. FDA rejected the RP‑1 melanoma drug.

The downgrade signals heightened risk for investors—and could limit the company's ability to raise capital, a crucial factor for a small biotech seeking to fund further trials. Replimune's pipeline relies heavily on the success of RP‑1, its lead melanoma candidate, and a setback could deter both private and institutional backers. The market reaction also influences the firm’s borrowing costs, as lower share prices reduce collateral value for any future debt issuance.

On April 13, Jefferies moved its rating from Buy to Hold and lowered its 12‑month price target from $13 to $2, an approximately 85% reduction.^[1][2] The change followed the U.S. FDA's issuance of a complete response letter that rejected the RP‑1 application and outlined additional data the agency requires before approval.^[2] The agency’s decision effectively halts the planned Phase III trial, pushing the timeline for any potential launch further into the future.

Jefferies said it sees a "tough road ahead" for Replimune after the U.S. FDA's rejection of RP‑1.^[2] The analyst team highlighted the loss of near‑term revenue and the uncertainty surrounding a revised regulatory pathway as primary drivers of the new rating.

JPMorgan said the rejection was "disappointing" and that overall RP‑1 data supported U.S. FDA approval.^[2] Yet not all market participants share the same outlook. Nasdaq said some Wall Street analysts still see a potential rally of up to 79.61% if the company can secure alternative pathways or partnerships.^[4] The contrast underscores the split view among investors about the stock’s upside.

Replimune said it could cut jobs after the application for RP‑1 was rejected.^[3] A spokesperson said the company is reviewing its operating expenses and may reduce headcount to preserve cash while it explores next‑step strategies, such as seeking a co‑developer for the melanoma program.

Shares have been volatile. One source said the shares gained 2.7% over the past four weeks, closing at $7.16.^[4] Another source said there was a plunge following the U.S. FDA decision, reflecting mixed sentiment among traders.^[3] The divergence in price movement illustrates how quickly market expectations can shift after regulatory news.

Analysts across Wall Street now project a challenging path ahead for the firm, with many questioning its ability to fund additional trials without fresh capital. The rating downgrade and aggressive price‑target cut serve as a warning that Replimune must either secure new financing or partner with a larger entity to sustain its development program.