Replimune Stock Catches Retail Fire As Analyst Says FDA Shakeup Removes 'Major Obstacle' For Skin Cancer Drug's Potential Approval

Retail trader buzz around Replimune Group surged Wednesday after Cantor Fitzgerald upgraded the stock to ‘Overweight’ from ‘Neutral’, citing the sudden resignation of Vinay Prasad, former head of the FDA’s biologics division, as a key development that could improve the outlook for RP1, the company’s lead oncolytic immunotherapy candidate.

The stock more than doubled Wednesday, closing up 101% at $7.55.

Cantor analyst Li Watsek said the FDA’s Complete Response Letter (CRL) issued on July 22 for RP1 in combination with nivolumab was likely influenced by senior leadership, possibly Prasad, overruling the agency’s review team. 

Watsek sees Prasad’s exit as “removing a major obstacle” and believes the odds of RP1 receiving accelerated approval have “greatly improved.” Cantor expects Replimune shares could return to pre-CRL levels above $12 if the decision is overturned.

BMO Capital analyst Evan Seigerman also said Prasad’s departure is a net positive for the biopharma sector, noting that a new FDA biologics director is “likely to be more permissive of innovation.” While BMO remains uncertain whether RP1 will be reconsidered, the firm expects shares to rally meaningfully on the change.

Prasad stepped down just two months into his role leading the FDA’s biologics division, after facing growing backlash over how he handled Sarepta’s Elevidys, the only approved gene therapy for Duchenne muscular dystrophy.

Earlier this month, Prasad and FDA Commissioner Marty Makary asked Sarepta to halt shipments of Elevidys after three children who received the therapy died, including two from liver failure. 

The move ignited backlash from patient advocates and conservative media, who slammed the agency for standing in the way of what many families see as a last hope for kids battling a fatal condition. 

Replimune stated that the CRL for RP1 cited the Ignyte Phase 1/2 trial as lacking the rigor to support approval, due to heterogeneity in the patient population and concerns regarding the confirmatory study design. No safety issues were raised. 

The company plans to request a Type A meeting with the FDA to explore a path forward for accelerated approval.

CEO Sushil Patel expressed surprise at the CRL, noting that the issues raised had not been discussed during the mid- and late-cycle reviews. RP1, engineered from a herpes simplex virus, is designed to directly kill tumors and trigger a systemic immune response. 

It’s the lead program in Replimune’s proprietary RPx platform, which the company believes can work independently or in conjunction with other cancer therapies.

On Stocktwits, retail sentiment for Replimune was ‘extremely bullish’ late Wednesday amid a 1,038% surge in 24-hour message volume.

Replimune’s stock has declined nearly 40% so far in 2025.

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