Replimune’s CEO Sushil Patel has already warned that the biotech will need to cut staff and substantially scale back its U.S. manufacturing operations.
The second FDA rejection of the melanoma drug RP1 has plunged Replimune into uncertainty, with the company’s likely path to recovery paved with job cuts, site closures and strategic alternatives.
“We have no choice but to eliminate jobs, including substantially scaling back our U.S. based manufacturing operations,” Replimune CEO Sushil Patel said in a prepared statement on Friday in response to RP1’s rejection. It remains unclear how many employees will be affected by Replimune’s savings push, or when the layoffs might occur. Replimune faces “a challenging path forward,” BMO Capital Markets wrote in a note to investors on Friday afternoon.
“The company will need to secure funding,” the analysts said, pointing to the biotech’s $269.1 million cash position at the end of 2025. “Significant cost cuts are likely necessary.”
The regulatory rebuff likely also signals the end of the road for RP1: “Without timely accelerated approval, the development of RP1 will not be viable,” Patel said on Friday, though he stopped short of definitively announcing that the drug’s development would be discontinued.
Friday’s rejection triggered a 20% drop in Replimmune’s shares—and the selloff has only worsened since. The biotech is trading at $1.75 per share before the opening bell on Monday, a 63% crash from its previous closing price.
Patel in his statement did not mince words. He called the FDA’s verdict “deeply disappointing,” claiming that the agency “has not exercised regulatory flexibility to meet patients’ needs.” The CEO also accused the agency of “inconsistent communication” and of employing a “fragmented and slow-moving regulatory process.”
In particular, Replimune’s press announcement blasted the FDA’s use of a different review team for RP1’s resubmission, replacing the previous staffers “who had interacted with the company.” This new review team, the biotech claimed, “did not meet with the company during the review process despite the company offering.”
Replimune also flagged what it characterized as contradictions between the FDA’s previous position on RP1’s data package and the reasons for rejection. Most notably, the biotech pointed out that the agency in 2021 agreed that “if the data was sufficiently compelling, a single arm trial could be acceptable for consideration under accelerated approval.”
But in the FDA’s complete response letter (CRL), which was made public under the agency’s new transparency initiative, the agency insisted that Replimune’s single-arm study “is not considered to be an adequate and well-controlled clinical investigation” and cannot support approval.
Analysts at BMO took the regulator’s side. “While we are no fans of [Center for Biologics Evaluation and Research Director Vinay] Prasad, commentary from the CRL clarify the consistency in FDA’s decision to deny approval,” the analysts wrote. The CRL is clear, they continued, that Replimune and the agency had never truly aligned on the use of a single-arm study or the company’s methods to assess RP1’s efficacy.
“While the FDA allowed the resubmission, they appeared to do so out of a desire to be open to the possibility that fundamental issues with the product’s clinical package could be addressed in a high unmet need indication,” the firm continued.
“We can’t help but feel prior resubmission efforts were grounded more on hope than true alignment with FDA,” the analysts added. “Hope is never a winning strategy, unfortunately.”
