Replimune surges 6% on earnings beat, financing relief
Hercules loan amendment extends cash runway to Q1 2027 as April PDUFA date for melanoma therapy confirmed
Replimune Group shares climbed 6% in pre-market trading Tuesday after the cancer immunotherapy company reported fiscal third-quarter earnings that beat analyst expectations and secured financing that extends its cash runway into early 2027.
The Woburn, Massachusetts-based biotechnology company reported a loss of 77 cents per share for the quarter ended December 31, exceeding Wall Street projections of an 82-cent loss. The company posted a net loss of $70.9 million, compared with $66.3 million in the same period a year earlier, as research and development expenses increased to $53.1 million from $48.0 million, driven by costs associated with the IGNYTE-3 confirmatory study and commercial launch preparations.
More significantly for investors, Replimune amended its loan agreement with Hercules Capital, providing immediate access to $35 million and the potential to draw an additional $120 million upon achieving post-approval milestones. The amendment also delays debt repayment from 2026 to 2027, addressing lingering concerns about the company's financial position. As of December 31, Replimune held $269.1 million in cash, cash equivalents, and short-term investments.
The company now projects its existing resources will fund operations late into the first quarter of calendar 2027, a timeline that encompasses potential commercialization of its lead therapy RP1 in skin cancers. This extended runway provides crucial breathing room as Replimune approaches a critical regulatory decision.
The FDA confirmed a Prescription Drug User Fee Act target action date of April 10, 2026, for the RP1 biologics license application in combination with nivolumab for advanced melanoma. This date marks the company's second attempt at approval after receiving a Complete Response Letter in July 2025, when the FDA cited concerns about the design of the Phase 1/2 IGNYTE trial and the interpretability of results due to patient population heterogeneity. The agency accepted the resubmission in October 2025.
"Commercial readiness activities, including commercial supply production and organizational preparedness, are actively underway in anticipation of potential approval," the company stated in its earnings release.
Replimune's clinical data has shown promise. In the IGNYTE anti-PD-1 failed melanoma cohort, RP1 demonstrated an objective response rate of 44% in acral melanoma with a median duration of response of 11.9 months, according to data presented at the ESMO Congress 2025. The ARTACUS Phase 2 trial of RP1 monotherapy in cutaneous squamous cell carcinoma patients following organ transplant showed an ORR of 34.6% and a 2-year duration of response of 61.0%.
Analysts remain broadly optimistic on the stock. Replimune carries a consensus "Buy" rating with six analysts recommending the stock and two suggesting hold positions. The average price target of $12.57 suggests roughly 80% upside from current levels, with individual targets ranging from $9.75 to over $12, according to MarketBeat data.
Beyond RP1, Replimune is advancing its pipeline through the REVEAL study of RP2 in metastatic uveal melanoma, which is actively enrolling patients with a Phase 2/3 transition expected in the first quarter of 2027. Liver-focused studies for RP2 in hepatocellular carcinoma and biliary tract cancer are ongoing, with monotherapy data for hepatocellular carcinoma anticipated by the end of 2026.
The stock, which closed Monday at $6.97, has traded between $2.68 and $14.80 over the past 52 weeks and has a market capitalization of approximately $551 million. Institutional investors own more than 106% of outstanding shares, indicating significant short interest alongside strong institutional backing.