Replimune (REPL) Q1 Loss Widens 61%

Replimune Group (REPL -1.91%), a biotechnology company specializing in oncolytic immunotherapies for cancer, reported its earnings for the first quarter of fiscal 2026 on August 7, 2025. The most notable headline was the U.S. Food and Drug Administration’s Complete Response Letter, issued on July 22, 2025, regarding approval of its RP1 therapy for advanced melanoma, which postponed the anticipated product launch and revenue generation. Net loss (GAAP) was $86.7 million. Actual GAAP earnings per share came in at $(0.95). The company reported no revenue in the quarter. Overall, the period marked a setback on the regulatory front, increased investment in both research and commercial infrastructure, and a higher cash burn rate than in previous periods.

Source: Analyst estimates for the quarter provided by FactSet.

Business Overview and Success Factors

Replimune Group is focused on developing immunotherapies using oncolytic viruses—engineered viruses that target and kill cancer cells while stimulating a patient’s immune response. Its lead product candidate, RP1, is being studied in combination with approved immunotherapies for melanoma and other cancers. The company's portfolio also includes RP2 and RP3, which is in earlier clinical trials targeting a range of solid tumors.

Current business priorities include proving the clinical efficacy and safety of its product candidates, especially RP1. Regulatory approvals are another core focus, highlighted by recent efforts to bring RP1 to market for advanced melanoma. Strategic partnerships, such as collaborations with Bristol Myers Squibb for combination trials, and protection of intellectual property are also key for future success. The ability to differentiate its therapies from other cancer immunotherapies and successfully navigate regulatory review processes will determine its long-term prospects.

Quarter Highlights and Developments

The most significant event in the period was the FDA’s issuance of a Complete Response Letter for the RP1 biologics license application in advanced melanoma. This regulatory feedback delays the commercial launch of RP1, deferring potential revenue and raising uncertainty over the path and timeline for approval. The company stated, “We are committed to finding an expeditious path forward with the FDA,””

Research and development expenses (GAAP) rose to $57.8 million, an increase of 34.4% year over year. This was mainly due to a ramp-up in personnel, medical affairs spending, and consulting costs as the company prepared for an expected commercial launch. Selling, general, and administrative expenses more than doubled to $32.6 million from $14.4 million in Q1 FY2025, reflecting the completed build-out of the customer-facing organization, commercial infrastructure, stock-based compensation expenses, and pre-launch activity. Net loss (GAAP) widened to $86.7 million, a 61.2% jump from $53.8 million in Q1 FY2025.

Operationally, Replimune completed preparations to support a potential RP1 launch before regulatory setback. These actions included hiring and extensive training of the commercial team, establishing distribution and reimbursement infrastructure, and manufacturing product inventory. Despite these investments, the regulatory delay means these resources are currently not contributing to commercial returns.

On the clinical side, enrollment progressed in the confirmatory IGNYTE-3 Phase 3 trial for RP1 in melanoma. This study aims to enroll 400 patients globally and is designed to collect data requested by regulators, including overall survival outcomes. Other pipeline programs advanced, such as RP2 in uveal melanoma (the REVEAL trial) and RP2 in hepatocellular carcinoma in collaboration with Roche, providing longer-term clinical milestones for the company.

Pipeline, Financial Position, and Competitive Landscape

RP1 is an oncolytic immunotherapy that uses a modified virus to directly destroy tumor cells and stimulate anti-cancer immune responses. In clinical studies, including the ongoing ARTACUS trial for skin cancer in organ transplant recipients, RP1 demonstrated a 34.6% overall response rate and a 24-month response duration in 61% of responders. The product is now being evaluated in combination with checkpoint inhibitors such as nivolumab, a Bristol Myers Squibb therapy that blocks the PD-1 pathway to help the immune system attack cancer.

The company continues to expand its product pipeline with RP2, an oncolytic immunotherapy engineered for broader anti-tumor activity, available in multiple clinical studies. Key projects include the REVEAL trial in metastatic uveal melanoma and additional studies in hepatocellular and biliary tract cancers. Collaborations with major pharmaceutical partners, including Bristol Myers Squibb and Roche, provide clinical support, but the near-term outlook depends heavily on regulatory outcomes for RP1.

Cash, Guidance, and Outlook

Replimune ended the quarter with $403.3 million in cash, cash equivalents, and short-term investments. This represents a decrease of $80.5 million in cash, cash equivalents, and short-term investments from Q4 FY2025. The company estimates its cash runway extends into the fourth quarter of FY2026, not factoring in potential product revenues or additional capital-raising events.

Management did not provide revenue guidance or projections for future quarters, citing ongoing uncertainty following the FDA’s regulatory feedback on RP1. The company indicated it will provide updates on product launch metrics and revenues once there is clarity on regulatory resolution and product availability. Replimune Group does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.