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Coverage Initiated on U.S. Biotech with a 'Potential Best-of-Breed Oncolytic Virus'
Research Report

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The investment thesis on this immunotherapies developer is made in an H.C. Wainwright & Co. report.

Analyst Ram Selvaraju reported in a July 8 research note that H.C. Wainwright & Co. initiated coverage on Replimune Group Inc. (REPL:NASDAQ) with a Buy rating and $26 per share target price. The biotech's current share price is about $13.52.

Selvaraju made the case for investing in this oncolytic immunotherapies development firm, presenting six compelling components of the story.

Replimune has partnerships with Bristol-Myers Squibb and Regeneron, Selvaraju pointed out, through which the companies are collaboratively evaluating RP1, Replimune's lead candidate and first Immulytic product, for proof of concept in melanoma and cutaneous squamous cell carcinoma (CSCC).

With RP1, Replimune is "building on the precedent of the product IMLYGIC, or talimogene laherparepvec (T-VEC), developed by BioVex, led by the same team. Those individuals sold BioVex to Amgen in 2011 for $425 million in cash upfront and up to $575 million in milestone payments. Selvaraju also noted that RP1, like T-VEC, has a herpes simplex virus construct but "constitutes an enhanced oncolytic virus product versus T-VEC."

The market potential in the first two indications Replimune is addressing, melanoma and CSCC, is "considerable," highlighted Selvaraju. H.C. Wainwright projects that with a likely commercial launch of RP1 in 2023, peak sales in both indications could surpass $1.7 billion by 2031, with additional potential associated revenue. "Substantial upside to our projections could be driven by the usage of RP1 in combination with CI backbone regimens in additional indications, as well as the deployment of next-generation oncolytic virus programs from Replimune's pipeline," he wrote.

Even further potential upside to H.C. Wainwright's forecasts exist with Replimune's earlier-stage pipeline candidates, P2 and P3, derivatives of P1, once they advance to the clinic, as they are "armed to the teeth," Selvaraju indicated. This means they contain additional key elements, such as sequences encoding CI antibodies and co-stimulators.

The catalysts expected with Replimune over the next two years are numerous. Selvaraju identified five of medium to high impact, two of which are upcoming external events that could derisk the biotech's pipeline candidates, one later this year, one in 2020. Internal catalysts include data readouts potentially in H2/19, H1/20 and H2/20.

Finally, Selvaraju relayed, Replimune already has a 63,000-square-foot manufacturing facility of its own in Framingham, Mass., where it can produce RP1 on a commercial scale and RP2 and PR3 as needed for future clinical trials.


1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Disclosures from H.C. Wainwright & Co., Replimune Group Inc., Initiating Coverage, July 8, 2019

Investment Banking Services include, but are not limited to, acting as a manager/co-manager in the underwriting or placement of securities, acting as financial advisor, and/or providing corporate finance or capital markets-related services to a company or one of its affiliates or subsidiaries within the past 12 months.

I, Raghuram Selvaraju, Ph.D. and Robert Burns, certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies.

None of the research analysts or the research analyst's household has a financial interest in the securities of Replimune Group, Inc. and Sorrento Therapeutics, Inc. (including, without limitation, any option, right, warrant, future, long or short position).

As of June 30, 2019 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Replimune Group, Inc. and Sorrento Therapeutics, Inc.

Neither the research analyst nor the Firm has any material conflict of interest in of which the research analyst knows or has reason to know at the time of publication of this research report.

The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services.

The Firm or its affiliates did not receive compensation from Replimune Group, Inc. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.

The Firm or its affiliates did receive compensation from Sorrento Therapeutics, Inc. for investment banking services within twelve months before, and will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report.

H.C. Wainwright & Co., LLC managed or co-managed a public offering of securities for Sorrento Therapeutics, Inc. during the past 12 months.

The Firm does not make a market in Replimune Group, Inc. and Sorrento Therapeutics, Inc. as of the date of this research report.

H.C. Wainwright & Co., LLC and its affiliates, officers, directors, and employees, excluding its analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research report.

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