Shares of a small-cap biotech company soared 107%. Its melanoma drug is close to approval.

Shares of small-cap biotech company Replimune Group soared 107% on July 31. The company announced that an advisory committee of the FDA, the industry regulator, had deemed its experimental melanoma drug effective. The FDA had previously rejected the biotech company’s application for accelerated approval of the drug twice. Wall Street now believes the chances of a favorable outcome are significantly higher.

Replimune’s stock rose 107% on the Nasdaq on July 31, reaching $11.2. The previous evening, the company announced that an advisory committee of the U.S. Food and Drug Administration (FDA) had voted that its experimental melanoma drug was clinically significant.

The regulatory agency must now decide whether to approve the drug; it could make a decision as early as this week, according to the company's press release.

For over a year, Replimune has been trying to register its experimental drug for the treatment of melanoma in patients who have not responded to previous therapy. This drug is based on a genetically modified strain of herpes simplex virus type 1, which is injected directly into the tumor and used in combination with another drug—from Bristol Myers Squibb.

In 2024, the FDA granted the drug candidate breakthrough therapy designation, which allowed the company to seek accelerated approval without completing all phases of clinical trials.

However, in July 2025, the regulator rejected the application for accelerated approval of Replimune, stating that the company had not convinced it of the drug’s efficacy. The company resubmitted its application, but in April 2026, it was rejected again—due to what the FDA deemed an insufficient data set. For example, the regulator took issue with the heterogeneity of the study population. The biotech company disagreed with this decision, calling the decision-making system ineffective and a threat to innovation. However, an FDA committee determined that the information provided by the company was sufficient to demonstrate the drug’s efficacy.

Following the FDA advisory committee’s decision on July 31, Wedbush analyst Robert Driscoll upgraded Replimune’s stock rating from “hold” to “buy,” according to Barron’s. He also raised his price target by 33% to $12, which is 7% higher than the stock’s closing price on Friday.

Driscoll noted that, although the FDA had repeatedly expressed concerns about flaws in the drug’s study design, he believes that compelling evidence supporting the treatment’s effectiveness convinced the members of the expert panel of doctors specializing in melanoma to vote in favor of it.

Investment bank Cantor Fitzgerald also upgraded its recommendation on Replimune shares from “hold” to “buy,” Barron’s reports. Analysts wrote that the “exceptionally positive” results, as well as “convincing” comments from patients and doctors during the advisory committee meeting, significantly increase the likelihood that the FDA will approve the therapy under an accelerated approval process.

Replimune’s stock has a total of five “buy” ratings and one “hold” rating from Wall Street analysts. Three months ago, the situation was completely different: only one analyst recommended buying the company’s stock, four believed it was a “hold,” and three recommended selling. The average price target is $14, which is 25% higher than the last closing price.