How might the lawsuit affect Replimune's upcoming earnings guidance?

The pending class‑action suit adds a fresh, material head‑line risk to Replimune’s balance sheet and could force management to temper its earnings outlook. Legal expenses, potential settlement costs, and the need to disclose any contingent liabilities will likely be reflected in the next earnings call, prompting a more conservative guidance range than the “optimistic” forecasts the market has been pricing in. In the short term the market will price‑in this uncertainty with a widening of the REPL bid‑ask spread, a dip in the stock (the recent sentiment score of –70 signals a sharp downside bias) and a surge in implied volatility as options traders hedge against a possible miss.

From a technical standpoint, REPL is now testing the 20‑day moving average near $1.45 and has broken below a short‑term support band that held since early June. If the company’s guidance comes out muted or below consensus, the price could break to the downside of the $1.40‑$1.35 zone, inviting further selling pressure. Conversely, if management manages to limit the legal exposure and delivers guidance that still reflects strong pipeline progress, the stock could find a quick bounce back to the $1.55‑$1.60 range, especially on heavy‑volume buying from risk‑on investors.

Actionable take‑aways:

- Risk‑averse traders may consider a short position or buying protective puts, targeting the $1.40 support as a downside stop.

- Long‑biased investors should wait for the earnings release; a “buy‑the‑dip” around $1.35‑$1.40 could be justified if guidance remains resilient and the legal exposure is capped.

- Keep an eye on any SEC filings or press releases over the next two weeks for details on contingent liabilities—those disclosures will be the catalyst that either confirms the downside risk or clears the fog for a rebound.