What potential liabilities or penalties could REPL face if the lawsuit proceeds to trial?

Potential Liabilities and Penalties

If the class‑action proceeds to trial, Replimune Group ( REPL ) could be exposed to several layers of financial exposure:

1. Monetary damages – The core of a securities‑fraud class action is a “loss‑plus‑expenses” award to the affected investors. Courts typically calculate the total amount investors would have earned but for the alleged misstatements, then add out‑of‑pocket costs. Depending on the size of the shareholder base that bought between Nov 22 2024 and Jul 21 2025, the liability could run into the low‑hundreds of millions of dollars. If the complaint alleges willful misconduct, a jury may also add punitive damages, which can double or even triple the compensatory award.

2. Regulatory and corporate penalties – A securities‑fraud finding often triggers SEC enforcement actions that can result in civil penalties, disgorgement of ill‑gotten profits, and mandatory compliance remediation. Even absent a SEC case, the company would still bear court‑ordered attorney fees, expert costs, and litigation expenses, which can easily exceed $10–20 million for a multi‑month trial.

3. Indirect costs – A protracted trial can depress the stock’s liquidity, widen bid‑ask spreads, and increase short‑interest as investors hedge against downside risk. The reputational hit may also affect future capital‑raising ability, prompting a higher cost of equity and potentially triggering covenant breaches on existing debt.

Trading Implications

Given the above exposure, the market is likely to price in a downside risk premium. Technical charts show REPL trading near recent support at $4.20 with a descending‑trend channel and elevated implied volatility (IV ≈ 45%). Until the case’s trajectory clarifies, a short‑to‑mid‑term bias is prudent—targeting the $3.80–$3.50 range if the trial materializes and the jury awards a substantive judgment. Conversely, if the plaintiff’s claims are dismissed early, the stock could rebound sharply, offering a short‑cover rally. Position sizing should reflect the binary nature of the event risk: a modest long‑short overlay or a protective stop just above the $4.30 resistance level to limit exposure to any unexpected favorable ruling.