Replimune Group Inc. (REPL) shares staged a remarkable turnaround in post-market trading on Tuesday, soaring 5.53% after a devastating 75% plunge earlier in the day. The dramatic swing came in the wake of a major setback for the clinical-stage biotechnology company.

The initial nosedive was triggered by news that the U.S. Food and Drug Administration (FDA) had issued a Complete Response Letter for Replimune's Biologics License Application for RP1, its lead candidate to treat advanced melanoma in combination with Bristol Myers Squibb's nivolumab. The FDA cited concerns about the adequacy of the clinical trial and the heterogeneity of the patient population, stating that the current application could not be approved.

Following the announcement, several analysts downgraded Replimune's stock. Wedbush Securities cut its rating to neutral from outperform and slashed its price target to $4 from $19. Similarly, JP Morgan downgraded the stock to neutral from overweight, reducing its target price to $9 from $19.

However, the post-market rebound suggests that some investors may view the steep sell-off as an overreaction, potentially creating a buying opportunity. The company has stated its intention to urgently engage with the FDA to find a path forward, maintaining confidence in RP1's potential benefits for advanced melanoma patients.

While the road ahead remains challenging for Replimune, the quick partial recovery indicates that market participants are reassessing the company's prospects. Investors will be closely watching for any updates on Replimune's interactions with the FDA and potential adjustments to its clinical development strategy in the coming weeks.