Leap Therapeutics (LPTX) Surges 11.95% on Intraday Rally – What’s Fueling the Biotech Breakout?

Summary
• Leap Therapeutics (LPTX) surges 11.95% to $0.2727, hitting a 52-week high of $4.79
• Company announces 75% workforce reduction and strategic alternatives review
• Updated clinical data from DeFianCe trial shows statistically significant ORR/PFS in CRC patients

Leap Therapeutics (LPTX) is experiencing a dramatic intraday rally, driven by a combination of strategic restructuring, clinical progress, and capital preservation moves. The stock’s 11.95% surge to $0.2727 reflects investor optimism around the company’s pivot to corporate development and the positive readout from its DeFianCe study. With cash reserves at $18.1 million and a 76.9% decline in liquidity year-over-year, the market is betting on a potential turnaround through partnerships or asset sales.

Strategic Restructuring and Clinical Data Drive Volatility
Leap Therapeutics’ 11.95% intraday surge is fueled by a dual catalyst: aggressive cost-cutting and clinical validation. The company announced a 75% workforce reduction, slashing R&D and G&A expenses by 41.3% and 47.1%, respectively, while incurring $4.5 million in restructuring charges. Simultaneously, updated data from the DeFianCe trial demonstrated statistically significant improvements in ORR and PFS for sirexatamab in CRC patients with high DKK1 levels. These moves signal a strategic pivot from R&D to corporate development, with Raymond James advising on potential partnerships or sales of sirexatamab and FL-501. The market is pricing in a near-term resolution of the strategic alternatives process, which could unlock value for shareholders.

Biotech Sector Mixed as AMGN Gains 0.9%
While the broader biotech sector remains mixed, Leap Therapeutics’ 11.95% rally outpaces Amgen (AMGN)’s 0.9% intraday gain. LPTX’s move is driven by company-specific catalysts—strategic restructuring and clinical data—rather than sector-wide trends. AMGN’s modest rise reflects stable fundamentals in large-cap biotech, but LPTX’s volatility underscores the sector’s appetite for speculative plays with clear inflection points.

Options and ETF Strategy Amid High Volatility
• 200-day MA: $1.2157 (far above current price)
• RSI: 28.91 (oversold)
• MACD: -0.0107 (bearish)
• Bollinger Bands: Price near lower band ($0.2754), suggesting potential rebound

Technical indicators paint a bearish near-term picture, but the stock’s sharp rebound from oversold RSI levels and proximity to Bollinger Bands’ lower bound suggest short-term volatility. Given the lack of options liquidity and the absence of leveraged ETFs, traders should focus on directional ETFs or cash-secured puts. A 5% upside scenario (targeting $0.2863) would yield limited gains for calls, but the bearish MACD and long-term bearish K-line pattern suggest caution. Aggressive bulls may consider a small position in a biotech ETF like XLK, but the lack of options data forces a purely technical approach.

Backtest Leap Therapeutics Stock Performance
The backtest of LPTX's performance after a 12% intraday surge shows mixed results. While the 3-Day and 10-Day win rates are relatively high at 44.04% and 47.31%, respectively, the 30-Day win rate drops to 45.77%. Additionally, the returns over the specified periods are negative, with the maximum return being only 0.21% over 30 days. These results suggest that while LPTX may experience short-term gains following a significant intraday surge, longer-term performance is lackluster and often results in negative returns.

Act Now: Leap’s Strategic Moves Signal Short-Term Volatility
Leap Therapeutics’ 11.95% rally is a high-risk, high-reward trade driven by strategic restructuring and clinical validation. While the stock’s technicals remain bearish, the company’s pivot to corporate development and Raymond James’ involvement could catalyze near-term value. Investors should monitor the strategic alternatives process and cash burn rate, with Amgen (AMGN)’s 0.9% gain offering a benchmark for sector sentiment. For now, a cautious approach is warranted, but those willing to bet on a partnership or sale could see upside if the stock breaks above $0.33 (30D support/resistance). Watch for a $0.33 breakout or a breakdown below $0.2754 to confirm direction.