Rezolute's 89% Plunge: A Biotech Meltdown Triggered by Failed Phase 3 Trial

Summary
• Rezolute (RZLT) crashes 89.26% intraday to $1.175, erasing 90% of its 52-week high of $11.46
• Phase 3 sunRIZE trial for congenital hyperinsulinism misses primary and key secondary endpoints
• 63-patient study showed 45% hypoglycemia reduction at top dose vs. 40% in placebo (non-statistically significant)
• Management hosts emergency conference call at 8:30am ET to address next steps

Rezolute’s catastrophic selloff has ignited a firestorm in biotech circles, with investors scrambling to assess the fallout from its failed Phase 3 trial. The stock’s freefall—from a $10.94 open to an intraday low of $1.07—reflects the market’s brutal verdict on a drug candidate that once promised to revolutionize rare disease treatment. With the biotech sector in a fragile state, this collapse raises urgent questions about the future of Rezolute’s pipeline and its ability to secure regulatory lifelines.

Phase 3 Trial Failure Shatters Biotech Hopes
Rezolute’s stock imploded after its Phase 3 sunRIZE study for congenital hyperinsulinism (HI) failed to meet both primary and key secondary endpoints. The trial reported a 45% reduction in hypoglycemia events at the top dose of ersodetug (10 mg/kg) versus 40% in the placebo group—a margin that, while numerically positive, lacked statistical significance. Similarly, the key secondary endpoint measuring time in hypoglycemia showed a 25% reduction in the treatment group versus a 5% increase in placebo, again without statistical validation. Management’s admission that the results ‘merit additional investigation’ did little to reassure investors, as the stock’s 90%+ intraday turnover rate underscored the depth of panic.

Biotech Sector Mixed as AMGN Outperforms
While Rezolute’s collapse was uniquely tied to its trial failure, the broader biotech sector showed resilience. Sector leader Amgen (AMGN) rose 0.95%, buoyed by positive data from its oncology pipeline. Meanwhile, leveraged ETFs like Direxion Daily S&P Biotech Bull 3X Shares (LABU) surged 2.9%, reflecting speculative bets on sector rotation. However, Rezolute’s 89% drop starkly contrasted with peers, highlighting the binary nature of late-stage trial risk in biotech.

Navigating the Aftermath: ETFs and Technicals in a Volatile Play
• Bold ETFs: State Street SPDR S&P Biotech ETF (XBI) +1.03%, LABU +2.9%
• Technical Indicators: 200D MA at $6.07 (far below current price), RSI at 57.5 (neutral), MACD histogram at 0.07 (bullish divergence)
• Key Levels: Support at $1.07 (intraday low), resistance at $1.41 (intraday high). Short-term momentum suggests a test of $1.07 before potential rebound attempts.

Given the absence of liquid options, focus shifts to ETF positioning. XBI offers broad biotech exposure, while LABU amplifies sector moves. Traders should monitor the 200D MA as a critical psychological level; a break above $1.175 could trigger short-covering rallies. For aggressive bets, LABU’s 3X leverage could magnify sector rebounds but carries elevated risk in a volatile environment.

Backtest Rezolute Stock Performance
The backtest of RZLT's performance after a -89% intraday plunge from 2022 to now shows mixed results. While the stock experienced a significant drop, it subsequently recovered, with maximum returns of 16.80% observed over a 30-day period.

Rezolute’s Crossroads: Regulatory Hopes or Redemption?
Rezolute’s stock now teeters near its 52-week low of $1.07, with its fate hinging on its ability to secure a regulatory lifeline via its Breakthrough Therapy Designation. While the Phase 3 failure is devastating, the company’s upcoming upLIFT study for tumor HI—expected in H2 2026—remains a wildcard. Investors should watch for catalysts in the next 90 days, including FDA feedback and patient enrollment updates. Meanwhile, sector leader Amgen (AMGN)’s 0.95% gain highlights the contrast between durable franchises and high-risk biotech plays. For Rezolute, survival now depends on a strategic pivot—and the market’s patience is wearing thin.