Rezolute's 90% Plunge: A Biotech Meltdown Triggered by Clinical Trial Failure

Summary
• Rezolute (RZLT) plunged 90% intraday after Phase 3 trial failure for lead drug ersodetug
• Legal investigations by Hagens Berman and Faruqi & Faruqi escalate post-trial
• Intraday range of $0.90–$2.49 highlights extreme volatility and liquidity collapse

Rezolute’s stock imploded on December 11, 2025, following the announcement that its Phase 3 sunRIZE trial for congenital hyperinsulinism failed to meet primary and secondary endpoints. The 90% drop—amplified by Nasdaq volatility halts—triggered a cascade of legal actions and analyst downgrades. With a current price of $2.375, the stock remains in a bearish short-term trend amid heightened legal and commercial uncertainty.

Phase 3 Trial Failure Shatters Investor Confidence
Rezolute’s catastrophic 90% intraday drop was directly triggered by the Phase 3 sunRIZE trial’s failure to demonstrate statistically significant efficacy for ersodetug in treating hypoglycemia caused by hyperinsulinism. The company had previously positioned the drug as a potential blockbuster, with management claiming it could 'substantially eradicate hypoglycemia' and 'improve quality of life.' The trial’s failure not only erased the drug’s commercial value but also exposed potential prior misrepresentations, prompting multiple securities investigations. Analysts swiftly downgraded the stock, with Wedbush slashing its price target from $12 to $1, while legal firms like Hagens Berman and Faruqi & Faruqi opened class-action alerts, further eroding investor trust.

Biotech Sector Resilient Amid RZLT’s Collapse
The broader biotech sector, led by Amgen (AMGN) with a 0.13% intraday gain, remained largely insulated from RZLT’s collapse. While Rezolute’s failure highlights the sector’s inherent clinical risk, peers like AMGN demonstrated stability, underscoring the lack of direct correlation between RZLT’s trial miss and sector-wide sentiment. However, the incident reinforces the sector’s vulnerability to late-stage data events, particularly for small-cap biotechs reliant on single-product pipelines.

Options Playbook: Navigating the Volatility
• RSI: 25.95 (oversold)
• MACD: -2.12 (bearish), Signal Line: -1.49, Histogram: -0.64
• 200D MA: $5.98 (well below current price)
• Bollinger Bands: $14.63 (upper), $6.59 (middle), $-1.45 (lower)

RZLT’s technicals paint a dire short-term picture, with RSI in oversold territory and MACD signaling bearish momentum. The stock is trading far below its 200-day moving average, suggesting prolonged weakness. For options traders, the key is to exploit volatility while avoiding overexposure to a stock with no clear catalyst for recovery.

Top Options Contracts:
• RZLT20260116C2.5 (Call, $2.5 strike, Jan 16, 2026):
- IV: 122.66% (high volatility)
- Leverage Ratio: 9.17% (moderate)
- Delta: 0.509 (neutral sensitivity)
- Theta: -0.0077 (rapid time decay)
- Gamma: 0.521 (high sensitivity to price swings)
- Turnover: $49,009 (liquid)
- Payoff (5% upside): $0.12 (max(0, 2.49 - 2.5))
- Why: High gamma and IV make this contract responsive to sudden price swings, though theta decay is aggressive.

• RZLT20260417C2.5 (Call, $2.5 strike, Apr 17, 2026):
- IV: 125.41% (high volatility)
- Leverage Ratio: 3.79% (low)
- Delta: 0.620 (moderate sensitivity)
- Theta: -0.0031 (slow decay)
- Gamma: 0.226 (moderate sensitivity)
- Turnover: $105,304 (liquid)
- Payoff (5% upside): $0.12 (max(0, 2.49 - 2.5))
- Why: Long-dated IV and moderate gamma offer exposure to potential catalysts in 2026, though leverage is limited.

Trading Setup: Aggressive bulls may consider RZLT20260116C2.5 for short-term volatility plays, while longer-term traders could use RZLT20260417C2.5 to hedge against unexpected catalysts. However, the stock’s technicals and legal risks suggest a bearish bias. Watch for support at $1.97 (intraday low) and resistance at $2.49 (intraday high).

Backtest Rezolute Stock Performance
The backtest of RZLT's performance following a 16% intraday increase from 2022 to the present reveals favorable short-to-medium-term gains, with the 3-Day win rate at 52.32%, the 10-Day win rate at 52.95%, and the 30-Day win rate at 62.24%. The maximum return during the backtest was 13.47% over 30 days, indicating the strategy's effectiveness in capturing intraday volatility.

Rezolute's Crossroads: Legal Scrutiny and Market Reckoning
Rezolute’s 90% collapse underscores the existential risks of late-stage clinical failures and the legal fallout that follows. With multiple investigations underway and no clear path to commercialization for ersodetug, the stock remains a high-risk, high-volatility play. Investors should monitor the January 16, 2026, options expiration for liquidity clues and watch for any management updates on alternative assets. Meanwhile, sector leader Amgen (AMGN) remains a safer bet, with a 0.13% intraday gain highlighting its resilience. For RZLT, the immediate focus is on legal developments and whether the stock can stabilize above $1.97. Action: Short-term traders should avoid long positions; legal updates and options expirations will dictate near-term direction.