Rhythm Pharmaceuticals Surges 14.27% on Breakthrough PWS Trial Data and Strategic Expansion

Summary
• Rhythm Pharmaceuticals (RYTM) surges 14.27% to $119.72, hitting its 52-week high of $122.20
• Positive Phase 2 trial results for setmelanotide in Prader-Willi syndrome (PWS) drive optimism
• Company announces Phase 3 trial plans and initiates Part D study for RM-718
• Conference call scheduled for 8:00 a.m. ET on December 11 to discuss data

Rhythm Pharmaceuticals delivered a historic intraday rally, surging 14.27% to $119.72 as positive Phase 2 trial data for setmelanotide in PWS ignited investor enthusiasm. The stock’s 122.20 intraday high aligns with its 52-week peak, signaling a breakout moment for the biotech. With 17 of 18 patients remaining on therapy and promising BMI/hyperphagia reductions, the company’s strategic pivot to Phase 3 trials and RM-718 development has redefined its growth trajectory.

Phase 2 PWS Trial Data Ignites Optimism
Rhythm’s 14.27% surge stems from robust Phase 2 trial results showing BMI and hyperphagia reductions in PWS patients treated with setmelanotide. Six of eight patients achieved BMI reductions at Month 3, with three maintaining progress at Month 6. The company’s announcement of a Phase 3 trial and RM-718’s Part D study—targeting weekly MC4R agonism—has amplified expectations. The 8:00 a.m. ET conference call, coupled with David Meeker’s emphasis on addressing unmet PWS needs, has positioned RYTM as a biotech breakout candidate.

Biotechnology Sector Mixed as Rhythm Outpaces Peers
While the biotechnology sector saw mixed performance, Rhythm’s 14.27% gain far outpaced Amgen’s (AMGN) 0.57% intraday rise. The sector’s focus on rare disease innovation and regulatory milestones—evidenced by Roche’s SERD data and Pfizer’s Tukysa updates—highlights RYTM’s unique positioning in neuroendocrine therapies. Rhythm’s PWS pipeline, with its high unmet need and clear regulatory pathway, distinguishes it from peers targeting broader indications.

Options and ETFs to Capitalize on RYTM’s Momentum
• 200-day average: 81.11 (well below current price)
• RSI: 52.26 (neutral)
• MACD: 0.098 (bullish), Signal Line: 0.139 (bearish), Histogram: -0.041 (divergence)
• Bollinger Bands: Upper (110.33), Middle (103.19), Lower (96.05)
• 30D Support: 104.53–104.89, 200D Support: 61.68–63.02

Rhythm’s technicals suggest a short-term bearish trend but long-term bullish setup. Key levels to watch include the 52-week high of $122.20 and the 200-day MA at $81.11. The stock’s 3.44% turnover rate and 14.27% intraday gain indicate strong near-term momentum, though the -39.14 PE ratio underscores its speculative nature. For leveraged exposure, consider the XBI ETF (Biotechnology Select Sector SPDR) to hedge against sector volatility.

Top Options Contracts:
1. RYTM20251219C115 (Call, $115 strike, 12/19 expiry)
• IV: 47.72% (moderate)
• LVR: 18.43% (high leverage)
• Delta: 0.7247 (high sensitivity)
• Theta: -0.5351 (rapid time decay)
• Gamma: 0.0372 (moderate sensitivity to price changes)
• Turnover: 129,700 (high liquidity)
• Payoff (5% upside): $14.76 per contract
• Rationale: High liquidity and leverage make this ideal for a bullish breakout above $115.

2. RYTM20260116C125 (Call, $125 strike, 1/16/26 expiry)
• IV: 52.44% (moderate)
• LVR: 19.97% (high leverage)
• Delta: 0.4420 (moderate sensitivity)
• Theta: -0.1591 (slow time decay)
• Gamma: 0.0197 (low sensitivity to price changes)
• Turnover: 93,640 (high liquidity)
• Payoff (5% upside): $2.45 per contract
• Rationale: Long-dated option with moderate delta for sustained bullish moves beyond January 2026.

Actionable Insight: Aggressive bulls should target RYTM20251219C115 for a short-term breakout above $115, while long-term holders may consider RYTM20260116C125 for a sustained rally into 2026.

Backtest Rhythm Stock Performance
The iPath RSY Total Market Index ETN (RYTM) experienced a notable intraday surge of 14% on November 11, 2025. Backtesting the performance of RYTM following this event reveals a positive short-to-medium-term trend. Here's a detailed analysis:1. Frequency and Win Rates: The 14% intraday increase event occurred 474 times over the backtested period. The 3-day win rate was 52.74%, the 10-day win rate was 57.38%, and the 30-day win rate was 64.77%. This indicates a higher probability of positive returns in the immediate aftermath of the event, with the win rates increasing as the time horizon expands.2. Returns: The average 3-day return following the event was 1.32%, the 10-day return was 4.47%, and the 30-day return was 12.25%. These returns suggest that while the immediate post-event gains may be modest, there is still a positive trend that can persist over a longer period.3. Maximum Return: The maximum return observed following the event was 18.71%, which occurred on day 59 after the event. This highlights the potential for significant gains if held for an extended period, although this is not a typical outcome, as the maximum return is above the average returns seen in the first few days.In conclusion, while the immediate response to an intraday surge like the one experienced by RYTM in 2025 may not always result in high returns, the backtest indicates that holding the instrument for a longer period can lead to more substantial gains. Investors should consider their risk tolerance and investment horizon when deciding how to respond to such events, as the potential for further appreciation is evident but comes with varying degrees of risk and uncertainty.

Rhythm’s PWS Breakthrough: A Catalyst for Sustained Gains
Rhythm’s 14.27% surge is driven by a clear catalyst: positive PWS trial data and a well-defined regulatory pathway. With 17 of 18 patients remaining on therapy and Phase 3 plans in motion, the stock’s momentum is underpinned by scientific and strategic rigor. Investors should monitor the 12/11 conference call for data validation and watch the 52-week high of $122.20 as a critical resistance level. Meanwhile, Amgen’s 0.57% gain underscores the sector’s broader volatility, but RYTM’s rare disease focus offers a unique edge. For those seeking exposure, RYTM20251219C115 provides high leverage for a breakout, while the XBI ETF offers sector diversification. Watch for a sustained close above $115 to confirm the bullish thesis.