RYTM Soars 15.6% on PWS Trial Optimism: Is This the Catalyst for a Biotech Breakout?

Summary
• Rhythm Pharmaceuticals (RYTM) surges 15.596% to $121.11, hitting its 52-week high of $122.20
• Positive Phase 2 data for setmelanotide in Prader-Willi Syndrome (PWS) fuels Phase 3 trial plans
• 16.5M shares traded, 2.66% turnover rate, and a 39.6x negative P/E ratio highlight speculative fervor

Rhythm Pharmaceuticals’ stock erupted on December 11, 2025, as preliminary Phase 2 trial results for setmelanotide in PWS triggered a 15.6% intraday rally. The biotech sector’s rare disease focus and RYTM’s aggressive clinical pipeline position it as a high-conviction play. With 18 patients enrolled and 17 remaining on therapy, the data’s durability and safety profile are reshaping investor sentiment.

PWS Trial Data Ignites Biotech Optimism
Rhythm’s 15.6% surge stems from robust Phase 2 results showing BMI and hyperphagia reductions in PWS patients treated with setmelanotide. Six of eight patients achieved BMI declines at Month 3, with three maintaining progress at Month 6. The company’s announcement of a Phase 3 trial and a Part D study for RM-718 in PWS further solidified momentum. With 17 of 18 patients remaining on therapy and safety consistent with setmelanotide’s profile, the data’s clinical and commercial potential has triggered a re-rating.

Options Playbook: Leveraging RYTM’s Volatility with Gamma-Driven Contracts
• 200-day MA: $81.11 (far below current price)
• RSI: 52.26 (neutral, no overbought/oversold signal)
• MACD: 0.098 (bullish divergence, but histogram at -0.041 suggests caution)
• Bollinger Bands: $96.05–$110.33 (price at $121.11, far above upper band)

RHYTM’s technicals suggest a short-term overextension but a structurally bullish setup. The stock has pierced its 52-week high of $122.20, with RSI and MACD hinting at potential consolidation. Key levels to watch: $115 (psychological support) and $125 (next resistance).

Top Options Contracts:
1. RYTM20251219C120
• Strike: $120, Expiry: 12/19
• IV: 38.64% (moderate)
• Delta: 0.592 (moderate sensitivity)
• Theta: -0.471 (high time decay)
• Gamma: 0.0527 (high sensitivity to price swings)
• Turnover: 7,756 shares
• LVR: 32.62% (moderate leverage)
• Payoff at 5% upside ($127.17): $7.17/share
• This call offers a balance of leverage and gamma, ideal for a short-term bullish bet as RYTM tests $125.

2. RYTM20260116C125
• Strike: $125, Expiry: 1/16
• IV: 48.71% (high)
• Delta: 0.466 (moderate sensitivity)
• Theta: -0.157 (moderate time decay)
• Gamma: 0.0211 (moderate sensitivity)
• Turnover: 93,040 shares
• LVR: 19.77% (moderate leverage)
• Payoff at 5% upside ($127.17): $2.17/share
• This contract’s high IV and liquidity make it a safer play for a mid-term rally, with a lower delta reducing directional risk.

Actionable Insight: Aggressive bulls should target RYTM20251219C120 for a 5-day breakout above $125. Conservative investors may prefer RYTM20260116C125 to hedge against near-term volatility.

Backtest Rhythm Stock Performance
The iPath® S&P 500 VIX Short-Term Futures ETN (RYTM) has demonstrated positive performance following a 16% intraday increase from 2022 to the present date. The backtest data reveals a 3-day win rate of 52.48%, a 10-day win rate of 57.02%, and a 30-day win rate of 64.26%, indicating a higher probability of positive returns in the short term. The maximum return during the backtest period was 18.52%, which occurred on day 59, suggesting that RYTM can capitalize on intraday surges effectively.

RYTM at a Crossroads: Hold for $125 Breakout or Cash in on Gamma?
Rhythm’s 15.6% surge reflects a pivotal inflection point driven by PWS trial optimism. While technicals suggest a potential pullback to $115–$120, the stock’s 52-week high and Phase 3 trial plans position it for a sustained move. Investors should monitor the $125 level as a critical threshold for confirming bullish momentum. Meanwhile, Amgen (AMGN), the sector leader, rose 0.9% today, signaling broader biotech resilience. Act now: For a high-conviction trade, buy RYTM20251219C120 if $125 is breached within 5 days; otherwise, consider a partial exit at $121.11 to lock in gains.