Ultragenyx (RARE) Surges 13.8% Amid Analyst Optimism and Trial Setbacks: What's Driving the Volatility?

Summary
• Ultragenyx (RARE) surges 13.8% to $22.45, rebounding from a 42% plunge after failed osteogenesis imperfecta trials.
• Jefferies analyst Maury Raycroft upgrades RARE with a $63 price target (219% upside) and maintains a 'buy' rating.
• Institutional investors add 1.79 million shares in Q3 2025, while insiders sell 11,023 shares in the past six months.

Ultragenyx’s stock is trading at its intraday high of $22.70, a dramatic reversal from Monday’s 42% collapse. The rebound follows Jefferies’ bullish outlook on apazunersen’s phase 3 readout in 2024 and cost-cutting plans for 2026. Despite a -86.27% operating margin and a -4.71 Altman Z-Score, analysts highlight RARE’s $65 median price target and oversold RSI-14 of 18.5.

Failed Trials Spark Short-Term Panic, Analyst Optimism Fuels Rebound
Ultragenyx’s 13.8% intraday surge follows a 42% collapse after the failure of two late-stage trials for setrusumab, a treatment for osteogenesis imperfecta. While the drug missed primary endpoints for fracture reduction, secondary bone density improvements and an unchanged safety profile sparked cautious optimism. Jefferies’ $63 price target (219% upside) and 2026 cost-cutting plans acted as a catalyst, with analysts shifting focus to apazunersen’s phase 3 readout in 2024. Institutional buying in Q3 2025 (4.68 million shares added by FMR LLC) and a 103.3% institutional ownership stake further underscore confidence in RARE’s long-term pipeline.

Biotech Sector Volatility Amid Mixed Signals as Amgen Slides
The biotech sector remains volatile, with Amgen (AMGN) down 0.46% despite RARE’s rebound. While RARE’s 13.8% gain defies sector trends, Amgen’s decline reflects broader concerns over profitability and regulatory scrutiny. RARE’s -3.64 dynamic PE and -86.27% operating margin contrast sharply with Amgen’s established revenue streams, highlighting the sector’s bifurcation between high-risk, high-reward biotechs and mature players. Jefferies’ $63 target for RARE suggests a 219% upside, far outpacing Amgen’s more conservative growth trajectory.

Options Playbook: Capitalizing on RARE’s Oversold Technicals and Analyst Bullishness
• RSI-14: 11.82 (oversold)
• MACD: -1.06 (bearish), Signal Line: 0.06 (neutral), Histogram: -1.12 (bearish)
• Bollinger Bands: $26.92 (lower), $34.24 (middle), $41.57 (upper)
• 200D MA: $33.39 (above current price)

RARE’s 13.8% rebound has pushed it near its 52-week low of $18.41, with RSI-14 at 11.82 indicating oversold conditions. However, the MACD (-1.06) and 200D MA ($33.39) suggest a bearish bias. Traders should focus on key levels: $22.50 (psychological support) and $25.00 (200D MA).

Top Options Picks:
• RARE20260116C22.5 (Call, $22.50 strike, Jan 16 2026):
- IV: 61.01% (moderate)
- Leverage Ratio: 18.69% (high)
- Delta: 0.52 (moderate sensitivity)
- Theta: -0.0578 (high time decay)
- Gamma: 0.1310 (high sensitivity to price movement)
- Turnover: 57,887 (liquid)
This call option offers a 200% price change potential if RARE breaks above $22.50, leveraging high gamma and moderate IV. A 5% upside to $23.57 would yield a $1.07 payoff per contract.

• RARE20260116C25 (Call, $25 strike, Jan 16 2026):
- IV: 63.93% (moderate)
- Leverage Ratio: 50.98% (high)
- Delta: 0.25 (low sensitivity)
- Theta: -0.0398 (moderate time decay)
- Gamma: 0.0995 (moderate sensitivity)
- Turnover: 41,766 (liquid)
This call benefits from high leverage and a 193% price change potential if RARE surges past $25. A 5% move to $23.57 would result in a $0.57 payoff, but its lower delta makes it more suitable for a breakout scenario.

Action: Aggressive bulls may consider RARE20260116C22.5 into a break above $22.50, while conservative traders should watch the 200D MA at $33.39 for a potential reversal.

Backtest Ultragenyx Stock Performance
The backtest of RARE's performance after an intraday surge of at least 14% from 2022 to the present shows mixed results. While the 3-day and 10-day win rates are above 50%, the 30-day win rate is slightly lower. However, the maximum return during the backtest period was only 0.01%, indicating that the stock did not capitalize on the intraday surge to achieve significant long-term gains.

RARE’s Rebound Hinges on Apazunersen’s 2024 Readout: Position for a 219% Upside or Exit on Weakness
Ultragenyx’s 13.8% rebound is a short-term bounce driven by Jefferies’ $63 target and cost-cutting optimism, but the stock remains 45.7% below its six-month peak. The oversold RSI-14 and high gamma options suggest a potential short-term rally, but the -3.64 dynamic PE and -4.71 Altman Z-Score highlight structural risks. Investors should monitor the 200D MA at $33.39 and Jefferies’ 2024 apazunersen readout. If Amgen (AMGN) continues its 0.46% decline, sector rotation could pressure RARE. Act now: Buy RARE20260116C22.5 if $22.50 breaks, or exit longs below $20.00.