NEW YORK - Applied Therapeutics Inc . (NASDAQ:APLT), a biopharmaceutical company, received a Complete Response Letter (CRL) from the U.S. Food and Drug Administration (FDA) regarding its New Drug Application (NDA) for govorestat. The treatment aimed at Classic Galactosemia, a rare metabolic disease, did not receive approval in its current form due to clinical application deficiencies.
The company expressed its commitment to the Galactosemia community and intends to request a meeting with the FDA to discuss the possibility of resubmitting the NDA or appealing the decision. Despite the setback, Applied Therapeutics highlighted the potential benefits of govorestat, citing data from clinical trials that showed improvements in cognitive and behavioral outcomes in pediatric patients.
Govorestat has shown promise in reducing galactitol levels, a toxic metabolite associated with neurological complications in Galactosemia patients. The drug has also been noted for its favorable safety profile. The Phase 3 ACTION-Galactosemia Kids study and the Phase 1/2 ACTION-Galactosemia adult study results have been published in the Journal of Clinical Pharmacology.
As part of its development pipeline, Applied Therapeutics is also working on govorestat for the treatment of Sorbitol Dehydrogenase (SORD) Deficiency, with an NDA submission expected in early 2025. This review process for SORD Deficiency is separate from the one concerning Classic Galactosemia.
Govorestat has received various designations from regulatory agencies, including Orphan Medicinal Product Designation from the European Medicines Agency (EMA) and Orphan Drug Designation from the FDA for multiple rare diseases.
Galactosemia affects approximately 3,300 patients in the U.S. and 4,400 in the E.U., with mandatory newborn screening in these regions. Currently, there are no treatment options for this debilitating disease.
This news is based on a press release statement from Applied Therapeutics, which continues to focus on developing drug candidates for rare diseases, including CNS metabolic disorders. The company's forward-looking statements involve risks and uncertainties, and there is no assurance that future plans will be achieved. The FDA's decision on govorestat is a significant point of focus for the company and the Galactosemia community.
In other recent news, Applied Digital Corporation has reported a fiscal first quarter revenue of $60.7 million, surpassing analyst expectations and marking a 67% increase year-over-year. The company's adjusted net loss was $21.6 million or $0.15 per share, a figure better than the anticipated loss of $0.27 per share. Adjusted EBITDA stood at $20.0 million, a significant increase from the $9.9 million reported in the same quarter last year.
Among other recent developments, the company's balance sheet saw significant improvements following strategic investments from NVIDIA (NASDAQ:NVDA), Related Companies, and a group of institutional and accredited investors. Applied Digital is also in the final stages of securing a lease agreement with a U.S.-based hyperscaler for its under-construction 100 MW facility and plans to bring an additional 300 MW online via two more buildings at the site.
The company concluded the quarter with $86.6 million in cash and cash equivalents, a substantial increase from the $31.7 million reported at the end of fiscal 2024. These are among the recent developments in the company.
InvestingPro Insights
Despite the setback with the FDA's Complete Response Letter, Applied Therapeutics Inc. (NASDAQ:APLT) has shown remarkable market performance. According to InvestingPro data, the company's stock has demonstrated a strong return of 454.89% over the past year, with a significant 150.25% increase in the last six months alone. This resilience in stock performance suggests that investors may be maintaining confidence in the company's long-term potential, possibly due to its diverse pipeline beyond govorestat.
However, it's crucial to note that Applied Therapeutics faces financial challenges. An InvestingPro Tip indicates that the company is not profitable over the last twelve months, which aligns with the article's context of a biotech company still in the development phase. Additionally, analysts anticipate a sales decline in the current year, which could be influenced by the recent FDA decision.
On a positive note, another InvestingPro Tip reveals that Applied Therapeutics holds more cash than debt on its balance sheet. This financial cushion could be vital as the company navigates the regulatory challenges and continues its research and development efforts.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for Applied Therapeutics, providing a deeper understanding of the company's financial health and market position.
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