Applied Therapeutics, Inc. (NASDAQ:APLT), a pharmaceutical company with a market capitalization of $203 million, is currently addressing concerns from the U.S. Food and Drug Administration (FDA) regarding its New Drug Application (NDA) for govorestat.
The company's stock has fallen nearly 79% in the past week following today's disclosure in a regulatory filing that it received a warning letter from the FDA focused on a specific clinical study, AT-007-1002.
The FDA's letter highlighted issues related to electronic data capture and a dosing error during the study's dose-escalation phase. According to InvestingPro data, the stock is now trading near its 52-week low, with technical indicators suggesting oversold conditions.
According to the company, the FDA's inspection yielded certain observations to which Applied Therapeutics has already responded, believing it has resolved any outstanding questions or issues. The dosing error mentioned resulted in slightly lower drug levels than targeted in a few patients but was corrected before the maintenance dosing phase, as stated by the company. Applied Therapeutics maintains that all necessary detailed records were kept in compliance with FDA regulations and were provided to the agency.
The company, based in New York, NY, intends to formally reply to the FDA's warning letter within the allowed 15 business days. In its statement, Applied Therapeutics expressed its belief that it had previously addressed the concerns raised by the FDA, including providing detailed paper and video records to the agency.
The warning letter does not necessarily reflect the final decision of the FDA on the drug approval but indicates regulatory challenges that the company must overcome. The FDA's Complete Response Letter (CRL) and subsequent warning letter are part of the review process for govorestat, which is being evaluated for medical use.
Analyst sentiment remains mixed, with InvestingPro showing price targets ranging from $2 to $15, reflecting the uncertainty surrounding the regulatory outcome. For deeper insights into APLT's valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
This development comes as Applied Therapeutics, which trades under the ticker NASDAQ:APLT, works on advancing its pipeline of drug candidates. While the company maintains a relatively strong balance sheet with more cash than debt, its financial health score from InvestingPro is rated as "FAIR," reflecting both opportunities and challenges ahead.
The company's forward-looking statements in the report acknowledge substantial risks and uncertainties, underlining that actual results could differ materially from their current expectations. InvestingPro subscribers have access to 15 additional key insights about APLT, including detailed financial metrics and growth projections.
Investors and stakeholders are advised that the information disclosed in the 8-K filing is not deemed "filed" for purposes of the Securities Exchange Act of 1934 or incorporated by reference into any filing under the Securities Act of 1933, as clarified by the company.
The 8-K filing is based on a press release statement issued by Applied Therapeutics.
In other recent news, Applied Therapeutics faced a series of regulatory challenges.
The company received a Complete Response Letter from the U.S. Food and Drug Administration for its drug govorestat, intended for the treatment of Classic Galactosemia, due to clinical application deficiencies. Despite this setback, the company plans to discuss potential resubmission or appeal options with the FDA.
Simultaneously, Applied Therapeutics is engaged in the development of a treatment for Sorbitol Dehydrogenase Deficiency, with a New Drug Application submission expected in 2025. Analysts from Baird and RBC Capital Markets, despite downgrading the company's stock, acknowledge the potential value in the company's SORD deficiency program.
On the financial front, Applied Digital Corporation reported a fiscal first quarter revenue of $60.7 million, a 67% increase year-over-year. The company also reported an adjusted net loss of $21.6 million or $0.15 per share, better than the anticipated loss of $0.27 per share. Adjusted EBITDA stood at $20.0 million, a significant increase from the previous year. These are among the recent developments in Applied Therapeutics.
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