Applied Therapeutics Stock Plummets 55% on FDA Setback
Uncertainty over the regulatory path for its lead drug candidate, govorestat, erases recent gains and sends investors fleeing.
Shares of Applied Therapeutics (NASDAQ: APLT) collapsed by nearly 55% in catastrophic trading after the company announced a murky outlook following a key meeting with regulators.
The massive sell-off was triggered after the company regarding its lead drug candidate, govorestat. The drug is being developed for the treatment of SORD Deficiency, a rare and progressive hereditary neuropathy. According to the company, the meeting did not establish a clear path forward for a regulatory submission, including the possibility of an accelerated approval pathway that investors had been anticipating.
The market's reaction was immediate and severe. as trading volume exploded to more than 45 times the daily average, wiping out significant gains the stock had accrued in the weeks leading up to the announcement. The update created deep uncertainty around the timeline and viability of bringing govorestat to market, a drug that has received Orphan Drug Designation from both the FDA and the European Medicines Agency.
Govorestat is designed to treat Charcot-Marie-Tooth Sorbitol Dehydrogenase (CMT-SORD) Deficiency, that leads to significant disability. The inconclusive nature of the FDA meeting is a major setback for a drug program that was seen as pivotal for the company's future.
The news was particularly jarring for investors given recent analyst optimism. Some Wall Street analysts had previously suggested that data might be sufficient to support an accelerated approval pathway. However, this latest update casts serious doubt on that best-case scenario. The company now awaits official minutes from the meeting to determine its next steps, leaving the program's future in limbo and raising concerns about the company's financial runway amidst the approval delay.