On Monday, Applied Therapeutics (NASDAQ:APLT) faced a downgrade from Outperform to Market Perform by a William Blair analyst, adding to the company’s challenges as its stock has declined over 70% in the past year. According to InvestingPro data, three analysts have recently revised their earnings downward for the upcoming period. The shift in rating follows recent management changes and updates on the company’s drug development programs that have cast uncertainty on its revenue generation timeline.
The analyst pointed out that while the management turnover at Applied Therapeutics was a positive move for rebuilding its reputation, the withdrawal of the Marketing Authorization Application (MAA) for the treatment of galactosemia and the decision not to submit a New Drug Application (NDA) for SORD in the first quarter have muddled the company’s revenue prospects.
InvestingPro analysis indicates a weak overall financial health score of 1.69 out of 10, reflecting these operational challenges. The reengagement with the FDA for SORD, although potentially beneficial for approval chances, is expected to delay the submission further.
Applied Therapeutics reported having $98.9 million in cash and equivalents as of September 30, which now presents an increased financial risk due to the limited cash runway. With a market capitalization of approximately $102 million and trading near its 52-week low, the analyst believes that the stock will likely maintain its current trading levels until there is clarity on the progression of the govo-restat program towards registration. Discover more comprehensive insights about APLT’s financial position and growth prospects through the detailed Pro Research Report, available exclusively on InvestingPro.
In response to these developments, the analyst has also revised the probability of success for SORD, delaying the anticipated launch of govo-restat in this indication until the first quarter of 2026 in their financial model. The company’s path forward appears to hinge on its ability to navigate the regulatory landscape and secure a stable financial footing.
In other recent news, Applied Therapeutics has faced a series of developments. The company’s fiscal first quarter revenue increased by 67% year-over-year to $60.7 million, despite an adjusted net loss of $21.6 million. Significant leadership changes occurred with the appointment of John H. Johnson as Executive Chairman and Les Funtleyder as Interim CEO, following the resignation of Dr. Shoshana Shendelman.
The company is currently addressing concerns raised by the FDA regarding the data integrity and risk profile for its drug, govorestat. This has led to RBC Capital downgrading the stock and reducing the price target, while acknowledging the drug’s potential efficacy. Applied Therapeutics also withdrew its Marketing Authorization Application for govorestat in Europe and delayed its New Drug Application submission to the FDA for the treatment of SORD Deficiency.
Analysts from Baird and RBC Capital Markets, despite downgrading the company’s stock, acknowledge the potential value in the company’s SORD deficiency program.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.