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On Wednesday, William Blair initiated coverage on Applied Therapeutics (NASDAQ:APLT) with an Outperform rating. The firm highlighted the company's focus on developing treatments for rare diseases and its potential for significant value increases within the coming year. Applied Therapeutics' new drug application for govorestat (AT-007), a treatment for galactosemia, is currently under review by the FDA.
Galactosemia is a rare genetic disorder affecting approximately 3,000 individuals in the United States and around 7,000 worldwide. It is caused by mutations that result in enzyme deficiencies, leading to an inability to metabolize the sugar galactose. This can cause a range of neurological issues, including problems with motor skills, cognition, tremors, and speech. The disease affects multiple tissues, necessitating a treatment approach that can reach various parts of the body.
The analyst from William Blair expressed confidence in the data supporting govorestat, suggesting that its efficacy in treating galactosemia could lead to FDA approval. The decision by the FDA is expected by the Prescription Drug User Fee Act (PDUFA) date of November 28. If approved, govorestat would be the first therapy available for galactosemia patients and could serve as a significant catalyst for Applied Therapeutics' stock.
The company's approach involves a small-molecule therapy that can penetrate multiple tissues, which may be more effective for this disease than gene therapies or biologics. This method aligns with the need for a treatment that can address the widespread effects of galactosemia.
The anticipation of the FDA's decision on govorestat represents a critical period for Applied Therapeutics, as an approval could transform the treatment landscape for galactosemia and potentially enhance shareholder value.
InvestingPro Insights
As Applied Therapeutics (NASDAQ:APLT) awaits the FDA's decision on govorestat, the company's financial metrics provide a mixed picture. With a market capitalization of $569.05 million, the company is trading at a high Price / Book multiple of 8.46, indicative of investors' expectations for future growth. Despite negative revenue growth over the last twelve months, the stock has experienced a significant price uptick, with a 179.78% return over the past year.
An InvestingPro Tip highlights that Applied Therapeutics holds more cash than debt on its balance sheet, which could provide financial stability as the company navigates the regulatory process. However, analysts have revised their earnings downwards for the upcoming period, and they do not anticipate the company will be profitable this year. These factors should be considered by investors looking at the long-term prospects of the company.
For those seeking a deeper analysis, InvestingPro offers additional tips on Applied Therapeutics, which could be invaluable for making informed investment decisions. Remember to use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, unlocking further insights into APLT's stock performance and future outlook. There are 9 additional InvestingPro Tips available that could provide a more nuanced understanding of the company's potential.
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