1. Executive Summary
- Company: Applied Therapeutics Inc.
- Ticker: APLT (NASDAQ)
- Industry: Biotechnology – Rare Disease Therapeutics
- Investment Rating: Hold
- Target Price: $5.63 (average); High: $13.00; Low: $1.50
- Key Point: Trading near all-time lows (~$0.44); the stock’s future depends heavily on FDA approval of Govorestat.
2. Company Overview
- Business Model: Applied Therapeutics is a clinical-stage biotech company developing novel therapies for rare metabolic and neurological diseases.
- Market Position: A small-cap biotech with limited commercialization infrastructure, currently operating in the pre-revenue phase.
- Key Pipeline Assets:
- Govorestat (AT-007) – lead asset targeting Galactosemia
- AT-001 – for diabetic cardiomyopathy
- AT-003 – for neurodegenerative disorders
- Management: CEO Shoshana Shendelman is the founder, with recent efforts to strengthen commercialization leadership through executive hires.
3. Financial Analysis
- Revenue: FY2024 revenue: $9.99M (up YoY, but still limited).
- Net Loss: FY2024 net loss: $104.3M (improved from prior year).
- EPS: FY2024 EPS: – $1.74, indicating continued negative earnings.
- Balance Sheet: Cash & equivalents: ~$79.4M (sufficient for near-term operations, but long-term funding needed).
- Cash Flow: FY2024 free cash flow: – $108.3M (continued burn rate).
4. Stock Performance
- 1-Year Return: Down ~89% over the past year; hit an all-time low of $0.295 in April 2025.
- Dividend: No dividends.
- Volatility: Beta: 2.14 – significantly more volatile than the market.
- Recent Trend: Shares fell on delayed FDA feedback and ongoing financial concerns.
5. Valuation Analysis
- P/E: Not applicable (negative earnings).
- P/S: ~6.2× — high given limited revenue.
- P/B: ~1.68× — fair relative to tangible book.
- DCF: Discounted cash flow is not reliable due to negative free cash flow.
- Peer Comparison: Riskier profile than most small-cap biotechs; reflects high uncertainty.
6. Industry & Market Analysis
- Trends: Growing demand for rare disease drugs, but the space is capital-intensive and highly regulated.
- Market Share: Minimal for now — no commercial products yet.
- Macro Factors: Higher interest rates and risk-off investor sentiment continue to weigh on early-stage biotech stocks.
7. Risk Analysis
- Regulatory Risk: FDA delay or rejection of Govorestat would severely impact valuation.
- Financial Risk: Ongoing losses and cash burn may necessitate dilution or debt issuance.
- Market Risk: Investor skepticism toward unprofitable biotech could sustain downward pressure.
- Operational Risk: Supply chain or trial delays could further push back commercialization.
8. Growth Catalysts
- Govorestat Approval: FDA approval would unlock revenue and validate the platform.
- Pipeline Expansion: Continued development of AT-001 and AT-003 could attract strategic interest.
- Partnership Opportunities: M&A or licensing deals could provide capital and reduce commercialization burden.
- Industry Tailwinds: Long-term demand for rare disease therapies remains strong.
9. Analyst Sentiment
- Consensus: Hold
- Target Price:
- Average: $5.63
- High: $13.00
- Low: $1.50
- Recent Commentary: Analysts have lowered price targets due to regulatory uncertainty and financial strain but remain cautiously optimistic if approvals proceed.
10. Conclusion
Applied Therapeutics is a speculative biotech stock trading at distressed levels. Its near-term fate is closely tied to FDA decisions on Govorestat. While the company holds promise in treating rare diseases, it faces significant financial and regulatory headwinds. Best suited for high-risk-tolerant investors watching for binary outcomes.