Acquisition of Applied Therapeutics Nears Finalization

Applied Therapeutics US03828A1016

The proposed acquisition of biopharmaceutical firm Applied Therapeutics by Cycle Group Holdings Limited is approaching its conclusion. Initially announced in December, the tender offer process has been extended following significant shareholder commitment. Investors are now assessing the implications of both the pending deal and recent clinical trial setbacks on the company's future drug development portfolio.

Applied Therapeutics specializes in treatments for rare diseases, but its development programs have encountered substantial obstacles. The company's lead drug candidate, Govorestat, has faced challenges across multiple indications.

• Govorestat for SORD CMT: In a Phase 2/3 study, Govorestat failed to meet its primary endpoint. While secondary measures, including blood sorbitol levels and patient-reported outcomes, showed positive trends, the key measurement of walking speed after 12 months did not demonstrate a statistically significant improvement over placebo. The company is now in discussions with the U.S. Food and Drug Administration (FDA) regarding the design of a new Phase 3 trial.
• Govorestat for Galactosemia: For this condition, Applied Therapeutics received a Complete Response Letter from the FDA in November 2024. The regulatory rejection cited deficiencies in the clinical application, including a dosing error in one study. Further dialogue with the agency is being pursued.
• AT-001 for Diabetic Cardiomyopathy: This program missed its primary endpoint in a Phase 3 trial back in January 2024. Since that result, the company has been seeking a development partner to advance the asset.

The impending takeover by Cycle Group Holdings is expected to initiate a new phase for these clinical programs under different leadership, with strategic refocusing likely following the transaction's completion.

Tender Offer Status and Shareholder Response

The public tender offer was most recently extended through the close of business on January 28. By the evening of January 27, shareholders had already tendered approximately 63.7 million shares of Applied Therapeutics stock for sale. This figure represents roughly 41.3% of the company's total outstanding shares.

The acquiring consortium, which includes Cycle Group Holdings Limited and its subsidiary AT2B, Inc., anticipates a prompt finalization of the deal once all remaining conditions are satisfied. The offer terms consist of a cash payment of $0.088 per share. In addition, tendering shareholders will receive one non-tradeable Contingent Value Right (CVR) for each share sold. These CVRs could potentially yield up to four future payments totaling as much as $0.40 per right, contingent upon the achievement of specific developmental and financial milestones.