Applied Therapeutics Shares Plummet Following Regulatory Setback

Applied Therapeutics US03828A1016

Shares of Applied Therapeutics are experiencing a dramatic sell-off, entering one of the most challenging periods in the company's recent history. The catalyst was a devastating regulatory decision that has collapsed the stock's valuation, with shares now trading around $0.21. The rejection of its lead drug candidate has fundamentally undermined the core investment thesis.

The company's financial health has come under intense scrutiny following the share price collapse. Applied Therapeutics reported its third-quarter results on November 13.

• GAAP Earnings Per Share (EPS): -$0.13
• Analyst Estimate: -$0.14

While the loss per share narrowly beat expectations, investor focus has shifted entirely to liquidity. With the equity now trading as a penny stock, any potential capital raise through share issuance would be severely dilutive for existing shareholders. The market is awaiting a revised strategic plan from management to extend the company's financial runway without the previously anticipated revenue from its key drug.

FDA Letter Triggers Avalanche of Selling

The steep decline was precipitated by a Complete Response Letter (CRL) from the U.S. Food and Drug Administration. The regulator declined to approve the drug candidate Govorestat for the treatment of Classical Galactosemia in its current form.

The market reaction was swift and severe. The speculative premium built into the share price ahead of the regulatory decision has been entirely erased. Investors are now reassessing the value of the entire development pipeline and seeking clarity on the future regulatory path for Govorestat, as well as the timeline for the SORD deficiency program.

Technical Picture Shows Oversold Conditions with No Clear Support

Chart analysis confirms the overwhelmingly bearish sentiment, while also indicating deeply oversold conditions.

The stock is trading well below both its 50-day moving average ($0.25) and its 200-day moving average ($0.72)—a clear signal of a sustained downtrend. However, with a 14-day Relative Strength Index (RSI) reading of approximately 23.1, the equity is deep in oversold territory. While such a reading often precedes a technical bounce, the fundamental weight of the FDA rejection continues to suppress any significant buying interest.

Analyst Targets: A Glimmer of Hope or Outdated Optimism?

Despite the catastrophic price drop, a massive gap exists between the current share price and the consensus outlook among market researchers. The average 12-month price target sits near $1.67, implying a theoretical upside potential exceeding 600%.

Caution is warranted, however. Analyst targets often lag behind seismic events like a CRL. Downward revisions are highly probable once financial models are adjusted for the delayed revenue timeline and heightened regulatory risk. The immediate future for the equity now hinges on the outcome of the company's upcoming discussions with the FDA.