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Why Applied Therapeutics Stock Is Sliding Today

By Cory Renauer – Jan 3, 2022 at 7:43AM

Key Points

  • Investors hoped the positive biomarker data that AT-007 produced in September would support accelerated approval for the treatment of galactosemia.
  • The FDA is not as impressed with the company's biomarker data as investors had hoped.
  • Part B of the study that produced positive biomarker data is also measuring how patients actually feel and function every six months.

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The company's lead candidate, AT-007, is going to take a lot longer to reach patients than expected.

What happened

Shares of Applied Therapeutics (APLT -5.61%), a clinical-stage biopharmaceutical company, are sliding today in response to upsetting news regarding its lead candidate. It turns out the Food and Drug Administration (FDA) wasn't on board with accelerated approval of AT-007 based on positive biomarker data. The stock was down by 32% as of 12:04 p.m. ET on Monday. 

So what 

AT-007 is an experimental treatment that inhibits aldose reductase in an attempt to treat multiple metabolic disorders. In September, Applied Therapeutics announced successful early biomarker results from a clinical trial with 47 pediatric galactosemia patients. Patients with galactosemia suffer from a buildup of galactitol. After 30 days of treatment, patients randomized to receive AT-007 had significantly less galactitol in their blood samples.

Scientists looking at genetic code.

Image source: Getty images.

Applied Therapeutics told investors it thought the FDA would grant accelerated approval to AT-007 based on galactitol reductions. Instead, the agency has insisted on waiting for evidence of long-term benefits combined with a lack of dangerous side effects.

Now what

Today's losses weren't terribly severe because part B of the trial that produced positive biomarker data will measure how patients feel and function every six months. Investigators will collect data from the first round of language and cognition tests in the first quarter.

Hopefully, the company is quick to share the first round of outcome data. Another delay could result in a far more severe beating than this volatile biotech stock received today.

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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