Rare Disease-Focused Applied Therapeutics' Lead Candidate Govorestat Has Blockbuster Potential, Analyst Sees 140% Stock Upside

William Blair initiated coverage on Applied Therapeutics Inc. APLT, a late-stage development company focused on rare diseases such as galactosemia, SORD deficiency, and diabetic cardiomyopathy.

The analyst says, “Applied Therapeutics is an under-the-radar company developing a nice mix of therapeutics targeting rare diseases and some larger indications with potential for several major value inflections over the next 12 months.”

In April, the FDA extended the review period for Applied Therapeutics’ marketing application, seeking approval for its potentially first marketed drug govorestat (AT-007) for Classic Galactosemia, by three months. 

William Blair anticipates that Applied Therapeutics will launch govorestat in the galactosemia market in 2025, predicting a successful rollout due to the high unmet medical need, absence of other approved therapies, well-identified patient population, and the strong performance of first-in-class rare disease products.

The analyst estimates 2030 sales of govorestat to exceed $1 billion with 70% peak penetration in the galactosemia market.

The analyst initiates with an Outperform rating and estimates a fair value for shares of $14.

Beyond govorestat, Applied Therapeutics is developing AT-001 (caficrestat) for diabetic cardiomyopathy.

Diabetic cardiomyopathy affects about 20% of diabetics and, accordingly, has blockbuster potential.

In February, Applied Therapeutics released interim 12-month results from the ongoing Phase 3 INSPIRE trial of oral govorestat in SORD deficiency patients, in which the primary and several key secondary endpoints were achieved.

The Company expects that its cash and cash equivalents of $146.5 million as of March 31, 2024, will fund the business into 2026.

Price Action: APLT stock is up 18.70% at $5.91 at the last check on Wednesday.

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