The FDA has rejected Applied Therapeutics’ attempt to win approval on the strength of a failed phase 3 trial, triggering a 75% drop in the biotech’s share price. Applied said the complete response letter cited “deficiencies in the clinical application” but it plans to reapply or appeal.
New York-based Applied was seeking approval for the aldose reductase inhibitor govorestat in people with classic galactosemia, a rare disease that causes developmental delays, speech problems and motor function abnormalities. A phase 3 trial missed its primary endpoint in 2023, but Applied said the study showed the consistent and sustained benefit of taking the drug candidate on multiple measures.
The FDA has overlooked primary endpoint misses to approve rare disease drugs in the past, flexing its rules to ensure patients with limited treatment options get access to products backed by mixed clinical data, but the govorestat package fell short of the agency’s requirements for authorization.
Applied is reviewing the feedback and plans to immediately request to meet with the FDA. The biotech said it will use the meeting to “discuss requirements for a potential resubmission of the NDA or appeal of the decision along with appropriate next steps.” Applied’s press release makes no mention of whether the FDA has asked it to run an additional trial before refiling for approval.
Applied reiterated its case for govorestat in its statement about the rejection. The biotech has focused on reductions in the biomarker galactitol that it claims resulted in meaningful improvements on clinical outcomes. Applied has made the case that govorestat’s benefits outweigh the risks, such as the elevated liver enzymes seen in around one-quarter of patients, but the FDA still needs convincing.
The biotech could draw on the support of the Galactosemia Foundation as it tries to win over the FDA. In a statement, Nicole Casale, president of the nonprofit, urged the agency to reconsider the decision and to “consider the patient voice when evaluating this therapy.”
Investors sent Applied’s share price down 80% to $1.75 when the news broke late Wednesday. The stock climbed slightly, rising to $2.15 by Monday morning, in post-Thanksgiving trading. The stock drop eradicated gains the stock made over the past year as hedge funds bet on the biotech and a change of leadership at the FDA’s rare drugs unit raised hopes of an approval.
Applied still plans to file for approval of govorestat in another indication, sorbitol dehydrogenase (SORD) deficiency, in the first quarter of 2025. The biotech said the review and potential approval of govorestat for the treatment of SORD is independent of the galactosemia filing.