On Wednesday, RBC Capital Markets maintained its Outperform rating on shares of Applied Therapeutics (NASDAQ:APLT), with a steady price target of $12.00. The firm's stance comes following a series of virtual meetings with the CEO and CFO of Applied Therapeutics.
During these discussions, the company outlined its regulatory roadmap, emphasizing positive feedback from the FDA regarding its New Drug Application (NDA) for the treatment of galactosemia, as well as the potential for an accelerated approval submission for SORD, a genetic disorder.
Applied Therapeutics is gearing up for the commercial launch of its galactosemia treatment, initially concentrating on pediatric patients. The company expressed optimism about the market potential for SORD, citing revised epidemiological data indicating a larger patient population than previously estimated.
While acknowledging the complexities and uncertainties surrounding the regulatory process due to the intricate data package, RBC Capital noted that the overall data seems to support a favorable risk/benefit profile for patients with few available treatment options.
The firm also highlighted the recent shift towards increased regulatory flexibility by the Center for Drug Evaluation and Research (CDER), which bolsters the likelihood of approval for both galactosemia and SORD treatments.
Approval of these indications could lead to significant revenue, with long-term projections estimated at $710 million, thus presenting a substantial upside for the company's valuation.
InvestingPro Insights
As Applied Therapeutics (NASDAQ:APLT) navigates the regulatory landscape with its promising treatments, current financial metrics and market sentiment provide a multifaceted view of the company's status. With a market capitalization of approximately $643.33 million, the company's financials reflect a challenging period, evidenced by a negative revenue growth of over 100% in the last twelve months as of Q1 2024. Despite this, the stock has experienced a remarkable 300.71% return over the last year, indicating strong investor confidence in its long-term prospects, particularly in light of its recent clinical advancements.
InvestingPro Tips underscore the company's strong cash position relative to its debt, which may offer some financial flexibility as it moves towards the commercialization of its treatments. However, analysts have tempered expectations, revising earnings downwards and anticipating a sales decline in the current year. They also caution investors about the company's volatility and the lack of profitability in the near term. For those interested in deeper analysis, there are additional tips available on InvestingPro, which can be accessed with the coupon code PRONEWS24 for up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
Investors should note the significant price uptick over the last six months, with a 129.8% return, which may reflect the market's optimistic view of Applied Therapeutics' future. While the company does not pay dividends, its potential for capital appreciation could be a key driver for investment decisions. With 11 additional tips available on InvestingPro, investors have ample resources to make informed decisions about the opportunities and risks associated with Applied Therapeutics.
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