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Applied Therapeutics, Inc. (APLT)·Q3 2024 Earnings Summary

Executive Summary

  • Q3 2024 showed higher operating spend ahead of potential commercialization: R&D rose to $14.8M and G&A to $15.0M, widening net loss to $(68.6)M (−$0.48/sh) versus $(42.4)M (−$0.47/sh) in Q3 2023 as commercialization prep and regulatory activities accelerated .
  • Regulatory catalysts dominated the period: FDA Priority Review for govorestat in Classic Galactosemia with a PDUFA date of Nov 28, 2024; EMA decision expected in early Q1 2025; SORD Deficiency NDA targeted for early Q1 2025 .
  • The FDA informed the company post–late-cycle review that an Advisory Committee would no longer be required (Sept 18, 2024), simplifying the path into the PDUFA date; management emphasized continued alignment with the agency .
  • Subsequent event: On Nov 27, 2024, the FDA issued a CRL for govorestat in Galactosemia, a material development likely to reset near-term expectations and timelines; the company plans to meet FDA to discuss resubmission or appeal .
  • Street estimates: S&P Global consensus for Q3 2024 could not be retrieved due to access limits; we therefore cannot present “vs. estimates” comparisons this quarter (values unavailable; S&P Global data).

What Went Well and What Went Wrong

What Went Well

  • Regulatory momentum and clarity: FDA Priority Review continued on plan for Galactosemia with PDUFA Nov 28, 2024; EMA review ongoing with decision expected early Q1 2025 .
  • AdCom no longer required: FDA communicated that an Advisory Committee meeting would not be held, indicating clarity and alignment on review approach ahead of PDUFA .
  • Management confidence and launch readiness: “We are proud of the significant progress…with a focus on transitioning from a clinical-stage company to a commercial organization,” highlighting pre-launch initiatives for govorestat in Galactosemia and SORD .

What Went Wrong

  • Operating expenses stepped up sharply: G&A nearly tripled YoY to $15.0M on legal/professional fees, commercialization buildout, and personnel; R&D rose to $14.8M on clinical, preclinical, regulatory and manufacturing costs, driving a larger net loss .
  • Financial volatility from warrants: A $(40.2)M non-cash loss from change in fair value of warrant liabilities significantly impacted reported net loss .
  • Subsequent event risk materialized: FDA CRL on Nov 27, 2024 for Galactosemia NDA introduces timeline uncertainty and raises the bar for a path forward (resubmission or appeal planned) .

Financial Results

Income statement snapshot (USD, thousands unless noted; EPS in USD). Columns ordered oldest → newest.

MetricQ3 2023Q1 2024Q2 2024Q3 2024
Total Revenue$455 $190 $144 $122
R&D Expense$10,785 $12,217 $10,004 $14,828
G&A Expense$4,710 $9,066 $10,580 $15,037
Loss from Operations$(15,495) $(21,093) $(20,440) $(29,743)
Change in FV of Warrants$(27,277) $(63,405) $22,744 $(40,184)
Net Income (Loss)$(42,370) $(83,938) $2,898 $(68,591)
EPS (basic/diluted)$(0.47) $(0.67) $0.02/$(0.13) $(0.48)

Balance sheet and capital (period-end):

MetricQ4 2023Q1 2024Q2 2024Q3 2024
Cash & Cash Equivalents$49,898 $146,484 $122,197 $98,867
Warrant Liabilities$53,725 $64,937 $42,192 $82,377
Stockholders’ Equity (Deficit)$(17,146) $67,294 $72,392 $5,892

Notes:

  • No segment reporting or gross margin/EBITDA provided; company remains pre-commercial. No non-GAAP reconciliations were presented in these releases .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance (Q3)Change
Govorestat (Galactosemia) PDUFA2024PDUFA Nov 28, 2024 PDUFA Nov 28, 2024 Maintained
FDA Advisory Committee2024Tentatively Oct 9, 2024 FDA no longer intends to hold AdCom (9/18/24) Withdrawn
EMA Decision (Galactosemia)Early Q1 2025Early Q1 2025 Early Q1 2025 Maintained
Govorestat NDA (SORD Deficiency)Early Q1 2025Plan to submit early Q1 2025 Plan to submit early Q1 2025 Maintained
Cash RunwayMulti-yearExpected to fund business into 2026; PRV sale could extend (Q2) Not updated in Q3 release Not updated

Earnings Call Themes & Trends

(We could not locate a Q3 2024 earnings call transcript in our sources; themes compiled from Q1–Q3 press materials.)

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Regulatory – GalactosemiaPriority Review; PDUFA Nov 28, 2024; EMA review; FDA planned AdCom; updated cognition data included PDUFA timeline reiterated; AdCom removed; EMA decision early Q1 2025 Clearer path (no AdCom); timing maintained
Regulatory – SORD DeficiencyAligned with FDA on potential Accelerated Approval path; NDA targeted early Q1 2025 NDA submission targeted early Q1 2025 reiterated Stable timeline
Commercial ReadinessNew CCO appointed; commercialization build noted Increased G&A on commercialization prep for govorestat Accelerating prep
Clinical/Medical EngagementARISE-HF data (AT‑001) presented; multiple patient/medical meetings Presented Galactosemia mechanism and outcomes at SSIEM/ASHG Continued visibility
Financial RunwayQ1/Q2: runway into 2026; PRV sale could extend Not reiterated in Q3; higher opex and warrant fair value volatility Increased uncertainty post quarter (CRL)
Post-Quarter Outcome——CRL issued Nov 27, 2024; meeting planned with FDA

Management Commentary

  • “We are proud of the significant progress we’ve made this quarter as we prepare for a transformational year ahead, with a focus on transitioning from a clinical-stage company to a commercial organization.” – Shoshana Shendelman, Founder & CEO .
  • “We remain confident in the promise of govorestat and its ability to address the underlying mechanisms of both diseases.” – Shendelman, on Galactosemia and SORD .
  • “The FDA communicated that an Advisory Committee meeting would no longer be required… The Priority Review of the NDA is continuing as planned.” – Sept 18 regulatory update .

Q&A Highlights

  • We were unable to obtain the Q3 2024 earnings call transcript from our sources; therefore, Q&A themes and any guidance clarifications from a call are not available as of this analysis (we searched company filings and common transcript aggregators; none accessible).

Estimates Context

  • S&P Global consensus estimates for Q3 2024 could not be retrieved due to access limits at the time of request; as a result, we cannot present revenue/EPS vs. consensus for this quarter (values unavailable; S&P Global).

KPIs and Operating Metrics

KPIQ1 2024Q2 2024Q3 2024Notes
Cash & Cash Equivalents$146.5M $122.2M $98.9M Sequential decline as spend ramps pre-launch
R&D Expense$12.2M $10.0M $14.8M Higher on clinical/preclinical/regulatory & manufacturing
G&A Expense$9.1M $10.6M $15.0M Higher on commercialization build, personnel, legal
PDUFA (Galactosemia)—Nov 28, 2024 Nov 28, 2024 Maintained
EMA Decision (Galactosemia)—Early Q1 2025 Early Q1 2025 Maintained
SORD NDA Target—Early Q1 2025 Early Q1 2025 Maintained

Financial Drivers and “Why”

  • Opex increases reflect commercialization build and regulatory push: Q3 G&A +$10.3M YoY on commercial prep (+$6.8M), legal/pro fees (+$1.7M), and personnel/stock comp (+$1.4M); R&D +$4.0M YoY on clinical/regulatory, manufacturing/formulation, and personnel .
  • Non-cash warrant liability fair value swing amplified P&L volatility: $(40.2)M in Q3 versus +$22.7M in Q2, materially impacting bottom-line results .
  • Regulatory path clarity (no AdCom) reduced near-term process risk during Q3, but subsequent CRL (Nov 27) introduces new timeline and approval uncertainty for Galactosemia .

Key Takeaways for Investors

  • Near-term regulatory overhang: The Nov 27 CRL for Galactosemia is a pivotal event; the company plans to meet FDA to discuss resubmission or appeal—watch for clarity on the required evidence and timeline .
  • Secondary path via SORD remains: Management reiterated plans to submit the SORD NDA in early Q1 2025, independent of the Galactosemia outcome, preserving an alternate regulatory pathway .
  • Commercial readiness continues, but cash trajectory bears monitoring: Cash fell to $98.9M at Q3 end; prior guidance (Q2) suggested runway into 2026 with potential PRV monetization upon approval—post-CRL, the runway scenario could change pending next FDA steps .
  • Expense profile likely to stay elevated near term: G&A devoted to launch prep and R&D tied to regulatory/CMC activities remained high in Q3, which may persist through regulatory resolution .
  • Lack of revenue and non-cash warrant remeasurement drive P&L volatility: Expect continued headline EPS swings tied to warrant liability marks until the capital structure normalizes .
  • Upcoming catalysts: Any FDA feedback on CRL resolution/resubmission, SORD NDA submission in early Q1 2025, and EMA decision in early Q1 2025 are the principal stock drivers over the next 1–2 quarters .

References:

  • Q3 2024 8‑K/Press Release and financial statements .
  • Q2 2024 8‑K/Press Release and financial statements .
  • Q1 2024 8‑K/Press Release and financial statements .
  • Regulatory update (Sept 18, 2024) .
  • CRL press release (Nov 27, 2024) .

Additional source (company IR copy of Q3 release): https://ir.appliedtherapeutics.com/news-releases/news-release-details/applied-therapeutics-reports-third-quarter-2024-financial (duplicative of -).