SanaCurrents on Applied Thera's govorestat to treat rare metabolic disease in infants | $APLT

SUMMARY

Applied Therapeutics, Inc. (NASDAQ:APLT) is advancing govorestat to treat the rare metabolic disease classic galactosemia. Children inherit the disease, which results in the inability to metabolize galactose. Eventually, galactose converts to a toxic and aberrant metabolite named galactitol.

Govorestat is the most advanced of three rare disease drugs in development at Applied Thera. The FDA recently set an August 28, 2024, PDUFA date to approved govorestat. The stocks of smaller companies such as Verrica Pharmaceuticals, Marinus Pharmaceuticals and Scynexis all experienced price increases after receiving approvals to introduce their first drug(s) to the market. Like Verrica’s drug to treat children with the rare, benign skin disease molluscum contagiosum, govorestat presents a greenfield opportunity for Applied Thera as it will be the first drug to treat a largely untreated condition.

Related

Key catalysts

• PDUFA decision for govorestat to treat classic galactosemia

Key catalyst dates

• August 28, 2024

Sentiment, MACE Score & The Edge….

SanaCurrents assigns a 66.3% overall probability the FDA will approve govorestat.

Three forms of galactosemia have been characterized. All are caused by a mutation or deletion in the GALT, GALK1, and GALE genes. These three genes are responsible for producing the enzymes essential to metabolize galactose.  Classic galactosemia, also known as Type I galactosemia, is the most severe form. If infants with classic galactosemia are not treated quickly with a galactose-free diet, life-threatening complications can start to occur shortly after birth.

Accordingly, nearly all newborns are screened for galactosemia after birth via a broad diagnostic panel to detect rare diseases. Once infants are diagnosed, they immediately are placed on galactose-free diet which generally involves avoiding dairy products. If classic galactosemia is diagnosed later in young children, it can result in long-term central nervous system (CNS) complications to include behavior and motor skills deficiencies, cognitive issues, tremors, and speech problems.

In a phase III trial testing govorestat against a placebo in 47 children between the ages of 2 and 17, govorestat demonstrated systematic improvement over time for the overall primary endpoint (p=0.1030) and for a pre-specified sensitivity analysis, including cognition (p=0.0698), according to the company. Govorestat demonstrated clinical benefit on daily living activities, behavioral symptoms, fine motor skills and tremors. The drug also significantly reduced plasma galactitol levels in both young adults and children with galactosemia.

THE EDGE

Approximately 3,000 patients are afflicted with galactosemia in the US and there 80 new births per year, according to Applied Thera. In the European Union, there are approximately 4,000 patients and 120 new births per year. The research company GlobalData Pharma projects govorestat will generate $81 million in sales by 2029. The $81 million figure includes projections for govorestat sales to treat a second indication, sorbitol dehydrogenase (SORD) deficiency.

While the statistics signal govorestat likely does not project as a blockbuster, the FDA granted a Priority Review for govorestat. The Priority Review typically decreases the likelihood of rejection by the agency. Govorestat also previously received the Pediatric Rare Disease designation from the FDA and will qualify for a Priority Review Voucher (PRV) upon approval.

As PRV vouchers can be sold for approximately $100 million, the financial benefits from govorestat approval in classic galactosemia extend beyond the specific indication. Moreover, approval in classic galactosemia strengthens the prospects for approval in SORD deficiency, which Applied Thera likely will seek in about 12 months.

Unlike the tepid launches of drugs at Verrica and Marinus, Applied Thera owns a much stronger base of institutional investors who either will back the company’s individual launch or help it seek a strong partner. Applied Thera announced the PDUFA date on February 28, 2024, and the company quickly, or simultaneously, followed up the announcement of a $100 million private placement from existing and new institutional investors. The private placement was aided by Applied Thera’s February 14 announcement of positive phase III data from the govorestat trial in SORD deficiency.

In recent years, the FDA appears to have encouraged the introduction of new drugs to address untreated conditions. The agency has not necessarily lowered the approval bar, especially regarding safety, but drugs that provide benefits to quality of life are gaining favor. Govorestat falls into this category.

Disclosure:

SanaCurrents, the parent of BioCurrents, is initiating coverage and a position in APLT. SanaCurrents may close its position in APLT prior to or following the expected catalyst date.