Applied Therapeutics (NASDAQ: APLT) Soars 121.35% on Phase 3 Trial Initiation, Legal Overhang Clearance

Applied Therapeutics (NASDAQ: APLT) surged 121.35% on September 26, 2025, marking a three-day rally of 173.13% as the stock hit its highest level since September 2025. The intraday gain of 135.71% underscored renewed investor confidence following a series of strategic and regulatory developments.

The momentum was fueled by the initiation of a pivotal Phase 3 trial for govorestat, the company’s lead candidate for Charcot-Marie-Tooth disease with Sorbitol Dehydrogenase (CMT-SORD) deficiency. Classified as a "confirmatory" study, the trial’s design aligns with FDA Subpart H guidelines, potentially enabling accelerated approval based on surrogate endpoints. Positive 12-month data from earlier trials, including slowed disease progression via MRI and sustained sorbitol reduction, further reinforced the drug’s clinical potential.

A critical catalyst was the resolution of securities fraud claims tied to a 2024 FDA rejection of govorestat for Classic Galactosemia. The legal overhang had previously weighed on the stock, and its clearance allowed the company to focus on its CMT-SORD pipeline, restoring market credibility. Leadership changes, including the appointment of Todd F. Baumgartner and Evan Bailey to regulatory and medical roles, added operational clarity, while institutional investors increased stakes in late 2024 and early 2025.

Broader industry trends in orphan drug development also played a role. The FDA’s expedited pathways for rare diseases, coupled with Applied Therapeutics’ strategic engagement with regulators, positioned the company to de-risk its pipeline. Despite financial challenges—including negative operating margins and a low Altman Z-Score—the stock’s rally reflected speculative optimism about govorestat’s potential as a first-in-class therapy in a niche market with no approved treatments.