Applied Therapeutics (NASDAQ: APLT) Plunges 70.33% Amid Regulatory Hurdles and Shrinking Cash Reserves

On November 14, 2025, shares of Applied Therapeutics (NASDAQ: APLT) plunged 70.3329% in pre-market trading, signaling heightened investor concerns over the biopharmaceutical firm’s recent quarterly results and regulatory updates. The company reported a sharp decline in cash reserves, from $79.4 million at year-end 2024 to $11.9 million as of September 30, 2025, raising questions about its near-term liquidity and operational flexibility.

The stock’s selloff coincided with mixed regulatory developments. While the FDA provided “constructive feedback” on govorestat for CMT-SORD, unresolved issues such as proof of pathophysiology and surrogate endpoint validation remain. A scheduled meeting in Q4 2025 for classic galactosemia, following a prior rejection, adds regulatory uncertainty. Meanwhile, clinical data for PMM2-CDG showed promise, but limited patient numbers and the need for carcinogenicity studies could delay pivotal trials. Leadership changes, including the resignation of Executive Chairman John Johnson, further cloud strategic clarity.

Financially, Applied Therapeutics reported a $19.0 million net loss for Q3 2025, driven by $9.6 million in R&D expenses and $8.2 million in G&A costs. Despite reduced spending compared to prior periods, the cash burn rate highlights dependency on upcoming FDA milestones or external financing. The company’s reliance on a narrow pipeline—centered on govorestat—leaves it vulnerable to regulatory setbacks, particularly as cash reserves shrink to a level that could constrain operations within the next few quarters.

Investor sentiment remains fragile, with the stock’s volatility reflecting the high-stakes balance between potential regulatory breakthroughs and liquidity risks. Key watchpoints include the outcome of the Q4 2025 FDA meeting for classic galactosemia and whether the agency accepts sorbitol as a validated endpoint. Without a clear regulatory pathway or additional funding, Applied Therapeutics faces significant hurdles in advancing its lead candidate to market.

A backtest strategy could focus on event-driven trading around FDA meetings and cash flow thresholds. For instance, a long position might be triggered if the Q4 2025 meeting confirms a viable path for govorestat, while a short bias could emerge if cash reserves fall below $5 million. Position sizing would need to account for the stock’s high volatility and limited liquidity, emphasizing risk management through strict stop-loss parameters and dynamic hedging during critical regulatory announcements.