PART I. FINANCIAL INFORMATION This section presents the company's unaudited financial statements, management's analysis, market risk disclosures, and internal controls [Item 1. Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The company's financial statements show a significant net loss, decreased cash and equity, and a 'going concern' warning due to funding needs [Condensed Balance Sheets](index=7&type=section&id=Condensed%20Balance%20Sheets) As of June 30, 2025, the company's total assets decreased to $37.3 million from $86.7 million at year-end 2024, primarily driven by a reduction in cash and cash equivalents from $79.4 million to $30.4 million Condensed Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $30,421 | $79,398 | | Total current assets | $34,511 | $83,646 | | **Total Assets** | **$37,342** | **$86,691** | | **Liabilities & Equity** | | | | Total current liabilities | $17,749 | $27,296 | | Total liabilities | $19,904 | $29,685 | | Total stockholders' equity | $17,438 | $57,006 | | **Total Liabilities & Stockholders' Equity** | **$37,342** | **$86,691** | [Condensed Statements of Operations](index=8&type=section&id=Condensed%20Statements%20of%20Operations) For the three months ended June 30, 2025, the company reported a net loss of $21.3 million, compared to a net income of $2.9 million in the same period of 2024 Statement of Operations Summary (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $0 | $144 | $0 | $334 | | Research and Development | $9,923 | $10,004 | $17,760 | $22,221 | | General and Administrative | $13,175 | $10,580 | $30,863 | $19,646 | | Loss from Operations | $(23,098) | $(20,440) | $(48,623) | $(41,533) | | Change in fair value of warrant liabilities | $1,437 | $22,744 | $4,541 | $(40,660) | | **Net Income (Loss)** | **$(21,330)** | **$2,898** | **$(43,155)** | **$(81,040)** | | **Net Income (Loss) per Share - basic** | **$(0.15)** | **$0.02** | **$(0.30)** | **$(0.60)** | [Condensed Statements of Stockholders' Equity/(Deficit)](index=9&type=section&id=Condensed%20Statements%20of%20Stockholders'%20Equity%2F(Deficit)) Stockholders' equity decreased from $57.0 million at the beginning of 2025 to $17.4 million as of June 30, 2025 - The company's accumulated deficit grew from **$574.2 million** at the start of 2025 to **$617.4 million** by the end of Q2 2025, reflecting the ongoing net losses[27](index=27&type=chunk) [Condensed Statements of Cash Flows](index=11&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) For the first six months of 2025, the company used $49.0 million in cash for operating activities and had no financing activities, resulting in a cash balance of $30.4 million Cash Flow Summary for the Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(48,977) | $(41,506) | | Net cash provided by financing activities | $0 | $113,805 | | **Net (Decrease) Increase in Cash** | **$(48,977)** | **$72,299** | | Cash at beginning of period | $79,398 | $49,898 | | **Cash at end of period** | **$30,421** | **$122,197** | [Notes to Condensed Financial Statements (Unaudited)](index=12&type=section&id=Notes%20to%20Condensed%20Financial%20Statements%20(Unaudited)) Notes detail accounting policies, a 'going concern' warning, license agreements, warrant liabilities, litigation, and the AT-001 out-licensing agreement - Management has concluded that substantial doubt exists regarding the company's ability to continue as a going concern within one year, given its net loss of **$43.2 million** for the six months ended June 30, 2025, and cash balance of **$30.4 million**[35](index=35&type=chunk)[36](index=36&type=chunk) - The company is involved in a securities class action lawsuit and a shareholder derivative action. As of June 30, 2025, the probability of loss was deemed reasonably possible, but the company could not estimate a range of loss and has not recorded a liability[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk) - On July 31, 2025, the company entered into an out-licensing agreement with Biossil, Inc. for AT-001, receiving a **$1.0 million** upfront payment and eligibility for future royalties and milestones[126](index=126&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses clinical developments, including FDA setbacks for govorestat, increased G&A expenses, decreased cash, and the 'going concern' warning, emphasizing the need for additional capital [Overview](index=37&type=section&id=Overview) Applied Therapeutics is a clinical-stage biopharmaceutical company developing novel product candidates against validated molecular targets in rare diseases, with a primary focus on aldose reductase (AR) inhibitors - The FDA issued a Complete Response Letter (CRL) for the govorestat NDA for Classic Galactosemia in November 2024, citing deficiencies in the clinical application. The company subsequently withdrew its European Marketing Authorization Application (MAA)[130](index=130&type=chunk) - The company is analyzing data from the Phase 2/3 INSPIRE trial for AT-007 in CMT-SORD and plans to meet with the FDA in Q3 2025 to discuss a potential NDA submission[132](index=132&type=chunk) - On July 31, 2025, the company out-licensed its AT-001 (caficrestat) program for Diabetic Cardiomyopathy to Biossil, Inc., receiving a **$1.0 million** upfront payment[135](index=135&type=chunk) [Results of Operations](index=45&type=section&id=Results%20of%20Operations) For the three and six months ended June 30, 2025, the company reported increased net losses from operations compared to the prior year, primarily driven by a significant rise in general and administrative expenses Comparison of R&D Expenses (in thousands) | Expense Category | Six Months 2025 | Six Months 2024 | Change | | :--- | :--- | :--- | :--- | | Clinical and pre-clinical | $7,328 | $14,621 | $(7,293) | | Drug manufacturing and formulation | $1,658 | $68 | $1,590 | | Personnel expenses | $5,408 | $3,592 | $1,816 | | **Total R&D Expenses** | **$17,760** | **$22,221** | **$(4,461)** | Comparison of G&A Expenses (in thousands) | Expense Category | Six Months 2025 | Six Months 2024 | Change | | :--- | :--- | :--- | :--- | | Legal and professional fees | $20,058 | $5,563 | $14,495 | | Commercial expenses | $1,297 | $5,288 | $(3,991) | | Personnel expenses | $4,937 | $3,339 | $1,598 | | **Total G&A Expenses** | **$30,863** | **$19,646** | **$11,217** | [Liquidity and Capital Resources](index=51&type=section&id=Liquidity%20and%20Capital%20Resources) The company's financial position raises substantial doubt about its ability to continue as a going concern, with cash and cash equivalents of $30.4 million as of June 30, 2025 - The company concluded there is substantial doubt about its ability to continue as a going concern for 12 months beyond the filing date, with cash and cash equivalents of **$30.4 million** as of June 30, 2025[172](index=172&type=chunk) - Net cash used in operating activities was **$49.0 million** for the first six months of 2025, an increase from **$41.5 million** in the prior year period[175](index=175&type=chunk)[176](index=176&type=chunk) - No cash was provided by financing activities in the first six months of 2025, compared to **$113.8 million** in the same period of 2024, which included proceeds from a private placement and ATM agreement sales[179](index=179&type=chunk)[180](index=180&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=59&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rate sensitivity and foreign currency sensitivity, with $30.4 million in cash and cash equivalents exposed to fluctuations - The company's cash and cash equivalents of **$30.4 million** as of June 30, 2025, are subject to interest rate risk[194](index=194&type=chunk) - The company is subject to foreign exchange risk from service agreements denominated primarily in the Euro, but does not engage in hedging activities[196](index=196&type=chunk) [Controls and Procedures](index=60&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were effective as of June 30, 2025, with a previously identified material weakness fully remediated - A material weakness related to the information and communication component of the COSO framework, reported for the fiscal year ended December 31, 2024, was fully remediated as of June 30, 2025[199](index=199&type=chunk)[201](index=201&type=chunk) - Remediation actions included the appointment of a new executive chairman and interim CEO, instituting a cross-functional quality council, and hiring a chief regulatory officer and a head of quality[200](index=200&type=chunk) PART II. OTHER INFORMATION This section details legal proceedings, comprehensive risk factors, equity sales, and other disclosures pertinent to the company's operations [Legal Proceedings](index=63&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in a consolidated securities class action lawsuit and a shareholder derivative action, both stemming from allegations related to the govorestat NDA - A consolidated securities class action lawsuit (In re Applied Therapeutics Securities Litigation) alleges violations of the Securities Exchange Act related to statements made between January 3, 2024, and December 2, 2024, concerning the govorestat NDA[206](index=206&type=chunk) - A shareholder derivative action (Hassine v. Shendelman, et al.) has been filed against certain current and former officers and directors based on similar facts as the class action. This action was temporarily stayed by the court on March 5, 2025[207](index=207&type=chunk) [Risk Factors](index=63&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial risks including ongoing losses, a 'going concern' warning, regulatory setbacks for govorestat, funding needs, litigation, third-party reliance, IP vulnerabilities, and stock price volatility [Risks Related to Financial Position and Capital Needs](index=68&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Capital%20Needs) The company has a history of significant operating losses, an accumulated deficit of $617.4 million, and a 'going concern' warning, necessitating substantial additional capital - The company has incurred significant operating losses since inception, with a net loss of **$43.2 million** for the six months ended June 30, 2025, and an accumulated deficit of **$617.4 million**[213](index=213&type=chunk) - The independent registered public accounting firm's report includes a 'going concern' paragraph, indicating substantial doubt about the company's ability to continue operations for 12 months beyond the filing date due to its financial condition[220](index=220&type=chunk) - The company requires substantial additional funding to finance operations, and failure to raise capital could force it to delay, reduce, or terminate development programs[233](index=233&type=chunk) [Risks Related to the Development and Commercialization of Our Product Candidates](index=77&type=section&id=Risks%20Related%20to%20the%20Development%20and%20Commercialization%20of%20Our%20Product%20Candidates) The company's success is highly dependent on its product candidates, particularly govorestat (AT-007), which faces significant regulatory hurdles and development risks - In November 2024, the company received a Warning Letter from the FDA related to its AT-007-1002 study, identifying issues with electronic data capture and a dosing error. Failure to resolve these matters could impede future clinical trials and NDA submissions[246](index=246&type=chunk) - The FDA issued a Complete Response Letter (CRL) for the govorestat NDA for Classic Galactosemia, stating the application is not approvable in its current form due to clinical deficiencies and failure to meet primary endpoints[248](index=248&type=chunk) - All current clinical-stage product candidates target the inhibition of aldose reductase, a mechanism of action for which there are no approved drugs in the U.S., posing a fundamental risk to the entire pipeline[280](index=280&type=chunk) [Risks Related to Our Dependence on Third Parties](index=111&type=section&id=Risks%20Related%20to%20Our%20Dependence%20on%20Third%20Parties) The company heavily relies on third parties for critical functions like clinical trials and manufacturing, introducing risks of delays, unreliable data, and inability to obtain regulatory approval - A clinical investigator for the AT-007-1002 study received a Warning Letter from the FDA in November 2024 for non-compliance with regulations, including deviations from the investigational plan. This could impact the data's reliability and future regulatory submissions[352](index=352&type=chunk)[353](index=353&type=chunk) - The company is dependent on third-party contract manufacturers for clinical and potential commercial supplies and does not own its own manufacturing facilities. Any failure by these manufacturers to comply with cGMP or meet specifications could halt development and commercialization[354](index=354&type=chunk) - The company relies on CROs to conduct and monitor clinical trials and is responsible for ensuring their compliance with GCP. Failures by CROs could result in unreliable data and require repeating trials, delaying the approval process[360](index=360&type=chunk)[361](index=361&type=chunk) [Risks Related to Our Intellectual Property](index=116&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) The company's business is critically dependent on licensed intellectual property, facing risks of license breaches, uncertain patent protection, and potential infringement claims - The company's core product candidates, including AT-007, AT-001, and AT-003, are dependent on an exclusive license agreement with Columbia University. A breach or termination of this agreement could halt the development of these products[369](index=369&type=chunk)[371](index=371&type=chunk) - The patent landscape for biotechnology is uncertain, and the company's pending applications may not result in issued patents that provide meaningful protection or prevent competitors from developing similar products[373](index=373&type=chunk)[374](index=374&type=chunk) - The company may face legal proceedings from third parties alleging infringement of their intellectual property rights, which could be costly, time-consuming, and could force the company to cease development or obtain expensive licenses[383](index=383&type=chunk)[385](index=385&type=chunk) [Risks Related to Our Business Operations, Employee Matters and Managing Growth](index=128&type=section&id=Risks%20Related%20to%20Our%20Business%20Operations%2C%20Employee%20Matters%20and%20Managing%20Growth) The company is exposed to significant operational risks, including ongoing litigation, recent leadership changes, and vulnerabilities in internal computer systems - The company is defending against a securities class action lawsuit and a shareholder derivative action following the negative FDA updates in November 2024, which could result in substantial costs and divert resources[409](index=409&type=chunk)[412](index=412&type=chunk) - Recent leadership changes, including the departure of the founder, President, and CEO in December 2024, may create uncertainty and disrupt business and investor relationships[414](index=414&type=chunk) - Internal computer systems are vulnerable to cyber-attacks, which could lead to the loss of clinical trial data, trade secrets, or other proprietary information, potentially delaying regulatory approval and harming the business[419](index=419&type=chunk) [Risks Related to Ownership of Our Common Stock](index=134&type=section&id=Risks%20Related%20to%20Ownership%20of%20Our%20Common%20Stock) Ownership of the company's common stock involves high risk due to extreme price volatility, potential delisting from Nasdaq, and no anticipated dividends - The market price of the company's common stock is extremely volatile and has declined significantly, particularly following the FDA's Complete Response Letter and Warning Letter in November 2024[425](index=425&type=chunk)[411](index=411&type=chunk) - On February 7, 2025, the company received a deficiency letter from Nasdaq for failing to maintain the minimum **$1.00** bid price, which could lead to the delisting of its common stock if compliance is not regained[431](index=431&type=chunk) - The company has never paid cash dividends and does not intend to in the foreseeable future, meaning capital appreciation is the sole potential source of gain for stockholders[433](index=433&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=143&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period covered by this report - There were no unregistered sales of equity securities during the reporting period[453](index=453&type=chunk) [Defaults Upon Senior Securities](index=143&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) Not applicable. The company reports no defaults upon senior securities [Mine Safety Disclosures](index=143&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable. The company has no mine safety disclosures to report [Other Information](index=143&type=section&id=Item%205.%20Other%20Information) The company reports that no officer or director adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the six months ended June 30, 2025 - No officer or director adopted or terminated a Rule 10b5-1 trading plan during the six months ended June 30, 2025[456](index=456&type=chunk) [Exhibits](index=144&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including management contracts and certifications - Exhibits filed include management contracts and certifications required under the Exchange Act and Sarbanes-Oxley Act[458](index=458&type=chunk)

[Applied Therapeutics Second Quarter 2025 Results](index=1&type=section&id=Applied%20Therapeutics%20Second%20Quarter%202025%20Results) [Management Commentary](index=1&type=section&id=Management%20Commentary) The interim CEO highlighted strong execution in H1 2025, focusing on clinical operations, pipeline advancement, and regulatory alignment for rare disease programs - The company is preparing for a potential New Drug Application (NDA) submission for govorestat for the treatment of CMT-SORD, with a meeting scheduled with the FDA in **Q3 2025**[3](index=3&type=chunk) - A new sponsored sorbitol assay has been launched at no cost to patients to remove barriers to diagnosis and treatment for the CMT-SORD community[3](index=3&type=chunk) - The company's primary focus for the remainder of the year is on regulatory alignment across its pipeline for rare diseases, including CMT-SORD, Classic Galactosemia, and PMM2-CDG[3](index=3&type=chunk) [Recent Highlights & Pipeline Update](index=1&type=section&id=Recent%20Highlights%20%26%20Pipeline%20Update) Applied Therapeutics reported significant progress across its clinical pipeline, advancing CMT-SORD, addressing Classic Galactosemia CRL, presenting PMM2-CDG data, and completing corporate developments [CMT-SORD Program](index=1&type=section&id=CMT-SORD%20Program) The govorestat program for CMT-SORD is advancing toward a potential NDA submission, supported by positive 24-month MRI data and a newly launched no-cost Urine Sorbitol Assay - A meeting with the FDA is scheduled for **Q3 2025** to align on the planned NDA submission strategy for govorestat in treating CMT-SORD[6](index=6&type=chunk) - Full 12-month results and 24-month MRI data from the INSPIRE Phase 2/3 trial were presented, demonstrating that govorestat slowed the progression of the disease and was generally safe and well-tolerated[7](index=7&type=chunk) - In July 2025, the company launched a sponsored, no-cost Urine Sorbitol Assay to help healthcare providers identify patients with suspected CMT-SORD[6](index=6&type=chunk)[7](index=7&type=chunk) [Classic Galactosemia Program](index=2&type=section&id=Classic%20Galactosemia%20Program) The company is actively evaluating its response to the FDA's Complete Response Letter (CRL) for govorestat in Classic Galactosemia, with the review progressing as planned - The company is actively evaluating its response to the FDA's Complete Response Letter (CRL) for govorestat in Classic Galactosemia, with the process progressing as planned[8](index=8&type=chunk) [PMM2-CDG Program](index=2&type=section&id=PMM2-CDG%20Program) Results from an investigator-initiated trial of govorestat for PMM2-CDG are scheduled for presentation, with govorestat having received Orphan Drug and Rare Pediatric Disease designations - Data from an ongoing trial of govorestat for PMM2-CDG will be presented at the ASHG Annual Meeting in **October 2025**[9](index=9&type=chunk) - Govorestat has received Orphan Drug Designation and Rare Pediatric Disease designation from the FDA for the treatment of PMM2-CDG, an ultra-rare and severe metabolic disorder[9](index=9&type=chunk) [Corporate Developments](index=2&type=section&id=Corporate%20Developments) The company entered an out-licensing agreement for AT-001 for Diabetic Cardiomyopathy and made key leadership promotions in July 2025 - Entered into an out-licensing agreement with Biossil, Inc. for AT-001, granting Biossil exclusive worldwide rights to develop and commercialize the drug for Diabetic Cardiomyopathy (DbCM), with Applied Therapeutics receiving an upfront payment and eligibility for future royalties and milestones[10](index=10&type=chunk) - Promoted Evan Bailey, M.D., to Chief Medical Officer and Dottie Caplan to Executive Vice President, Patient Advocacy and Government Affairs[10](index=10&type=chunk) [Second Quarter 2025 Financial Results](index=3&type=section&id=Second%20Quarter%202025%20Financial%20Results) Applied Therapeutics reported a net loss of **$21.3 million** for Q2 2025, a significant shift from a net income of **$2.9 million** in Q2 2024, primarily due to changes in warrant liabilities and increased G&A expenses Financial Metrics | Financial Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Net Income (Loss)** | $(21.3) million | $2.9 million | Decreased significantly | | **Net Loss per Share (basic)** | $(0.15) | $0.02 (income) | N/A | | **R&D Expenses** | $9.9 million | $10.0 million | -1.0% | | **G&A Expenses** | $13.2 million | $10.6 million | +24.5% | | **Cash & Cash Equivalents** | $30.4 million (as of Jun 30, 2025) | $79.4 million (as of Dec 31, 2024) | -61.7% YTD | - The increase in General and administrative expenses was primarily driven by higher legal, professional, personnel, and data storage costs[16](index=16&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) The condensed financial statements detail the company's financial position and operational results, reflecting a significant reduction in cash and total assets and a net loss for the quarter due to non-operational changes [Condensed Balance Sheets](index=6&type=section&id=Condensed%20Balance%20Sheets) As of June 30, 2025, total assets decreased to **$37.3 million** from **$86.7 million** at year-end 2024, primarily due to a decline in cash and cash equivalents Balance Sheet Summary (in thousands) | (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $30,421 | $79,398 | | Total current assets | $34,511 | $83,646 | | **Total Assets** | **$37,342** | **$86,691** | | **Liabilities & Equity** | | | | Total current liabilities | $17,749 | $27,296 | | Total liabilities | $19,904 | $29,685 | | Total stockholders' equity | $17,438 | $57,006 | | **Total Liabilities and Stockholders' Equity** | **$37,342** | **$86,691** | [Condensed Statements of Operations](index=7&type=section&id=Condensed%20Statements%20of%20Operations) For Q2 2025, the company reported no revenue and a net loss of **$21.3 million**, contrasting with a **$2.9 million** net income in Q2 2024, largely due to changes in the fair value of warrant liabilities Statements of Operations Summary (in thousands, except per share data) | (in thousands, except per share data) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total revenue | $— | $144 | | Research and development | $9,923 | $10,004 | | General and administrative | $13,175 | $10,580 | | Loss from operations | $(23,098) | $(20,440) | | Change in fair value of warrant liabilities | $1,437 | $22,744 | | **Net income (loss)** | **$(21,330)** | **$2,898** | | **Net income (loss) per share - basic** | **$(0.15)** | **$0.02** |

Core Insights - The company is making significant progress in its clinical operations and pipeline, particularly with govorestat for the treatment of CMT-SORD, and is preparing for a meeting with the FDA in Q3 2025 regarding a potential NDA submission [2][3] - A new sponsored Urine Sorbitol Assay has been launched to aid in the identification of patients with CMT-SORD, which is available at no cost to healthcare providers [3] - The company presented full 12-month clinical results from the INSPIRE Phase 2/3 trial of govorestat, showing slowed disease progression and statistically significant improvements in key secondary endpoints [3] CMT-SORD - A meeting with the FDA is scheduled to discuss the NDA submission strategy for govorestat, focusing on its treatment for CMT-SORD [3] - The company launched a Urine Sorbitol Assay to help healthcare providers identify suspected cases of CMT-SORD, removing barriers to diagnosis and treatment [3] - Full clinical results from the INSPIRE trial indicated that govorestat is generally safe and well-tolerated, with significant improvements in various health metrics [3] Classic Galactosemia - The company is reviewing its development program for govorestat in Classic Galactosemia, including responses to the Complete Response Letter from the FDA [4] PMM2-CDG - Results from an ongoing trial of govorestat for PMM2-CDG will be presented at the 2025 ASHG Annual Meeting, highlighting the drug's potential in treating this ultra-rare disease [5] Corporate Developments - The company entered into an out-licensing agreement with Biossil, Inc. for AT-001, gaining upfront payment and potential future royalties [9] - Key leadership changes were made, promoting Evan Bailey, M.D., to Chief Medical Officer and Dottie Caplan to Executive Vice President [9] Financial Results - As of June 30, 2025, cash and cash equivalents totaled $30.4 million, down from $79.4 million at the end of 2024 [7] - Research and development expenses for Q2 2025 were $9.9 million, slightly down from $10.0 million in Q2 2024 [7] - General and administrative expenses increased to $13.2 million in Q2 2025 from $10.6 million in Q2 2024, contributing to a net loss of $21.3 million for the quarter [7]

Core Insights - The company is advancing its CMT-SORD program and has scheduled a meeting with the FDA in Q3 2025 to discuss the New Drug Application (NDA) submission for govorestat [1][4] - Full 12-month clinical results from the INSPIRE Phase 2/3 trial of govorestat for CMT-SORD were presented, showing slowed disease progression observed via MRI at 24 months [1][4] - A new sponsored Sorbitol Assay has been launched to assist in identifying patients suspected of having CMT-SORD [1][4] - The company has entered into an out-licensing agreement with Biossil, Inc. for AT-001, an investigational therapy for Diabetic Cardiomyopathy [1][9] CMT-SORD Program - A meeting with the FDA is planned to align on the NDA submission strategy for govorestat, focusing on comprehensive data for Sorbitol Dehydrogenase Deficiency [4] - The newly launched Urine Sorbitol Assay aims to support healthcare providers in identifying suspected CMT-SORD cases at no cost to patients [4] - Clinical results from the INSPIRE trial indicated that govorestat was generally safe and well-tolerated, with significant improvements in key secondary endpoints at 12 months [4] Other Development Programs - New data on govorestat for PMM2-CDG will be presented at the 2025 ASHG Annual Meeting [2][6] - The review of the govorestat development program for Classic Galactosemia is progressing as planned, including responses to the Complete Response Letter from the FDA [5] Financial Performance - As of June 30, 2025, cash and cash equivalents totaled $30.4 million, down from $79.4 million at the end of 2024 [8] - Research and development expenses for Q2 2025 were $9.9 million, slightly down from $10.0 million in Q2 2024 [8] - General and administrative expenses increased to $13.2 million in Q2 2025 from $10.6 million in Q2 2024 [8] - The net loss for Q2 2025 was $21.3 million, compared to a net income of $2.9 million in Q2 2024 [8][15]

Core Viewpoint - Applied Therapeutics, Inc. has announced key executive appointments, promoting Evan Bailey to Chief Medical Officer and Dottie Caplan to Executive Vice President of Patient Advocacy and Government Affairs, effective June 15, 2025 [1][5]. Group 1: Executive Appointments - Evan Bailey, MD, has been promoted to Chief Medical Officer, succeeding Riccardo Perfetti, MD, PhD, who served since 2018 [5]. - Dottie Caplan has been promoted to Executive Vice President, Patient Advocacy and Government Affairs, expanding her role to include government affairs [5][6]. Group 2: Leadership Contributions - Dr. Bailey has been with Applied Therapeutics for four years and has played a critical role in advancing the company's development programs, particularly in clinical development execution [2][3]. - Ms. Caplan has been instrumental in integrating patient voices into clinical development strategies and will continue to lead advocacy efforts in her new role [2][4]. Group 3: Focus on Rare Diseases - The company is dedicated to developing treatments for rare diseases, with its lead drug candidate, govorestat, targeting conditions such as Classic Galactosemia and CMT-SORD [7]. - Dr. Bailey expressed commitment to advancing the portfolio of supporting data for govorestat to address high unmet medical needs in rare disease patients [2][3].

Core Insights - The company presented full 12-month clinical results and new topline data from 18 and 24 months of the INSPIRE Phase 2/3 trial for govorestat, aimed at treating CMT-SORD, at the Peripheral Nerve Society Annual Meeting in May 2025 [2][4][10] Group 1: Clinical Trial Results - Govorestat treatment demonstrated a statistically significant 37% reduction in sorbitol levels in the sciatic nerve of CMT-SORD rats, indicating its potential effectiveness [1] - MRI data at 24 months showed a slowing of disease progression in patients treated with govorestat compared to 12 months [8][9] - Statistically significant improvements were observed in the CMT-Health Index (CMT-HI) at 12 months, correlating with reductions in blood sorbitol levels [11][12] Group 2: Safety and Tolerability - Govorestat remained generally safe and well tolerated throughout the 24 months of treatment, with similar adverse event rates between active and placebo groups [12][11] Group 3: Regulatory Pathway and Future Plans - The company is committed to submitting a New Drug Application (NDA) for govorestat for CMT-SORD treatment in 2025 [2][10] - 90% of remaining patients from the INSPIRE trial have transitioned to an open-label extension study, indicating strong patient retention and interest in continued treatment [10] Group 4: Disease Background - CMT-SORD is a rare, progressive neuromuscular disease caused by genetic mutations affecting the sorbitol dehydrogenase enzyme, leading to high levels of sorbitol in blood and tissues [3][14] - The disease was officially recognized in 2020, and there are now commercially available tests for sorbitol and genetic testing specific to CMT-SORD [3][4]

PART I. FINANCIAL INFORMATION This section details the unaudited financial statements, management's analysis, market risk, and internal controls [Item 1. Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed financial statements for Q1 2025, highlighting a net loss of **$(21,825) thousand** and a going concern doubt [Condensed Balance Sheets](index=7&type=section&id=Condensed%20Balance%20Sheets) Condensed Balance Sheet Highlights (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $50,762 | $79,398 | | **Total current assets** | $53,966 | $83,646 | | **Total Assets** | $56,907 | $86,691 | | **Total current liabilities** | $17,965 | $27,296 | | **Total Liabilities** | $20,239 | $29,685 | | **Total stockholders' equity** | $36,668 | $57,006 | - Cash and cash equivalents decreased by **$28,636 thousand** during the first quarter of 2025, from **$79,398 thousand** at the end of 2024 to **$50,762 thousand**[18](index=18&type=chunk) [Condensed Statements of Operations](index=8&type=section&id=Condensed%20Statements%20of%20Operations) Condensed Statement of Operations (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total revenue | $0 | $190 | | Research and development | $7,837 | $12,217 | | General and administrative | $17,688 | $9,066 | | Loss from operations | $(25,525) | $(21,093) | | Change in fair value of warrant liabilities | $3,104 | $(63,405) | | **Net loss** | **$(21,825)** | **$(83,938)** | | Net loss per share | $(0.15) | $(0.67) | - The net loss significantly narrowed to **$(21,825) thousand** in Q1 2025 from **$(83,938) thousand** in Q1 2024, primarily due to a positive change in the fair value of warrant liabilities, which was a **$3,104 thousand** gain in 2025 versus a **$(63,405) thousand** expense in 2024[21](index=21&type=chunk) [Condensed Statements of Stockholders' Equity/(Deficit)](index=9&type=section&id=Condensed%20Statements%20of%20Stockholders'%20Equity%2F(Deficit)) - The company's accumulated deficit grew from **$574,200 thousand** at the beginning of 2025 to **$596,025 thousand** by March 31, 2025, reflecting the net loss incurred during the quarter[26](index=26&type=chunk) [Condensed Statements of Cash Flows](index=11&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) - Net cash used in operating activities was **$28,636 thousand** for the three months ended March 31, 2025, an increase from **$18,900 thousand** in the same period of 2024[28](index=28&type=chunk) - There were no financing activities in Q1 2025, in contrast to Q1 2024 when the company generated **$115,500 thousand** from financing activities, including the issuance of common stock and warrants[28](index=28&type=chunk) [Notes to Condensed Financial Statements (Unaudited)](index=12&type=section&id=Notes%20to%20Condensed%20Financial%20Statements%20(Unaudited)) - Management has concluded that substantial doubt exists regarding the company's ability to continue as a going concern for one year from the issuance of these financial statements, based on a net loss of **$(21,825) thousand** for the quarter, an accumulated deficit of **$596,025 thousand**, and cash and cash equivalents of **$50,762 thousand** as of March 31, 2025[35](index=35&type=chunk)[36](index=36&type=chunk) - The company is involved in a securities class action lawsuit and a shareholder derivative lawsuit. As of March 31, 2025, the probability of loss was deemed reasonably possible, but no liability has been recorded as the amount cannot be estimated[127](index=127&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk) - Revenue recognized from the Advanz Pharma agreement was **$0 thousand** for the three months ended March 31, 2025, compared to **$200 thousand** in the same period of 2024, as the related research and development services performance obligation nears completion[124](index=124&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's clinical-stage status, the FDA's Complete Response Letter for govorestat, and the critical liquidity position with a going concern doubt - In November 2024, the FDA issued a Complete Response Letter for the New Drug Application (NDA) for govorestat (AT-007) for Classic Galactosemia, indicating it could not be approved in its current form. The company subsequently withdrew its European Marketing Authorization Application (MAA)[135](index=135&type=chunk) Comparison of Operating Expenses (in thousands) | Expense Category | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Research & Development | $7,837 | $12,217 | $(4,380) | | General & Administrative | $17,688 | $9,066 | $8,622 | - The **$4,380 thousand** decrease in R&D expenses was primarily driven by a **$5,600 thousand** reduction in clinical and pre-clinical costs for AT-007 and AT-001. The **$8,622 thousand** increase in G&A expenses was mainly due to a **$9,700 thousand** rise in legal and professional fees related to litigation and responding to the FDA's CRL and warning letter[166](index=166&type=chunk)[171](index=171&type=chunk) - The company's cash and cash equivalents were **$50,762 thousand** as of March 31, 2025. Management has concluded there is substantial doubt about the company's ability to continue as a going concern for the next 12 months due to its operating losses and funding needs[170](index=170&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=62&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk is primarily interest rate sensitivity on cash and foreign currency risk, neither of which is considered significant - The primary market risk is interest rate sensitivity on the company's **$50,762 thousand** in cash and cash equivalents. The investment objective is to preserve principal, and the company does not believe there is significant risk of default or illiquidity[191](index=191&type=chunk)[192](index=192&type=chunk) - Foreign currency sensitivity arises from some service agreements denominated in currencies other than the U.S. Dollar, mainly the Euro. The company does not hedge this exposure and believes a hypothetical 10% change in exchange rates would not have a material impact[193](index=193&type=chunk) [Item 4. Controls and Procedures](index=63&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective due to a material weakness in internal control over financial reporting, despite ongoing remediation efforts - Management concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to a material weakness in internal control over financial reporting[196](index=196&type=chunk) - The material weakness stems from deficiencies in the information and communication component of the COSO framework, specifically a failure to ensure timely and reliable communication between the former CEO, senior management, and the board of directors[198](index=198&type=chunk) - Remediation actions include appointing a new executive chairman and interim CEO, instituting a new disclosure review process, and creating a cross-functional quality council. However, the material weakness cannot be considered fully remedied until the new controls have operated effectively for a sufficient period[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=66&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in a consolidated securities class action and a shareholder derivative action related to govorestat NDA statements - A consolidated securities class action lawsuit (In re Applied Therapeutics Securities Litigation) alleges violations of the Securities Exchange Act by the company and certain officers/directors regarding statements made about the govorestat NDA[205](index=205&type=chunk) - A shareholder derivative action (Hassine v. Shendelman, et al.) has been filed against certain officers/directors for breach of fiduciary duty and other claims, based on substantially the same facts as the class action. This case has been temporarily stayed[206](index=206&type=chunk) [Item 1A. Risk Factors](index=66&type=section&id=Item%201A.%20Risk%20Factors) This section outlines substantial risks including financial instability, regulatory setbacks for govorestat, operational dependencies, and stock price volatility - **Financial Risks:** The company has a history of significant losses, and its independent auditor's report includes a "going concern" explanatory paragraph. A material weakness in internal control over financial reporting was identified as of December 31, 2024[212](index=212&type=chunk)[225](index=225&type=chunk)[228](index=228&type=chunk) - **Regulatory Risks:** The FDA issued a Complete Response Letter for the govorestat NDA and a Warning Letter related to a clinical study, creating significant uncertainty for the product's approval and the company's future clinical trials[212](index=212&type=chunk)[254](index=254&type=chunk)[257](index=257&type=chunk) - **Operational & Management Risks:** The company relies heavily on third parties for clinical trials and manufacturing. It recently experienced the departure of its founder and CEO, creating leadership uncertainty. The company is also defending against securities class action and shareholder derivative litigation[215](index=215&type=chunk)[216](index=216&type=chunk)[424](index=424&type=chunk) - **Stock Ownership Risks:** The company's stock price is highly volatile. It received a deficiency letter from Nasdaq for its stock price closing below the **$1.00** minimum bid price requirement for over 30 consecutive days[435](index=435&type=chunk)[441](index=441&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=149&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the quarter ended March 31, 2025 - None[461](index=461&type=chunk) [Item 3. Defaults Upon Senior Securities](index=151&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable as the company has no defaults upon senior securities to report - Not applicable[464](index=464&type=chunk) [Item 4. Mine Safety Disclosures](index=151&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[465](index=465&type=chunk) [Item 5. Other Information](index=151&type=section&id=Item%205.%20Other%20Information) The company states that no officer or director adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the first quarter of 2025 - During the three months ended March 31, 2025, no officer or director adopted or terminated a Rule 10b5-1 trading arrangement[466](index=466&type=chunk) [Item 6. Exhibits](index=152&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including employment agreements and Sarbanes-Oxley Act certifications - The report includes certifications from the Executive Chairman (Principal Executive Officer) and the Interim CEO/CFO (Principal Financial Officer) pursuant to Sarbanes-Oxley Act requirements[468](index=468&type=chunk)

Financial Performance - Cash and cash equivalents totaled $79.4 million as of December 31, 2024, compared to $49.9 million at December 31, 2023, representing a 59% increase[9] - Research and development expenses for the year ended December 31, 2024, were $48.7 million, a decrease of approximately 10% from $53.9 million for the year ended December 31, 2023[9] - General and administrative expenses increased to $56.0 million for the year ended December 31, 2024, from $20.6 million in 2023, marking an increase of approximately 172%[9] - The net loss for the year ended December 31, 2024, was $105.6 million, or $0.76 per share, compared to a net loss of $119.8 million, or $1.42 per share, for the year ended December 31, 2023[9] - Total revenue for the year ended December 31, 2024, was $455,000, a significant decrease from $9.99 million in 2023[16] - The accumulated deficit increased to $574.2 million as of December 31, 2024, compared to $468.6 million as of December 31, 2023[14] Regulatory and Strategic Developments - The company received a Complete Response Letter from the FDA regarding the New Drug Application for govorestat for Classic Galactosemia, and is evaluating its response[3] - The company is focused on preparing for potential regulatory interactions regarding govorestat in both Classic Galactosemia and SORD Deficiency[2] - The company appointed key senior executives to enhance its regulatory, medical, and quality affairs capabilities, including Todd F. Baumgartner as Chief Regulatory Officer[3] Asset Management - The total assets increased to $86.7 million as of December 31, 2024, from $54.8 million as of December 31, 2023[14]

Core Viewpoint - Applied Therapeutics, Inc. is focused on advancing its lead drug candidate, govorestat, for the treatment of rare diseases, particularly CMT-SORD and Classic Galactosemia, while preparing for upcoming regulatory interactions and clinical data presentations [2][6]. Recent Highlights - The company will present full 12-month clinical data and new topline 18-month and 24-month data from the INSPIRE Phase 3 trial of govorestat at the Peripheral Nerve Society 2025 Annual Meeting [5][6]. - Ongoing reviews of govorestat development programs for Classic Galactosemia and CMT-SORD Deficiency are progressing as planned [5][6]. Financial Results - Cash and cash equivalents and short-term investments totaled $50.8 million as of March 31, 2025, down from $79.4 million at December 31, 2024 [6]. - Research and development expenses for Q1 2025 were $7.8 million, a decrease from $12.2 million in Q1 2024, primarily due to reduced clinical and regulatory expenses [6]. - General and administrative expenses increased to $17.7 million in Q1 2025 from $9.1 million in Q1 2024, mainly due to higher legal and professional costs [6]. - The net loss for Q1 2025 was $21.8 million, or $0.15 per share, compared to a net loss of $83.9 million, or $0.67 per share, in Q1 2024 [6][13].

Core Insights - Applied Therapeutics, Inc. announced the presentation of full 12-month clinical results from the INSPIRE Phase 3 trial of govorestat (AT-007) at the Peripheral Nerve Society 2025 Annual Meeting, along with new topline 18-month and 24-month data [1] - The INSPIRE Phase 3 trial is a double-blind, placebo-controlled study evaluating govorestat's effect on patients with Sorbitol Dehydrogenase (SORD) Deficiency, a subtype of Charcot-Marie-Tooth (CMT) disease [1] - Govorestat is a central nervous system penetrant Aldose Reductase Inhibitor being developed for multiple rare diseases, including CMT-SORD, Classic Galactosemia, and PMM2-CDG [2][4] Presentation Details - The oral presentation titled "INSPIRE CMT-SORD Clinical Trial: Month 18 and Month 24 INSPIRE Trial Results and Designing the Next Randomized Study" will be presented by Dr. Evan Bailey on May 18, 2025 [2] - The presentation is scheduled for 12:25 - 12:40 p.m. BST [2] Regulatory Designations - Govorestat has received Orphan Medicinal Product Designation from the European Medicines Agency for both Galactosemia and CMT disease [3] - It has also received Orphan Drug Designation from the U.S. FDA for Galactosemia, PMM2 deficiency, and SORD Deficiency, along with Rare Pediatric Disease designation for Galactosemia and PMM2-CDG, and Fast Track designation for Galactosemia [3] Company Overview - Applied Therapeutics is a clinical-stage biopharmaceutical company focused on developing novel drug candidates targeting rare diseases [4] - The lead drug candidate, govorestat, is aimed at treating CNS rare metabolic diseases, including Classic Galactosemia, CMT-SORD, and PMM2-CDG [4]