Applied Therapeutics, Inc. (NASDAQ: APLT) announced that its Board of Directors has initiated a formal review of strategic alternatives designed to maximize shareholder value, while simultaneously cutting its workforce by roughly 46%. The decision, made by interim CEO and CFO Les Funtleyder, reflects the company’s urgent need to conserve cash amid a “substantial doubt” about its ability to continue as a going concern.
The company’s financial position has deteriorated sharply. Cash and cash equivalents have fallen to a level that cannot support ongoing operations without additional capital. Auditors have raised a “substantial doubt” warning, and the company has recorded continuous operating losses since its inception, with negative operating and net margins. The workforce reduction is intended to reduce operating expenses and extend the limited runway, but it also signals a broader strategy to either sell the business, partner with a larger entity, or pursue other exit options.
Regulatory setbacks have compounded the financial strain. In November 2024, the FDA issued a Complete Response Letter for the company’s lead drug candidate, govorestat, in Classic Galactosemia, and ongoing discussions for govorestat in Charcot‑Marie‑Tooth Sorbitol Dehydrogenase Deficiency (CMT‑SORD) have stalled progress. These setbacks have delayed potential revenue streams and increased the company’s reliance on external financing.
In a statement, Funtleyder emphasized the company’s unwavering commitment to bringing govorestat to patients with rare diseases while maximizing value for shareholders. He noted that the strategic review is a proactive step to preserve cash runway and explore the optimal path forward for all stakeholders, thanking employees for their dedication during a challenging period.
The workforce reduction and strategic alternatives review are expected to have a material impact on operating expenses and future capital requirements. Management’s focus on cost conservation and the exploration of potential mergers, acquisitions, or partnerships signal a shift toward a more conservative, survival‑oriented strategy. The company’s market capitalization has fallen to approximately $41 million, and its stock has declined nearly 97% over the past year, underscoring investor concern about the company’s long‑term viability.
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