Applied Therapeutics' stock plummeted 75 percent after the Food and Drug Administration (FDA) rejected approving govorestat as a treatment for galactosemia.
The stock closed at $2.03, reported Yahoo Finance.
The FDA issued a complete response letter (CRL) in reply to the company's new drug application, that said the medication could not be approved in its current form due to clinical deficiencies.
Applied Therapeutic plans to address the FDA's concerns and pursue a potential resubmission or appeal, the company said in an official statement.
While govorestat has shown positive clinical outcomes, like reduced galactitol levels and improvements in cognition and motor skills in galactosemia patients, the FDA review highlighted unresolved issues.
The company also plans to submit a new drug application for govorestat in treating sorbitol dehydrogenase deficiency in 2025.
