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Envoy of Woes: APLT Faces Rough Waters Following FDA Verdict

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Written by Timothy Sykes Reviewed by Jack Kellog Fact-checked by Ellis Hobb
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Uproar surrounds Applied Therapeutics Inc. as the company’s blow to confidence from a failed Phase 2 study in treating Diabetic Cardiomyopathy overshadows other developments. On Friday, Applied Therapeutics Inc.’s stocks have been trading down by -74.45 percent.

FDA Response Reverberates Across Markets:

  • FDA’s Complete Response Letter for Applied Therapeutics’ govorestat application rattles investors due to noted deficiencies, causing stock value to plummet.

Candlestick Chart

Live Update At 09:17:41 EST: On Friday, November 29, 2024 Applied Therapeutics Inc. stock [NASDAQ: APLT] is trending down by -74.45%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

  • Applied Therapeutics plans to appeal the FDA decision, hopeful for a favorable turnaround despite the initial setback with the NDA for govorestat.

  • Govorestat aims to target galactosemia; however, after FDA pushback, further developments are anticipated for Q1 2025.

Financial Storms: Earnings And Key Financial Metrics

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Amid the drama, Applied Therapeutics has reported Q3 revenue of just $122,000 amidst a turbulent fiscal period. Scratching beneath the surface reveals a net income loss rounding approximately $68.6M. Ghastly, isn’t it? The negative pretax profit margin stands at a staggering -5446.3%, spotlighting the harsh terrain the company is navigating.

The company’s financial health reveals a current ratio of 1.1, symbolizing an ambivalent liquidity position amidst towering liabilities. The PE ratio stands unreported, highlighting the company’s enigmatic valuation amidst market turbulence. On a more granular level, the company, depleted of cash flow from operating activities, registers a free cash flow of -$23.3M, resonate with its continued operational struggles.

More Breaking News

Astoundingly, Applied Therapeutics champions a pricetobook ratio of 169.24, an overvaluation symbol compared to broader industry standards. Equally stark is the price to sales ratio standing robustly at 99.79, overshadowing revenue-per-share numbers. The stock, hence, bizarrely soars above intrinsic values, rendering a curiosity amongst market stakeholders.

Tumultuous Times: A Closer Look at Market Volatility

Through the lens of recently rocked investors stands an image of unbounded pandemonium following the FDA’s letter. Days prior, shares floated around $10, holding promise yet prompting caution. However, Tuesday’s heartache (Nov 27, 2024), astride regulatory rebuttal, sent shares plummeting a sharp 84%. The $10.4 high shook to an $8.57 crash within hours of disclosure, drastically affecting market sentiments and investor outlook.

The rapid decent correlates perfectly with the negative response from FDA authorities, signifying the unyielding effect regulatory frameworks hold on biotechnological enterprises. Shareholders remain on tenterhooks, hopeful for remediation and corrective measures assuring progressive upswings.

A Potential Upside: Possible Market Recovery?

Can Applied Therapeutics rebound from this financial abyss? Many harbor hope, banking on potential NDA resubmission or appeals swaying FDA’s stance in their favor by Q1 2025. A turnaround in regulatory dialogue could catalyze rehab in stock trajectory and investor confidence.

Still, present market conditions remain a mixed bag. Investment communities await crucial insights and resolutions by captivated stakeholders. The narrative spanning tomorrow’s board meeting echoes audibly through Wall Street corridors, conjecturing not simply hope but skepticism, uncertainty, and promise interwoven amongst this scientific tapestry.

The Verdict: Inescapable Market Repercussions

In culmination, stakeholders grapple with a complex concoction melding bleak news, financial misfortunes, and speculative hope beneath Applied Therapeutics’ future course. As millionaire penny stock trader and teacher Tim Sykes, says, “Preparation plus patience leads to big profits.” This aphorism resonates deeply in the trading world, where the ultimate test lies ahead in steering back from the brink post-FDA’s recent decision and bolstering market faith in its innovative potential.

Whether dawn paves a triumphant pathway or whether the pharmaceutical contender falls shall remain its intricate dance mingling chance and strategic ingenuity, dictating the horizon they strive towards.

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

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Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”