Wolf Popper LLP, as Court-appointed Lead Counsel in the federal
securities class action In re Applied Therapeutics Securities
Litigation, Case No. 1:24-cv-09715 (S.D.N.Y.), has filed a
consolidated amended complaint on behalf of Lead Plaintiff Dr.
Martin Dietrich and a proposed class of investors who purchased
Applied Therapeutics, Inc. ("Applied," NASDAQ: APLT)
publicly traded common stock on a U.S. exchange between January 3,
2024 and December2 2, 2024 (the "Class Period").
The Amended Complaint, filed on May 2, 2025, alleges that Applied
Therapeutics and senior executives, including founder and former
CEO, President, Secretary, and Chair Dr. Shoshana Shendelman and
CMO Dr. Riccardo Perfetti, made materially false and misleading
statements concerning Applied's New Drug Application
("NDA") for govorestat (AT-007), a proposed treatment for
Classic Galactosemia, and interactions and communications with the
U.S. Food and Drug Administration ("FDA") concerning the
NDA.
The Complaint alleges that, between March and June 2021, Applied
administered only 80% of the protocol-required dose of govorestat
to at least 19 or 47 participants in its pediatric trial. Despite
knowing of this issue since June 2021, the Company failed to
disclose these dosing errors, or the clinical data resulting from
these dosing errors, to the FDA in the NDA, and instead reported
doses as if they had been properly administered.
Also, on March 27, 2024, just two days after the FDA pre-announced
an inspection of Applied's clinical testing sites, a
third-party vendor deleted electronic clinical outcome assessment
data, and the associated audit trails, for all 47 participants in
the pediatric clinical trial. As a result, the FDA was not able to
verify all clinical data that supported the NDA.
The FDA discovered the dosing errors and the data deletion in its
inspections of Applied's clinical sites between April 27 and
May3, 2024. On May 3, 2024, the FDA gave a Form FDA 483 to Dr.
Shendelman, which detailed three objectionable conditions
discovered during the inspection, including the data deletion. On
May 9, 2024, Applied responded to the FDA and confirmed that it
could not recovered the deleted data for 11 clinical
subjects.
The Complaint alleges that the dosing errors and the data deletion
were violations of FDA regulations, and compromised the FDA's
ability to assess the NDA and verify and trust the clinical data
submitted in support of the NDA. Yet, throughout the Class Period,
defendants made repeated public statements falsely assuring
investors that the regulatory review was progressing smoothly. For
example, in January and February 2024, the Company described its
NDA as being supported by favorable clinical outcomes and safety
data and claimed it was working closely with the FDA. During
investor conferences on May 14, 2024 and September 4, 2024,
then-CEO Dr. Shendelman explicitly stated that "things are
going very well with the FDA" and that there were "no
major sticking points" or "surprises" in the review
process, despite knowing by that time that the FDA had uncovered
serious issues, including the deletion of critical clinical trial
data and undisclosed dosing errors, and had already issued formal
inspection findings identifying regulatory violations. On September
18, 2024, Applied and Dr. Shendelman announced that the FDA had
cancelled an upcoming advisory committee meeting to evaluate the
NDA, and characterized this as a positive regulatory update.
However, the defendants failed to disclose the known negative
factors of the dosing errors and data deletion and that the FDA had
discovered the data deletion through its inspection.
On November 27, 2024, after market close, Applied disclosed that
the FDA issued a Complete Response Letter ("CRL"),
declining to approve the NDA due to clinical deficiencies. On
December 2, 2024, after market close, the Company disclosed that it
had also received a Warning Letter from the FDA, which revealed
that Applied had been aware of serious deficiencies as early as May
2024, but did not disclose them during the Class Period. On
December 3, 2024, the FDA published Warning Letter on its website,
and pharmaceutical news services covered the warning letter and
rejection of the NDA on December 4 and 5, 2024.
In response to these disclosures, Applied's stock fell from a
closing price of $8.57 per share on November 27, 2024 to a closing
price of $1.29 per share on December 5, 2024.
On December 20, 2024, during pre-market hours, Applied announced
that on December 19, 2024, Dr. Shendelman had stepped down from her
roles as President, CEO, Secretary, and Chair. In response, the
price of Applied common stock fell from a closing price of $1.02
per share on December 19, 2024 to a closing price of $0.88 per
share on December 20, 2024.
The complaint asserts claims under Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934 and Rule 10b-5, and seeks damages
for class members who were harmed by Defendants'
misconduct.
The Court has entered a Scheduling Order providing that Defendants
must answer or move to dismiss the amended complaint by May 23,
2025, and that briefing on any motion to dismiss will conclude by
June 27, 2025.
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