Applied Therapeutics’ stock market winning streak has come to an end. Having seen its shares soar over the past year, the biotech suffered a setback Thursday when it reported the failure of a phase 3 heart disease trial to hit its primary endpoint.
Last year, updates on Applied’s rare disease drug candidate govorestat sent the stock up and up, despite a primary endpoint miss, a trend that continued early this week when news of the acceptance of regulatory filings brought the biotech’s stock gains over the past year up above 325%. Phase 3 data on another candidate, AT-001, offered Applied the opportunity to climb higher still.
Instead, the biotech reported the failure of AT-001, an aldose reductase inhibitor, to beat placebo on its primary endpoint. The trial randomized patients with diabetic cardiomyopathy at high risk of progression to overt heart failure to receive AT-001 or placebo twice daily.
Over 15 months of treatment, Peak VO2, a measure of cardiac functional capacity, fell by 0.01 ml/kg/min in the AT-001 cohort and 0.31 ml/kg/min in the placebo group. The numerical difference fell short of statistical significance, causing the study to miss its primary endpoint with a p value of 0.210.
Investors responded by sending Applied’s share price down 29% to $2.70 in after-hours trading, wiping out the gains made over the past month. But the biotech called the results “encouraging,” pointing to the fact cardiac functional capacity stabilized in patients on AT-001 and a pre-specified subgroup analysis of the 62% of participants who weren’t taking SGLT2 or GLP-1 therapies for diabetes to make its case.
In the subgroup, Applied tracked a 0.54 ml/kg/min worsening of Peak VO2 in the placebo group and a 0.08 ml/kg/min improvement in the AT-001 cohort. More patients on placebo, 46%, than AT-001, 32.7%, suffered a 6% or more worsening of cardiac capacity, a decline associated with long-term survival and hospitalization for heart failure.
Applied saw no substantial differences in serious adverse events or treatment emergent adverse events between the AT-001 and placebo groups, leading chief medical officer Riccardo Perfetti, M.D., Ph.D., to argue the molecule is an “important potential tool” for treating diabetic cardiomyopathy. No drugs are approved in the indication, although the cardiovascular labels of SGLT2 inhibitors may cover the patients.
The biotech wants a partner to help bring AT-001 to market. Applied, which ended September with $37.5 million, plans to focus on bringing govorestat to market as a treatment for classic galactosemia. Like AT-001, govorestat is an aldose reductase inhibitor that is designed to avoid the off-target toxicity that undid earlier efforts to target the enzyme.