Applied Therapeutics Inc. (APLT) shares plummeted over 75% in the pre-market session on Friday, following the U.S. Food and Drug Administration's (FDA) decision to reject the company's New Drug Application (NDA) for govorestat in treating classic galactosemia, a rare genetic metabolic disorder.

The FDA issued a Complete Response Letter (CRL) to APLT, stating that the clinical application for govorestat had deficiencies and failed to meet the necessary requirements for approval. This unexpected setback has led analysts to significantly downgrade their outlook on the biopharmaceutical company.

RBC Capital Markets downgraded APLT from "Outperform" to "Sector Perform" and slashed its price target from $12 to $4, citing increased risks and uncertainties around govorestat's future prospects after the FDA rejection. Meanwhile, APLT plans to request a meeting with the FDA to discuss the requirements for a potential NDA resubmission or appeal. The company is also developing govorestat for sorbitol dehydrogenase deficiency and intends to file an NDA for that indication in the first quarter of 2025.