Adrian Alexandru, representing all similarly affected investors, has filed a federal securities class-action lawsuit against Applied Therapeutics (NASDAQ:APLT), alleging the company violated federal securities laws.

The lawsuit claims that the company provided misleading information about its clinical trials and failed to disclose key adverse facts, causing significant financial losses for shareholders.

Also Read: Rare Disease-Focused Applied Therapeutics' Lead Candidate Govorestat Has Blockbuster Potential, Analyst Sees 140% Stock Upside

The class action covers investors who purchased Applied Therapeutics securities between January 3, 2024, and December 2, 2024.

Central to the lawsuit are claims that the company touted positive results from its Phase 3 INSPIRE trial for govorestat for Galactosemia, without disclosing significant issues. Bloomberg Law published a copy of the lawsuit online.

Allegations include problems with electronic data capture and dosing errors during the dose-escalation phase of the study, which were concealed from investors.

Investor confidence began to erode on November 27, 2024, when Applied Therapeutics received an FDA Complete Response Letter (CRL).

The CRL indicated that the agency could not approve the company's New Drug Application for govorestat in its current form, citing deficiencies in the clinical application.

Following the disclosure, Applied Therapeutics' stock price dropped sharply, which worsened after the company disclosed receiving a warning letter from the FDA on December 2 highlighting unresolved clinical trial issues.

The FDA's warning letter pointed to electronic data capture problems and a dosing error that resulted in lower-than-targeted doses for some patients during the trial's early phase.

While Applied Therapeutics claims to have addressed these issues through detailed records and prior communications with the agency, investors reacted negatively to the revelations, further eroding the stock's value.

The lawsuit seeks to recover damages for investors who purchased shares at artificially inflated prices, alleging that the company's failure to provide accurate and complete information misled the market.

On Friday, Applied Therapeutics named John Johnson as executive chairman and announced that Shoshana Shendelman has stepped down as Chair and CEO. The company named Les Funtleyder, Applied Therapeutics' CFO, as the interim CEO.

RBC Capital analyst maintains Applied Therapeutics with a Sector Perform, lowering the price target from $4 to $1.5.

Price Action: APLT stock closed lower by 13.7% to $0.87 on Friday.

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This article Penny Stock Applied Therapeutics' FDA Troubles Trigger Investor Lawsuit, Shareholders Claim Deception Over Govorestat Clinical Data originally appeared on Benzinga.com

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