Applied Therapeutics Inc. (NASDAQ: APLT) shares pushed higher on Thursday after a new analyst report came out supposing massive upside for this biotech. As we have said before, there’s no industry quite like biotech, where fortunes can change so drastically, so quickly.
Truist’s Robyn Karnauskas initiated coverage on Applied Therapeutics with a Buy rating and an $85 price target, implying an upside of 298% from the most recent closing price of $21.33.
Karnauskas believes that there is a huge opportunity in Applied Therapeutics for its diabetic cardiomyopathy treatment. The second major reason for buying this stock, according to the firm, is the near-term upside from lead indication of galactosemia, but this could carry more risks. Either way, Truist believes that this stock is massively undervalued.
Diabetic cardiomyopathy represents a huge and underappreciated opportunity, according to Truist. The stock reflects no credit to diabetic cardiomyopathy despite being close to pivotal data. Truist believes there exists proof of concept from earlier drugs. AT-001 looks capable of generating better risk/benefit than earlier drugs, and the firm sees reasons for the uptake. Truist models peak U.S. unadjusted/adjusted sales of $2 billion and $300 million, respectively.
Near-term catalysts in the lead indication of galactosemia provide upside to the stock. Truist believes Applied Therapeutics could get the first approval in galactosemia and could prevent worsening of disease outcomes, but the firm believes that risks in uptake likely will linger until clinically meaningful results and initial sales.
The firm listed the potential stock-moving catalysts as follows: galactitol brain data in fall 2020, preclinical data from AT-001 in mid-November at AHA 2020, NDA acceptance by second quarter of 2021 for galactosemia and topline pivotal Phase 3 data in diabetic cardiomyopathy in 2022.
Applied Therapeutics stock traded up about 8% to $23.00 on Thursday, in a 52-week range of $9.92 to $57.39. The consensus price target is $55.20.