A turbulent month at Applied Therapeutics is being capped off with the departure of CEO and chair Shoshana Shendelman, Ph.D., mere days after she and the company were named in a proposed class action lawsuit.
Applied’s chief financial officer Les Funtleyder has been named interim CEO, according to a Dec. 20 release, while biopharma vet John Johnson has been named executive chairman. Funtleyder will continue his role as CFO while filling in for Shendelman.
The company’s share price has plunged by about 90% since Thanksgiving, which is when an FDA rejection for its drug candidate govorestat began a chain reaction.
The rejection was paired with a warning letter from the FDA, in which the agency chastised Applied’s conduct during its 47-patient trial of govorestat in kids with classic galactosemia.
The agency took issue with the deletion of electronic data by a third-party vendor and the mishandling of a dosing error that caused some patients to receive lower levels of govorestat than intended.
Applied has now withdrawn its marketing authorization application to the European Medicines Agency for govorestat in classic galactosemia, the company said in the Dec. 20 release, in order to gather more data to support EU approval.
After learning of the warning letter, an investor accused Applied of knowing about these trial issues but not disclosing them in a proposed class action lawsuit. The Dec. 17 lawsuit names the company, Shendelman and chief medical officer Riccardo Perfetti, M.D., Ph.D., as defendants.
According to the lawsuit, Applied kept the trial’s problems to itself while continuing to share positive news about govorestat and discuss plans for its potential approval and commercialization. This made investors think the drug had a higher chance of approval than it actually did, the lawsuit alleges, leading them to suffer losses when the drug was rejected and Applied’s stock tumbled.
In the wake of the warning letter, lawsuit and Shendelman’s departure, Applied is delaying its submission of govorestat for approval in treating sorbitol dehydrogenase deficiency. The firm had originally planned to seek approval early in the first quarter of 2025 but now says it will shoot for after the first quarter, according to the Dec. 20 release.