Cycle Group Secures Applied Therapeutics in Strategic Rare Disease Acquisition

Cycle Group Holdings Ltd., a privately held developer of treatments for rare genetic disorders, is acquiring clinical-stage biopharmaceutical company Applied Therapeutics Inc. (APLT) through a cash tender offer. The deal values Applied’s outstanding shares at $0.088 per share, marking a significant restructuring in the rare metabolic disease sector.

Deal Structure: Base Price Plus Performance Milestones

Beyond the upfront cash consideration, shareholders will receive contingent value rights (CVRs) linked to critical drug development achievements. The CVR framework offers $0.10 upon FDA approval of Govorestat for galactosemia treatment, an additional $0.10 upon regulatory clearance for Charcot-Marie-Tooth Sorbitol Dehydrogenase Deficiency (CMT-SORD) indication, and up to $0.20 contingent on reaching $200 million in worldwide net sales during any fourth-quarter fiscal period. Additionally, CVR holders receive a pro rata allocation of Applied’s excess cash above $500,000, capped at $1.5 million.

Govorestat: A Multi-Indication CNS Therapy

Applied’s lead asset, Govorestat, represents a central nervous system-penetrant aldose reductase inhibitor targeting rare metabolic conditions. The clinical program encompasses galactosemia, CMT-SORD, and PMM2-CDG (phosphomannomutase 2 congenital disorder of glycosylation)—three serious CNS-affecting genetic disorders where treatment options remain limited. The CVR structure reflects the high regulatory and commercial risk inherent in orphan disease development.

Funding Crisis Drives Acquisition Timeline

The urgency behind this transaction stems from Applied’s severe liquidity constraints. The company disclosed it could not sustain operations beyond a limited number of days without external funding. Cycle has provided an $8.5 million unsecured promissory note to cover working capital until closing, underscoring the financial distress that necessitated the sale.

Strategic Rationale and Timeline

Cycle Pharmaceuticals, established in 2012 and based in Cambridge, UK, develops treatments across metabolic, immunology, urology, oncology, and neurology rare disease areas. The Applied acquisition strengthens Cycle’s metabolic disease portfolio while positioning Govorestat for potential clinical and commercial success. Applied’s Board unanimously approved the transaction following a comprehensive strategic review. Closing is anticipated in Q1 2026, contingent upon standard conditions including majority shareholder tender.

Market Reaction Reflects Deal Skepticism

APLT’s stock response signals investor concern regarding the acquisition terms. The stock finished trading at $0.21, down 1.41%, before declining a further 34.53% to $0.14 in after-hours trading. The sharp overnight sell-off reflects market uncertainty about both the CVR realization probability and the PMM2-CDG program’s development trajectory. Historically, APLT has traded between $0.20 and $1.50, indicating substantial value compression since the company’s clinical-stage peak.