Cycle Pharmaceuticals to Acquire Applied Therapeutics

Rhea-AI Summary

Applied Therapeutics (Nasdaq: APLT) agreed to be acquired by Cycle Group Holdings for $0.088 per share cash plus one non-transferrable contingent value right (CVR). The CVR can pay up to $0.10 for FDA approval in a galactosemia indication, $0.10 for FDA approval in CMT-SORD, and $0.20 upon first worldwide net sales ≥ $200M in any four-quarter period; CVR holders also share in a capped Closing Cash Payment tied to Applied cash above $500,000 (capped at $1.5M).

The tender offer is expected to close in Q1 2026; the merger has no financing condition. Applied received an unsecured promissory note enabling up to $8.5M in loans to fund working capital.

Positive

• Upfront cash consideration of $0.088 per share
• CVR structure offers up to $0.40 total per share-equivalent
• No financing condition in the merger agreement
• Promissory note provides up to $8.5M immediate funding

Negative

• Low upfront price of $0.088 per share for shareholders
• Applied would wind down without additional funds or the note
• Promissory note becomes repayable if transaction is terminated
• Transaction requires majority tender of outstanding shares to close

Key Figures

Tender offer price $0.088 per share Cash consideration in Cycle tender offer

Galactosemia CVR Up to $0.10 per CVR Payable on FDA approval for galactosemia indication

CMT-SORD CVR Up to $0.10 per CVR Payable on FDA approval for CMT-SORD indication

Sales milestone CVR Up to $0.20 per CVR Payable on ≥$200M worldwide net sales in any four-quarter period

Sales threshold $200 million Worldwide net sales hurdle for CVR sales milestone

Closing cash floor $500,000 Cash threshold before CVR holders share excess (capped)

Closing cash cap $1.5 million Maximum aggregate Closing Cash Payment shared via CVRs

Promissory Note size $8.5 million Unsecured loans from Cycle to fund working capital

Market Reality Check

$0.2169 Last Close

Volume Volume 5,140,698 is 0.19x the 20-day average, indicating subdued trading activity ahead of the deal. low

Technical Shares at $0.2169 were trading below the $0.53 200-day moving average and far under the $1.50 52-week high.

Peers on Argus 1 Up

Biotech peers showed mixed moves (e.g., ADVM up 2.83%, ANL up 4.92%, INKT down 1.8%), while APLT traded modestly lower, suggesting a stock-specific reaction rather than a sector-wide driver.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Nov 20	Strategic review, cuts	Negative	-1.5%	Strategic alternatives review and 46% workforce reduction signaled stress.
Nov 13	Q3 2025 earnings	Negative	-70.3%	Q3 loss with sharply lower cash and going‑concern pressures.
Sep 29	FDA meeting update	Neutral	-50.6%	FDA meeting on govorestat with no definitive regulatory path yet.
Aug 13	Q2 2025 earnings	Neutral	+4.5%	Q2 loss but pipeline progress and partnerships offset some concerns.
Jun 17	Leadership changes	Positive	+1.6%	New CMO and EVP roles to advance govorestat rare disease programs.

Pattern Detected

Recent APLT headlines around liquidity, FDA interactions, and strategic reviews often coincided with negative price moves, especially around earnings and regulatory uncertainty, with only limited strength on operational or leadership updates.

Recent Company History

Over the last six months, Applied Therapeutics has moved from leadership changes and pipeline updates toward a stressed liquidity and strategic review scenario. Q2 and Q3 2025 results highlighted declining cash balances and ongoing net losses, while multiple 10‑Q and 8‑K filings cited substantial doubt about going concern. FDA interactions on govorestat for CMT‑SORD and Classic Galactosemia did not yet yield a clear regulatory path and were followed by sharp declines. The November strategic alternatives review and workforce reduction underscored financial pressure that set the backdrop for the announced acquisition.

Market Pulse Summary

This announcement outlines a take-private path for Applied Therapeutics via a tender offer at $0.088 per share plus CVRs tied to FDA approvals and a $200 million sales milestone. The structure reflects the company’s constrained liquidity and prior strategic review, with up to $8.5 million in Promissory Note funding enabling operations until closing. Investors should focus on closing conditions, timing into the expected Q1 2026 completion, and the specific regulatory milestones that drive CVR payouts.

Key Terms

central nervous system medical

"govorestat, is a novel central nervous system penetrant Aldose"

The central nervous system (CNS) is the body's main control center, made up of the brain and spinal cord, that processes information and directs movement, sensation and basic functions like breathing. For investors, CNS-related products and research matter because they face long development times, strict safety testing and regulatory hurdles; success or failure can dramatically affect a company’s costs, timelines and potential market value.

contingent value right financial

"plus one non-transferrable contingent value right (CVR) that entitles"

A contingent value right is a special security that gives its holder the right to receive one or more future payments only if specified events happen, such as a product reaching a sales target or getting regulatory approval. It matters to investors because it offers potential extra payout tied to uncertain outcomes—like a bet that a project will succeed—so it can add upside to a deal while also carrying extra risk and valuation uncertainty.

tender offer financial

"Cycle will commence a tender offer to acquire all of the outstanding"

A tender offer is a proposal made by a person or company to buy shares from existing shareholders at a set price, usually higher than the current market value, within a specific time frame. It matters to investors because it can lead to a change in ownership or control of a company, and shareholders must decide whether to sell their shares at the offered price.

new drug application regulatory

"payable upon FDA approval of a new drug application for any"

A new drug application is a formal request submitted to government regulators seeking approval to market a new medicine. It is like a detailed proposal that shows the drug has been tested for safety and effectiveness. For investors, receiving approval signals that the drug may soon become available for sale, potentially leading to revenue growth and impacting the company's value.

promissory note financial

"Applied also issued a Promissory Note (the “Promissory Note”) to"

A promissory note is a written IOU in which one party promises to pay a specific sum, often with interest, to another party by a set date or on demand. Investors care because it functions like a loan: it creates a legal claim on future cash flows, carries credit and timing risk, and can affect valuation or liquidity—think of it as a formal, tradable promise to be repaid that can be assessed like any other debt investment.

AI-generated analysis. Not financial advice.

Applied Therapeutic’s lead drug candidate, govorestat, is a novel central nervous system penetrant Aldose Reductase Inhibitor for the treatment of CNS rare metabolic diseases

NEW YORK, Dec. 11, 2025 (GLOBE NEWSWIRE) -- Applied Therapeutics, Inc. (Nasdaq: APLT; “Applied”), a clinical-stage biopharmaceutical company dedicated to creating transformative treatments for rare diseases, today announced a definitive agreement for Cycle Group Holdings Limited (“Cycle”) to acquire Applied Therapeutics.

Applied Therapeutics is a clinical-stage biopharmaceutical company committed to the development of novel drug candidates against validated molecular targets in rare diseases. Applied’s lead drug candidate, govorestat, is a novel central nervous system (CNS) penetrant Aldose Reductase Inhibitor (ARI) for the treatment of CNS rare metabolic diseases, including Classic Galactosemia, Charcot-Marie-Tooth Sorbitol Dehydrogenase Deficiency (CMT-SORD) and phosphomannomutase 2 congenital disorder of glycosylation (PMM2-CDG).

“We are confident that Cycle has the resources and capabilities to move govorestat forward towards the ultimate goal of bringing a life-changing treatment to the patients suffering from Classic Galactosemia, CMT-SORD and PMM2-CDG, who have always been at the center of everything we do at Applied,” said Les Funtleyder, Interim Chief Executive Officer and Chief Financial Officer of Applied. “I want to thank the entire Applied team for their perseverance and commitment. We are also grateful to the investigators and patients who have contributed to the development of govorestat.”

Under the terms of the merger agreement, Cycle will commence a tender offer to acquire all of the outstanding shares of Applied common stock for a per share price of $0.088 per share in cash payable at closing plus one non-transferrable contingent value right (CVR) that entitles the holder to receive potential additional payments.

The CVR provides payments based on the following:

• Up to $0.10 per CVR in cash payable upon FDA approval of a new drug application for any galactosemia indication prior to the eighth anniversary of closing.
• Up to $0.10 per CVR in cash payable upon FDA approval of a new drug application for the CMT-SORD indication prior to the eighth anniversary of closing.
• Up to $0.20 per CVR in cash payable upon the first achievement of worldwide net sales of any product covered by the CVR by Cycle, its affiliates or licensees equal to or exceeding $200 million dollars in any four-quarter fiscal period prior to the tenth anniversary of closing.
• Each CVR holder will also be entitled to receive their pro rata share of any cash of Applied in excess of $500,000 at closing (capped at $1.5 million) (“Closing Cash Payment”).
• Each such CVR and Closing Cash Payment will be paid only once, if at all.

The transaction is subject to customary closing conditions contained in the merger agreement that will be filed with the SEC, including the tender of a majority of the outstanding shares of Applied common stock. The merger agreement does not include a financing condition. The transaction is expected to close in the first quarter of 2026, subject to satisfaction of the closing conditions. If the tender offer closes, then Cycle would acquire untendered shares of Applied through a second-step merger for the same consideration.

Applied also issued a Promissory Note (the “Promissory Note”) to Cycle. The Promissory Note is unsecured and enables Applied to receive loans aggregating up to $8.5 million from Cycle, to fund Applied’s working capital needs under an approved budget. Cycle’s funding obligations cease, and amounts borrowed immediately becomes repayable, if the transaction is terminated for certain reasons. Absent funds provided by Cycle under the Promissory Note or from another source, Applied would be unable to continue to fund its activities for more than a limited number of days and Applied would anticipate proceeding to wind down operations.

The transaction was unanimously approved by the Applied Board of Directors following an extensive evaluation of strategic alternatives. This evaluation process included numerous discussions with potential counterparties. The Applied Board of Directors determined that entering into the merger agreement with Cycle represented the path that best advanced the interests of Applied and its stockholders.

For Cycle, Goodwin Procter LLP is acting as legal counsel. For Applied, Aquilo Partners, L.P. provided a fairness opinion, and Ropes & Gray LLP is acting as legal counsel.

About Cycle Pharmaceuticals

Cycle was founded in 2012 with the sole aim of delivering drug treatments and product support to the underserved rare disease community. Cycle focuses on rare genetic conditions in metabolic, immunology, urology, and oncology. In neurology, Cycle focuses on multiple sclerosis. Cycle is headquartered in Cambridge, UK and has offices in Detroit, Michigan. For more information, please visit www.cyclepharma.com and follow us on X, LinkedIn and Facebook.

About Applied Therapeutics

Applied Therapeutics, Inc. is a clinical-stage biopharmaceutical company committed to the development of novel drug candidates against validated molecular targets in rare diseases. The Company’s lead drug candidate, govorestat, is a novel central nervous system (CNS) penetrant Aldose Reductase Inhibitor (ARI) for the treatment of CNS rare metabolic diseases, including Classic Galactosemia, Charcot-Marie-Tooth Sorbitol Dehydrogenase Deficiency (CMT-SORD) and phosphomannomutase 2 congenital disorder of glycosylation (PMM2-CDG).

Additional Information and Where to Find it

The tender offer referred to in this document has not yet commenced. This document is for informational purposes only and is neither an offer to purchase nor a solicitation of an offer to sell shares, nor is it a substitute for the tender offer materials that Cycle Group Holdings Limited (“Parent”) and AT2B, Inc., an indirect wholly owned subsidiary of Parent (“Purchaser”) will file with the SEC upon commencement of the tender offer. At the time the tender offer is commenced, Parent and Purchaser will cause to be filed a tender offer statement on Schedule TO with the SEC, and Applied Therapeutics will file a solicitation/recommendation statement on Schedule 14D-9 with respect to the tender offer.

THE TENDER OFFER MATERIALS (INCLUDING AN OFFER TO PURCHASE, A RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED ACQUISITION AND THE PARTIES THERETO. INVESTORS AND STOCKHOLDERS OF APPLIED THERAPEUTICS ARE URGED TO READ THESE DOCUMENTS CAREFULLY WHEN THEY BECOME AVAILABLE (AND EACH AS IT MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME) BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION THAT INVESTORS AND STOCKHOLDERS SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR SHARES OF COMMON STOCK IN THE OFFER.

Both the tender offer statement and the solicitation/recommendation statement will be mailed to Applied Therapeutics’ stockholders free of charge. A free copy of the tender offer statement and the solicitation/recommendation statement will also be made available to all stockholders of Applies Therapeutics by accessing https://ir.appliedtherapeutics.com/ or by contacting Investor Relations at appliedtherapeutics@argotpartners.com. In addition, the tender offer statement and the solicitation/recommendation statement (and all other documents filed with the SEC) will be available at no charge on the SEC’s website: www.sec.gov, upon filing with the SEC.

APPLIED THERAPEUTICS’ STOCKHOLDERS ARE ADVISED TO READ THE SCHEDULE TO AND THE SCHEDULE 14D-9, AS EACH MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME, AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BEFORE THEY MAKE ANY DECISION WITH RESPECT TO THE TENDER OFFER, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES THERETO. 

Cautionary Statement Regarding Forward-Looking Statements

This document includes forward-looking statements that are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, statements regarding the proposed acquisition of Applied Therapeutics by Parent, the expected timetable for completing the transaction, and Applied Therapeutics’ future financial or operating performance. These forward-looking statements typically can be identified by words such as “believe,” “expect,” “estimate,” “predict,” “target,” “potential,” “likely,” “continue,” “ongoing,” “could,” “should,” “intend,” “may,” “might,” “plan,” “seek,” “anticipate,” “project” and similar expressions, as well as variations or negatives of these words. Forward-looking statements include, without limitation, statements regarding the proposed acquisition of Applied Therapeutics by Parent, similar transactions, prospective performance, future plans, events, expectations, objectives, opportunities, and the outlook for Applied Therapeutics; the expected timing of the completion of the transaction; the ability to complete the transaction considering the various closing conditions; and the accuracy of any assumptions underlying any of the foregoing. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties; accordingly, investors are cautioned not to place undue reliance on forward-looking statements. Actual results may differ materially due to several factors. Factors that could cause future results to differ materially include: risks associated with the timing of the closing of the proposed transaction, including the risks that a condition to closing would not be satisfied within the expected timeframe or at all or that the closing of the proposed transaction will not occur; uncertainties as to how many of Applied Therapeutics’ stockholders will tender their shares in the offer; the possibility that competing offers will be made; the occurrence of any event, change, or other circumstance that could give rise to the termination of the Merger Agreement, including circumstances requiring the Company to pay a termination fee pursuant to the Merger Agreement; the outcome of any legal proceedings that may be instituted against the parties and others related to the merger agreement; unanticipated difficulties or expenditures relating to the proposed transaction; the response of business partners to the announcement of the proposed transaction, and/or potential difficulties in employee retention as a result of the announcement and pendency of the proposed transaction; the possibility that the milestone payments related to the CVR will never be achieved and that no milestone payment may be made or if made the amount of such milestone payment made; the risk that any equityholder litigation in connection with the proposed transactions may result in significant costs of defense, indemnification and liability; Applied Therapeutics’ ability to successfully demonstrate the efficacy and safety of its drug or drug candidates, and the preclinical or clinical results for its product candidates, which may not support further development of such product candidates; comments, feedback and actions of regulatory agencies; Applied Therapeutics’ dependence on the successful clinical development, regulatory approval and commercialization of its product candidates; the inherent uncertainties associated with developing new products or technologies and operating as clinical stage company; the Company’s obligations under the Promissory Note and its ability to satisfy such obligations; the Company’s ability to receive loans from Parent under the Promissory Note; the Company’s cash sufficiency and runway; and other risks identified in Applied Therapeutics’ SEC filings, including Applied Therapeutics’ Annual Report on Form 10-K for the year ended December 31, 2024, Quarterly Reports for the quarters ended March 31, 2025, June 30, 2025 and September 30, 2025 and subsequent filings with the SEC. Applied Therapeutics cautions you not to place undue reliance on any forward-looking statements, which speak only as of the date they are made. The forward-looking statements in this document speak only as of the date of this document. Applied Therapeutics undertakes no obligation to update any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by applicable law.

Contacts

Investors:
Julie Seidel / Andrew Vulis
(212) 600-1902
appliedtherapeutics@argotpartners.com 

Media:
media@appliedtherapeutics.com 

FAQ

What deal did Cycle announce for Applied Therapeutics (APLT) on December 11, 2025?

Cycle will commence a tender offer to acquire Applied for $0.088 per share in cash plus one CVR, with the transaction expected to close in Q1 2026.

How much can Applied Therapeutics CVRs (APLT) potentially pay out to holders?

Each CVR can pay up to $0.10 for galactosemia FDA approval, $0.10 for CMT-SORD FDA approval, and $0.20 for first worldwide net sales ≥ $200M in any four-quarter period.

Does the Applied-Cycle merger depend on Cycle securing financing?

No, the merger agreement does not include a financing condition.

What interim funding did Cycle provide to Applied Therapeutics (APLT)?

Applied issued an unsecured promissory note permitting Cycle to loan up to $8.5M to fund working capital under an approved budget.

What happens if Applied fails to receive promised funding before closing?

Absent funds from Cycle or another source, Applied would be unable to continue funding activities for more than a limited number of days and would anticipate winding down operations.

What shareholder action is required for the Applied tender offer to succeed?

The tender offer requires the tender of a majority of outstanding Applied common shares; untendered shares would be acquired in a second-step merger if the offer closes.