We recently compiled a list of the 10 Best Diabetes Stocks To Buy Under $10.In this article, we are going to take a look at where Applied Therapeutics, Inc. (NASDAQ:APLT) stands against the other diabetes stocks.
Global Growth and Innovation in Diabetes Care: The Rise of Continuous Glucose Monitors and AI Integration
About 422 million people worldwide have diabetes, according to the WHO, and most of them live in low- or middle-income nations. Every year, diabetes directly causes 1.5 million deaths on average. Both the number of cases and the prevalence of diabetes have steadily increased during the last several decades. However, according to the International Diabetes Federation, there are currently 500 million people with diabetes globally, and that number is expected to rise by 25% by 2030 and 51% by 2045.
The continuous glucose monitor (CGM) is one type of medical equipment used to help manage diabetes, including type 1 and type 2. It is now a rapidly growing segment of diabetic care devices, and the market has increased significantly in recent years. According to GlobalData, the demand for sophisticated diabetes care products, such as insulin pumps, pens, and continuous glucose monitoring (CGM) devices, was projected to be valued at $21.8 billion in 2023. According to GlobalData's forecasts, the market will grow at a compound annual growth rate (CAGR) of 6.34% to reach revenues of $33.4 billion by 2030.
There are now 97 goods in the CGM category, according to the GlobalData marketed products database. Only a small number of these devices are implantable sensors; the majority are conventional CGMs. The GlobalData pipeline products database indicates that 133 goods are either approved or in the development stage. According to the data, this market niche is growing rapidly and is a center for cutting-edge new technologies such as implantable CGMs.
AI is now being included in CGM technology. For instance, Roche unveiled Accu-Chek SmartGuide, a revolutionary predictive AI-powered CGM device. Roche Diabetes Care Chief Medical Officer Julien Boisdron described it as “a solution more than a CGM” at the introduction. He explained how the system, which includes a sensor and two algorithms, helps with prediction and data visualization.
Rising Demand for GLP-1 Medications: Opportunities and Challenges in Diabetes and Obesity Treatment
The management of diabetes and its related complications has entered a new era of opportunity. The combined issues of diabetes and obesity can be effectively treated with these innovative approaches. Glucagon-like peptide-1 (GLP-1) agonists are a class of medications used to treat type 2 diabetes mellitus (T2DM) and obesity. The GLP-1 market, which is driven equally by diabetes and obesity, is predicted to reach $100 billion by 2030. By this time, there could be 30 million GLP-1 users or around 9% of the US population.
According to the most recent KFF Health Tracking survey, 12% of adult Americans say they have used a GLP-1 medication at some point. In the past five years, 43% of GLP-1 prescription users had diabetes, and 22% of patients with obesity or overweight diagnoses also took the medication. Over the course of the past year, the percentage of adults who have heard "a little" or "a lot" about these medicines has climbed from 70% to 82%, while the percentage of adults who have heard "a lot" or "a lot" about them has increased from 19% to 32%.
However, the rising demand for these weight-loss and diabetes drugs has created challenges. The National Pharmacy Association (NPA) warned of a possible "explosion in the unlicensed sale of medication online." Semaglutides, marketed under the name Ozempic, assist people with type 2 diabetes in controlling their blood sugar levels. However, they are also frequently used to aid in weight loss in certain nations, such as the US, where they are marketed under the name Wegovy.
NPA chairman Nick Kaye stated:
“Pharmacists remain deeply concerned that the current medicine shortages crisis could lead to an explosion in the unlicensed sale of medication online.”
Our Methodology
Our methodology involved identifying healthcare companies focused on diabetes treatment using a stock screener. From the resultant dataset, we selected those with stock prices under $10 and ranked them based on their share price as of the close of December 26.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A researcher in a lab coat holding up a test tube filled with a glowing green liquid, symbolizing the clinical-stage biopharmaceutical company's research into cardiovascular disease treatments.
Standing third on our list is Applied Therapeutics, Inc. (NASDAQ:APLT). It is a biopharmaceutical company focused on developing treatments for rare diseases, particularly those related to metabolic disorders. Its lead drug, govorestat (AT-007), targets Aldose Reductase Inhibitors (ARIs) to treat conditions like Galactosemia, SORD Deficiency, and PMM2-CDG. The company is also developing AT-001 for Diabetic Cardiomyopathy and Diabetic Peripheral Neuropathy, and AT-003 for Diabetic Retinopathy, addressing significant unmet needs in diabetes care.
Applied Therapeutics, Inc. (NASDAQ:APLT) reported $122,000 in revenue for Q3 2024 which is a significant decrease from $10.66 million in the same period of 2023 due to a one-time licensing agreement. R&D expenses rose to $14.8 million which was driven by increased personnel costs and data storage for commercialization. G&A expenses increased to $15.0 million due to higher headcount. The net loss for Q3 was $68.6 million, compared to $42.4 million in Q3 2023, largely due to higher expenses and changes in warrant liabilities.
As of September 30, 2024, the company had $98.9 million in cash, with a runway expected to last until 2026. Applied Therapeutics, Inc. (NASDAQ:APLT) is awaiting critical regulatory decisions, including the FDA's Priority Review for govorestat in Classic Galactosemia, with a PDUFA date of November 28, 2024, and an EMA decision expected in Q1 2025. An NDA submission for govorestat in SORD Deficiency is planned for early Q1 2025.
Analysts hold a consensus Moderate Buy rating on the stock. The average price target for the stock is $4.50, with a high estimate of $8.00 and a low estimate of $1.50. The average price target indicates a 411.31% increase from the last price of $0.88.
Overall APLT ranks 3rd on our list of the best diabetes stocks to buy under $10. While we acknowledge the potential of APLT as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than APLT but that trades at less than 5 times its earnings, check out our report about thecheapest AI stock.
