Larimar Therapeutics, Inc. — Q3 2023 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2023. The filing was signed November 14, 2023. Larimar is a clinical-stage biotechnology company with no product revenue; its lead candidate, nomlabofusp, is being developed for Friedreich’s ataxia (FA).
Financial results and position
| Metric | Q3 2023 | Q3 2022 | Nine months 2023 | Nine months 2022 |
|---|---|---|---|---|
| Revenue | None | None | None | None |
| Research and development expense | $6.6 million | $5.6 million | $17.0 million | $17.0 million |
| General and administrative expense | $3.8 million | $2.9 million | $10.6 million | $9.1 million |
| Total operating expenses | $10.3 million | $8.5 million | $27.6 million | $26.1 million |
| Net loss | $9.1 million | $8.3 million | $24.0 million | $25.9 million |
| Net loss per share, basic and diluted | $0.21 | $0.37 | $0.55 | $1.32 |
| Operating cash used | Not stated for quarter | Not stated for quarter | $24.1 million | $20.9 million |
- Liquidity: At September 30, cash and cash equivalents were $38.7 million and marketable securities were $56.9 million, totaling $95.6 million available for operations; restricted cash of $1.3 million is excluded. Total current assets were $98.5 million versus current liabilities of $6.6 million.
- Assets and equity: Total assets were $104.0 million and stockholders’ equity was $92.7 million. Accumulated deficit was $175.6 million.
- Debt and leases: The filing reports no borrowings; operating lease liabilities totaled $5.4 million, including $0.7 million current. Lease commitments are not borrowings.
- Margins: Not applicable because Larimar had no revenue. Other income was $1.3 million for Q3 and $3.6 million for the nine-month period, primarily reflecting interest income.
Changes versus comparable periods
- Q3 operating expenses increased $1.8 million year over year, while net loss increased $0.7 million. R&D expense rose $1.0 million, mainly from Phase 2 trial costs and personnel, partly offset by lower clinical-supply manufacturing costs; G&A rose $0.8 million.
- For the first nine months, operating expenses increased $1.5 million. Net loss improved by $2.0 million, largely because other income rose to $3.6 million from $0.2 million; R&D expense was essentially flat and G&A increased $1.5 million.
- Operating cash use increased $3.2 million to $24.1 million. Investing activities provided $36.0 million, chiefly reflecting maturities and sales of marketable securities. Financing provided less than $0.1 million in 2023, compared with $75.6 million from an equity offering in 2022.
- Cash, cash equivalents and marketable securities fell from $118.4 million at December 31, 2022 to $95.6 million at September 30, 2023. Common shares outstanding rose from 43.27 million to 43.91 million, including exercise of prefunded warrants in August.
Outlook, development, and risks
- Management expected the available cash and marketable securities to fund operations into the first quarter of 2025, at least 12 months from issuance of the statements. The company expects ongoing operating losses and will likely need additional capital; there is no assurance it can raise funds on acceptable terms.
- The FDA had cleared the Phase 2 nomlabofusp trial’s 50 mg cohort and the open-label extension (OLE) to proceed, while the program remained under a partial clinical hold. The 50 mg cohort completed enrollment and dosing in November 2023; treatment assignments remained blinded. The company reported no serious adverse events in either group based on blinded dosing-period observations.
- Top-line safety, pharmacokinetic and frataxin data from the 25 mg and 50 mg cohorts were expected in Q1 2024, revised from the first half of 2024. Further U.S. trials or dose escalation depended on FDA review of the 50 mg data.
- The OLE, planned to evaluate daily 25 mg dosing, was expected to begin in Q1 2024, with interim data expected in Q4 2024. These are forward-looking expectations, not reported results.
- Key risks include clinical safety and efficacy uncertainty, FDA review and potential additional requirements, manufacturing and supply execution, competition, and the need for future financing. In 2021, the FDA imposed a clinical hold after reported mortalities at the highest dose levels in a 26-week nonhuman-primate toxicology study; the hold was later partially lifted.
- The company reported no material changes to previously disclosed risk factors, no material pending or threatened litigation, and no off-balance-sheet arrangements. Management concluded disclosure controls were effective for the quarter.
Important facts for investors to verify
- Whether Q1 2024 cohort data support further development and what FDA action follows, including the status of the partial clinical hold.
- Whether the OLE starts on schedule and whether its design, enrollment, and interim-data timing change.
- Actual cash burn and runway versus management’s forecast, including any subsequent financing, spending reductions, or changes in clinical assumptions.
- Clinical safety, frataxin response, manufacturing readiness, and any new regulatory or competitive developments.