Larimar Therapeutics, Inc. quarterly report, Q2 FY2023

Larimar Therapeutics, Inc. — Q2 2023 Form 10-Q

Reporting period: Three and six months ended June 30, 2023. Financial figures below are in millions of dollars unless stated otherwise. Larimar is a clinical-stage biotechnology company developing CTI-1601 for Friedreich’s ataxia (FA); it reported no product revenue.

Financial results and liquidity

At June 30, cash and cash equivalents were $94.321 and marketable securities were $9.879, totaling approximately $104.2 available for operations; restricted cash was $1.339. Operating cash use was $14.916 for the first half. Investing activities provided $82.412, primarily from maturities and sales of marketable securities; there were no financing cash flows. Total assets were $111.716, total liabilities $11.786, and stockholders’ equity $99.930. The filing reports no debt; lease liabilities totaled $5.077. Profit margins are not meaningful given the absence of revenue.

Changes versus comparable periods

Q2 net loss narrowed by $0.301 year over year even as operating expenses increased $0.933, because other income rose to $1.254, principally from interest on a larger investment balance at higher rates. For the first half, net loss improved by $2.718; operating expenses decreased $0.317, while other income improved by $2.401. First-half R&D expense fell $1.013, mainly due to lower clinical-supply manufacturing costs, partly offset by higher personnel and stock-based compensation. G&A increased $0.696, primarily from professional fees, personnel, and stock-based compensation. First-half operating cash use was nearly unchanged from 2022.

Program outlook, risks, and other matters

• In May 2023, Larimar reported preliminary data from the completed 25 mg Phase 2 cohort (n=13): CTI-1601 was generally well tolerated and increased frataxin levels from baseline relative to placebo in evaluated skin and buccal cells at day 14.
• In July 2023, after the quarter-end, the FDA cleared the Phase 2 study to proceed to a 50 mg cohort and cleared initiation of a 25 mg daily open-label extension (OLE). The 50 mg regimen is daily for 14 days, then every other day through day 28. Further dose escalation and additional U.S. trials remain subject to FDA review under a partial clinical hold.
• Management expected 50 mg cohort data in the first half of 2024 and OLE initiation in the first quarter of 2024, with interim OLE data expected in the fourth quarter of 2024. These are forward-looking expectations, not reported outcomes.
• The FDA’s original 2021 clinical hold followed mortalities at the highest dose levels in a 26-week non-human-primate toxicology study. Regulatory review, trial execution, safety, manufacturing, and financing remain material risks.
• Management expects available cash, cash equivalents, and marketable securities to fund forecasted expenses and capital needs for at least 12 months from issuance of the statements. Larimar expects continued losses and may need additional capital; there is no assurance financing will be available on acceptable terms.
• No material litigation was reported. The company stated disclosure controls were effective and reported no material change in internal control over financial reporting during the quarter.

Important facts for investors to verify

1. FDA feedback and any conditions on proceeding beyond the 50 mg cohort, given the continuing partial clinical hold.
2. Actual 50 mg cohort safety, pharmacokinetic, and pharmacodynamic results, and whether they support further dosing or trials.
3. Whether the OLE began on the expected timetable and what longer-term safety and frataxin data show.
4. Cash burn, investment income, and updated liquidity runway against the company’s development plans and financing needs.
5. Clinical-supply manufacturing progress and whether R&D spending rises as additional studies advance.