Larimar Therapeutics, Inc. — 2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021. This is an annual filing, not a standalone fourth-quarter report. Larimar is a clinical-stage biotechnology company; it has no commercial product revenue. Following its 2020 merger with Zafgen, the financial statements reflect Chondrial as the accounting acquirer.
Financial results and liquidity
| Metric | 2021 | 2020 |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $38.4 million | $31.4 million |
| General and administrative expense | $12.1 million | $11.4 million |
| Total operating expenses | $50.5 million | $42.8 million |
| Net loss | $50.6 million | $42.5 million |
| Net loss per share, basic and diluted | $2.95 | $3.57 |
| Net cash used in operating activities | $42.1 million | $42.2 million |
Operating expenses rose $7.7 million year over year, mainly from increased nonclinical and laboratory spending, headcount, and stock-based compensation. Net loss widened by $8.2 million, partly offset by lower other income. No meaningful operating margin is available because the company had no revenue.
- At December 31, 2021, cash and cash equivalents were $70.1 million, restricted cash was $1.3 million, and marketable debt securities were zero (versus $24.5 million at year-end 2020).
- Total assets were $78.7 million; total liabilities were $14.3 million, including $6.0 million of operating lease liabilities. The filing reports no debt financing.
- Operating cash use was largely offset by $24.2 million of investing cash inflows, primarily from sales and maturities of marketable securities, and $19.9 million of net proceeds from ATM share sales. Cash, cash equivalents and restricted cash increased $1.9 million.
- Management expected available cash to fund forecasted operating and capital requirements for at least 12 months from issuance of the financial statements, while stating additional capital would be needed for future operations. The company reported no off-balance-sheet arrangements.
Business, material developments, and outlook
- The business is focused principally on CTI-1601, a subcutaneous fusion protein intended to deliver frataxin to mitochondria for Friedreich’s ataxia. The filing describes the candidate as its sole product candidate.
- Two Phase 1 trials were completed. The company reported dose-dependent increases in frataxin in tested peripheral tissues; daily 50 mg and 100 mg dosing for up to 13 days produced levels in buccal cells at or above expected levels in healthy carriers. No serious adverse events were reported in those trials; injection-site reactions were generally mild.
- Development is blocked by an FDA clinical hold imposed in May 2021 after mortalities at the highest dose levels in a 26-week nonhuman-primate toxicology study. The company submitted a complete response in January 2022; in February 2022 the FDA maintained the hold and requested additional information. Larimar said it did not know when, or if, the hold would be lifted.
- The hold delays planned open-label extension and pediatric multiple-ascending-dose studies; a global registration study is contingent on adequate data and lifting the hold. Management was evaluating its response to FDA and reassessing study timing, not providing a firm development timetable.
- Larimar had $70.1 million in cash and cash equivalents at year-end and sold 2.34 million shares through its ATM program in 2021 for $19.9 million net. A further $29.2 million of ATM capacity remained as of March 23, 2022. Future financing may dilute shareholders or require debt, collaborations, licensing, or reduced development spending.
- CTI-1601 held FDA orphan-drug, Fast Track and rare-pediatric-disease designations, and EU orphan-drug and PRIME designations. These do not guarantee approval or faster review. Competitive risk increased with Reata’s January 2022 announcement of a rolling FDA application for omaveloxolone.
- Other notable risks include dependence on third-party manufacturers and CROs, uncertain clinical and regulatory outcomes, limited patent protection under some licensed patents expiring in 2024–2025, and potential trial or supply disruption from COVID-19. The company reported no material pending legal proceedings.
Most important facts for investors to verify
- Whether and on what conditions the FDA will lift the CTI-1601 clinical hold, and what additional toxicology or clinical work may be required.
- The full context of the nonhuman-primate deaths, including dose levels, findings, and how FDA-requested information addresses the safety concerns.
- Cash burn, actual runway, and financing needs relative to clinical restart plans; confirm subsequent ATM usage and dilution.
- Whether early increases in peripheral-tissue frataxin translate into clinically meaningful benefit and acceptable safety with longer-term dosing.
- Manufacturing readiness, availability of clinical supply, and the timing and success of the planned lyophilized formulation.
- Patent coverage and licensing terms, particularly the status of pending applications and the implications of licensed patent expirations.