Larimar Therapeutics, Inc. — Q1 2023 Form 10-Q
Reporting period: Three months ended March 31, 2023. Larimar is a clinical-stage biotechnology company developing CTI-1601, a potential treatment for Friedreich’s ataxia (FA). It has no commercialized products and reported no revenue.
Financial results and liquidity
| Metric | Q1 2023 | Q1 2022 / comparison |
|---|---|---|
| Revenue | None | None |
| Research and development expense | $4.6 million | $5.8 million; down $1.2 million |
| General and administrative expense | $3.1 million | $3.1 million; broadly unchanged |
| Total operating expenses | $7.6 million | $8.9 million; down $1.3 million |
| Net loss | $6.5 million | $8.9 million |
| Net loss per share | $0.15 | $0.49 |
| Net cash used in operating activities | $7.6 million | $7.5 million |
Margins are not meaningful because the company has no revenue. Q1 2023 other income was $1.1 million, primarily interest income, versus $0.1 million of other expense in Q1 2022.
At March 31, 2023, cash and cash equivalents were $111.5 million, with $1.3 million of restricted cash; marketable securities were zero, compared with $91.6 million at year-end. The $92.3 million of investing cash inflow principally reflects maturities and sales of marketable securities, not operating cash generation. Total assets were $118.9 million and stockholders’ equity was $106.2 million. The company reported no financial debt; operating lease liabilities totaled $5.2 million.
Material changes and business developments
- R&D expense declined by $1.2 million year over year, mainly due to lower nonclinical process development and drug manufacturing costs, with a smaller reduction in clinical trial expense.
- Net loss narrowed by $2.4 million, aided by lower operating expenses and the shift to interest income.
- Cash and cash equivalents increased from $26.8 million at December 31, 2022, while marketable securities were liquidated or matured during the quarter. No financing cash flows occurred in Q1.
- The September 2022 equity offering generated $75.2 million in net proceeds. The $50 million at-the-market program had not been used as of the filing.
Outlook, clinical program, and risks
- The FDA had lifted its full clinical hold on CTI-1601 but maintained a partial hold. The Phase 2 dose-exploration trial was proceeding in the 25 mg cohort; clearance for a 50 mg cohort remained subject to FDA feedback.
- After quarter-end, in May 2023, Larimar reported preliminary 25 mg cohort results: repeated dosing was described as generally well tolerated, and frataxin levels increased from baseline versus placebo in evaluated tissues. The company submitted unblinded trial data to the FDA and expected to update on next steps in Q3 2023 after a planned FDA meeting. These are preliminary findings, not evidence of approval or confirmed clinical benefit.
- Management stated that available cash and cash equivalents were expected to fund forecast operating expenses and capital needs for at least 12 months from issuance of the financial statements. The company expects continuing losses and may need additional capital; financing may not be available on acceptable terms.
- Key risks include FDA requirements or further delays, clinical safety and efficacy uncertainty, manufacturing and vendor execution, competition in FA, and the need for future financing. Larimar reported no material pending or threatened litigation and no off-balance-sheet arrangements.
Important facts for investors to verify
- FDA feedback and whether CTI-1601 receives clearance to proceed with the 50 mg cohort or other studies.
- Full clinical data, including safety, frataxin measurements, trial design, and any subsequent regulatory interpretation of the preliminary 25 mg results.
- Cash burn and runway as clinical plans, manufacturing costs, and operating assumptions evolve.
- Whether the company raises additional capital, including any future use of its ATM program and the potential effect on shareholders.