10-Q
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-36510

LARIMAR THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

20-3857670

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification No.)

 

 

Three Bala Plaza East, Suite 506

19004

Bala Cynwyd, PA

(zip code)

(Address of principal executive offices)

 

 

(844) 511-9056

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

LRMR

The Nasdaq Global Market

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

 

Accelerated filer

Non-accelerated filer

 

Emerging growth company

Smaller reporting company

 

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

As of November 8, 2022, there were 43,269,200 shares of the registrant’s Common Stock, $0.001 par value per share, outstanding.

 


 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Statements made in this Quarterly Report on Form 10-Q that are not statements of historical or current facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements discuss our business, operations and financial performance and conditions, as well as our plans, objectives and expectations for our business operations and financial performance and condition. In some cases, you can identify forward-looking statements by terminology such as “aim,” “anticipate,” “assume,” “believe,” “contemplate,” “continue,” “could,” “design,” “due,” “estimate,” “expect,” “goal,” “intend,” “may,” “objective,” “plan,” “predict,” “positioned,” “potential,” “seek,” “should,” “target,” “will,” “would” and other similar expressions that are predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology. In addition, statements that “we believe” or similar statements reflect our beliefs and opinions on the relevant subject only. These forward-looking statements, which are subject to risks, uncertainties and assumptions about us, may include projections of our future financial performance, our anticipated growth strategies and anticipated trends in our business.

You should understand that the following important factors could affect our future results and could cause those results or other outcomes to differ materially from those expressed or implied in our forward-looking statements:

our ability to successfully engage with, and satisfactorily respond to, requests from the U.S. Food and Drug Administration ("FDA") for further information and data regarding the CTI-1601 clinical trial, including the FDA’s review of data from cohort 1 of the Phase 2 dose exploration trial, and the FDA’s agreement to allow us to perform additional cohorts and/or initiate other clinical trials for CTI-1601 and the timing and outcomes of such interactions;
uncertainties in obtaining successful non-clinical or clinical results that reliably and meaningfully demonstrate safety, tolerability and efficacy profiles that are satisfactory to the FDA, European Medicines Agency ("EMA") and other comparable regulatory authorities for marketing approval for CTI-1601 or any other product candidate that we may develop in the future and unexpected costs that may result therefrom;
delays in patient recruitment (including the impact of other clinical trials of competitive products), delays as a result of clinical and non-clinical results and FDA's request for additional studies, changes in clinical protocols, regulatory restrictions, including additional clinical holds, and milestones for CTI-1601, including those associated with COVID-19 and the efforts to mitigate it;
uncertainties associated with the clinical development and regulatory approval for CTI-1601 or any other product candidate that we may develop in the future, including potential delays in the commencement, enrollment and completion of clinical trials;
the difficulties and expenses associated with obtaining and maintaining regulatory approval for CTI-1601 or any other product candidate we may develop in the future, and the indication and labeling under any such approval;
our estimates regarding future results of operations, financial position, research and development costs, capital requirements and our needs for additional financing;
how long we can continue to fund our operations with our existing cash, cash equivalents and marketable debt securities;
our ability, and the ability of third-party manufacturers we engage, to optimize and scale CTI-1601 or any other product candidate’s manufacturing process and to manufacture sufficient quantities of clinical supplies, and, if approved, commercial supplies of CTI-1601;
our ability to realize any value from CTI-1601 and any other product candidate we may develop in the future in light of inherent risks and difficulties involved in successfully bringing product candidates to market and the risk that the product candidates, if approved, will not achieve broad market acceptance;
our ability to comply with regulatory requirements applicable to our business and other regulatory developments in the United States and other countries;

 


 

the size and growth of the potential markets for CTI-1601 or any other product candidate that we may develop in the future, the rate and degree of market acceptance of CTI-1601 or any other product candidate, if approved, that we may develop in the future and our ability to serve those markets;
competing therapies and products including those that are currently in clinical development which become available via marketing authorizations or compassionate use and their impact on our ability to recruit and retain clinical trial patients, to obtain and maintain potential expedited regulatory pathways, and to commercialize current and future product candidates, if approved, (including the impact of potential barriers to entry if a competitor is able to establish a strong market position before we are able to commercialize our products);
our ability to obtain and maintain patent protection and defend our intellectual property rights against third-parties;
the performance of third parties upon which we depend, including third-party contract research organizations ("CROs") and third-party suppliers, manufacturers, distributors, and logistics providers;
our ability to maintain our relationships, and contracts with our key vendors and to identify and contract with alternate or secondary key vendors;
our ability to recruit and retain key scientific, technical, commercial, and management personnel and to retain our executive officers;
our ability to maintain proper functionality and security of our internal computer and information systems and prevent or avoid cyber-attacks, malicious intrusion, breakdown, destruction, loss of data privacy or other significant disruption;
the extent to which health epidemics, unforeseen emergencies and other outbreaks of communicable diseases, including the ongoing COVID-19 pandemic and the efforts to mitigate it, and geopolitical turmoil, could disrupt our operations, the operations of third parties on which we rely or the operations of regulatory agencies we interact with in the development of CTI-1601; and
the potential impact of healthcare reform in the United States, including the Inflation Reduction Act of
2022, and measures being taken worldwide designed to reduce healthcare costs and limit the overall level of government expenditures.

These forward-looking statements are based on management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate, and management’s beliefs and assumptions are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. In light of the significant uncertainties in these forward-looking statements, you should not rely upon forward-looking statements as predictions of future events. Although we believe the expectations reflected in the forward-looking statements are reasonable, the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements may not be achieved or occur at all. The factors that could cause or contribute to such differences include, but are not limited to, those discussed in our Annual Report on Form 10-K filed on March 25, 2022. All forward-looking statements are applicable only as of the date on which they were made and, except as required by law, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise after the date of this Quarterly Report on Form 10-Q or to reflect the occurrence of any unanticipated events. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless expressed as such, and should only be viewed as historical data.

 


 

Larimar Therapeutics, Inc.

INDEX

 

 

 

Page

 

 

 

PART I - FINANCIAL INFORMATION

 

 

 

 

 

Item 1

 

Financial Statements (unaudited)

 

3

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2022 and 2021

 

4

 

 

 

 

 

 

 

Condensed Consolidated Statements of Changes in Stockholders' Equity for the three and nine months ended September 30, 2022 and 2021

 

5

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021

 

7

 

 

 

 

 

 

 

Notes to Condensed Consolidated Financial Statements

 

8

 

 

 

 

 

Item 2.

 

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

19

 

 

 

 

 

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

 

28

 

 

 

 

 

Item 4.

 

Controls and Procedures

 

28

 

 

 

 

 

 

PART II - OTHER INFORMATION

 

 

 

 

 

Item 1.

 

Legal Proceedings

 

29

 

 

 

 

 

Item 1A.

 

Risk Factors

 

29

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

 

29

Item 3.

 

Defaults Upon Senior Securities

 

29

Item 4.

 

Mine Safety Disclosures

 

29

Item 5.

 

Other Information

 

29

 

 

 

 

 

Item 6.

 

Exhibits

 

30

 

 

 

 

 

Signatures

 

31

 

2


 

PART I-FINANCIAL INFORMATION

Item 1. Financial Statements

LARIMAR THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)

 

 

 

September 30,

 

 

December 31,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

86,047

 

 

$

70,097

 

Marketable debt securities

 

 

38,652

 

 

 

 

Prepaid expenses and other current assets

 

 

2,428

 

 

 

2,107

 

Total current assets

 

 

127,127

 

 

 

72,204

 

Property and equipment, net

 

 

909

 

 

 

1,049

 

Operating lease right-of-use assets

 

 

2,997

 

 

 

3,406

 

Restricted cash

 

 

1,339

 

 

 

1,339

 

Other assets

 

 

643

 

 

 

669

 

Total assets

 

$

133,015

 

 

$

78,667

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

849

 

 

$

1,660

 

Accrued expenses

 

 

7,939

 

 

 

6,592

 

Operating lease liabilities, current

 

 

632

 

 

 

594

 

Total current liabilities

 

 

9,420

 

 

 

8,846

 

Operating lease liabilities

 

 

4,933

 

 

 

5,408

 

Total liabilities

 

 

14,353

 

 

 

14,254

 

Commitments and contingencies (See Note 8)

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock; $0.001 par value per share; 5,000,000 shares authorized
   as of September 30, 2022 and December 31, 2021;
no shares issued and
   outstanding as of September 30, 2022 and December 31, 2021

 

 

 

 

 

 

Common stock, $0.001 par value per share; 115,000,000 shares
   authorized as of September 30, 2022 and December 31, 2021;
   
43,269,200 shares and 17,710,450 shares issued and outstanding as of
   September 30, 2022 and December 31, 2021, respectively

 

 

43

 

 

 

18

 

Additional paid-in capital

 

 

260,839

 

 

 

180,645

 

Accumulated deficit

 

 

(142,180

)

 

 

(116,250

)

Accumulated other comprehensive loss

 

 

(40

)

 

 

 

Total stockholders’ equity

 

 

118,662

 

 

 

64,413

 

Total liabilities and stockholders’ equity

 

$

133,015

 

 

$

78,667

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

3


 

LARIMAR THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)

(Unaudited)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

$

5,582

 

 

$

14,028

 

 

$

17,032

 

 

$

32,104

 

General and administrative

 

 

2,931

 

 

 

2,702

 

 

 

9,055

 

 

 

9,275

 

Total operating expenses

 

 

8,513

 

 

 

16,730

 

 

 

26,087

 

 

 

41,379

 

Loss from operations

 

 

(8,513

)

 

 

(16,730

)

 

 

(26,087

)

 

 

(41,379

)

Other income (expense), net

 

 

193

 

 

 

(75

)

 

 

157

 

 

 

(123

)

Net loss

 

$

(8,320

)

 

$

(16,805

)

 

$

(25,930

)

 

$

(41,502

)

Net loss per share, basic and diluted

 

$

(0.37

)

 

$

(0.92

)

 

$

(1.32

)

 

$

(2.48

)

Weighted average common shares outstanding, basic and diluted

 

 

22,228,228

 

 

 

18,287,924

 

 

 

19,649,558

 

 

 

16,768,458

 

Comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(8,320

)

 

$

(16,805

)

 

$

(25,930

)

 

$

(41,502

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gain (loss) on marketable debt securities

 

 

17

 

 

 

(1

)

 

 

(40

)

 

 

(1

)

Total other comprehensive income (loss)

 

 

17

 

 

 

(1

)

 

 

(40

)

 

 

(1

)

Total comprehensive loss

 

$

(8,303

)

 

$

(16,806

)

 

$

(25,970

)

 

$

(41,503

)

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


 

LARIMAR THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN

STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

Comprehensive

 

 

Stockholders’

 

 

 

Shares

 

 

Par Value

 

 

Capital

 

 

Deficit

 

 

Loss

 

 

Equity

 

Balances as of December 31, 2021

 

 

17,710,450

 

 

$

18

 

 

$

180,645

 

 

$

(116,250

)

 

$

 

 

$

64,413

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

1,635

 

 

 

 

 

 

 

 

 

1,635

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(8,943

)

 

 

 

 

 

(8,943

)

Balances as of March 31, 2022

 

 

17,710,450

 

 

$

18

 

 

$

182,280

 

 

$

(125,193

)

 

$

 

 

$

57,105

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

1,675

 

 

 

 

 

 

 

 

 

1,675

 

Unrealized gain on marketable debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(57

)

 

 

(57

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(8,667

)

 

 

 

 

 

(8,667

)

Balances as of June 30, 2022

 

 

17,710,450

 

 

$

18

 

 

$

183,955

 

 

$

(133,860

)

 

$

(57

)

 

$

50,056

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

1,666

 

 

 

 

 

 

 

 

 

1,666

 

Issuance of Common Stock, net

 

 

25,558,750

 

 

 

25

 

 

 

75,218

 

 

 

 

 

 

 

 

 

75,243

 

Unrealized gain on marketable debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17

 

 

 

17

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(8,320

)

 

 

 

 

 

(8,320

)

Balances as of September 30, 2022

 

 

43,269,200

 

 

$

43

 

 

$

260,839

 

 

$

(142,180

)

 

$

(40

)

 

$

118,662

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

5


 

LARIMAR THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN

STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

Other

 

 

Total

 

 

 

Common Stock

 

 

Paid-in

 

 

Accumulated

 

 

Comprehensive

 

 

Stockholders’

 

 

 

Shares

 

 

Par Value

 

 

Capital

 

 

Deficit

 

 

Gain

 

 

Equity

 

Balances as of December 31, 2020

 

 

15,367,730

 

 

$

15

 

 

$

155,290

 

 

$

(65,614

)

 

$

1

 

 

$

89,692

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

1,180

 

 

 

 

 

 

 

 

 

1,180

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(12,088

)

 

 

 

 

 

(12,088

)

Balances as of March 31, 2021

 

 

15,367,730

 

 

$

15

 

 

$

156,470

 

 

$

(77,702

)

 

$

1

 

 

$

78,784

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

1,350

 

 

 

 

 

 

 

 

 

1,350

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(12,609

)

 

 

 

 

 

(12,609

)

Balances as of June 30, 2021

 

 

15,367,730

 

 

$

15

 

 

$

157,820

 

 

$

(90,311

)

 

$

1

 

 

$

67,525

 

Stock-based compensation expense

 

 

 

 

 

 

 

 

1,463

 

 

 

 

 

 

 

 

 

1,463

 

Issuance of Common Stock, net

 

 

2,342,720

 

 

 

3

 

 

 

19,882

 

 

 

 

 

 

 

 

 

19,885

 

Unrealized gain on marketable debt securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1

)

 

 

(1

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(16,805

)

 

 

 

 

 

(16,805

)

Balances as of September 30, 2021

 

 

17,710,450

 

 

$

18

 

 

$

179,165

 

 

$

(107,116

)

 

$

 

 

$

72,067

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

6


 

LARIMAR THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(25,930

)

 

$

(41,502

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Stock-based compensation expense

 

 

4,976

 

 

 

3,993

 

Loss on disposal of fixed asset

 

 

 

 

 

(1

)

Depreciation expense

 

 

240

 

 

 

238

 

Amortization of premium on marketable debt securities

 

 

(66

)

 

 

(12

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Prepaid expenses and other current assets

 

 

(321

)

 

 

2,085

 

Accounts payable

 

 

(891

)

 

 

(877

)

Accrued expenses

 

 

1,097

 

 

 

2,123

 

Right-of-use assets

 

 

409

 

 

 

396

 

Operating lease liabilities

 

 

(437

)

 

 

(378

)

Other assets

 

 

26

 

 

 

(252

)

Net cash used in operating activities:

 

 

(20,897

)

 

 

(34,187

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchase of property and equipment

 

 

(100

)

 

 

(324

)

Purchase of marketable debt securities

 

 

(61,626

)

 

 

(8,247

)

Maturities and sales of marketable debt securities

 

 

23,000

 

 

 

26,250

 

Net cash (used in)/provided by investing activities

 

 

(