SEC Filing | Larimar Therapeutics, Inc.

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10-Q

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


☐	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

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.

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.

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.

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.

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