Larimar Therapeutics Shares Plumb New Lows as FDA Extends Hold

By Colin Kellaher

Shares of Larimar Therapeutics Inc. sank to new lows Tuesday after the U.S. Food and Drug Administration extended a clinical hold on the biotechnology company's sole pipeline candidate.

Larimar's CTI-1601 program in the rare neuromuscular disease Friedreich's ataxia has been on hold since last May, after the Bala Cynwyd, Pa., company reported mortalities that occurred at the highest dose levels in a 26-week non-human primate toxicology study.

Larimar said the hold extension comes after it submitted of a complete response to the FDA, including a comprehensive report from the toxicology study, and that the agency said it needs more data to resolve the hold.

Analysts at William Blair cut their rating on Larimar shares to "market perform" from "outperform," citing a lack of clarity on the timeline to resolution of the hold and the future clinical development path for CTI-1601, along with Larimar's lack of any additional pipeline asset in development.

Larimar said it believes there is a path forward for CTI-1601, and that it remains committed to further development of the drug. The company said it is further analyzing its previous studies and evaluating whether more studies are warranted.

William Blair said that if Larimar needs to conduct another longer-term toxicology study, the company's 2023 cash runway will be front and center. Larimar reported cash, equivalents and marketable securities totaling $78 million as of Sept. 30.

The analysts said while Larimar has the resources to fund another study, the timing would allow numerous gene-therapy competitors to close the development gap.

Larimar said it plans to operate under a cost-reduction plan while it works to resolve the clinical hold in a bid to manage its cash burn and extend its runway if needed.

Larimar shares were recently changing hands at $3.75, down about 55%, after falling to $2.71--their lowest level since the company went public through a reverse merger in 2020--earlier in the session.

Write to Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

February 15, 2022 10:49 ET (15:49 GMT)

Larimar Therapeutics (NASDAQ:LRMR)
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