Larimar Shares Decline Despite Positive Data Amid Negative Developments
On Monday, shares of Larimar Therapeutics experienced a significant decline following a data update from an ongoing Friedreich's ataxia treatment study. The update included reports of serious adverse events (SAEs) affecting two patients, both of whom preferred to withdraw from the study. Although these events were resolved within 24 hours, the stock dropped by as much as 51% on the New York Stock Exchange before rallying to close with a 25% loss.
In a pre-market statement, the company noted that daily injections of 25 mg nomlabofusp in the open-label extension (OLE) study were "generally well tolerated for up to 260 days." Larimar continues to aim for the submission of a Biologics License Application (BLA) to U.S. regulators in the second half of 2025, seeking potential accelerated approval for the treatment of the rare neurodegenerative disease.
According to a press release dated December 16, 2024, Larimar revealed positive initial data from the OLE study, indicating that nomlabofusp increased and preserved tissue frataxin (FXN) levels. The company also observed early trends suggesting potential clinical benefits. It appears that the treatment reached a steady state by day 30, with dose escalation to 50 mg starting in six participants. Additionally, adolescent screening for a pediatric pharmacokinetic (PK) study is ongoing, with dosing expected to begin in early 2025.
Despite the setbacks, analysts from Leerink Partners, Citi, and Guggenheim shared their views on the stock's potential. They acknowledged the adverse events but emphasized the encouraging biomarker and functional data, the company's strong balance sheet, and the ongoing development of the nomlabofusp program. Furthermore, they noted that the stock's reaction to the safety news appeared exaggerated and recommended buying on the dip, reiterating their confidence in the drug's favorable risk/benefit profile.
Larimar ended the third quarter of 2024 with $203.7 million in cash and investments, extending its financial runway into the second quarter of 2026. The company is preparing for upcoming key milestones, including the initiation of the global confirmatory/registration study by mid-2025, the collection of initial data from the OLE study at the 50 mg dose, and the targeted BLA submission for potential accelerated approval in the second half of 2025.