On Monday, Leerink Partners maintained their Outperform rating and $25.00 price target for Larimar Therapeutics (NASDAQ:LRMR), currently trading at $4.56, following the company's report of positive Phase 2 open-label extension (OLE) data. According to InvestingPro data, analysts maintain a strong buy consensus with price targets ranging from $12.36 to $36.00, suggesting significant upside potential despite the stock trading 67% below its 52-week high of $13.68.
The study showed an increase in tissue frataxin levels in buccal and skin cells and a trend toward improvement in several clinical outcomes for patients with Friedreich's ataxia, a debilitating disease.
Despite the positive data, Leerink noted that serious adverse events (SAEs) in two patients have put pressure on Larimar's stock, which InvestingPro shows has declined 8.73% in the past week. The company, valued at $293 million, is currently evaluating a higher 50mg dose cohort of their treatment, nomlabofusp, with results expected in mid-2025.
InvestingPro analysis indicates the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report. Leerink believes that the treatment has a favorable risk/benefit profile, even though safety remains a paramount concern due to the program's former clinical hold.
Larimar is not yet in the clear regarding safety, as only six patients have been dosed with the 50mg treatment for a few weeks to a month, and no safety signals have emerged from this cohort. The two SAEs—an allergic reaction and a seizure—were reported early in the 25mg dose cohort.
As Larimar moves toward the second half of 2025, they aim to submit a Biologics License Application (BLA) under an accelerated approval pathway. The company believes that four key decisions will affect their ability to file: the FDA's acceptance of frataxin as a surrogate endpoint, the required size of the safety database, the initiation of a confirmatory study, and additional OLE data from the 25mg dose cohort expected in mid-2025.
Larimar ended the third quarter of 2024 with $203.7 million in cash and has extended their cash runway into the second quarter of 2026. This strong liquidity position is reflected in the company's exceptional current ratio of 13.1 and minimal debt-to-equity ratio of 0.03, as reported by InvestingPro.
Leerink's reiteration of the Outperform rating and $25 price target reflects their confidence in Larimar's prospects despite the recent safety concerns. InvestingPro subscribers can access 8 additional key insights about LRMR's financial health and growth prospects.
In other recent news, Larimar Therapeutics has been making significant strides with its lead product candidate, nomlabofusp, aimed at treating Friedreich’s ataxia (FA). Despite two serious adverse events reported during the Open-Label Extension (OLE) study, the trial is proceeding as planned. The company has begun dose escalation to 50 mg daily in six participants and plans to transition adolescents from a pediatric pharmacokinetic study into the OLE study after safety and pharmacokinetic data assessment.
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