Larimar Therapeutics Announces Closing of Underwritten Public Offering of Common Stock and Exercise in Full of the Underwriters’ Option to Purchase Additional Shares

Rhea-AI Summary

Larimar Therapeutics, Inc. successfully closed a public offering of 19,736,842 shares of common stock, raising approximately $172.5 million. The proceeds will support the development of nomlabofusp (CTI-1601) and other pipeline candidates, as well as general corporate purposes.

Insights

Financial Analyst

The completion of Larimar Therapeutics' underwritten public offering, resulting in gross proceeds of approximately $172.5 million, is a significant financial event for the company. The capital raised through the sale of nearly 20 million shares at $8.74 each provides Larimar with a substantial cash infusion. This funding is critical for the company's ongoing research and development efforts, particularly for their lead candidate nomlabofusp (CTI-1601), which targets complex rare diseases. The full exercise of the underwriters' option to purchase additional shares indicates strong investor confidence in Larimar's potential and its pipeline.

From a financial perspective, the influx of capital will likely extend Larimar's operational runway, allowing them to progress through expensive clinical trials without the immediate need for further fundraising. This is particularly important in the biotechnology sector, where cash burn rates are high due to the cost-intensive nature of drug development. However, investors should monitor how efficiently the company utilizes these funds to advance its pipeline and create shareholder value.

Medical Research Analyst

The successful funding round is a pivotal development for Larimar Therapeutics, as it secures the necessary capital to advance the clinical trials of nomlabofusp (CTI-1601). Nomlabofusp represents a potential breakthrough treatment for Friedreich's ataxia, a debilitating and rare genetic disease that currently lacks effective treatments. The ability to fund these trials is crucial, as clinical development is a lengthy and uncertain process, often taking years and requiring significant resources to reach pivotal trials and, eventually, regulatory approval.

Investors and stakeholders should note that the success of these trials could have a profound impact on the company's valuation and stock performance. Positive trial results could lead to increased investor interest and potentially partnerships or buyout offers from larger pharmaceutical companies. Conversely, any setbacks in clinical development could adversely affect the company's financial position and stock price. Therefore, the allocation of the raised funds toward the development of nomlabofusp and other pipeline candidates will be closely scrutinized by the market.

Market Research Analyst

In the context of the broader biotechnology sector, Larimar Therapeutics' successful capital raise is indicative of the market's appetite for investment in innovative therapies for rare diseases. The sector often sees significant volatility based on clinical trial outcomes and regulatory news. The fact that Larimar has secured a substantial amount of funding suggests that the market perceives its scientific approach and pipeline as promising. This could reflect a broader trend of increased investment in rare disease therapies, which often command high prices and can benefit from regulatory incentives such as orphan drug designation.

Looking at the market dynamics, it is important to consider that while the capital raise may dilute existing shares, the potential for long-term growth could offset this effect if Larimar successfully brings its treatments to market. The involvement of reputable financial institutions as bookrunners and managers in the offering also lends credibility to the transaction, which may positively influence investor perception and the stock's liquidity.

BALA CYNWYD, Pa., Feb. 16, 2024 (GLOBE NEWSWIRE) -- Larimar Therapeutics, Inc. (“Larimar”) (Nasdaq: LRMR), a clinical-stage biotechnology company focused on developing treatments for complex rare diseases, today announced the closing of its previously announced underwritten public offering of 19,736,842 shares of its common stock, which includes the exercise in full of the underwriters’ option to purchase 2,574,370 additional shares, at the public offering price of $8.74 per share, the closing price of its common stock on February 13, 2024. The aggregate gross proceeds to Larimar from this offering, before deducting underwriting discounts and commissions and estimated offering expenses, were approximately $172.5 million.

Leerink Partners, Citigroup and Guggenheim Securities acted as joint bookrunning managers for the offering. LifeSci Capital acted as lead manager for the offering.

Larimar intends to use the net proceeds from the proposed offering to support the development of nomlabofusp (CTI-1601) and other pipeline candidates, and for working capital and general corporate purposes, including research and development expenses.

The shares were offered pursuant to a shelf registration statement on Form S-3 (File No. 333-268312) that was declared effective by the Securities and Exchange Commission (“SEC”) on November 21, 2022. A final prospectus supplement and accompanying prospectus relating to the offering were filed with the SEC on February 14, 2024 and is available for free on the SEC’s website at www.sec.gov. Copies of the final prospectus supplement and the accompanying prospectus relating to the offering may also be obtained from Leerink Partners LLC, Attention: Syndicate Department, 53 State Street, 40th Floor, Boston, Massachusetts 02109, by telephone at (800) 808-7525, ext. 6105 or by email at syndicate@leerink.com; or Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, New York 11717, or by telephone at (800) 831-9146; or Guggenheim Securities, LLC, Attention: Equity Syndicate Department, 330 Madison Avenue, 8th Floor, New York, New York 10017 by telephone at (212) 518-9544 or by email at GSEquityProspectusDelivery@guggenheimpartners.com.

This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that state or jurisdiction.

About Larimar Therapeutics, Inc.

Larimar Therapeutics, Inc. (Nasdaq: LRMR), is a clinical-stage biotechnology company focused on developing treatments for complex rare diseases. Larimar’s lead compound, nomlabofusp, is being developed as a potential treatment for Friedreich’s ataxia. Larimar also plans to use its intracellular delivery platform to design other fusion proteins to target additional rare diseases characterized by deficiencies in intracellular bioactive compounds.

Caution Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “might,” “will,” “should,” “believe,” “expect,” “anticipate,” “estimate,” “continue,” “predict,” “forecast,” “project,” “plan,” “intend,” or similar expressions, or statements regarding intent, belief, or current expectations are forward-looking statements and reflect the current beliefs of Larimar’s management. Such forward-looking statements include, without limitation, statements relating to the use of proceeds from the public offering of common stock. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors that could cause actual results and events to differ materially and adversely from those indicated by such forward-looking statements including, among others, the risks and uncertainties set forth in the “Risk Factors” section and elsewhere in the prospectus supplement related to the public offering filed with the Securities and Exchange Commission and in our other filings with the Securities and Exchange Commission and available at www.sec.gov, including but not limited to Larimar’s periodic reports, including Larimar’s most recent annual report on Form 10-K, subsequent quarterly reports on Form 10-Q and current reports on Form 8-K. Any forward-looking statements that we make in this announcement speak only as of the date of this press release, and Larimar assumes no obligation to update forward-looking statements whether as a result of new information, future events or otherwise after the date of this press release, except as required under applicable law.

Investor Contact:
Joyce Allaire
LifeSci Advisors
jallaire@lifesciadvisors.com
(212) 915-2569

Company Contact:
Michael Celano
Chief Financial Officer
mcelano@larimartx.com
(484) 414-2715

FAQ

What is the ticker symbol for Larimar Therapeutics, Inc.?

The ticker symbol for Larimar Therapeutics, Inc. is LRMR.

How many shares of common stock were offered in the public offering?

Larimar Therapeutics, Inc. offered 19,736,842 shares of common stock in the public offering.

What was the public offering price per share?

The public offering price per share was $8.74.

What is the intended use of the net proceeds from the offering?

The net proceeds from the offering will be used to support the development of nomlabofusp (CTI-1601) and other pipeline candidates, as well as for working capital and general corporate purposes.

Who were the joint bookrunning managers for the offering?

Leerink Partners, Citigroup, and Guggenheim Securities acted as joint bookrunning managers for the offering.

When was the shelf registration statement declared effective by the SEC?

The shelf registration statement on Form S-3 (File No. 333-268312) was declared effective by the SEC on November 21, 2022.

Where can the final prospectus supplement and accompanying prospectus be obtained?

Copies of the final prospectus supplement and accompanying prospectus can be obtained from Leerink Partners LLC, Citigroup, and Guggenheim Securities, as detailed in the press release.

Does this press release constitute an offer to sell securities?

No, this press release does not constitute an offer to sell securities.

What is the purpose of the public offering?

The purpose of the public offering was to raise funds to support the development of Larimar Therapeutics, Inc.'s pipeline candidates and for general corporate purposes.