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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
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☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2024
or
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☐ |
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)
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Delaware |
20-3857670 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
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Three Bala Plaza East, Suite 506 |
19004 |
Bala Cynwyd, PA |
(Zip Code) |
(Address of principal executive offices) |
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(844) 511-9056
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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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.
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Large accelerated filer |
☐ |
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Accelerated filer |
☐ |
Non-accelerated filer |
☒ |
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Smaller reporting company |
☒ |
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Emerging growth 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 August 6, 2024, there were 63,806,628 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, as amended. 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. 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:
•uncertainties in obtaining successful non-clinical or clinical results that reliably and meaningfully demonstrate safety, tolerability and efficacy profiles that are satisfactory to the U.S. Food and Drug Administration (“FDA”), European Medicines Agency ("EMA") and/or other comparable regulatory authorities for marketing approval for nomlabofusp (nomlabofusp is the International Nonproprietary Name and the United States Adopted Name for CTI-1601 ) or any other product candidates that we may develop in the future and unexpected costs that may result therefrom;
•our ability to continue to successfully execute our ongoing open label extension study (“OLE”), including the timing of site initiations and rate of patient enrollment, and our ability to pursue dose escalation;
•our ability to benefit from participating in the FDA’s Support for Clinical Trials Advancing Rare Disease Therapeutics (“START”) pilot program for the development of nomlabofusp;
•uncertainties associated with the clinical development and regulatory approval for nomlabofusp, including potential delays in the commencement, enrollment and completion of clinical trials, the timing of a potential Biologics License Application (“BLA”) submission for accelerated approval, including our ability to supply to the FDA all required data for the FDA to review and accept an accelerated application, or any other product candidates that we may develop in the future;
•the difficulties and expenses associated with obtaining and maintaining regulatory approval for nomlabofusp or any other product candidates we may develop in the future, and the indication and labeling under any such approval;
•how long we can continue to fund our operations with our existing cash, cash equivalents and marketable securities and our estimates regarding future results of operations, financial position, research and development costs, capital requirements and our access and needs for additional financing;
•our expectations regarding the use of proceeds from recent and future financings, if any;
•our ability, and the ability of third-party manufacturers we engage, to optimize and scale nomlabofusp or any other product candidate’s manufacturing process and to manufacture sufficient quantities of clinical supplies, and, if approved, commercial supplies of nomlabofusp or any other product candidates that we may develop in the future and 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 realize any value from nomlabofusp and/or any other product candidates 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 nomlabofusp, if approved, or any other product candidates that we may develop in the future, the rate and degree of market acceptance of nomlabofusp or any other product candidate, if approved, that we may develop in the future and our ability to serve those markets;
•given competing therapies and products for the treatment of FA, our ability to obtain and maintain designations or eligibility for expedited regulatory programs, 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 and compliance with the rules and regulations of the FDA (and all other regulatory authorities) of third parties upon which we depend, including third-party contract research organizations ("CROs"), consultants, and third-party suppliers, manufacturers, distributors, and logistics providers;
•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 geopolitical tensions, including regional conflicts around the world, adverse macroeconomic events, including those due to inflationary pressures, rising interest rates, banking instability, monetary policy changes,economic slowdowns or recessions, health epidemics, unforeseen emergencies and other outbreaks of communicable diseases 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 nomlabofusp and any other product candidates that we may develop;
•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 14, 2024 and our Quarterly Report on Form 10-Q filed on May [9], 2024. 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
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements
LARIMAR THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(Unaudited)
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June 30, |
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December 31, |
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2024 |
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2023 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
32,311 |
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$ |
26,749 |
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Short-term marketable securities |
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193,753 |
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60,041 |
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Prepaid expenses and other current assets |
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5,066 |
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3,385 |
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Total current assets |
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231,130 |
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90,175 |
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Property and equipment, net |
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844 |
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684 |
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Operating lease right-of-use assets |
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3,213 |
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3,078 |
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Restricted cash |
|
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1,339 |
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|
|
1,339 |
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Other assets |
|
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636 |
|
|
|
659 |
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Total assets |
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$ |
237,162 |
|
|
$ |
95,935 |
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Liabilities and Stockholders’ Equity |
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|
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Current liabilities: |
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Accounts payable |
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$ |
2,917 |
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$ |
1,283 |
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Accrued expenses |
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17,246 |
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|
7,386 |
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Operating lease liabilities, current |
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992 |
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|
837 |
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Total current liabilities |
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21,155 |
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9,506 |
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Operating lease liabilities |
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4,603 |
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4,709 |
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Total liabilities |
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25,758 |
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14,215 |
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Commitments and contingencies (See Note 8) |
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Stockholders’ equity: |
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Preferred stock; $0.001 par value per share; 5,000,000 shares authorized
as of June 30, 2024 and December 31, 2023; no shares issued and
outstanding as of June 30, 2024 and December 31, 2023 |
|
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— |
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— |
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Common stock, $0.001 par value per share; 115,000,000 shares
authorized as of June 30, 2024 and December 31, 2023;
63,802,517 and 43,909,069 shares issued and outstanding as of
June 30, 2024 and December 31, 2023, respectively |
|
|
64 |
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43 |
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Additional paid-in capital |
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436,325 |
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270,150 |
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Accumulated deficit |
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(224,835 |
) |
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(188,554 |
) |
Accumulated other comprehensive gain (loss) |
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(150 |
) |
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81 |
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Total stockholders’ equity |
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211,404 |
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81,720 |
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Total liabilities and stockholders’ equity |
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$ |
237,162 |
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$ |
95,935 |
|
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)
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Three Months Ended June 30, |
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Six Months Ended June 30, |
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2024 |
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2023 |
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2024 |
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2023 |
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Operating expenses: |
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Research and development |
|
$ |
19,682 |
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$ |
5,875 |
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|
$ |
32,621 |
|
|
$ |
10,437 |
|
General and administrative |
|
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4,917 |
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3,745 |
|
|
|
8,712 |
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|
6,820 |
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Total operating expenses |
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|
24,599 |
|
|
|
9,620 |
|
|
|
41,333 |
|
|
|
17,257 |
|
Loss from operations |
|
|
(24,599 |
) |
|
|
(9,620 |
) |
|
|
(41,333 |
) |
|
|
(17,257 |
) |
Other income, net |
|
|
2,972 |
|
|
|
1,254 |
|
|
|
5,052 |
|
|
|
2,365 |
|
Net loss |
|
$ |
(21,627 |
) |
|
$ |
(8,366 |
) |
|
$ |
(36,281 |
) |
|
$ |
(14,892 |
) |
Net loss per share, basic and diluted |
|
$ |
(0.34 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.62 |
) |
|
$ |
(0.34 |
) |
Weighted average common shares outstanding, basic and diluted |
|
|
63,801,792 |
|
|
|
43,897,603 |
|
|
|
58,677,749 |
|
|
|
43,897,603 |
|
Comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(21,627 |
) |
|
$ |
(8,366 |
) |
|
$ |
(36,281 |
) |
|
$ |
(14,892 |
) |
Other comprehensive gain (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) on marketable securities |
|
|
(125 |
) |
|
|
12 |
|
|
|
(231 |
) |
|
|
43 |
|
Total other comprehensive gain (loss) |
|
|
(125 |
) |
|
|
12 |
|
|
|
(231 |
) |
|
|
43 |
|
Total comprehensive loss |
|
$ |
(21,752 |
) |
|
$ |
(8,354 |
) |
|
$ |
(36,512 |
) |
|
$ |
(14,849 |
) |
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 (Loss) |
|
|
Equity |
|
Balances as of December 31, 2023 |
|
|
43,909,069 |
|
|
$ |
43 |
|
|
$ |
270,150 |
|
|
$ |
(188,554 |
) |
|
$ |
81 |
|
|
$ |
81,720 |
|
Issuance of common stock, net |
|
|
19,736,842 |
|
|
|
20 |
|
|
|
161,736 |
|
|
|
— |
|
|
|
— |
|
|
|
161,756 |
|
Vesting of restricted stock units |
|
|
153,750 |
|
|
|
1 |
|
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Exercise of stock options |
|
|
356 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
2,128 |
|
|
|
— |
|
|
|
— |
|
|
|
2,128 |
|
Unrealized loss on marketable securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(106 |
) |
|
|
(106 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(14,654 |
) |
|
|
— |
|
|
|
(14,654 |
) |
Balances as of March 31, 2024 |
|
|
63,800,017 |
|
|
$ |
64 |
|
|
$ |
434,013 |
|
|
$ |
(203,208 |
) |
|
$ |
(25 |
) |
|
$ |
230,844 |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
2,301 |
|
|
|
— |
|
|
|
— |
|
|
|
2,301 |
|
Exercise of stock options |
|
|
2,500 |
|
|
|
— |
|
|
|
11 |
|
|
|
— |
|
|
|
— |
|
|
|
11 |
|
Unrealized loss on marketable debt securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(125 |
) |
|
|
(125 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(21,627 |
) |
|
|
— |
|
|
|
(21,627 |
) |
Balances as of June 30, 2024 |
|
|
63,802,517 |
|
|
$ |
64 |
|
|
$ |
436,325 |
|
|
$ |
(224,835 |
) |
|
$ |
(150 |
) |
|
$ |
211,404 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated |
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
Other |
|
|
Total |
|
|
|
Common Stock |
|
|
Paid-in |
|
|
Accumulated |
|
|
Comprehensive |
|
|
Stockholders’ |
|
|
|
Shares |
|
|
Par Value |
|
|
Capital |
|
|
Deficit |
|
|
Gain (Loss) |
|
|
Equity |
|
Balances as of December 31, 2022 |
|
|
43,269,200 |
|
|
$ |
43 |
|
|
$ |
262,496 |
|
|
$ |
(151,605 |
) |
|
$ |
(31 |
) |
|
$ |
110,903 |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
1,833 |
|
|
|
— |
|
|
|
— |
|
|
|
1,833 |
|
Unrealized gain on marketable securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
31 |
|
|
|
31 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(6,526 |
) |
|
|
— |
|
|
|
(6,526 |
) |
Balances as of March 31, 2023 |
|
|
43,269,200 |
|
|
$ |
43 |
|
|
$ |
264,329 |
|
|
$ |
(158,131 |
) |
|
$ |
— |
|
|
$ |
106,241 |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
2,043 |
|
|
|
— |
|
|
|
— |
|
|
|
2,043 |
|
Unrealized gain on marketable debt securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
12 |
|
|
|
12 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(8,366 |
) |
|
|
— |
|
|
|
(8,366 |
) |
Balances as of June 30, 2023 |
|
|
43,269,200 |
|
|
$ |
43 |
|
|
$ |
266,372 |
|
|
$ |
(166,497 |
) |
|
$ |
12 |
|
|
$ |
99,930 |
|
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)
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
2024 |
|
|
2023 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
Net loss |
|
$ |
(36,281 |
) |
|
$ |
(14,892 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
Stock-based compensation expense |
|
|
4,429 |
|
|
|
3,876 |
|
Lease expense |
|
|
(86 |
) |
|
|
(51 |
) |
Depreciation expense |
|
|
167 |
|
|
|
154 |
|
Amortization of premium on marketable securities |
|
|
(2,361 |
) |
|
|
(645 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Prepaid expenses and other current assets |
|
|
(1,681 |
) |
|
|
33 |
|
Accounts payable |
|
|
1,626 |
|
|
|
658 |
|
Accrued expenses |
|
|
9,765 |
|
|
|
(4,043 |
) |
Other assets |
|
|
23 |
|
|
|
(6 |
) |
Net cash used in operating activities: |
|
|
(24,399 |
) |
|
|
(14,916 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(274 |
) |
|
|
— |
|
Purchases of marketable securities |
|
|
(166,582 |
) |
|
|
(9,847 |
) |
Maturities and sales of marketable securities |
|
|
35,000 |
|
|
|
92,259 |
|
Net cash provided by (used in) investing activities |
|
|
(131,856 |
) |
|
|
82,412 |
|
Cash flows from financing activities: |
|
|
|
|
|
|
Proceeds from issuance of equity securities, net of issuance costs |
|
|
161,806 |
|
|
|
— |
|
Proceeds from exercise of stock options and warrants |
|
|
11 |
|
|
|
— |
|
Net cash provided by financing activities |
|
|
161,817 |
|
|
|
— |
|
Net increase in cash, cash equivalents and restricted cash |
|
|
5,562 |
|
|
|
67,496 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
|
28,088 |
|
|
|
28,164 |
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
33,650 |
|
|
$ |
95,660 |
|
Supplemental disclosure of non-cash investing and financing activities: |
|
|
|
|
|
|
Purchases of property and equipment included in accounts payable and accrued expenses |
|
$ |
53 |
|
|
$ |
— |
|
Offering costs included in accrued expense |
|
$ |
50 |
|
|
$ |
— |
|
Leased assets obtained in exchange for new operating lease liabilities |
|
$ |
465 |
|
|
$ |
— |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
LARIMAR THERAPEUTICS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.Description of Business and Basis of Presentation
Larimar Therapeutics, Inc., together with its subsidiary (the “Company” or “Larimar”), is a clinical-stage biotechnology company focused on developing treatments for patients suffering from complex rare diseases using its novel cell penetrating peptide technology platform. Larimar's lead product candidate, nomlabofusp (nomlabofusp is the International Nonproprietary Name and the United States Adopted Name for CTI-1601 ), is a subcutaneously administered, recombinant fusion protein intended to deliver human frataxin ("FXN"), an essential protein, to the mitochondria of patients with Friedreich’s ataxia ("FA"). FA is a rare, progressive and fatal disease in which patients are unable to produce sufficient FXN due to a genetic abnormality.
The Company has completed two phase 1 studies of nomlabofusp, a Phase 2 dose exploration study, and initiated an open label extension study (“OLE”) in patients with FA in January, 2024.
In May 2021, after reporting positive top-line data from the Company’s Phase 1 FA program, the U.S. Food and Drug Administration (“FDA”) placed a clinical hold on the Company’s nomlabofusp clinical program after the Company notified the FDA of mortalities at the highest dose levels of a 26-week non-human primate toxicology study that was designed to support extended dosing of patients with nomlabofusp. In September 2022, the FDA lifted its full clinical hold on the nomlabofusp program and imposed a partial clinical hold.
In May 2023, the Company announced top-line data from its completed 25 mg cohort of a Phase 2, four-week, dose exploration trial of nomlabofusp in patients with FA and provided a complete response to the FDA in June 2023, which included unblinded safety, pharmacokinetic ("PK"), and pharmacodynamic ("PD") data from the Phase 2 trial’s completed 25 mg cohort.
In June 2023, the Company met with the FDA. Following that meeting, the Company submitted a complete response to the FDA’s partial clinical hold that included unblinded safety, PK and frataxin data from the Phase 2 trial’s completed 25 mg cohort.
In July 2023, following the FDA’s review of the Company's complete response to the partial clinical hold, the FDA cleared initiation of a second cohort at 50 mg of our four-week, placebo-controlled, Phase 2 dose exploration trial and initiation of an OLE study with daily dosing of 25 mg.
In February 2024, the Company reported positive top-line data and successful completion of their four-week, placebo-controlled Phase 2 dose exploration study of nomlabofusp in participants with FA. Nomlabofusp was generally well tolerated throughout the four-week treatment periods, had a predictable pharmacokinetic profile and led to dose dependent increases in FXN levels in all evaluated tissues (skin and buccal cells) after daily dosing of 14 days followed by every other day dosing until day 28 in the 25 mg and 50 mg cohorts. Participants in the 25 mg (n=13) and 50 mg (n=15) cohorts were randomized 2:1 to receive subcutaneous injections of nomlabofusp or placebo. In May 2024 the FDA removed the partial clinical hold on the development of nomlabofusp
In March 2024, the Company dosed the first patient in the OLE trial, discussed above, evaluating daily subcutaneous injections of 25 mg of nomlabofusp self-administered or administered by a caregiver,This study is ongoing with all seven sites activated and additional patients continue to be enrolled and dosed. Participants who completed treatment in the Phase 2 dose exploration study, or who previously completed a prior clinical trial of nomlabofusp, are potentially eligible to screen for the OLE study. The OLE study will evaluate the safety and tolerability, pharmacokinetics, and frataxin levels in peripheral tissues as well as other exploratory pharmacodynamic markers (lipid profiles and gene expression data) following long-term subcutaneous administration of nomlabofusp. In addition, clinical assessments collected during the study will be compared to data from a matched control arm derived from participants in the Friedreich’s Ataxia Clinical Outcome Measures Study (FACOMS) database. Dose escalation to the 50 mg dose in the OLE study is currently planned following further characterization of the frataxin pharmacodynamics (PD) at the 25 mg dose. Interim data is expected in the fourth quarter of 2024.
The Company has had separate discussions with the FDA regarding the use of tissue FXN levels as a novel surrogate endpoint. The FDA acknowledged that frataxin deficiency appears to be critical to the pathogenic mechanism of FA, and that there continues to be an unmet need for treatments for FA patients that address the underlying disease pathophysiology. The Company intends to pursue an accelerated approval using FXN levels, supportive PD and clinical information, and safety data from the OLE study, along with additional non-clinical pharmacology information needed to support the novel surrogate endpoint approach
The Company plans to expand the nomlabofusp clinical program into adolescent (12-17 years old) and pediatric (2-11 years old) patients with FA. The Company expects to initiate a pharmacokinetics (PK) run-in study in adolescents by the end of this year and expects to transition these study participants into the ongoing OLE study upon completion of the PK study. The run-in-study will enroll 12-15 adolescent patients who will be randomized 2:1 to receive either nomlabofusp or placebo daily. The Company is also planning the initiation of a global confirmatory study by mid-2025 with potential sites in the U.S., Europe, the U.K., Canada and Australia. The Biologics License Application (BLA) filing is targeted in the second half of 2025 to support accelerated approval.
On May 30, 2024, the Company announced that the FDA's Center for Drug Evaluation and Research (CDER) had selected nomlabofusp as one of a few programs for participation in the Support for Clinical Trials Advancing Rare Disease Therapeutics ("START") Pilot Program. The objective of the program is to accelerate the development of drugs for rare diseases that lead to significant disability or death by facilitating frequent advise and regular communication with the FDA staff to expedite the review process of biologics and drugs.
The Company is subject to risks and uncertainties common to pre-commercial companies in the biotechnology industry, including, but not limited to, development and commercialization by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with governmental regulations, failure to secure regulatory approval for its drug candidates or any other product candidates and the ability to secure additional capital to fund its operations. Product candidates under development will require extensive non-clinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel, infrastructure and extensive compliance-reporting capabilities. Even if the Company's drug development efforts are successful, it is uncertain when, if ever, it will realize significant revenue from product sales.
Basis of Presentation
The condensed consolidated financial statements include the accounts of Larimar and its wholly owned subsidiary. All intercompany balances and transactions have been eliminated. The accompanying condensed consolidated financial statements have been prepared in conformity with Generally Accepted Accounting Principles ("GAAP").
The condensed consolidated balance sheet as of December 31, 2023 was derived from the Company’s audited financial statements but does not include all disclosures required by GAAP. The accompanying unaudited condensed consolidated financial statements as of June 30, 2024 and for the three and six months ended June 30, 2024 and 2023, have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 14, 2024 and the Company's Quarterly Report on Form 10-Q filed with the SEC on May 9, 2024.
In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s condensed consolidated financial position as of June 30, 2024, condensed consolidated results of operations for the three and six months ended June 30, 2024 and condensed consolidated statement of cash flows for the six months ended June 30, 2024 have been made. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2024.
Liquidity and Capital Resources
The Company’s condensed consolidated financial statements have been presented on the basis that it will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business.
Since its inception, the Company has incurred significant recurring operating losses and negative cash flows from operations. The Company has incurred net losses of $36.3 million and $14.9 million for the six months ended June 30, 2024 and 2023, respectively. In addition, as of June 30, 2024, the Company had an accumulated deficit of $224.8 million. The Company expects to continue to generate operating losses for the foreseeable future. As of June 30, 2024, the Company had approximately $226.1 million of cash, cash equivalents and marketable securities available for use to fund its operations and capital requirements.
The Company has funded its operations to date primarily with proceeds from sales of common stock and proceeds from the sale of prefunded warrants for the purchase of common stock, the acquisition in 2020 of cash, cash equivalents and marketable securities upon the merger with Zafgen, Inc. ("Zafgen") and, prior to the 2020 merger with Zafgen, capital contributions from Chondrial Holdings, LLC.
In February 2024, the Company completed an underwritten public offering in which the Company issued and sold 19,736,842 shares of its common stock at a public offering price of $8.74 per share. The Company received net proceeds of approximately $161.8 million after deducting underwriting discounts, commissions and other offering expenses.
In accordance with Accounting Standards Update (“ASU”) No. 2014-15, "Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern", the Company has evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these condensed consolidated financial statements are issued. As of the issuance date of these condensed consolidated financial statements, the Company expects its cash, cash equivalents and marketable securities will be sufficient to fund its forecasted operating expenses and capital expenditure requirements into 2026. If the timing of the Company's clinical assumptions are delayed, or if there are other forecasted assumption changes that negatively impact its operating plan, the Company could reduce expenditures in order to further extend cash resources.
The Company has not yet commercialized any products and does not expect to generate revenue from the commercial sale of any products for several years, if at all. The Company expects that its research and development and general and administrative expenses will continue to increase and, as a result, that it will need additional capital to fund its future operating and capital requirements. Unless and until the Company can generate substantial revenue, management continuously evaluates different strategies to obtain the required funding for future operations. These strategies include seeking additional funding through a combination of public or private equity offerings, debt or royalty financings, collaborations and licensing arrangements, strategic partnerships with pharmaceutical and/or larger biotechnology companies, or other sources. The incurrence of indebtedness would result in increased fixed payment obligations and the Company may be required to agree to certain restrictive covenants, such as limitations on its ability to incur additional debt, limitations on its ability to acquire, sell or license intellectual property rights, minimum required cash balances and other operating restrictions that could adversely impact the Company's ability to conduct its business. Any additional fundraising efforts may divert the Company's management from their day-to-day activities, which may adversely affect its ability to develop and commercialize its product candidates.
There can be no assurance that the Company will be able to raise sufficient additional capital on acceptable terms, if at all. If such additional financing is not available on satisfactory terms, or is not available in sufficient amounts, or if the Company does not have sufficient authorized shares, the Company may be required to delay, limit, or eliminate the development of business opportunities and its ability to achieve its business objectives, its competitiveness, and its business, financial condition, and results of operations will be materially adversely affected. The Company could also be required to seek funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable and it may be required to relinquish rights to some of its technologies or product candidates or otherwise agree to terms unfavorable to it, any of which may have a material adverse effect on the Company's business, operating results and prospects. In addition, geopolitical tensions, volatility of capital markets, and other adverse macroeconomic events, including those due to inflationary pressures, rising interest rates, banking instability, monetary policy changes and the ability of the U.S. government to manage federal debt limits as well as the potential impact of other health crises on the global financial markets may reduce the Company's ability to access capital, which could negatively affect its liquidity and ability to continue as a going concern.
If the Company is unable to obtain sufficient funding when needed and/or on acceptable terms, the Company may be required to significantly curtail, delay or discontinue one or more of its research and development programs, the manufacture of clinical and commercial supplies, product portfolio expansion, pre commercialization efforts and/or commercial operations, which could adversely affect its business prospects, or the Company may be unable to continue operations.
2.Summary of Significant Accounting Policies
Use of Estimates
The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. This process involves reviewing open contracts and purchase orders, communicating with our personnel and outside vendors to identify services that have been performed on our behalf and estimating the level of service performed and the associated costs incurred for the services when we have not yet been invoiced or otherwise notified of the actual costs. Significant estimates and assumptions reflected in these condensed consolidated financial statements include, but are not limited to, the accrual of research and development expense, the recording as prepaid expense of payments made in advance of the actual provision of goods or services, valuation of stock-based awards and valuation of leases. Due to inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in these estimates. On an ongoing basis, the Company evaluates its estimates and assumptions.
Research and Development Costs
Costs associated with internal research and development and external research and development services, including drug development, clinical studies and non-clinical studies, are expensed as incurred. Research and development expenses include costs for salaries, employee benefits, subcontractors, facility-related expenses, depreciation, stock-based compensation, third-party license fees, laboratory supplies, and external costs of outside vendors engaged to conduct discovery, non-clinical and clinical development activities and clinical trials as well as to manufacture clinical trial materials, and other costs. The Company recognizes external research and development costs based on an evaluation of the progress to completion of specific tasks using information provided to the Company by its key service providers.
Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are recorded as prepaid expenses. Such prepaid expenses are recognized as an expense when the goods have been delivered or the related services have been performed, or when it is no longer expected that the goods will be delivered, or the services rendered.
Upfront payments, milestone payments and annual maintenance fees under license agreements are currently expensed in the period in which they are incurred.
Patent Costs
All patent-related costs incurred in connection with filing and prosecuting patent applications are expensed as incurred due to the uncertainty about the recovery of the expenditure. Amounts incurred are classified as general and administrative expenses.
Stock-Based Compensation
The Company measures all stock-based awards granted to employees and directors based on the fair value on the date of grant using the Black-Scholes option-pricing model. Compensation expense of those awards is recognized over the requisite service period, which is the vesting period of the respective award. Typically, the Company issues awards with only service-based vesting conditions and records the expense for these awards using the straight-line method. The Company accounts for forfeitures as they occur.
The Company classifies stock-based compensation expense in its consolidated statements of operations and comprehensive loss in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.
Prior to May 28, 2020, the Company had been a private company and lacked company-specific historical and implied volatility information for its common stock. Prior to January 1, 2023, the Company estimated its expected common stock price volatility solely based on the historical volatility of publicly traded peer companies. Beginning on January 1, 2023, based on the availability of sufficient historical trading data of the Company's own common stock on the Nasdaq Global Market to calculate accurately its volatility, the Company began blending its volatility starting from June 2020 (following its merger with Zafgen in 2020) to the date of each stock-based award, and weighing the volatility of its peer group for the amount of time from May 31, 2020 backwards so that the blended volatility equals the expected term of the related stock-based award. The expected term of the Company’s stock
options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. The expected dividend yield considers the fact that the Company has never paid cash dividends on common stock and does not expect to pay any cash dividends in the foreseeable future.
Net Loss Per Share
Basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period. Prior to August 11, 2023, basic shares outstanding includes the weighted average effect of the Company’s prefunded warrants issued in June 2020, the exercise of which requires little or no consideration for the delivery of shares of common stock. These prefunded warrants were exercised on August 11, 2023 and the Company received cash proceeds of less than $0.1 million. Accordingly, the 628,403 shares were issued upon the exercise of these warrants and are included in issued and outstanding common stock.
Diluted net loss per share attributable to common stockholders is computed by dividing the diluted net loss attributable to common stockholders by the weighted average number of common shares, including potentially dilutive common stock equivalents assuming the dilutive effect of outstanding stock options, outstanding restricted stock units, and unvested restricted common shares, as determined using the treasury stock method. For periods in which the Company has reported net losses (all periods since inception), diluted net loss per common share attributable to common stockholders is the same as basic net loss per common share attributable to common stockholders, since dilutive common stock equivalents are not assumed to have been issued if their effect is antidilutive.
The Company excluded 6,900,232 and 5,129,327 common stock equivalents outstanding as of June 30, 2024 and 2023, respectively, from the computation of diluted net loss per share for the three and six months ended June 30, 2024 and 2023 because they had an anti-dilutive impact due to the net loss incurred for the periods presented.
Recently Issued and Adopted Accounting Pronouncements
From time to time, new accounting guidance is issued by the FASB or other standard setting bodies that is adopted by us as of the effective date or, in some cases where early adoption is permitted, in advance of the effective date. We have assessed the recently issued guidance that is not yet effective and believe the new guidance will not have a material impact on the condensed consolidated results of operations, cash flows or financial position.
3.Fair Value Measurements and Marketable Securities
Fair Value Measurements
The Company’s assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023 are measured in accordance with the standards of ASC 820, "Fair Value Measurements and Disclosures", which establishes a three-level valuation hierarchy for measuring fair value and expands financial statement disclosures about fair value measurements. The valuation hierarchy is based on the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:
|
|
Level – 1 |
Inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
|
|
Level – 2 |
Inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. |
|
|
Level – 3 |
Inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
The Company’s financial instruments consist primarily of cash, cash equivalents, marketable securities, accounts payable and accrued liabilities. For accounts payable and accrued liabilities, the carrying amounts of these financial instruments as of June 30, 2024 and December 31, 2023 were considered representative of their fair values due to their short term to maturity.
The following tables summarize the Company’s cash equivalents and marketable securities as of June 30, 2024 and December 31, 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
Quoted
Prices in
Active
Markets
(Level 1) |
|
|
Significant
Other
Observable
Inputs
(Level 2) |
|
|
Significant
Unobservable
Inputs
(Level 3) |
|
|
|
(in thousands) |
|
June 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds invested in government securities |
|
$ |
27,476 |
|
|
$ |
27,476 |
|
|
$ |
— |
|
|
$ |
— |
|
Total cash equivalents |
|
|
27,476 |
|
|
|
27,476 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury Bills |
|
|
34,584 |
|
|
|
34,584 |
|
|
|
— |
|
|
|
— |
|
U.S. Government securities |
|
|
159,169 |
|
|
|
— |
|
|
|
159,169 |
|
|
|
— |
|
Total marketable securities |
|
|
193,753 |
|
|
|
34,584 |
|
|
|
159,169 |
|
|
|
— |
|
Total cash equivalents and marketable securities |
|
$ |
221,229 |
|
|
$ |
62,060 |
|
|
$ |
159,169 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds invested in government securities |
|
$ |
24,701 |
|
|
$ |
24,701 |
|
|
$ |
— |
|
|
$ |
— |
|
Total cash equivalents |
|
|
24,701 |
|
|
|
24,701 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury Bills |
|
|
17,334 |
|
|
|
17,334 |
|
|
|
— |
|
|
|
— |
|
U.S. Government securities |
|
|
35,719 |
|
|
|
— |
|
|
|
35,719 |
|
|
|
— |
|
Corporate bonds |
|
|
6,988 |
|
|
|
— |
|
|
|
6,988 |
|
|
|
— |
|
Total marketable securities |
|
|
60,041 |
|
|
|
17,334 |
|
|
|
42,707 |
|
|
|
— |
|
Total cash equivalents and marketable securities |
|
$ |
84,742 |
|
|
$ |
42,035 |
|
|
$ |
42,707 |
|
|
$ |
— |
|
The accrued interest receivable related to the Company’s investments was $0.8 million and $0.3 million as of June 30, 2024 and December 31, 2023, respectively, and is included in prepaid expenses and other current assets on the condensed consolidated balance sheet.
The Company classifies its money market funds and U.S. treasury bills, which are valued based on quoted market prices in active markets with no valuation adjustment, as Level 1 assets within the fair value hierarchy.
The Company classifies its investments in U.S. government and agency securities, corporate commercial paper, and corporate bonds, if any, as Level 2 assets within the fair value hierarchy. The fair values of these investments are estimated by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities, issuer credit spreads, benchmark securities, prepayment/default projections based on historical data and other observable inputs.
As of June 30, 2024 and December 31, 2023, the unrealized losses for available-for-sale investments were non-credit related, and the Company does not intend to sell the investments that were in an unrealized loss position, nor will it be required to sell those investments before recovery of their amortized cost basis, which may be maturity. As of June 30, 2024 and December 31, 2023, no allowances for credit losses for the Company’s investments were recorded. During the three and six months ended June 30, 2024 and 2023, the Company did not recognize any impairment losses related to investments.
Marketable securities
The following table summarizes the Company's marketable securities as of June 30, 2024 and December 31, 2023.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortized
Cost |
|
|
Gross
Unrealized
Gains |
|
|
Gross
Unrealized
Losses |
|
|
Fair Value |
|
|
|
(in thousands) |
|
June 30, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury Bills |
|
$ |
34,588 |
|
|
$ |
— |
|
|
$ |
(4 |
) |
|
$ |
34,584 |
|
U.S. Government securities |
|
|
159,315 |
|
|
|
— |
|
|
|
(146 |
) |
|
|
159,169 |
|
Total marketable securities |
|
$ |
193,903 |
|
|
$ |
— |
|
|
$ |
(150 |
) |
|
$ |
193,753 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury Bills |
|
$ |
17,330 |
|
|
$ |
4 |
|
|
$ |
— |
|
|
$ |
17,334 |
|
U.S. Government securities |
|
|
35,653 |
|
|
|
66 |
|
|
|
— |
|
|
|
35,719 |
|
Corporate bonds |
|
|
6,977 |
|
|
|
11 |
|
|
|
— |
|
|
|
6,988 |
|
Total marketable securities |
|
$ |
59,960 |
|
|
$ |
81 |
|
|
$ |
— |
|
|
$ |
60,041 |
|
No marketable securities held as of June 30, 2024 or December 31, 2023, had remaining maturities greater than two years.
As of June 30, 2024 and December 31, 2023, the Company held no investments that have been in a continuous loss position for 12 months or longer.
4.Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|
|
2024 |
|
|
2023 |
|
|
|
(in thousands) |
|
Prepaid research and development expenses |
|
$ |
3,733 |
|
|
$ |
1,994 |
|
Interest receivable |
|
|
751 |
|
|
|
332 |
|
Prepaid insurance |
|
|
273 |
|
|
|
682 |
|
Other prepaid expenses and other assets |
|
|
309 |
|
|
|
377 |
|
|
|
$ |
5,066 |
|
|
$ |
3,385 |
|
Fixed assets, net consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|
|
Useful Life |
|
2024 |
|
|
2023 |
|
|
|
|
|
(in thousands) |
|
Computer equipment |
|
5 years |
|
$ |
117 |
|
|
$ |
117 |
|
Lab equipment |
|
5 years |
|
|
1,519 |
|
|
|
1,192 |
|
Furniture and fixtures |
|
7 years |
|
|
555 |
|
|
|
555 |
|
Leasehold improvements |
|
lease term |
|
|
45 |
|
|
|
45 |
|
|
|
|
|
|
2,236 |
|
|
|
1,909 |
|
Less: Accumulated depreciation |
|
|
|
|
(1,392 |
) |
|
|
(1,225 |
) |
|
|
|
|
$ |
844 |
|
|
$ |
684 |
|
Depreciation expense was $0.1 million for the three and six months ended June 30, 2024 and 2023, respectively. In addition, for the three and six months ended June 30, 2024 and 2023, there was less than $0.1 million of depreciation related to sublet assets recorded as other expense.
Accrued expenses consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
|
December 31, |
|
|
|
2024 |
|
|
2023 |
|
|
|
(in thousands) |
|
Accrued research and development expenses |
|
$ |
14,629 |
|
|
$ |
4,594 |
|
Accrued payroll and related expenses |
|
|
1,538 |
|
|
|
2,365 |
|
Accrued other |
|
|
1,079 |
|
|
|
427 |
|
|
|
$ |
17,246 |
|
|
$ |
7,386 |
|
7.Stockholders’ Equity and Stock Options
Common Stock and Prefunded Warrants
On May 28, 2020, the Company entered into a securities purchase agreement with certain accredited investors (the “Purchasers”) for the sale by the Company in a private placement of 6,105,359 shares of the Company’s common stock and prefunded warrants to purchase an aggregate of 628,403 shares of the Company’s common stock, for a price of $11.88 per share of the common stock and $11.87 per prefunded warrant. The prefunded warrants were exercisable at an exercise price of $0.01 and were exercisable indefinitely. In August 2023, the 628,403 shares of prefunded warrants were exercised and the Company received cash proceeds of six thousand two hundred and eighty-four dollars. The private placement closed on June 1, 2020. The aggregate gross proceeds for the issuance and sale of the common stock and prefunded warrants were $80.0 million, transaction costs totaled $4.6 million and resulted in net proceeds of $75.4 million. The Company’s Registration Statement on Form S-3, filed with the SEC on June 26, 2020, registered the resale of 6,105,359 shares of common stock sold and the 628,403 shares of common stock underlying the prefunded warrants. MTS Health Partners served as placement agent to the Company in connection with the private placement. As partial compensation for these services, the Company issued MTS Health Partners 35,260 shares of common stock.
As of June 30, 2024,the Company’s Ninth Amended and Restated Certificate of Incorporation, as amended, authorized the Company to issue up to 115,000,000 shares of common stock, par value $0.001 per share, of which 63,802,517 shares were issued and outstanding, and up to 5,000,000 shares of undesignated preferred stock, par value $0.001 per share, of which no shares were issued or outstanding. The voting, dividend and liquidation rights of the holders of the Company’s common stock are subject to and qualified by the rights, powers and preferences of the holders of the preferred stock. Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to receive dividends, as may be declared by the board of directors of the Company (the “Board”), if any. No cash dividends have been declared or paid to date.
In February 2024, the Company completed an underwritten public offering in which the Company issued and sold 19,736,842 shares of its common stock at a public offering price of $8.74 per share. The Company received net proceeds of approximately $161.8 million after deducting underwriting discounts, commissions and other offering expenses.
ATM Agreement
In November 2022, the Company entered into a Sales Agreement (the "2022 ATM Agreement") with Guggenheim Securities, LLC as a sales agent in connection with the establishment of an “at-the-market” offering program under which the Company could sell up to an aggregate of $50.0 million of shares of common stock (the “2022 ATM Shares”) from time to time. In February 2024, in connection with the underwritten public offering described above, the Company terminated the 2022 ATM Agreement. No ATM Shares were ever sold pursuant to the 2022 ATM Agreement.
In May 2024, the Company entered into a sales agreement (the "ATM Agreement") with Guggenheim Securities, LLC in connection with the establishment of an “at-the-market” offering program under which the Company could sell up to an aggregate of $100.0 million of shares of common stock (the “ATM Shares”) from time to time.To date, no sales of common stock have been made under this ATM Agreement.
2020 Equity Incentive Plan
The Board adopted the 2020 Equity Incentive Plan (the "2020 Plan") on July 16, 2020 and the stockholders of the Company approved the 2020 Plan on September 29, 2020. The 2020 Plan replaced the predecessor plans (the "Prior Plans") that the Company assumed following its merger with Zafgen in May 2020. Options outstanding under the Prior Plans will remain outstanding, unchanged, and subject to the terms of the Prior Plans and the respective award agreements, and no further awards will be made under the Prior Plans. However, if any award previously
granted under the Prior Plans, expires, terminates, is canceled, or is forfeited for any reason after the approval of the 2020 Plan, the shares subject to that award will be added to the 2020 Plan share pool so that they can be utilized for new grants under the 2020 Plan.
The 2020 Plan provides for the grant of incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”), stock appreciation rights, restricted stock awards, restricted stock unit awards, and cash or other stock-based awards. ISOs may be granted only to the Company’s employees, including the Company’s officers, and the employees of the Company’s affiliates. All other awards may be granted to the Company’s employees, including the Company’s officers, the Company’s non-employee directors and consultants, and the employees and consultants of the Company’s affiliates.
The maximum number of shares that may be issued in respect of any awards under the 2020 Plan is the sum of: (i) 1,700,000 shares plus (ii) an annual increase on January 1, 2021 and each anniversary of such date thereafter through January 1, 2030, equal to the lesser of (A) 4% of the shares issued and outstanding on the last day of the immediately preceding fiscal year, or (B) such smaller number of shares as determined by the Board (collectively, the “Plan Limit”). The maximum aggregate number of shares that may be issued under the 2020 Plan is 8,000,000 over the ten-year term of the 2020 Plan.