LRMR 10-Q
Larimar Therapeutics, Inc. (LRMR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
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:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
|
|
(Zip Code) |
|
(Address of principal executive offices) |
|
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
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.
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).
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.
Large accelerated filer |
☐ |
|
Accelerated filer |
☐ |
☒ |
|
Smaller reporting company |
||
|
|
|
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 2, 2026, there were
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 only. 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:
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 19, 2026 and our Quarterly Report on Form 10-Q filed on May 14, 2026. 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
|
Page |
|||
|
|
|
||
|
|
|
|
|
Item 1 |
|
|
3 |
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025 |
|
3 |
|
|
|
|
|
|
|
|
4 |
|
|
|
|
|
|
|
|
|
5 |
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2026 and 2025 |
|
7 |
|
|
|
|
|
|
|
|
8 |
|
|
|
|
|
|
Item 2. |
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|
22 |
|
|
|
|
|
Item 3. |
|
|
31 |
|
|
|
|
|
|
Item 4. |
|
|
31 |
|
|
|
|
|
|
|
|
|
|
|
Item 1. |
|
|
32 |
|
|
|
|
|
|
Item 1A. |
|
|
32 |
|
|
|
|
|
|
Item 2. |
|
|
33 |
|
|
|
|
|
|
Item 3. |
|
|
33 |
|
|
|
|
|
|
Item 4. |
|
|
33 |
|
|
|
|
|
|
Item 5. |
|
|
33 |
|
|
|
|
|
|
Item 6. |
|
|
34 |
|
|
|
|
|
|
|
35 |
|||
2
PART I-FINANCIAL INFORMATION
Item 1. Financial Statements
LARIMAR THERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(Unaudited)
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Marketable securities |
|
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
|
|
|
|
||
Total current assets |
|
|
|
|
|
|
||
Property and equipment, net |
|
|
|
|
|
|
||
Operating lease right-of-use assets |
|
|
|
|
|
|
||
Restricted cash |
|
|
|
|
|
|
||
Other assets |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
|
|
$ |
|
||
Accrued expenses |
|
|
|
|
|
|
||
Operating lease liabilities, current |
|
|
|
|
|
|
||
Total current liabilities |
|
|
|
|
|
|
||
Operating lease liabilities |
|
|
|
|
|
|
||
Total liabilities |
|
|
|
|
|
|
||
|
|
|
|
|
|
|||
Stockholders’ equity: |
|
|
|
|
|
|
||
Preferred stock; $ |
|
|
|
|
|
|
||
Common stock, $ |
|
|
|
|
|
|
||
Additional paid-in capital |
|
|
|
|
|
|
||
Accumulated deficit |
|
|
( |
) |
|
|
( |
) |
Accumulated other comprehensive gain (loss) |
|
|
( |
) |
|
|
|
|
Total stockholders’ equity |
|
|
|
|
|
|
||
Total liabilities and stockholders’ equity |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
LARIMAR THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In thousands, except share and per share data)
(Unaudited)
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|||||||||
|
|
2026 |
|
|
2025 |
|
2026 |
|
2025 |
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
||||
Research and development |
|
$ |
|
|
$ |
|
$ |
|
$ |
|
||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
||||
Total operating expenses |
|
|
|
|
|
|
|
|
|
|
||||
Loss from operations |
|
|
( |
) |
|
|
( |
) |
|
( |
) |
|
( |
) |
Other income, net |
|
|
|
|
|
|
|
|
|
|
||||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
||||
Comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
||||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
Other comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
||||
Unrealized loss on marketable securities |
|
|
( |
) |
|
|
( |
) |
|
( |
) |
|
( |
) |
Total other comprehensive loss |
|
|
( |
) |
|
|
( |
) |
|
( |
) |
|
( |
) |
Total comprehensive loss |
|
$ |
( |
) |
|
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted net loss per share: |
|
|
|
|
|
|
|
|
|
|
||||
Common stock |
|
$ |
|
|
$ |
|
$ |
|
$ |
|
||||
Preferred stock |
|
|
|
|
$ |
— |
|
|
|
|
— |
|
||
Weighted-average shares used in computing basic and |
|
|
|
|
|
|
|
|
|
|
||||
Common stock |
|
|
|
|
|
|
|
|
|
|
||||
Preferred stock |
|
|
|
|
|
— |
|
|
|
|
— |
|
||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
LARIMAR THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS’ EQUITY
(In thousands, except share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
Other |
|
|
Total |
|
||||||||
|
Preferred Stock |
|
|
Common Stock |
|
|
Paid-in |
|
|
Accumulated |
|
|
Comprehensive |
|
|
Stockholders’ |
|
||||||||||||||
|
Shares |
|
|
Par Value |
|
|
Shares |
|
|
Par Value |
|
|
Capital |
|
|
Deficit |
|
|
Gain (Loss) |
|
|
Equity |
|
||||||||
Balances as of December 31, 2025 |
|
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
||||||
Issuance of common stock, net of issuance costs |
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Issuance of preferred stock in exchange for common stock |
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|||
Vesting of restricted stock units |
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Exercise of stock options |
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|||
Stock-based compensation expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Unrealized loss on marketable debt securities |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Net Loss |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Balances as of March 31, 2026 |
|
|
|
$ |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||||
Stock-based compensation expense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Unrealized loss on marketable debt securities |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Net Loss |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Balances as of June 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
LARIMAR THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS’ EQUITY
(In thousands, except share data)
(Unaudited)
(Continued)
|
|
|
|
|
|
|
Additional |
|
|
|
|
|
Other |
|
|
Total |
|
||||||
|
Common Stock |
|
|
Paid-in |
|
|
Accumulated |
|
|
Comprehensive |
|
|
Stockholders’ |
|
|||||||||
|
Shares |
|
|
Par Value |
|
|
Capital |
|
|
Deficit |
|
|
Gain (Loss) |
|
|
Equity |
|
||||||
Balances as of December 31, 2024 |
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
Vesting of restricted stock units |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Stock-based compensation expense |
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Unrealized loss on marketable securities |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Net loss |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Balances as of March 31, 2025 |
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
Vesting of restricted stock units |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation expense |
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Unrealized loss on marketable securities |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Net loss |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Balances as of June 30, 2025 |
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
LARIMAR THERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
|
|
Six Months Ended June 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Stock-based compensation expense |
|
|
|
|
|
|
||
Lease expense |
|
|
( |
) |
|
|
( |
) |
Depreciation expense |
|
|
|
|
|
|
||
Amortization of premium on marketable securities |
|
|
( |
) |
|
|
( |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
|
|
|
|
||
Accounts payable |
|
|
|
|
|
|
||
Accrued expenses |
|
|
( |
) |
|
|
|
|
Other assets |
|
|
|
|
|
|
||
Net cash used in operating activities: |
|
|
( |
) |
|
|
( |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
( |
) |
|
|
( |
) |
Purchases of marketable securities |
|
|
( |
) |
|
|
( |
) |
Maturities of marketable securities |
|
|
|
|
|
|
||
Net cash provided by (used in) investing activities |
|
|
( |
) |
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from issuance of equity securities |
|
|
|
|
|
— |
|
|
Proceeds from exercise of stock options |
|
|
|
|
|
— |
|
|
Net cash provided by financing activities |
|
|
|
|
|
— |
|
|
Net increase in cash, cash equivalents and restricted cash |
|
|
|
|
|
( |
) |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
|
|
|
|
|
||
Cash, cash equivalents and restricted cash at end of period |
|
$ |
|
|
$ |
|
||
Supplemental disclosure of non-cash investing and financing activities: |
|
|
|
|
|
|
||
Purchases of property and equipment included in accounts payable and accrued expenses |
|
$ |
|
|
$ |
|
||
Offering costs included in accounts payable and accrued expenses |
|
$ |
|
|
$ |
|
||
Leased assets obtained in exchange for new operating lease liabilities |
|
$ |
|
|
$ |
— |
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
7
LARIMAR THERAPEUTICS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
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, 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.
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 U.S. Generally Accepted Accounting Principles (“GAAP”).
The consolidated balance sheet as of December 31, 2025 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, 2026 and for the three and six months ended June 30, 2026 and 2025, 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, 2025 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 19, 2026.
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, 2026, condensed consolidated results of operations for the three and six months ended June 30, 2026 and condensed consolidated statement of cash flows for the six months ended June 30, 2026 have been made. The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of the results of operations that may be expected for the year ending December 31, 2026.
Liquidity and Capital Resources
Since its inception, the Company has incurred significant recurring operating losses and negative cash flows from operations. The Company has incurred net losses of $
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 July 2025, the Company completed an underwritten public offering of common stock raising net proceeds of approximately $
In February 2026, the Company completed another underwritten public offering of common stock raising net proceeds of approximately $
8
Going Concern
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 unaudited condensed consolidated financial statements are issued. While the Company expects its cash, cash equivalents and marketable securities will fund its forecasted operating expenses and capital expenditure requirements into the third quarter of 2027, these cash resources are not sufficient to fund the Company’s planned operations for a period of at least one year from the date these unaudited condensed consolidated financial statements are issued.
The Company will need to raise additional capital to fund its ongoing operations. The Company continues to evaluate opportunities to further finance its operating cash needs through a combination of some, or all, of the following: equity or debt offerings, royalty financings, collaborations, strategic alliances, and/or marketing, distribution or licensing arrangements. In addition, the Company believes it will be eligible for the FDA's rare pediatric disease priority review voucher which could then be sold if nomlabofusp receives FDA approval. There is no assurance, however, that additional financing will be available when needed or that the Company will be able to obtain financing on terms acceptable to the Company. If the Company is unable to obtain funding when required in the future, the Company could be required to delay, reduce, or eliminate research and development programs, or commercialization efforts, which could adversely affect its business prospects. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.
The accompanying unaudited condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of the business. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classifications of liabilities that might result from the outcome of this uncertainty.
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.
9
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 accounts for its stock-based compensation awards in accordance with FASB ASC Topic 718, Compensation-Stock Compensation (ASC 718). ASC 718 requires all stock-based payments to employees, including grants of employee stock options, restricted stock units, modifications to existing stock options, and equity classified warrants to be recognized in the consolidated statements of operations based on their grant date fair values. The grant-date fair value of stock options is estimated using the Black-Scholes option pricing model. The grant-date fair value of restricted stock awards and performance-based restricted stock awards are determined based on the closing price of the Company’s common stock on the date of grant (or, if the grant date is not a business day, the closing price on the preceding business day).
Compensation expense of stock options and restricted stock units 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. For performance-based restricted stock awards, the Company recognizes the expense over the estimated period in which the awards are expected to be earned; such period begins once achievement of the performance objective is determined to be probable.
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.
Segment Information
Operating segments are defined as components of an enterprise for which separate discrete information is available for evaluation by the chief operating decision maker, or decision making group, in deciding how to allocate resources in assessing performance. The Company is managed on a consolidated basis and has
10
The accounting policies of the life science segment are the same as those described in the summary of significant accounting policies. The CODM assesses performance for the Company and its reportable segment based on net loss, which is reported on the consolidated Statements of Operations. The measure of segment assets is reported on the balance sheet as total consolidated assets. All long-lived assets are located in the U.S.
To date, the Company has not generated any product revenue. The Company expects to continue to incur significant expenses and operating losses for the foreseeable future as it advances product candidates through all stages of development and clinical trials and regulatory approval.
The table below summarizes the significant expense categories regularly provided to the CODM for the three and six months ended June 30, 2026 and 2025:
|
|
For the Three Months Ended June 30, |
|
For the Six Months Ended June 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
2026 |
|
|
2025 |
|
||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
||||
Technical operations |
|
$ |
|
|
$ |
|
$ |
|
|
$ |
|
||||
Development (a)(b) |
|
|
|
|
|
|
|
|
|
|
|
||||
Nomlabofusp support |
|
|
|
|
|
|
|
|
|
|
|
||||
General and administrative (c)(d) |
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial (e) |
|
|
|
|
|
|
|
|
|
|
|
||||
Total operating expenses |
|
$ |
|
|
$ |
|
$ |
|
|
$ |
|
||||
Other income, net |
|
|
( |
) |
|
|
( |
) |
|
( |
) |
|
|
( |
) |
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
$ |
( |
) |
|
$ |
( |
) |
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 consolidated results of operations, cash flows or financial position.
Recently Issued Accounting Pronouncements Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, which requires disaggregated disclosures in the notes of the financial statements of certain categories of expenses that are included in expense line items on the face of the income statement. This ASU is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company will evaluate the impact adopting ASU 2024-03 will have on the Company's consolidated financial statements and disclosures.
11
Income Taxes
We recognize deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities, as well as for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We record valuation allowances to reduce deferred tax assets to the amount we believe is more likely than not to be realized. During the three and six months ended June 30, 2026 and 2025, the Company recorded
Fair Value Measurements
The Company’s assets and liabilities that are measured at fair value on a recurring basis as of June 30, 2026 and December 31, 2025 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, 2026 and December 31, 2025 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, 2026 and December 31, 2025:
|
|
Total |
|
|
Quoted |
|
|
Significant |
|
|
Significant |
|
||||
|
|
(in thousands) |
|
|||||||||||||
June 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds invested in government securities |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
U.S. Treasury Bills |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
Total cash equivalents |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury Bills |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
U.S. Government securities |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total marketable securities |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|||
Total cash equivalents and marketable securities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
12
Money market funds invested in government securities |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
— |
|
||
Total cash equivalents |
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Government securities |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total marketable securities |
|
|
|
|
|
— |
|
|
|
|
|
|
— |
|
||
Total cash equivalents and marketable securities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|||
The accrued interest receivable related to the Company’s investments was $
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, 2026 and December 31, 2025, 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, 2026 and December 31, 2025,
As of June 30, 2026 and December 31, 2025, the Company's cash equivalents and marketable securities consisted of a U.S. government money market fund, U.S. Treasury Bills, and U.S. government and agency securities, all held in our name in a separate custody account with U.S. Bank. The U.S. government money market fund has same-day liquidity access and the U.S. government and agency securities all have maturities of 360 days or less.
Marketable Securities
The following table summarizes the Company's marketable securities as of June 30, 2026 and December 31, 2025:
|
|
Amortized |
|
|
Gross |
|
|
Gross |
|
|
Fair Value |
|
||||
|
|
(in thousands) |
|
|||||||||||||
June 30, 2026 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Treasury Bills |
|
$ |
|
|
|
|
|
$ |
( |
) |
|
$ |
|
|||
U.S. Government securities |
|
$ |
|
|
|
|
|
|
( |
) |
|
$ |
|
|||
Total marketable securities |
|
$ |
|
|
$ |
— |
|
|
$ |
( |
) |
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
December 31, 2025 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
U.S. Government securities |
|
$ |
|
|
|
|
|
|
— |
|
|
$ |
|
|||
Total marketable securities |
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
|||
13
As of June 30, 2026 and December 31, 2025, the Company held
Prepaid expenses and other current assets consisted of the following:
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
|
|
(in thousands) |
|
|||||
Prepaid research and development expenses |
|
$ |
|
|
$ |
|
||
Interest receivable |
|
|
|
|
|
|
||
Prepaid insurance |
|
|
|
|
|
|
||
Other prepaid expenses and other assets |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
Fixed assets, net consisted of the following:
|
|
|
|
June 30, |
|
|
December 31, |
|
||
|
|
Useful Life |
|
2026 |
|
|
2025 |
|
||
|
|
|
|
(in thousands) |
|
|||||
Computer equipment |
|
|
$ |
|
|
$ |
|
|||
Lab equipment |
|
|
|
|
|
|
|
|||
Furniture and fixtures |
|
|
|
|
|
|
|
|||
Leasehold improvements |
|
|
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
||
Less: Accumulated depreciation |
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
$ |
|
|
$ |
|
||
Depreciation expense was $
Accrued expenses consisted of the following:
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
|
|
(in thousands) |
|
|||||
Accrued research and development expenses |
|
$ |
|
|
$ |
|
||
Accrued payroll and related expenses |
|
|
|
|
|
|
||
Accrued other |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
Common Stock
At the Company's annual meeting of stockholder on May 19, 2026, the Company's stockholders approved and increase in the number of authorized shares of common stock, par value $
14
$
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.
In July 2025, the Company sold
In February 2026, the Company sold
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 $
Preferred Stock
In December 2025, the Company entered into an exchange agreement (the “Exchange Agreement”) with Blue Owl Healthcare Opportunities IV Public Investments LP (the “Stockholder”) pursuant to which the Stockholder exchanged
Each share of the Series A Preferred Stock will be convertible into
The Series A Preferred Stock ranks on parity with the common stock and any class or series of capital stock of the Company created specifically ranking by its terms on parity with the preferred stock. Additionally, it ranks senior to any class or series of capital stock of the Company hereafter created specifically ranking by its terms junior to the preferred stock and junior to any class or series of capital stock of Larimar created specifically ranking by its terms senior to any preferred stock, in each case, as to distributions of assets upon liquidation, dissolution or winding up of the Company, whether voluntarily or involuntarily.
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
15
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, performance-based restricted stock units, 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.
As permitted by the 2020 Plan, the Company added
During the six months ended June 30, 2026 and twelve months ended December 31, 2025, options to purchase
Stock Option Valuation
The following table presents, on a weighted average basis, the assumptions used in the Black-Scholes option-pricing model to determine the grant-date fair value of stock options granted to employees during the six months ended June 30, 2026:
|
|
June 30, |
|
|
2026 |
Risk-free interest rate |
|
|
Expected term (in years) |
|
|
Expected volatility |
|
|
Dividend yield |
|
Stock Options
The following table summarizes the Company’s stock option activity for the six months ended June 30, 2026 (amounts in millions, except for share, contractual term, and per share data):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
Weighted |
|
|
Weighted Average |
|
|
Aggregate |
|
||||
|
|
|
|
|
Average |
|
|
Remaining |
|
|
Intrinsic |
|
||||
|
|
Number of |
|
|
Exercise |
|
|
Contractual |
|
|
Value (a) |
|
||||
|
|
Shares |
|
|
Price |
|
|
Term (in years) |
|
|
(in millions) |
|
||||
Outstanding as of December 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Options granted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Options exercised |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Options forfeited/expired |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Outstanding as of June 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Exercisable as of June 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Vested and expected to vest as of June 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
16
Option Grants
During the six months ended June 30, 2026, the Company granted options to purchase
As of June 30, 2026, total unrecognized compensation expense related to unvested stock options granted under the 2020 Plan was $
Inducement Stock Option Grant
There were
As of June 30, 2026, total unrecognized compensation expense related to unvested inducement options granted was $
Restricted Stock Units
RSUs are granted under the 2020 Plan to certain of the Company's employees in order to retain key employees. The value of an RSU award is based on the Company's stock price on the date of grant. The shares underlying the RSUs are not issued until the RSUs vest.
Activity with respect to the Company's RSUs and performance-based RSUs during the six months ended June 30, 2026 was as follows (in millions, except share, contractual term, and per share data):
|
|
|
|
|
Weighted |
|
|
Weighted Average |
|
|
Aggregate |
|
||||
|
|
|
|
|
Average |
|
|
Remaining |
|
|
Intrinsic |
|
||||
|
|
Number of |
|
|
Grant Date |
|
|
Contractual |
|
|
Value (a) |
|
||||
|
|
Shares |
|
|
Fair Value |
|
|
Term (in years) |
|
|
(in millions) |
|
||||
Outstanding as of December 31, 2025 |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Restricted stock units granted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Restricted stock units vested |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Restricted stock units forfeited |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Outstanding as of June 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Unvested and expected to vest as of June 30, 2026 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Restricted Stock Unit Grants
During the six months ended June 30, 2026, the Company granted
As of June 30, 2026, total unrecognized compensation expense for RSUs was $
Performance-Based Restricted Stock Unit Grants
In January 2025, the Company granted performance-based RSUs (the “January 2025 PSU Awards”) to each of the
17
The grant date fair value of the performance-based RSUs was $
Stock-Based Compensation
Stock-based compensation expense was classified in the condensed consolidated statements of operations as follows:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Research and development |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Intellectual Property Licenses
The Company is party to an exclusive License Agreement (the "IU License"), dated November 30, 2016, as amended, with Indiana University (“IU”). Such agreement provides for a transferable, worldwide license to certain patent rights regarding technology used by the Company with respect to the development of nomlabofusp.
In partial consideration for the right and license granted under the agreement, the Company will pay IU a royalty of a low single digit percentage of net sales of licensed products depending on whether there is a valid patent covering such products. As additional consideration for these agreements, the Company is obligated to pay IU certain milestone payments of up to $
In October 2022, the Company initiated dosing of a Phase 2 study. Pursuant to the terms of the IU License, the company recognized milestone expense of $
The agreement continues from its effective date through the last to date of expiration of the licensed patent, unless earlier terminated by either party in accordance with the terms of the agreement.
We were previously a party to the License Agreement dated November 30, 2016, with Wake Forest University Health Sciences (“WFUHS”), which licensed certain patent rights regarding technology used by us with respect to the development of nomlabofusp in consideration for an obligation to pay WFUHS a royalty of a low single digit percentage of net sales of licensed products, certain milestones, and certain sublicensing revenue. The WFUHS license expired in December 2025 with the last to expire licensed patent.
Leases
Bala Cynwyd Office Space
On August 8, 2019, the Company entered into an operating lease for
On March 9, 2023, the Company executed a lease extension agreement on its original
18
The lease extension on the original
The new lease on
On November 24, 2025, the Company executed the second amendment to the lease on the current
The right of use assets and lease liabilities with this lease are reflected in the financial statements for six months ended June 30, 2026 as are the right of use asset and lease liability of the Company's Boston office space discussed below.
Boston Office Lease
In connection with the Company's 2020 merger with Zafgen, on May 28, 2020, the Company acquired a non-cancellable operating lease for approximately
On October 27, 2020, the Company entered into a sublease agreement (the “Sublease”) with Massachusetts Municipal Association, Inc. (the “Subtenant”), whereby the Company sublet the entire Premises to the Subtenant. The initial term of the Sublease commenced on
The Sublease provided for an initial annual base rent of $
Lab Space
On October 16, 2023, the Company entered into an operating lease for lab space in King of Prussia, Pennsylvania for a period of
Lease Expense
Expense arising from operating leases was $
19
leases, the weighted average discount rate for leases as of June 30, 2026 and December 31, 2025 was
Maturities of lease liabilities due under these lease agreements as of June 30, 2026 are as follows:
|
|
Operating |
|
|
(in thousands) |
Leases |
|
||
Six months ending December 31, 2026 |
|
$ |
|
|
Year ended December 31, 2027 |
|
|
|
|
Year ended December 31, 2028 |
|
|
|
|
Year ended December 31, 2029 |
|
|
|
|
Thereafter |
|
|
|
|
Total lease payments |
|
|
|
|
Less: imputed interest |
|
|
( |
) |
Present value of lease liabilities |
|
$ |
|
|
Legal Proceedings
The Company is not currently a party to any litigation, nor is management aware of any pending or threatened litigation against the Company, that it believes would materially affect the Company's business, operating results, financial condition or cash flows.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||
|
|
2026 |
|
|
2026 |
|
||
Net Loss |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Allocation of net loss to common |
|
|
|
|
|
|
||
Allocation of net loss to Series A Preferred |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Weighted average shares of common stock outstanding, basic and diluted |
|
|
|
|
|
|
||
Weighted average shares of Series A Preferred outstanding, basic and diluted |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Net loss per share of common stock, basic and diluted |
|
$ |
|
|
$ |
|
||
Net loss per share of Series A Preferred, basic and diluted |
|
$ |
|
|
$ |
|
||
The weighted average number of Series A Preferred Stock reflects only the period of time that this class of securities has been newly designated and issued.
20
The Company excluded the options below to purchase common stock, unreleased restricted stock units, and performance-based restricted stock units outstanding as of June 30, 2026 and 2025, respectively, from the computation of diluted net loss per share for the six months ended June 30, 2026 and 2025, respectively, because they had an anti-dilutive impact due to the net loss incurred for the periods. Additionally, the as-converted preferred shares have been excluded from diluted earnings per share as the effect would not be dilutive.
|
|
As of June 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Options to purchase common stock |
|
|
|
|
|
|
||
Unvested restricted common stock |
|
|
|
|
|
|
||
Unvested performance-based restricted common stock |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
During the six months ended June 30, 2026, the Company sponsored patient and caregiver awareness events held by Friedreich’s Ataxia Research Alliance ("FARA") for a cumulative $
21
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q (“Quarterly Report”), and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2025 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 19, 2026 (the “2025 Annual Report”). Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks, uncertainties, and assumptions. These statements are based on our beliefs and expectations about future outcomes and are subject to risks and uncertainties that could cause our actual results to differ materially from anticipated results. We undertake no obligation to publicly update these forward-looking statements, whether as a result of new information, future events or otherwise. You should read the “Risk Factors” section included in our 2025 Annual Report, in addition to the“Cautionary Note Regarding Forward-Looking Statements” sections of this Quarterly Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
Overview
We are a clinical-stage biotechnology company focused on developing treatments for patients suffering from complex rare diseases using our novel cell penetrating peptide (“CPP”) technology platform. Our lead product candidate, nomlabofusp, is a subcutaneously administered, recombinant fusion protein intended to deliver 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. Currently, there are no treatment options that address the core deficit of FA, low levels of FXN. Nomlabofusp represents the first potential therapy designed to systemically increase FXN levels in patients with FA.
We believe that our CPP platform, which enables a therapeutic molecule to cross a cell membrane in order to reach intracellular targets, also has the potential to enable the treatment of other rare and orphan diseases. We intend to use our proprietary platform to target additional orphan indications characterized by deficiencies in or alterations of intracellular content or activity.
Since our inception, we have devoted substantially all of our resources to developing nomlabofusp, building our intellectual property portfolio, developing third-party manufacturing capabilities, business planning, raising capital, developing sales and marketing capacities, and providing general and administrative support for such operations.
Nomlabofusp Program Update
We have Orphan Drug Designation, Fast Track Designation, Pediatric Rare Disease Designation and Breakthrough Therapy Designation from the FDA and have been granted orphan drug designation and access to the European Medicines Agency’s (“EMA’s”) Priority Medicines Program (“PRIME”) scheme in the European Union (the “EU”). We have also received access in the United Kingdom (the “UK”) to the Medicines and Healthcare Regulatory Agency’s (“MHRA”) Innovative Licensing and Access Pathway (“ILAP”). These programs are designed to facilitate development of certain therapeutics such as those for rare and serious diseases, and those that have the potential to meet an unmet medical need.
The FDA’s Center for Drug Evaluation and Research selected nomlabofusp as one of a few drug development 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 advice and regular communication with the FDA staff to expedite the review process of biologics and drugs.
We have engaged in multiple discussions and interactions with the FDA in connection with our clinical development of nomlabofusp and communications remain ongoing. We have also had numerous interactions with the EMA, the MHRA, and Canada’s Health Canada regarding the clinical development of nomlabofusp.
22
We have completed four clinical studies: (i) two Phase 1 clinical studies in adults, (ii) a Phase 2 dose exploration study in adults and (iii) a Phase 1 pharmacokinetic (“PK”) run-in study in adolescents (12-17 years old). We currently have an ongoing open label (“OL”) study (previously referred to as the Open Label Extension, (“OLE”) study) in adults and adolescents with FA.
Recent significant developments are as follows:
23
For our global confirmatory Phase 3 study, we are planning sites in the U.S., E.U., U.K., Canada and Australia. We have obtained feedback from both the FDA and the EMA on the study protocol. We plan to initiate dosing of the first patient in the third quarter of 2026.
Critical Accounting Policies and Significant Judgments and Estimates
Our condensed, consolidated financial statements are prepared in accordance with Generally Accepted Accounting Principles (“GAAP”). The preparation of our consolidated financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amount of assets, liabilities, costs and expenses, and related disclosures. We believe that the estimates and assumptions involved in the accounting policies described below may have the greatest potential impact on our consolidated financial statements and, therefore, consider these to be our critical accounting policies. We evaluate these estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions and conditions.
Research and Development Expense
Costs for certain research and development activities, such as manufacturing, non-clinical studies, and clinical trials are generally recognized based on the evaluation of the progress of completion of specific tasks using information and data provided by our vendors and collaborators, and accordingly, are considered an area of significant judgment and management’s review of manufacturing, non-clinical, and clinical expenses. 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. We work with vendors and suppliers to ensure that our estimates of our research and development expenses are reasonable. We expect to increase our investment in research and development in order to advance nomlabofusp through additional clinical trials. As a result, we expect that our research and development expenses will continue to increase in the foreseeable future as we pursue clinical development of nomlabofusp, including manufacturing activities, and/or any other product candidates we develop.
24
Stock Compensation Expense
We measure all stock options granted to employees and directors based on the fair value on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes option-pricing model requires the use of highly subjective assumptions which determine the fair value of stock-based awards. The assumptions used in our option-pricing model represent management’s best estimates. These estimates are complex, involve a number of variables, uncertainties, and assumptions and the application of management’s judgment, and thus are inherently subjective. If factors change and different assumptions are used, our stock-based compensation expense could be materially different in the future.
We measure restricted stock options and performance-based restricted stock units based on the grant-date fair value of based on the closing price of the Company’s common stock on the date of grant (or, if the grant date is not a business day, the closing price on the preceding business day).
For restricted stock unit awards, we recognize expense over the expected service period of the recipient.
For restricted performance-based restricted stock awards we recognize expense over the estimated period the awards are expected to be earned; that period is the period once the performance objective is determined to be likely, once the performance goal is achieved.
Prior to May 28, 2020, we were a private company and lacked company-specific historical and implied volatility information for our common stock. Prior to January 1, 2023, we estimated our expected common stock price volatility solely based on the historical volatility of publicly traded peer companies with comparable characteristics including enterprise value, risk profiles, and position within the industry. Beginning on January 1, 2023, we began blending our historical data starting in June 2020 (following our merger with Zafgen in 2020) with its historical peer group. We regularly evaluate our peer group to assess changes in circumstances where identified companies may no longer be similar to us, in which case, more suitable companies whose share prices are publicly available would be utilized in the calculation. We expect to continue to do so until we have full historical data regarding the volatility of our own traded stock price.
The expected term of our 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 we have never paid cash dividends on common stock and do not expect to pay any cash dividends in the foreseeable future.
Compensation expense of those awards is recognized over the requisite service period, which is generally the vesting period of the respective award. Typically, we issue awards with only service-based vesting conditions and record the expense for these awards using the straight-line method. We account for forfeitures as they occur.
In January 2025, our Board of Directors (“Board”) approved the issuance of an aggregate of 200,000 performance-based restricted stock units (“RSUs”) to certain of our executive officers (the “January 2025 PSU Awards”). The Board established specified performance criteria and a corresponding performance period over which such performance criteria must be achieved, the satisfaction of which are conditions to earning the January 2025 PSU Awards, and vesting of the underlying RSUs. As of June 30, 2026, the underlying performance criteria of the January 2025 PSU Awards were determined to be not probable of achievement for accounting purposes and no stock-based compensation expense was recognized for the three months ended June 30, 2026.
We classify stock-based compensation expense in our 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.
Financial Operations Overview
Revenue
To date, we have not generated any revenue from product sales and do not expect to generate any revenue from the sale of products in the foreseeable future. If our development efforts result in clinical success and regulatory approval or collaboration agreements with third parties for our product candidates, we may generate revenue from those product candidates or collaborations.
25
Operating Expenses
The majority of our operating expenses since inception have consisted primarily of research and development activities, and general and administrative costs.
Research and Development Expenses
Research and development expenses, which consist primarily of costs associated with our product research and development efforts, are expensed as incurred. Research and development expenses consist primarily of:
At this time, we cannot reasonably estimate or know the nature, timing and estimated costs of the efforts that will be necessary to complete the clinical and commercial development of nomlabofusp, or any other product candidates we develop. We are also unable to predict when, if ever, material net cash inflows will commence from sales of our product candidates. The duration, costs, and timing of clinical trials and development of nomlabofusp or any other product candidates we develop will depend on a variety of factors, including:
A change in the outcome of one or more of these variables with respect to the development of a product candidate could significantly change the costs, timing, and viability associated with the development of that product candidate. For example, if the FDA or another regulatory authority were to require us to conduct additional non-clinical or clinical trials beyond those that we currently anticipate will be required for the completion of clinical development of a product candidate, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time on the completion of clinical development.
26
General and Administrative Expenses
General and administrative expenses consist primarily of personnel costs, consisting of salaries, related benefits and stock-based compensation, costs related to our executive, finance, commercial, information technology, and costs related to other administrative functions. General and administrative expenses also include insurance expenses and professional fees for auditing, commercial readiness costs, tax, and legal services, including legal expenses to pursue patent protection for our intellectual property and related costs. We expect that our general and administrative expenses will increase in the foreseeable future as we hire additional employees to implement, improve, and scale our operational, financial, commercial and management systems.
Results of Operations
Comparison of three months ended June 30, 2026 and 2025
The following table summarizes our results of operations for the three months ended June 30, 2026 and 2025:
|
|
Three Months Ended June 30, |
|
|||||||||
|
|
|
|
|
|
|
|
Increase |
|
|||
|
|
2026 |
|
|
2025 |
|
|
(Decrease) |
|
|||
|
|
(in thousands) |
|
|||||||||
Statement of Operations Data: |
|
|
|
|
|
|
|
|
|
|||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|||
Research and development |
|
$ |
28,000 |
|
|
$ |
23,368 |
|
|
$ |
4,632 |
|
General and administrative |
|
|
6,351 |
|
|
|
4,424 |
|
|
|
1,927 |
|
Total operating expenses |
|
|
34,351 |
|
|
|
27,792 |
|
|
|
6,559 |
|
Loss from operations |
|
|
(34,351 |
) |
|
|
(27,792 |
) |
|
|
(6,559 |
) |
Other income (expense), net |
|
|
1,569 |
|
|
|
1,610 |
|
|
|
(41 |
) |
Net loss |
|
$ |
(32,782 |
) |
|
$ |
(26,182 |
) |
|
$ |
(6,600 |
) |
Research and Development Expenses
Research and development expenses for the three months ended June 30, 2026 increased $4.6 million compared to the three months ended June 30, 2025. The increase in research and development expenses was primarily driven by a $2.3 million increase in process performance qualification, and other drug manufacturing activities at our third-party manufacturers and a $2.0 million increase in professional and consulting fees associated with our ongoing and planned clinical trials, data analysis costs, FDA inspection readiness expenditures, as well as Biologics License Application preparation costs.
General and Administrative expenses
General and administrative expenses for the three months ended June 30, 2026 increased $1.9 million compared to the three months ended June 30, 2025. The increase in general and administrative expenses primarily related to the acceleration of commercial activities as we prepare for the planned mid-2027 launch of nomlabofusp, if approved. This included an increase of $0.7 million of increased compensation costs associated with additional commercial and related headcount, an increase of $0.5 million of market development activities and commercial readiness efforts as well as an increase of $0.5 million in legal fees supporting commercialization and development efforts.
Other Income (expense), net
Other income (expense), net was $1.6 million in the three months ended June 30, 2026 compared to $1.6 million income in the three months ended June 30, 2025.
27
Comparison of six months ended June 30, 2026 and 2025
The following table summarizes our results of operations for the six months ended June 30, 2026 and 2025:
|
|
Six Months Ended June 30, |
|
|||||||||
|
|
|
|
|
|
|
|
Increase |
|
|||
|
|
2026 |
|
|
2025 |
|
|
(Decrease) |
|
|||
|
|
(in thousands) |
|
|||||||||
Statement of Operations Data: |
|
|
|
|
|
|
|
|
|
|||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|||
Research and development |
|
$ |
53,031 |
|
|
$ |
49,919 |
|
|
$ |
3,112 |
|
General and administrative |
|
|
12,437 |
|
|
|
9,060 |
|
|
|
3,377 |
|
Total operating expenses |
|
|
65,468 |
|
|
|
58,979 |
|
|
|
6,489 |
|
Loss from operations |
|
|
(65,468 |
) |
|
|
(58,979 |
) |
|
|
(6,489 |
) |
Other income (expense), net |
|
|
3,073 |
|
|
|
3,516 |
|
|
|
(443 |
) |
Net loss |
|
$ |
(62,395 |
) |
|
$ |
(55,463 |
) |
|
$ |
(6,932 |
) |
Research and Development Expenses
Research and development expenses for the six months ended June 30, 2026 increased $3.1 million compared to the six months ended June 30, 2025. This increase was driven by a $3.7 million increase in professional and consulting fees associated with our ongoing and planned clinical trials, data analysis costs, inspection readiness expenditures as well as Biologics License Application preparation costs partially offset by lower manufacturing activities and there related costs in the six month period ended June 30, 2026 compared to the six month period ended June 30, 2026.
General and administrative expenses for the six months ended June 30, 2026 increased $3.4 million compared to the six months ended June 30, 2025. The increase in general and administrative expenses primarily related to the acceleration of commercial activities as we prepare for the planned mid-2027 launch of nomlabofusp, if approved. This included an increase of $1.6 million in market research, market development and other commercial readiness activities, an increase of $1.0 million of increased compensation costs associated with additional commercial and related headcount,as well as an increase of $0.5 million in legal fees supporting commercialization and development efforts.
Other Income (expense), net
Other income (expense), net was $3.1 million income in the six months ended June 30, 2026 compared to $3.5 million income in the six months ended June 30, 2025. The decrease was primarily driven by lower interest and accretion income due to lower interest yields and lower average investable cash, cash equivalents, and marketable securities balances.
Liquidity and Capital Resources
Financing Activities, including Recent Material Financings
We have funded our operations to date primarily with proceeds from sales of common stock, proceeds from the sale of prefunded warrants for the purchase of common stock, the acquisition in 2020 of cash, cash equivalents, marketable securities, and restricted cash upon the merger with Zafgen, Inc. (“Zafgen”) and, prior to the 2020 merger with Zafgen, capital contributions from Chondrial Holdings, LLC.
In July 2025, we completed an underwritten public offering in which we issued and sold 21,562,500 shares of our common stock, including the exercise in full of the underwriters' option to purchase additional shares, at a public offering price of $3.20 per share. We received net proceeds of approximately $65.0 million, after deducting underwriting discounts, commissions and other offering expenses.
In February 2026, we completed an underwritten public offering in which we issued and sold 23,000,000 shares of our common stock, including the exercise in full of the underwriters' option to purchase additional shares, at a public offering price of $5.00 per share. We received net proceeds of approximately $107.6 million, after deducting underwriting discounts, commissions, and other offering expenses.
28
Cash Flows
The following table summarizes our sources and uses of cash for each of the periods presented below:
|
|
Six Months Ended June 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
|
|
(in thousands) |
|
|||||
Net cash used in operating activities |
|
$ |
(88,644 |
) |
|
$ |
(45,921 |
) |
Net cash provided by (used in) investing activities |
|
|
(11,911 |
) |
|
|
33,290 |
|
Net cash provided by financing activities |
|
|
107,680 |
|
|
|
— |
|
Net increase in cash, cash equivalents and restricted cash |
|
$ |
7,125 |
|
|
$ |
(12,631 |
) |
Net cash used in operating activities
During the six months ended June 30, 2026, operating activities used $88.6 million of cash, resulting from our net loss of $62.4 million, adjusted for noncash expenses of $3.7 million and changes in our operating assets and liabilities resulting in a use of cash of $30.0 million. Our net loss was primarily attributed to research and development activities related to our nomlabofusp program and our general and administrative expenses as described above. Noncash expenses primarily relate to stock-based compensation expenses. The change in operating assets and liabilities was primarily due to decreases in prepaid expenses and accrued expenses, partially offset by an increase in accounts payable.
During the six months ended June 30, 2025, operating activities used $45.9 million of cash, resulting from our net loss of $55.5 million, adjusted for noncash expenses of $2.5 million and changes in our operating assets and liabilities resulting in a source of cash of $7.1 million. Our net loss was primarily attributed to research and development activities related to our nomlabofusp program and our general and administrative expenses as described above. Noncash expenses primarily relate to stock-based compensation expenses. The change in operating assets and liabilities was primarily due to increases in prepaid expenses, accounts payable and accrued expenses.
Net cash provided by (used in) investing activities
During the six months ended June 30, 2026, investing activities used $11.9 million. This use of cash resulted from purchases of $63.3 million of marketable securities, partially offset by the maturities of $51.5 million of marketable securities.
During the six months ended June 30, 2025, investing activities provided $33.3 million. This source of cash resulted from the maturities of $113.5 million of marketable securities partially offset by purchases of $80.1 million of marketable securities.
Net cash provided by financing activities
During the six months ended June 30, 2026, financing activities provided $107.7 million of cash flows from an offering of common stock.
During the six months ended June 30, 2025, there were no financing activities.
Operating Capital Requirements
Since our inception, we have not generated any revenue from any sources, including from product sales, and have incurred significant operating losses and negative cash flows from our operations. We have incurred net losses of approximately $62.4 million and $55.5 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, we had an accumulated deficit of $497.2 million. We have devoted substantially all of our resources to developing nomlabofusp, building our intellectual property portfolio, developing third-party manufacturing capabilities, business planning, capital raising, and providing general and administrative support for such operations.
As of June 30, 2026, we had approximately $156.3 million of cash, cash equivalents and marketable securities. In accordance with Accounting Standards Update (“ASU”) No. 2014-15, “Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”, we have evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that these unaudited condensed consolidated financial statements are issued. These cash resources are not sufficient to fund our planned operations for a period of at least one year from the date these
29
financial statements are issued. While we expect our cash, cash equivalents and marketable securities will fund our forecasted operating expenses and capital expenditure requirements into the third quarter of 2027, if we encounter unexpected delays in our clinical trials or if there are other unanticipated changes to our operating plan from our current assumptions that negatively impact our operations, we may reduce expenditures in order to further extend our existing cash resources.
We expect to incur significant expenses and operating losses for the foreseeable future as we expect to continue to incur expenses in connection with our ongoing activities, if and as we:
Until we can generate substantial revenue, if ever, we will need to raise additional capital to fund our ongoing operations, and continue to evaluate opportunities to further finance our operating cash needs through a combination of some, or all, of the following: equity, debt and royalty offerings, collaborations, strategic alliances, and/or marketing, distribution or licensing arrangements. There is no assurance, however, that additional financing will be available when needed or that we will be able to obtain financing on terms acceptable to us. If we are unable to obtain funding when required in the future, we could be required to delay, reduce, or eliminate research and development programs, or commercialization efforts, which could adversely affect our business prospects. These conditions raise substantial doubt about our ability to continue as a going concern.
Off-Balance Sheet Arrangements
During the periods presented we did not have, and we currently do not have, any off-balance sheet arrangements, as defined under applicable SEC rules, such as relationships with unconsolidated entities or financial partnerships, which are often referred to as structured finance or special purpose entities, established for the purpose of facilitating financing transactions that are not required to be reflected on our balance sheets.
Recently Issued Accounting Pronouncements
Please read Note 2 to our condensed consolidated financial statements included in Part I of Item 1 of this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements applicable to our business, if any.
Other Company Information
None.
30
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are a "smaller reporting company" as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and are not required to provide the information under this item.
Item 4. Controls and Procedures
We maintain “disclosure controls and procedures,” as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosure.
The design of any disclosure controls and procedures is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
With respect to the quarter ended June 30, 2026, under the supervision and with the participation of our management, we conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective.
Management does not expect that our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control systems are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in a cost-effective control system, no evaluation of internal control over financial reporting can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been or will be detected.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that have occurred during the fiscal quarter ended June 30, 2026, which have materially affected or reasonably likely to materially affect our internal control over financial reporting.
31
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we are subject to claims in legal proceedings arising in the normal course of business. To our knowledge, during the six months ended June 30, 2026, there were none, and as of the date of this Quarterly Report, there are no threatened or pending legal actions that could reasonably be expected to have a material adverse effect on our business, financial condition, results of operations, or cash flows.
Item 1A. Risk Factors
You should carefully consider the risk factors described in our 2025 Annual Report under the caption “Item 1A. Risk Factors.” .” Except as set forth below, there have been no material changes in our risk factors disclosed in our 2025 Annual Report. The risks described in our 2025 Annual Report are not the only risks facing our company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, or future results.
We initiated our rolling BLA submission to the FDA for marketing approval of nomlabofusp using the accelerated approval pathway and expect to submit the remaining modules in the second half of 2026; however, there can be no assurance that we will submit the remaining modules on our expected timeline, that the FDA will accept the BLA for filing or the FDA will approve our BLA submission for accelerated approval.
We submitted the first module of our BLA to the FDA in June 2026 to request marketing approval of nomlabofusp. We expect to submit the remaining modules in the second half of 2026. However, our anticipated submission timeline is based on our current development, manufacturing and regulatory plans and assumptions. The timing of submission of the remaining modules may be delayed for a variety of reasons, including for unforeseen reasons beyond our control, and even if we are able to complete our BLA submission on our anticipated timeline, the FDA may not accept or approve our BLA for a variety of reasons. There can be no assurance that the FDA will agree that the data submitted in the BLA is adequate to support approval, including accelerated approval. In addition, the FDA may refuse to accept our planned BLA for substantive review (thereby issuing a “refuse to file” letter) or may conclude after review of our data that our application is insufficient to obtain regulatory approval (thereby issuing a “complete response” letter). Further, as previously disclosed, the FDA stated that the adequacy of the safety database will be a matter of review at the time of BLA submission.
We also rely on third parties for non-clinical, clinical and manufacturing activities to support the conduct of our trials and our BLA submission. As part of the FDA review process, we are subject to inspections by FDA, as are each of our third-party sites, vendors and suppliers including our clinical sites, non-clinical sites and manufacturing sites, and there is no guarantee that these sites will pass the FDA’s inspection. Accordingly, any regulatory or other issues experienced by these third parties could impact the timing of our BLA submission or any subsequent approval. The FDA conducted a cGMP inspection of our third-party drug product (fill and finish) manufacturer related to the site’s processes and procedures and issued a Form 483 letter. The manufacturer has developed a remediation plan to address the FDA’s observations, but there can be no assurance that this plan will be adequate or address all the issues in a timely manner to the FDA’s satisfaction, which could result in a delay or warning letter. Our strategy is to to have back-up sources for key components in our supply chain. As we have done with our drug substance manufacturer, we are in the process of qualifying an additional drug product (fill and finish) manufacturer. The remediation of issues at our sites or vendors could have a material adverse effect on our business, operating results, financial condition and prospects.
32
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Rule 10b5-1 Trading Arrangements
During the quarter ended June 30, 2026,
33
Item 6. Exhibits
The exhibits filed as part of this Quarterly Report are set forth on the Exhibit Index, which is incorporated herein by reference.
EXHIBIT INDEX
Exhibit No. |
|
Description |
|
|
|
3.1* |
|
|
|
|
|
31.1* |
|
|
|
|
|
31.2* |
|
|
|
|
|
32.1** |
|
|
|
|
|
101.INS* |
|
Inline XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tag re embedded within the Inline XBRL document |
|
|
|
101.SCH* |
|
Inline XBRL Taxonomy Extension Schema Document. |
|
|
|
104 |
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
* Filed herewith.
** Furnished herewith.
34
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
LARIMAR THERAPEUTICS, INC. |
||
|
|
|
||
Date: August 4, 2026 |
|
By: |
|
/s/ Carole S. Ben-Maimon, M.D. |
|
|
|
|
Carole S. Ben-Maimon, M.D. |
|
|
|
|
President and Chief Executive Officer (Principal Executive Officer) |
|
|
|
|
|
Date: August 4, 2026 |
|
By: |
|
/s/ Michael Celano |
|
|
|
|
Michael Celano |
|
|
|
|
Chief Financial Officer (Principal Financial and Accounting Officer) |
35