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Investing.com - Jones Trading lowered its price target on Larimar Therapeutics (NASDAQ:LRMR) to $10.00 from $12.00 on Monday, while maintaining a Buy rating on the stock. Currently trading at $3.29, the stock sits well below analysts’ target range of $10-$40, according to InvestingPro data.
The firm cited dilution from Larimar’s recent public offering as the primary reason for the price target reduction. Jones Trading noted that Larimar closed a $69 million public offering on July 31, bringing its pro forma cash position to approximately $185 million as of August 1, which is estimated to extend the company’s runway into the fourth quarter of 2026. InvestingPro analysis shows the company maintains strong liquidity with a current ratio of 7.48, though it’s currently burning through cash rapidly.
Jones Trading highlighted insights from a key opinion leader (KOL) regarding Larimar’s treatment for Friedreich’s ataxia (FA), noting that six months could be sufficient to show meaningful change in clinical outcomes. The KOL also indicated that frataxin levels within 50% of normal are expected to be therapeutic, and expressed excitement about frataxin replacement therapies.
The firm expects Phase 2 open-label extension data in FA patients in September, with skin frataxin as the key biomarker. The KOL observed that preservation of cardiac function would likely change mortality statistics for FA patients. For detailed analysis of Larimar’s financial health and growth prospects, including exclusive ProTips and comprehensive valuation metrics, visit InvestingPro.
Jones Trading also reported that approximately 90% of the KOL’s patients over 16 years old are currently on Skyclarys, with the greatest benefit seen in younger patients, while noting that injection site reactions and daily syringe preparation for nomlabofusp could limit compliance in some patients.
In other recent news, Larimar Therapeutics has successfully completed its public offering, raising $69 million in gross proceeds. This follows the sale of 21,562,500 shares of common stock at $3.20 per share, including the full exercise of the underwriters’ option to purchase an additional 2,812,500 shares. Initially, the company had announced the pricing of 18.75 million shares at $3.20 per share, aiming to generate $60 million before underwriting discounts and expenses. Larimar Therapeutics had also launched an underwritten public offering of common stock and pre-funded warrants, with a 30-day option for underwriters to purchase additional securities. Additionally, the company published two peer-reviewed articles showcasing nonclinical data on nomlabofusp, its frataxin protein replacement therapy for Friedreich’s ataxia. This research supports the mechanism of action and efficacy of the therapy in increasing FXN levels in relevant tissues. These developments highlight Larimar Therapeutics’ ongoing efforts in advancing its clinical-stage biotechnology projects.
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