2023-08-02 06:02:15 ET
Summary
- Clearance given by FDA to initiate higher 50 mg dosing of CTI-1601 for patients with Friedreich's Ataxia for phase 2 study; results from this cohort expected 1st half of 2024.
- Clearance given to initiate open-label extension study of CTI-1601 for Friedreich's Ataxia; study initiation Q1 of 2024 and then interim results Q4 of 2024.
- Prior phase 1 study, using CTI-1601 for the treatment of patients with Friedreich's Ataxia, showed that the drug was able to increase frataxin levels in a dose-dependent manner.
- Biogen paid around $7.3 billion to acquire Reata Pharmaceuticals for its Friedreich's Ataxia drug SKYCLARYS; buyout of Reata makes a case for speculative investment in Larimar Therapeutics.
Larimar therapeutics (LRMR) has been making significant progress in advancing its drug known as CTI-1601, which is being developed for the treatment of patients with Friedreich's ataxia [FA]. That's because it just received clearance from the FDA so that it can advance a higher dosing 50 mg cohort of CTI-1601 in a phase 2 study treating patients with FA. Top-line safety, pharmacokinetic and pharmacodynamic data from this phase 2 study using CTI-1601 for this patient population is expected to be released in the 1st half of 2024. The most important factor from this data to be released will be to see if there is an increase in frataxin levels in peripheral tissues. Not only that, but in addition, it also received clearance to begin an open-label extension [OLE] trial, which is going to use 25 mg daily dosing of CTI-1601 in these FA patients. Initiation of this OLE trial is expected Q1 of 2024 and from there interim results are expected in Q4 of 2024. The premise to bring up this biotech is that FA is a large market opportunity and this was signified in the buyout of Reata Pharmaceuticals that occurred. That is, Biogen (BIIB) paid $7.3 billion [including debt] to acquire Reata because of its approved FA drug known as SKYCLARYS. Should Larimar achieve similar or superior success in its ongoing clinical studies, then I could either see it being successful in this FA space or ultimately acquired by another big pharmaceutical company.
CTI-1601 Is Showing Great Promise In Friedreich's ataxia
As I stated above, Larimar has been able to obtain clearance to advance its phase 2 study into a higher dosing cohort. That is, is obtained the ability to start treating patients with Friedreich's ataxia with 50 mg of its drug CTI-1601 . Patients are going to receive 50 mg of daily dosing with this drug for 14 days. After that, they will be given it every other day until day 28. The goal is to see safety of this higher dosing regimen of CTI-1601, but of equal importance will also be the pharmacodynamic data to be revealed. That's because this FA drug may ultimately achieve what no other current treatment option offers, which is to increase frataxin levels for these patents. With the clearance of initiating the 50 mg cohort, there is a catalyst opportunity for investors to look forward to. This would be the release of results from this phase 2 study, using 50 mg of CTI-1601, in the 1st half of 2024. It also gained clearance to initiate an open-label extension [OLE] trial, which was cleared for initiation by the FDA. Patients for this OLE study will be receiving 25 mg of CTI-1601 daily. The significance of this is that this opens up two catalysts. The first catalyst would be initiation of this OLE study, which is expected in Q1 of 2024. The second catalyst would be interim results from this OLE study, which is then expected in Q4 of 2024.
Friedreich's Ataxia [FA] is a rare inherited degenerative disorder. It can damage the peripheral nerves, spinal cord, and cerebellum portion of a patient's brain. These patients experience progressive neurodegeneration and loss of muscle strength. How so? Well, a major problem is that these patients suffer from low levels of a protein known as frataxin. This protein is important, because it helps mitochondria to function properly. That is, to boost energy production of cells. Specifically, they play a critical role in skeletal muscle physiology. As you can see with low levels of frataxin being present, these mitochondria are not able to effectively help patients with muscle strength and coordination. There are several symptoms that these patients might experience, such as the following:
- Tiredness
- Trouble walking properly
- Slow speech
- Vision loss
- Shortness of breath
The thing is that most of these patients start to experience signs and symptoms of Friedreich's ataxia between the ages of 5 to 15. They start off with poor coordination and balance and then may typically require the use of a wheelchair after about 10 years that signs and symptoms appear.
The reason for moving towards the higher 50 mg dosing was thanks to prior advancement of this program using CTI-1601 for patients with FA. That's because in a prior phase 1 study, it was noted that this drug was able to increase frataxin levels in a dose-dependent manner. In the most recently completed cohort with 25 mg of CTI-1601, it was shown that treatment was well tolerated. Not only that, but daily subcutaneous injections of 25 mg CTI-1601 for 14 days led to an increase in frataxin levels from baseline compared to placebo in all evaluated tissues [both skin and buccal cells]. The bottom-line is that this drug was evaluated in 37 adults so far across both phase 1 and 2 studies. A total of 35 patients completed treatment all the way through, while two withdrew due to an allergic reaction and mild to moderate nausea and vomiting respectively. The 50 mg CTI-1601 data is important, because higher dosing could possibly mean an even greater increase in frataxin levels.
Recent Buy Of Reata Makes Case For Larimar Therapeutics
As I stated in the beginning above, Biogen paid around $7.3 billion to acquire Reata Pharmaceuticals . The reason why it paid so much to do so has to do with the potential market opportunity as it relates to the approved drug SKYCLARYS, which was approved by the FDA for the treatment of patients with Friedreich's Ataxia [FA]. Where the opportunity comes into play for SKYCLARYS is the market opportunity for targeting this disease. It is expected that sales of SKYCLARYS could touch $1.3 billion by 2029 . The thing to note is that the U.S. market is smaller compared to other territories. Thus, the reason why Larimar is already in the process of engaging with regulators and investigators outside of the United States. Why is it doing so? That's because 75% of patients with FA live outside of the United States. Thus, it is good that Larimar Therapeutics is getting the ball rolling to start thinking about advancing studies for other territories.
A key question you must be asking is, how does Larimar Therapeutics with CTI-16016 hope to compete against Biogen with SKYCLARYS? If Larimar eventually is able to get its drug through trials and approval, it will compete based on mechanism of action. The thing about SKYCLARYS is that it doesn't actually target the protein frataxin like CTI-1601 does. SKYCLARYS activates a protein known as nuclear factor erythroid 2-related factor 2 [NrF2]. This particular protein works to activate genes that promote mitochondrial function, boost antioxidant responses and prevent inflammation in FA patients. On the other hand, Larimar with CTI-1601 is going after frataxin levels in FA patients which is low. Thus, this drug is a recombinant fusion protein intended to deliver a human frataxin to the mitochondria of patients with FA. It remains to be seen in further testing if a drug like CTI-1601 is ultimately successful in phase 3 testing, plus ultimately approved, but the premise is that it goes to the root cause of FA, which is the lack of adequate frataxin in mitochondria.
Another potential competitor, that is actually hoping to restore the production of functional natural occurring frataxin proteins to therapeutic levels would be Design Therapeutics (DSGN). That's because this biotech has a drug candidate known as DT-216, which is being explored in a phase 1 study for the treatment of patients with FA. It is expected that initial data from the phase 1 Multiple-Ascending Dose study, using DT-216 for the treatment of patients with FA, is expected in Q3 of 2023. It will be important to see if this biotech achieves positive data and whether or not it continues to advance this treatment.
Financials
According to the 10-Q SEC Filing , Larimar Therapeutics had cash and cash equivalents of $111.5 million as of March 31, 2023. A big reason for the cash on hand is because of an underwritten offering of 22,225,000 shares of its common stock, which were sold at an offering price of $3.15 per share. The gross proceeds that it generated around September of 2022 was approximately $70 million. However, on November 22nd 2022 it also entered into an ATM agreement with Guggenheim Securities, LLC in which Larimar from time to time could sell up to an aggregate of $50 million worth of shares of its stock. As of the date of the quarterly report, which was May 15th 2023, no shares were sold under this ATM agreement. This means that should this biotech need additional cash to fund its pipeline, then it has the option of selling some shares to obtain some. It will likely need to tap into this ATM to generate some funds or raise cash by other means. Why is that? That's because in its 10-Q SEC Filing, it states that it has enough cash to fund its operations for at least the next 12 months from the date of said filing, which is May 15, 2023.
Risks To Business
There are several risks that investors should be aware of before investing in Larimar Therapeutics. The first risk to consider would be with respect to the advancement of the higher dosing 50 mg cohort of CTI-1601 in the ongoing phase 2 study. That's because while pharmacodynamic data beforehand showed an increase in frataxin levels in a dose-dependent manner, there is no guarantee that the higher dosing of 50 mg will improve upon the frataxin levels possible. Not only that, but it also remains to be seen if this higher dosing is safe/tolerable for patients to take either. Either way, it is expected that results from the 50 mg dose cohort will be released in the 1st half of 2024. A second risk to consider would be with respect to the open-label extension study using CTI-1601 for FA patients, which is expected to begin in Q1 of 2024.
That's because interim results from this OLE study are expected to be released in Q4 of 2024. There is no guarantee that this data will turn out to be positive. A third risk to consider would be with respect to the prior clinical hold that was done with respect to CTI-1601. Eventually, Larimar was able to get the FDA to remove the full clinical hold relating to the advancement of this program, but there is no guarantee that there won't be any further safety issues later on. A fourth risk to consider would be to the competitive landscape that Larimar Therapeutics would be in if it ultimately advances CTI-1601 for FA.
That's because SKYCLARYS has already been approved to treat this disorder. Plus, Design Therapeutics is advancing its own drug DT-216 for the treatment of this patient population. Again, data from its phase 1 MAD study is expected by Q3 of 2023. A fifth and final risk to consider would be with respect to its financial position. As I stated above, it believes it only has enough cash for at least the next 12 months. I believe that it will need to enact a cash raise in the coming months. It can do this either through the sale of stock or by tapping into its ATM agreement with Guggenheim Securities.
Conclusion
Larimar Therapeutics has made significant progress in advancing its drug CTI-160 for the treatment of patients with Friedreich's Ataxia [FA]. That's because it has already achieved clearance from the FDA to continue on with the higher 50 mg dosing of its drug for the treatment of this patient population. In addition, to having received clearance to initiate an open-label extension study using CTI-1601 as well. I believe that Biogen buying Reata Pharmaceuticals reinforces the potential for a biotech such as Larimar, which is advancing its drug for the treatment of patients with FA. There are about three catalysts for investors to look forward to in 2024 and I believe all of these may be able to boost shareholder value.
For further details see:
Larimar: Friedreich's Ataxia Drug With Significant Potential