On Monday, Citi reiterated its Buy rating on Larimar Therapeutics (NASDAQ:LRMR), maintaining a $14.00 price target for the company's stock. The endorsement comes after Larimar disclosed initial Open-Label Extension (OLE) data for the 25mg dose of nomla in 14 Friedreich's ataxia (FA) patients.
According to InvestingPro data, LRMR shares have fallen nearly 9% in the past week, with analyst targets ranging from $12.36 to $36, suggesting significant upside potential.
The analyst from Citi addressed the market's negative response to the announcement, which included two serious adverse events (SAEs) leading to patient discontinuations. Despite these events, one being an allergic reaction and the other a seizure in a patient with multiple co-morbidities, the analyst believes the market is misinterpreting these as indicative of broader safety concerns. With a strong consensus recommendation of 1.18 (where 1 is a Strong Buy), analysts remain overwhelmingly positive on LRMR's prospects.
Citi's analysis suggests that the longer-term safety data released today supports the view that nomla is safe and tolerable for chronic use. This aspect of the treatment has been a significant part of the investment thesis for the company. The analyst emphasized that the data presented confirms the safety of nomla, which is crucial for long-term dosing strategies.
Furthermore, the update included information that Larimar has started dose escalation to 50mg and plans to initiate new enrollments at this higher dose level. This includes adolescent and pediatric patients, reflecting both the company's and the U.S. Food and Drug Administration's (FDA) confidence in the safety profile of nomla. The FDA has reviewed the reported SAEs.
In light of the day's market selloff of Larimar's stock, the Citi analyst views the reaction as excessive and suggests that this could be an opportunity to buy shares at a lower price. The firm's position remains optimistic about the stock's prospects, underlined by the maintained Buy rating and $14.00 price target.
InvestingPro analysis indicates the stock is currently undervalued, with a robust balance sheet showing a current ratio of 13.1. Get access to the full LRMR research report and 8 additional ProTips by subscribing to InvestingPro.
In other recent news, Larimar Therapeutics has been making strides in its clinical trials, with multiple analysts maintaining their positive ratings. Guggenheim reaffirmed a Buy rating with a $26.00 price target, following the presentation of encouraging clinical trial data.
Similarly, H.C. Wainwright maintained its Buy rating, forecasting sales of $356 million by 2030. Citi, Leerink Partners, and Wedbush also maintained their positive ratings, while Jones Trading and Baird initiated coverage with positive ratings.
Larimar is testing a 50 mg dose in six patients and plans to elevate all current participants to this higher dose. Data from the 50mg cohort is anticipated by mid-2025.
The company is also discussing with the FDA the data required for a potential accelerated approval, with a Biologics License Application submission targeted for the second half of 2025. The company has extended its cash runway guidance into the second quarter of 2026.
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