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Larimar Therapeutics (NASDAQ:LRMR) Stock Climbs on Notable Insider Buying
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Larimar Therapeutics (NASDAQ:LRMR) Stock Climbs on Notable Insider Buying

Story Highlights

Shares of clinical-stage biotech firm Larimar Therapeutics are trending higher after insiders made notable purchases of the company’s common stock as part of an underwritten offering. The proceeds from this offering will help to fund the company’s key clinical program.

Larimar Therapeutics (NASDAQ:LRMR), a clinical-stage biotechnology company that develops treatments for complex rare diseases, witnessed significant insider transactions as part of the company’s underwritten offering of 25,558,750 common stock. Furthermore, another positive signal for retail investors is that last week, Larimar disclosed that the U.S. Food and Drug Administration (FDA) was lifting its full clinical hold on the company’s CTI-1601 program and imposing a partial hold.

Larimar shares were up 8.7% in Wednesday’s pre-market trading. However, shares have declined 70% year-to-date (as of September 20).  

Notable Insider Transactions in LRMR Stock

As per an SEC filing, James E. Flynn, a major shareholder (and a director by deputization), along with related entities, purchased over 11.1 million shares of Larimar at $3.15 apiece. The aggregate amount of the purchases made by Flynn on September 16 was nearly $35 million.    

Also, on September 16, director Thomas Edward Hamilton bought 317,460 shares for nearly $1 million. Furthermore, Larimar’s President, CEO, and director Carole Ben-Maimon, and CFO Michael Celano, each bought 31,746 shares for $100,000.

All these transactions were made as part of the company’s recently completed underwritten common stock offering that fetched gross proceeds of $80.5 million. The company disclosed that Deerfield Management (Flynn is the managing partner of Deerfield Management) and other life science investors participated in this offering.

Larimar intends to use these proceeds to support its CTI-1601 program as well as for working capital and general corporate purposes.

As per TipRanks’ Insider Trading Activity tool, the Insider Confidence Signal is Very Positive for Larimar based on four informative insider transactions in the past three months. Overall, the aforementioned insiders purchased LRMR shares worth $36.2 million.  

What Is the Target Price for Larimar Stock?

This week, William Blair analyst Myles Minter upgraded Larimar stock to a Buy from a Hold after the company received FDA clearance to advance its lead asset, CTI-1601, in a Phase 2 trial for Friedreich’s ataxia patients.

The company expects to begin the Phase 2 trial in the fourth quarter of this year, with top-line data expected in the second half of 2023.

Overall, Larimar scores a Strong Buy consensus rating based on three unanimous Buys. The average Larimar price target of $16 suggests 398.4% upside potential from current levels.

Conclusion

Strong insider buying following the FDA’s clearance for the initiation of a Phase 2 trial of Larimar’s lead asset sends positive signals for retail investors.

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