Baird has initiated coverage on Larimar Therapeutics (NASDAQ: LRMR) with an Outperform rating and set a price target of $16.00.
The firm's optimism is anchored in the potential U.S. approval of Larimar's lead drug candidate, nomlabofusp, for the treatment of Friedreich's ataxia, a rare genetic disease.
The analyst highlighted a 60% probability of the drug gaining approval, with the possibility of an accelerated approval by 2026.
The decision by Baird comes after the U.S. Food and Drug Administration (FDA) selected nomlabofusp for its START pilot program in May.
The program is designed to expedite the development and review of drugs that treat serious conditions. The inclusion of nomlabofusp in this program followed promising results from a placebo-controlled phase 2 study.
Nomlabofusp is being recognized for its unique mechanism of action that directly targets the underlying cause of Friedreich's ataxia, which is a deficiency of the protein frataxin.
The Baird analyst expressed confidence in the drug's ability to capture a significant market share, even in a competitive landscape.
The positive outlook for Larimar Therapeutics is further bolstered by the expectation that nomlabofusp's differentiated approach will stand out in the market.
The analyst's coverage note suggests that the drug's focus on the root cause of the disease may provide a competitive edge.
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