Fulcrum Therapeutics, Inc.

Good morning and welcome to the Fulcrum Therapeutics first quarter 2023 financial results and business update conference call. Currently, all participants are in the listen only mode. This call is being webcast live on the investor section of Fulcrum's website at www.fulcrumtx.com and is being recorded. For opening remarks, I would like to introduce Chris Calabrese. Please go ahead.

Thank you and good morning.

Welcome to the Fulcrum Therapeutics First Quarter 2023 Financial Results and Business Update Conference Call. Please be reminded that remarks made during this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These may include statements about the company's future expectations and plans, including the clinical hold of FTX 6058, clinical development timelines, and financial projections. While these forward-looking statements represent Fulcrum's views as of today, this should not be relied upon as representing the company's views in the future. Fulcrum may update these statements in the future, but is not taking on an obligation to do so. Please refer to Fulcrum's most recent filings with the Securities and Exchange Commission for a discussion of certain risks and uncertainties associated with the company's business. Leading the call today will be Dr. Robert Gould, Interim Chief Executive Officer at Fulcrum, who will provide a corporate overview, discuss key pipeline updates, as well as the financials before we open the call for Q&A. And Dr. Ian Frazier, Interim Chief Medical Officer, will be able to answer questions during the Q&A portion of the call. With that, it's my pleasure to turn the call over to Robert.

Thank you, Chris. Good morning. I appreciate everyone taking the time to join us today. I'd like to begin by reiterating our deep commitment to advancing our organization and improving the lives of patients with genetically defined diseases in areas of high unmet medical need. In the first few months of 2023, we continue to make progress to address the FTX 6058 clinical hold and advance our phase three reach trial of losmaphimod in fascioscopular humeral muscular dystrophy. We are also pleased to announce the appointment of Alex Sapir to the position of President and Chief Executive Officer and member of the Board of Directors, effective July 1st, 2023. As of last Friday, Alex joined as special advisor to me, and we are thrilled to have a world-class leader of his stature on board to propel Fulcrum to the next level of achievement. Alex brings deep industry knowledge from the public sector and has more than 25 years of experience building commercial stage pharmaceutical organizations. Most recently, Alex served as chief executive officer and a member of the board of directors of Reviral prior to the company's acquisition by Pfizer. Prior to Reviral, Alex served as president, chief executive officer, and member of the board of directors of Dover Pharmaceuticals. Earlier in his career, Alex spent 10 years as Executive Vice President of Marketing and Sales for United Therapeutics and held roles of increasing responsibility within the commercial organization at GlaxoSmithKline. Alex's impressive track record makes him an ideal fit for Fulcrum at this critical juncture. With this brief introduction, I'll now dive into our programs and provide an update on recent activities. Let me start by discussing our most recent update to the FDX 6058 program, our oral HPF inducer for the potential treatment of patients with sickle cell disease. As previously announced, we received verbal notification from the FDA on February 23rd that they had placed a full clinical hold on the investigational new drug application for FDX 6058, and we received a formal clinical hold letter from the FDA on February 24th. We immediately suspended dosing and paused enrollment in the trial of FTX6050A. We have been in active and ongoing dialogue with the FDA, and we'll provide an update once we have more clarity on the regulatory path forward. Overall, our interactions with the agency thus far have been productive and collaborative, and we look forward to continuing our dialogue as we work to resolve the clinical hold. In the initial feedback provided in February 2023, The FDA stated that the hold related to preclinical data submitted in April, October, and December 2022, and nonclinical and clinical evidence of hematologic malignancies observed with other inhibitors of polycom repressor complex 2, or PRC2. The agency is focused on balancing the safety and efficacy tradeoffs and has requested that Fulcrum further define the population where the potential benefit of continued treatment with FTX6058 outweighs potential risk. The hold was not a result of any clinical findings in the Phase 1b trial that was ongoing at the time of the hold. For further context, we have a strong data set from the subjects who completed dosing prior to the clinical hold. Treatment with FTX6058, the highest dose of 12 mg, showed a 10% absolute HBF increase from baseline, resulting in a total HBF level of 24.9% after 42 days of treatment. 58 has been generally well tolerated to date with no drug-related treatment emergent serious adverse events or discontinuations due to treatment emergent adverse events. All adherence subjects showed clinically relevant improvements in the 6 and 12 milligram dose cohorts consistent across subjects both on and off background hydroxyurea, the current standard of care. We maintain that FDX6058 has the potential to provide a differentiated therapeutic option for people living with sickle cell disease, and that the clinical and preclinical data generated to date demonstrate a favorable benefit-risk profile. Now, turning to our most advanced program, Losmaphimod, a selective P38 alpha-beta mitogen-activated protein kinase inhibitor. Losmaphimod is in Phase III development for the treatment of FSHD, an autosomal dominant genetic form of muscular dystrophy, which has an estimated patient population of 16,000 to 38,000 in the United States alone. FSHD is characterized by relentless and accumulating muscle and functional loss and results in the inability to perform daily life activities due to a significant impairment of upper extremity function, loss of mobility, and chronic pain. Although it's one of the most common forms of muscular dystrophy, there are currently no approved treatments. Given the high unmet need for innovation, we are extremely encouraged by Losmaphimod's therapeutic potential to preserve muscle function and believe it has the potential to address the urgent need for a safe and effective disease-modifying treatment that can slow or stop disease progression. We initiated REACH, our double-blind, placebo-controlled Phase III trial of Losmaphimod in June 2022 and are currently enrolling patients in the U.S., Canada, and Europe. At this time, 31 sites are active out of 36 sites. This 48-week trial is expected to enroll approximately 230 adults and expected to complete enrollment in the second half of 2023. We are pleased with the rapid pace of enrollment in the Los Matamad Phase III REACH trial. which is both a testament to the high level of engagement by our clinical trial sites and our team's strategic execution. The primary endpoint is the absolute change from baseline in reachable workspace, or RWS, a quantitative measure of upper extremity range of motion and function that specifically evaluates shoulder and proximal arm mobility with 3D motion sensor technology. Preserving this upper extremity function is critical for maintaining the ability for self-care and other activities of daily living that directly influence quality of life and independence. In addition to safety and tolerability, secondary endpoints include muscle fat infiltration, or MFI, an important marker of disease pathology, and self-reported outcomes, such as the patient global impression of change, or PGIC, and quality of life measures. These will include healthcare utilization questionnaires that will inform our thinking about payer strategy as we prepare for a potential commercial launch. REACH was designed as a highly efficient 48-week trial and is intended to be registration enabling both in the U.S. and in ex-U.S. geographies. We are confident that we have selected reliable measures of disease progression and we hope to demonstrate meaningful advantages for Los Matamoros compared to placebo. Encouragingly, our Phase IIb REDUX-IV trial demonstrated significant improvements in RWS relative to placebo at 48 weeks. Furthermore, top-line results from the ongoing open-label extension of REDUX-IV showed that participants in the initial treatment arm who continued to receive Lusmapamod demonstrated durability of effect through a 96-week period. Additionally, patients who crossed over from placebo to Lusmapamod after the initial 48-week trial period, showed improvement and slowing of disease progression as measured by RWS mean change from baseline. We believe these data support the disease-modifying potential and long-term benefit of losmapinibon. To date, losmapinibon has been dosed in over 3,600 patients across multiple therapeutic areas and results from REDUX-IV and our open-label extension trial provide evidence of an encouraging safety and tolerability profile. As we drive our clinical path forward for Lismapamon, we look forward to leveraging the large safety database and building on our learnings from REDUX-IV, an ongoing open-label extension trial. Now, turning to other corporate matters, as previously announced, Esther Rajabelu, our Chief Financial Officer, recently resigned from the company, effective April 21st, 2023. We appreciate her commitment to operational and financial excellence and are grateful for the positive contribution she has made to our company. We are continuing to work with Esther in her role as an advisor while the finance team continues to execute our financial strategy. As a reminder, Dr. Ian Frazier continues to serve as Interim CMO And Dr. Alan Ezekiewicz, member of the Fulcrum Board of Directors since February 2017, continues to serve as Senior Clinical Advisor to ensure program continuity. As we continue to solidify our leadership team, we remain focused on realizing Fulcrum's mission and the work at hand. With that, I will provide an update on our financials. We ended March 31, 2023 with cash, cash equivalents, and marketable securities of $297.8 million compared to $202.9 million on December 31, 2022. In January 2023, we completed an underwritten public offering of our common stock, raising approximately $117.3 million in net proceeds. We continue to operate from a strong financial position, and we expect our cash, cash equivalents, and marketable securities to fund their operating expenses into mid-2025. This projection assumes a timely resolution of the FTX 6058 clinical hold. Collaboration revenue was $0.3 million for the first quarter of 2023, as compared to $2.6 million for the first quarter of 2022. Research and development expenses were $16.7 million for the first quarter of 2023, as compared to $17.8 million for the first quarter of 2022. The decrease of $1.1 million was primarily due to decreased research and development headcount, partially offset by increased costs associated with the advancement of REACH. General and administrative expenses were $11.5 million for the first quarter of 2023, as compared to $10.8 million for the first quarter of 2022. The increase of $0.7 million was primarily due to increased stock-based compensation expense. Net loss was $24.8 million for the first quarter of 2023 as compared to $25.9 million for the first quarter of 2022. Overall, I am confident the company's strong cash position and upcoming catalyst provide a solid foundation for execution and value creation. We remain focused on driving our clinical programs forward, exploring opportunities to leverage the value of our research engine, and executing our corporate objectives. We remain on track to complete enrollment for our FSHD Phase III REACH Trial in the second half of 2023, and are committed to working with the FDA to resolve the clinical hold on FTX 6058. I want to reiterate that we are optimistic there is a path forward to resolve the full clinical hold. Additionally, with today's announcement of Alex as our next CEO and president, Fulcrum is ending the first quarter of 2023 in a position of strength and great promise for the future. Before we conclude today's call, I want to extend my sincere appreciation and gratitude for the foundational work that has brought us closer to treating the root cause of genetically defined rare diseases and bringing transformative therapies to patients. I'd like to thank the entire Fulcrum team, our investors, and the many people who have been supportive along the way, including our patients and their families. With that, we are happy to take questions.

To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. The first question comes from Edward Tintoff with Piper Sandler. Your line is open.

Great. Thank you for taking the, um, my question and, uh, Robert, uh, thank you for the thorough update. I wanted to dig a touch deeper into 6058 and sort of what are the outstanding issues? What do you see as sort of the experiments you need to do or data you need to collect? in order to provide the FDA with the information they need to lift the halt.

Thanks. Thanks, Chad. There's two outstanding issues with the FDA that we're currently in discussions with them. One is the question around reversibility of the effect that we see when we inhibit EED with 6058. That's primarily related to reversibility of gene expression changes, which of course are a consequence of inhibiting the EED protein. Those studies are preclinical non-toxicology studies along the lines of pharmacological reversibility. They are well underway. And as we get those results, we'll be discussing them with the FDA. The other set of outstanding issues relates to defining the patient populations that can most benefit from the elevation in HBF that we're seeing. The regulatory agency has asked us to define that population, a higher risk population than we were evaluating previously, and we're in active discussions with them to discuss that population. As I'm sure you know, there have been a number of different definitions of at-risk populations in sickle cell patients, whether you're looking gene and cell therapy studies or some of the other small molecules that are symptomatic treatments. And so we're integrating those prior studies along with our own thoughts to define that population that can most benefit.

Yep, that makes a lot of sense. One last quick question, if I may, and this may be a tough one to answer. Is there a dose relationship to the concerns that the FDA has? Or since this really isn't clinical finding, Is there not some kind of dose relationship tox concerns?

Yeah, so we've not seen anything in the clinical studies that would give us any concern about the toxicologic findings that have been seen preclinically. As I've mentioned during the update, at the 2, 6, and 12 milligrams, clinical doses, there have been no serious adverse events at all. And in terms of the preclinical studies, we see dose-dependent increases in target engagement. And part of the FDA's concern around the hematologic malignancies that we've seen is that those types of malignancies have been seen with other PRC2 inhibitors, and they want to be sure that we're defining risk-benefit ratio appropriately, both pre-clinically as well as clinically.

Yep, that's super helpful. And Robert, if I may just say, you know, congrats on funding a new CEO and great job stepping in during this sort of transition time for the company. Thanks, Ed.

Please stand by for the next question. The next question comes from Joseph Schwartz with SBB Securities. Your line is open.

Thanks so much. I was wondering if you have any data on hand which can help distinguish the propensity of FTX6058 to cause heme malignancies relative to other PRC2 inhibitors. that you're able to show to the FDA in order to help them get comfortable with the risk benefit of 6058 and sickle cell disease? And as a follow-up, how are you thinking about defining the patient population who can benefit and is at high risk?

Thanks, Joe. Maybe I'll take the first part of that, the first question that you asked, and then let Ian speak to the second, defining the patient population. Among the data that we've been able to share with the FDA is, of course, not only the studies that we've done, the toxicology studies that we've done, but also the gene expression changes that we are seeing with EED inhibition in the animal studies, particularly the mouse towns model of animal studies. What we've seen there is that there's a, While there obviously are a number of gene expression changes, we're seeing really, as you would expect, robust effects on the HBF gene, HBV. And that's what the FDA is really focused on in terms of the reversibility studies. And so those kinds of gene expression changes relative to other inhibitors of PRC2 are what they're focusing on. And maybe you want to speak to defining the patient population.

Yeah. Thanks, Robert, and thanks, Joseph, for the question. So based on the clinical data that we've generated to date, we've been able to see that subjects treated with FDX6058 experience a dose-dependent and clinically relevant increase in their fetal hemoglobin into the range where we think that this is going to be clinically relevant and potentially beneficial. We will discuss these aspects with the FDA as we explore our path forward. And as we think about populations for the clinical trial, we've been informed greatly by therapies in the field, including gene therapies and stem cell replacement therapies, gene editing, and so on, where a higher risk population has been defined in those studies.

Please stand by for our next question. The next question comes from Madhu Kumar with Goldman Sachs. Your line is open.

Hey, this is Rob on for Madhu. Thanks for taking our questions. And we were just wondering, are there any thoughts to new asset INDs given your cash runway?

Thanks, Rob. Yeah, we actually, under the leadership of our chief scientific officer, Jeff Jacobs, or JJ as he goes by, we've got a number of options that are progressing through the preclinical programs. We're not quite ready to give updates on the status of those programs or the areas, but we continue to be focused on the non-malignant hematology space and the muscular dystrophy space. As Alex comes on board and has a chance to come up to speed on those programs, we're excited about providing further updates on what those programs are and their development status.

Okay. Is there a timeline that we can expect for sort of communication of the new INDs?

Not yet. It's a little premature for us to speculate on that or to provide guidance on those timelines. Okay. Thank you.

Please stand by for the next question. The next question comes from Matthew Beigler with Oppenheimer. Your line is open.

Hey, Rob and team. Thanks for the question. We were just curious on timelines. Do you still think that six-month timeline to possible resolution is still on the table, or is this likely a 2024 event?

As we're continuing the ongoing dialogue with the FDA, it's a little early to provide a clear definition of when the timeline will get resolved. Certainly, we're in active conversations. We've really been encouraged by the dialogue that we're having with them. The interaction with them is cordial and very, very active. So our current guidance is, assuming a rapid resolution of that timeline, but exactly when that'll get resolved, I don't want to glide to yet.

Okay. That's fair. I wanted to maybe dial into a little bit more into what you just said about your interactions with the FDA. How would you describe them? Are they ongoing and collaborative? you kind of just working now behind the scenes to you know as you said define an eligible patient population and then run some of the other non-toxicology studies or is this like a a very uh cordial um relationship that you have thanks yeah it's actually extremely cordial uh with the regulatory agency um as as we discussed um various thoughts with them it's been it's

been a true partnership with them with real open discussion around their perception of the populations, which coincides with our perception of the populations that are at risk. And it's not contentious in any way. It's actually a pleasure interacting with them as they provide guidance and thoughts on the population.

Thanks, Ron.

As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. Please stand by for our next question. The next question comes from Judah Fermer with Credit Suisse. Your line is now open.

Yeah, hi, good morning. Thanks for taking the questions. First, just curious from a clinical study perspective, does changing the risk profile of the potentially addressable patient population kind of, you know, devalue any of the data you have thus far, or is it more just about the commercial risk-benefit profile here?

Yeah, let me speak to the last part of that, the commercial value, and then let Ian speak to the first part of the question, which has As you have praised, it doesn't devalue the data we have in hand. In this, these initial studies defining a higher risk population, as the FDA has requested, first of all, we think we'll, based on the data we have in hand, we'll continue to see the robust increases in HPF that we've seen up to date. But more importantly, that's, the study they're requesting us to do first. And that really doesn't speak to subsequent studies that we'd be doing that would be looking at the overall commercial opportunity for a oral small molecule activator of HPF, which we think still has an important place in the pharmacopoeia. As you know, an overall commercial strategy often involves multiple kinds of trials and multiple kinds of patients. And this is just the first foray into a higher risk population. Maybe I'll let Ian speak to whether the applicability of the data we generated today. Yeah, thank you, Robert, and thanks, Judith.

So I think in no way at all does this devalue or alter our perceptions of the data that we've generated to date in the sickle cell patient population at doses of 2, 6, and 12 milligrams once daily. You know, that population clearly is an affected sickle cell population. Some of them were also on concomitant hydroxyurea at the time, and we've seen robust increases in fetal hemoglobin in that population. So as we move forward into a somewhat slightly different defined patient population, I don't think that there's any impact or adverse effects related to the previous data.

Okay. And is it fair to assume that if you're going up against, you know, gene editing, cell therapy type approaches, that you'd potentially be dosing higher to arrive at higher levels of HBF induction in a higher risk population? Or is your sense that, again, you know, which I know has been an area of contention historically, this 10% absolute induction bar might still be relevant in this higher risk population?

Yeah, yeah, thanks. The, I don't think we see ourselves as going up against gene therapy and gene editing. We're using the way that they've defined their patient populations as a guideline as we move forward to define our patient population. bearing in mind that those procedures are associated with significant risks in and of themselves. So just a clarification there on how we're thinking of those particular populations. I don't think there's any bar on how much HPF induction we're looking for. I think clearly, as you've mentioned, the 10 is a number that's being thrown out there. I think in terms of the absolute percents that are helpful, getting into the range of 20 to 30% is clearly being associated with clinical benefit using either genetic or pharmacological or a combination of those two approaches in the past. And so I think getting into that range seems to be clearly beneficial. And 30% and a little higher might be functionally curative to some extent. So we'll be evaluating the dose response as we move up, potentially beyond 12 milligrams, to evaluate the dose response on HBF.

That's helpful. Thank you.

This concludes the question and answer portion of the call. I will now turn the call back over to Fulcrum CEO, Robert, for closing remarks. Robert?

Thank you, operator, and thanks to everyone who joined us this morning. Please stay safe and healthy, and I'm sure we'll all be talking to you all later. Thanks again. Thanks.

Thank you for participating. You may now disconnect.

Goodbye. Thank you. Thank you. Thank you.

Thank you.

Good morning and welcome to the Fulcrum Therapeutics first quarter 2023 financial results and business update conference call. Currently, all participants are in a listen-only mode. This call is being webcast live on the investor section of Fulcrum's website at www.fulcrumtx.com and is being recorded. For opening remarks, I would like to introduce Chris Calabrese. Please go ahead.

Thank you and good morning.

Welcome to the Fulcrum Therapeutics First Quarter 2023 Financial Results and Business Update Conference Call. Please be reminded that remarks made during this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These may include statements about the company's future expectations and plans, including the clinical hold of FTX 6058, clinical development timelines, and financial projections. While these forward-looking statements represent Fulcrum's views as of today, this should not be relied upon as representing the company's views in the future. Fulcrum may update these statements in the future, but is not taking on an obligation to do so. Please refer to Fulcrum's most recent filings with the Securities and Exchange Commission for a discussion of certain risks and uncertainties associated with the company's business. Leading the call today will be Dr. Robert Gould, Interim Chief Executive Officer at Fulcrum, who will provide a corporate overview, discuss key pipeline updates, as well as the financials before we open the call for Q&A. And Dr. Ian Frazier, Interim Chief Medical Officer, will be able to answer questions during the Q&A portion of the call. With that, it's my pleasure to turn the call over to Robert.

Thank you, Chris. Good morning. I appreciate everyone taking the time to join us today. I'd like to begin by reiterating our deep commitment to advancing our organization and improving the lives of patients with genetically defined diseases in areas of high unmet medical need. In the first few months of 2023, we continue to make progress to address the FTX 6058 clinical hold and advance our Phase III REACH trial of losmaphimod and fascioscopular humeral muscular dystrophy. We are also pleased to announce the appointment of Alex Sapir to the position of President and Chief Executive Officer and member of the Board of Directors, effective July 1st, 2023. As of last Friday, Alex joined as Special Advisor to me, and we are thrilled to have a world-class leader of his stature on board to propel Fulcrum to the next level of achievement. Alex brings deep industry knowledge from the public sector and has more than 25 years of experience building commercial stage pharmaceutical organizations. Most recently, Alex served as chief executive officer and a member of the board of directors of Reviral prior to the company's acquisition by Pfizer. Prior to Reviral, Alex served as president, chief executive officer, and member of the board of directors of Dover Pharmaceuticals. Earlier in his career, Alex spent 10 years as Executive Vice President of Marketing and Sales for United Therapeutics and held roles of increasing responsibility within the commercial organization at GlaxoSmithKline. Alex's impressive track record makes him an ideal fit for Fulcrum at this critical juncture. With this brief introduction, I'll now dive into our programs and provide an update on recent activities. Let me start by discussing our most recent update to the FDX 6058 program, our oral HPF inducer for the potential treatment of patients with sickle cell disease. As previously announced, we received verbal notification from the FDA on February 23rd that they had placed a full clinical hold on the investigational new drug application for FDX 6058, and we received a formal clinical hold letter from the FDA on February 24th. We immediately suspended dosing and paused enrollment in the trial of FTX6050A. We have been in active and ongoing dialogue with the FDA, and we'll provide an update once we have more clarity on the regulatory path forward. Overall, our interactions with the agency thus far have been productive and collaborative, and we look forward to continuing our dialogue as we work to resolve the clinical hold. In the initial feedback provided in February 2023, The FDA stated that the hold related to preclinical data submitted in April, October, and December 2022, and nonclinical and clinical evidence of hematologic malignancies observed with other inhibitors of polycom repressor complex 2, or PRC2. The agency is focused on balancing the safety and efficacy tradeoffs and has requested that Fulcrum further define the population where the potential benefit of continued treatment with FTX6058 outweighs potential risk. The hold was not a result of any clinical findings in the Phase 1b trial that was ongoing at the time of the hold. For further context, we have a strong data set from the subjects who completed dosing prior to the clinical hold. Treatment with FTX6058, the highest dose of 12 mg, showed a 10% absolute HBF increase from baseline, resulting in a total HBF level of 24.9% after 42 days of treatment. 58 has been generally well tolerated to date with no drug-related treatment emergent serious adverse events or discontinuations due to treatment emergent adverse events. All adherent subjects showed clinically relevant improvements in the 6 and 12 milligram dose cohorts consistent across subjects both on and off background hydroxyurea, the current standard of care. We maintain that FDX6058 has the potential to provide a differentiated therapeutic option for people living with sickle cell disease, and that the clinical and preclinical data generated to date demonstrate a favorable benefit-risk profile. Now, turning to our most advanced program, Losmaphimod, a selective P38 alpha-beta mitogen-activated protein kinase inhibitor. Losmaphimod is in Phase III development for the treatment of FSHD, an autosomal dominant genetic form of muscular dystrophy, which has an estimated patient population of 16,000 to 38,000 in the United States alone. FSHD is characterized by relentless and accumulating muscle and functional loss and results in the inability to perform daily life activities due to a significant impairment of upper extremity function, loss of mobility, and chronic pain. Although it's one of the most common forms of muscular dystrophy, there are currently no approved treatments. Given the high unmet need for innovation, we are extremely encouraged by losmaphimod's therapeutic potential to preserve muscle function and believe it has the potential to address the urgent need for a safe and effective disease-modifying treatment that can slow or stop disease progression. We initiated REACH, our double-blind, placebo-controlled Phase III trial of losmaphimod in June 2022 and are currently enrolling patients in the U.S., Canada, and Europe. At this time, 31 sites are active out of 36 sites. This 48-week trial is expected to enroll approximately 230 adults and expected to complete enrollment in the second half of 2023. We are pleased with the rapid pace of enrollment in the Los Matamad Phase III REACH trial. which is both a testament to the high level of engagement by our clinical trial sites and our team's strategic execution. The primary endpoint is the absolute change from baseline in reachable workspace, or RWS, a quantitative measure of upper extremity range of motion and function that specifically evaluates shoulder and proximal arm mobility with 3D motion sensor technology. Preserving this upper extremity function is critical for maintaining the ability for self-care and other activities of daily living that directly influence quality of life and independence. In addition to safety and tolerability, secondary endpoints include muscle fat infiltration, or MFI, an important marker of disease pathology, and self-reported outcomes such as the patient global impression of change, or PGIC, and quality of life measures. These will include healthcare utilization questionnaires that will inform our thinking about payer strategy as we prepare for a potential commercial launch. REACH was designed as a highly efficient 48-week trial and is intended to be registration and labeling, both in the U.S. and in ex-U.S. geographies. We are confident that we have selected reliable measures of disease progression, and we hope to demonstrate meaningful advantages for Los Matamoros compared to placebo. Encouragingly, our Phase IIb REDUX-IV trial demonstrated significant improvements in RWS relative to placebo at 48 weeks. Furthermore, top-line results from the ongoing open-label extension of REDUX-IV showed that participants in the initial treatment arm who continued to receive lesmaphimod demonstrated durability of effect through a 96-week period. Additionally, patients who crossed over from placebo to lesmaphimod after the initial 48-week trial period, showed improvement and slowing of disease progression as measured by RWS mean change from baseline. We believe these data support the disease-modifying potential and long-term benefit of losmapinibon. To date, losmapinibon has been dosed in over 3,600 patients across multiple therapeutic areas and results from REDUX-IV and our open-label extension trial provide evidence of an encouraging safety and tolerability profile. As we drive our clinical path forward for Los Matamon, we look forward to leveraging the large safety database and building on our learnings from REDUX-IV, an ongoing open-label extension trial. Now, turning to other corporate matters, as previously announced, Esther Rajabelu, our Chief Financial Officer, recently resigned from the company, effective April 21, 2023. We appreciate her commitment to operational and financial excellence and are grateful for the positive contributions she has made to our company. We are continuing to work with Esther in her role as an advisor while the finance team continues to execute our financial strategy. As a reminder, Dr. Ian Frazier continues to serve as Interim CMO And Dr. Alan Ezekiewicz, member of the Fulcrum Board of Directors since February 2017, continues to serve as Senior Clinical Advisor to ensure program continuity. As we continue to solidify our leadership team, we remain focused on realizing Fulcrum's mission and the work at hand. With that, I will provide an update on our financials. We ended March 31, 2023 with cash, cash equivalents, and marketable securities of $297.8 million compared to $202.9 million on December 31, 2022. In January 2023, we completed an underwritten public offering of our common stock, raising approximately $117.3 million in net proceeds. We continue to operate from a strong financial position, and we expect our cash, cash equivalents, and marketable securities to fund our operating expenses into mid-2025. This projection assumes a timely resolution of the FTX 6058 clinical hold. Collaboration revenue was $0.3 million for the first quarter of 2023 as compared to $2.6 million for the first quarter of 2022. Research and development expenses were $16.7 million for the first quarter of 2023 as compared to $17.8 million for the first quarter of 2022. The decrease of $1.1 million was primarily due to decreased research and development headcount, partially offset by increased costs associated with the advancement of REACH. General and administrative expenses were $11.5 million for the first quarter of 2023, as compared to $10.8 million for the first quarter of 2022. The increase of $0.7 million was primarily due to increased stock-based compensation expense. Net loss was $24.8 million for the first quarter of 2023 as compared to $25.9 million for the first quarter of 2022. Overall, I am confident the company's strong cash position and upcoming catalyst provide a solid foundation for execution and value creation. We remain focused on driving our clinical programs forward, exploring opportunities to leverage the value of our research engine, and executing our corporate objectives. We remain on track to complete enrollment for our FSHD Phase III REACH Trial in the second half of 2023, and are committed to working with the FDA to resolve the clinical hold on FTX 6058. I want to reiterate that we are optimistic there is a path forward to resolve the full clinical hold. Additionally, with today's announcement of Alex as our next CEO and president, Fulcrum is ending the first quarter of 2023 in a position of strength and great promise for the future. Before we conclude today's call, I want to extend my sincere appreciation and gratitude for the foundational work that has brought us closer to treating the root cause of genetically defined rare diseases and bringing transformative therapies to patients. I'd like to thank the entire Fulcrum team, our investors, and the many people who have been supportive along the way, including our patients and their families. With that, we are happy to take questions.

To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. The first question comes from Edward Tintos with Piper Sandler. Your line is open.

Great. Thank you for taking my question. And Robert, thank you for the thorough update. I wanted to dig a touch deeper into 605A and sort of what are the outstanding issues? What do you see as sort of the experiments you need to do or data you need to collect? in order to provide the FDA with the information they need to lift the halt.

Thanks. Thanks, Ted. There's two outstanding issues with the FDA that we're currently in discussions with them. One is the question around reversibility of the effect that we see when we inhibit EED with 6058. That's primarily related to reversibility of gene expression changes, which of course are a consequence of inhibiting the EED protein. Those studies are preclinical non-toxicology studies along the lines of pharmacologic reversibility. They are well underway. And as we get those results, we'll be discussing them with the FDA. The other set of outstanding issues relates to defining the patient populations that can most benefit from the elevation in HBF that we're seeing. The regulatory agency has asked us to define that population, a higher risk population than we were evaluating previously, and we're in active discussions with them to discuss that population. As I'm sure you know, there have been a number of different definitions of at-risk populations in sickle cell patients, whether you're looking gene and cell therapy studies or some of the other small molecules that are symptomatic treatments. And so we're integrating those prior studies along with our own thoughts to define that population that can most benefit.

Yep, that makes a lot of sense. One last quick question, if I may, and this may be a tough one to answer. Is there a dose relationship to the concerns that the FDA has? Or since this really isn't clinical finding, Is there not some kind of dose relationship tox concerns?

Yeah, so we've not seen anything in the clinical studies that would give us any concern about the toxicologic findings that have been seen preclinically. As I've mentioned during the update, at the 2, 6, and 12 milligrams, clinical doses, there have been no serious adverse events at all. And in terms of the preclinical studies, we see dose-dependent increases in target engagement. And part of the FDA's concern around the hematologic malignancies that we've seen is that those types of malignancies have been seen with other PRC2 inhibitors. And I want to be sure that we're defining that, risk-benefit ratio appropriately, both pre-clinically as well as clinically.

Yep, that's super helpful. And Robert, if I may just say, you know, congrats on funding a new CEO and great job stepping in during this sort of transition time for the company. Thanks, Ed.

Please stand by for the next question. The next question comes from Joseph Schwartz with SBB Securities. Your line is open.

Thanks so much. I was wondering if you have any data on hand which can help distinguish the propensity of FTX6058 to cause heme malignancies relative to other PRC2 inhibitors. that you're able to show to the FDA in order to help them get comfortable with the risk benefit of 6058 and sickle cell disease? And as a follow-up, how are you thinking about defining the patient population who can benefit and is at high risk?

Thanks, Joe. Maybe I'll take the first part of that, the first question that you asked, and then let Ian speak to the second, defining the patient population. Among the data that we've been able to share with the FDA is, of course, not only the studies that we've done, the toxicology studies that we've done, but also the gene expression changes that we are seeing with EED inhibition in the animal studies, particularly the mouse towns model of animal studies. What we've seen there is that there's a, While there obviously are a number of gene expression changes, we're seeing really, as you would expect, robust effects on the HBF gene, HBV. And that's what the FDA is really focused on in terms of the reversibility studies. And so those kinds of gene expression changes relative to other inhibitors of PRC2 are what they're focusing on. And maybe you want to speak to defining the patient population.

Yeah. Thanks, Robert, and thanks, Joseph, for the question. So based on the clinical data that we've generated to date, we've been able to see that subjects treated with FDX6058 experience a dose-dependent and clinically relevant increase in their fetal hemoglobin into the range where we think that this is going to be clinically relevant and potentially beneficial. We will discuss these aspects with the FDA as we explore our path forward. And as we think about populations for the clinical trial, we've been informed greatly by therapies in the field, including gene therapies and stem cell replacement therapies, gene editing, and so on, where a higher risk population has been defined in those studies.

Please stand by for our next question. The next question comes from Madhu Kumar with Goldman Sachs. Your line is open.

Hey, this is Rob on for Madhu. Thanks for taking our questions. And we were just wondering, are there any thoughts to new asset INDs given your cash runway?

Thanks, Rob. Yeah, we actually, under the leadership of our chief scientific officer, Jeff Jacobs, or JJ as he goes by, we've got a number of options that are progressing through the preclinical programs. We're not quite ready to give updates on the status of those programs or the areas, but we continue to be focused on the non-malignant hematology space and the muscular dystrophy space. As Alex comes on board and has a chance to come up to speed on those programs, we're excited about providing further updates on what those programs are and their development status.

Okay. Is there a timeline that we can expect for sort of communication of the new INDs?

Not yet. It's a little premature for us to speculate on that or to provide guidance on those timelines. Okay. Thank you.

Please stand by for the next question. The next question comes from Matthew Beigler with Oppenheimer. Your line is open.

Hey, Rob and team. Thanks for the question. We were just curious on timeline. Do you still think that six-month timeline to possible resolution is still on the table, or is this likely a 2024 event?

As we're continuing the ongoing dialogue with the FDA, it's a little early to provide a clear definition of when the timeline will get resolved. Certainly, we're in active conversations. We've really been encouraged by the dialogue that we're having with them. The interaction with them is cordial and very, very active. So our current guidance is assuming a rapid resolution of that timeline, but exactly when that'll get resolved, I don't want to guide to yet.

Okay. That's fair. I wanted to maybe dial into a little bit more into what you just said about your interactions with the FDA. How would you describe them? Are they ongoing and collaborative? you kind of just working now behind the scenes to you know as you said to find an eligible patient population and then run some of the other non-toxicology studies or is this like a a very uh cordial um relationship that you have thanks yeah it's actually extremely cordial uh with the regulatory agency um as as we discussed um various thoughts with them it's been it's

been a true partnership with them, with real open discussion around their perception of the populations, which coincides with our perception of the populations that are at risk. And it's not contentious in any way. It's actually a pleasure interacting with them as they provide guidance and thoughts on the population.

Thanks, Ron.

As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. Please stand by for our next question. The next question comes from Judah Fermer with Credit Suisse. Your line is now open.

Yeah, hi, good morning. Thanks for taking the questions. First, just curious from a clinical study perspective, does changing the risk profile of the potentially addressable patient population kind of, you know, devalue any of the data you have thus far, or is it more just about the commercial risk-benefit profile here?

Yeah, let me speak to the last part of that, the commercial value, and then let Ian speak to the first part of the question, which is, as you praise it, doesn't devalue the data we have in hand. In this, these initial studies defining a higher risk population, as the FDA has requested, first of all, we think we'll, based on the data we have in hand, we'll continue to see the robust increases in HBF that we've seen up to date. But more importantly, that's, the study they're requesting us to do first. And that really doesn't speak to subsequent studies that we'd be doing that would be looking at the overall commercial opportunity for a oral small molecule activator of HPF, which we think still has an important place in the pharmacopoeia. As you know, an overall commercial strategy often involves multiple kinds of trials and multiple kinds of patients. And this is just the first foray into a higher risk population. Maybe I'll let Ian speak to whether the applicability of the data we generated today. Yeah.

Thank you, Robert, and thanks, Judith. So I think in no way at all does this devalue or alter our perceptions of the data that we've generated to date in the sickle cell patient population at doses of 2, 6, and 12 milligrams once daily. You know, that population clearly is an affected sickle cell population. Some of them were also on concomitant hydroxyurea at the time, and we've seen robust increases in fetal hemoglobin in that population. So as we move forward into a somewhat slightly different defined patient population, I don't think that there's any impact or adverse effects related to the previous data.

Okay. And is it fair to assume that if you're going up against, you know, gene editing, cell therapy type approaches, that you'd potentially be dosing higher to arrive at higher levels of HBF induction in a higher risk population? Or is your sense that, again, you know, which I know has been an area of contention historically, this 10% absolute induction bar might still be relevant in this higher risk population?

Yeah, yeah, thanks. The, I don't think we see ourselves as going up against gene therapy and gene editing. We're using the way that they've defined their patient populations as a guideline as we move forward to define our patient population. bearing in mind that those procedures are associated with significant risks in and of themselves. So just a clarification there on how we're thinking of those particular populations. I don't think there's any bar on how much HPF induction we're looking for. I think clearly, as you've mentioned, that the 10 is a number that's being thrown out there. I think in terms of the absolute percents that are helpful, getting into the range of 20 to 30% is clearly being associated with clinical benefit using either genetic or pharmacological or a combination of those two approaches in the past. And so I think getting into that range seems to be clearly beneficial and 30% and a little higher might be functionally curative to some extent. So we'll be evaluating the dose response as we move up, potentially beyond 12 milligrams, to evaluate the dose response on HBF.

That's helpful. Thank you.

This concludes the question and answer portion of the call. I will now turn the call back over to Fulcrum CEO, Robert, for closing remarks. Robert?

Thank you, operator, and thanks to everyone who joined us this morning. Please stay safe and healthy, and I'm sure we'll all be talking to you all later. Thanks again.

Thank you for participating. You may now disconnect.