Fulcrum Therapeutics, Inc.

Good morning and welcome to Fulcrum Therapeutics third quarter 2024 financial results and business update conference call. Currently all participants are in a listen only mode. This call is being webcast live and can be accessed on the investor section of Fulcrum's website at www.fulcrumtx.com and is being recorded. Please be reminded that remarks during this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, may include statements about the company's future expectations and plans, 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 discussions of certain risks and uncertainties associated with the company's business. Leading the call today will be Alex Sapir, CEO and President of Fulcrum. Joining Alex on the call are Alan Musso, Chief Financial Officer, Dr. Pat Horn, Chief Medical Officer, and Dr. Ian Fraser, Senior Vice President of Development. After providing updates on our key programs, there will be a brief Q&A in which Alex, Alan, Pat, and Ian will be available to answer your questions. With that, it's my pleasure to turn the call over to Alex.

That's great. Thanks, Michelle, and good morning, everyone. I appreciate you joining us for our third quarter conference call. Today, I'll provide you with updates on recent progress and upcoming milestones. I'll then hand the call over to Alan to review financials, and finally, we'll end by taking your questions. I'll begin with a very brief review of the update we provided on the Los Mapamod program back in September. As you'll recall, we reported that Los Mapamod did not show separation from the placebo group on the primary or key secondary endpoints in the Phase III REACH trial. In light of these results, we suspended the development of Los Mapamod and announced a workforce reduction of approximately 40% in order to focus our research and development efforts on advancing post-serodere and our preclinical pipeline. This included a reduction of positions across both research and development, as well as general and administrative functions. I do want to take a moment to express my gratitude to the patients, physicians, and clinical coordinators who participated in our trials. to the FSHD Society and to the broader FSHD community. We sincerely appreciate all of your support in advancing the Los Mapamad program, and we remain fully committed to sharing the full results of the REACH trial for the benefit of the FSHD community. Although we were disappointed that the Phase 3 results did not replicate what was shown in Phase 2, the entire Fulcrum organization remains deeply committed to our mission of improving the lives of patients with genetically defined diseases in areas of high unmet need. To that end, we are excited to continue advancing Posterior Dare, our oral HBF inducer, for the potential treatment of patients with sickle cell disease. Sickle cell disease is a lifelong inherited blood disorder that severely impacts quality of life for approximately 100,000 people in the US and approximately 4.4 million people worldwide. Historically, the standard of treatment for patients with sickle cell disease has involved blood transfusions, pain medications, and hydroxyurea, focusing primarily on symptom relief. Despite the recent approval of gene editing approaches, we believe there remains a significant unmet need for safe and accessible oral therapeutic options that are broadly protective of sickle cell symptomatology, which is further underscored by the recent global withdrawal of Oxprita. As a first-in-class oral small molecule HBF inducer, we believe that Pociradir has the potential to address this unmet need. Now, in our Phase 1b trial of Posterior Dear, which we call the Pioneer Trial, we continue to make progress in enrolling patients and activating sites. We are focused on progressing the development of Posterior Dear as expeditiously as possible and remain on track to provide data from the Pioneer Trial in 2025. Based on our progress in site activation and current enrollment trends, we intend to provide more detailed guidance on our plans to share data early in the new year. As a reminder, cohort three of the trial is evaluating Posteriori at the 12 milligram once daily dose with a dosing duration of three months. And this will be followed by cohort four at the 20 milligram once daily dose also for three months. Both cohorts are expected to enroll up to 10 patients. In addition to the ongoing pioneer trial, we are also pleased to report that we are initiating phase one clinical trials of Posterior Dare in healthy volunteers following recent interactions with the FDA. These studies are intended to support the comprehensive development program for Posterior Dare. The literature supports that any increase in fetal hemoglobin is beneficial for patients with sickle cell disease. And most importantly, when sickle cell patients achieve fetal hemoglobin levels in the mid to high 20s, their disease presentation may become asymptomatic. We believe that as a novel inducer of fetal hemoglobin, POSIRIDER has the potential to provide a differentiated therapeutic option for people living with sickle cell disease. We look forward to building on the encouraging clinical data generated prior to the hold, which demonstrated that POSIRIDER increased total fetal hemoglobin of a magnitude that could translate into meaningful improvements in disease severity. Now, beyond posterior deer, we are also focused on advancing our early-stage development programs in inherited aplastic anemias, such as Diamond, Black-Fand anemia, or DBA, Schwachmann-Diamond syndrome, or SDS, and Fanconi anemia under our licensing agreement with CAMP4. We anticipate sharing additional information regarding a development candidate and plans for IND-enabling studies in the near future. I also wanted to provide some updates on the management and board of directors front. This morning we announced that Rachel King has joined our board of directors. Having served as the CEO at Bio, executive in residence at NEA, as well as CEO of several early stage biotech companies, Rachel's experience is well aligned with Fulcrum's needs given where we are in our evolution. She currently serves on the board of Novavax and Glycomimetics. Rachel will be replacing Jim Collins, who will be transitioning to an advisory role on our Science and Technology Committee. I am personally excited to have Rachel joining us and also pleased that we will continue to benefit from Jim's deep scientific acumen and sound judgment. Now, on the management front, Dr. Thomas Winkler joined us in September as our Vice President of Hematology Clinical Development. and has assumed responsibility for our hematology program, but also for the Pioneer study. Thomas has a distinguished career within the hematology branch of the NIH before transitioning to industry, where he focused on developing numerous hematology assets at both Agios and AstraZeneca. Additionally, Pat Horn, our chief medical officer, has decided to retire at the end of this year. Pat joined Fulcrum earlier this year and was instrumental in leading clinical development for the REACH study, hiring key talent like Thomas, and building out the medical team as we prepared for the launch of losmapamide. I would like to personally thank Pat, who is here with us in the room today. Thank you, Pat. As well as express my appreciation to Thomas for bringing his strong hematology background to Fulcrum at such a critical time. And with that, I will now turn it over to our Chief Financial Officer, Alan Musso, to run through the numbers. Alan, over to you.

Thanks, Alex. I'll now review our financial results, starting with our cash position. As of September 30, 2024, cash, cash equivalents, and marketable securities were $257.2 million, compared to $236.2 million as of December 31, 2023. The increase in our cash position is due to the $80 million upfront payment that we received from Sanofi in the second quarter, partially offset by cash used to fund our operating activities in 2024. We had no collaboration revenue in the third quarter of 2024 compared to $0.8 million for the third quarter of 2023. The decrease of $800,000 was due to the completion of our research services under our collaboration agreement with Myocardia. during the fourth quarter of 2023. Our research and development expenses were $14.6 million for the third quarter of 2024, compared to $18.2 million for the third quarter of 2023. The decrease of $3.6 million was primarily due to the global development cost-sharing reimbursement under our collaboration with Sanofi for Los Matamad, partially offset by increased costs related to the advancement of our Phase 1b pioneer trial. General administrative expenses were $8.4 million for the third quarter of 2024 compared to $10 million for the third quarter of 2023. The decrease of $1.6 million was primarily due to decreased employee compensation costs as a result of our reduction in workforce implemented in the third quarter of 2024. The net loss was $21.7 million for the third quarter of 2024 compared to a net loss of $24 million for the third quarter of 2023. Finally, turning to our cash guidance, we expect to end 2024 with approximately $240 million of cash, cash equivalents, and marketable securities. And we expect that in 2025, our cash burn will be approximately $55 to $65 million. Based on current operating plans, we expect that our existing cash, cash equivalents, and marketable securities will be sufficient to fund our operating requirements into at least 2027. And with that, let me turn the call back over to you, Alex. Okay, great.

Thanks so much, Alan. And I think with that overview of the business and the financials, Michelle, why don't we go ahead and open it up for questions?

Thank you. 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. And our first question will come from Matthew Beigler with Oppenheimer. Your line is now open.

Hey, guys. Thanks for the update this morning. Maybe just a high-level question, Alex, on the platform tech and how you're thinking of seeding the pipeline with new wholly-owned assets. How do you think about the difference between keeping it wholly-owned versus partnering something out? And for maybe, you know, next-gen assets, are there certain disease therapeutic areas that you want to focus in? I mean, should the focus be hematology going forward, or are you kind of open to exploring new avenues? Thanks.

Yeah, it's great, Matt. Thanks so much for the question. Yeah, so we do have a very rich preclinical pipeline. I would say that the most advanced preclinical program that we have, as I mentioned during the the prepared remarks is our program that we have for inherited aplastic anemias, which do include DBA, Swachman-Diamond syndrome or SDS, Fanconi anemia, 5Q syndrome. And we do expect to announce more updates in the near future around the selection of a development candidate and IND enabling studies. So that is by far our most advanced program. And as you know, came from the deal that we signed with Camp Four in September of last year. We do have the global rights for those. You know, I think for the time being, we are going to continue to progress those ourselves. And then obviously, you know, there is always an option for potential licensing for potentially markets outside of the U.S., similar to what we did with the Sanofi deal with Los Mapamad. But right now, our focus is really on progressing some very, very interesting work that we've got going on in our discovery efforts. Most notable is the work we're doing in some of these inherited aplastic anemias that I mentioned. Ian, anything you would add to that?

No, I think that covers the ground, Tim. pretty comprehensively. Okay. Thanks, guys. Appreciate it. Yeah, thanks, Matt.

And our next question will come from Dagon Ha with Stifel. Your line is open.

Great. Good morning, guys. Thanks for taking our questions, and congrats on the progress. I guess two questions on posterior deer specifically. Going back to your 10Q filing, it seems like on the risk section, you have been having this information or the language around request for information to define the potential risk in any further studies that may be conducted in healthy volunteers. You are announcing your intention to do another healthy volunteer study. So curious, what exactly was the feedback from the FDA post-Oxbrita withdrawal that led you to having this trial run sort of concurrent with the Pioneer study? And then second, I guess, in terms of the African conduct, just curious what have been sort of the latest FDA feedback on whether or not that meets the standards for the FDA review? Thanks so much.

Sure. Yeah, thanks, Dagan, so much for the question. And I'll probably, I'll add a little bit of color on the first question, punt that over to Ian. And then as it relates to the second question around African content, I'll punt that over to Ian. I'll punt that over to Pat. Yeah, so I think just to remind everybody on the call, when we did get off clinical hold, there was no additional clinical or preclinical data that the FDA required prior to going into patients. There was some additional work that the FDA did require of us in order to progress with healthy volunteers. And based on the discussions that we've had with the agency, we are, as I mentioned in the prepared remarks, we are moving forward with the work that we need to do in Healthy Volunteers to really inform the overall clinical development plan and the eventual package that will become the NDA. But I think more specifically, let me turn that over to Ian maybe to get into a little bit more detail.

Yes. Thanks, Alex. Thanks, Dagon. So I think important to recognize that these Healthy Volunteers studies are studies that have been planned all along. They're part of the routine development of a compound There are studies that look at evaluations of new formulations as they get introduced into the clinic, some of the drug-drug interaction studies, and studies to more finely delineate the metabolism and excretion of the compound. So those are standard drug development studies that were always part of the program. As Alex mentioned, there was this differentiation at the time of the clinical hold between the patient studies And resuming patient studies was entirely around redefining that patient population and balancing risk-benefit. And then on the healthy volunteer side was segregated out because, of course, there's no benefit to individuals participating in healthy volunteer studies. And so we've performed those and are now progressing with the studies as part of the overall development plan. It's really coincidental around the timing of the oxpride withdrawal. There's no link between resumption of those studies and the oxpride withdrawal.

Yeah, and then, Dagon, as it relates to your second question, before turning it over to Pat, I think maybe just real quickly, you know, for some of the patients that we have enrolled to date, they are coming from African countries. countries, and I will say that we've actually been pretty pleased with some of the compliance that we've seen to date. In terms of the regulatory's take on patients coming from sites in Africa, maybe I'll turn that one over to Pat to provide a little bit more detail.

Yeah, so the FDA has a long history of accepting data from XUS sites. In fact, most of the large phase three studies now are global sites. and in diseases such as sickle cell anemia where the population is really concentrated in different geographies. There's a long history. I think the majority of studies in sickle cell that have led to approval and that are currently ongoing in phase two and phase three have included sites in sub-Saharan Africa especially. The FDA is really only concerned about the quality data and that they are follow GCP. And as part of our progress and ongoing activity and study, we review each of these sites before we select sites that have experience. Most of them have experience in previous sickle cell studies. And most of the sites we're looking at have been audited by regulatory agencies, some even by the FDA. So we feel confident in the sites we've selected and their ability to produce acceptable data for the phase one study and even for future registration studies.

Great. Thanks for taking our questions. Oh, sorry. No worries. Thanks, Dagon. Thanks so much. Operator, next question.

And our next question will come from Edward Tintoff with Piper Sandler. Your line is open.

Great. Good morning, everyone. Thanks for taking my question. So following up on Dagon's question, I wanted to get a little sense in terms of can you provide any better guidance on how this data from Pioneer may roll out next year? Will you report it all together? Would you split the 12 and the 20 meg and kind of report it out as it's available? And how quickly do you envision being able to transition from that into a registrational study. Thank you.

Yeah, that's great. Ted, thanks so much for asking the question. I'll address the first part of your question, excuse me, and then I'll turn it over to Pat to address the second part of your question. Yeah, so as we've said in the past, we do intend to share the 12 milligram cohort, which is being run sequential to the 20 milligrams. So those two data sets will come out at different points in time. in 2025. And so we do intend to share those independent of one another. We are pleased with the progress that we are seeing right now with enrollment. We absolutely have the right sites that are now in place and we're continuing to add new sites. And as we've always said, once we build that critical mass of patients, we'll come back to everybody with more specificity, specifically when in 2025 we'll have data to share. So I think right now, It is a bit premature to give any more specific guidance, but as I said in some of my prepared remarks, you know, we do intend to provide more detailed guidance on our plans to share data early in the new year, in early 2025. So, I think more specifically about your question in terms of what's the next study after this, maybe I'll turn that one over to Pat.

Yeah.

Great.

Thomas Winkler, since he's been here, he's been working with our head of regulatory and our regulatory group to really define the clinical development program for posterity or following just phase 1B. And there are multiple possibilities. You know, since we have orphan drug designation, we are entitled to an end of phase 1 study with the FDA, which we plan to make use of. So we'll take the data from the pioneer study, propose a clinical development plan to the FDA, and then get their agreement. And that may be the ability to move quickly to a phase two, phase three study, which may be registrational, or it may be a separate phase two followed by a phase three study. But that will depend on the data from Pioneer and the feedback from the FDA.

Yeah. And then, Ted, maybe the only other thing that I would add is the abundance of evidence to show that increases in fetal hemoglobin improves not only symptomatology in terms of reduction in VOCs, but also overall survival. And as we've said and shared with you many times, you know, once you get patients over that sort of mid to high 20s, their disease does become asymptomatic. So I think there is, there's certainly internal discussion going as well as to, you know, when is the right time to discuss fetal hemoglobin potentially as a, you know, as a surrogate endpoint that we may use and in one of our further studies for the Pioneer Development Program. So that work is still ongoing, but I think that is an important point to make just because how strongly the relationship is based on the data that is out there to show that increases in fetal hemoglobin have a very, very noticeable impact on survival as well as reduction in VOCs.

Yeah, makes a lot of sense. Great. Thank you so much for the call. I look forward to seeing you in just a couple weeks here.

Yeah, it's great. Thanks so much, Ted. Operator, next question.

And our next question comes from Kristen Kluska with Cantor Fitzgerald. Your line is open.

Hi, everyone. This is Rick Miller on for Kristen. Thanks for taking our question. Just a quick follow-up on the healthy volunteer studies. You talked about initiating. How are you thinking about dosing in these trials? And how does this relate to kind of the previous phase one trial dosing strategies you looked at? And in terms of main outcomes here, will this be mostly looking at safety? Or are there any kind of PK PD measures you're interested in getting a look at? Thank you.

Yeah, it's a great question, Rick. And I think to answer that, let me kick that one over to Ian.

Yeah, thanks, Rick. The studies are predominantly looking at PK profiles in this case, both from the perspective of the ADME, the absorption distribution of metabolism of the drug. It's a standard radiolabel study that gets done in development, so that's one of the studies that's teed up measuring the drug in the blood and the excretion in the urine and the stool, for example. And then the other studies are primarily focused on measuring the PK. So new formulations as they come into development will be given to healthy volunteers. And they're typically single-dose PK studies where you measure the performance of the new formulation and compare it to the older formulation. And for the drug-drug interaction studies, it's giving posterity or in the presence of other agents that are commonly used in order to evaluate any impact on the plasma, pharmacokinetics of the drug. So those are the studies that are in line as part of the overall development program and what we'll be doing. We obviously look at safety and tolerability as a key endpoint in all of those studies, but the important driver of the results that goes back to inform the clinical program in the patients is around the PK.

Thank you. Yeah, thanks, Rick.

Operator, next question.

And our next question comes from Gregory Renza with RBC Capital. Your line is open.

Great, thanks. Good morning, Alex and team. Good morning, Greg. Thank you for taking the updates, and thank you, and thanks for taking the questions. Just a couple from us, Alex. Just as you reflect on the Los Mapamad experience, how are you using that journey to inform people you know, the value proposition, the risk assessment of future programs, not just with POSIRA there, but also, of course, with the early discovery programs. And then maybe secondly, if you could just comment a bit about how you expect to balance the early discovery programs internally and with CAMP that you're looking at versus the thought of looking externally for assets. And maybe I'll sneak a third one, if I may, for Alan. maybe related to all this as you've talked a bit about resources and spend for 2025. How does that allocation pan out? How should we be thinking about what's implied in some of the runway there? Thanks so much, guys.

Yeah, thanks so much, Greg. Great set of questions. Yeah, so I think if we do a comparison and contrast of Los Mapamad versus posterior, I think they are very different. I think, you know, some of the challenges that we knew going into the phase three study with losmapamod is it was a new and novel endpoint, and it was very effort-dependent. I think what we see with Pociridir and what we know about Pociridir in terms of the patients that were enrolled in the study prior to the initiation of the hold and very impressive increases that we saw in fetal hemoglobin, as well as the abundance of literature out there to show that increases in fetal hemoglobin have a direct impact on patients' crises as well as their overall survival. I think they, I see them as very, I see them as very sort of different development programs as we move forward. And I think as I mentioned earlier after one of Pat's last comments, you know, we are having internal discussions. Given how strong the evidence is, we've been working very closely with some ex-FDA consultants to really understand, you know, does it make sense or when is the right time to approach the agency and their surrogate endpoint group within the agency around the potential to use fetal hemoglobin as a surrogate endpoint. Obviously, the agency does have a history of approving other products in sickle cell disease using surrogate endpoints, as we know. I think as you think about sort of early discovery versus externally, you know, as Alan mentioned, we've got a very robust balance sheet into at least 2027, and that is assuming success with all of our programs, so that's advancing the posterior deer program once we've completed this Phase 1b study. into phase two and phase three. So we certainly have the financial ability to go out and look at external assets. But I think we've got a lot of really exciting things going on in early discovery. If we were to look externally at potentially opportunities to bring in-house, given how robust our balance sheet is, you know, we'll continue to be very judicious and highly selective. The company has had a history of doing deals, but those deals, I think, have been on excellent terms. And we've been very sort of smart and judicious in terms of what we decide to bring in. So if we were to do something, I think it would be, you know, at the level of sort of intelligence and just sort of deep diligence that we've historically done with other licensing opportunities of assets that we brought in. And then maybe Alan to answer his third question.

Yeah, Alex, I think you addressed some of it. Greg, as we guided, we expect next year's spend to be $55 to $65 million, and that does anticipate the full funding of posteriority and maximizing the opportunity there. and funding our preclinical programs and seeing those advance forward. So we feel like we're fortunate to be in a really good shape with our cash position at this time.

Great. Thank you, guys.

Yeah, thanks, Greg.

And our next question comes from Joseph Schwartz with Learing. Your line is open.

Hi, I'm Julie Park, dialing in for Jill. Thanks for taking our question. So this summer at EHA, you presented a map of sites you were onboarding, and I believe there were 11 in the U.S. and two ex-U.S. I was curious what your latest thoughts were on these sites. And separately, I believe that you plan to activate up to 20 sites, that's what you said on a previous call, with more sites to activate, which you've mentioned on today's call. So I was curious if you've identified the remaining seven sites and where you are on the onboarding process for them. Thank you.

Yeah, it's a great question, and I'll start, and then I'll turn it over to Pat to provide a little bit more detail. So, yes, you are correct. We have 12 sites activated. I would say that some of the more recently activated sites, both here in the U.S. as well as the ex-U.S., you know, are absolutely the right sites that are in place now. And, again, pleased with some of the, you know, early insights we're seeing in terms of patient enrollment. Our goal is still to ramp up and enroll 20 sites by the end of this year. We were at a – both Pat and I were at an investigator meeting in Dallas just this past Friday. We had 15 sites represented, many of the existing sites, but also several new sites that will be activated in the coming months. But maybe, Pat, do you want to sort of give a little bit more specificity in terms of when we would expect to have those additional sites onboarded?

Yeah, so, you know, we are actively working on activation, and we have, to your question, we have identified the sites that we believe will be successful in recruiting Pioneer. The majority of those remain in the U.S., but there are some in Africa, and we are working to activate all of those. You know, we have activated, I don't know the exact number, but many more since the EHA meeting, and we continue, we have in the next, couple of months, we had the activation and site initiation visits planned for pretty much the remaining sites. We continue to, and like I said, we think these sites will be sufficient to enroll Pioneer. We continue to engage new sites and new investigators, partly for future studies, because there has been an increased interest in posterior and hemoglobin F inducers. So we continue to engage with new sites, and there's a possibility that some of them, if their activation could be quick enough, could also join and help with Pioneer.

But it's predominantly more for future studies.

Great. Thank you.

Yeah, thanks so much for the question.

As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. And our next question comes from Corinne Johnson with Goldman Sachs. Your line is open.

Good morning, everyone. You mentioned that the Posteriority Error Program is fully funded. I guess, does that apply to a broader scope of patients and is currently allowed within the trial? Or would that be specific to this higher risk group you're currently focused on? Thanks.

Yeah. So, Corinne, maybe I'll start, and then I'll turn it over to Alan for more specifics in terms of the funding and what we've allocated. Yeah. So, as we've said in the past, you know, we believe that once we're able to show the benefits that, based on the data that we had prior to the initiation of the hold with these additional 20 patients, we will be able to have a future conversation with the agency, as Pat mentioned, at the end of the Phase I program, to really look to expand the patient population beyond the more severe patient population that we're currently targeting. Because I think, obviously, for the agency, they're thinking about everything from a risk-benefit. And as we've talked about in some of our preclinical work, there was this carcinogenicity risk that was seen. That was really the impetus for the reason for the hold. But there were also some of the impressive levels of fetal hemoglobin that we saw in the first 15 patients. So our goal is to get these additional 20 patients with this more severe patient population enrolled, have them complete their entire three months of dosing, take a look at that data, and then approach the agency about expanding the patient population beyond where we are today. And then, Alan, in terms of the specifics around the funding and what that looks like and what the study looks like.

Yeah, Corinne. So our sort of budgeting and forecast process encompasses taking the development plans and, you know, in full as to where we expect the program will go, not only next year, but beyond that, and then allocating the capital towards that. So, that's the guidance that we give, which is, you know, sort of complete development anticipation for this year going forward.

Thank you.

Thanks, Corinne.

I show no further questions at this time. This does conclude today's conference call. Thank you so much for participating. You may now disconnect.