FULC (2021 - Q1)

Good morning, and welcome to the Fulcrum Therapeutics First Quarter 2021 Conference Call. Currently all participants are in listen-only mode. There will be a question-and-answer session at the end of this call. I would now like to turn the call over to Christi Waarich, Director of Investor Relations and Corporate Communications at Fulcrum. Please proceed. Christi

Thank you operator. Good morning. And welcome to the Fulcrum Therapeutics conference call to discuss our first quarter 2021 financial results and recent corporate highlight. Earlier today we issued a press release, for those of you who don’t have a copy you can access it in the Investor Relations section of our website at fulcrumtx.com. 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 our future expectations and plans, clinical development timelines, and financial projections. While these forward-looking statements represent our views as of today, they should not be relied upon as representing our views in the future. We may update these statements in the future, but we are not taking on an obligation to do so. Please refer to our most recent filings with the Securities and Exchange Commission for a discussion of certain risks and uncertainties associated with our business. With me on today's call are Bryan Stuart, President and CEO; Chris Moxham, Chief Scientific Officer and Peter Thomson, Vice President, Finance and Accounting; Judith Dunn, President, Research and Development. Let me quickly run through this morning's agenda. Bryan will begin the call with a corporate overview. Chris will provide a more detailed review of our program in sickle cell disease and our product engine and Peter will cover our financials. With that it's my pleasure to turn the call over to Bryan. Bryan?

Thank you Christi. Good morning, everyone, and thank you for joining us today. It's been an exciting and fast-moving quarter for Fulcrum. We continue to make important progress across our clinical development programs, discovery collaborations and product engine and expect to have meaningful updates for multiple key initiatives in the near-term. I'd like to first start with our product engine FulcrumSeek, which is a powerful and differentiated approach that serves as the innovation backbone for our company. FulcrumSeek has allowed us to rapidly identify novel high quality targets that modulate the root cause of genetically defined rare diseases. Our lead programs in both facioscapulohumeral muscular dystrophy or FSHD and select hemoglobinopathies were identified by our earlier version of FulcrumSeek and remain on track. By enabling drug discovery at an unprecedented scale in disease relevant settings, FulcrumSeek creates an unparalleled opportunity to efficiently grow our pipeline of therapeutics and develop root cause treatments for genetically defined rare diseases. With this in mind, our goal is to bring forward two INDs over the next 24 months. The full Losmapimod data from ReDUX4 in FSHD will be presented next month at the FSHD International Research Congress. I'll have more to share on that in a few minutes, but these data will provide new insights that will inform the clinical path forward in FSHD. Following data availability, we'll meet with the FDA to discuss the path to registration. And with FTX-6058, we'll have data from the Phase 1 trial in healthy adult volunteer’s mid-year. And we anticipate initiating dosing in people living with sickle cell disease by the end of the year. Additionally, we have further enhanced our leadership team with the appointment of Dr. Judith Dunn, as our President of Research and Development. And today, we announced the appointment of Dr. Chris Morabito as our Chief Medical Officer. Both Judi and Chris have extensive experience in drug discovery and clinical development. Judi has held multiple roles in global research and development including leadership roles at Roche and Pfizer. And Chris also has extensive leadership experience at biotech companies including most recently as Chief Medical Officer at Cardurion. Prior to Cardurion, Chris held leadership roles at Takeda, Sanofi and Merck. We are thrilled to have both of them as part of our team. Now let's turn to Losmapimod for FSHD. As a reminder, FSHD is a rare progressive and disabling disease, characterized by severe muscular degeneration that occurs as skeletal muscle is replaced by fat. We estimate there are approximately 16,000 to 38,000 patients in the U.S. and similar incidence worldwide leading to an estimated global patient population of 300,000 to 780,000 patients. There are currently no approved therapeutics for FSHD and Fulcrum is advancing the only known industry-sponsored clinical trial evaluating a potential treatment. Our development program in FSHD builds on the established safety of Losmapimod demonstrated in approximately 3,600 subjects. We have made tremendous progress with our integrated FSHD clinical development strategy, evaluating molecular biomarkers as well as structural and functional measures and patient reported outcomes. This strategy includes natural history studies to better understand disease progression, preparatory studies to establish a biomarker in clinical endpoints, as well as studies that have demonstrated muscle penetration and target engagement for Losmapimod. Recently at the virtual Muscular Dystrophy Association conference in March, we presented new data related to the use of imaging biomarkers and clinical outcome assessments for FSHD. Presentations included development of a whole body muscle skeletal MRI protocol. Data show this can capture heterogeneity and provide important information about disease severity. Meaningful composite MRI measurements demonstrated correlation with relevant FSHD functional endpoints. Specifically these data were the first to demonstrate strong correlations of muscle fat infiltration and muscle fat fraction was timed up and go FSHD timed up and go in reachable workspace, which measure impact on function. This work has helped to inform the design of Fulcrum's current ongoing studies of Losmapimod in patients with FSHD, which include a single site Phase 2 open label study as well as ReDUX4. As a reminder, ReDUX4 is an international Phase 2B double-blind placebo controlled trial of Losmapimod in approximately 80 subjects with genetically confirmed FSHD. We are on track to report results from this trial next month. We and others in the field have demonstrated that DUX4 expression occurs on a spectrum. And we believe that all people with FSHD will have muscles that exhibit high DUX4 driven gene expression. Biomarker data reported from ReDUX4's interim analysis indicated that muscles with the highest DUX4 driven gene expression in pre-treatment biopsies showed larger reductions following treatment with Losmapimod compared to placebo. We look forward to the ReDUX4 data readout, which will include the entirety of the biomarker data as well as outcomes from structural, functional and patient reporting measures. We'll be encouraged, if we continue to observe evidence of trends similar to the interim analysis in high expressing muscle biopsies from Losmapimod treated patients. Additionally, we'll be encouraged if we observe trends of benefit in secondary endpoints like muscle-skeletal MRIs, clinical outcome assessments or patient reported outcomes. We believe Losmapimod has the potential to establish a new treatment paradigm for people living with FSHD, and reflects our continued commitment to research that targets genetically defined rare diseases with high unmet need. I'd like to now turn the call over to Chris.

Thanks, Bryan. Our unique research focus at Fulcrum, positions us to pursue targeted indications where we believe we can develop safe and effective therapies and to rebalance gene expression. By working to understand and then target the root cause of the disease, we have the best chance to optimize the potential efficacy of treatments and more broadly transform the way these diseases are being treated. This research approach has enabled us to rapidly progress clinical programs intended to treat serious diseases beyond FSHD, including select hemoglobinopathies, such as sickle cell disease and beta-thalassemia. Sickle cell disease is the most common type of inherited hemoglobinopathy and affects an estimated 100,000 people in the United States and millions more worldwide. It's a genetic disorder caused by mutation in the adult form of hemoglobin. The result for the mutation is less efficient oxygen transport and the formation of sickle red cells. People living with sickle cell disease typically suffer from serious complications, which can lead to anemia, pain and vaso-occlusive crises or VOCs, as well as shortened lifespan. Increasing fetal hemoglobin can have a transformative impact for patients including reduced recurring pain crisis events, reduced mortality and increased likelihood of asymptomatic presentation. We believe significant unmet need remains with existing sickle cell to these treatments. Most therapies focus on the symptoms either on reducing pain episodes or ameliorating anemia. More elaborate attempts aimed at functional cures namely hematopoietic stem cell transplants and cell therapies often utilize harsh conditioning regimens, which have inherent safety risks that may limit when and how they will be utilized. We believe there is a great opportunity with FTX-6058 projected oral once daily therapy intended to treat the root cause of disease and therefore potentially address both anemia and VOCs. People living with sickle cell disease and beta-thalassemia represent a diverse global population in great need of an effective therapy that can be accessed and administered with ease. We believe that an oral small molecule that can meaningfully increase levels of fetal hemoglobin will not only provide the therapeutic benefit and convenience of oral administration, but also the distribution at scale that this global population needs. Thus, we believe FTX-6058 has the potential to be an impactful therapy. Recently at the American Chemical Society meeting, we presented the medicinal chemistry strategy for FTX-6058, including some initial PK data from the single ascending dose or SAD, portion of our Phase 1 trial in healthy volunteers. FTX-6058 selectively up-regulates fetal hemoglobin in a pan-cellular manner in both human cellular models and mouse models of sickle cell disease. The treatment of human CD34 positive cells from healthy and sickle cell disease donors with FTX-6058 resulted in fetal hemoglobin levels of up to approximately 30% hemoglobin with no observed effects on cell health. We believe this is a superior preclinical profile relative to the standard of care hydroxyurea as well as other mechanisms that have been reported to induce fetal hemoglobin. I'm also pleased to report that our composition of matter patent been issued giving us patent protection until 2040. We continue to enroll in our Phase 1 SAD portion and recently began enrolling in the multiple ascending dose or MAD portion of the trial. This Phase I study in healthy volunteers is evaluating safety, tolerability pharmacokinetics and target engagement of FTX-6058. Based on our PK/PD modeling, we anticipate that the pharmacological doses will be in the six milligram to 20 milligram range, which is where we anticipate maximum levels of target engagement. Recent reports suggest that red blood cell half-life in healthy volunteers is approximately 30 days, which may limit the opportunity to observe effects on fetal hemoglobin in a 14-day MAD study. However, we will be measuring fetal hemoglobin mRNA levels and the number of reticular sites, containing fetal hemoglobin in the MAD cohorts to monitor potential early signs of efficacy. We expect to report data from the SAD and MAD cohorts mid-2021, which is when we'll also outline our future clinical plans. And we anticipate dosing the first cohort of people living with sickle cell disease by the end of this year. We intend to continue our dialogue with the FDA and other health authorities as the program progresses. As the data warrants, we plan to seek orphan drug, fast track and breakthrough therapy designations. The opportunity to bring a new oral therapy to people living with sickle cell disease is a very exciting prospect for us with the potential to be a significant advance in treatment in the years ahead. Moving to our research efforts. We are very excited about the productivity of our proprietary target discovery platform FulcrumSeek. We have several discovery programs that span or core focus areas of muscular hematologic and CNS disorders. Our unique approach is designed to identify starting points that are more technically enabled from a drug discovery perspective as evidenced by the rapid progression from target ID to IND for our FSHD and sickle cell programs. For the targets currently being assessed we continue to explore both internal medicinal chemistry campaigns as well as opportunities to in-license advanced chemical matter. Our goal is to bring forward two INDs over the next 24 months. FulcrumSeek has advanced significantly on many fronts. Multiple advances in next generation sequencing and cell biology have allowed us to model complex human biology and generate data at unprecedented scale. The convergence with the knowledge of the root cause of genetically defined rare disease creates the ability for Fulcrum to discover and develop potential treatments for rare diseases with a level of productivity that was historically not possible. Whether through the use of patient-derived cells or via the application of single cell genomics to patient biopsies, that revealed the dysregulated cell states and biological drivers of a given disease, the resulting high fidelity assays offer a remarkable level of clinical relevance and translatability. From this sophisticated product engine, we use machine learning algorithms to analyze the large amounts of functional, morphological and transcriptional data, they've generated with great precision and at great scale. The result is highly de-risked targets that are extensively enabled for further characterization. We believe FulcrumSeek is an important evolution in our product engine to identify targets informed by clinical biology and thus more predictive of desired therapy counts. Moreover, FulcrumSeek has supported the development of the clinical programs discussed today and has enabled our ongoing collaborations with Acceleron and MyoKardia, which continue to proceed well. In summary, we believe we are well positioned to deliver a constant stream of therapeutic innovation, from our labs and with our partners. With that, I'll now turn the call over to Peter.

Thanks, Chris. We ended the first quarter with $143.9 million in cash, cash equivalents and marketable securities. Based on our current financial projections, we continue to expect this will support our operations into the fourth quarter of 2022. Collaboration revenue for the first quarter of 2021 was $4.8 million compared to $0.8 million of collaboration revenue recognized during the first quarter of 2020. Research and development expenses for the first quarter of 2021 were $16.3 million, compared to $14.5 million in the first quarter of 2020. General and administrative expenses for the first quarter of 2021 for $5.5 million, as compared to $5.1 million for the first quarter of 2020. And our net loss was $17 million for the first quarter of 2021, compared to a net loss of $18.5 million for the first quarter of 2020. With that, I'll turn it back to Bryan. Bryan?

Thanks Peter. We have a lot of work ahead as we continue to execute on our plans. We'll report complete Losmapimod from ReDUX4 at the FSHD IRC, we'll have data from the Phase I trial with FTX-6058 in healthy volunteers mid-year, and anticipate initiating a trial in people with sickle cell disease by the end of the year. And we plan to bring forward two INDs from our product engine over the next 24 months. In closing, we expect many significant advancements in clinical updates across our pipeline. And I look forward to keeping you updated on our progress in the months ahead. Operator, you may now open the line for questions.

[Operator Instructions] Your first question comes from Joseph Schwartz with SVB Leerink.

This is Kelly Girskis on for Joe Schwartz. Could you tell us a bit about the FSHD patients you enrolled in ReDUX4? Where are they in their disease progression and is there anything you can share with us regarding baseline characteristics such as, maybe how many of those muscle biopsies would be considered high expressing?

Yes thank you for the question. I would say, in terms of baseline characteristics we'll certainly be able to share more when we have the full dataset at the IRC, but at a high level from an inclusion criteria perspective we tried to keep a relatively broad inclusion criteria. So there's a clinical severity score that ranges from one to five. And we tried to select patients that were between two and four. So these are patients that are symptomatic and showing signs of the disease and their muscles are affected by the disease, but they're not patients that are completely wheelchair-bound. So we tried to be very well-balanced in our inclusion criteria, but also have a broad range of patients that are actively being affected by the disease.

Makes sense. Thanks. And maybe one more. Given this phenomenon that the highest DUX4 expressing muscles are able to show the best reduction what are your expectations for the primary endpoint? And should we really be focusing more on the pre-specified sensitivity analysis?

Yeah, I think we were certainly encouraged by the interim analysis with the results that we saw and the large reductions that we saw in the Losmapimod arm relative to placebo. At the same time, just as a reminder the interim analysis only focused on the primary endpoint for a subset of the patients. So it was only the first 29 patients and it was only the primary endpoint. The benefits that, we have in the full dataset is that, we'll be able to see the biomarker data across all of the patients both on Losmapimod and placebo. We'll be able to see the pre-specified sensitivity analysis, and additionally we'll be able to observe all of the structural, functional endpoints as well as patient reported outcomes. So as we go into this data, as we mentioned we'll certainly be encouraged, if the interim analysis is recapitulated, and we observe large reductions in the highest expressing muscle biopsies. Additionally, we'll obviously be very encouraged if we identify trends of benefit across any of the secondary exploratory or patient reported outcomes. And just as a reminder, any trends of benefit would truly be unprecedented as there are no therapeutic alternatives available for these patients today.

Okay. Looking forward AGM.

Thank you.

Your next question comes from Ted Tenthoff with Piper Sandler.

Great. Thank you so much, and congrats on all the progress. So just thinking about REDUX for a minute assuming positive data what does that look like and what could we expect as next potential steps? Thank you.

Yeah. Hi, Ted. Good morning. I think we would emphasize we would certainly be very encouraged by either recapitulating the interim analysis and seeing a reduction in the highest expressing muscle biopsies or observing these trends of efficacy in any of the secondary exploratory endpoints or patient reported outcomes. So that's certainly, what we'll be focused on as data gets analyzed. And on the other side of that, we'll certainly plan on engaging with the FDA. As we've talked about in the past, it's unfortunate that there are no therapeutics available for these patients today. There's no other industry-sponsored programs in the clinic, and we'll look forward to engaging with the agency. I would also add we were very encouraged last year that the FDA held a patient-focused drug development day for FSHD, and they were able to engage directly with people living with FSHD, as well as advocacy, as well as family members to truly understand the impact of the disease on the patients who are affected by it. So we found that very encouraging, and we'll look forward to interacting with the agency on the other side of data.

Great. Thank you very much and looking forward from you guys.

Thanks, Ted.

Your next question comes from Matthew Harrison with Morgan Stanley.

Hi. Good morning. This is Kostas Biliouris on for Matthew. Two questions from us. One on sickle cell disease, the other on FSHD. On sickle cell disease, from what we understand the projections about the clinical doses were mostly driven by the preclinical AUC findings. And based on your data that you recently presented the AUC in clinic was about 1.5 times higher than your projected. So we are wondering if this has any impact on your expectations around the efficacies or maximum target engagement doses for Phase 2? Thank you.

Yes, so why don't I turn it over to Chris to speak to our dosing projections.

Yes. Thank you very much for the question. So you're right. We did see a greater exposure higher than expected exposure at the lower doses. And that may mean, in fact that we do see higher levels of target engagement at lower doses in the healthy volunteer subjects than we initially modeled. Either way we will be encouraged if we see significant levels of target engagement either at lower doses or the doses that we initially modeled. And again, the intent of this study is to not only understand safety and tolerability and target engagement, but also to look for signs of potential efficacy or really the goal is to select the next doses that we would intend to move into patients living with sickle cell disease.

Thank you very much. And just one follow-up. Have you already selected the doses in Phase 2 or not you haven't finalized that?

We have not finalized that and we still very much in the midst of the healthy volunteer study.

Great. Thank you. And one quick on FSHD. Are you planning to top line any data ahead of the congress or you will be presenting everything at the congress? Thank you.

Yes, Kostas. I think our plan right now is to present full data at the FSHD IRC and that will be in late June and we're excited to do that.

Great. Thank you and we’ll look forward to.

[Operator Instructions] Your next question comes from Tazeen Ahmad with Bank of America.

Good morning guys. Thanks very much for taking my question. One question on sickle cell, as you look forward to the development of this particular program, how should we be thinking about what we should consider to be clinically meaningful data as it relates to efficacy? There are other companies using obviously different mechanisms of action to treat patients, but you would certainly have a dosing method of advantage. And so how do you weigh that versus efficacy expectations based on any kind of feedback that you've received from physicians so far? And then secondly, as we look to the rest of your pipeline, what is your longer-term goal of how many programs you'd like to have in the clinic at any given time? What might be some areas of focus for the company indication-wise that you could potentially share? Thank you.

Yes. So thank you for the questions and I'll turn it over to Chris to speak to the first question on fetal hemoglobin induction. I think one of the things we're obviously very excited about with the approach is that by inducing fetal hemoglobin we have the ability obviously address both presentations of sickle cell disease, both anemia-driven disease and VOC driven disease. And we view that as being a very meaningful advantage. And the other element we can speak to is, because of the data that is available from those patients that have hereditary persistence of fetal hemoglobin, there's a tremendous amount of literature and data that really supports the benefit of inducing fetal hemoglobin and the effect that that can have on symptoms of the disease. But I'll turn it over to Chris.

Yes. Thank you, Bryan. Maybe I'll -- we're still in the midst of designing our clinical trials in patients living with sickle cell disease, but to build upon what Bryan talked about, again, we believe that FTX-6058 has the opportunity to be a best-in-class therapy, oral once-daily administration, the therapeutic benefits of elevating fetal hemoglobin as Bryan spoke to and really the distribution at scale that this global patient population needs. And certainly, we'll be looking for elevation of fetal hemoglobin, but we also understand that the levels of fetal hemoglobin induction that we have observed pre-clinically have the potential to provide benefit to patients all along the spectrum. That is you can elevate fetal hemoglobin to levels that would significantly reduce the risk of shortened lifespan that these patients unfortunately experience or elevate fetal hemoglobin significantly to reduce the risk of recurring events. And we certainly have seen evidence pre-clinically that we have the ability to elevate fetal hemoglobin levels to those that are associated with asymptomatic presentation. So we remain extremely excited about the molecule and its potential in the clinic.

And then, regarding your second question, in terms of the productivity of the product engine, I think, as we stated, we intend and our goal is to have two new INDs over the course of the next 24 months. And I think most importantly, as we think about FulcrumSeek, we're extremely enthusiastic about the advances that we've made. So as we look at our two clinical programs to date, those have come from our earlier version of the product engine. We're extremely excited about those, but I'll turn it over to Chris and we can just speak to some of the advances in scale in our discovery efforts, which we believe should really facilitate, not only these next two INDs, but a very rich clinical development pipeline in the years ahead.

Yes. At FulcrumSeek -- the advances we have made with FulcrumSeek seek truly are astounding. This allows us not only to double down on the areas where we've had success already, in muscle and hematology and build upon the deep R&D expertise that we now have, but allows us to frankly consider other franchise areas, other therapeutic areas. And with the scale of FulcrumSeek we can potentially screen an entire franchise in one shot. And so, this allows us to readily consider new therapeutic area opportunities in-house, as well as through new partnerships in a much more integrated fashion. So, again, we remain very, very excited about the opportunity that FulcrumSeek presents for the future.

Okay. Thank you.

I'm showing no further questions at this time. I would now like to turn the call back to Bryan Stuart.

Thank you. Thank you all for joining us today and for your support of Fulcrum. Have a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.