Fulcrum Therapeutics, Inc.
Q4 2020 Earnings Call Transcript

Published: 4 Mar 2021

[Operator:]

Good morning, and welcome to the Fulcrum Therapeutics Fourth Quarter and Year End 2020 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 Waarich:]

Thank you, operator. Good morning. And welcome to the Fulcrum Therapeutics conference call to discuss our fourth quarter and full year 2020 financial results and recent corporate highlight.

[Robert Gould:]

Thank you, Christi. Good morning, everyone. And thank you for joining us today. 2021 is poised to be another important year for Fulcrum, as we expect to have meaningful updates from multiple key initiatives. The full losmapimod data from ReDUX4 late in the second quarter of this year 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. With FTX-6058 we’ll have data from the Phase 1 trial in healthy adult volunteers mid-year, and we anticipate initiating a trial and people with sickle cell disease by the end of the year. We're also continuing our efforts to advance additional treatments for genetically defined rare diseases with FulcrumSeek, both internally and through our partnerships with the goal of bringing forward two IMDs over the next 24 months. This morning, we also announced my retirement and that Bryan Stuart, who has been our Chief Operating Officer since 2018, will be promoted to President and CEO at the end of this month. I look forward to staying engaged with Fulcrum, as I continue on the Board. Bryan will join Fulcrums Board, and Mark Levin, our Board Chair will assume the role of Executive Chair upon my retirement.

[Bryan Stuart:]

Thank you, Robert. I'm looking forward to working together in our new roles. It's a privilege to build on the foundation that you've helped create, and I'm honored to be taken over as CEO during such an exciting time for the company. Like all of my teammates, I was drawn to Fulcrum by the opportunity to develop transformative therapies for people living with genetically defined rare diseases. This is evidenced in our lead programs in both FSHD and select hemoglobinopathies, where we're targeting the root cause of severe diseases, as well as our enhanced proprietary product engine, which now allows us to rapidly identify novel targets that ameliorate disease phenotypes, utilizing insights derived directly from patients. The strength of this platform is evidence in both our internal preclinical pipeline, as well as our collaborations with Acceleron and MyoKardia, and it positions us very well to take advantage of drug discovery at a scale far beyond our previous capabilities. As we make this transition, Fulcrum is very well-positioned to build on our great momentum and develop impactful therapies in the years ahead. Before providing more color on our FSHD in sickle cell trials, I'd first like to provide an update on our program with losmapimod for COVID-19. As announced in our press release earlier this morning, after a strategic review, we have decided to discontinue the LOSVID trial. This decision is a reflection of the significant changes in the COVID-19 treatment paradigm, including the introduction of new therapeutic options and emerging vaccines. After careful consideration, we have decided to redeploy our resources to Fulcrums other clinical programs and discovery efforts with a continued focus on rare diseases. I'd like to note that losmapimod was generally well tolerated, and there were no safety concerns with losmapimod. I would also like to thank the patients and investigators who participated, as well as the Fulcrum team who worked so hard on this trial.

[Chris Moxham:]

Thanks, Bryan. Our unique research focus at Fulcrum positions us to pursue targeted indication where we believe we can develop safe and effective therapies to rebalance gene expression. By working to understand and then target the root cause of 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 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 is a genetic disorder caused by a mutation in the adult form of hemoglobin. The result of the mutation is less efficient oxygen transport, and the formation of sickles red cells. People living with sickle cell disease typically suffer from serious complications, which can lead to anemia, pain and vaso-occlusive crisis or VOC's, as well as shortened lifespan. Increasing fetal hemoglobin can have a transformative impact for patients, including reduce recurring pain crises events, reduce mortality and increased likelihood of asymptomatic presentation. We believe significant unmet need remains with existing sickle cell disease treatments.

[Peter Thomson:]

Thanks, Chris. We entered 2020 with $112.9 million in cash, cash equivalents and marketable securities, not including the $14.4 million in net proceeds from our January 2021 financing. Based on our current plans and projections, we expect this will support our operations into the fourth quarter of 2022. Collaboration revenue for the fourth quarter of 2020 was $4.2 million, compared to no collaboration revenue recognized during the fourth quarter of 2019. Collaboration revenue for the full year 2020 was $8.8 million compared to no collaboration revenue recognized during the full year 2019. Research and development expenses for the fourth quarter of 2020 were $16.1 million, compared to $12.1 million in the fourth quarter of 2019. R&D expenses for the full year 2020 were $59 million, compared to $71.1 million for the full year 2019. General and administrative expenses for the fourth quarter of 2020 were $5.9 million, as compared to $4.4 million for the fourth quarter of 2019. G&A expenses for the full year 2020 were $21.4 million, compared to $13.1 million for the full year 2019. Our net loss was $17.7 million for the fourth quarter of 2020 compared to a net loss of $16.1 million for the fourth quarter of 2019. Net loss for the full year 2020 was $70.8 million, compared to $82.7 million for the full year 2019. With that, I'll turn it back to Bryan. Bryan.

[Bryan Stuart:]

Thanks, Peter. We have a lot of work ahead as we continue to execute on our plans. We'll report the full losmapimod data from ReDUX4 later in the second quarter. We'll have data from the Phase 1 trial with FTX-6058 in healthy volunteers in the year and anticipate initiating a trial in people with sickle cell disease by the end of the year. And we're planning on bringing forward two INDs from the product engine over the course of the next 24 months. In closing, we've made important progress over the course of 2020. And we expect 2021 to be a year of many significant advancements in clinical updates across our pipeline. At our core we’ll always maintain our commitment to putting the patients first and to innovation that can help us identify advancing promising therapies that target the root cause of genetically defined diseases. I'm excited to serve as Fulcrums new CEO and look forward to keeping you updated on our progress. Operator, you may now open the line for questions.

[Operator:]

Our first question comes from the line of Ted Tenthoff from Piper Sandler. Your line is open.

[Ted Tenthoff:]

So Robert, I just want to start by saying thank you for all your hard work and friendship. It's such a pleasure and I wish you nothing but good things. And Bryan, sincere congratulations. Very well deserved. And I'm excited to work with you guys all going forward.

[Robert Gould:]

Thank you, Ted.

[Ted Tenthoff:]

Yeah, thank you. I want to get a sense from just basically wrapping up on the COVID study. Is there anything that you kind of learned about that, that has read through to FSHD? Obviously very, very different conditions, but just want to see if there is any takeaways from discontinuing LOSVID? Thank you.

[Robert Gould:]

Yeah, I think first and foremost, we would point out that there were no safety concerns. And that's obviously very important as we look at the LOSVID trial. And we also think about the ongoing trials in FSHD. At this point, what we can communicate is, is when the data becomes available, we'll certainly plan on sharing that and to the extent that there are any learnings that would be helpful, as it relates to losmapimod or the treatment of COVID-19, those are things that we'll certainly plan on sharing.

[Ted Tenthoff:]

Great, thanks. And I'm looking forward to the other study readouts this year, too. Thank you.

[Operator:]

Our next question comes from the line of Joseph Schwartz from SVB Leerink. Your line is open.

[Joseph Schwartz:]

Thanks very much. So my first question on FTX-6058 is, what would you like to see in the healthy volunteers on different PD biomarkers in order to give you the sense that you're on track to seeing meaningful changes once you get into sickle cell patients? If you could just give us your thoughts on that. And also, what - how - given that you have seen in preclinically an increase in Hbf up to approximately 30%. You know, what's the threshold, the minimum threshold level of Hbf induction do you think that is clinically meaningful, and likely to translate into improvements in things like VOCs? Thank you.

[Robert Gould:]

Sure. And I'll turn it over to Chris.

[Chris Moxham:]

Yeah, thank you for the question. In the context of the Phase 1 healthy volunteer study, obviously, we're very much focused on safety, tolerability, pharmacokinetics, and target engagement. And as I mentioned, we will be making measures of HBG1 mRNA, as well as of reticulocytes. Of course, we know in healthy volunteers during a 14 day study, and just given the slow rate of turnover - turnover of the red blood cell population, that the likelihood of seeing changes in HBG1 mRNA is as low, but not zero. So our primary focus, again, is really on safety and tolerability, and a focus on targeting engagement. And that really helps set the stage for how do we move forward now in select doses to take into the sickle cell patient population, for continuing our clinical development. You know, as we think about the pharmacodynamic biomarkers, and the data that we've generated preclinically, we've seen an amazing level of consistency across the different assays, either in vitro or in vivo. And you mentioned that the data that we shared where we see up to 30%. And so as we've talked to KOLs and clinicians about what's a meaningful increase in Hbf, many of them point to increases in this upper single digit range, as being really providing clinical benefits. So that data that we've generated to date, preclinically certainly demonstrates that we can produce those types of increases in absolute Hbf, in the models that we've used. I think the other key point is that we know that other companies have been talking with the FDA and have disclosed they've been focused more around a threshold of 3%, absolute increase in Hbf. And again, based upon the preclinical data that we've generated with FTX-6058, we see increases well above that. And so, again, we're very excited about the preclinical data. And of course, if that translates into the clinical - into the clinical realm, we believe that we can - FTX-6058 has the potential to provide great benefit for patients living with sickle cell disease.

[Joseph Schwartz:]

That's very helpful. Thank you. And then maybe one on losmapimod and FSHD. I know that you have a pre-specified sensitivity analysis to focus on patients with the highest level of DUX4 gene expression. But have you considered just given the wide, very wide range of DUX4 gene expression in patients muscle samples to - before you look at the data, would it be possible to or have you considered whether it makes sense to change from just the average reduction in DUX4 gene expression across all of these samples to maybe something more like an integral analysis that could account for the wide range by looking at like the weighted average of gene expression? It just seems like mathematically, it might do more justice to what the drug is able to push?

[Bryan Stuart:]

Yeah, great, great question, Joe. I think one of the things and as we reiterated, and as you alluded to, that we were very enthusiastic about it. Obviously, the interim analysis data, which did show this large reduction in DUX4 driven gene expression in the biopsies that had the highest pre-treatment levels of DUX4. I think one of the things that we had mentioned at the time, is that also were similar to trends that we were seeing in the open label study that we're running out of a single site. So as we look towards the total data set, we're going to do another pre-specified sensitivity analysis. One of the key learnings that obviously we're observing here is that there is this spectrum of DUX4 driven gene expression. So we'll focus on these biopsies that have the highest pre-treatment DUX4 levels. At the same time, I think we're also obviously very encouraged, we'll certainly look at the totality of the biomarker data. But obviously, this gives us an opportunity as well to look at the structural, functional, patient reported outcomes and all of those other measures as well. And what we spoke to last time as well, it certainly we believe that all patients have high and lower expressing muscles. So therefore, we don't think the benefit of losmapimod would necessarily be limited to those patients that have these highest pre-treatment biopsies. But all patients have the potential to benefit from losmapimod.

[Joseph Schwartz:]

Great. That's very helpful. Thanks for taking my questions.

[Bryan Stuart:]

Yeah. Thanks, Joe.

[Operator:]

Our next question comes from the line of Dae Gon Ha from Stifel. Your line is open.

[Dae Gon Ha:]

Yeah. Hi, thanks for taking the question. And let me add my congrats to Robert for your retirement. Thanks for your leadership. And Bryan, look forward to working with you as well. And congrats on the promotion. Two questions for me. One on losmapimod and one on 6058. On the losmapimod side, just wondering if you have I guess, before we get that readout in second quarter, do you guys have any certain pre-specified analyses you will conduct on your secondaries, looking at the heterogeneity of the patient population, just wondering what kind of hierarchy or order that we should be mindful of before we get that full totality of the data in the second quarter? And then on 6058, just looking into the literature, it does seem like the trimethylation and the epigenetics can be sort of more broad-based on the effects beyond Hbf induction. So, Chris, maybe a question for you is, can you speak to the characterization of the gene expression profile when you do administer this in both the in vitro model, as well as the in vivo model, so just talk about sort of the off target effects, if you will? Thanks.

[Bryan Stuart:]

Yeah. Thank you, Dae Gon. And maybe why don't I start on FSHD. And then I can turn it over to Chris, on 6058. Yeah, in terms of - as we spoke to, one of the things we're obviously enthusiastic about in this data set is being able to show the totality of the data, including, as you alluded to, a number of secondary and exploratory endpoints that we're measuring, such as whole body MRI, a Timed Up and Go, reachable workspace. And I think one of the things that I would highlight is, one, obviously, there's a significant amount of unmet need that exists, if we talked about no approved therapies, and unfortunately, nothing else in the clinic. In addition to the efficacy measures, we're still going to be very focused on safety and tolerability, as this is a chronic disease. But without pointing to any particular secondary exploratory measures, one of the things that I would point out is, as we've spoken about in the past, we have done a number of preparatory studies where we've really established these endpoints, as endpoints that are not only relevant towards the trial, but most importantly, are relevant towards the patients. So these are for people living with FSHD, we believe we're measuring a lot of - the measures that are going to be very important to them, such as the ability to lift their arms, the ability to get out of the bed and consistent with what we're hearing from them. So certainly, as we look towards the secondary and exploratory, if we – while we didn't power the study, to achieve statistical significance, and then if we are able to identify trends of benefit, we would view that I think highly encouraging.

[Chris Moxham:]

Sure. And with respect to FTX-6058 and its profile, if you will, first of all, the non-clinical safety package indicated that we had an acceptable window that warranted moving into the clinic. We've also done extensive profiling of the molecule both within the entries family and across diverse target families as well. And again, FTX-6058 demonstrated a very clean profile in that regard. The other thing that I'll point to is that, you know, we've done broader gene expression analysis in multiple different cell types, looking at differentiated neurons, cardiomyocytes, myotubes. And really, we see very selective effects on gene expression in the CD34 cells. So we have upregulation of fetal hemoglobin. To kind of reiterate, FTX-6058 has very acceptable therapeutic index. We've now taken into the clinic, we'll get a couple more data in convenience with respect to safety and tolerability. And we also continue to characterize the mechanism of action. And then we'll try to connect this up, if you will, between fetal hemoglobin gene expression.

[Dae Gon Ha:]

Okay, great. Thanks very much.

[Chris Moxham:]

Thanks, Dae Gon.

[Operator:]

Our next question comes from the line of Matthew Harrison from Morgan Stanley. Your line is open.

[Unidentified Analyst:]

Hello, everyone. This is Kostas on for Matthew. I would like to add my congratulations to Robert for his retirement and Bryan on your new role. Two questions from us on FSHD. One is on the prespecified sensitivity analysis. I was wondering whether these type of analysis is powered to detect a statistical - statistically significant improvement versus placebo? You mentioned that many patients if not all have both high and low DUX4 levels in the muscles, but I was wondering whether you have made sure somehow that these analysis will be powered sufficiently?

[Bryan Stuart:]

Yeah. So we did not power the prespecified sensitivity analysis for statistical significance. But one of the things that we view is as being very relevant is again, as we mentioned, at the time of the interim analysis, that this was, this observation was based on learnings from our single site open label study. And we did do this prespecified sensitivity analysis prior to looking at our interim analysis data, and we plan on recapitulating that for the full data set. And again, if we do observe these trends that we saw in the interim analysis, we think that that has a potential to be very beneficial for patients as it is affecting the root cause of the disease.

[Unidentified Analyst:]

Thank you. And one quick follow up, have you engaged with the FDA to discuss what they would potentially want to see in the Phase 2b data, or you are planning to do that after you see the data?

[Bryan Stuart:]

Yeah, we certainly have had a constructive dialogue with the FDA to date. We'd also point out we were very pleased that there was a patient focused drug development day that took place last year, where the FDA was able to hear directly from patients, caregivers, and it just really understand the disease burden from those living with FSHD. So we think, on the other side of this Phase 2b data, that will certainly represent a good time for us to continue our engagement with the FDA and determine a regulatory path forward.

[Unidentified Analyst:]

Thank you. Very helpful.

[Bryan Stuart:]

Great.

[Operator:]

We have a no further questions as this time. I'll be handing the call over back to Bryan Stuart. Please continue.

[Bryan Stuart:]

Thank you. And thank you for all for joining us today. We appreciate your support of Fulcrum. Have a great day.

[Operator:]

Ladies and gentlemen, that does conclude our conference for today. Thank you all for joining. You may all disconnect.

[Christi Waarich:]

Good-bye.