Fulcrum Therapeutics, Inc. (NASDAQ:FULC) Q4 2023 Earnings Call Transcript
Fulcrum Therapeutics, Inc. (NASDAQ:FULC) Q4 2023 Earnings Call Transcript February 27, 2024
Fulcrum Therapeutics, Inc. beats earnings expectations. Reported EPS is $-0.4, expectations were $-0.44. FULC isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good morning and welcome to Fulcrum Therapeutics Fourth Quarter and Full Year 2023 Financial Results and Business Update Conference Call. Currently all participants are in listen-only mode. This call is being webcast live and can be accessed on the Investors section of Fulcrum's website at www.fulcrumtx.com and is being recorded. Please be reminded that remarks made during this call may contain forward-looking statements within the meaning of the Private Security Litigation Reform Act of 1995. These may include statements about the company's future expectations, plans, clinical development timelines and financial projections. While these forward-looking statements represent Fulcrum's view of today, this should not be relied upon as presenting 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 filing 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 Alex Sapir, CEO and President of Fulcrum. Joining Alex on the call are Alan Musso, Chief Financial Officer, and Dr. Iain Fraser, Interim Chief Medical Officer. After providing updates on our key programs, there will be a brief Q&A in which Alex, Alan and Iain will be available to answer your questions. With that, it's my pleasure to turn the call over to Alex.
Alex Sapir: That's great. Thanks, Valerie, and thanks to all of you for joining us today. 2023 was a year in which we both completed enrollment in our Phase 3 REACH trial for losmapimod for facioscapulohumeral muscular dystrophy, or FSHD for short, and resolved the clinical hold for pociredir, which allowed us to resume clinical testing in patients with sickle cell disease. In the fourth quarter, we continued to drive forward our two key clinical programs and advance our pre-clinical pipeline and with our cash runway that extends into 2026, I do believe that we are well-positioned to execute our corporate objectives and deliver on key milestones in 2024 and beyond. So at this point, let me go a bit deeper and elaborate on the progress we've made toward our goal of delivering transformative therapies to improve the lives of patients with rare genetic diseases.
Let's start with our most advanced program, losmapimod, which is an oral small molecule p38 alpha/beta MAP kinase inhibitor currently in Phase 3 development for the treatment of FSHD. Now, FSHD is a rare form of muscular dystrophy with an estimated US prevalent patient population of 30,000. FSHD is characterized by a slow but relentless loss of muscle function year after year, resulting in significant impairment of upper extremity muscle function and mobility. As a result, many patients are unable to perform daily life activities that you and I take for granted, such as reaching for a cup of coffee, reaching for a cup in the kitchen cabinet, brushing your teeth, feeding yourself, even practicing good hygiene. And about 20% of patients ultimately become wheelchair-bound.
Despite the high unmet need, there are currently no approved treatment options for these patients. So in our quest to bring hope for these patients, in September of last year, we completed enrollment in our global Phase 3 trial for losmapimod, with a total of 260 patients enrolled in the trial. The trial initiated in June 2022 and 15 months later we had surpassed our enrollment expectations, which we believe is a real testament to the high unmet need for this rare disease. We are on track to report top-line data in the fourth quarter of 2024, which will bring us one step closer to delivering the first-ever FDA-approved therapy for FSHD patients. So, just a quick reminder of some of the details around the Phase 3 study, which we call REACH. REACH is a 48-week trial intended to be registration-enabling both in the US and in ex-US geographies.
The primary endpoint for REACH is a change from baseline in the relative surface area, or RSA, which is a quantitative assessment of reachable workspace. RSA is an objective measure of upper extremity range of motion and muscle function that specifically evaluates shoulder and arm mobility using 3D motion sensor technology. In our Phase 2 study, losmapimod demonstrated a 10% change in the RSA score relative to placebo at 48 weeks. And based on interactions with FDA, we are currently assessing the extent to which a change in the RSA score is considered meaningful to patients. Additionally, key secondary endpoints include muscle fat infiltration or MFI, which is an important marker of disease pathology measured by whole-body MRI, shoulder dynamometry, as well as self-reported quality of life measures that will help inform our thinking on our payer strategy as we begin preparing for a commercial launch here in the US.
Now turning to pociredir, our oral HbF inducer for the potential treatment of patients with sickle cell disease, or SCD for short. Sickle cell 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 sickle cell disease has involved blood transfusions, pain medications and hydroxyurea, focusing primarily on symptom relief. And while exciting scientific progress has enabled the advancement and more recently of the approval of gene editing therapeutic approaches, we believe there remains a high unmet need for safe and accessible therapeutic options that are broadly protective of sickle cell symptomatology.
As a first-in-class oral small molecule HbF inducer, we believe pociredir has the potential to address a critical unmet need for patients. Now, just as a quick reminder, in August of 2023, the FDA lifted the clinical hold for pociredir. And I think it's also really important to note that there were no changes either in the protocol-defined dose escalation scheme or the three-month treatment duration. Clinical trial sites have now been activated and others have been selected and are going through the necessary steps for site activation in order to be ready for patient recruitment for the Phase 1b study we call PIONEER. Based on the revised inclusion-exclusion criteria, we will be enrolling patients with high disease severity. Cohort three of the PIONEER study will evaluate pociredir at the 12 milligram once-daily dose followed by cohort four at the 20 milligram once-daily dose.
Both cohorts are expected to enroll approximately 10 patients each. And we look forward to providing specific guidance on readout of the 12 milligram and 20 milligram cohort as we have additional sites activated and a good basis to project enrollment trajectory. We are looking forward to building on the encouraging clinical data obtained prior to the clinical hold, which demonstrated that pociredir increased total HbF of a magnitude that could translate into a meaningful improvement in disease severity. More specifically, after only 42 days of treatment, we observed up to a 10 percentage point increase in HbF from baseline or total HbF of approximately 25%. We believe that pociredir, as an oral HbF inducer, has the potential to provide a differentiated therapeutic option for people living with sickle cell disease.
Addressing the significant unmet need in the sickle cell community remains a key priority for us, and we are excited to build on this momentum in the years ahead. So that's the clinical update. For the financial update, let me turn it over to Alan Musso, our Chief Financial Officer, who will walk you through some of the numbers. Alan, over to you.
Alan Musso: Thanks, Alex. I'll now go over our results for the fourth quarter and full year ended December 31, 2023, beginning with the results for the quarter. Collaboration revenue was $0.9 million for the fourth quarter of 2023 compared to $0.7 million for the same period in 2022. Our research and development expenses were $19 million for the fourth quarter of 2023, compared to $18.6 million for the same period in 2022. The increase of $0.4 million was primarily due to higher personnel cost. General and administrative expenses were $9.9 million for the fourth quarter of 2023 compared to $10.1 million for the same period in 2022. The decrease of $0.2 million was primarily due to lower professional service costs. And for the fourth quarter of 2023, Fulcrum reported a net loss of $24.8 million compared to $26.1 million for the same period in 2022.
I'll now review the results for the year ended December 31, 2023. Collaboration revenue was $2.8 million for the year ended December 31, 2023, compared to $6.3 million for the same period in 2022. The lower collaboration revenue during 2023 was attributable to the completion of activities under our collaboration agreement with Acceleron, which terminated in October 2022, and due to a decrease in revenues under our collaboration agreement with MyoKardia as we completed our research services during the fourth quarter of 2023. Our research and development expenses were $71.8 million for the year ended December 31, 2023, compared to $76.8 million in 2022. The decrease in 2023 was primarily attributable to a $5 million milestone obligation incurred upon the initiation of the REACH clinical trial in the second quarter of 2022 under our license agreement with GlaxoSmithKline.
Our general and administrative expenses were $41.7 million for each of the years ended December 31, 2023 and 2022. The net loss was $97.3 million for the year ended December 31, 2023 compared to $109.9 million in 2022. And now turning to the balance sheet. We ended 2023 with cash, cash equivalents and marketable securities of $236.2 million, compared to $202.9 million as of December 31, 2022. This increase in our cash position is primarily due to net proceeds from our January 2023 equity offering of $117.3 million, partially offset by our net cash used in operating activities in 2023. And during the fourth quarter of 2023, our cash burn was $20.9 million. We continue to operate from a strong financial position with a cash runway into 2026. And with that, let me turn the call back over to Alex.
Alex Sapir: Great. Thanks so much, Alan. So, as all of you can see, we are well-positioned for a very exciting 2024 and are encouraged by the progress across our two clinical programs, losmapimod, which has the potential -- which has first-in-market potential for patients with FSHD, and pociredir, which has best-in-class potential for patients living with sickle cell disease. So at this point, Valerie, let's go ahead and open it up for questions.
Operator: [Operator Instructions] Our first question comes from the line of Matthew Biegler of Oppenheimer. Your line is open.
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