Fulcrum Therapeutics, Inc. (NASDAQ:FULC) Q3 2023 Earnings Call Transcript
Fulcrum Therapeutics, Inc. (NASDAQ:FULC) Q3 2023 Earnings Call Transcript November 7, 2023
Fulcrum Therapeutics, Inc. beats earnings expectations. Reported EPS is $-0.39, expectations were $-0.44.
Operator: Good morning and welcome to Fulcrum Therapeutics Third 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. 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, clinical development timelines and financial projections. While these forward-looking statements represent Fulcrum's view 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 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 OfficerAfter 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 is my pleasure to turn the call over to Alex. Sir, you may begin.
Alex Sapir: That's great. Thanks, Tawanda and thanks to all of you for joining us today. We are pleased with the progress that we've made in the third quarter of 2023, advancing our two clinical assets, losmapimod and pociredir. In addition, we remain well capitalized with a cash position of $257 million as of September 30 and have extended our cash runway into 2026 through a strategic review and budget process only on our essential priorities. So what I'd like to do this morning is provide an update on our two key programs, losmapimod for facioscapulohumeral muscular dystrophy, or FSHD, and pociredir, previously referred to as FTX-6058, for sickle cell disease, after which I'll turn it over to Alan for some financial highlights.
So let's start with our most advanced program, losmapimod. Now, just as a quick reminder, losmapimod is a selective p38 alpha/beta MAP kinase inhibitor, and is currently in Phase 3 development for the treatment of FSHD, for which there are currently no approved treatment options. FSHD is a form of muscular dystrophy with an estimated patient population of 30,000 in the U.S. alone. The disease is characterized by a slow and progressive loss of muscle function over many years, resulting in significant impairment of upper extremity function and mobility. As a result, many patients are unable to perform many of life's daily activities that we all take for granted, like reaching for a cup of coffee in the kitchen cabinet, brushing your teeth, feeding oneself, and even practicing good hygiene.
These critical factors and our insights on the genetic underpinnings of FSHD drove us to identify and develop a safe and effective treatment option with the potential to slow disease progression for these patients. In September of this year, we completed enrolment and reached our global Phase 3 trial for losmapimod, which we initiated in June of 2022. We believe that the rapid pace of enrolment of the 260 patients into the trial is a real testament to the high unmet need of this rare disease. We are on track to report top line in the fourth quarter of 2024. We are on track to report top line in the fourth quarter of 2024, which will bring us one step closer to delivering the first ever FDA approved therapy for FSHD. Now let me just give a quick reminder to everybody about REACH.
REACH is a 48-week trial intended to be registration enabling both in the U.S. and in ex-U.S. geographies. The primary endpoint for the study is the change from baseline in the relative surface area, or RSA score, which is a quantitative assessment of reachable workspace, or RWS. This is a measure of upper extremity range of motion and function that specifically evaluates shoulder and arm mobility using 3D motion sensor technology. Preserving this upper extremity function is critical for patients to maintain their independence and their ability to perform some of these activities of daily living that I spoke about earlier. As part of this study, we'll also be looking at other key secondary endpoints like muscle fat infiltration, or MFI, which is an important marker of disease pathology measured by whole body MRI, as well as reported quality of life measures and healthcare utilization questionnaires that will help inform our thinking on our payer strategy as we begin preparing for a commercial launch here in the U.S. We are pleased to have reached, there is no pun intended there, this critical milestone, and we look forward to sharing with everyone top line results in the fourth quarter of next year.
So, let me now move on to pociredir, our oral fetal hemoglobin inducer, or HBF for short, for the potential treatment of patients with sickle cell disease. In August 2023, the FDA lifted the clinical hold on our investigational new drug application for pociredir for the potential treatment of sickle cell disease. Our interactions with the FDA were productive and collaborative throughout the hold, and we're pleased to have aligned on a revised inclusion-exclusion criteria that targets a more severe patient population for this Phase 1b study. I think it's also important to note that there were no changes in the protocol-defined dose escalation scheme or the three-month treatment duration. We are working hard to resume enrolment in the Phase 1b study at the 12 milligram dose followed by the 20 milligram dose of pociredir.
Each of these dose cohorts are scheduled to enrol 10 patients. We are reactivating current sites, as well as identifying new sites in the U.S. and ex-U.S. that are excited to participate. Now, as many of you know, activating new sites takes time, given the contracting and IRB approval process. I think once we have a few months of enrolment under our belt, we'll be in a far better position to estimate when we would expect to have results of the 12 and the 20 milligram to share with everyone. I just want to take a minute and talk about why we're so excited about pociredir, given the fact that this is only in a Phase 1b study. So data that we obtained prior to the clinical hold demonstrated that pociredir increased total fetal hemoglobin of a magnitude that could translate into a meaningful improvement in disease severity.
Specifically, after only 42 days of treatment, we observed up to a 10 percentage point increase in fetal hemoglobin from baseline, or total fetal hemoglobin of approximately 25%. We believe that as an oral HPF inducer, we believe that pociredir has the potential to provide a differentiated therapeutic option for patients living with sickle cell disease. Addressing the significant unmet need in sickle cell remains a key priority for us, and we look forward to providing further updates in our progress. So with that clinical update, I'll now turn it over to Alan, our Chief Financial Officer, who will provide an update on our financials. Alan's been a great addition to the team since joining in August, and he will be invaluable as we move into the next phase of growth and continue to advance our mission of delivering these transformative therapies.
So Alan, over to you.
Alan Musso: Thank you, Alex. Let me start with our cash position. We ended September 30, 2023 with cash, cash equivalents and marketable securities of $257.1 million and during the third quarter, our net cash burn was $21.1 million. We continue to operate from a strong financial position, and based on our recent operating results and current projections, we now expect our cash runway to extend into 2026, an update from our prior guidance of mid-2025. In the third quarter of 2023, our collaboration revenue was $0.8 million. That compares to $1.2 million for the third quarter of 2022. Our research and development expenses were $18.2 million for the third quarter of 2023, compared to $15.4 million for the third quarter of 2022.
The increase of $2.8 million was primarily due to increased costs associated with the advancement of our Phase 3 REACH trial, including the completion of enrolment during September of 2023. Our general administrative expenses were $10 million for the third quarter of 2023, as compared to $9.7 million for the third quarter of 2022. The increase of $0.3 million was primarily due to increased facilities, professional services, and software costs. Our net loss was $24 million for the third quarter of 2023, and that compares to $23.7 million for the third quarter of 2022. And with that, let me turn it back over to Alex.
Alex Sapir: Great. Thanks, Alan and again, great to have you on the team. So Tawanda, let's go ahead and open it up for questions.
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