FULC - NASDAQ

Good morning, and welcome to Fulcrum Therapeutics’ First Quarter 2025 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 Investors 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 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 any 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. After providing updates on the company's key programs, there will be a brief Q&A in which the Fulcrum management team will be available for questions. With that, it is my pleasure to turn the call over to Alex.

Thank you, Livia, and good morning, everyone. And thanks for joining us today. So before jumping into the updates for the quarter, I just wanted to take a moment to welcome Dae Gon Ha, the newest member of the Fulcrum management team, as our Senior Vice President, Head of Strategy and Business Development. Dae Gon is no stranger to Fulcrum nor to the sickle cell space. For the past five years, Dae Gon was an equity research analyst at the banking firm Stifel, covering Fulcrum. Dae Gon, whose first day with the company is today, will be focused on overall corporate strategy and business development here at Fulcrum as we continue our efforts in sickle cell disease and other benign hematological conditions. So now let's turn to the updates for the quarter. The past several months have been an exciting period for Fulcrum as we've continued to make good progress with our lead program, pociredir, which is currently enrolling in a Phase 1b trial, a trial that we call PIONEER for the treatment of sickle cell disease, an inherited blood disorder afflicting approximately 100,000 people in the U.S. and approximately 4.4 million people worldwide. I am pleased to announce that we completed enrollment in the 12 milligram cohort, Cohort 3 with a total of 16 patients enrolled and plan to share results of this cohort in early Q3. These data will include key baseline patient characteristics, adverse events, magnitude of HPF induction and changes in other important hematological parameters measured throughout the study. Let me spend a bit of time providing some details on these 16 patients. The majority of these patients have come from sites in the U.S. with the remainder coming from a single site in South Africa. Their median fetal hemoglobin level at the start of the study was 7.7% with a mean value of 7.6%. To date, no patients have discontinued from the study and we continue to see greater than 90% adherence to the once a day oral drug regimen. Furthermore, we're pleased to report that the Data Monitoring committee for the PIONEER study, after reviewing interim data from the 12 milligram cohort, recommended that we continue the study as planned with the initiation of the 20 milligram cohort, Cohort 4, which is now underway and currently screening patients. We remain on track with our plans to report data from Cohort 4, the 20 milligram cohort, by the end of 2025. And we continue to believe that inducing fetal hemoglobin is the optimal strategy for treating sickle cell disease. Evidence for this approach continues to grow as highlighted by not only the recently approved gene therapies, but recent data analysis showing that even modest increases in fetal hemoglobin correlate to reduced disease severity. Specifically, a recent data analysis that was presented at ASH last December showing that for every 1% increase in HbF, there was a 4% to 8% reduction in-vaso occlusive crises, or VOCs. These VOCs occur when sickled red blood cells prevent oxygenated blood from getting to the tissues, resulting in debilitating pain, often requiring hospitalization or visits to the emergency room. Additionally, fetal hemoglobin levels in the mid-20% range have shown in your abolition of these VOCs that I spoke about. Based on pociredir's mechanism of action and the data that we have previously disclosed, we believe that pociredir has the potential to provide a differentiated therapeutic option for people living with sickle cell disease. And we look forward to providing important clinical data this year to further validate our potentially transformative approach with pociredir. At the upcoming European Hematology Association meeting or EHA for short, which is being held in June in Milan, we have two abstracts that have been accepted for poster presentation. Those abstracts include preclinical target engagement and reversibility of gene expression data with pociredir, as well as clinical data from our previously completed Phase 1 healthy volunteer study. Now beyond pociredir, we continue to advance our earlier stage development program for the potential treatment of inherited aplastic anemias such as Diamond-Blackfan anemia, or DBA, Shwachman-Diamond syndrome, and Fanconi anemia. We plan to submit an IND for DBA in the fourth quarter of this year. And with that overview, I will now turn it over to our Chief Financial Officer, Alan Musso to run through the financials. Over to you, Alan?

Thanks, Alex. I'll now go over our results for the quarter ended March 31, 2025. Our research and development expenses were $13.4 million for the first quarter of 2025, compared to $19.8 million for the first quarter of 2024. The decrease of $6.4 million was due to the discontinuation of our losmapimod program and the global development cost sharing reimbursement under the Sanofi collaboration. Partially offset by increased costs related to the advancement of the Phase 1b PIONEER trial of pociredir. The general and administrative expenses were $7 million for the first quarter of 2025, compared to $10.1 million for the first quarter of 2024. The $3.1 million decrease was primarily due to decreased employee compensation costs as a result of the reduction in workforce implemented in the third quarter of 2024. Net loss was $17.7 million for the first quarter of 2025, compared to a net loss of $26.9 million for the first quarter of 2024. And turning to the balance sheet, we ended the first quarter of 2025 with cash, cash equivalents, and marketable securities of $226.6 million compared to $241 million as of December 31, 2024. The $14.4 million decrease is primarily due to cash used to fund the operating activities. And finally, turning to cash guidance. Based on our current operating plans, we continue to 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, I'll turn the call over back to you, Alex.

That's great. Thanks, Alan. So to conclude, Fulcrum is off to a solid start in 2025, and we're very much looking forward to delivering two important data releases this year with the PIONEER trial. So with that overview of the business and the financials that Alan went over, Olivia, let's go ahead and open it up for questions.

[Operator Instructions] Our first question coming from the line of Joe Schwartz of Leerink Partners. Your line is now open.

Great. Thanks so much. Congrats on all the progress. And hi to Dae Gon. Look forward to working together again. I was wondering if you could talk some more about the quantum of data you expect to report from the 12-milligram cohort of PIONEER midyear. What range of follow-up duration do you anticipate we'll see for the 16 patients who've been enrolled? And will we get any data on the markers of hemolysis in addition to fetal hemoglobin data for these patients?

Yes, great question, Joe. Thanks for asking it. To answer that, I will turn that answer over to, Iain Fraser, our Head of Development, who is actually with us in the room, but it wasn't introduced at the outset of the call. Iain, you want to take that?

Yes, thanks, Alex. Maybe for the first – the second part of your Joe, markers of hemolysis, yes, we'll be providing hematological parameters, the blood counts, bilirubin's and so on, as indicators of hemolysis. With respect to the first part of your question, we will have all the data for all 16 patients on the treatment phase of the study. So that's the three-month treatment duration and then a subset of the patients with the four-week follow-up after that. There probably will not be all 16 for the full four weeks based on the data cut, but we will have a subset of those patients.

Great, thanks. That's super helpful. And then I guess does the observed dosing provide you with specific data on the number of doses that patients are receiving real time? And do you happen to have any of that data handy that you could share with us?

Yes. Joe, is this sort of related to the 90% adherence number that we referenced in our opening remarks?

Yes, I'm just. Yes, I guess, is there any more color that you can provide on the timing of the doses? Are they all within the prescribed timeframe? And I guess how many doses have occurred to date?

Yes, yes, it's a great question, Joe. I appreciate you asking it. So let me give out maybe a little bit of background. So just for everybody that's on the call, it is an oral once daily dosing. And the way that we're able to capture the adherence rates is not through the more traditional kind of pill counts at the end of the month where the patient comes in and gets their next bottle. It's really using this AI tool that we've mentioned, and that is listed in our investor presentation, AiCure. And this is something where the actual patient has to sort of register themselves on this AI tool, show that they've actually put the drug in their mouth, have swallowed it, they then have to open their mouth to show that the drug is gone. And then we get reports, I wouldn't necessarily say on a real time basis, but we get them in a very sort of timely manner, as do the sites as well. And so that's really where that – where that 90% – that's really where that 90% number is coming from, not really from the more traditional ways that people measure adherence to drug around pill counts. Iain, anything else you'd want to add to that?

No, other than that, the patient selects the time of day that they want to take their medication and the app will remind them at that time. So everything's built around that time of day that they're taking it, and that gets captured as well.

Yes, and we – so we certainly can capture that Joe, assuming that they're using the tool, which we know they are in greater than 90% of cases. So we can actually determine, are they actually taking it exactly at 08:00 every day for the full 84 days or not. I don't have that data handy, and I'm not – we haven't really discussed whether that's something that we'll be presenting when we share the data in early Q3. Does answer your question?

Yes, that's excellent. We're looking forward to your updates this year.

Okay.

Thanks for the insights.

Yes, thanks so much, Joe, for the questions.

Thank you. Our next question coming from the line of Matthew Biegler with Oppenheimer. Your line is now open.

Oh, great. Hey, everyone. I'll send my congrats as well. Thanks for the updated color here. The baseline in HbS is a bit higher, I think at 7% than we anticipated, given like the severity of disease for these patients at entry. So number one, do you think you've gotten a representative sample of the broader demographic you're going to be trying to treat here when we do get the data? And number two, do you think pociredir should work equally well or perhaps even better in patients with higher baseline HbF?

Yes, great, great question, Joe. Sorry, great questions, Matt. Thanks for asking them. Yes, let me – maybe just comment a little bit on your first sort of comment that it was a little bit sort of higher than many people had expected. I think that what we were hearing in our normal course of conversations with investors is that because this was a more severe patient population, I think some were worried that you were seeing a baseline fetal hemoglobin in the very sort of low single digits. And if they are in the very low single digits, it's going be very sort of difficult to get them to a number that, that people can get excited about. So I think when we saw what the baselines were at 7% – 7.7% for the median and a mean value of 7.6%, we thought it was important to sort of share that with folks, because again, I think many people were thinking that, boy, these baseline fetal hemoglobin levels could be extremely low given the severity of the patients that we're enrolling. And then maybe an answer to your other two questions, let me turn that one over to Iain.

Yes, I would think, Matt, that in the general population with larger numbers, those that have the more severe phenotype will tend to have lower baseline fetal hemoglobins. We have a small sample size here at the moment and spans a range of those baselines. I don't think there's anything unexpected around that. And as Alex said, we thought it was helpful to provide that additional bit of color leading into the data readout. With respect to your other question about responsiveness, I think at the moment we don't have any reason to believe that your baseline level of HbF in and of itself determines your response to pociredir. And we've certainly seen from the initial 16 patients enrolled that some at the low end had a pretty robust induction of HbF in response to drug. I think what is fair to say is that if you're starting very low where you eventually max out at steady state on therapy, maybe at a lower absolute fetal hemoglobin than if you were starting at a higher level. But I think we need the fuller data set to be able to comment further on that.

Okay. Awesome. That makes a lot of sense. If I could just maybe squeeze one quick one on the guide going from, I guess, midyear to early 3Q. Is that just kind of the nuts and bolts of the execution of the clinical trial? Or you actually want to get more follow-up on potential disease modification endpoints such like that? Thank you very much.

Yes, Matt, I think it was really just more the execution of the trial. We thought that obviously having more patients versus less patients would be better. The fact that we've enrolled 16, and as Iain said, we'll have the full treatment data for all of those 16 patients at the end of Q3. So that sorry, at the beginning of Q3, so that was really, I think, the reason that we tightened that guidance, but still, that guidance has always been in the sort of midyear range.

Thank you. And our next question coming from the line of Edward Tenthoff with Piper Sandler. Your line is now open.

Great. Thank you. Thank you very much for taking the call. And I apologize, I'm bouncing a little bit between calls today. But I just want to get a sense for, and I apologize if this was asked. But what is – what's a win for you guys from the 12-week data? Obviously, we saw somewhere around 10%. There's going to be some differences in terms of the patients who are enrolled, maybe their baseline fetal hemoglobin will be different. But what are you guys really focused on from that data set to know that this is working in the ballpark you're looking for?

Yes, thanks for the question, Ted. I'll start and then I'll turn it over to Iain for any additional color. As we've said in the past and as we said in our opening remarks, I think that any increase in fetal hemoglobin is beneficial to the patients. And even something as small as a 1% increase can lead to a 4%, anywhere from a 4% to 8% reduction in VOCs. We also know that based on drugs that have been approved for the treatment of sickle cell, a VOC reduction somewhere in the sort of 25% to 50% range is considered clinically meaningful for the patients. And that has been the basis of approval. So where you sort of net out in that 4% to 8% range, you could easily have single digit, absolute single digit increases in fetal hemoglobin compared to where the patients were at baseline. And that can be clinically meaningful certainly for the patients. Once you get to that 25% range, that's really where it becomes transformative for patients. Maybe let me stop there and see what additional color Iain wants to add.

I think, Ted, you alluded to what we had seen before and we're looking to see as we broaden the numbers of patients in the cohort that we reaffirm that magnitude of induction. And as Alex said, the mid-single digit percent increases in fetal hemoglobin are expected to be clinically meaningful.

Great. Excellent. Thanks, Iain. And thanks guys. It really makes a lot of sense. Looking forward to the data.

Yes. Thanks, Ted.

Thank you. Our next question coming from the line of Kristen Kluska with Cantor Fitzgerald. Your line is now open.

Hi. Good morning, everybody. Very encouraging to see you ended up with 16 patients in this cohort and that enrollment overall seems to be going a lot faster than a lot of us expected. How much of this in your opinion could just be attributed to the loss of Oxbryta and different dynamics? Or how much of it is attributed to getting more sites on board?

Yes, Kristen, it's Alex. Thanks for the question. I think it's a combination of both. And when you say getting sites on board, I think what we have now is we've got the right sites on board. And what I mean by right sites is these are sites that we know tend to treat older patients that maybe have more severe disease, i.e., either four VOCs over a 12-month period of time or two VOCs over a 6-month period of time. So these patients do tend to be more severe. So I think that part of that is driven by the fact that we've got the right sites on board. I think part of it is also driven by the fact that voxelotor is no longer available. And obviously the patients that were on voxelotor, obviously, were very interested in actively managing their disease. So once they had to go off, I think that many of those patients were going back to their physicians and saying, what else is available? And then I would say that the third factor is just kind of overall excitement and momentum around fetal hemoglobin induction as really what we believe is the path forward to really potentially see transformative treatment options for these patients. And with us being very much sort of at the forefront in leading that charge, physicians get excited about the drug, they started – get excited about the trial, they start the patient, they hear positive sentiments from their patients, and that just sort of feeds even greater success and greater enrollment into the study. Iain, anything you want to add there?

The only additional bit of color would be, I think we've articulated previously how getting some of these sites that are best matched to this patient population takes a long time to get those sites up and running. And there is that lag phase. And I think what we're seeing is that lag phase being overcome, those sites being activated with the right sites being able to recruit the patients. And that's really helped with the recruitment in the study.

Okay, thanks. And I know you talked about that – you don't currently have reason to believe that baseline levels will determine your responses. But has there been any work or research done to understand why certain patient populations may present as more severe? And why these patients don't respond to other therapies that are part of your inclusion/exclusion criteria? And I think ultimately, where I'm trying to go with my question is, if you're able to show response in a population that's already deemed to be quite severe and tougher to treat with any intervention, how does that help us understand how the data can translate potentially to a more traditional all comers population?

Iain, you want to take that?

Yes. That's a great question. I think there are lots of components there, Kristen. On the one hand, the relationship between the underlying genetics and the severity manifestations of the disease and HbF is obviously a big contributor to that, but there are other components related to that as well. And then secondly is the aspect of responsiveness to therapy as being able to provide benefit to those patients. And I think that's going to be different for different therapies. Different therapies will have different reasons for responsiveness or non-responsiveness. I think as we move through our clinical program, those are things that we're going to be looking for, are there key issues that we can tease out as determining responsiveness or not and translating to benefits. So I think that's an important piece of it. With respect to the translatability to the less severe patient population, we do have data from the initial 16 patients in the study who were less clinically severe at the outset. And while we don't have really clinical data because it's a short study. We do have their HbF responses. And those, as I think everyone knows, have been very encouraging. So we certainly expect to see that responsiveness there. And even at the high end of baseline fetal hemoglobin, small increments even on top of relatively high baselines are clearly associated with benefit as well. So we expect to see that translate too.

Thanks, Alex and Iain.

Yes. Thanks, Kristen. Next question, operator?

Thank you. [Operator Instructions] Our next question coming from the line of Gregory Renza with RBC Capital Markets. Your line is now open.

Good morning, Alex and team. It's Anish for Greg. Thanks for the updates this quarter and for taking our questions. Just a couple from us. First, given the shifts at the FDA, how are you thinking about the impact to pociredir broader development such as on endpoint selection HbF as a surrogate marker, which I know you've talked about before, and even the overall development timelines, what's your take on the current setup with regulators? And then just quickly in your deck you note novel HbF inducers in your discovery pipeline, could you share how you're thinking about differentiating from other mechanisms in the landscape such as WI

Yes. Two really good questions, Anish. Appreciate you asking them. Maybe to answer those, let me turn those over to Iain.

Yes, Anish, and I think what we'll be doing, as we've articulated previously, is that at the end of the 20 milligram cohort, at the end of the Phase 1b study, we'll be interacting with the FDA in an end of Phase 1 interaction. And I think that'll be our opportunity to get a gauge on their thinking as we discuss plans for the next study there. So that's an upcoming interaction which is planned and which we expect will occur at the end of the 20 milligram cohort. With respect to the other HbF inducers, I think we're looking more broadly and agnostically at compounds that are able to induce HbF. I think it's early days in the clinic for some of the other inducers that have just entered the clinic in the last year or so, including as you mentioned, WI

Great. Thanks so much.

Thanks, Anish.