Fulcrum Therapeutics, Inc. (FULC) Earnings Call Transcript & Summary

Good afternoon, everyone. Thanks for joining us at the Bank of America Healthcare Conference. I'm Tazeen Ahmad. I'm one of the senior biotech analysts here at the bank. It is my pleasure to introduce our next presenting company, Fulcrum. Presenting for Fulcrum today is President and CEO, Robert Gould. Good afternoon, Robert. Thanks for joining us.

Good afternoon, Tazeen. And it's truly my pleasure to join you today.

So we're looking forward to spending the next 30 minutes with your team. Maybe you can start us off with a quick overview of the company, some of your recent highlights. And then we can go into a little bit more detail about some of your catalysts.

Sure, that would be great. So Fulcrum Therapeutics is a company designed to regulate gene expression to treat the root cause of diseases. And in our 4 years of existence, we've enabled the progression of one -- our lead program into the clinic, our lead program for the treatment of form of muscular dystrophy, called FSHD. This form of muscular dystrophy is caused by the inappropriate expression of a protein called DUX4 in the skeletal muscle of patients that have FSHD, and this inappropriate expression causes the death of the skeletal muscle. And so a number of years ago now, we began to explore mechanisms by which we could turn off this toxic protein, turn off this muscle-killing protein called DUX4, and we were able to successfully identify a mechanism that could regulate the gene expression of that protein and treat the root cause of the disease FSHD. That program is in Phase II, and we're looking forward to getting results from that Phase II study in the first quarter of next year. One of our other programs that's moved forward very quickly is almost the opposite concept. In the case of FSHD, we're trying to turn off a gene. In the case of our sickle cell program, we're actually trying to turn on a gene. We're trying to turn on a gene called fetal hemoglobin that can compensate for the diseased hemoglobin gene that's causing sickle cell disease. The commonality between this approach, in both cases, is that we're seeking to regulate gene expression, turn a gene down or up, in order to treat the root cause of the disease. The sickle cell program, we'll be filing an IND later this year, and we anticipate being in patients before the end of the year in that program. But the general approach we're taking is applicable across a whole host of different disease areas. Our lead program is in muscular dystrophy. Our next program is in sickle cell disease. And earlier this year, we announced a collaboration with Acceleron in respiratory disease with the same concept, to up or down regulated gene of interest in an undisclosed respiratory disease to treat the root cause of that disease. So we've been really encouraged by the approach we're taking. First 4 years of the company, we've been able to establish a productive platform and product engine that utilizes cells taken from patients with genetically defined diseases to understand how to turn on or off the genes that can treat the disease. We've developed a proprietary small molecule library collection that gives us insight into the genetic regulatory pathways to control the gene expression as well as a unique CRISPR library that provides insight into those same pathways and using a combination of genetic, chemogenomic and bioinformatic approaches, built a proprietary database called FulcrumSeek that, again, gives us unique insights into the regulatory pathways that we can exploit to turn on or off genes of interest, to turn on or off these disease-causing genes, so we can treat genetically defined patients at the root cause of their disease.

Okay. Great. Maybe give us a little bit more detail on FSH. Can you remind us the typical pathology of these patients? What do we know about the progression of the disease relative to natural history studies? And how many of FSHD patients have been identified so far?

Yes. So FSHD is the second most common form of muscular dystrophy. And it's caused by, as I mentioned earlier, the inappropriate expression of a gene called DUX4, which produces a protein called DUX4. And it's a disease for which we -- a great deal is known about the molecular and pathologic progression of the disease. So in these patients, 1 of 2 different genetic alteration causes an expression of DUX4, either a deletion at the end of chromosome 4 that results in inappropriate expression of DUX4 or a point mutation that results in the inappropriate expression of DUX4. Either one of these genetic alteration causes DUX4 to be turned on and expressed in skeletal muscle of patients. Now DUX4 itself normally is a protein that's important during embryonic development, at around the 4 cell stage of embryonic development, where it turns on an entire program of embryonic proteins. But when it turns on these same proteins in the skeletal muscle of patients, the skeletal muscle, if you will, doesn't know what to do with these embryonic proteins. It experiences a lot of oxidative stress. And in response to that oxidative stress, the muscle goes into apoptotic cell death. And as the muscle dies, it gets replaced by fat, and that shows up as a muscular dystrophy. So you can track each step of that. So natural history studies have been done previously to show that if you look an abnormal muscle from these patients for DUX4-driven gene expression, this family of proteins and program that's turned on by DUX4, you see elevation in DUX4-driven gene expression in abnormal-appearing muscle from FSHD patients, but not in the muscle of normal patients who are normal-appearing muscle from FSHD patients. Secondly, you can visualize that fat infiltrate into the muscle of the patients by doing whole-body MRI, and you can see muscles throughout the entire body affected by that fat infiltration. And that progresses over time. In fact, over the course of about a year, studies have been shown that you can see that progression of skeletal fat penetration into the muscle of the patients, and that shows up in the patient's life by a progressive inability, first of all, to use facial muscles, which the F in FSHD stands for, facio meaning face, then progression into the shoulder girdle, typically scapula, the scapular muscles. And we can measure that progression in the scapular muscles by quantitatively assessing the ability of patients to access space above their shoulders, an assessment called reachable workspace that is an objective, quantifiable measure of the shoulder girdle function and reflects the disease, facioscapular. And then the disease typically progresses into the trunk and upper muscles of the upper arm, the so-called humeral portion of our bodies. And we can measure that by measuring the ability of the patients to get up out of the bed and, more often called optimized timed up and go or FSHD timed up and go. And so both the molecular as well as pathologic presentation on the muscle of these patients is known as well as quantifiable objective clinical endpoints that measurably deteriorate over the course of about a year or 2. It's a familial disease, so 2/3 of the patients have family members, and so they often know they have the disease, in advance of any molecular diagnosis or clinical diagnosis. And of the -- as I mentioned, about 2/3 are familial, about 1/3 are spontaneous, and that contributes to the sort of almost 16,000 to 38,000 FSHD patients that are seen in the United States with this disease.

Okay. So very recently, yesterday, you announced some changes to your ReDUX4 trial. Can you just remind us what those changes are and the reasons behind making those alterations? And then I have just one quick follow-up on that.

Yes. I'll let Diego, our Head of Clinical Development, discuss the changes from our original protocol that we had -- that we initiated in response to the COVID-19 pandemic.

Yes. Thank you, Robert. Yes, yesterday, we announced an amendment to our Phase II placebo control FSHD trial called ReDUX4. The original design was a 24-week placebo control. We introduced an amendment that extends the study to a 48-week placebo controls to allow some sites that have been impacted by COVID-19 to bring patients for some critical assessments, like the on-treatment muscle biopsy, which is the primary endpoint of the trial. In the original design, all patients would get an on-treatment biopsy at week 16, and many of those have been completed and are being completed, but some sites are temporarily closed. Therefore, by introducing this amendment now, these sites and patients have the option to obtain their on-treatment muscle biopsy at week 36 with a window of a few weeks earlier or later. And this increased flexibility is really welcomed by all the sites and patients to make sure we preserve the integrity of the trial and can answer the key question, if losmapimod is better than placebo are reducing the root cause of the disease the activity of the DUX4 program in affected skeletal muscle.

So one question that we've been getting is why are you extending the observation period from 24 weeks all the way out to 48 weeks. What is the additional data do you think that would allow for?

Yes. The main reason for the 48-week is when we communicated with all the sites and we made an estimate of when they will be reopening, and by going all the way up to 48 weeks, we maximize the opportunities for these sites to reopen and bring the patients and, in a safe way, perform the assessments of the trial, although that was another original goal. By now having 48-week placebo control trial, we believe that this creates also an opportunity for other endpoints that, we believe, may take longer time, like the muscle fat infiltration or muscle fat replacement and some clinical outcome assessments to begin to show some trends or differences with drug versus placebo. So definitely, we get additional clinical data, specifically over longer placebo control, and that is a gain of the amendment, although, again, the main reason was really for the impact of COVID-19 to minimize data loss.

Okay. So with these changes, when should we expect the top line results now to come?

Yes. We communicated yesterday that top line results for the full study are expected in Q1 2021.

And any potential for interim this year?

Yes, we announced yesterday that there will be an interim analysis of approximately 25 patients in Q3 this year. These are really the first 25 patients who reached the week 16 and obtained their on-treatment muscle biopsy.

Okay. And what should we, as investors, be looking for at that interim to feel confident about the full results?

Yes. No, we definitely feel that the 80 patients enrolled in the trial that, that will yield the final results in Q1 next year are sufficient to answer the key question. However, the approximately 25 patients interim analysis in Q3 gives us a first opportunity to look at drug versus placebo and begin some preparation that is needed to plan for confirmatory trials or late-stage trials. So definitely, it's a welcome opportunity for everybody to start looking at drug versus placebo, although a limited sample size, definitely not to draw any firm conclusions.

Okay. So what are -- do you get some other functional improvements that are important, do you think, to see in these FSHD patients? And could you -- would you be able to disclose any quantitative functional measures from the ReDUX4 program?

So the interim analysis is focused on the primary endpoint, which is the muscle biopsy. However, the ReDUX4 trial includes other important endpoints, for example, the whole-body quantitative skeletal muscle MRI, where we will be able to measure the changes in the damage to the muscle, including fat infiltration and fat replacement, in a quantitative objective way. And definitely, 48 weeks of placebo-controlled data is a really important piece of data. It's one of our secondary endpoints. Also we have several exploratory clinical endpoints that measure key functions that we've heard from patients matter a lot, like mobility, the use of the shoulder and proximal arm and how they function or feel every day, strength of their muscles. And at the end of the trial, all this information will be available from us in the context of a high-quality trial, double-blinded placebo control, 1-year follow-up, good sample size for a rare disease trial.

Okay. So this is obviously a Phase II study, but this is also an area of high-end unmet need. Can you talk to us about any discussions you've had, even preliminary, with the agency about the potential for getting accelerated approval based on Phase II data, assuming that it is positive? So if everything does go right from here in terms of the data you're looking for, when do you think could be the earliest you can launch? Again, not setting the expectations that it would be, but just to get a sense of what an accelerated path could look like.

Yes. So we believe FSHD checks all the boxes for a disease that is eligible for accelerated approval. Not only it is a rare disease, there's nothing approved or off-label, so the unmet need is very high. It is a serious disabling disease. FDA has recognized that when they granted orphan drug designation to losmapimod earlier this year. We announced yesterday the EMA also granted orphan drug designation to losmapimod. And we have designed a very high-quality Phase II trial. With that in mind, the biomarkers, including the primary endpoint and the MRI, we believe. a treatment effect on those biomarkers would predict clinical benefit. In other words, once we show that a drug treats the root cause of the disease, it's only a matter of time before we start to see clinical benefit. So at the end of the Phase II, we will continue these discussions with regulators. They have been ongoing. The neuro division is now more familiar about FSHD. And the ability to get an approval, of course, depends on the data, but also the regulatory flexibility. And we believe the community is actively engaged to enable a safe and effective drug to be available as early as possible, and that's certainly Fulcrum's goal.

And this is Bryan, just to add on one point. We also had the benefit. This is a program that we in-licensed from GSK, and they did a very significant amount of work on both the molecule. And while they were developing it initially for an additional indication, as we think about ultimately filing, there's a tremendous amount of work on the drug, on stability, et cetera, that we think will put us in an advantageous position when we ultimately look to gain approval.

So if your top line data is due next year some time, do you think that 2022 would be a reasonable expectation if everything does go right for a U.S. launch?

Yes. I think based on the assumption, or if that's the assumption that we were to engage with the FDA in 2021 on the other side of the trial, I think, under an accelerated approval scenario, that represents, I think, a reasonable assumption.

Okay. Great. So keeping on topic with FSH, since this disease is slowly progressing, how are you thinking about treatment compliance in milder patients versus the more severe patients, and especially since now you're looking at it over 48 weeks?

Yes. This, again, is -- in terms of compliance, this, again, is an advantage and one thing that really attracted us to losmapimod. It's dosed twice daily orally in a 7.5 milligram tablet, so 2 tablets twice a day for a total of 4 tablets total. And we've really been pleased with the compliance that we've seen thus far in the trial. So a number -- as Diego mentioned, a number of the patients have completed the 24-week portion of the original trial. Those patients had the opportunity to choose to -- if they wanted to, to roll over into an open-label extension, and they all -- all of the patients that completed the original 24 weeks have elected to roll over into an open-label portion of the trial. And that's really encouraging to us because it speaks to a number of different components. One is the -- confirming the extreme tolerability of this drug that's been seen previously, the patients tolerated extremely well. Second is just the amazing support we have from the patient community to participate with us in this trial, and that's really been marvelously encouraging for us. I think the other advantage from a clinical trial design point of view is that there's an agreed-upon clinical severity score that these patients -- neurologists use with these patients. And we're intentionally targeting patients that are in the mid-group of this trial, that runs from 0 to 5 or 0 to 10. Using the 0 to 5 scale, we're targeting patients that are in the 2 to 4 range of severity, which speaks to patients that are beginning to lose shoulder girdle function and are progressing further to be starting to lose some ability to walk and stand. So if you will, the sort of medium range of severity on this score, I think that combination of ease of administration, extremely well-tolerated drug and ability to specifically target patients that still have muscle that we think can be salvaged and regenerate really makes us very encouraged about the aspects of the treatment compliance.

Okay. So maybe I'll just move on to one of your other indications, sickle cell. You recently completed an IND-enabling safety study. Can you give us an overview of where you are on that program?

Yes. We're really excited about the sickle cell program and the ability of this small molecule to elevate fetal hemoglobin. As you mentioned, we completed the in-life portion of the IND-enabling studies as well as a number of the necessary CMC components for develop -- for filing an IND. We're in the process of preparing those reports and initiating the pre-IND and IND requirements. We're still on track to have that IND filed and potentially be in humans before the end of the year, pending successful outcome, of course, of discussions with the FDA. COVID-19 really did not affect the time line of that program at all. The IND in-life portions were completed before COVID-19 hit. We've been completing the histological evaluations and preparing the reports, all of which, of course, can be done under work-from-home conditions.

Okay. So can you give us a little bit more color on how your program might be differentiated from others that might be ahead of you in development?

Yes. sure. This is Bryan. So obviously, there has been some very significant advancements in the space, which has been great. But the size of the patient population and the unmet need is still very significant. So as Robert mentioned, we're seeking to induce fetal hemoglobin, and the benefits of that to patients are very well understood from human genetics. So there are patients that have both the sickle mutation and a different mutation, which causes them to express fetal hemoglobin. And this hereditary persistence of fetal hemoglobin is called, and it shows what the benefit is to these patients of having fetal hemoglobin expressed. It's at lower levels can reduce symptoms and at higher levels can make these patients asymptomatic. So this is a surrogate that, I think, is very well understood by the community. We think this is -- this has the potential to be beneficial for patients who have more of an anemia profile, those who have more -- suffer from more BOCs and could be beneficial across, we think, a very broad portion of the patient population. And we'd probably also add on that, as we engage with the community and we engage with KOLs, we believe the small molecule modality is very well received. Because of the size of the patient population, there are a lot of cell and gene therapy approaches that are very exciting scientifically, but there's still a tremendous need for a therapy that can be accessed very broadly, and a small molecule can do that.

Okay. Are there any drawbacks to targeting fetal hemoglobin?

We don't think so because of this just extraordinary experiment of human genetics, if you will, or an experiment that nature did in human genetics, there's a population of people who have a hereditary persistent elevation of fetal hemoglobin in the sense that all of us make fetal hemoglobin early in life, and then many of us shut off the fetal hemoglobin as the adult hemoglobin comes on. But there are patients who -- there are individuals who do not shut off their fetal hemoglobin, and so they have this hereditary persistence of fetal hemoglobin. And they -- other than having the elevation of fetal hemoglobin, they really have no other clinical presentation. In fact, that trait is relieving of sickle cell disease. So there are some patients who not only have their hereditary persistence of fetal hemoglobin, they also have the sickle cell gene, yet the fetal hemoglobin protects them from sickle cell disease. So it doesn't appear to be any downside to elevating fetal hemoglobin.

Okay. And so what's the -- I guess, what's the gating factor now for starting Phase I?

It's really the regulatory process. It's having a pre-IND meeting. It's filing the IND. It's getting agreement with the FDA that we can move forward. That's really just the normal time line of a drug discovery and development program.

Okay. So maybe a couple of broader questions to end off with. The first is, obviously, related to the pandemic. Now you've already talked about changes that you've made to your key current clinical program to address some of the results of the pandemic and impact to clinical trial sites, et cetera. But is there anything that you're changing in a general way that you're doing business or in a way that people are interacting with Fulcrum that you think will persist, even after things return -- or start to return to some sense of normal?

One of the things that we've really just -- I've been extraordinarily impressed with and impressed by is the willingness of our employees to not only work remotely, but also coordinate among themselves to continue the laboratory investigations that have been ongoing. As I mentioned earlier, we have a collaboration with Acceleron that just began right before the COVID-19 started. And just through extraordinary teamwork, cooperation, covering for each other and enabling experiments to continue, while still managing social distancing, we've been able to continue the research activities. And I think there's been some important learnings for us, at least in that, that just the amazing amount of work that can be done by careful coordination of calendaring and people covering for each other. I think the other thing that has impressed us is with sort of modern technology, if you will, be it Zoom or Webex or other types of opportunities to communicate electronically, but also the ability to work remotely. There's a number of functions that really have, if anything, been as productive working from home as they have been coming in. And I think we're going to -- personally, I think we're going to continue to see a momentum for people to work from home and continue to integrate their work life and their family life in a way that, perhaps, we didn't appreciate we could do so well before being forced into it.

Okay. And maybe the last question is, how do you foresee your business evolving if we move from the pandemic environment into a more recessionary environment that may or may not last for an extended period of time? Are there areas for cost offsets that you're -- that you think you can do as you plan ahead?

Yes. I think we're trying to be very flexible with how we execute the business. I think, most importantly, we feel very fortunate that our FSHD trial was fully enrolled at the time that the pandemic really hit, which has created a lot of flexibility for us. And we think this trial amendment will be very helpful. And as Robert mentioned also, with sickle cell disease, we were fortunate to complete all of our IND-enabling safety and tox work, too, and are now proceeding into the clinic for that. So beyond that, we continue to operate the business with our internal programs in drug discovery, which are advancing, as well as our collaboration with Acceleron. And we'll certainly pay attention to the dynamics moving forward and look to navigate those on a continual basis as best as we can.

Okay. Great. I think with that, we are just about out of time. So thanks so much for presenting this afternoon. We look forward to updates from your programs over the next several months, and we will speak to you soon.

Thanks, Tazeen, and we really appreciate the questions and the opportunity to tell you about our programs.

Thank you.

Thank you.

Have a good day, guys, thanks.

Goodbye.

Goodbye.