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

Good morning. And welcome to Fulcrum Therapeutics Pipeline Update Conference Call. [Operator Instructions] I would now like to turn the call over to Christi Waarich, Director of Investor Relations and Corporate Communications at Fulcrum. Please proceed.

Thank you, Sidney. Good morning. And welcome to the Fulcrum Therapeutics Pipeline Update Conference Call. You can view today's corresponding press release in the Investor Relations section of our website at fulcrumtx.com. 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 our future expectations and plans, clinical development time lines and financial projections. While these forward-looking statements represent our views as of today, they should not be relied upon as representing our views in the future. We may update these statements in the future, but we are not taking on an obligation to do so. Please refer to our most recent filings with the Securities and Exchange Commission for a discussion of certain risks and uncertainties associated with our business. With me on today's call are Robert Gould, President and Chief Executive Officer; Owen Wallace, Chief Scientific Officer; Bryan Stuart, Chief Operating Officer; and Diego Cadavid, Senior Vice President of Clinical Development. I will now turn the call over to Robert.

Thank you, Christi. Good morning, everyone, and thank you for joining us today. As COVID-19 continues to impact many people across the globe, I hope you and your families are staying safe and well. For those most familiar with Fulcrum, you are likely aware that our corporate strategy is to discover and develop therapeutics to treat genetically defined diseases by addressing their root cause. We've made significant progress in that regard, with ongoing clinical trials in facioscapulohumeral muscular dystrophy or FSHD with losmapimod, and our anticipated entry into the clinic with FTX-6058 for the potential treatment of sickle cell disease. Losmapimod is a selective p38 mitogen activated protein kinase, or MAPK inhibitor, that Fulcrum exclusively in-licensed from GSK following our discovery of the role of p38 inhibitors in the reduction of DUX4 expression in muscle cells derived from patients with FSHD. Today, we are very excited to update you on our plans to study losmapimod in COVID-19. Owen will be providing more detail on the scientific rationale. But before he does, let me give you a little background on how we got here. Back in March when the pandemic began, we became aware of the potential for losmapimod to affect multiple aspects of COVID-19. As we learn more about COVID-19 pathology, it became clear that the rationale and supportive data for losmapimod make a compelling case to progress clinical development. We saw a clear opportunity to apply our insights and understanding of losmapimod as a potential differentiated treatment option in the global fight against this pandemic. We reached out to numerous key opinion leaders, and the feedback was very encouraging. Our interactions with regulators progressed quickly. Following pre-IND consultation with the FDA via the Coronavirus Treatment Acceleration Program, or CTAP, we submitted an IND application to support the initiation of a randomized, placebo-controlled Phase III clinical trial in hospitalized COVID-19 patients in the United States. We are very pleased with our rapid progress and the support from the research community for this development effort. Based on our extensive experience with losmapimod, there are 3 primary reasons we believe it could be an effective treatment option for COVID patients. First, inhibiting p38 provides a novel mechanistic approach to address multiple key contributors to the disease pathology. This approach is supported by a compelling scientific rationale and extensive preclinical and clinical data. As a highly selective p38 inhibitor, losmapimod has the potential to impact multiple aspects of the disease. Second, losmapimod has an extensive safety and tolerability database and is late-stage ready. And third, in addition to losmapimod's mechanism of action, it is administered orally, shows a rapid onset of action, and can potentially be used in combination therapy, all of which contribute to this unique opportunity. With this plan to expand our robust development portfolio, I'm confident that we have the resources and expertise in place to continue to advance all of our development programs simultaneously. As previously reported, we continue to expect to announce results from the interim analysis from the Phase IIb trial, ReDUX4, in the third quarter of this year. And we remain on track to initiate our Phase I trial in our sickle cell program by the end of the year. This new late-stage program in COVID-19 is another significant opportunity for Fulcrum as a company. I'm proud of the work by our team and collaborators to advance this clinical program as quickly as possible and I look forward to keeping you updated on our progress. I'll now turn the call over to Owen to walk you through more details on the scientific rationale for losmapimod as a potential treatment for COVID-19.

Thanks, Robert. The more we learn about COVID-19, the more enthusiastic we are about the opportunity with losmapimod to intervene in the disease. A very compelling science led us to the decision to date. Several lines of preclinical and clinical evidence indicate that activation of the p38 MAP kinase pathway significantly contributes to the pathogenesis of coronavirus infections, including COVID-19. p38 MAP kinase is well characterized as an important mediator of acute response to stress, including acute inflammation. In preclinical studies, p38 inhibitors have been shown to modulate inflammatory cytokines that have been implicated in the exaggerated immune response linked to the severity of COVID-19. This hyperactivated immune response is associated with acute lung injury and cardiomyopathy leading to severe morbidity and increased risk of mortality. There is evidence that p38 inhibition may address multiple pathologic processes driving the severity of COVID-19, including the suppression of a broad inflammatory cytokine response, restoration of the adaptive immune balance response needed to clear the infection, and restoration of the balance in the renin-angiotensin axis. Clinical data has previously been generated with losmapimod across several diseases that support its potential to affect multiple aspects of COVID-19 as a safe oral compound. One of the most important aspects of COVID-19 is the marked pulmonary inflammation associated with high levels of markers, such as IL-6 and C-reactive protein or CRP. In multiple clinical trials across several indications, losmapimod reduced inflammatory proteins associated with poor COVID-19 prognosis, including IL-6 and CRP. The effect in those trials was rapid with a robust reduction observed after a single dose. Additionally, a recently published clinical trial demonstrated that losmapimod treatment rapidly resolved acute inflammation and restored effective T cell response to a viral antigen challenge in the older human subjects. The increasing understanding of COVID-19 suggests that a dysfunctional renin-angiotensin system is an important contributor to disease severity and end organ damage. And p38 inhibition has been shown in preclinical models to reduce pathology associated with high levels of angiotensin II that lead to cardiac and kidney damage. Furthermore, the established safety of losmapimod has been demonstrated in approximately 3,600 subjects in other indications in adults, including in the elderly at a dose we proposed for the COVID-19 study. When we first approached the FDA about this study, they recommended we move directly into a Phase III trial. We have already identified clinical sites and investigators across the United States. And because we have sufficient supply of losmapimod and placebo tablets, we can rapidly begin this trial. Should it prove successful, we also believe that we have the ability to ramp up production of losmapimod quickly. You heard from Robert about our continued commitment to losmapimod for patients with FSHD and the progress we were making in the clinical development program. We have the resources in place to continue with our plans to advance that program, our sickle cell disease program, and our other research programs in the months ahead. As we expand our focus to include COVID-19, we expect our other development programs to progress as planned. With that, let me turn the call over to Bryan for a corporate update.

Thanks, Owen. We're in a very strong position as we continue to execute on our broader development plan. Today's financing enables us to advance losmapimod past our key Phase IIb data in FSHD as well as develop losmapimod as a potential treatment for COVID-19 and bring FTX-6058 into the clinic. Additionally, we will continue to progress FulcrumSeek, our proprietary product engine, and our collaboration with Acceleron. Based on our current operating plan and projections, we believe our cash, cash equivalents and marketable securities of $81.2 million as of March 31, 2020, together with the $68.5 million in gross proceeds from the private placement announced today, will support our operations into the first quarter of 2022. In summary, there is a convincing scientific rationale for developing losmapimod as a potential treatment for COVID-19, including extensive preclinical and clinical data. We've continued to receive support and encouragement from key clinical investigators and are well positioned to advance the Phase III trial quickly and effectively. As we plan for this opportunity to make a difference in patients' lives, our team remains as committed as ever to our mission, and we are optimistic about the potential to play a part in the global fight against COVID-19. With that, we'll now open up the call for questions. Operator?

[Operator Instructions] Our first question is from Joseph Schwartz with SVB Leerink.

So losmapimod has been studied a lot in various diseases already. So are there any clinical observations from prior clinical trials and any of these settings that provide examples of particular clinical benefits that you hope can be recapitulated in this setting?

Thanks, Joe. I'll let Diego go into some of the detail. But part of the encouragement that we had in investigating losmapimod in COVID-19 was, in fact, the effect that has been seen previously on acute markers in a variety of diseases.

Yes, that's right. In several previous clinical trials, there were measurements of the response to losmapimod in markers of acute inflammation like C-reactive protein and IL-6, and consistently across indications that treatment effect was observed over several areas after one dose and over several weeks. There has been no testing for clinical efficacy in acute indications until now.

Great. Okay. And then can you talk about the trials protocol and design in terms of the number and type of patients that will be enrolled and the sites you'll be using and the doses or doses tested and the primary endpoint?

Yes. We're still in discussions with the FDA. So what the trial will be designed as is a 15-milligram BID oral dosing because that's the dose that's been shown previously to have an effect on these acute markers that Diego referred to. Additionally, it's going to be a randomized, double-blind, placebo-controlled multicenter trial in the U.S., looking at the efficacy and safety of losmapimod in hospitalized COVID-19 patients.

Okay. And then just maybe qualitatively, can you talk at all about the spirit of the endpoints that you're most focused on evaluating? Are they the lung disease, the hypercoagulopathy aspects? Or is it something else that you think might give you the best opportunity of detecting the signal?

Yes. We'll be providing more details as we continue to engage with the FDA. But I think, broadly, Joe, what particularly intrigued us about this opportunity was the broad effect that COVID-19 or SARS-CoV2, the virus, elicits in patients across multiple axes as Owen outlined, effects on not only markers like CRP and IL-6, but also SARS-CoV2's effect on the renin-angiotensin system. And the preclinical studies that have been done to date suggest that by inhibiting p38, we can affect the progression of and alleviate a number of these markers that are all contributing to the clinical presentation of the disease.

And our next question comes from the line of Matthew Harrison with Morgan Stanley.

This is Kostas on for Matthew. Congratulations on the news. Two questions for me. Could you provide some color on the time lines for the COVID study? And when should we expect data out of this study? And the second one is whether you have formulated a commercial plan in case you find out that COVID works and if you will be looking to make a profit out of this.

Thanks, Kostas. So I'll let Diego address the time line on the clinical trials and then let Bryan address the commercialization aspects.

Yes. Hi, Kostas. So on the time line, we have filed the IND with the FDA, and we are prepared to initiate as soon as that IND clears. In terms of the conclusion of the trial, and we haven't really given the details but we believe, as you have seen, these COVID trials have been enrolling on time. And we predict that will be the case for us.

Yes. Hi, Kostas. In -- yes, in terms of commercial planning, I think we're actively going through and building up our plans right now. A lot of our focus has been over the course of the past 3 months or so in really progressing this to this Phase III trial, including talking to KOLs, investigators, interactions with the FDA, et cetera, and that's all moved very quickly. So this is now a focus in terms of our commercial planning. It would be premature to talk about pricing or anything like that at this time. But I think all of those plans are coming together in the background. So if successful, we will be prepared to commercialize the drug.

[Operator Instructions] Our next question comes from Tazeen Ahmad with Bank of America.

As it relates to your commercialization plans in COVID, how are you thinking about manufacturing and being ready to supply needs, assuming that the study is positive and you get approval? And then what prep work are you doing for that? And then I have a couple of follow-ups.

Yes. Thanks, Tazeen. This is Owen. Yes, we've been able to leverage a lot of the progress that we've made with the FSHD program with regard to manufacturing and also leverage a lot of the expertise that GSK has generated during their development plan. And to remind you, they were heading towards an NDA. So I think the commercialization strategy, as it relates to manufacturing and CMC, is coming together very nicely. And I think we'll be able to scale up to the appropriate levels as we continue to generate clinical data.

Okay. And maybe to follow up on the previous question. I realize it's difficult to quantify profitability from a treatment designed to address the pandemic. And then in that frame of mind, I did want to ask about what other potential infectious diseases do you think that this therapy could have some efficacy in, in the future.

Yes. This is Owen again. There's a lot of preclinical data to suggest that the p38 MAP kinase pathway is activated following a host of viral infections. So we think that preclinical data is quite supportive, and it's consistent with our hypothesis around COVID-19. Our focus at this point really is on moving the COVID-19 program forward, but we're going to continue to look at other potential infections as well as we generate our clinical data.

Okay. And there are other companies that are also looking towards COVID treatment. How do you think that your mechanism of action might differentiate from others, like, say, for example, the use of JAKs to prevent inflammation?

Yes. We think that losmapimod can really provide a potentially compelling therapeutic option. We've already generated a significant safety database in prior clinical studies. It's oral as well. We think that losmapimod's multiple mechanisms of action, as I outlined, that are supported by preclinical and clinical data, are potentially differentiators. We think that the mode of administration, as I mentioned, and the safety database is a significant potential differentiator. And we also think that there's a potential for use in combination therapy. There have been no significant DDI concerns that have been observed with losmapimod to date. And we're certainly looking forward to seeing the data as some of these other compounds move through development, including JAK inhibitors. As you know, JAK inhibitors are black boxes, so we'll be curious to see how that data looks as their data is released.

And do you think that -- I'm sorry, do you think it would be potential use in combo therapy with drug inhibitors? Or are there others that you're thinking about?

Yes. I think we'd probably think about some other mechanisms that don't necessarily involve the immune system. And certainly, antivirals, we think, would be a potentially great option in combination.

And I'm not showing any further questions at this time. I'd now like to turn the call back to Robert Gould for any further remarks.

Thank you, operator. For those online, we'll be putting on our website a deck that contains much more of the detailed information around not only the scientific rationale, but also the potential in other viral infections for losmapimod to have an effect. So I'll refer you to that deck, both the data generated to date in clinical studies as well as the preclinical rationale. Let me just conclude by saying, in these unprecedented times, we're committed to making a difference for patients with FSHD and select hemoglobinopathies, such as sickle cell disease, as well as helping advance our understanding of how best to treat patients with COVID-19. We're proceeding with a great sense of urgency to bring these potentially transformative therapies to patients. And I want to conclude by thanking you all for joining us today and for your support of Fulcrum. Please stay healthy and stay safe.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.