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

Hi, everyone, and welcome to the final session of the 2021 Crédit Suisse Healthcare Conference. We're excited to have Bryan Stuart, President and CEO; and Chris Morabito, Chief Medical Officer, with us from Fulcrum. If anyone in the audience does have questions, you can certainly send them to me via email, [email protected], and I'll be sure to get those asked on your behalf. But we've got a long list here. So why don't we just jump in?

I thought we could start with a little bit of background on the FulcrumSeek platform, and how it differentiates your discovery process versus competitors?

Yes. And Judah, thank you. We appreciate the time. We appreciate everybody tuning in. So Fulcrum was started about 6 years ago around the idea and the opportunity to create a transformative rare disease-focused biotech, where we would develop root cause treatments for genetically defined rare diseases. So the opportunity we saw in the last number of decades, there's been a tremendous advancement in terms of understanding the genetic root causes of thousands of rare diseases. And we saw an opportunity to really build up a discovery platform, where we could quickly and efficiently and at scale identify root cause treatments. And we thought all of the advances that existed with cell biology, with computational biology would put us in a position to do that. So our process really everything starts with the cell model. So we utilize the cell model, and we think about that as a toolbox really to give us a better understanding of both gene signatures, really understanding what targets modulate the gene expression and the root cause genes. We then interrogate those models with our highly annotated small molecule library with RNAi, with CRISPR. And then we use machine learning on that data set to identify targets. And we feel like with the progress that we've made here over the last number of years, it's really validated that approach. We'll talk more about the 2 clinical programs that we had exciting readouts on this year. And we've also guided towards filing 2 new INDs over the course of the next 15 months. So between that progress we've made internally as well as the progress we're making externally with our partners, so we've done 2 collaborations to date, one with MyoKardia, which became BMS and the other with Acceleron. Feel like that really puts us in a great position to build a transformative rare disease company.

That's a great place to start it. Maybe we can move into those clinical programs. We'll start with sickle cell and FTX-6058. So clearly, your stock moved a bit on interim data last quarter. Maybe we can just start with a little bit of a data review, some of the key highlights from that interim Phase I update in healthy volunteers and some expectations for the higher dose in those healthy volunteers, which is coming.

Yes. No, our stock did move a bit, as you said. And we were really thrilled with the data and the interest that we received. And I think all of this started around -- with the product engine and identifying a disease in sickle cell disease, where there was -- it's a very severe disease, and there's an incredible unmet need that existed. So we pointed the product engine at that. And there was also this really interesting dynamic where we know the best way to treat sickle cell disease, and that is by inducing fetal hemoglobin. So most importantly, we know this from human genetics. There are patients that have both the sickle trait and they have a second trait, which is called hereditary persistence of fetal hemoglobin. And as a result, their fetal hemoglobin continues to be expressed. And from these patients, it's really educated the field that we know that by inducing fetal hemoglobin, by inducing HbF, we can come up with a transformative therapy or a curative therapy for people living with sickle cell disease. So we took that approach. We looked at the product engine. And we said, "Can we find a small molecule that can induce fetal hemoglobin?" So obviously, there are a number of companies that are looking to do this with gene editing, which is validating, but obviously a far more complicated and invasive procedure. But if we could find a small molecule, we really view that as something that could benefit so many patients. And we identified that. So we identified the relationship between EED inhibition and inducing fetal hemoglobin. We generated data preclinically, which was showing a two- to threefold induction of both mRNA as well as protein. And we know that people living with sickle cell disease have starting fetal hemoglobin levels of about 5% to 10%. So the ability to have this two- to threefold induction of both mRNA and then protein would get them towards these levels of -- that would be transformative or potentially serve as a functional cure. And that also is informed by the hereditary persistence of fetal hemoglobin. We know with these people, when they have 25% fetal hemoglobin or above, that essentially they're asymptomatic. So that's -- preclinically, we were seeing data that was consistent with that. And probably equally exciting, we were seeing data that was consistent with what was generated with BCL11A gene editing. So we were looking in the same assays. We had the same starting levels, and we were looking at essentially the same fold induction. So that gave us a lot of confidence going into the clinic. And maybe I'll turn it over to Chris, and we can talk about some of the highlights of that data and some of the expectations for the upcoming data release.

Yes. Great. Thanks, Bryan. So in August, we released interim data from the ongoing Phase I study. This is a study in healthy volunteers, specifically looking for safety and tolerability, pharmacokinetics. And we took the opportunity to look also at pharmacodynamics, again, in healthy volunteers. In the multiple ascending dose portion of the study, we were able to look at target engagement and add HPG mRNA. And because this is a 14-day study, we looked at particular sites opportunistically, which would be the first potential sign that we could see some evidence of HbF. But because this is only a 14-day study, we're unable to look at longer duration kinds of biomarkers like HbF. So in the study, we saw that we were actually able to achieve maximal target engagement at all 3 doses tested, so at 2, 6 and 10. We had maximal target engagement. We're reducing PRC2, which is consistent with our mechanism, PRC2 activity where -- and we see a dose proportional increase in HPG mRNA. As Bryan said, our goalpost here really is a two- to threefold induction on HPG mRNA and then on HbF. We're seeing a 6-milligram dose, the mil dose tested, already a threefold induction on HPG mRNA. And at the 10-milligram dose, the highest dose tested so far, we've seen now a 4.5-fold induction on mRNA. And we believe based on our preclinical data that this will translate into protein, commensurate with the increase in mRNA. On F-retics, we're starting to see signs that, in fact, there is evidence of HbF. So the HPG mRNA is translating therefore into protein, which then gets assembled into the HbF fetal hemoglobin. We can't quantify the amount of HbF for 2 reasons: one is that it's an antibody-mediated assay is flow cytometry; and the second is, frankly, it's just not long enough to see quantifiable changes that are meaningful because it's only a 2-week treatment period. But we do see evidence that we are producing HbF. And as Bryan said, this is exciting because this is an indicator that we have the potential to impact the disease in its totality. And we can do that with an oral HbF inducer, which can have a profound impact on patients with sickle cell disease, who really need this kind of therapy.

That's really helpful. And you touched on it there, but can you just remind us based on preclinical work, what is the proportional translatability between measurement in F-reticulocytes and in fetal hemoglobin mRNA to the protein?

So we -- in our preclinical models, we looked at HPG mRNA, we looked at HbF. We actually didn't do flow, so we don't know what the intermediary steps are there in terms of F-retics and F cells. We do know from flow assays that we did in other models that we have a pan-cellular expression. So we know that in every red blood cell that is exposed, every red blood precursor that is exposed to 6058, we are able to induce hemoglobin F. But we don't yet understand from our preclinical data what the relationship is between F-retics and total HbF levels. Ultimately, we're going to have to wait for the Phase Ib program data. The one Phase Ib study will start this year is in sickle cell patients. The treatment period is 3 months. And in that study, we'll be able to demonstrate, we think, a maximal increase in HbF. And then based on what we've been seeing from our clinical data and our previous preclinical data, we anticipate that we'll be able to achieve this goal post that could have a good effect on patients.

And Judah, I might just add, I think one of the things we were particularly encouraged by is just the consistency of our preclinical data. So as we looked across different assays, CD34-positive cells from healthy, from sickle donors as we looked at the town's mouse model, so we looked at wild-type mouse, we always saw this consistent two- to threefold increase in mRNA and a two- to threefold increase in protein. So that, as Chris said, that will take time. And we anticipate we'll be able to see that in the Phase Ib. I think I would also add, we've been equally encouraged as we've looked at other mechanisms and profile those in a CD34-positive assay, both work that we've done as well as when we look at other opportunities like the BCL11A gene editing, it's an assay that has translated very well. The same protein increases on a full basis that were observed in the assay have begun to play themselves out in the clinic. So we view that as very encouraging as well. When we went into the Phase I healthy volunteer study, we realized from a time perspective, the only opportunity we would have is to see the mRNA increases, but the correlation is so good that, that gives us a lot of confidence as we proceed.

Okay. Great. And just on the safety side of what we've seen so far, any theoretical safety concerns around the inhibition? And can you walk through maybe some of the toxicology studies that kind of give you confidence on the safety of the mechanism?

Right. I'll actually start by talking about the clinical data because I think that's the most compelling. And so far, in our clinical program, which is in the healthiest, and just for 2 weeks, we don't see any signals here that are concerning. We see few treatment-related adverse events of mild, grades 1 or 2. We have had no SAEs. We've had no discontinuations. So everything that we're seeing so far, in clinical experience, has been encouraging. I told you before, we reported interim data up through 10 milligrams. Since then, we've dosed now through 2 additional dose cohorts. We've dosed now through 30 milligrams for 14 days, and we still have confidence in the mechanism. We still have confidence in our profile. So we're very encouraged about moving into patients and getting additional safety experience. In the preclinical space, in preclinical safety pharmacology, in the tox studies, we haven't seen anything here that gives us concern about progressing this program forward. We have adequate toxicology package that's allowing us to proceed according to our stated clinical development time lines, and nothing so far has given us pause.

Okay. That's great. And then probably the biggest question we get following the interim data release is, how reasonable is it to expect the magnitude of F cell and fetal hemoglobin mRNA improvements in healthy volunteers to be similar to what you'd see in sickle cell patients? Or do we just need to wait?

Right. So our preclinical data that Bryan has referred to demonstrate that no matter what model we use, in vitro or in vivo, wild-type or sickle cell disease, we see a consistent two- to threefold reduction on HPG mRNA and on HbF protein. No matter what the baseline level is for HbF, we still see this two- to threefold induction. And that gives us confidence moving into this next phase that as we start studying this drug in patients, we'll see at least consistent increases on RNA that should translate into consistent increases on protein. We think just based on the pathology of this disease in patients in whom there is a massive hemolysis and a reflex reticulocytosis, the turnover in hematopoietic stem cells allows for more substrate for 6058, and therefore, the potential for even greater effect. That's hypothesis at this point. But it's a hypothesis that has some data behind it in the CRISPR data that Bryan referred to. Preclinically, CRISPR saw two- to threefold induction on HbF in a CD34 model, and that's translated into even more robust increases in HbF in patients. So we're optimistic that we're going to see -- we're going to hit our goal post, and we have the potential to exceed that. And we'll see when we do the Phase Ib study.

Okay. And you touched on it, but can we just walk through in a little bit more detail the Phase Ib design in patients? And why, based on cell turnover time lines, you're confident you'll see that HbF protein production?

Right. So the design of the study is, it's an open-label study in patients. We're looking at a wide range of disease here. We want patients who are on hydroxyurea and patients who are not on hydroxyurea. We're looking to see what the effect is on safety and tolerability and then ultimately on important pharmacodynamic markers, including HbF, which we think has a surrogacy potential. And we will have 3 dose cohorts, up to 3 dose cohorts with up to 10 participants in each dose cohort. So up to about 30 patients. We think it would take between 6 and 12 months to execute. We chose the duration of treatment based on what we've been seeing in the preclinical space and in some other analogs. We think that just based on the half-life of RBCs and patients that by a month, we should be able to see significant increases in HbF, quantifiable increases in HbF, that are meaningful, but we won't have maximal levels until after a month. So that's why we extend the treatment period out to 3 months. And we think that a 3-month treatment period with a few dose cohorts will not only define proof-of-concept but will inform future development by giving us a dose or potentially 2 doses to take into, we think, a potentially pivotal Phase II study that would allow for the opportunity for accelerated approval.

Yes. And that's the follow-up. What could be the time line around a pivotal trial? And another question that we get off is, how well defines the potential accelerated pathway in SCD?

Right. So as we've been saying, the HbF mechanism is established in sickle cell disease. And there was convincing genetic data and now emerging clinical data that say that if you can increase HbF on top of baseline levels in sickle cell patients, you have a potentially profound impact on the outcome of the disease. And if you can induce levels, as Bryan said, into the 25% to 35% range, we're talking about functional cure. So no more anemia, no more VOCs, no more endothelial damage because you have this ability to affect how the mutant hemoglobin polymerizes and damages the red blood cell. We think that has the potential to be a surrogate biomarker that would allow for the opportunity for an accelerated approval. And we're looking forward to that. We've heard from other development programs that there is good justification behind this, and we agree with that. We have yet to speak with the FDA about what our Phase II program would look like. We look forward to doing that. We are currently thinking deeply about what the design of this Phase II potentially pivotal study will look like. We think a true period of 6 to 12 months would give us not only information about HbF but also very compelling information about clinical endpoints. And if we can produce data that suggests that we can not only increase HbF but also reduce the instance of VOCs in a short Phase II study, we would have a differentiated profile that could disrupt the current treatment paradigm.

That makes a lot of sense. And if we kind of roll the clock forward and we think about potential commercialization of 6058, how do you see it maybe competing? You talked about gene therapy, but within the landscape of clinical stage competition, where could it fit in post a potential approval?

Sure. And I think this really just comes down to the very clear and well-understood benefits of inducing HbF. And we talked about the genetics. We talked about sort of the confirmatory data that we see even from the gene-editing approaches. And we know that an oral HbF inducer is the only opportunity, as Chris said, to address all the symptoms of sickle cell disease and potentially have a functional cure. So as we look at the treatment landscape today, obviously, hydroxyurea is a standard of care. That has, from studies we've seen, increases in protein of about 3% to 4% of fetal hemoglobin. So relatively modest but still beneficial at those levels. And obviously, there are safety and tolerability challenges inherent with that drug. So as we look about what's being developed, for the most part, approaches fit into sort of 2 buckets. One is primarily focused, as you said, gene editing. Most of them also looking to induce fetal hemoglobin. Obviously, very, very interesting approaches, but at the same time, very invasive, very challenging. And we think the opportunity for those to be utilized broadly is probably very limited. The other approach is increasing HPS, is increasing total hemoglobin. And we know now from data that, that only has the opportunity to impact the anemia portion of the disease but not the VOCs and not the other symptoms. And as we and clinicians engage with patients, they obviously -- they care about the totality of the symptoms. So we think an oral HbF inducer that can induce HbF at higher levels than hydroxyurea, and that is -- as we talked about these fold increases, that would be about a 1.4-fold increase or above, would ultimately become standard of care. I think one of the reasons why we're so enthusiastic is, again, thinking about these 5% to 10% starting fetal hemoglobin levels and seeing these increases that we observed preclinically and now beginning to translate, as we think about two- to threefold induction, the genetics tell us that you're going to be able to affect so many different symptoms of the disease and get close to that functional cure. So I think there's a tremendous opportunity for this program in the commercial landscape.

That's really helpful. And last one on 6058, Bryan. Can you remind us of kind of next steps and the broader plan in beta-thalassemia?

Yes. So the data that we presented, the interim data that we presented in August have informed the continued development of this. So those data told us that we're going to go. We're going to go for the Phase Ib. We're going to try to define proof-of-concept in short order, and that we're also going to start looking at additional indications. And the first indication that we'll seek some data in outside of sickle cell disease is nonsickle cell disease hemoglobinopathies and specifically in the beta-thalassemia range. So we're working on an IND that we'll submit by the end of the year with an aim to start clinical development in beta-thalassemia early next year.

Okay. Perfect. And moving on to the other lead program, losmapimod. So maybe can you just set the stage by briefly introducing losmapimod and the level of unmet need in FSHD?

So FSHD is the second-most common form of muscular dystrophy. It's a rare disease. It's a relentless progressive disease that starts in the head and neck and progresses down through the shoulders into the trunk. And then it affects the muscles in the lower extremities and has a profound effect on function. And patients who have this disease have told us, they told regulators, they tell their physicians, they want a therapy that will slow or stop disease progression. There is nothing now for these patients that's been approved. There are very little options for this. Nothing has been demonstrated to impact disease progression. The disease itself is caused by the aberrant expression of a transcription factor called DUX4. And the link between DUX4 and pathology has been very well elucidated. We identify it through FulcrumSeek that a small molecule inhibitor, losmapimod, which is a p38 MAP kinase inhibitor has the ability to knock down DUX4 and actually reduce in vitro and in vivo, not just the DUX4 protein but also the downstream effects of DUX4 and DUX4 gene work. There's a decrease in apoptosis in our models. And we -- the link between both losmapimod and inhibition of DUX4 gene activity is quite clear and robust. And now we've taken this into clinical trials. We've taken this broadly into FSHD to understand much more about the disease and understand the effects of losmapimod in patients who have FSHD.

And maybe, Judah, just to add, and you had asked about just the unmet need that exists today in the space. Obviously, as we mentioned, with the FulcrumSeek approach, we believe it's potentially applicable towards a lot of genetically defined rare diseases. It's very unique that we ever look at a disease like this. As Chris said, it's relentless. It's progressive. It's a lifelong disease, approximately 500,000 people with it worldwide but yet no therapeutic alternatives and nothing else in the clinic. And those general dynamics are just very, very unique.

Yes. Sure. And you did present some Phase II results from ReDUX4. There were some -- it looked like some benefits on secondary and exploratory endpoints, kind of, downstream benefits related to DUX4 reduction. But can you walk us through the Phase II results, and then we'll go from there into next steps?

Right. So ReDUX4 was a 48-week long study looking at losmapimod versus placebo in people with FSHD, people living with FSHD. The primary endpoint for the study was an experimental biomarker. It was actually DUX4-driven gene expression, measured by muscle biopsy. And then we had a multitude of functional and patient-reported outcomes that we looked at as well. And the aspiration here was that we would achieve some findings around experimental biomarker and get some information on the more functional-oriented endpoints to inform continued development. What happened in the study is, in fact, when we look at the results is the inverse. We saw that the DUX4-driven gene expression was incredibly noisy. There was an extraordinarily wide variability that we did not predict in both groups and that there was no change in either group. Now we expected there to be a decrease in the placebo group -- sorry, an increase in the placebo group of DUX4 and a decrease in losmapimod. There was no change in either group, and then obviously, no difference. But we did see meaningful impacts on muscle structure, on function and on basic reported outcome. On muscle structure, we saw that losmapimod decreased the amount of fat that was infiltrating muscle in patients with FSHD. So that indicates to us that there is a cessation of the apoptosis, and therefore, the fat infiltration in those muscles in patients. This translated into functional benefit. We saw changes in strength in multiple muscle groups. And we saw changes in function and things like the reachable workspace, which is a measure of how well one can use upper extremities to perform activities of daily living. We saw not only lack of progression, so halt, slowing down of the disease, but in fact, improvement in some parameters on reachable workspace, which was an unexpected but very grateful finding. It's quite nice to see that. And then we saw improvements on how patients feel. Compared to when patients started the trial, patients felt better on losmapimod, and they felt worse on placebo. So those are all very compelling to us. And we think that there is a very big opportunity here for benefit of this medicine in patients who have FSHD. On top of all that, losmapimod is an experienced molecule. We in-licensed it when we identified p38 as a potential target. The molecule had at the time about 3,500 people exposed to it. So there was already a very robust safety and tolerability data set. We've expanded that further with additional people now studied as well and people studied longer. So on top of the benefit that we've seen, we have a clean favorable safety profile. Therefore, we believe the benefit risk supports continued development with an aim towards getting this medicine to patients as quickly as possible. So with that in mind, we continue on track to meet with regulators before the end of this year. We anticipate in our base case that we'll have a Phase III study, which will be well informed from ReDUX4, well informed from our knowledge of this disease space, which is extensive at this point. And we aim to get alignment with the agencies and move this program forward. And as we've been saying, as soon as there is clarity about what that path forward is, we'll be able to share that information.

Okay. Do you have a sense directionally what kind of sample size and a primary endpoint you'd imagine might be of interest to regulators?

Right. So yes, absolutely, we do. We know from an 80-patient study over 48 weeks, we could show an impact on the progression of this disease. And we know how to measure impact of progression now because we have data from these end points that I referred to, like reachable workspace, like strength and like the MRI. So we believe we could design a study of maybe slightly longer, but certainly around that time frame with more participants to give us more power, which, of course, is a requirement moving forward into confirmatory trials that we can execute quickly. We know this disease space. We know the physician leaders in the field in the U.S. and outside the U.S. We were actually very happy with how the ReDUX4 trial executed. We enrolled without difficulty faster than expected in a 80-patient study, that actually costs less than expected. So we're looking forward to moving into a confirmatory trial, within a framework that we well understand and we feel we can execute on.

Okay. That's helpful. And I think you mentioned you're going to continue to monitor the open-label study. So how do you think about timing for disclosure from that study? Could we see anything in the coming months? And what exactly could we be looking out for?

Yes. So we were very grateful that the vast majority of participants of ReDUX4 opted to roll into the open-label extension. 99% of the participants opted to roll in, and we're continuing to follow those out now. We now have collected -- we're collecting data actively, of course. And we're collecting data in tranches at every 3 months. So we do anticipate sharing data in the first half of '22, and we'll provide more information about that venue as we get a little bit closer to that.

Okay. That's really helpful. And you've also said your focus for losmapimod remains on FSHD, but at the same time, you're thinking about, like Bryan said, other genetically defined diseases within the muscular dystrophy spaces. So what are other potential disease areas and targets maybe you could pursue with this molecule, if you can share that with us?

Yes. I would say, broadly, I think a lot of our focus, obviously, with losmapimod is on FSHD. And we've been working extremely closely with clinicians and with families and with advocacy over the course of the last many years and are very committed towards finding a good path forward here. I think beyond that and maybe just a little more broadly than losmapimod, as we think about the product engine, we feel like this data has very much validated as we said, not only FulcrumSeek, but specifically our approach within the muscular space. So we see a lot more opportunities with other genetically defined diseases. The unmet need is still so great. We've done a tremendous amount in terms of just understanding the biology in order to not only identify this target, but quickly transition it into the clinic. And I think looking forward, we see a great opportunity here to continue in the muscle space and make that a key area of focus and really build on the success that we've had in FSHD.

Okay. That's really helpful. And maybe just to wrap up, can you remind us of current cash position, cash runway? Where does that get you through? And how should we think about capital allocation needs for the pivotal trials likely in sickle cell and also for losmapimod and IND-enabling studies as well for other indications?

Yes. No, great question. And so we announced our quarterly earnings last week, cash position of about $240 million and runway into 2024. So we feel like that puts us in a very strong position with a number of key catalysts coming up. As you mentioned, firstly, meeting with the FDA and looking to get clarity on a Phase III trial in FSHD moving forward in sickle cell disease, not only into this Phase Ib but as Chris mentioned we're very excited about the potential to then transition in 2023 into hopefully what will be a confirmatory trial. Additionally, filing an IND by the end of this year in hemoglobinopathies. So all of that plus, obviously, as we mentioned, we've really scaled up FulcrumSeek. It has been validated. That's a big focus in being able to find other targets. We've guided towards being able to file one more IND beyond what I just mentioned in the course of the next 15 months, and we'll continue to do collaboration. So we feel like we have a lot of inflection points here as we move towards some potentially pivotal trials in the near term. And I think the consistent thread as we think about our approach and we think about our discovery approach is really looking for these genetically defined diseases where there is very significant unmet need. And as a result, we have the opportunity to try to advance quickly through the clinic. And I think that's probably aided by the fact that when we identify these targets and we identify these novel relationships between modulating gene expression and these targets, some of those instances will involve us creating our own chemical matter. And that's something like 6058, where that's exactly what we did, and we identified a highly specific compound with great off-target or no off-target limitations. And then other situations are going to be more like what we're doing in FSHD where we identify a target. There is chemical matter, as Chris mentioned, available. So we're looking at both of those approaches. We like the fact that our discovery approach lends themselves to both, and it should create situations where we have the opportunity to move more quickly into the clinic, and we're excited about that.

Okay. Perfect. Yes. I think that's a great place to end. So thank you again, Bryan and Chris, for your participation and for Fulcrum's participation in our conference. We certainly appreciate it.

Wonderful. We appreciate it, Judah. Thank you.

Thanks.