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

Hi. Good afternoon, everyone. Thank you all for joining us today. My name is Adi Jayanthi from the health care investment banking team here at JPMorgan. Just before we get started, you'll see a blue Ask A Question button on your screen. If you do have any questions for the presenters as they're going through, please feel free to submit them through that button and we will try to field those after the presentation. But it's my pleasure to introduce Bryan Stuart today, who's the CEO at Fulcrum Therapeutics. Bryan, over to you.

Thanks, Adi. We appreciate JPMorgan and the opportunity to present here today. So if you follow along with me on the slides today, we'll be making some forward-looking statements. And it really is a pleasure to be able to talk about Fulcrum and our approach and some of the meaningful progress that we've made over the course of the last year. So our mission at Fulcrum is to treat the root cause of genetically defined rare diseases. And how we aim to do that is by using our proprietary FulcrumSeek platform to identify and deliver disease-modifying therapies. And with the progress that we've made here over the course of 2021, we're really in a tremendous position to fulfill that mission. Now we have 3 potentially disease-modifying therapies in the clinic. Our most advanced program is for FSHD, which is a progressive and relentless form of muscular dystrophy. This is a Phase III-ready program and we announced Phase IIb data last year which really showed that losmapimod had the potential to affect the disease progression of FSHD. And we were able to show statistically significant and clinically meaningful benefit in muscle health, function and patient-reported outcomes, and we'll share more data on that later on. And then our second program is FTX-6058 and that's for both sickle cell disease and non-sickle cell hemoglobinopathies. And we're very excited about the potential of this program which, based on our preclinical data and our early [Audio Gap] extremely productive since we originally built it. And the whole idea behind FulcrumSeek was to really take advantage of decades of advancement in understanding the genetic root causes of literally thousands of rare diseases. So we wanted to build up a screening platform where we could very efficiently and at scale, identify root cause treatments independent of therapeutic area or independent of disease state. And how we do that is we have a toolbox of disease-relevant cell models. We interrogate those with highly annotated and curated perturbagens and that yields tremendous data sets, which we can then harvest with computational biology, high content imaging and has allowed us to generate very specific and selective targets. And as you see on Slide 5, that's generated our portfolio of wholly owned programs, as you see with our 3 clinical programs, but also helps facilitate the next wave of disease-modifying therapies. So we'll talk more about losmapimod. That was an example of FulcrumSeek identifying a target. And then we were able to in-license chemical matter, which had meaningful safety and tolerability data and allowed us to advance that quickly through the clinic. And FTX-6058 was an example of a program that we used our own medicinal chemistry after FulcrumSeek identified a target, which could induce HbF, fetal hemoglobin. Additionally, we've guided towards our next IND, which will be our fourth as a company in the first quarter of 2023. And what's particularly exciting about the product engine and the success that we've had is that it is applicable towards genetically defined rare diseases more broadly, even outside of our areas of focus which are blood, CNS and muscle. And we have 2 very exciting active collaborations, one with Merck in the pulmonary space and one with BMS for genetically defined cardiomyopathy. And as I mentioned, the significant progress that we made in 2021 is really positioning us for a transformative 2022. And as you see here on Slide 6, as I mentioned for losmapimod and FSHD, we reported positive data consistent with disease modification earlier this year in our Phase IIb trial. We met with the FDA at the end of last year about our Phase III plans, and we intend to be able to provide an update on that program and our Phase III planning in the first quarter of this year. For FTX-6058, we reported positive Phase I healthy volunteer data, which was consistent with our very robust preclinical data that we had shared earlier. We have initiated now our Phase Ib trial in sickle cell patients. We also announced earlier this week that we've now completed 3-month preclinical talks. And we've also submitted an IND for non-sickle cell hemoglobinopathies. And all of that progress and success that we had in 2021 is we're now able to guide to some very important catalysts in 2022. Firstly, in the sickle cell program, I mentioned that we have initiated dosing in people living with sickle cell disease. We're guiding towards being able to provide an update in the second quarter of this year, including HBF protein data. And also in the second quarter of this year, we intend to initiate our trial for non-sickle cell hemoglobinopathies. Additionally, FulcrumSeek continues to be very productive and guiding towards this fourth IND coming out of the platform in early 2023. All of these with a very strong financial position and cash runway that takes us into 2024. So now on Slide 7, we'll tell you more about FSHD and our lead program, losmapimod. So as you can see on Slide 8, FSHD is the second most common form of muscular dystrophy. It is a relentless and progressive disease. And because we know the known root cause, and that is the aberrant expression of DUX4, made the perfect opportunity for us to try to find a target utilizing FulcrumSeek. So as DUX4 is expressed, skeletal muscle gets replaced by fat. That leads to progressive weakening of the muscles and some very difficult symptoms, including impaired upper and lower body function, increased difficulty in activities of daily living, loss of independence. Many people with FSHD ultimately end up in a wheelchair. And typically, how FSHD progresses is it starts in the face then goes into the shoulders and down throughout the body. And despite the fact that it is the second most prevalent form of muscular dystrophy, there are unfortunately no approved treatments, and there's nothing else even in the clinic. So we, at Fulcrum, spent a lot of time with physicians, with patients, with advocates to really understand what was important to them in a therapeutic. And that was something that had the ability to slow disease progression, improve mobility, improve upper body function as well as an attractive safety and tolerability profile. And as I mentioned, so we pointed FulcrumSeek at FSHD, and you see on Slide 9, we identified losmapimod. This is a highly selective p38 MAP kinase inhibitor. It reduced DUX4 expression in preclinical studies. And it also has this well-established safety profile having been dosed in over 3,600 subjects now and that's particularly relevant for such a severe and chronic disease like FSHD. It also allowed us to quickly transition losmapimod into a Phase IIb trial, and that's what you see here on Slide 10. This was our ReDUX4 trial, which was a comprehensive study to evaluate the impact of losmapimod on disease progression. So it's a randomized trial, placebo-controlled, 48 weeks, and we had 80 patients. And what we'll see on the upcoming slides is that we were able to show very meaningful patient benefit in all 3 primary areas of focus: in muscle health, in strength and function and in patient reported outcomes. So we'll start now with muscle health. So if you look on Slide 11, losmapimod decreased fat infiltration in people with FSHD. And as I mentioned earlier, as DUX4 is expressed, fat begins to infiltrate muscle as muscle dies. So this is utilizing whole body MRI. And what you see on the left from the ReDUX4 study is these are muscles that are affected by the disease. So they have unusually high levels of fat infiltration. And you see over the course of 48 weeks, for those patients on placebo in gray, fat continues to infiltrate muscle. But for those patients on losmapimod, you see that process nearly stops. And equally exciting, as you look at the right, losmapimod preserved muscles that are not yet affected by the disease. So these are normal appearing muscles. And over the course of 48 weeks, patients on placebo began to see fat infiltration but patients on losmapimod did not. And these patient benefits that we observed in fat infiltration then translated into both strength and function in the upper body and the lower body. And as you look on Slide 12, this shows that there was improved strength in the shoulders. So this is by a measure of dynamometry, so a measure of strength. You see in some cases in the nondominant shoulder abductors, there was actually an improvement with losmapimod. And importantly, that led to statistically significant and clinically meaningful benefit in function. And this is an incredibly important measure here, as you see in this -- on the right, and that's a reachable workspace. So reachable workspace measures a patient's ability to lift their arms and essentially move it around their bodies with their shoulder straight. And why that's so relevant is, as I mentioned, the progression of the disease is face into the shoulders and down throughout the body. So this is highly correlated with activities of daily living. It's highly correlated with quality of life. And this movement can make the difference for many patients and their ability to remain independent. Things like brushing their teeth, combing their hair, being able to feed themselves. So an incredibly important measure and an actual improvement in function, which was very unexpected when we started the trial. As you see on the next slide, Slide 13. This then translated also into lower body improvements in strength and a benefit in function. So this is a measure of dynamometry. We see here on the left, in the ankle dorsiflexor, that improvement, that was measured with losmapimod, then led to a patient benefit and timed up and go. So this is somebody's ability to get up out of a chair, walk and return. And while the difference wasn't statistically significant, it was clinically meaningful and obviously very relevant towards patient independence as well. So these changes in fat infiltration, the changes in strength, the changes in function also translated, as you see on Slide 14, to how patients felt. So patients reported feeling better on losmapimod. On the left, and this is the PGIC scale, you'll see that 4x as many patients on losmapimod versus placebo reported feeling better and equally important on the right side, 20% fewer losmapimod-treated patients reported feeling worse versus placebo. So we believe that, that puts this program in a very strong position moving forward. And as you see on Slide 15, in the course of only 48 weeks and with only 80 subjects, we achieved these meaningful differences in muscle health, which led to benefit in function and strength, which led to benefit in quality of life and all with a very attractive safety and tolerability profile. So as I mentioned, we met with the FDA at the end of last year, and we hope to be able to provide an update on our Phase III plans in the first quarter of this year. Now on Slide 16, we'll transition to our FTX-6058, which is a program that we're extremely excited about for sickle cell disease and other hemoglobinopathies. As you see on Slide 17, sickle cell disease is a debilitating disease with a very high unmet need. It's caused by a mutation in the HBB gene and it leads to devastating symptoms: vaso-occlusive crises, stroke, acute chest syndrome, anemia and morbidity and mortality. And this is not only a large unmet need in the United States, it's a very prevalent disease worldwide. Over 100,000 patients in the U.S., millions more around the globe. And the current therapies today have meaningful limitations. They are either highly invasive or don't address the broad symptoms of the disease. And on Slide 18, we -- to drill down on that a little bit, it shows why the unmet need is so meaningful. So hydroxyurea is the current standard of care. It does induce low levels of fetal hemoglobin, but there are meaningful nonresponders. There's waning efficacy and safety and tolerability challenges. There are also 2 new classes of therapies, but they only have the potential to address single symptoms of the disease. So HbS polymerization inhibitors look to increase total hemoglobin. That only has the potential to address anemia but not the broad symptoms. Likewise, P-selectin inhibitors have the potential to reduce VOCs, but none of the other symptoms. BCL11A gene editing looks to increase fetal hemoglobin much like hydroxyurea. And while it represents a potential functional cure, it's also highly invasive, very risky, has unknown durability and very meaningful barriers to access. But it does validate what is the only known way to address the broad symptoms of the disease. And consistent with human genetics, that is by inducing fetal hemoglobin. And as you see here on Slide 19, we know this very clearly from a condition called hereditary persistence of fetal hemoglobin. So fetal hemoglobin, or HbF, is typically silenced at birth and hemoglobin beta is turned on. But there are a subset of people who have sickle cell disease, but they also have something called hereditary persistence of fetal hemoglobin. So their HbF is expressed at higher than normal levels. And as it's increased, even by small amounts, there begins to be meaningful patient benefit, and at large amounts, as patients get towards 25% fetal hemoglobin expression, that represents a functional cure. So as we go to Slide 20, this is a schematic showing exactly that and what we know from this hereditary persistence of fetal hemoglobin. So in a typical sickle cell patient, as you see on the left, you typically have a starting baseline fetal hemoglobin of 5% to 10%. And as we see in the blue, and we know this from human genetics, these small increases begin to provide patient benefit and mortality. And larger increases begin to address more and more symptoms. And as I mentioned, as patients get towards this 25% level, they're essentially asymptomatic, really representing a functional cure for people living with sickle cell disease. So that informed our therapeutic approach, which was to look for a once-daily small molecule that could induce fetal hemoglobin by two to threefold over these 5% to 10% baseline levels, and you see that in the orange here. And that's exactly what we did. So as we go to Slide 21, FulcrumSeek identified FTX-6058, essentially, the target of EED inhibition and identified the relationship in inducing fetal hemoglobin. So unlike the other situation with losmapimod, where we in-licensed chemical matter, this was a case where we used our own medicinal chemistry, we created our own compound, and we developed a once-daily treatment. It is potent and highly selective. It has a clean off-target profile. We have long composition of matter patent. And preclinically, we saw very robust data with HBG mRNA induction as well as HbF protein. And as we transition to Slide 22, what was most exciting was the consistency and robust nature of our preclinical data. So you see here on the left, independent of whether it was an in vitro or an in vivo assay, independent of starting levels, whether fetal hemoglobin protein was starting higher or lower, we saw this very consistent two to threefold induction of mRNA which led to a two to threefold induction of protein. And what was also very encouraging is a number of these assays have been shown to be highly translatable into the clinic and none more so than the CD34 positive assay. And as we go to Slide 23, it shows that preclinically, the HbF induction that we observed in the CD34 positive assay was comparable to what was observed with BCL11A gene editing. So really further validating the opportunity to achieve in a once-daily pill, what would need to be done with a very cumbersome and invasive procedure. You see on the left, independent again of starting levels, this consistent two to threefold induction of protein, very consistent with BCL11A gene editing. And also, as we further elucidated the mechanism to better understand the relationship between 6058 and HbF, we've observed that we are downregulating key HbF repressers, including BCL11A as well as MIB in our preclinical studies. Additionally, beyond BCL11A gene editing, as I mentioned, the CD34 assay has translated very well into the clinic with a number of known HbF inducers, and we have more details on that on Slide 24. So you see here a number of mechanisms, which have shown HbF induction in sickle cell patients. BCL11A gene editing, DNMT1, hydroxyurea, PDE9. And what's very encouraging is that the fold increases that were observed preclinically have translated into the clinic at those levels or above, and that's consistent across mechanism. And this also sheds greater light on the time. The amount of time it should take to be able to see HbF induction in sickle cell patients. It's observed in other studies in as early as a month, but typically maximal is around 3 to 4 months, and that really helped inform our therapeutic strategy as well as what we show on Slide 25, the time course of a erythropoiesis. So there is a meaningful difference between healthy volunteers and sickle cell patients. And that is red blood cell turnover. So what you see here is in -- up top, in the schematic in blue, healthy volunteers have red blood cell turnover of approximately 120 days. People living with sickle cell disease, it's much faster. It's about 30 days. So this process informed what we would have the ability to look at in a Phase I healthy volunteer study of only 14 days as well as what we could hope to observe in a longer study in sickle cell patients. So in our 14-day healthy volunteer study, we focused on the top 3 boxes that you see in orange: target engagement, mRNA expression as well as F-reticulocytes. So reticulocytes that contain some amount of HbF to show that the process of mRNA induction is beginning to lead to the process of protein induction. And based on what I showed on the last slide in terms of what we've seen with other HbF inducers, it also helps inform that within the context of a Phase Ib study, which we are in right now, that the 1- to 3-month time period should be sufficient to begin to see protein induction. So I'll focus now on our healthy volunteer study. And we were able to observe very robust target engagement, and that led to what we see on Slide 26, which is extremely exciting data in which we show mRNA induction that is both time and dose-dependent. And at the 6-milligram dose and above is beyond or within our two to threefold threshold, which is our therapeutic goal. As I mentioned, everything we've observed preclinically is mRNA induction has translated into protein induction, fold induction 1:1. So we were very encouraged to be able to observe these increases that were even beyond what we saw preclinically. Equally importantly, we wanted to see, as I mentioned, if there were some measure so we could begin to observe protein production even in the context of a healthy volunteer trial. Based on the slower red blood cell turnover, we assumed in order to observe protein, we would likely need to dose healthy volunteers for 4 to 6 months. But in the course of the 14-day trial, as you see on Slide 27, we did look at F-reticulocytes and wanted to see the beginning of increases, and that's what we observed here. After a treatment period of 14 days, you can see at the safety follow-up visit, you are beginning to see increases in F-reticulocytes. Now this is not quantifiable. We can't yet measure protein, as I mentioned, because we didn't dose long enough, but this is providing evidence that the process is starting, and it gives us more confidence that as we dose sickle cell patients in our Phase Ib trial that we will see protein production. This also sets us up very well for our ongoing Phase Ib trial in sickle cell patients. Before we get to that on Slide 28, equally importantly, FTX-6058 has been generally well tolerated. No serious adverse events reported to date. No discontinuations. Everything related to FTX-6058 has been either grade 1 or 2 and resolved. And as I mentioned on Slide 29, this is our Phase Ib trial. So this is in people living with sickle cell disease. They can be either on or off hydroxyurea. We've announced up to 3 cohorts, and we're starting with our first cohort, which is 6 milligrams. Up to 10 patients per cohort, and we'll be dosing for 12 weeks. And as I mentioned and as we saw from other programs, we believe that will be sufficient time to begin to see protein increases, and that will be part of what we report out in our initial data update, which we're guiding towards the second quarter of this year. On Slide 30, I mentioned that we had also filed and IND at the end of last year to look at 6058 in non-sickle cell hemoglobinopathies, and we believe that it has tremendous applicability in beta thal as well as other hemoglobinopathies. We're very excited about this program as well. We intend to initiate our Phase Ib study in the second quarter of this year and also a global disease with tremendous unmet need and a meaningful opportunity for a once-daily oral therapy. Then finally, on Slide 31, this is setting us up for a tremendous 2022. We have meaningful catalysts across a number of key programs. FulcrumSeek continues to be extremely productive getting towards our next programs. We will also look to further progress our collaborations and look to do more collaborations, and it really gets us closer towards our goal of delivering impactful disease-modifying therapies to people living with severe genetic diseases. The progress we've made in 2021 was extremely derisking, and we're very excited about the programs that we have and the potential impact that they can have. Thank you.

Great. Well, thanks, Bryan, for the presentation. Obviously, a really exciting time for the company. Maybe we can get started on the Q&A. We've had a few questions come in from the audience as well. Starting with FSHD. I mean, there was a question around the endpoint for the Phase III. So what do you think will be an approval endpoint for the Phase III? And will those be the same as the Phase IIb? Or how are you guys thinking about that?

Sure. And why don't I turn it over to our Chief Medical Officer, Chris Morabito, who's joined us here as well.

Yes. Great. Thanks, Bryan. Thanks, Adi. Wonderful question. We are actually very excited about what we have been seeing with losmapimod in FSHD. No one has been here before. No other program has gotten this far in the clinic. And our Phase IIb data suggests to us that we do have the ability in 48 weeks to profoundly impact, function and feel 2 main regulatory goals. Bryan showed you data regarding the impact on reachable workspace. That surface area that one can reach with an outstretched arm by moving just the shoulder tightly correlated with activities of daily living, as Bryan said, tightly correlated with quality of life. And we also have data now that impact how patients feel with the patient global impression of change data. We met with the FDA last quarter. We had a robust discussion. We're currently planning those next steps. In Q1, later on this quarter, we will be updating more substantially. But you have to understand that we're looking deep into what we've discovered in the Phase IIb program to identify what could be responsive in that Phase III study, and those data seem to be informative.

Got it. Great. That's a really, really helpful overview. Maybe moving on to sickle, just kind of a broader question. Obviously, there are others pursuing sickle as well with different modalities. So how do you guys think about -- how do you feel your program kind of fits within the broader landscape of sickle?

Yes. And maybe I'll take this one. Obviously, we spend a tremendous amount of time with clinicians and with patients, and sickle cell disease is very unique because of the human genetics, because of hereditary persistence of fetal hemoglobin. As I mentioned in the presentation, it's very clear that HbF and only HbF has the potential to address the broad symptoms. And I think obviously, what BCL11A gene editing has shown has been very validating and very validating for our program. But I think it's very clear from our interactions and clinicians' understanding of that a once-daily oral HbF inducer would be standard of care, and we feel like we're very much differentiated from all the other approaches.

Yes. Great. And maybe thinking ahead to the data readout in Q2 for the Ib, what are your kind of initial expectations of that?

Yes, Chris?

Sure. So our goal post for the program has been two to threefold induction from baseline. We want to see hemoglobin F levels increase by that amount. What we've been showing so far based on our preclinical data is that, that is possible with 6058. You see that in all of our animal models, all of our in vitro, in vivo assays. And now we're seeing HPG mRNA starting increases at 2.5 fold and going all the way up to sixfold, potentially exceeding our expectations. The 6-milligram dose does increase HPG mRNA at 6 -- to 2.5-fold, and we think that will potentially translate into protein. So we selected that dose as our starting dose for the Phase Ib. And as Bryan said, we're dosing for 12 weeks. We'll be looking to enroll up to 10 people in that cohort. It is open label. And after we have a series of incoming data from those participants, we'll make dose determination for cohort 2 and then start enrolling cohort 2. We're currently enrolling in cohort 1. And we anticipate in Q2 to be able to provide an update, not just on progress, but ultimately on what we're doing to protein, what we're doing to safety, what we're doing to PK and other pharmacodynamic parameters. We want this to be a meaningful update. We haven't guided specifically as to what we'll say and how many participants data we'll have at that time, but we do intend to provide a meaningful update, especially on protein.

Okay. Great. And we had a couple of kind of broader strategic questions. I guess the first was on FulcrumSeek. So obviously, you guys have the FulcrumSeek approach, and how do you balance kind of finding new targets via your approach versus really kind of progressing and continuing the programs that you have? How do you strategically kind of think about that?

Yes. And I would say, I think most importantly, and particularly as we look back on 2021, it was extremely validating for FulcrumSeek. So as we mentioned, all 3 of our clinical programs have come out of FulcrumSeek. And obviously, with the progress that we made on that data, it really does validate the approach, the broad applicability of the approach. So as we move forward, one of the things that we've talked about is we've scaled up FulcrumSeek really meaningfully. So we started off, we used to look at one gene at a time, and that was a very laborious but productive process. We now have the ability to look at thousands of genes at a time, and has really increased the scale and the efficiency that we can identify targets. So our intent is to continue to move programs forward ourselves, particularly in our areas of focus, which are the muscle, heme and CNS. But we also think there's tremendously broad applicability in so many other genetically defined rare diseases, and we intend to really exploit those with collaborations, much like the 2 that we've done, and we'll be looking to do more. But we see a lot of potential based on the success that we've had and how we've been able to scale up the approach.

Got it. No, that's great. And you kind of foreshadowed my next question, which was about partnerships. You mentioned the Merck and the BMS, but -- you kind of touched on it already, but how do you kind of think about partnership strategy moving forward? And is there anything that you think investors should be kind of thinking about in that area?

Well, I would say, I think business development has been and will continue to be an important part of our strategy. I think we feel like we're in a very strong position today with the 3 clinical programs that we have being wholly owned. And at the same time, really to take advantage of what we've built in FulcrumSeek and the discovery approach we're going to need to and there's a tremendous opportunity to enter into more collaborations with partners that have expertises in different disease areas or therapeutic areas. So it's going to be and has been a big part of our strategy. And I think we'll really continue to try to leverage partners, but really leverage partners that we feel like our leaders in particular diseases and really bring a lot of expertise to the collaborations. And that's exactly what we've done so far.

Yes. Okay. Great. Well, those were all the questions that we have. So I really wanted to thank Bryan, Chris and Esther and the Fulcrum team for the great presentation. And thank you to the audience for joining the session as well.

Wonderful. We appreciate it. Thank you.

Thank you.