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

Good morning, everybody. Thanks for joining us for the next session. I'm Matthew Harrison, I'm one of the biotech analysts here at Morgan Stanley. Pleased to have Fulcrum with us for the next session. Just briefly before we get started, I need to read a disclosure statement. Please note that all important disclosures, including personal holdings disclosures and Morgan Stanley disclosures, appear on the Morgan Stanley public website at morganstanley.com/researchdisclosures. So with that, out of the way, we can get going. Happy to have Bryan Stuart, the CEO of Fulcrum with us. Bryan, maybe just to kick it off before we get into the program, just talk about the platform at Fulcrum and how you're generating targets there?

Yes, absolutely. So thanks, everyone, for joining us. So Fulcrum started about 6 years ago, really around the idea of looking to find disease-modifying therapies for genetically defined rare diseases. So the platform that we've built is a discovery platform where we focus on a genetically defined rare disease that has a known root cause. We screen it with a proprietary library, and we look to find a target that modulates gene expression. So we've been very successful with the platform to date. It has led to both of our clinical programs. One, as we'll talk more about it in a registrational trial for a form of muscular dystrophy, the other in a Phase I program for sickle cell disease, and we also see opportunities beyond sickle cell and both of them have come out of that platform. So we believe it's broadly applicable towards any genetically defined rare disease that has a known root cause. We have our internal areas of focus at Fulcrum, particularly hematology, cardio, and muscle. And beyond that, we look to do collaborations, and we've done 2 to date, one with BMS, and one with Merck.

Great. Great. Good. So probably, we'll spend the bulk of the time on sickle cell because I think that's where people are focused. But I want to make sure we also talk about losmapimod. So maybe briefly before we get into sickle cell, we can touch on losmapimod. So just remind people about study design, what the time line here is with losmapimod and how you are thinking about clinical benefit for this population.

Yes. And maybe just to begin, for those who are less familiar, losmapimod is for FSHD. FSHD is the second most prevalent form of muscular dystrophy. It has a known root cause, which is the aberrant expression of DUX4. And unfortunately, unlike DMD, unlike other forms of muscular dystrophy, there has been relatively little therapeutic innovation. So there's nothing approved. There's nothing else in the clinic. We identified a target that knocks down DUX4-driven gene expression with our platform. We moved it into a Phase II trial last year and ultimately saw patient benefit across muscle health, function, patient-reported outcomes, and strength. We met with the regulators, both the FDA as well as European regulators towards the end of last year and got alignment to use a functional measure called Reachable Workspace, which is one of the endpoints that we hit on in our Phase II trial, which is highly correlated with activities of daily living, very relevant to people living with FSHD to use that as our primary. So the Phase III trial, which we've begun enrolling is a 48-week trial, 230 patients randomized 1:1, and using Reachable Workspace as our primary endpoint is, I think, relevant for 2 reasons. One, it is highly correlated with activities of daily living -- but also FSHD, unlike other forms of muscular dystrophy, while it is a relentless and progressive disease, what's unique about it is, it actually starts in the upper body, starts in the upper body and then goes down throughout the body. So when you have -- and this measures the patient's ability to move their arms around their shoulders, it's very relevant for patients. Patients always are saying that they can adapt with their lower body disability, but to be able to have something that can affect their upper body mobility is particularly relevant. So that's the same benefit that we want to replicate in the Phase III trial. We believe that if we can be successful, that will be very meaningful for patients.

And there are probably 2 top questions I get with losmapimod. So the first is, can you just address the, -- I guess -- how to think about DUX4 and -- because I think the original thesis on the program was DUX4 modulation, it drives an outcome and clinical benefit -- you obviously saw a mixed signal on DUX4, which I think maybe depends on where you take the biopsy, how you take the biopsy, et cetera. But I think for a lot of people, it's still hard to get over the fact that you didn't see a clear signal on DUX4. So how do you feel then confident moving this into Phase III?

Yes, absolutely. So pre clinically, through our screening, we identified that this target p38 MAP kinase reduces DUX4-driven gene expression. We identified that -- that was independently validated by researchers. And it was a very robust increase and our hypothesis was that if we can reduce DUX4-driven gene expression [ and ] in the clinic, we will see all of these downstream benefits. When we ultimately took it to the clinic, there was just a tremendous amount of variability in DUX4-driven gene expression in any given needle biopsy. And that variability was probably even best shown by our placebo. So patients on placebo had tremendous variability, and they did not see increases in DUX4. And this has to do with just the fact that it is variably expressed, it's stochastic and you're doing a needle biopsy and then trying to do a second needle biopsy 24 or 48 weeks later and trying to get that exact area of tissue. I think what we were very encouraged by is what we saw in the trial was that we did see the downstream benefits. And I think even more so than Reachable Workspace, which we hit on was just the connectivity between we were seeing reductions in fat infiltration as measured by whole-body MRI. Patients were seeing benefits and strength. Patients were seeing benefits and patient-reported outcomes. And I think that's the connectivity that gives us encouragement that not only it is a Reachable Workspace relevant, but it's also closely tied together with the other endpoints that we saw. And I think we just candidly believe that measuring DUX4-driven gene expression due to these limitations is not something that's feasible clinically, but I think the consistency of our preclinical data and others gives us conviction [ that's ] still how the drug is working.

Okay. And then the second question is more related to, I think, capital allocation and sort of cost of running this Phase III program versus, the cost of investments in the sickle cell or other areas. So -- how do you think about that internally and how are you thinking about maybe financing this program more broadly, and are you open to partnerships or other things on this program?

Yes, sure. I would say, I think most importantly, because of the size of the patient population, because this being the second most prevalent form of muscular dystrophy, we're not competing with other clinical trials, we're not competing with any background meds, the unmet need of this is very large. The commercial opportunity is very large. I think we're encouraged by the data that we saw in Phase II. One of the other elements is that we were able to execute our Phase II trial very efficiently. We had 80 subjects. We enrolled it very quickly. And I think the reason for that is these same dynamics. There are 500,000 patients worldwide. They're not on background meds or in competing trials. So we believe we'll be able to execute this in a very efficient and capital-effective way. It is something that we are moving forward with ourselves. [ What ] one never knows what would make sense in the future, but we feel like we can do it in a way from a resource and a capital perspective that's efficient and at the same time, I think the opportunity to bring a treatment to these patients is going to be very, very meaningful if we could be successful.

Okay. Great. Good. Why don't we turn to 6058, then so maybe just as a good [ starting point ] remind people what's the data you have so far?

Yes. And just what the program is, it is an oral HbF inducer for sickle cell disease. And our original approach, again, going back to the product engine, it came from understanding that we know from human genetics that if you can increase HbF, you reduce or completely eliminate all of the symptoms of sickle cell disease. So unlike any other approach for sickle cell disease, inducing HbF is the only approach -- therapeutic approach where you can ameliorate all the symptoms of the disease. So we screened. We look to find a target that induced HbF. We found one. We've transitioned that into the clinic. Originally, last year, we showed healthy volunteer data where mRNA was increasing. And then we wanted to show data early this year to establish proof of concept. So that's the data that we shared at EHA. It's a small number of patients, and it's initial data. But what we were able to show is that we are beginning to see very robust increases in HbF and consistent with our therapeutic goal, which are 5% to 10% increases above baseline. So the literature, the human genetics, real-world evidence, KOLs consistently point us to, if you can see a 5% to 10% increase, this could be transformational for patients. And that is -- seems to be levels that we're beginning to get to. So the data set had 5 subjects. We see, I think, multiple subjects that are trending towards those levels, some that have achieved them. We also had 2 patients that were not adherent -- and that has caused us to make a change to the trial, so we're now switching to observe dosing. So that's something that we believe we'll be able to better manage moving forward. But even though the data set was small, one of the things about HbF is it does not increase independent of therapeutic intervention. So this has been something -- this has been a therapeutic goal -- [ and the ] therapeutical of the field for decades. And after a relatively short time period, we are beginning to see these increases. We want to obviously see if this gets validated with a broader data set.

Okay. So there are a lot of ways we can go. Why don't we start with this? So why 5% to 10%? Why not -- why not push the dose and get higher than obviously, you observed with gene editing or gene therapy treatments, right, that they get much higher levels of induced HbF. And there doesn't -- at least as far as I'm aware, that doesn't seem to be anything deleterious about raising HbF to a very high level. So why only that number?

Yes. So why 5% to 10% of our goal is really very much data-driven? So if you look at the hereditary persistence of fetal hemoglobin, these are people who have sickle cell disease but have a second mutation, which causes their HbF to be expressed at abnormally high levels. If you look at the literature, as we talk to KOLs, you consistently see that as you get into that range, and this is sort of the 3% plus range, you're starting to have impacts on all of the symptoms of the disease. So as you get towards the 5% to 10%, that's our therapeutic goal, we hear from KOLs that these increases, we would have a therapy that would be transformational and that would be first-line therapy. So that's our goal. Is there an opportunity to increase HbF by more than 5% to 10% potentially, and we agree that there doesn't seem to be or we have not observed any sort of nondrug-related deleterious effects of increasing HbF more. But we think that's what it will take for this drug, not to be utilized to be standard of care. And anything beyond that would obviously just be beneficial for patients.

Is there anything in nonclinical [ tox ] or otherwise that would stop you from trying to push the dose to look at those higher levels?

Yes. So at this point, there's nothing -- we don't have any limitations in terms of dosing. Obviously, it's an active trial, both in terms of we're dosing patients. We're running chronic tox studies. So we need to continue to pay attention to what comes out of that. I think what we've guided to is right now, we're moving forward with 6 and 2. We plan to initiate a higher dose and complete enrollment this year, but we really want to make data-driven decisions. I think what we were very encouraged by with the initial data that we had was that we are beginning even at the 6-milligram dose to see the types of increases that we would hope to see in therapy, obviously, as we get towards our full data set, we want to see more of that, and we want to see consistency. I think one of the unfortunate limitations today with hydroxyurea, which is the standard of care, is that there are so many nonresponders to therapy. So you have relatively modest HbF increases. You've got non responders, you've got meaningful safety and tolerability challenges. When we looked at 6058 pre clinically, we didn't see any nonresponders. We need to understand, particularly as we shift towards observed dosing, is that still the case, and that will come out of a larger data set. But I think even at 6%, the big question that we always got coming into this year is that we had shown mRNA increases in healthy volunteers. We weren't dosing long enough to see protein, particularly in the context of a healthy volunteer. So the fact that we actually saw protein going up and going up relatively robustly and quickly is very exciting, and now it's just about execution, and gathering more data.

Okay. So there's -- I think we obviously want to talk about doses. We want to talk about time lines, but maybe before we get there, let's just talk about study conduct, which I think is a big focus for people, just given the initial data set. So are the issues that you faced either in terms of enrollments or missing data? Do you feel like those are fixed or have been addressed at this point?

Yes. I would say I certainly think that we're addressing them. Something like adherence, for example, we switched towards observed dosing. Observed dosing is widely utilized in the space. That is -- it is not uncommon. It's still something that we have to very actively manage, but we feel like we're putting the right things in place. And in terms of enrollment, our focus now is on generating quality data. We want to see consistency in terms of response. We want to understand are we continuing to see a consistent response. What do the kinetics look like? What do they look like at different doses? Our focus is not on the quantity of patients, it's really developing a robust data set that's going to help us understand what's possible with the drug, but also help us inform what is the dose that we take into a registrational trial.

Okay. Presumably, right, you can monitor the number of doses taken and things like that. So in terms of what you're able to monitor at this point, are you seeing the kind of -- people are showing up and they're taking their drugs? [ Or is that ]...

Yes. I think we're comfortable that our transition to observe dosing was the right thing to do and that we'll be able to appropriately manage adherence. That's right.

Okay. Okay. So then maybe let's talk about doses next. So there's a couple of things going on, right? Obviously, there's more exposures at 6. There's exposures with hydroxyurea -- and then you're also dosing down. Probably the biggest question I get is why down first before up? So maybe explain that?

Yes, sure. And maybe I think these 2 things are somewhat related. So we, prior or at least in the data set that we shared at [ EHA ] had not yet had any data with 6058 on top of [ HU ]. As I mentioned, hydroxyurea has a lot of challenges. There are tolerability challenges, there's waiting efficacy, et cetera, but it still is the standard of care. So based on what we saw pre clinically, we believe 6058 should be additive to [ HU ]. We should see HbF increases beyond where a patient is, but we need to validate that in the clinic. So what we want to do is, we want to gather data along with [ HU ] both at 6 and 2 and then that will allow us to select a higher dose. I would also say out of our initial subjects, none of them were on background [ HU ] that was not intentional. It just so happened that, that was the case. So I think between having that data, understanding that data at the different doses, that will then help inform what a third dose cohort looks like, all of which we are planning to enroll by the end of this year.

And is the requirement that patients who are on a stable dose of [ HUC ] do you know what their background HbF level is?

Yes, that's exactly right. So it needs to be stable for 3 months prior to starting the therapy. And again, we do have the benefit here with HbF is that HbF has been extremely well studied. The benefits are very well understood. But we also know that HbF does not change if you don't change it with therapy. It's a very stable endpoint, and that is a meaningful benefit as we go into a trial, and we want to understand what the impact of the drug is. Again, our hypothesis being from at least our preclinical data that we think that this should be additive to a patient's baseline level on [ HU ], but that needs to be borne out by clinical data.

So then remind people how many patients should we expect when you talk about full enrollment by the end of the year? And is that the point at which you'll decide on what the higher dose cohort looks like? Or how should people think about time lines for the higher dose cohort?

Yes. So in terms of -- we've indicated up to 3 cohorts, 10 subjects per cohort, up to 10. We have no, and we certainly do get the question about, particularly as we evaluate a lower dose, are we obligated or committed to getting 10 subjects at that lower dose, -- absolutely not. We want to understand the kinetics. We want to understand what HbF increases are we seeing? How does that look? That will then help inform where we -- when we get to a higher dose? And maybe said a little bit differently, we don't believe and we aren't guiding to that. We need to complete enrollment or complete the trial at the 2 lower doses before selecting a higher dose. We just want to be able to get sufficient data that we can make the appropriate decisions internally about one moving higher and 2 what that dose would be.

Okay. So then maybe that's a good point to explain a little bit more about what data do you need to select the higher dosing because you've talked about your PK/PD model. And so presumably, you need some of these inputs to drive that model to pick a higher dose. So what are the selection criteria for a higher dose? And what amount of data do you think you need?

Yes. I would say nothing atypical, right? We want to understand PK/PD. We want to understand HbF. We obviously want to understand safety and tolerability as we have more subjects in the trial. We'll then get together and make a decision about what that higher dose would be. So it's really data-driven, and it's just getting more data, both subjects on HU and those not on HU.

And let's play out a theoretical example. Let's say, so you enroll -- and just to be clear, it's 10 patients at 6 and it will be a mix of patients with baseline HU and mono therapy. Is that the right way to think about the size of that?

Yes, I think that's exactly right. So again, we're saying up to 10 patients in every cohort, but yes, that's a combination of both. And one of the things obviously we're going to be focused on is, again, is this additive to HU -- and again, consistency.

Yes. Yes. So let's -- just for the sake of [ arm ] -- we play that out and you get with 6, some mix and you're in the 5% to 10% range. How do you then -- what's the criteria to pick a higher dose? Because I think the -- maybe I should leave it a little more open end, which is there are 2 outcomes, right? You're not between 5 and 10 with 6 as you get more patients where you are. So I guess what I'm really asking is if you're above -- if you're in the right range that you've set, how do you then pick the higher dose?

Yes. So I think some of that will come down to PK/PD modeling. We do also want to make sure that we have a dose that's sufficiently differentiated from our other doses. So -- but it really is going to be data-driven. We want to understand -- to your point, most importantly, our therapeutical hasn't changed. We want to be able to get towards that 5% to 10% range. So we need to look at that as a driver. We need to look at safety and tolerability. And I think what we've indicated for the trial is that it's a dose range between 2 and 20. So as we think about a higher dose, we would obviously be thinking about something between 6 and 20, but our PK/PD modeling will help drive that decision.

Okay. But -- and sorry to dwell on this, but I guess the point would be that you will pick a higher dose irrespective of whether or not you meet sort of your 5% to 10% range [ with ]...

Yes. It's certainly our plan at this point to pick a higher dose. That's right.

Okay. Yes. Okay. And so then the next question, obviously, everybody wants to know is disclosure and how to think about if you're enrolling patients, how should people think about actually seeing that data and knowing what you've been able to observe?

Yes. So what we've guided to is completing enrollment this year. We haven't guided towards data disclosure, I guess a few things that I would highlight. So one, it's obviously an open-label study primarily focused on HbF. So we believe our ability to both complete enrollment, complete dosing, and then share data can be relatively efficient. So we'll share more as we get closer. I think one of the other things I would highlight, and you had brought up the question earlier about enrollment, we've obviously added more sites. This has continued to ramp up. I think enthusiasm for the program has ramped up as we've begun to share data showing HbF increase. But we feel like we're well positioned to be able to complete enrollment this year. And again, the idea is complete enrollment, complete dosing, and be able to share data with the hope that we think we're going to have enough data here that's really going to drive us towards what is a single dose in a registrational trial.

And is there a minimum amount of follow-ups that you want before you will share data?

In terms of how long patients are dosed or post-dosing?

You can -- Feel free to define it as you would like.

Yes. I think, obviously, we want to be able to share a robust data set. One of the things that we've been encouraged by is that we're not only seeing amongst the adherent patients, we're not only seeing robust HbF increases, but we're seeing rapid HbF increases. And that's very meaningful because the sooner patients begin to experience HbF increases, they're going to have impacts on symptoms. So we want to make sure through additional data that those kinetics are replicated in other patients. We're not guiding towards more than completing enrollment and then sharing the data when appropriate. But we want to be able to share a data set that's robust, that's very helpful for investors, clinicians, et cetera, and really understanding the drug. So that's probably all I could say...

But I think let me ask...

Sure, sure In this context.

So obviously, in the 3 patients that you had adherence, you had different time points for them. And their curves were going up, but obviously, the ones that were out longer had higher HbF increases in general.

Yes, yes.

Just given that, is there a certain amount of follow-up you would like to see so that everybody has a better picture of what the trajectory looks like? Or do you think having different patients at different time points is still sort of okay in terms of how to share data?

Yes. We're not guiding towards that, but let me just say this. The intent of sharing the data at EHA this year, and we appreciate it was a small data set. It was an emerging data set. But we wanted to answer the question, be able to share can we induce HbF? Again, that is something that the field has been looking for, for literally decades. At this point, we don't intend to share any more data piecemeal. We believe that we've shown that. We've clearly shown that. And now we want to be able to share a complete data set and be able to show what are the differences in both HbF as well as tolerability at the different dosing levels. And I think that's what's really important at this point rather than sharing sort of updates on a patient-by-patient basis.

Yes. Perfect. And then just the last question on the sort of disclosure topic it's just given -- and maybe you'll be able to comment on this, when -- if and when you assign a higher dose cohort, say, prior to data, should -- is there any expectation that we might see some patients on a higher dose with this data disclosure? Is that -- should that not be something people consider?

Yes. Our intent is for our next data disclosure that, that will be all of the dose cohorts. That may include some of [ this absolute ] higher dose cohort.

Yes, great.

Yes. And just part of our guidance is to complete enrollment, and that's both in the 6 and the 2 as well as a planned higher dose cohort by the end of the year.

Okay. Okay. Perfect. Pivotal program. So you get to the end of the year, you've got people enrolled. Let's just take of argument. You have some data disclosure next year. You don't need to comment on that, but just from a theoretical time line. How should we think about pivotal program, assuming that, that's enough data to pick your dose?

Yes. And certainly, our goal is to generate enough data in this trial to pick our dose. And we think we'll be able to do that between the HbF responses as well as a very good understanding of what the impacts are of HbF [ risk ] increases to different symptoms. So our goal is to transition into a registrational trial next year. We obviously, as we've talked about, we want to go talk to the FDA about the potential to use HbF for accelerated approval. It's an extremely well-studied and validated bio marker. The benefits are very clear. We're starting to see that also with gene editing data. So ultimately, we need to have those discussions to help inform what that registrational trial will look like, but we want to begin that next year, and we want to move as aggressively as we're able to.

Okay. And in terms of being able to have that accelerated approval discussion, I assume you need the data and you'd request sort of a meeting after you have the data package from this current study. Is that the plan in terms of time lines?

Yes. I think in terms of time lines, what we're guiding to is obviously having data from the study will be helpful to inform those discussions. Again, we're coming at this from a place where HbF is so well understood and well studied, and we're seeing gene editing data. There's just such a consistency around it that, that gives us a lot of conviction about a registrational trial, but that will be helpful as we have those interactions with the FDA. But again, it's a lot of consistency that the types of increases that we want to see are going to lead to meaningful patient benefits.

Okay. Perfect. Good. Maybe just to finish this off, you can talk about your cash position, where you think that gets to you and how you're thinking about financing the company?

Yes. So we have runway until mid-2024. We most recently did a financing a couple of weeks ago, which extends that runway and gives us more flexibility. We'll share additional guidance as we have in terms of how far that takes us. But it puts us, I think, in a very strong position now as we -- for FSHD, look to complete enrollment of that trial next year. And then for sickle, as we look to transition to this registrational trial.

Great. Bryan, thanks for being here. Thanks for answering the question.

Yes, I appreciate it. Thank you, Matthew.