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

Hi, everyone. Good afternoon, and welcome to the 41st Annual JPMorgan Healthcare Conference. My name is Lalita Sundarrajan, and I'm an associate here on the JPMorgan healthcare banking team. It's my absolute pleasure to introduce our speaker for today's presentation, CEO of Fulcrum Therapeutics, Robert Gould. He's joined on stage by CFO, Esther Rajavelu; and Chief Medical Officer, Santiago Arroyo. With that, Robert, I'll turn it over to you.

Well, thank you very much, and thank you to JPMorgan for the opportunity to present to you this afternoon. What we'll be looking at today is the progress we've made over the last year at Fulcrum Therapeutics and also looking forward to some of the highlights of what we anticipate coming in 2023. As such, I'll be presenting forward-looking statements. Fulcrum was started about 7 years ago with the vision of treating genetically defined diseases with small molecules to change the lives of patients with genetically defined diseases with orally bioavailable specific agents that would ameliorate their disease state. In that 7 years, we have progressed 2 programs into the clinic, and I'll be discussing the progress that we've made in those 2 programs as well as what we anticipate the highlights of 2023 will look like. The first of those programs is a compound called losmapimod. Losmapimod has the potential to be the first-to-market treatment for patients with a formal muscular dystrophy called facioscapulohumeral dystrophy or FSHD. This is the second most common muscular dystrophy in adults, and there is no available therapy for these patients. We anticipate completing the Phase III enrollment in this program in the second half of this year. Our other program that has moved into the clinic is FTX-6058, which has the potential to be the best-in-class agent to treat sickle cell disease by elevating fetal hemoglobin or HbF. We will be providing a Phase Ib data update in the fourth quarter of this year, and I'm very excited to be presenting the initial results on the Phase Ib data today for you. These 2 programs are the product of our -- or the output of our product engine, where we continue to identify novel targets for treatment of blood disorders and muscle disorders as well as neurologic disorders. This is my friend, Sean. Sean is typical of the 33,000 people in the United States who have FSHD. He also represents -- all right. Sorry about that technical glitch. Sorry, there's a disconnect between the 3 slides. Oh, okay, I'll just follow this one. The second of our program that's in clinical development is FTX-6058, which has best-in-class potential for the treatment of sickle cell disease by elevation in fetal hemoglobin. As I mentioned, these are outputs of our product engine, which have activities in blood disorders as well as muscle disorders. This is Sean. Sean is representative of the 33,000 people in the U.S. who have FSHD or facioscapulohumeral disease. He's also representative of the approximately 22% of those people who will end up in wheelchair despite leading a -- expecting a normal life span. We've been able -- we've already obtained Fast Track designation for losmapimod as well as orphan drug designation. And this really speaks to the significant unmet medical need that this population represents. There is no available therapy for these patients. It also impacts the whole family. Sean's son, Patrick, is Sean's primary caregiver, and that's typical for this disease as the course of the disease means the family has to help facilitate and look after the patients. The disease gets its name from the typical presentation. It begins in the face, facio, inability to purse the lips, drink from a straw, blow up balloons, those kinds of things, very stoic look because muscles that enable each of us to smile and express emotion are dystrophic. It then progresses into the shoulder, hence, the name scapula, so facioscapular. Then into the trunk of the body, humeral dystrophy. 95% of the patients report that the loss of ability to move the shoulder is the primary debilitating aspect of the disease. And I would ask each of you to consider getting up in the morning, not being able to brush your hair, not being able to brush your teeth, not being able to put on makeup, having to ask someone to get the coffee cup down for you. The entire family adapts to this disease. 2/3 of the patients are genetic, are inherited. So it's a genetically defined disease that is passed from parent to child. And that enables us, once we identify a patient with FSHD, to immediately identify other patients that are in the family that may also be suffering from this disease. As I mentioned, it progresses from the face to the shoulder, and the primary disease aspect that patients find most disconcerting is the inability to lift their hands above their shoulder. This is -- because of this, we have implemented innovative clinical outcome measures using an instrument called reachable workspace. In essence, reachable workspace takes advantage of a connect video camera to track the patient's ability to lift their arm above their shoulder on the ipsilateral or contralateral side or below the shoulder on the ipsilateral and contralateral side, and that provides a sensitive and accurate measurement of the reachable work area that these patients experience. A patient with FSHD is unable to access those regions above their shoulder. And we can use this as a measure of disease progression. In addition, we are assessing muscle fat infiltrate. As the muscle dies, fat infiltrates the muscle, replaces the protein in the muscle with fat, and we can assess this measure of muscle health using MRI modalities. We initiated the Phase III program based on the phase -- results we obtained from a Phase II program, where losmapimod demonstrated stability of disease and improvement in reachable workspace came -- compared to placebo after a 48-week treatment. So in this slide on the left-hand side shows the reachable workspace on the dominant side. I'm right-handed, so that would be my dominant side; or the nondominant side. It -- in orange is shown the losmapimod-treated patients with stable disease over this 48-week period, and the placebo-treated patients in which the reachable workspace has deteriorated by about 4% or 5% over that roughly 1-year course of treatment. And in patient -- voice of the patient survey that we did in collaboration with the FSH Society (sic) [ FSHD Society ], patients reported that, for them, stabilizing disease, and for their family, stabilizing disease would be a significant advance for them. There's no fit therapy. They've learned to adapt to the disease and if they -- their vision and wish is to stay where they are in the disease progression. Of course, improvement would be wonderful, but stabilization is acceptable as well for these patients. Having the 48-week data, we continued to look for an additional 48 weeks, and this shows the 96-week results. In that study, patients that were on placebo or on losmapimod all crossed over in an open-label fashion to receive losmapimod. 95% of the patients chose to continue in that study, speaking to the very robust safety profile that we've seen with losmapimod. In the orange line on the left-hand side shows the reachable surface area stabilized over the course of the 96 weeks of treatment, and the blue dash line shows the deterioration in reachable workspace, dominant side on the left, nondominant side on the right, the deterioration in the reachable workspace over the first 48 weeks that I showed you previously. The orange dash line shows those patients who crossed over from placebo on to active drug, on to losmapimod. And again, you see stabilization of the reachable workspace as over the subsequent 48 weeks of receiving treatment. This was seen on both the left, the dominant side as well as the nondominant side. So our -- sorry. So our Phase III trial enrollment is ongoing. We plan to complete enrollment in this Phase III trial called the REACH trial in the second half of 2023. Our other clinical program that has advanced in the last year is our program of FTX-6058 for the potential treatment of sickle cell disease. 6058 also has Fast Track designation and also has orphan pediatric designation, again, speaking to the significant need for new therapies in sickle cell disease. Part of our interest in elevating fetal hemoglobin for the -- or HbF for the potential treatment of sickle cell disease comes from human genetics. On the left-hand side of this depiction shows the sequelae of patients who have sickle cell gene and sickle cell disease. They experience potential for stroke, acute chest syndrome, nephropathy, osteonecrosis, ulcers and pains. And there are patients who have an additional genetic alteration in which they continue to make HbF. Each of us make HbF until we're about 2 or 3 years of age, and then adult hemoglobin takes over. And that's when the sickle cell mutation begins to affect these patients. But in these individuals who have both a persistence of fetal hemoglobin, so-called hereditary persistence of fetal hemoglobin, they make that -- they do not shut off this fetal hemoglobin. And they -- as the fetal hemoglobin rises, they have an amelioration of the symptoms. So 5% to 10%, they have reduced morbidity and mortality, reduced the recurring events as they get to 20% fetal hemoglobin and essentially asymptomatic presentation at 30% HbF. The goal of the program was to elevate HbF with an oral small molecule agent. We have been able to do that with 6058. It has the potential to be best-in-class therapy as it -- and we'll be working -- as I'll show you, works in combination with hydroxyurea or alone to elevate fetal hemoglobin in an oral -- convenient oral formulation and has the potential, therefore, to be physiologically modifying. We are in the midst of a Phase Ib clinical trial in sickle cell patients that are aged 18 to 65 either on or off hydroxyurea. There are currently ongoing -- either completed or ongoing 3 dose cohorts in this trial. Cohort 1 received 6 milligrams for a 4-week period, followed by an 8-week treatment extension. Cohort 2 received 2 milligrams, followed by an 8-week treatment extension. We have completed the 8-milligram cohort 1 and are completing cohort 2 currently. We have just initiated cohort 3, which is a 12-milligram cohort, again, following the same 4 weeks of treatment, followed by an 8-week treatment extension. As is normal in a Phase I trial, the primary endpoint of this trial is safety and tolerability, along with pharmacokinetic measurements. Secondary endpoints, among others that I'll show you today, are the change from baseline in HbF and the change from baseline in a measure of red cell health and vitality reticulocytes. We've also explored a number of exploratory endpoints, and I'll show you some of the biomarkers of hemolysis that we have observed. In this Phase Ib study, we have 2 subjects treated at 2 milligrams and 10 subjects at 6 milligrams. These subjects overall had a mean baseline HbF of 8.4% and 3 of them that were receiving 6 milligrams were also on hydroxyurea. One of the goals of the study was to understand the potential of 6058 in combination with hydroxyurea. Overall, 6058 was well tolerated. There were 14 treatment-emergent adverse events, 2 of them possibly related to study drug. One was a headache. One was lip numbness. These both resolved on continued treatment with the drug, and they were of mild severity and considered nonserious. There were 2 treatment-emergent adverse events that were characterized as vaso-occlusive crises. They were characterized by the attending physician as unrelated to study drug. One was reported as an TAE with acute chest syndrome. This was in a subject that was non-adherent. There were no lab-related adverse events and no discontinuations due to the TAEs. This shows the totality of the treatments and as well as the treatment periods for 12 patients -- for the 12 patients. Patients 1 through 10 received 6 milligrams, patients 11 and 12 received 2 milligrams. One of the issues that we faced early on in this program was confirm compliance that the patients were actually taking the drug, and we were able to confirm compliance in 2 different ways: by pharmacokinetic measurements, actually measuring drug levels; and also by pill count, that is, do they return -- how many pills did they actually return. And by that analysis, patients 4, 5 and 6 actually did not receive any treatment. So we have not included those patients in an on-treatment analysis. Other patients, we were able to confirm treatment for the indicated number of days, be it 28 in the case -- days in the case of subjects 9 and 10 or 84 days in the case of subjects 7 and 8. The 2-milligram dose, the 2 patients, 11 and 12, are in an -- are ongoing currently. While patients 4 and 5 did not -- were noncompliant, we did -- we were able to observe some data from these patients. And subject 5, on the left-hand side, this was a non-adherent patient and you see the stable protein levels of HbF and stable message levels over the 96 -- approximately 96 days of treatment. On the right-hand side is subject 4, who is noncompliant for the first roughly 50 days of treatment. And then as we switch to observe dosing and we confirmed they were taking drug, we began to see the anticipated increase in HbF and the anticipated increase in messenger RNA. If we look now at all of the compliant patients, the 2-milligram, which is ongoing on the right, and the 6-milligram ongoing on the left, what we observed is that there was a consistent and uniform rate of increase in fetal hemoglobin. On the top left is shown the absolute percent HbF levels and on the bottom is shown the normalized levels. Every patient responded, patients 7, 9 and 10, as indicated by the asterisks, were on hydroxyurea, and they showed a comparable rate of increase as patients off hydroxyurea. We also observed a dose response relationship in that 2 milligram appears to be a minimally effective good dose and 6 milligrams appears to be a clinically effective does. The other thing I'd draw your attention to is the decline in HbF and the -- following termination of the drug. So as expected, HbF rose with this oral treatment. When the oral treatment was discontinued, the HbF levels fell, consistent with the pharmacology of the agent. Just to illustrate the effect with hydroxyurea, on the left-hand side shows the subject 7, who is on hydroxyurea, starting at about 10% HbF. On the right, subject 8 started at about 10% HbF, although they were not on hydroxyurea. And you see a similar rate and extent of HbF increase on or off hydroxyurea. We also wanted to look at biomarkers of hemolysis. That is, by elevating HbF, where we're having a positive clinical -- potential positive clinical benefit in these patients. We looked at that in a number of different ways. First of all, we looked at red cell distribution with sickle red cells have a broader distribution. As the HbF rose, what we can see is that the red cell distribution with returns to normal, the dashed horizontal line. Once drug is discontinued, indicated by the vertical dash line, red cell distribution with -- begins to increase again. Again, indicating the onset of the effect of the drug and the washout of the drug as it cleared. Total bilirubin fell, indicating a stability of the red cells. Absolute reticulocyte count went down, again, by about 50%, an anticipated effect of prolonging the life of red cells as we elevated the HbF, and total hemoglobin rose by about a gram per deciliter. Again, indicating that anemia was being ameliorated, hemolysis was being positively impacted, and the patients appeared to show the beginning of clinical benefit with this elevation of HbF. So as we look forward to 2023 in this program, we anticipate completing the Phase Ib study. We have amended the protocol and increased the number of sites really to reduce the patient burden. Doing the pharmacokinetic studies required, patients come in for about 1.5 days to receive multiple blood draws 3 times during the course of treatment. We've learned that FTX-6058 is a very well-behaved molecule, and we've obtained the necessary pharmacokinetic data that we wanted in that program. So by amending the protocol, increasing the number of sites, we anticipate this will accelerate the enrollment as we look forward to enrolling up to 10 patients at 12 milligrams through the course of 2023. We -- that data, in combination with a refined PK/PD model, puts us in a good position to select our final dose for the pivotal trial. We expect selecting that final dose before the end of 2023 as well. So as we look forward to the future of Fulcrum, we have a diversified pipeline of clinical assets, both representing potential significant benefit to patients with muscular dystrophy or sickle cell disease. We anticipate completing enrollment of the REACH Phase III study this year, completing the Phase Ib and selecting the registrational dose by the end of this year. And we anticipate both of these compounds, moving forward, to be either first to market or best-in-market class. Our cash runway through late 2024 positions us well to deliver on these goals. I'm excited for the potential we have to bring benefit to the patients with these genetically defined diseases, improve the lives of them and their family, and I thank you for your kind attention.

Thank you so much, Robert, for running through that presentation. A couple of questions for you. Can you talk a little bit more about what motivated you to start the company? What your vision was at the time? How things have evolved? And now what excites you about Fulcrum today and brought you back from your Board role into a more operating-focused role?

Well, thank you for that because I'm -- my enthusiasm for Fulcrum over the last 7 years has only grown with the potential of using small molecules to treat gene therapy. When we started the company 7 years ago, actually, FSHD and sickle cell were 2 of the first 3 programs that we initiated the company with, with the vision of could we turn off a disease-causing gene called DUX4 and treat muscular dystrophy? Could we turn on fetal hemoglobin and treat sickle cell disease? So what I'm most excited about is not only the progress and the wonderful team that has enabled that progress over the last 7 years, but we are finally in the place where patients have the potential to see benefit from that. And that's really what brought me back. I have been doing drug discovery for many, many years now, 30-plus years, and to be able to see the potential of improving the lives of patients and their families with these agents is really what motivates me.

That's awesome. And then are you able to share anything about the ongoing CEO search? Like how long are you willing to stay on as interim CEO?

I'm going to be Interim CEO as long as it takes to find the next person who'll lead Fulcrum into the next stage of growth. We've just initiated that search, so it's very early, but I'm committed to the company and the future of the company.

Awesome. Esther, a couple of questions for you. I know you had it up on the slide, but can you remind us a little bit about your runway guidance and talk a little bit about what this will help deliver?

Sure. So as Robert mentioned, our runway is through late 2024 and that helps us -- that gets us to completing our Phase Ib for the sickle program and being prepared to get into a Phase III for that program. We're also going to complete enrollment in our FSHD Phase III trial. And it's a 48-week trial, so potentially be in a position to deliver data with that as well.

And then how do you think about business development and strategic partnerships?

Sure. So business development has always been an important part of our strategy. If you look in our past, we have leveraged business development for nondilutive sources of financing. We've done early-stage discovery partnerships. And now as we have 2 clinical stage assets, we will be looking at all opportunities to deliver value.

And I know you have a little bit of it on the slide, but are there any other key catalysts for this year?

No. This year, I mean, we just released data on 6058, and that's -- it's been an exciting couple of weeks for us. And our most important catalyst, we'll be completing the trial for FSHD, but the most important, in my view, is the 6058 data readout from the Phase Ib at the end of the year in the fourth quarter.

Awesome. And maybe we dive in a little bit into the science information. Santiago, why was RWS chosen as a primary endpoint for FSHD? Was there anything else that you considered?

There are many endpoints that you could use in FSHD. It's a muscular dystrophy, and many endpoints have been used in muscular dystrophies in the past. What was attractive about that endpoint is that it has a very good [ test reliability ] and it also can measure small differences in patient outcome. And especially if you think about this disease that is a very slowly progressive disease, it's important to have an instrument that is good enough to detect those changes without having to extend a trial for 5 years or more, which will be undoable.

Can you characterize what a good data set should look like from the REACH trial to obtain approval?

Well, if you see our Phase II data, our Phase II data actually was already pretty compelling. We hit 3 endpoints, all of them of clinical relevance, both in the reaching workspace, MRI changes with reducing -- reduction on the fat infiltration. The fat infiltration is the hallmark for this disorder and then a patient global impression of change. So all of these endpoints were positive in Phase II. Our Phase III design is very similar to the Phase II, same duration, approximately the same patient population. It's just a bigger trial, more patients. So we think that we have a robust Phase II that will support our Phase III success.

And how is enrollment going for the trial?

We're doing well. We are aiming to enroll the study this year. The truth is that patients are waiting. There is nothing else for these patients. There is no therapy available, and they have been waiting for something. And it's actually more the ability and the capability of this size to be able to get the patients in than the patients. The patients are there waiting for -- to be enrolled.