Fulcrum Therapeutics Inc (FULC) Q1 2024 Earnings Call Transcript Highlights: Strategic ...

• Cash, Cash Equivalents, and Marketable Securities: $213.3 million as of March 31, 2024, down from $236.2 million as of December 31, 2023.

• Pro Forma Cash Position: $293.3 million, considering the $80 million milestone from Sanofi.

• Collaboration Revenue: $0 in Q1 2024, down from $0.3 million in Q1 2023.

• Research and Development Expenses: $19.8 million in Q1 2024, up from $16.7 million in Q1 2023.

• General and Administrative Expenses: $10.1 million in Q1 2024, down from $11.5 million in Q1 2023.

• Net Loss: $26.9 million in Q1 2024, compared to $24.8 million in Q1 2023.

• Funding Outlook: Cash sufficient to fund operations into 2027.

• Warning! GuruFocus has detected 2 Warning Signs with FULC.

Release Date: May 13, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Fulcrum Therapeutics Inc (NASDAQ:FULC) announced a significant collaboration and license agreement with Sanofi for the commercialization of losmapimod outside the US, enhancing global reach and reducing commercial execution risks.

• Received a substantial $80 million upfront payment from Sanofi, providing non-dilutive capital to fund US commercial launch plans for losmapimod.

• Eligible to receive up to an additional $975 million in regulatory and sales milestones, plus tiered royalties on net sales outside the US, securing long-term financial benefits.

• High patient retention and continuation into the open-label extension of the Phase 3 trial for losmapimod, indicating strong ongoing patient interest and potential efficacy.

• Progress in the pociredir program with the FDA lifting the clinical hold on the Phase 1b study, allowing continuation of the trial aimed at treating sickle cell disease.

Negative Points

• Reported a net loss of $26.9 million for the first quarter of 2024, indicating ongoing financial challenges and operational costs.

• Decrease in cash and cash equivalents from the previous quarter, highlighting substantial cash burn associated with advancing clinical trials.

• No collaboration revenue reported in the first quarter of 2024 compared to the previous year, reflecting potential volatility in revenue streams.

• Increased research and development expenses due to costs associated with advancing the REACH clinical trial for losmapimod.

• The complexity and novelty of the RSA endpoint in the REACH trial could pose challenges in regulatory approval and market acceptance.

Q & A Highlights

Q: Can you walk us through the manufacturing process for the partnership with Sanofi and any final steps needed ahead of the Phase 3 data for losmapimod? A: (Paul Bruno, Senior Vice President, Business and Corporate Development) Currently, Fulcrum will continue to supply both clinical and commercial products globally. There is flexibility for Sanofi to take over manufacturing in the future. Regarding the Phase 3 data, everything is on track with no specific additional focuses beyond ongoing trial processes.

Q: How does losmapimod impact gene expression downstream of DUX4, and how does this position it competitively? A: (Iain Fraser, Senior Vice President, Early Development) Losmapimod works upstream from DUX4 but can reduce DUX4 gene expression and downstream gene expression in preclinical models. This includes concentration-dependent reductions in DUX4 and downstream genes, as well as decreases in markers of apoptosis and muscle cell death.

Q: What were the considerations and inputs used in determining the deal terms with Sanofi for losmapimod? A: (Alex Sapir, President and CEO) The deal terms were influenced by the competitive nature of the process, with multiple interested parties. The large potential market for FSHD, both in the US and globally, and Fulcrum's significant lead over competitors played roles in shaping the terms.

Q: What are the top priority actions for a strong US commercial launch of losmapimod? A: (Alex Sapir, President and CEO) Key actions include hiring a strong chief commercial officer experienced in launching rare disease therapies in the pharmacy benefit space, focusing on market access, and ensuring genetic testing does not hinder access at launch.

Q: How is the work on establishing the clinical meaningfulness of changes in reachable workspace (RWS) progressing for losmapimod? A: (Iain Fraser, Senior Vice President, Early Development) The process involves a completed survey of FSHD patients, a cross-sectional study correlating RWS with activities of daily living, and structured exit interviews from the REACH study. Results are expected to align with the top line data from the REACH study.

Q: Can you update us on site activation and data sharing plans for the ongoing study of pociredir? A: (Alex Sapir, President and CEO) Site activation is progressing well with strong interest. Data will be shared after completing the 12 mg cohort and subsequent 20 mg cohort, each involving 10 patients for three months. The timing for data sharing will be announced once a critical mass of patients is enrolled.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.