Fulcrum Therapeutics Inc

Previous wording

We are a clinical-stage biopharmaceutical company focused on developing small molecules to improve the lives of patients with genetically defined rare diseases in areas of high unmet medical need. Our most advanced clinical-stage product candidate, losmapimod, is being developed for the potential treatment of facioscapulohumeral muscular dystrophy, or FSHD. Our other clinical product candidate is pociredir, which is being developed for the potential treatment of sickle cell disease, or SCD. We initiated REACH, a randomized, double-blind, placebo-controlled, multi-national Phase 3 clinical trial of losmapimod in the second quarter of 2022 and completed enrollment during September 2023, enrolling 260 patients. We expect to report topline data from REACH in the fourth quarter of 2024.

Current wording

We are a clinical-stage biopharmaceutical company focused on developing small molecules to improve the lives of patients with genetically defined rare diseases in areas of high unmet medical need. Our most advanced clinical-stage product candidate, losmapimod, is being developed for the potential treatment of facioscapulohumeral muscular dystrophy, or FSHD. Our other clinical product candidate is pociredir, which is being developed for the potential treatment of sickle cell disease, or SCD. We initiated REACH, a randomized, double-blind, placebo-controlled, multi-national Phase 3 clinical trial of losmapimod in the second quarter of 2022 and completed enrollment during September 2023, enrolling 260 patients. We expect to report topline data from REACH by the end of October 2024.

Previous wording

In January 2023, we announced interim data from our Phase 1b clinical trial of pociredir in SCD. We completed enrollment in the 6 mg and 2 mg dose cohorts, and do not plan to enroll additional subjects in these cohorts. Although we commenced enrollment in the 12 mg dose cohort, in February 2023 the FDA placed a full clinical hold on the investigational new drug, or IND, application for pociredir for SCD, which was lifted in August 2023. We reinitiated the Phase 1b clinical trial at the 12 mg once daily dose level, with that cohort expected to enroll approximately 10 patients, to be followed by an additional cohort of approximately 10 patients at the 20 mg once daily dose level, and have activated additional clinical trial sites. Following the clinical hold, we amended the protocol to revise the inclusion and exclusion criteria for the Phase 1b clinical trial to target patients with higher disease severity.

Current wording

In January 2023, we announced interim data from our Phase 1b clinical trial of pociredir in SCD. We completed enrollment in the 6 mg and 2 mg dose cohorts, and do not plan to enroll additional subjects in these cohorts. Although we commenced enrollment in the 12 mg dose cohort, in February 2023 the FDA placed a full clinical hold on the investigational new drug, or IND, application for pociredir for SCD, which was lifted in August 2023. Following the clinical hold, we amended the protocol to revise the inclusion and exclusion criteria for the Phase 1b clinical trial to target subjects with higher disease severity. We reinitiated the Phase 1b clinical trial at the 12 mg once daily dose level in the fourth quarter of 2023, with that cohort expected to enroll approximately 10 subjects, to be followed by an additional cohort of approximately 10 subjects at the 20 mg once daily dose level. We expect to provide clinical data from this trial in 2025.

Previous wording

On May 11, 2024, we entered into a collaboration and license agreement with Genzyme Corporation, a wholly-owned subsidisary of Sanofi, or Sanofi, pursuant to which we granted Sanofi an exclusive license under certain intellectual property rights to commercialize losmapimod outside of the United States. Pursuant to a mutually agreed global development plan, we will continue to conduct the ongoing REACH trial. We and Sanofi will equally share global development costs. In addition to potential future activities conducted under a mutually agreed global development plan, Sanofi will also have the right to conduct certain development activities that are solely intended to support obtaining or maintaining regulatory approval outside of the United States. We will have the sole right to manufacture for our activities under the global development plan and for commercialization in the United States. and, subject to the terms of a supply agreement, we will supply Sanofi’s clinical and commercial supply requirements of losmapimod until Sanofi elects to take over such manufacturing responsibilities.

Current wording

In May 2024, we entered into a collaboration and license agreement with Genzyme Corporation, a wholly-owned subsidiary of Sanofi, or Sanofi, pursuant to which we granted Sanofi an exclusive license under certain intellectual property rights to commercialize losmapimod outside of the United States. Pursuant to a mutually agreed global development plan, we will continue to conduct the ongoing REACH trial. We and Sanofi will equally share global development costs. In addition to potential future activities conducted under a mutually agreed global development plan, Sanofi will also have the right to conduct certain development activities that are solely intended to support obtaining or maintaining regulatory approval outside of the United States. We will have the sole right to manufacture for our activities under the global development plan and for commercialization in the United States and, subject to the terms of a supply agreement, we will supply Sanofi’s clinical and commercial supply requirements of losmapimod until Sanofi elects to take over such manufacturing responsibilities.

Previous wording

Per the terms of the agreement, Sanofi will make an upfront payment of $80.0 million to us. We are also eligible to receive up to an additional $975.0 million in specified regulatory and sales-based milestones, and Sanofi will pay us tiered royalties ranging from low-teens to mid-twenties based on Sanofi’s and any of its affiliates’ and sublicensees’ annual net sales of losmapimod outside the United States. The royalties are payable on a product-by-product basis during a specified royalty term, and may be reduced in specified circumstances.

Current wording

Per the terms of the agreement, Sanofi made an upfront license payment of $80.0 million to us in the second quarter of 2024. We are also eligible to receive up to an additional $975.0 million in specified regulatory and sales-based milestones, and Sanofi will pay us tiered royalties ranging from low-teens to mid-twenties percent of Sanofi’s and any of its affiliates’ and sublicensees’ annual net sales of losmapimod outside the United States. The royalties are payable on a product-by-product basis during a specified royalty term, and may be reduced in specified circumstances.

Previous wording

We have incurred significant operating losses since our inception and we expect to continue to incur significant operating losses for the foreseeable future. Our ability to generate product revenue sufficient to achieve profitability, if ever, will depend heavily on the successful development and eventual commercialization of one or more of our product candidates. Our net losses were $26.9 million and $24.8 million for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, we had an accumulated deficit of $536.5 million. We expect our expenses and operating losses will increase substantially over the next several years in connection with our ongoing activities, as we:

Current wording

We have incurred significant operating losses since our inception, with the exception of the three and six months ended June 30, 2024, and we expect to continue to incur significant operating losses for the foreseeable future. Our ability to generate product revenue sufficient to achieve profitability, if ever, will depend heavily on the successful development and eventual commercialization of one or more of our product candidates. Our net income was $28.5 million for the six months ended June 30, 2024, primarily due to the $80.0 million of collaboration revenue associated with our collaboration and license agreement with Sanofi that we recognized during the period. Our net loss was $48.6 million for the six months ended June 30, 2023. As of June 30, 2024, we had an accumulated deficit of $481.1 million. Excluding the potential for future milestone payments under our collaboration and license agreement with Sanofi, we expect our expenses and operating losses will increase substantially over the next several years in connection with our ongoing activities, as we:

Previous wording

As of March 31, 2024, we had $213.3 million in cash, cash equivalents, and marketable securities. We believe that our existing cash, cash equivalents, and marketable securities as of March 31, 2024, together with the $80.0 million upfront payment that we expect to receive under our recent collaboration and license agreement with Sanofi, will enable us to fund our operating expenses and capital expenditure requirements into 2027. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See “—Liquidity and Capital Resources.”

Current wording

As of June 30, 2024, we had $273.8 million in cash, cash equivalents, and marketable securities. We believe that our existing cash, cash equivalents, and marketable securities as of June 30, 2024 will enable us to fund our operating expenses and capital expenditure requirements into 2027. We have based this estimate on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. See “—Liquidity and Capital Resources.”

Previous wording

In July 2020, we entered into a collaboration and license agreement with MyoKardia, which we amended in April 2023, pursuant to which we granted to MyoKardia an exclusive worldwide license under certain intellectual property rights to research, develop, make, have made, use, have used, sell, have sold, offer for sale, have offered for sale, import, have imported, export, have exported, distribute, have distributed, market, have marketed, promote, have promoted, or otherwise exploit products directed against certain biological targets identified by us that are capable of modulating up to a certain number of genes of interest with relevance to certain genetically defined cardiomyopathies. MyoKardia was subsequently acquired by Bristol-Myers Squibb Company in November 2020. The primary goal of the collaboration is to identify and validate potential biological targets for further research, in order to support the development, manufacture and commercialization of product candidates by MyoKardia for the potential treatment of certain genetically defined cardiomyopathies. We satisfied our obligation to perform research services as of December 31, 2023.

Current wording

In July 2020, we entered into a collaboration and license agreement with MyoKardia, which we amended in April 2023 and again in July 2024, pursuant to which we granted to MyoKardia an exclusive worldwide license under certain intellectual property rights to research, develop, make, have made, use, have used, sell, have sold, offer for sale, have offered for sale, import, have imported, export, have exported, distribute, have distributed, market, have marketed, promote, have promoted, or otherwise exploit products directed against certain biological targets identified by us that are capable of modulating up to a certain number of genes of interest with relevance to certain genetically defined cardiomyopathies. MyoKardia was subsequently acquired by Bristol-Myers Squibb Company in November 2020. The primary goal of the collaboration is to identify and validate potential biological targets for further research, in order to support the development, manufacture and commercialization of product candidates by MyoKardia for the potential treatment of certain genetically defined cardiomyopathies. We satisfied our obligation to perform research services as of December 31, 2023.

Previous wording

Under the terms of the MyoKardia collaboration agreement, we received a $10.0 million upfront payment and a $2.5 million payment as prepaid research funding in July 2020. MyoKardia will also reimburse us for the costs of the research activities not covered by the prepaid research funding, up to a maximum amount of total research funding (including the prepaid research funding). Upon the achievement of specified preclinical, development and sales milestones, we will be entitled to preclinical milestone payments, development milestone payments and sales milestone payments of up to $298.5 million in the aggregate per target for certain potential cardiomyopathy gene targets, and of up to $150.0 million in the aggregate per target for certain other potential cardiomyopathy gene targets. To date, we have achieved a $2.5 million specified preclinical milestone. MyoKardia will also pay us tiered royalties ranging from a mid single-digit percentage to a low double-digit percentage based on MyoKardia’s, and any of its affiliates’ and sublicensees’, annual worldwide net sales of products under the MyoKardia collaboration agreement directed against any identified target. The royalties are payable on a product-by-product basis during a specified royalty term, and may be reduced in specified circumstances.

Current wording

Under the terms of the MyoKardia collaboration agreement, we received a $10.0 million upfront payment and a $2.5 million payment as prepaid research funding in July 2020. MyoKardia agreed to reimburse us for the costs of the research activities not covered by the prepaid research funding, up to a maximum amount of total research funding (including the prepaid research funding). Upon the achievement of specified preclinical, development and sales milestones, we will be entitled to preclinical milestone payments, development milestone payments and sales milestone payments of up to $298.5 million in the aggregate per target for certain potential cardiomyopathy gene targets, and of up to $150.0 million in the aggregate per target for certain other potential cardiomyopathy gene targets. To date, we have achieved a $2.5 million specified preclinical milestone. MyoKardia will also pay us tiered royalties ranging from a mid single-digit percentage to a low double-digit percentage based on MyoKardia’s, and any of its affiliates’ and sublicensees’, annual worldwide net sales of products under the MyoKardia collaboration agreement directed against any identified target. The royalties are payable on a product-by-product basis during a specified royalty term, and may be reduced in specified circumstances.

Previous wording

For the three months ended March 31, 2024 and 2023, we recognized zero and $0.3 million, respectively, of collaboration revenue under the MyoKardia collaboration agreement. As of March 31, 2024 and December 31, 2023, we have recorded no deferred revenue associated with the MyoKardia collaboration agreement. As of March 31, 2024, we had received $7.7 million of cost reimbursement payments and $2.5 million of milestone payments under the MyoKardia collaboration agreement. As of March 31, 2024, we recorded no accounts receivable or unbilled accounts receivable under the MyoKardia collaboration agreement.

Current wording

For the three months ended June 30, 2024 and 2023, we recognized zero and $0.9 million, respectively, of collaboration revenue under the MyoKardia collaboration agreement. As of June 30, 2024 and December 31, 2023, we have recorded no deferred revenue associated with the MyoKardia collaboration agreement. As of June 30, 2024, we had received $7.7 million of cost reimbursement payments and $2.5 million of milestone payments under the MyoKardia collaboration agreement. As of June 30, 2024, we recorded no accounts receivable or unbilled accounts receivable under the MyoKardia collaboration agreement.

Previous wording

The following table summarizes our external research and development expenses by program following nomination as a development candidate for the three months ended March 31, 2024 and 2023. Pre-development candidate expenses, unallocated expenses and internal research and development expenses are classified separately.

Current wording

The following table summarizes our external research and development expenses by program following nomination as a development candidate for the three and six months ended June 30, 2024 and 2023. Pre-development candidate expenses, unallocated expenses and internal research and development expenses are classified separately. Payments to or reimbursements from Sanofi related to global development activities are accounted for as an increase to or reduction of losmapimod external expenses.

Previous wording

Research and development expense increased by $3.1 million from $16.7 million for the three months ended March 31, 2023 to $19.8 million for the three months ended March 31, 2024. The increase in research and development expense was primarily attributable to the following:

Current wording

Research and development expense decreased by $0.5 million from $17.8 million for the three months ended June 30, 2023 to $17.3 million for the three months ended June 30, 2024. The decrease in research and development expense was primarily attributable to the following:

Previous wording

$0.1 million of decreased other costs.

Current wording

$0.2 million of decreased other costs;

Previous wording

General and administrative expenses decreased by $1.5 million from $11.5 million for the three months ended March 31, 2023 to $10.1 million for the three months ended March 31, 2024. The decrease in general and administrative expenses was primarily attributable to the following:

Current wording

General and administrative expenses decreased by $0.1 million from $10.3 million for the three months ended June 30, 2023 to $10.2 million for the three months ended June 30, 2024. The decrease in general and administrative expenses was primarily attributable to the following:

Previous wording

partially offset by $0.2 million of increased professional services costs, primarily due to increased legal costs.

Current wording

partially offset by $0.5 million of increased professional services costs, primarily due to increased legal costs.

Previous wording

Other income, net decreased by $0.2 million from $3.2 million for the three months ended March 31, 2023 to $3.0 million for the three months ended March 31, 2024. The decrease was primarily attributable to a decrease in our average cash, cash equivalents, and marketable securities balance.

Current wording

Other income, net decreased by $0.6 million from $3.5 million for the three months ended June 30, 2023 to $2.9 million for the three months ended June 30, 2024. The decrease was primarily attributable to a decrease in our average cash, cash equivalents, and marketable securities balance.

Previous wording

$0.9 million of increased employee compensation costs, including a $0.5 million increase in stock-based compensation expense;

Current wording

$1.9 million of increased employee compensation costs, including a $1.2 million increase in stock-based compensation expense;

Previous wording

$2.7 million of increased external research and development costs, primarily due to the advancement of REACH as we completed enrollment in September 2023;

Current wording

$1.9 million of increased external research and development costs, primarily due to the advancement of REACH as we completed enrollment in September 2023, partially offset by $2.3 million reimbursement from the global development cost sharing under our collaboration with Sanofi for losmapimod;

Previous wording

partially offset by $0.3 million of decreased laboratory supplies costs;

Current wording

partially offset by $0.9 million of decreased laboratory supplies costs;

Previous wording

$1.6 million of decreased employee compensation costs, including a $0.8 million decrease in stock-based compensation expense, due to decreased headcount;

Current wording

$1.8 million of decreased employee compensation costs, which reflects a $0.5 million decrease in stock-based compensation expense, due to decreased headcount;

Previous wording

We have incurred significant operating losses since our inception and expect to continue to incur significant operating losses for the foreseeable future and may never become profitable. We have not yet commercialized any of our product candidates, which are in various phases of preclinical and clinical development, and we do not expect to generate revenue from sales of any products for several years, if at all. As of March 31, 2024, we have funded our operations primarily with aggregate gross proceeds of $712.5 million from the sale of shares of our capital stock and from upfront payments received under our collaboration and license agreements. As of March 31, 2024, we had cash, cash equivalents, and marketable securities of $213.3 million.

Current wording

We have incurred significant operating losses since our inception and expect to continue to incur significant operating losses for the foreseeable future and may never become profitable. We have not yet commercialized any of our product candidates, which are in various phases of preclinical and clinical development, and we do not expect to generate revenue from sales of any products for several years, if at all. As of June 30, 2024, we have funded our operations primarily with aggregate gross proceeds of $792.5 million from the sale of shares of our capital stock and from upfront payments received under our collaboration and license agreements. As of June 30, 2024, we had cash, cash equivalents, and marketable securities of $273.8 million.

Previous wording

The following table provides information regarding our cash flows for the three months ended March 31, 2024 and 2023:

Current wording

The following table provides information regarding our cash flows for the six months ended June 30, 2024:

Previous wording

Net Cash Used in Operating Activities

Current wording

Net Cash Provided by (Used in) Operating Activities

Previous wording

Net cash used in operating activities was $25.3 million during the three months ended March 31, 2024 compared to $24.1 million during the three months ended March 31, 2023. The increase in net cash used in operating activities of $1.2 million was primarily due to a increase in our net loss, including as a result of increased external research and development costs as we continued the advancement of REACH.

Current wording

Net cash provided by operating activities was $33.6 million during the six months ended June 30, 2024 compared to net cash used in operating activities of $44.9 million during the six months ended June 30, 2023. The increase in net cash provided by operating activities of $78.5 million was primarily due to the receipt of the $80.0 million upfront license payment during the second quarter of 2024 under the Sanofi collaboration agreement, partially offset by an increase in our net loss, including as a result of increased external research and development costs as we continued the advancement of REACH.

Previous wording

Net cash provided by investing activities was $38.1 million during the three months ended March 31, 2024 compared to net cash used in investing activities of $93.9 million during the three months ended March 31, 2023. The increase in net cash provided by investing activities of $132.1 million was primarily due to net maturities of marketable securities during the three months ended March 31, 2024, as compared to net purchases of marketable securities during the three months ended March 31, 2023.

Current wording

Net cash provided by investing activities was $25.6 million during the six months ended June 30, 2024 compared to net cash used in investing activities of $74.1 million during the six months ended June 30, 2023. The increase in net cash provided by investing activities of $99.7 million was primarily due to net maturities of marketable securities during the six months ended June 30, 2024, as compared to net purchases of marketable securities during the six months ended June 30, 2023.

Previous wording

Net cash provided by financing activities was $1.7 million during the three months ended March 31, 2024 compared to net cash provided by financing activities of $117.7 million during the three months ended March 31, 2023. Net cash provided by financing activities during the three months ended March 31, 2024 consisted of net proceeds of $1.7 million from the issuance of common stock under our benefit plans. Net cash provided by financing activities during the three months ended March 31, 2023 primarily consisted of net proceeds of $117.3 million from the January 2023 public offering of our common stock.

Current wording

Net cash provided by financing activities was $2.0 million during the six months ended June 30, 2024 compared to net cash provided by financing activities of $117.8 million during the six months ended June 30, 2023. Net cash provided by financing activities during the six months ended June 30, 2024 consisted of net proceeds of $1.8 million from the issuance of common stock under our benefit plans. Net cash provided by financing activities during the six months ended June 30, 2023 primarily consisted of net proceeds of $117.3 million from the January 2023 public offering of our common stock.

Previous wording

We expect our expenses to increase substantially in connection with our ongoing research and development activities, particularly as we continue the research and development of, initiate clinical trials of, and seek marketing approval for, our product candidates. In addition, we expect to incur additional costs to support the growth of our organization. As a result, we expect to incur substantial operating losses and negative operating cash flows for the foreseeable future.

Current wording

We expect our expenses to increase substantially in connection with our ongoing research and development activities, particularly as we continue the research and development of, initiate clinical trials of, and seek marketing approval for, our product candidates. In addition, we expect to incur additional costs to support the growth of our organization. As a result, we expect to incur substantial operating losses and negative operating cash flows for the foreseeable future, excluding the potential for future milestone payments under our collaboration and license agreement with Sanofi.

Previous wording

Based on our current operating plan, we believe that our existing cash, cash equivalents, and marketable securities as of March 31, 2024, together with the $80.0 million upfront payment that we expect to receive under our recent collaboration and license agreement with Sanofi, will enable us to fund our operating expenses and capital expenditure requirements into 2027. However, we have based this estimate on assumptions that may prove to be wrong and we could exhaust our capital resources sooner than we expect.

Current wording

Based on our current operating plan, we believe that our existing cash, cash equivalents, and marketable securities as of June 30, 2024 will enable us to fund our operating expenses and capital expenditure requirements into 2027. However, we have based this estimate on assumptions that may prove to be wrong and we could exhaust our capital resources sooner than we expect.

Previous wording

Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of expenses during the reporting periods. Our estimates are based on our historical experience, known trends and events, and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities and amount of expense recognized that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We evaluate our estimates and assumptions on an ongoing basis. The effects of material revisions in estimates, if any, will be reflected in the consolidated financial statements prospectively from the date of change in estimates. During the three months ended March 31, 2024, there were no material changes to our critical accounting policies from those described in our Annual Report on Form 10-K filed with the SEC on February 27, 2024.

Current wording

Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States. The preparation of these consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of expenses during the reporting periods. Our estimates are based on our historical experience, known trends and events, and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities and amount of expense recognized that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We evaluate our estimates and assumptions on an ongoing basis. The effects of material revisions in estimates, if any, will be reflected in the consolidated financial statements prospectively from the date of change in estimates. During the three months ended June 30, 2024, there were no material changes to our critical accounting policies from those described in our Annual Report on Form 10-K filed with the SEC on February 27, 2024, except as noted below with respect to our accounting policies related to collaboration revenue.