[PART I. FINANCIAL INFORMATION](index=1&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the company's unaudited financial statements, management's analysis, and disclosures on controls and market risk [Item 1. Financial Statements](index=1&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the periods ended June 30, 2023, and December 31, 2022 [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets%20as%20of%20June%2030%2C%202023%20and%20December%2031%2C%202022) The balance sheets show a significant increase in total assets and stockholders' equity driven by a recent public offering Key Balance Sheet Metrics | Metric | June 30, 2023 (in thousands) | December 31, 2022 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total Current Assets | $282,947 | $207,519 | | Total Assets | $300,332 | $226,685 | | Total Current Liabilities | $14,804 | $16,725 | | Total Liabilities | $24,904 | $27,743 | | Total Stockholders' Equity | $275,428 | $198,942 | - Total assets increased by **$73.6 million**, primarily driven by an increase in marketable securities[15](index=15&type=chunk) - Total stockholders' equity increased by **$76.5 million**, largely due to a public offering of common stock in January 2023[15](index=15&type=chunk)[29](index=29&type=chunk) [Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202023%20and%202022) The company's net loss narrowed year-over-year due to decreased operating expenses, particularly in research and development Key Operational Metrics | Metric (in thousands) | 3 Months Ended Jun 30, 2023 | 3 Months Ended Jun 30, 2022 | 6 Months Ended Jun 30, 2023 | 6 Months Ended Jun 30, 2022 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Collaboration Revenue | $880 | $1,882 | $1,175 | $4,474 | | R&D Expenses | $17,849 | $25,019 | $34,564 | $42,850 | | G&A Expenses | $10,323 | $11,098 | $21,843 | $21,857 | | Net Loss | $(23,783) | $(34,070) | $(48,562) | $(59,998) | | Net Loss per Share | $(0.38) | $(0.83) | $(0.80) | $(1.47) | - Net loss decreased by **$10.3 million** for the three months ended June 30, 2023, and by **$11.4 million** for the six months ended June 30, 2023, primarily due to decreased operating expenses and increased other income[17](index=17&type=chunk)[127](index=127&type=chunk)[134](index=134&type=chunk) - Research and development expenses decreased by **$7.2 million** (3 months YoY) and **$8.3 million** (6 months YoY), mainly due to a **$5.0 million** milestone payment in Q2 2022 and reduced FTX-6058 costs due to a clinical hold[129](index=129&type=chunk)[130](index=130&type=chunk)[136](index=136&type=chunk)[138](index=138&type=chunk) [Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Stockholders%27%20Equity%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202023%20and%202022) Stockholders' equity increased significantly due to a public stock offering, while the accumulated deficit continued to grow Key Equity Metrics | Metric (in thousands) | Dec 31, 2022 | Jun 30, 2023 | | :-------------------- | :----------- | :----------- | | Common Stock | $52 | $62 | | Additional Paid-In Capital | $612,025 | $737,466 | | Accumulated Deficit | $(412,338) | $(460,900) | | Total Stockholders' Equity | $198,942 | $275,428 | - Additional paid-in capital increased significantly by **$125.4 million**, primarily from a public offering of common stock in January 2023, which generated net proceeds of **$117.3 million**[20](index=20&type=chunk)[29](index=29&type=chunk) - Accumulated deficit increased to **$460.9 million** as of June 30, 2023, reflecting ongoing net losses[20](index=20&type=chunk)[105](index=105&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20six%20months%20ended%20June%2030%2C%202023%20and%202022) Cash flow from financing activities increased substantially due to a stock offering, offsetting cash used in operations and investments Key Cash Flow Metrics | Metric (in thousands) | 6 Months Ended Jun 30, 2023 | 6 Months Ended Jun 30, 2022 | | :-------------------- | :-------------------------- | :-------------------------- | | Net Cash Used in Operating Activities | $(44,901) | $(49,472) | | Net Cash (Used in) Provided by Investing Activities | $(74,066) | $51,054 | | Net Cash Provided by Financing Activities | $117,835 | $3,159 | | Net (Decrease) Increase in Cash, Cash Equivalents, and Restricted Cash | $(1,132) | $4,741 | - Net cash used in operating activities decreased by **$4.6 million**, primarily due to lower external R&D costs related to FTX-6058's clinical hold[143](index=143&type=chunk) - Net cash provided by financing activities significantly increased to **$117.8 million**, driven by **$117.3 million** in net proceeds from a public common stock offering in January 2023[145](index=145&type=chunk) - Investing activities shifted from providing **$51.1 million** in cash in 2022 to using **$74.1 million** in 2023, mainly due to net purchases of marketable securities[144](index=144&type=chunk) [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes detail the company's accounting policies, financial instruments, agreements, and other key financial information [1. Nature of the Business and Basis of Presentation](index=10&type=section&id=1.%20Nature%20of%20the%20Business%20and%20Basis%20of%20Presentation) The company is a clinical-stage biopharmaceutical firm with a history of losses, funded by a recent public offering - Fulcrum Therapeutics, Inc is a clinical-stage biopharmaceutical company focused on genetically-defined rare diseases[25](index=25&type=chunk) - The company has incurred significant losses since inception, with an accumulated deficit of **$460.9 million** as of June 30, 2023, and expects continued losses[11](index=11&type=chunk)[30](index=30&type=chunk) - In January 2023, the company completed a public offering, issuing 9,615,384 shares of common stock at $13.00 per share, generating net proceeds of **$117.3 million**[29](index=29&type=chunk) - Management estimates that existing cash, cash equivalents, and marketable securities will fund operations for at least 12 months from the financial statement issuance date[31](index=31&type=chunk) [2. Summary of Significant Accounting Policies](index=11&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) No material changes were made to significant accounting policies, and new accounting standards had no material impact - The consolidated financial statements include Fulcrum Therapeutics, Inc and its wholly-owned subsidiary, Fulcrum Therapeutics Securities Corp, with all intercompany transactions eliminated[32](index=32&type=chunk) - No material changes occurred in significant accounting policies during the six months ended June 30, 2023[33](index=33&type=chunk) - The company adopted ASU No 2016-13 (Credit Losses) and ASU No 2019-12 (Income Taxes) effective January 1, 2023, with no material impact on financial position or results[36](index=36&type=chunk)[37](index=37&type=chunk) [3. Fair Value Measurements](index=12&type=section&id=3.%20Fair%20Value%20Measurements) The company's financial assets, primarily cash equivalents and marketable securities, are measured at fair value using Level 2 inputs Fair Value of Financial Assets | Asset Type (in thousands) | June 30, 2023 Total Fair Value | December 31, 2022 Total Fair Value | | :------------------------ | :----------------------------- | :------------------------------- | | Cash Equivalents | $33,966 | $35,098 | | Marketable Securities | $244,198 | $167,823 | | Total | $278,164 | $202,921 | - The majority of financial assets are measured at fair value using **Level 2 inputs** (observable inputs other than quoted prices)[38](index=38&type=chunk) - There were no transfers between fair value levels during the three and six months ended June 30, 2023[38](index=38&type=chunk) [4. Cash Equivalents and Marketable Securities](index=13&type=section&id=4.%20Cash%20Equivalents%20and%20Marketable%20Securities) The company holds a significant portfolio of marketable securities, with a large portion in an unrealized loss position Fair Value of Cash Equivalents and Marketable Securities | Asset Type (in thousands) | June 30, 2023 Fair Value | December 31, 2022 Fair Value | | :------------------------ | :----------------------- | :--------------------------- | | Cash Equivalents | $33,966 | $35,098 | | Marketable Securities | $244,198 | $167,823 | | Total | $278,164 | $202,921 | - As of June 30, 2023, the company held 91 debt securities in an unrealized loss position for less than 12 months, with an aggregate fair value of **$222.2 million**[39](index=39&type=chunk) - The company did not record any credit-related impairments for marketable securities, as it has the intent and ability to hold debt securities until recovery[40](index=40&type=chunk) [5. Property and Equipment, Net](index=14&type=section&id=5.%20Property%20and%20Equipment%2C%20Net) Net property and equipment decreased slightly due to depreciation expense outpacing new acquisitions Property and Equipment Breakdown | Category (in thousands) | June 30, 2023 | December 31, 2022 | | :---------------------- | :------------ | :---------------- | | Lab equipment | $9,475 | $9,057 | | Leasehold improvements | $7,102 | $7,102 | | Total Property and Equipment, Net | $6,161 | $6,906 | - Property and equipment, net, decreased by **$0.7 million** from December 31, 2022, to June 30, 2023[41](index=41&type=chunk) - Depreciation expense for the six months ended June 30, 2023, was **$1.1 million**, a slight decrease from $1.2 million in the prior year period[41](index=41&type=chunk) [6. Additional Balance Sheet Detail](index=14&type=section&id=6.%20Additional%20Balance%20Sheet%20Detail) Accrued expenses decreased primarily due to lower R&D and payroll accruals, while interest income receivable increased Selected Balance Sheet Accounts | Category (in thousands) | June 30, 2023 | December 31, 2022 | | :---------------------- | :------------ | :---------------- | | Prepaid expenses and other current assets | $4,127 | $4,369 | | Accrued expenses and other current liabilities | $7,875 | $9,551 | - Prepaid expenses decreased, while interest income receivable increased significantly from **$852 thousand to $1.4 million**[42](index=42&type=chunk) - Accrued expenses and other current liabilities decreased by **$1.7 million**, primarily due to lower payroll and benefits and external research and development accruals[42](index=42&type=chunk) [7. Preferred Stock](index=14&type=section&id=7.%20Preferred%20Stock) The company has authorized preferred stock but has not issued any shares - As of June 30, 2023, and December 31, 2022, the company had **5,000,000 shares** of undesignated preferred stock authorized, with no shares issued or outstanding[43](index=43&type=chunk) [8. Common Stock](index=14&type=section&id=8.%20Common%20Stock) The number of common shares outstanding increased significantly following a public offering in January 2023 - As of June 30, 2023, **61,822,554 shares** of common stock were issued and outstanding, up from 52,099,211 shares at December 31, 2022[15](index=15&type=chunk) - The increase in outstanding shares is primarily due to the public offering in January 2023[29](index=29&type=chunk) Shares Reserved for Future Issuance | Shares Reserved for Future Issuance | June 30, 2023 | December 31, 2022 | | :---------------------------------- | :------------ | :---------------- | | Outstanding stock options | 10,114,591 | 6,504,080 | | Future issuance under 2019 Stock Incentive Plan | 2,512,307 | 1,941,054 | | Future issuance under 2022 Inducement Stock Incentive Plan | 1,482,845 | 329,880 | [9. Stock-based Compensation Expense](index=15&type=section&id=9.%20Stock-based%20Compensation%20Expense) Stock-based compensation expense increased year-over-year, with a significant amount of unrecognized expense remaining Stock-based Compensation Breakdown | Stock-based Compensation (in thousands) | 3 Months Ended Jun 30, 2023 | 3 Months Ended Jun 30, 2022 | 6 Months Ended Jun 30, 2023 | 6 Months Ended Jun 30, 2022 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | General and administrative | $2,391 | $2,076 | $5,799 | $4,541 | | Research and development | $972 | $803 | $1,817 | $2,185 | | Total | $3,363 | $2,879 | $7,616 | $6,726 | - The company has several stock incentive plans (2016, 2019, and 2022 Inducement Plan) and an Employee Stock Purchase Plan (ESPP)[48](index=48&type=chunk)[49](index=49&type=chunk)[51](index=51&type=chunk)[58](index=58&type=chunk) - Total stock-based compensation expense increased by **$0.5 million** for the three months and **$0.9 million** for the six months ended June 30, 2023, compared to the prior year periods[57](index=57&type=chunk) - As of June 30, 2023, unrecognized stock-based compensation expense totaled **$37.8 million**, expected to be recognized over a weighted average period of 3.25 years[57](index=57&type=chunk) [10. Collaboration and License Agreements](index=17&type=section&id=10.%20Collaboration%20and%20License%20Agreements) Collaboration revenue is primarily generated from the MyoKardia agreement, following the termination of the Acceleron agreement - The Acceleron Collaboration Agreement terminated effective October 1, 2022, resulting in no collaboration revenue from this agreement in 2023[60](index=60&type=chunk)[61](index=61&type=chunk) - Under the MyoKardia Collaboration Agreement, the company recognized **$0.9 million** and **$1.2 million** in collaboration revenue for the three and six months ended June 30, 2023, respectively[79](index=79&type=chunk) - MyoKardia made a **$10.0 million** upfront payment and **$2.5 million** prepaid research funding in July 2020, and the company achieved a **$2.5 million** preclinical milestone[66](index=66&type=chunk) - The MyoKardia agreement includes potential milestone payments up to **$298.5 million** per target and tiered royalties on net sales[66](index=66&type=chunk) [11. Right of Reference and License Agreement (GSK)](index=20&type=section&id=11.%20Right%20of%20Reference%20and%20License%20Agreement) The company's agreement with GSK for losmapimod includes significant potential milestone payments and royalties - The company has an exclusive worldwide license from GSK to develop and commercialize losmapimod[80](index=80&type=chunk) - The agreement includes potential milestone payments up to **$37.5 million** (clinical/regulatory) and **$60.0 million** (sales), plus tiered royalties on net sales[81](index=81&type=chunk) - A **$5.0 million** clinical milestone was achieved during Q2 2022[81](index=81&type=chunk) [12. Leases](index=21&type=section&id=12.%20Leases) The company holds operating leases for its corporate headquarters and additional office space with varying expiration dates Lease Liability Summary | Lease Liability (in thousands) | 26 Landsdowne Street | 125 Sidney Street | | :----------------------------- | :------------------- | :---------------- | | Total minimum lease payments | $13,453 | $631 | | Total lease liability | $11,540 | $620 | - The company leases corporate headquarters at 26 Landsdowne Street (expiring June 2028) and office space at 125 Sidney Street (expiring March 2024)[84](index=84&type=chunk)[86](index=86&type=chunk) - Operating lease expense for the six months ended June 30, 2023, was approximately **$0.9 million** for 26 Landsdowne Street and **$0.4 million** for 125 Sidney Street[84](index=84&type=chunk)[86](index=86&type=chunk) [13. Commitments and Contingencies](index=22&type=section&id=13.%20Commitments%20and%20Contingencies) The company is defending against a class action lawsuit related to the clinical hold on its FTX-6058 program - The company is subject to a class action lawsuit (Celano v Fulcrum Therapeutics, Inc, et al) filed in April 2023, alleging securities law violations related to the FTX-6058 clinical hold[89](index=89&type=chunk) - The lawsuit seeks compensatory damages for an allegedly inflated stock price between March 3, 2022, and March 8, 2023, and attorneys' fees[89](index=89&type=chunk) - The company intends to vigorously defend against this litigation and has not incurred material costs related to legal proceedings during the reporting period[89](index=89&type=chunk)[90](index=90&type=chunk) [14. Defined Contribution Plan](index=22&type=section&id=14.%20Defined%20Contribution%20Plan) The company maintains a 401(k) plan for employees with consistent contribution levels year-over-year - The company has a 401(k) Plan for eligible employees[91](index=91&type=chunk) - Contributions to the 401(k) Plan were **$0.2 million** for the three months and **$0.4 million** for the six months ended June 30, 2023, consistent with the prior year[91](index=91&type=chunk) [15. Net Loss per Share](index=22&type=section&id=15.%20Net%20Loss%20per%20Share) All potential common stock equivalents were excluded from diluted net loss per share calculations due to their anti-dilutive effect Anti-Dilutive Securities | Common Stock Equivalents | 3 Months Ended Jun 30, 2023 | 3 Months Ended Jun 30, 2022 | 6 Months Ended Jun 30, 2023 | 6 Months Ended Jun 30, 2022 | | :----------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Outstanding stock options | 10,114,591 | 6,137,740 | 10,114,591 | 6,137,740 | | Unvested restricted stock units | 84,942 | 115,189 | 84,942 | 115,189 | - All common stock equivalents were excluded from diluted net loss per share calculations due to their anti-dilutive effect[92](index=92&type=chunk) [16. Subsequent Events](index=22&type=section&id=16.%20Subsequent%20Events) The company entered into a new exclusive license agreement with CAMP4 Therapeutics after the reporting period - In July 2023, the company entered into a worldwide exclusive license agreement with CAMP4 Therapeutics Corporation for its Diamond Blackfan Anemia (DBA) program[93](index=93&type=chunk)[94](index=94&type=chunk) - Under the CAMP4 agreement, the company will make an undisclosed upfront payment and CAMP4 is eligible for up to **$35.0 million** in development/regulatory milestones and **$35.0 million** in sales milestones, plus tiered royalties[95](index=95&type=chunk) - The company is currently evaluating the accounting treatment for the CAMP4 license agreement[97](index=97&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=24&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes the company's financial condition, results of operations, clinical programs, and future funding needs [Overview](index=24&type=section&id=Overview) The company is advancing its lead candidate losmapimod while its FTX-6058 program remains on clinical hold - Fulcrum Therapeutics is a clinical-stage biopharmaceutical company focused on genetically defined rare diseases, with lead product candidates losmapimod (FSHD) and FTX-6058 (hemoglobinopathies)[100](index=100&type=chunk) - The Phase 3 clinical trial for losmapimod (REACH) is expected to complete enrollment in Q3 2023 and report topline data in Q4 2024[100](index=100&type=chunk) - The FTX-6058 program for SCD is currently on a **full clinical hold** by the FDA as of February 23, 2023, and the IND for beta thalassemia was withdrawn[101](index=101&type=chunk) - The company's proprietary product engine, FulcrumSeek, is used to identify and validate cellular drug targets for genetically defined diseases[103](index=103&type=chunk) - Net losses were **$23.8 million** and **$48.6 million** for the three and six months ended June 30, 2023, respectively, with an accumulated deficit of **$460.9 million**[105](index=105&type=chunk) [Components of Results of Operations](index=25&type=section&id=Components%20of%20Results%20of%20Operations) This section breaks down the key drivers of revenue and operating expenses [Revenue](index=25&type=section&id=Revenue) Collaboration revenue decreased due to the termination of the Acceleron agreement and lower revenue from MyoKardia - The company has not generated product sales revenue and does not expect to for several years[109](index=109&type=chunk) - Collaboration revenue decreased due to the termination of the Acceleron agreement (effective Oct 2022) and lower revenue from the MyoKardia agreement[110](index=110&type=chunk)[113](index=113&type=chunk) Collaboration Revenue Breakdown | Collaboration Revenue (in thousands) | 3 Months Ended Jun 30, 2023 | 3 Months Ended Jun 30, 2022 | 6 Months Ended Jun 30, 2023 | 6 Months Ended Jun 30, 2022 | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Acceleron | $0 | $100 | $0 | $1,000 | | MyoKardia | $900 | $1,700 | $1,200 | $3,500 | [Operating Expenses](index=27&type=section&id=Operating%20Expenses) Operating expenses are primarily driven by research and development and general and administrative costs [Research and Development Expenses](index=27&type=section&id=Research%20and%20Development%20Expenses) R&D expenses decreased significantly year-over-year, driven by a prior-year milestone payment and the FTX-6058 clinical hold - R&D expenses decreased by **$7.2 million** (3 months YoY) and **$8.3 million** (6 months YoY)[129](index=129&type=chunk)[136](index=136&type=chunk) - The decrease was primarily due to a **$5.0 million** milestone payment to GSK in Q2 2022 and reduced costs for FTX-6058 following its clinical hold[130](index=130&type=chunk)[138](index=138&type=chunk) - R&D expenses are expected to increase significantly in future periods as clinical trials advance and discovery efforts expand[123](index=123&type=chunk) R&D Expense Breakdown | R&D Expenses (in thousands) | 3 Months Ended Jun 30, 2023 | 3 Months Ended Jun 30, 2022 | 6 Months Ended Jun 30, 2023 | 6 Months Ended Jun 30, 2022 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | External R&D | $10,353 | $16,416 | $19,903 | $24,793 | | Employee compensation | $5,037 | $5,311 | $9,844 | $11,531 | | Total R&D Expenses | $17,849 | $25,019 | $34,564 | $42,850 | [General and Administrative Expenses](index=28&type=section&id=General%20and%20Administrative%20Expenses) G&A expenses remained relatively flat year-over-year, with lower professional services costs offsetting higher compensation - G&A expenses decreased by **$0.8 million** (3 months YoY) and remained relatively flat (less than $0.1 million decrease) for the six months YoY[132](index=132&type=chunk)[137](index=137&type=chunk) - The decrease was primarily due to lower professional services costs (consulting, insurance, legal), offset by increased employee compensation and facility costs[132](index=132&type=chunk)[137](index=137&type=chunk) G&A Expense Breakdown | G&A Expenses (in thousands) | 3 Months Ended Jun 30, 2023 | 3 Months Ended Jun 30, 2022 | 6 Months Ended Jun 30, 2023 | 6 Months Ended Jun 30, 2022 | | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Employee compensation | $5,710 | $5,690 | $12,977 | $11,516 | | Professional services | $3,137 | $4,125 | $5,955 | $8,046 | | Total G&A Expenses | $10,323 | $11,098 | $21,843 | $21,857 | [Other Income, Net](index=29&type=section&id=Other%20Income%2C%20Net) Other income increased substantially due to higher interest rates and a larger cash and investment balance - Other income, net, increased significantly by **$3.3 million** (3 months YoY) and **$6.4 million** (6 months YoY)[133](index=133&type=chunk)[139](index=139&type=chunk) - This increase was primarily due to a higher rate of return on cash, cash equivalents, and marketable securities, coupled with an increased average cash and investment balance[133](index=133&type=chunk)[139](index=139&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) This section provides a comparative analysis of the company's operational results for the three and six-month periods [Comparison of the Three Months ended June 30, 2023 and 2022](index=29&type=section&id=Comparison%20of%20the%20Three%20Months%20ended%20June%2030%2C%202023%20and%202022) Net loss decreased significantly due to lower R&D expenses and higher other income Three-Month Operational Comparison | Metric (in thousands) | Jun 30, 2023 | Jun 30, 2022 | Change ($) | | :-------------------- | :----------- | :----------- | :--------- | | Collaboration revenue | $880 | $1,882 | $(1,002) | | R&D expenses | $17,849 | $25,019 | $(7,170) | | G&A expenses | $10,323 | $11,098 | $(775) | | Net loss | $(23,783) | $(34,070) | $10,287 | - Net loss decreased by **$10.3 million**, primarily driven by a **$7.2 million** reduction in R&D expenses and a **$3.3 million** increase in other income, net[127](index=127&type=chunk)[129](index=129&type=chunk)[133](index=133&type=chunk) [Comparison of the Six Months ended June 30, 2023 and 2022](index=30&type=section&id=Comparison%20of%20the%20Six%20Months%20ended%20June%2030%2C%202023%20and%202022) Net loss narrowed due to reduced R&D spending and higher other income, which offset lower collaboration revenue Six-Month Operational Comparison | Metric (in thousands) | Jun 30, 2023 | Jun 30, 2022 | Change ($) | | :-------------------- | :----------- | :----------- | :--------- | | Collaboration revenue | $1,175 | $4,474 | $(3,299) | | R&D expenses | $34,564 | $42,850 | $(8,286) | | G&A expenses | $21,843 | $21,857 | $(14) | | Net loss | $(48,562) | $(59,998) | $11,436 | - Net loss decreased by **$11.4 million**, primarily due to an **$8.3 million** reduction in R&D expenses and a **$6.4 million** increase in other income, net, partially offset by a **$3.3 million** decrease in collaboration revenue[134](index=134&type=chunk)[136](index=136&type=chunk)[139](index=139&type=chunk) [Liquidity and Capital Resources](index=32&type=section&id=Liquidity%20and%20Capital%20Resources) The company believes its current capital is sufficient to fund operations into mid-2025 but will require future financing - As of June 30, 2023, the company had **$278.2 million** in cash, cash equivalents, and marketable securities[140](index=140&type=chunk) - The company expects existing capital to fund operating expenses and capital expenditure requirements into **mid-2025**[147](index=147&type=chunk) - Future funding requirements depend on clinical trial progress, R&D expansion, regulatory approvals, manufacturing, and potential collaborations[148](index=148&type=chunk) - The company anticipates financing future cash needs through equity offerings, debt financings, collaborations, strategic alliances, and licensing arrangements[150](index=150&type=chunk) [Critical Accounting Policies and Estimates](index=34&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) No material changes to critical accounting policies were reported during the period - No material changes to critical accounting policies were reported during the three months ended June 30, 2023, from those described in the Annual Report on Form 10-K[152](index=152&type=chunk) [Recently Issued Accounting Pronouncements](index=34&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) Information on recently issued accounting pronouncements is available in the notes to the financial statements - A description of recently issued accounting pronouncements is disclosed in Note 2 to the consolidated financial statements[153](index=153&type=chunk) [Emerging Growth Company Status](index=34&type=section&id=Emerging%20Growth%20Company%20Status) The company utilizes the extended transition period for new accounting standards available to emerging growth companies - The company is an 'emerging growth company' (EGC) and has elected not to opt out of the extended transition period for complying with new or revised accounting standards[154](index=154&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exempt from market risk disclosure requirements as a smaller reporting company - The company is a smaller reporting company and is not required to provide disclosures about market risk[155](index=155&type=chunk) [Item 4. Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal financial reporting controls were effective as of the period end [Evaluation of Disclosure Controls and Procedures](index=35&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Disclosure controls and procedures were deemed effective at a reasonable assurance level - Management, including the CEO, concluded that disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2023[157](index=157&type=chunk) [Changes in Internal Control over Financial Reporting](index=35&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) No material changes in internal control over financial reporting occurred during the quarter - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2023[158](index=158&type=chunk) [PART II. OTHER INFORMATION](index=36&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part covers legal proceedings, risk factors, and other required disclosures [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company faces a class action lawsuit alleging securities violations related to the clinical hold on its FTX-6058 program - A class action complaint was filed on April 28, 2023, alleging violations of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934[161](index=161&type=chunk) - The lawsuit is related to the FDA's clinical hold on the IND application for FTX-6058 for sickle cell disease, announced in February 2023[161](index=161&type=chunk) - The plaintiffs seek compensatory damages for an allegedly inflated stock price between March 3, 2022, and March 8, 2023, and attorneys' fees[161](index=161&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks that could materially affect the company's business, financial condition, and operations [Risks Related to our Financial Position and Need for Additional Capital](index=36&type=section&id=Risks%20Related%20to%20our%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) The company's history of losses and need for substantial future funding pose significant financial risks - The company has incurred significant losses since inception (**$460.9 million** accumulated deficit as of June 30, 2023) and expects to continue incurring losses, potentially never achieving profitability[163](index=163&type=chunk) - Substantial additional funding will be required to support ongoing and planned clinical trials (losmapimod, FTX-6058), R&D, and potential commercialization efforts[167](index=167&type=chunk) - Inability to raise capital when needed could force delays, reductions, or elimination of product development programs or commercialization efforts[167](index=167&type=chunk) - Adverse developments in the financial services industry, such as bank failures, could impair access to funding and adversely affect business operations[189](index=189&type=chunk)[190](index=190&type=chunk) [Risks Related to the Discovery and Development of our Product Candidates](index=41&type=section&id=Risks%20Related%20to%20the%20Discovery%20and%20Development%20of%20our%20Product%20Candidates) The early stage of development and the clinical hold on FTX-6058 create substantial uncertainty for product candidates - The company is early in development with only two clinical-stage candidates (losmapimod, FTX-6058), and **FTX-6058 is currently on clinical hold**, posing significant commercialization risks[191](index=191&type=chunk) - Clinical drug development is lengthy, expensive, and uncertain; preclinical and early clinical trial results may not predict future success, and serious adverse events could halt development[195](index=195&type=chunk)[209](index=209&type=chunk) - The FDA placed a clinical hold on FTX-6058 due to hematological malignancies in nonclinical toxicology studies, which may prevent or delay its clinical development[210](index=210&type=chunk) - Challenges in patient enrollment for clinical trials, especially for rare diseases, could delay or prevent regulatory approvals[205](index=205&type=chunk)[208](index=208&type=chunk) [Risks Related to the Commercialization of our Product Candidates](index=47&type=section&id=Risks%20Related%20to%20the%20Commercialization%20of%20our%20Product%20Candidates) The company faces significant hurdles in market acceptance, competition, manufacturing, and pricing for its potential products - Even if approved, product candidates may fail to achieve market acceptance by physicians, patients, and payors, limiting commercial success[218](index=218&type=chunk) - The company lacks its own sales, marketing, and distribution capabilities and faces risks if unable to establish them or secure effective third-party agreements[220](index=220&type=chunk)[222](index=222&type=chunk) - Substantial competition from larger pharmaceutical and biotechnology companies, with greater resources, poses a significant threat to market share[223](index=223&type=chunk)[227](index=227&type=chunk) - Reliance on contract manufacturing organizations (CMOs) for product supply introduces risks of delays, quality issues, or inability to meet demand[231](index=231&type=chunk)[232](index=232&type=chunk) - Unfavorable pricing regulations, inadequate third-party coverage, or healthcare reform initiatives could harm profitability and market access[241](index=241&type=chunk)[242](index=242&type=chunk) [Risks Related to our Dependence on Third Parties](index=53&type=section&id=Risks%20Related%20to%20our%20Dependence%20on%20Third%20Parties) The company's reliance on CROs and collaboration partners introduces risks related to performance and control - Reliance on third-party CROs to conduct clinical trials reduces control and poses risks of unsatisfactory performance or missed deadlines[250](index=250&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk) - Collaborations with third parties, such as MyoKardia, may not be successful, and the company may have limited control over collaborators' efforts and resource allocation[254](index=254&type=chunk)[255](index=255&type=chunk) - Failure to establish or maintain collaborations could force the company to alter development and commercialization plans, potentially requiring additional capital or expertise[262](index=262&type=chunk) [Risks Related to our Intellectual Property](index=55&type=section&id=Risks%20Related%20to%20our%20Intellectual%20Property) Protecting intellectual property is critical and faces challenges from patent prosecution, litigation, and license compliance - Inability to obtain, maintain, enforce, and protect patent protection for technology and product candidates could allow competitors to commercialize similar products[263](index=263&type=chunk)[264](index=264&type=chunk) - Patent prosecution is expensive and complex, with uncertain outcomes regarding issuance, scope, validity, and enforceability[265](index=265&type=chunk)[266](index=266&type=chunk) - Third parties may allege infringement of their intellectual property rights, leading to costly litigation, potential damages, or the need to obtain licenses on unfavorable terms[285](index=285&type=chunk)[290](index=290&type=chunk) - Failure to comply with obligations under intellectual property licenses could result in termination of agreements and loss of critical intellectual property rights[295](index=295&type=chunk) - Inability to protect trade secrets and proprietary information could harm the company's business and competitive position[309](index=309&type=chunk) [Risks Related to Regulatory Approval of our Product Candidates and Other Legal Compliance Matters](index=65&type=section&id=Risks%20Related%20to%20Regulatory%20Approval%20of%20our%20Product%20Candidates%20and%20Other%20Legal%20Compliance%20Matters) The company faces a complex, lengthy, and uncertain regulatory landscape for product approval and post-marketing compliance - The marketing approval process is expensive, time-consuming, and uncertain; delays or failure to obtain approvals would materially impair revenue generation[312](index=312&type=chunk)[316](index=316&type=chunk) - Orphan drug designation or exclusivity may not be obtained or, if granted, may not effectively prevent competition[320](index=320&type=chunk)[323](index=323&type=chunk) - Special designations like fast track or breakthrough therapy do not guarantee faster development, review, or approval[324](index=324&type=chunk)[327](index=327&type=chunk) - Any approved product will be subject to post-marketing restrictions, and non-compliance with regulatory requirements could lead to substantial penalties or market withdrawal[334](index=334&type=chunk)[336](index=336&type=chunk) - Compliance with global privacy and data security requirements (e g, GDPR, CCPA) could result in additional costs, liabilities, or significant fines[342](index=342&type=chunk)[347](index=347&type=chunk) [Risks Related to Employee Matters and Managing Growth](index=73&type=section&id=Risks%20Related%20to%20Employee%20Matters%20and%20Managing%20Growth) Retaining key personnel and managing expected growth are critical to the company's future success - Future success depends on retaining key executives and attracting/retaining qualified personnel, especially given recent executive transitions and a workforce reduction[365](index=365&type=chunk)[366](index=366&type=chunk) - Expected significant growth in employees and operations (drug development, regulatory, sales/marketing) may lead to difficulties in management and could disrupt operations[367](index=367&type=chunk) [Risks Related to our Common Stock](index=74&type=section&id=Risks%20Related%20to%20our%20Common%20Stock) Common stock ownership is concentrated, and its price is subject to high volatility and market conditions - Executive officers, directors, and principal stockholders collectively own approximately **48.9%** of capital stock, enabling them to control or significantly influence matters submitted to stockholders[368](index=368&type=chunk) - Provisions in corporate charter documents and Delaware law could make company acquisition more difficult and prevent attempts to replace management[370](index=370&type=chunk)[371](index=371&type=chunk) - The price of common stock is volatile and can fluctuate substantially due to various factors, including clinical trial results, regulatory developments, and market conditions[373](index=373&type=chunk)[374](index=374&type=chunk) - As an 'emerging growth company,' reduced disclosure requirements may make common stock less attractive to investors, potentially leading to lower trading volume and increased price volatility[378](index=378&type=chunk)[379](index=379&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=78&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable for the reporting period - This item is not applicable[387](index=387&type=chunk) [Item 3. Defaults Upon Senior Securities](index=78&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable for the reporting period - This item is not applicable[388](index=388&type=chunk) [Item 4. Mine Safety Disclosures](index=78&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable for the reporting period - This item is not applicable[389](index=389&type=chunk) [Item 5. Other Information](index=78&type=section&id=Item%205.%20Other%20Information) No other information is reported under this item - No other information is reported[390](index=390&type=chunk) [Item 6. Exhibits](index=79&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q - Exhibits include the Restated Certificate of Incorporation, Amended and Restated Bylaws, First Amendment to Collaboration and License Agreement with MyoKardia, and Employment Agreement with Alex C Sapir[394](index=394&type=chunk) - Certifications of the Principal Executive Officer and Principal Financial Officer are included, as well as Inline XBRL Instance and Taxonomy Extension Documents[394](index=394&type=chunk) [Signatures](index=80&type=section&id=Signatures) The report is duly signed on behalf of the company by its President and Chief Executive Officer - The report was signed by Alex C Sapir, President and Chief Executive Officer (Principal Executive Officer and Principal Financial Officer) on August 3, 2023[398](index=398&type=chunk)

Fulcrum Therapeutics, Inc. (NASDAQ:FULC) Q1 2023 Earnings Conference Call May 15, 2023 8:00 AM ET Company Participants Chris Calabrese - LifeSci Advisors, LLC Robert J. Gould - President and CEO Iain Fraser - Interim Chief Medical Officer Conference Call Participants Edward Tenthoff - Piper Sandler Joseph Schwartz - SVB Securities Unidentified Analyst - Goldman Sachs Matthew Biegler - Oppenheimer Judah Frommer - Crédit Suisse Operator Good morning and welcome to the Fulcrum Therapeutics First Quarter 2023 F ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | | --- | --- | --- | | Common stock, par value $0.001 per share | FULC | The Nasdaq Global Market | or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Fo ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-38978 FULCRUM THERAPEUTICS, INC. (Exact name of registrant as specified in its Charter) | Delaware | 47-4839948 | | --- | --- | | (St ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38978 FULCRUM THERAPEUTICS, INC. (Exact name of registrant as specified in its charter) Delaware 47-4839948 (State or other j ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38978 FULCRUM THERAPEUTICS, INC. (Exact Name of Registrant as Specified in its Charter) Delaware 47-4839948 (State or other jurisd ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38978 FULCRUM THERAPEUTICS, INC. (Exact Name of Registrant as Specified in its Charter) Delaware 47-4839948 (State or other juris ...

Financial Performance - The company reported a net loss of $80.8 million for the year ended December 31, 2021, and an accumulated deficit of $302.5 million as of the same date[16]. Clinical Trials and Product Development - The ongoing clinical trials for losmapimod and FTX-6058 are critical to the company's future financial results and product development plans[11]. - The Phase 2b clinical trial, ReDUX4, involved 80 patients and aimed to evaluate the change in DUX4-driven gene expression, with secondary endpoints including muscle health and patient-reported outcomes[22]. - The Phase 3 trial, REACH, is expected to enroll approximately 230 adults with FSHD and will evaluate the efficacy and safety of losmapimod over a 48-week treatment period[25]. - The company plans to initiate a Phase 3 trial for losmapimod in FSHD in Q2 2022, aiming for rapid development and regulatory approval[42]. - The ongoing ReDUX4 open label extension allows long-term treatment with losmapimod, including clinical assessments every three months[73]. - The Phase 1b clinical trial for FTX-6058 in people with SCD was initiated in Q4 2021, with initial data expected in Q2 2022[37]. - The Phase 1 trial included various dosing cohorts, with healthy volunteers receiving doses ranging from 2mg to 60mg[28]. - The company plans to nominate its next development candidate by the end of the first quarter of 2023[19]. Drug Candidates and Mechanisms - Losmapimod targets p38α/ß and aims to treat FSHD, with an estimated patient population of 16,000 to 38,000 in the U.S. and 300,000 to 780,000 globally[20]. - FTX-6058 is an investigational oral HbF inducer in development for SCD and other hemoglobinopathies, designed to upregulate fetal hemoglobin[26]. - FTX-6058 demonstrated robust HbF elevation, reaching approximately 30% of total hemoglobin in preclinical studies, significantly higher than hydroxyurea[27]. - FTX-6058 showed a greater than mean 2-fold induction in HBG mRNA starting with the 6mg dose, which is associated with significantly improved outcomes in SCD[32]. - Losmapimod, the lead product candidate, demonstrated a 38-fold decrease in DUX4-driven gene expression in patients with the highest baseline levels compared to a 5.4-fold decrease in the placebo group[67]. Regulatory Engagement and Designations - The company has engaged with regulatory agencies to align on the design of the Phase 3 trial for losmapimod[25]. - The FDA granted orphan drug designation to losmapimod in January 2020, and fast track designation in May 2021 for the treatment of FSHD[61]. Manufacturing and Development Challenges - The company relies on contract manufacturing organizations for product candidate manufacturing, which could impact development timelines[16]. - The ongoing COVID-19 pandemic may continue to affect the company's clinical trials and overall business operations[17]. - The company has engaged a contract manufacturing organization to produce losmapimod tablets and has sufficient quantities for ongoing Phase 2 clinical trials[182]. Market Landscape and Competition - The biotechnology and pharmaceutical industries are characterized by intense competition, with competitors having greater financial resources and expertise[186]. - The company faces competition from existing therapies and new therapies that may become available, which could impact its market position[188]. - There are currently no approved therapies for the treatment of FSHD, and the company is not aware of any product candidate in clinical development with the same mechanism of action as losmapimod[190][191]. - FTX-6058 faces competition from various therapeutic approaches for sickle cell disease (SCD) including gene therapies and PKR activators in clinical trials[194]. Collaborations and Agreements - The company has entered into a right of reference and license agreement with GlaxoSmithKline, which includes milestone payments aggregating up to $37.5 million and royalties ranging from mid single-digit to low double-digit percentages based on annual net sales[153]. - A collaboration and license agreement with Acceleron includes an upfront payment of $10 million and potential milestone payments of up to $145 million based on sales milestones for products directed to identified targets[162]. - The collaboration with MyoKardia aims to identify biological targets relevant to genetically defined cardiomyopathies, granting MyoKardia an exclusive worldwide license for research and development[164]. Research and Development Initiatives - The company is leveraging FulcrumSeek to discover drug targets for rare genetic diseases, with a focus on muscular, hematologic, and neurologic disorders[38]. - The company has made significant enhancements to its FulcrumSeek platform, enabling drug target screening at scale in physiologically relevant assay systems[134]. - The company is focused on drug target validation to establish a robust link between identified drug targets and modulation of root cause gene expression, utilizing diverse pharmacological tools[143]. - The company has initiated medicinal chemistry and drug discovery activities to advance development candidates suitable for clinical trials, optimizing characteristics such as potency and safety[144]. Patient Population and Disease Prevalence - The estimated prevalence of Facioscapulohumeral muscular dystrophy (FSHD) in the U.S. is between 16,000 to 38,000 patients, with a significant portion potentially undiagnosed due to the lack of approved treatments[54]. - The estimated prevalence of SCD in the U.S. is around 100,000 individuals, with a global incidence of approximately 300,000 births annually[99]. - β-thalassemia affects approximately 40,000 babies born worldwide each year, with 25,000 requiring blood transfusions due to severe anemia[108]. Safety and Efficacy Data - In the Phase 1 clinical trial, FTX-6058 was well-tolerated with no serious adverse events reported, supporting once-daily dosing with a mean half-life of approximately 6-7 hours[30]. - The MAD cohorts exhibited a 75-95% reduction in H3K27me3 after 14 days of treatment, indicating robust target engagement[30]. - Secondary endpoints indicated non-statistically significant trends of slower progression and meaningful improvements (12-27%) in muscle strength for losmapimod-treated patients compared to placebo[69]. - The MAD cohorts showed time- and dose-dependent HBG mRNA induction, with persistent induction observed for 7-10 days post-treatment[120].

WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION For the transition period from to Commission File Number: 001-38978 FULCRUM THERAPEUTICS, INC. (Exact Name of Registrant as Specified in its Charter) Delaware 47-4839948 (State or other j ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-38978 FULCRUM THERAPEUTICS, INC. (Exact Name of Registrant as Specified in its Charter) Delaware 47-4839948 (State or other jurisd ...