Fulcrum Therapeutics(US:FULC)2025-05-01 11:10PART I. FINANCIAL INFORMATION Financial Statements This section presents unaudited consolidated financial statements for Q1 2025, reporting a net loss of $17.7 million and an accumulated deficit of $537.1 million Consolidated Balance Sheet Highlights (Unaudited, in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $42,178 | $58,212 | | Marketable securities | $184,425 | $182,809 | | Total Assets | $242,649 | $260,718 | | Total current liabilities | $8,100 | $11,044 | | Total Liabilities | $14,163 | $17,684 | | Accumulated deficit | $(537,053) | $(519,398) | | Total Stockholders' Equity | $228,486 | $243,034 | Consolidated Statements of Operations (Unaudited, in thousands, except per share data) | Metric | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Research and development | $13,404 | $19,773 | | General and administrative | $6,999 | $10,061 | | Loss from operations | $(20,403) | $(29,834) | | Net loss | $(17,655) | $(26,870) | | Net loss per share, basic and diluted | $(0.28) | $(0.43) | Consolidated Statements of Cash Flows (Unaudited, in thousands) | Cash Flow Activity | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(15,257) | $(25,284) | | Net cash (used in) provided by investing activities | $(777) | $38,128 | | Net cash provided by financing activities | $0 | $1,651 | - The company expects its existing cash, cash equivalents, and marketable securities to be sufficient to fund operating expenses and capital expenditure requirements for at least 12 months from the date of the financial statements33 - The collaboration agreement with Sanofi for losmapimod was terminated for convenience by Sanofi, effective April 17, 2025, following the discontinuation of the drug's development. The company is not entitled to any further payments6667 - MyoKardia elected to terminate its collaboration and license agreement for convenience, with the termination becoming effective on June 26, 2025. The company will not be entitled to further milestone or royalty payments7677 - In September 2024, the company implemented a restructuring plan to focus on pociredir and DBA, reducing its workforce from 80 to 51 full-time employees94 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's focus on developing pociredir for SCD, with Q1 2025 net loss decreasing to $17.7 million due to reduced R&D expenses - The company is a clinical-stage biopharmaceutical company focused on developing small molecules for genetically defined rare diseases, with its lead candidate, pociredir, being developed for Sickle Cell Disease (SCD)101 - Clinical trial updates for pociredir: The Phase 1b trial was reinitiated in Q4 2023. The 12 mg dose cohort is fully enrolled, with data expected in early Q3 2025. The 20 mg dose cohort has been initiated, with data expected by the end of 2025102 - The company plans to submit an Investigational New Drug (IND) application for Diamond-Blackfan Anemia (DBA) during the fourth quarter of 2025103 Comparison of Operating Results (in thousands) | Item | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | Change ($) | | :--- | :--- | :--- | :--- | | Research and development | $13,404 | $19,773 | $(6,369) | | General and administrative | $6,999 | $10,061 | $(3,062) | | Total operating expenses | $20,403 | $29,834 | $(9,431) | | Net loss | $(17,655) | $(26,870) | $9,215 | - R&D expenses decreased by $6.4 million, primarily due to a $4.9 million decrease in external costs from the suspension of the losmapimod program and a $1.7 million decrease in employee compensation costs from lower headcount127129 - G&A expenses decreased by $3.1 million, mainly due to a $1.4 million decrease in employee compensation costs and a $1.1 million decrease in professional services costs130135 - As of March 31, 2025, the company had $226.6 million in cash, cash equivalents, and marketable securities, which is expected to fund operations into at least 2027108131139 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, Fulcrum Therapeutics is not required to provide quantitative and qualitative disclosures about market risk146 Controls and Procedures Management concluded disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025147 - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls148 PART II. OTHER INFORMATION Legal Proceedings A securities class action lawsuit related to the pociredir clinical hold was dismissed in full by the court on March 27, 2025 - A securities class action lawsuit filed against the company and its officers, related to the clinical hold on pociredir, was dismissed in full by the court on March 27, 202515190 Risk Factors This section details significant risks including financial losses, funding needs, reliance on pociredir, clinical development uncertainties, competition, and intellectual property challenges Risks Related to Financial Position and Need for Additional Capital The company faces significant historical losses and requires substantial additional funding to advance product candidates, with current cash expected to fund operations into at least 2027 - The company has incurred significant losses since inception, with a net loss of $17.7 million for Q1 2025 and an accumulated deficit of $537.1 million as of March 31, 2025153 - Substantial additional funding is required to continue clinical development of pociredir and other candidates. Failure to raise capital could force delays, reductions, or elimination of programs156 - The company's cash, cash equivalents, and marketable securities of $226.6 million are expected to fund operations into at least 2027, but this estimate is based on assumptions that could prove wrong160 Risks Related to Discovery and Development of Product Candidates The company is early in development with one clinical candidate, pociredir, facing lengthy, expensive, and uncertain clinical processes and enrollment challenges - The company is early in its development efforts with only one product candidate, pociredir, in active clinical development after suspending the losmapimod program178 - Clinical drug development is a lengthy, expensive process with an uncertain outcome. The Phase 3 trial for losmapimod did not meet its primary endpoint, leading to its discontinuation183185 - In February 2023, the FDA placed a clinical hold on the IND for pociredir due to hematological malignancies in nonclinical studies. Although the hold was lifted in August 2023, future adverse events could halt or delay development196 - The company may experience difficulties enrolling patients in clinical trials for rare diseases, which could delay regulatory approvals. The revised protocol for the pociredir trial has more stringent criteria, making enrollment challenging190 Risks Related to Commercialization of Product Candidates Product candidates may not achieve market acceptance due to substantial competition, lack of sales infrastructure, reliance on CMOs, and small patient populations - The company faces substantial competition from major pharmaceutical companies and recently approved gene therapies for SCD, such as CASGEVY and LYFGENIA211213 - The company has no sales, marketing, or distribution infrastructure and establishing these capabilities is expensive and risky206207 - The company relies on contract manufacturing organizations (CMOs) for clinical and potential commercial supply, which creates risks related to supply delays, quality issues, and regulatory compliance218219 - The addressable patient populations for the company's target rare diseases are small, requiring it to capture a significant market share to achieve profitability216 Risks Related to Dependence on Third Parties The company relies on third-party CROs and collaborators, which reduces control and introduces risks of performance failures, delays, and potential conflicts of interest - The company relies on third-party contract research organizations (CROs) to conduct its clinical trials, which reduces control over these activities and may lead to delays if these parties do not perform satisfactorily237239 - Future collaborations with third parties for development or commercialization are subject to risks, including collaborators not performing as expected, delaying trials, or terminating agreements for convenience241244 - If the company cannot establish or maintain successful collaborations, it may have to alter its development plans, which could require additional capital and expertise that may not be available247249 Risks Related to Intellectual Property Success depends on obtaining and enforcing patent protection, an uncertain and expensive process, with risks of litigation, license non-compliance, and trade secret breaches - The company's success depends on its ability to obtain and maintain patent protection for its technology and product candidates, which is an expensive and uncertain process250251 - The company may be subject to litigation or other proceedings challenging its patent rights, which could result in invalidation or narrowing of its patents254268 - Failure to comply with obligations in license agreements could lead to the loss of important intellectual property rights282 - The company relies on trade secrets and confidentiality agreements, which may be breached, and protecting them can be difficult and costly295 Risks Related to Regulatory Approval and Legal Compliance Marketing approval is expensive and uncertain, with ongoing regulatory oversight and complex healthcare laws posing risks of delays, rejections, and significant penalties - The marketing approval process is expensive, time-consuming, and uncertain, and the company may not obtain approvals for its product candidates298301 - Even if orphan drug designation is obtained, it may not prevent competitors from getting approval for different drugs for the same condition or for the same drug if it is proven clinically superior308311 - The company's relationships with healthcare providers and payors are subject to fraud and abuse, false claims, and other healthcare laws, with violations potentially leading to criminal sanctions and civil penalties328330 - Compliance with global privacy and data security laws (e.g., GDPR, CCPA) is costly and complex, and failure to comply could result in significant fines and penalties331336 Risks Related to Employee Matters and Managing Growth Success depends on retaining key personnel amid intense competition and recent transitions, with future growth requiring significant managerial and financial resources - The company is highly dependent on its key executives and scientific teams and has experienced recent transitions in several leadership roles, including CEO, CFO, and CSO353354 - Competition for qualified personnel is intense, and the company's recent workforce reductions may make it a less attractive employer354 - Future growth in operations would require significant expansion of managerial, operational, and financial systems, which may be difficult to manage effectively356 Risks Related to Common Stock The company's stock price is volatile, with significant control by principal stockholders, anti-takeover provisions, and no anticipated cash dividends - As of April 24, 2025, executive officers, directors, and principal stockholders beneficially owned approximately 72.6% of the company's capital stock, giving them significant control357 - The company's stock price has been and is likely to continue to be volatile due to factors such as clinical trial results, regulatory developments, and market conditions363 - The company is a "smaller reporting company" and can rely on scaled disclosure requirements, which may make its common stock less attractive to some investors369 - The company does not anticipate paying cash dividends in the foreseeable future; capital appreciation will be the sole source of gain for stockholders374 Unregistered Sales of Equity Securities and Use of Proceeds This item is not applicable for the reporting period - Not applicable377 Defaults Upon Senior Securities This item is not applicable for the reporting period - Not applicable378 Mine Safety Disclosures This item is not applicable for the reporting period - Not applicable379 Other Information There is no other information to report for this period - None380 Exhibits This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and Inline XBRL documents - Exhibits filed include CEO and CFO certifications pursuant to Sarbanes-Oxley Act Sections 302 and 906382 - Inline XBRL documents are included as exhibits for interactive data filing382