Fulcrum Therapeutics(FULC) - 2024 Q1 - Quarterly Report

Financial Performance - As of March 31, 2024, Fulcrum Therapeutics reported total assets of $232.6 million, a decrease from $257.7 million as of December 31, 2023, representing a decline of approximately 9.7%[17] - For the three months ended March 31, 2024, Fulcrum reported a net loss of $26.9 million, compared to a net loss of $24.8 million for the same period in 2023, reflecting an increase in loss of approximately 8.5%[19] - Total operating expenses for the first quarter of 2024 were $29.8 million, up from $28.2 million in the same quarter of 2023, marking an increase of about 5.6%[19] - The company had no collaboration revenue for the first quarter of 2024, a decrease from $295,000 in the same period of 2023[19] - As of March 31, 2024, the accumulated deficit stood at $536.5 million, up from $509.7 million at the end of 2023, indicating an increase of approximately 5.3%[17] - Fulcrum's total stockholders' equity decreased to $213.6 million as of March 31, 2024, from $235.2 million at the end of 2023, a decline of about 9.2%[17] - The company expects to incur substantial operating losses and negative operating cash flows for the foreseeable future due to ongoing research and development activities[151] - The net loss for the year ended December 31, 2023, was $97.3 million, and for the three months ended March 31, 2024, it was $26.9 million, with an accumulated deficit of $536.5 million as of March 31, 2024[167] Cash and Liquidity - The company had cash and cash equivalents of $39.9 million as of March 31, 2024, up from $25.6 million at the end of 2023, indicating a significant increase of 56.7%[17] - The Company expects its cash, cash equivalents, and marketable securities to be sufficient to fund operating expenses and capital expenditures for at least 12 months[34] - As of March 31, 2024, total cash equivalents and marketable securities amounted to $213.3 million, a decrease from $236.2 million as of December 31, 2023[40][43] - The company had cash, cash equivalents, and marketable securities totaling $213.3 million as of March 31, 2024, which, along with the expected $80.0 million payment, is projected to fund operations into 2027[175] - The company anticipates continued reliance on additional financing due to the lengthy and uncertain process of product development, which may not yield commercial success for several years[176] - The company may need to raise additional capital through equity offerings, debt financings, or collaboration arrangements, which could dilute existing stockholders' interests[155] Research and Development - Research and development expenses increased by $3.1 million from $16.7 million in Q1 2023 to $19.8 million in Q1 2024, primarily due to increased external research and development costs[140] - The company plans to continue clinical development of losmapimod and pociredir, advance clinical-stage candidates, and seek regulatory approvals for successful candidates[119] - The Phase 3 clinical trial of losmapimod for the treatment of FSHD completed enrollment in September 2023[174] - The FDA imposed a clinical hold on the IND application for pociredir, which was lifted in August 2023[173] - The company is still in the early stages of development for its product candidates and has not completed development of any product candidates[167] - The company has two product candidates in clinical development, with high risks of failure and no completed pivotal clinical trials[201] Collaboration and Revenue - The Company achieved a $2.5 million specified preclinical milestone under the MyoKardia Collaboration Agreement[68] - The Company received a non-refundable upfront payment of $10.0 million from MyoKardia as part of the collaboration agreement[67] - The Company recognized no collaboration revenue associated with the MyoKardia Collaboration Agreement for the three months ended March 31, 2024, compared to $0.3 million for the same period in 2023[81] - The company expects to recognize revenue from the Sanofi Agreement associated with the $80.0 million upfront payment and potential future milestones and royalties[125] - The company has entered into a collaboration and license agreement with Genzyme Corporation (Sanofi) to commercialize losmapimod outside the U.S., sharing global development costs[110] Stock and Equity - The Company has reserved 17,591,700 shares of common stock for future issuance as of March 31, 2024, an increase from 15,388,773 shares as of December 31, 2023[52] - The Company had outstanding stock options totaling 12,289,352 as of March 31, 2024, compared to 6,876,679 for the same period in 2023[99] - The total stock-based compensation expense for the three months ended March 31, 2024, was $3.916 million, compared to $4.253 million for the same period in 2023[62] - The aggregate intrinsic value of stock options outstanding at March 31, 2024, was $35.107 million[58] - The weighted average grant date fair value of stock options granted in the three months ended March 31, 2024, was $6.23 per share[59] Risks and Challenges - The company has incurred significant operating losses since inception and expects to continue incurring losses over the next several years[167] - Clinical trials are lengthy and expensive, with uncertain outcomes, and the company may face delays or additional costs[203][207] - Serious adverse events or unacceptable side effects during product candidate development may necessitate abandonment or limitation of certain candidates[213] - The commercial potential of the pociredir program may be materially and negatively impacted even if regulatory approval is received[215] - The company may need to conduct additional clinical trials or testing, which could increase development costs and delay marketing approvals[207][209] Legal and Regulatory - The company intends to defend against a class action lawsuit alleging misleading statements related to the FDA's clinical hold on pociredir[165] - The FDA placed the IND for pociredir on clinical hold in February 2023 due to concerns over hematological malignancies, which was lifted in August 2023[214] - Regulatory authorities have substantial discretion in the approval process, making it difficult to predict the time and cost of product candidate development[200]