false--12-31Q300016805810001680581fulc:SidneyStreetMember2024-01-012024-09-300001680581us-gaap:AdditionalPaidInCapitalMember2023-12-310001680581us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-09-300001680581us-gaap:FairValueInputsLevel2Memberfulc:GovernmentAgencySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001680581fulc:TwoThousandNineteenStockIncentivePlanMember2019-07-020001680581us-gaap:AdditionalPaidInCapitalMember2023-01-012023-03-310001680581fulc:MyokardiaAgreementMembersrt:MaximumMember2020-07-310001680581us-gaap:EmployeeStockOptionMember2024-07-012024-09-300001680581us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300001680581us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-07-012024-09-300001680581fulc:TwoThousandNineteenStockIncentivePlanMember2024-07-012024-09-300001680581us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001680581us-gaap:MoneyMarketFundsMember2023-12-310001680581fulc:RaCapitalMember2024-08-012024-08-310001680581us-gaap:CollaborativeArrangementMember2024-07-012024-09-300001680581us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001680581us-gaap:EmployeeStockOptionMember2023-01-012023-09-300001680581us-gaap:AdditionalPaidInCapitalMember2024-09-300001680581us-gaap:RestrictedStockUnitsRSUMemberfulc:GrantsOutsideOfTwoThousandSixteenStockIncentivePlanAndTwoThousandNineteenStockIncentivePlanMember2024-09-300001680581us-gaap:AdditionalPaidInCapitalMember2024-06-300001680581fulc:MyokardiaAgreementMember2024-01-012024-09-300001680581us-gaap:CommonStockMember2024-06-300001680581fulc:GrantsOutsideOfTwoThousandSixteenStockIncentivePlanAndTwoThousandNineteenStockIncentivePlanMember2024-01-012024-09-300001680581us-gaap:RetainedEarningsMember2023-09-300001680581fulc:UnvestedRestrictedStockUnitsMember2023-07-012023-09-300001680581fulc:GrantsUnderTwoThousandNineteenEmployeeStockPurchasePlanMember2023-12-310001680581us-gaap:RetainedEarningsMember2024-04-012024-06-300001680581fulc:TwothousandtwentytwoinducementstockincentiveplanMember2024-09-300001680581fulc:Camp4AgreementMembersrt:MaximumMember2024-01-012024-09-3000016805812024-11-060001680581us-gaap:FairValueInputsLevel2Memberus-gaap:CommercialPaperMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001680581us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-06-300001680581us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-09-300001680581us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-12-310001680581fulc:MyokardiaAgreementMember2023-01-012023-12-310001680581fulc:LegalProceedingsMember2024-01-012024-09-300001680581fulc:TwothousandtwentytwoinducementstockincentiveplanMember2024-06-172024-07-170001680581us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-09-3000016805812023-06-300001680581us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-07-012023-09-300001680581fulc:TwothousandtwentytwoinducementstockincentiveplanMember2022-02-280001680581us-gaap:RetainedEarningsMember2023-12-310001680581us-gaap:AdditionalPaidInCapitalMember2024-03-310001680581us-gaap:CommonStockMember2024-09-300001680581fulc:MyokardiaAgreementMember2022-12-310001680581fulc:GovernmentAgencySecuritiesMember2024-09-300001680581us-gaap:CollaborativeArrangementMember2023-01-012023-09-300001680581fulc:SanofiAgreementMember2024-07-012024-09-300001680581fulc:SidneyStreetMember2024-09-300001680581us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-09-300001680581us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-09-3000016805812023-12-310001680581fulc:ClinicalAndRegulatoryMilestonesMemberfulc:MyokardiaAgreementMember2024-09-300001680581us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-04-012024-06-3000016805812018-08-310001680581us-gaap:EmployeeStockMember2024-01-012024-01-010001680581fulc:SanofiAgreementMember2024-06-300001680581us-gaap:RetainedEarningsMember2022-12-310001680581us-gaap:EmployeeStockOptionMember2023-12-3100016805812023-01-012023-09-300001680581fulc:TwothousandtwentytwoinducementstockincentiveplanMember2023-03-082023-03-080001680581fulc:TwoThousandNineteenAndTwoThousandSixteenStockIncentivePlanMember2023-07-012023-09-300001680581fulc:UnvestedRestrictedStockUnitsMember2024-01-012024-09-300001680581fulc:TwoThousandNineteenAndTwoThousandSixteenStockIncentivePlanMember2024-07-012024-09-300001680581us-gaap:USTreasurySecuritiesMember2023-12-310001680581fulc:TwoThousandNineteenStockIncentivePlanMember2023-04-012023-06-300001680581us-gaap:EmployeeStockOptionMember2024-09-300001680581us-gaap:RetainedEarningsMember2023-01-012023-03-310001680581us-gaap:EmployeeStockOptionMemberfulc:TwoThousandNineteenAndTwoThousandSixteenStockIncentivePlanMember2024-09-300001680581fulc:TwoThousandAndTwentyTwoInducementStockIncentivePlanMember2023-12-310001680581fulc:MyokardiaAgreementMember2023-09-300001680581us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001680581us-gaap:EmployeeStockOptionMember2023-07-012023-09-300001680581fulc:GSKAgreementMembersrt:MaximumMember2024-01-012024-09-300001680581fulc:SidneyStreetMember2024-07-012024-09-300001680581us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001680581fulc:LandsdowneStreetMember2017-11-302017-11-300001680581fulc:SanofiAgreementMember2024-01-012024-09-300001680581us-gaap:RetainedEarningsMember2023-03-310001680581fulc:Camp4AgreementMember2024-01-012024-09-300001680581us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-01-012023-03-310001680581us-gaap:IndemnificationGuaranteeMember2024-09-300001680581fulc:TwoThousandNineteenStockIncentivePlanMember2023-07-012023-09-300001680581us-gaap:RetainedEarningsMember2024-01-012024-03-3100016805812024-06-300001680581us-gaap:AdditionalPaidInCapitalMember2024-04-012024-06-300001680581us-gaap:GeneralAndAdministrativeExpenseMember2024-07-012024-09-300001680581fulc:TwoThousandAndTwentyTwoInducementStockIncentivePlanMember2024-09-300001680581us-gaap:CommonStockMember2022-12-310001680581us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001680581fulc:TwoThousandNineteenStockIncentivePlanMember2024-09-300001680581us-gaap:MoneyMarketFundsMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001680581us-gaap:GeneralAndAdministrativeExpenseMember2024-01-012024-09-300001680581fulc:UnvestedRestrictedStockUnitsMember2024-07-012024-09-300001680581us-gaap:CollaborativeArrangementMember2024-01-012024-09-300001680581us-gaap:RestrictedStockUnitsRSUMemberfulc:GrantsOutsideOfTwoThousandSixteenStockIncentivePlanAndTwoThousandNineteenStockIncentivePlanMember2024-01-012024-09-300001680581fulc:MyokardiaAgreementMember2020-07-310001680581us-gaap:CollaborativeArrangementMember2023-12-310001680581us-gaap:CommercialPaperMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001680581us-gaap:ResearchAndDevelopmentExpenseMember2023-07-012023-09-300001680581fulc:GrantsUnderTwoThousandNineteenEmployeeStockPurchasePlanMember2024-09-300001680581us-gaap:AccountingStandardsUpdate201602Memberfulc:LandsdowneStreetMember2024-09-300001680581us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-03-310001680581fulc:RaCapitalMember2024-08-310001680581us-gaap:CommonStockMember2023-01-012023-03-310001680581us-gaap:AdditionalPaidInCapitalMember2024-01-012024-03-310001680581us-gaap:GeneralAndAdministrativeExpenseMember2023-07-012023-09-300001680581us-gaap:EmployeeStockMember2024-09-300001680581us-gaap:CommonStockMember2023-09-300001680581fulc:TwoThousandNineteenStockIncentivePlanMember2024-01-012024-09-300001680581us-gaap:SoftwareDevelopmentMember2024-09-300001680581us-gaap:AdditionalPaidInCapitalMember2023-06-300001680581fulc:GovernmentAgencySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001680581us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberfulc:CorporateBondsMember2024-09-300001680581us-gaap:FairValueMeasurementsRecurringMemberfulc:CorporateBondsMember2023-12-310001680581us-gaap:EmployeeStockMember2019-07-020001680581fulc:TwoThousandNineteenStockIncentivePlanMember2019-07-022019-07-020001680581us-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001680581us-gaap:RetainedEarningsMember2023-07-012023-09-300001680581us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-01-012024-03-310001680581fulc:TwoThousandNineteenStockIncentivePlanMember2023-01-012023-09-300001680581fulc:GSKAgreementMember2024-01-012024-09-300001680581us-gaap:FurnitureAndFixturesMember2024-09-3000016805812024-01-012024-09-3000016805812024-01-012024-03-310001680581fulc:MyokardiaAgreementMember2023-12-310001680581us-gaap:EmployeeStockOptionMemberfulc:TwoThousandNineteenStockIncentivePlanMember2024-01-012024-09-3000016805812024-09-300001680581fulc:GrantsUnderTwoThousandNineteenStockIncentivePlanMember2024-09-300001680581us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-12-310001680581us-gaap:ResearchAndDevelopmentExpenseMember2024-01-012024-09-300001680581fulc:GovernmentAgencySecuritiesMember2023-12-310001680581fulc:TwoThousandSixteenStockIncentivePlanMember2024-09-300001680581us-gaap:CommonStockMember2023-04-012023-06-300001680581us-gaap:CorporateBondSecuritiesMember2024-09-300001680581us-gaap:FairValueMeasurementsRecurringMember2024-09-300001680581us-gaap:RetainedEarningsMember2024-03-310001680581us-gaap:SoftwareDevelopmentMember2023-12-310001680581us-gaap:EmployeeStockOptionMemberfulc:TwoThousandNineteenAndTwoThousandSixteenStockIncentivePlanMember2023-01-012023-12-310001680581us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001680581us-gaap:USTreasurySecuritiesMember2024-09-300001680581fulc:LandsdowneStreetMember2017-11-3000016805812023-09-300001680581fulc:GrantsUnderTwoThousandNineteenStockIncentivePlanMember2023-12-3100016805812024-07-012024-09-300001680581us-gaap:RetainedEarningsMember2023-04-012023-06-300001680581us-gaap:AdditionalPaidInCapitalMember2023-03-310001680581us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-03-310001680581us-gaap:LeaseholdImprovementsMember2024-09-300001680581us-gaap:SeriesBPreferredStockMember2024-01-012024-09-300001680581us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-12-310001680581us-gaap:MoneyMarketFundsMemberus-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001680581fulc:ClinicalAndRegulatoryMilestonesMemberfulc:MyokardiaAgreementMember2021-12-310001680581fulc:TwoThousandNineteenStockIncentivePlanMember2023-01-012023-06-3000016805812018-08-012018-08-310001680581us-gaap:CommonStockMember2023-12-3100016805812024-04-012024-06-300001680581us-gaap:RetainedEarningsMember2023-06-300001680581fulc:UnvestedRestrictedStockUnitsMember2023-01-012023-09-300001680581us-gaap:RetainedEarningsMember2024-09-300001680581us-gaap:EmployeeStockOptionMemberfulc:TwoThousandNineteenAndTwoThousandSixteenStockIncentivePlanMember2024-01-012024-09-300001680581fulc:GovernmentAgencySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-09-3000016805812023-03-310001680581fulc:MyokardiaAgreementMember2020-12-310001680581us-gaap:AdditionalPaidInCapitalMember2023-04-012023-06-300001680581us-gaap:CollaborativeArrangementMember2024-09-3000016805812023-01-012023-01-310001680581us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001680581fulc:LabEquipmentMember2023-12-310001680581us-gaap:FairValueMeasurementsRecurringMember2023-12-310001680581us-gaap:EmployeeStockMember2019-07-022019-07-020001680581us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberfulc:CorporateBondsMember2023-12-310001680581fulc:TwothousandtwentytwoinducementstockincentiveplanMember2023-05-182023-05-180001680581us-gaap:RetainedEarningsMember2024-06-300001680581us-gaap:CommonStockMember2024-01-012024-03-3100016805812024-03-310001680581fulc:LabEquipmentMember2024-09-300001680581us-gaap:CommercialPaperMember2023-12-310001680581fulc:LandsdowneStreetMember2024-01-012024-09-300001680581fulc:GSKAgreementMembersrt:MaximumMember2024-01-012024-06-300001680581fulc:TwoThousandNineteenStockIncentivePlanMember2024-01-012024-01-010001680581us-gaap:AdditionalPaidInCapitalMember2024-07-012024-09-300001680581fulc:TwoThousandNineteenAndTwoThousandSixteenStockIncentivePlanMember2024-01-012024-09-300001680581us-gaap:FairValueInputsLevel2Memberus-gaap:USTreasurySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001680581us-gaap:FairValueMeasurementsRecurringMemberfulc:CorporateBondsMember2024-09-300001680581us-gaap:CommonStockMember2023-03-310001680581fulc:SidneyStreetMember2021-11-300001680581us-gaap:AdditionalPaidInCapitalMember2023-09-300001680581us-gaap:EmployeeStockOptionMemberfulc:TwoThousandNineteenAndTwoThousandSixteenStockIncentivePlanMember2023-12-3100016805812023-01-012023-03-310001680581fulc:SidneyStreetMember2021-11-012021-11-3000016805812023-04-012023-06-3000016805812022-12-310001680581us-gaap:MoneyMarketFundsMember2024-09-300001680581us-gaap:EmployeeStockOptionMember2024-01-012024-09-300001680581us-gaap:CommonStockMember2024-07-012024-09-3000016805812023-01-310001680581us-gaap:AdditionalPaidInCapitalMember2022-12-310001680581us-gaap:AccumulatedOtherComprehensiveIncomeMember2023-04-012023-06-300001680581us-gaap:ResearchAndDevelopmentExpenseMember2024-07-012024-09-300001680581us-gaap:CommonStockMember2024-03-310001680581us-gaap:AccumulatedOtherComprehensiveIncomeMember2024-06-300001680581us-gaap:IndemnificationGuaranteeMember2023-12-3100016805812024-09-012024-09-300001680581us-gaap:CommonStockMember2023-06-300001680581fulc:TwoThousandNineteenAndTwoThousandSixteenStockIncentivePlanMember2023-01-012023-09-300001680581us-gaap:RetainedEarningsMember2024-07-012024-09-300001680581us-gaap:CorporateBondSecuritiesMember2023-12-3100016805812023-07-012023-09-300001680581us-gaap:ComputerEquipmentMember2024-09-300001680581us-gaap:FurnitureAndFixturesMember2023-12-310001680581us-gaap:CollaborativeArrangementMember2023-07-012023-09-300001680581us-gaap:CommonStockMember2024-04-012024-06-300001680581us-gaap:ComputerEquipmentMember2023-12-310001680581us-gaap:LeaseholdImprovementsMember2023-12-310001680581fulc:SeriesBConvertiblePreferredStockMemberfulc:GSKAgreementMember2024-01-012024-09-300001680581us-gaap:FairValueInputsLevel2Memberfulc:GovernmentAgencySecuritiesMemberus-gaap:FairValueMeasurementsRecurringMember2024-09-300001680581us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember2023-12-310001680581fulc:MyokardiaAgreementMember2024-09-300001680581us-gaap:RestrictedStockUnitsRSUMemberfulc:GrantsOutsideOfTwoThousandSixteenStockIncentivePlanAndTwoThousandNineteenStockIncentivePlanMember2023-12-31xbrli:purexbrli:sharesfulc:Votefulc:Securitiesfulc:SquareFeetiso4217:USD
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 September 30, 2024
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 jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
26 Landsdowne Street
Cambridge, Massachusetts |
02139 |
(Address of principal executive offices) |
(Zip Code) |
(617) 651-8851
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
|
|
|
|
|
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 |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
|
|
|
|
|
|
Large accelerated filer |
|
☐ |
|
Accelerated filer |
|
☐ |
|
|
|
|
Non-accelerated filer |
|
☒ |
|
Smaller reporting company |
|
☒ |
|
|
|
|
|
|
|
|
|
|
|
Emerging growth company |
|
☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of November 6, 2024, the registrant had 53,938,661 shares of common stock, $0.001 par value per share, outstanding.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements, which reflect our current views with respect to, among other things, our operations and financial performance. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “would,” and the negative version of these words and other similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words and include, among other statements, express or implied statements regarding:
•our ongoing clinical trial of pociredir, including the effects of the revised inclusion and exclusion criteria on our trial of pociredir;
•the impact of our organizational streamlining and realignment of resources, including anticipated savings;
•the timing of and our ability to submit applications for, and obtain and maintain regulatory approvals for pociredir and any other product candidates;
•our expectations regarding our ability to fund our operating expenses and capital expenditure requirements with our cash, cash equivalents, and marketable securities;
•the initiation, timing, progress and results of our current and future preclinical studies and clinical trials and our research and development programs, including novel therapeutic agents for the potential treatment of inherited aplastic anemias, such as Diamond-Blackfan anemia, or DBA, Shwachman-Diamond syndrome, and Fanconi anemia, and other early discovery programs;
•our plans to develop and, if approved, subsequently commercialize pociredir and any other product candidates, including in combination with other drugs and therapies;
•the potential advantages of our product candidates;
•the rate and degree of market acceptance and clinical utility of our products, if our product candidates are approved;
•our estimates regarding the potential market opportunity for our product candidates;
•our commercialization, marketing and manufacturing capabilities and strategy;
•the initiation, timing, progress and results of our drug target discovery screening programs;
•our intellectual property position;
•the progress and results of our collaboration agreement with MyoKardia, Inc., or MyoKardia, a wholly-owned subsidiary of Bristol-Myers Squibb Company, or under our exclusive global license agreement with CAMP4 Therapeutics Corp., or CAMP4;
•our ability to identify additional products, product candidates or technologies with significant commercial potential that are consistent with our commercial objectives;
•our estimates regarding expenses, future revenue, timing of any future revenue, capital requirements and needs for additional financing;
•the impact of government laws and regulations;
•our competitive position;
•developments relating to our competitors and our industry;
•our ability to maintain and establish collaborations, license agreements or obtain additional funding;
•the impact global pandemics or other geopolitical events on our business and operations, including our clinical trials and development plans, as well as our future financial results; and
•our expectations regarding the time during which we will be an emerging growth company or a smaller reporting company as defined under the federal securities laws.
We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. Such forward looking statements are subject to various risks and uncertainties. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have included important factors in the cautionary statements included in this Quarterly Report on Form 10-Q, particularly in the “Risk Factors” and “Management’s Discussion and Analysis of Results of Operations” sections, that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, collaborations, license agreements, joint ventures or investments we may make or enter into.
You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q completely and with the understanding that our actual future results may be materially different from what we expect. The forward-looking statements contained in this Quarterly Report on Form 10-Q are made as of the date of this Quarterly Report on Form 10-Q, and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.
SUMMARY RISK FACTORS
Our business is subject to a number of risks that if realized could materially affect our business, financial condition, results of operations, cash flows and access to liquidity. These risks are discussed more fully in the “Risk Factors” section of this Quarterly Report on Form 10-Q. Our principal risks include the following:
•We have incurred significant losses since our inception. Our net loss was $97.3 million for the year ended December 31, 2023. Our net income was $6.8 million for the nine months ended September 30, 2024, primarily due to the $80.0 million upfront payment under our collaboration and license agreement with Genzyme Corporation, a wholly-owned subsidiary of Sanofi, or Sanofi. We expect to incur losses over the next several years and may never achieve or maintain profitability. As of September 30, 2024, we had an accumulated deficit of $502.8 million.
•We will need substantial additional funding. If we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts. We expect to devote substantial financial resources to our ongoing and planned activities, particularly as we continue our clinical trial of pociredir and continue research and development and initiate additional clinical trials of, and seek regulatory approval for, pociredir and other product candidates.
•We are early in our development efforts, and we only have one product candidate in clinical trials. If we are unable to commercialize our product candidates or experience significant delays in doing so, our business will be materially harmed.
•Clinical drug development involves a lengthy and expensive process, with an uncertain outcome. The results of preclinical studies and early clinical trials may not be predictive of future results. We may incur additional costs or experience further delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.
•Because we are developing some of our product candidates for the treatment of diseases in which there is limited clinical experience and, in some cases, using new endpoints or methodologies, the U.S. Food and Drug Administration, or FDA, or other regulatory authorities may not consider the endpoints of our clinical trials to predict or provide clinically meaningful results.
•If serious adverse events or unacceptable side effects are identified during the development of our product candidates, including others’ product candidates in the same class of drugs, we may need to abandon or limit our development of some of our product candidates.
•We may not be successful in our efforts to use our discovery approach to build a pipeline of product candidates.
•We face substantial competition, which may result in others discovering, developing or commercializing products before or more successfully than we do.
•We rely, and expect to continue to rely, on contract manufacturing organizations, or CMOs, to manufacture our product candidates. If we are unable to enter into such arrangements as expected or if such organizations do not meet our supply requirements, development and/or commercialization of our product candidates may be delayed.
•We rely, and expect to continue to rely, on third parties to conduct our clinical trials, and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, which may harm our business.
•We have entered into, and may in the future enter into, collaborations and license agreements with third parties for the discovery, development or commercialization of product candidates. If our collaborations are not successful or we are not able to develop product candidates that we license-in, we may not be able to capitalize on the market potential of these product candidates and our business could be adversely affected.
•If we are unable to obtain, maintain, enforce and protect patent protection for our technology and product candidates or if the scope of the patent protection obtained is not sufficiently broad, our competitors could develop and commercialize technology and products similar or identical to ours, and our ability to successfully develop and commercialize our technology and product candidates may be adversely affected.
•If we fail to comply with our obligations in our intellectual property licenses and funding arrangements with third parties, or otherwise experience disruptions to our business relationships with our licensors, we could lose intellectual property rights that are important to our business.
•Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults or non-performance by financial institutions or transactional counterparties, could adversely affect our current and projected business operations and financial condition and results of operations.
•Our business was negatively impacted by the COVID-19 pandemic and may in the future be impacted by any future pandemics, as well as other geopolitical events that can impact our clinical trials or the supply chain, such as the Russian invasion of Ukraine or recent hostilities in Israel, Lebanon, and the Gaza Strip. These events may continue to, and any future pandemics may, adversely impact economies worldwide, which could result in adverse effects on our business and operations.
Table of Contents
In this Quarterly Report on Form 10-Q, unless otherwise stated or as the context otherwise requires, references to “Fulcrum,” “Fulcrum Therapeutics,” “the Company,” “we,” “us,” “our” and similar references refer to Fulcrum Therapeutics, Inc. together with its consolidated subsidiary. The Fulcrum Therapeutics logo and other trademarks or service marks of Fulcrum Therapeutics, Inc. appearing in this Quarterly Report on Form 10-Q are the property of Fulcrum Therapeutics, Inc. This Quarterly Report on Form 10-Q also contains registered marks, trademarks and trade names of other companies. All other trademarks, registered marks and trade names appearing herein are the property of their respective holders.
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
Fulcrum Therapeutics, Inc.
Consolidated Balance Sheets
(In thousands, except share and per share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
September 30,
2024 |
|
|
December 31,
2023 |
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
72,630 |
|
|
$ |
25,563 |
|
Marketable securities |
|
|
184,604 |
|
|
|
210,658 |
|
Unbilled accounts receivable |
|
|
3,656 |
|
|
|
537 |
|
Prepaid expenses and other current assets |
|
|
6,599 |
|
|
|
5,441 |
|
Total current assets |
|
|
267,489 |
|
|
|
242,199 |
|
Property and equipment, net |
|
|
4,218 |
|
|
|
5,216 |
|
Operating lease right-of-use assets |
|
|
6,024 |
|
|
|
7,176 |
|
Restricted cash |
|
|
1,201 |
|
|
|
1,092 |
|
Other assets |
|
|
76 |
|
|
|
2,011 |
|
Total assets |
|
$ |
279,008 |
|
|
$ |
257,694 |
|
Liabilities and stockholders’ equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
4,041 |
|
|
$ |
2,757 |
|
Accrued expenses and other current liabilities |
|
|
8,334 |
|
|
|
8,726 |
|
Operating lease liability, current |
|
|
2,134 |
|
|
|
2,192 |
|
Total current liabilities |
|
|
14,509 |
|
|
|
13,675 |
|
Operating lease liability, excluding current portion |
|
|
7,011 |
|
|
|
8,629 |
|
Other liabilities, excluding current portion |
|
|
197 |
|
|
|
197 |
|
Total liabilities |
|
|
21,717 |
|
|
|
22,501 |
|
Commitments and contingencies (Note 12) |
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Preferred stock, $0.001 par value; 5,000,000 shares authorized; no shares issued or outstanding |
|
|
— |
|
|
|
— |
|
Common stock, $0.001 par value; 200,000,000 shares authorized; 53,938,661 and 61,915,367 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively |
|
|
54 |
|
|
|
62 |
|
Additional paid-in capital |
|
|
759,688 |
|
|
|
744,940 |
|
Accumulated other comprehensive gain (loss) |
|
|
379 |
|
|
|
(136 |
) |
Accumulated deficit |
|
|
(502,830 |
) |
|
|
(509,673 |
) |
Total stockholders’ equity |
|
|
257,291 |
|
|
|
235,193 |
|
Total liabilities and stockholders’ equity |
|
$ |
279,008 |
|
|
$ |
257,694 |
|
The accompanying notes are an integral part of these financial statements.
Fulcrum Therapeutics, Inc.
Consolidated Statements of Operations and Comprehensive Income (Loss)
(In thousands, except per share data)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, |
|
|
Nine Months Ended
September 30, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Collaboration revenue |
|
$ |
— |
|
|
$ |
759 |
|
|
$ |
80,000 |
|
|
$ |
1,934 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
14,639 |
|
|
|
18,238 |
|
|
|
51,673 |
|
|
|
52,802 |
|
General and administrative |
|
|
8,424 |
|
|
|
9,961 |
|
|
|
28,732 |
|
|
|
31,804 |
|
Restructuring expenses |
|
|
2,063 |
|
|
|
— |
|
|
|
2,063 |
|
|
|
— |
|
Total operating expenses |
|
|
25,126 |
|
|
|
28,199 |
|
|
|
82,468 |
|
|
|
84,606 |
|
Loss from operations |
|
|
(25,126 |
) |
|
|
(27,440 |
) |
|
|
(2,468 |
) |
|
|
(82,672 |
) |
Other income, net |
|
|
3,430 |
|
|
|
3,423 |
|
|
|
9,311 |
|
|
|
10,093 |
|
Net (loss) income |
|
$ |
(21,696 |
) |
|
$ |
(24,017 |
) |
|
$ |
6,843 |
|
|
$ |
(72,579 |
) |
Net (loss) income per share, basic |
|
$ |
(0.35 |
) |
|
$ |
(0.39 |
) |
|
$ |
0.11 |
|
|
$ |
(1.19 |
) |
Net (loss) income per share, diluted |
|
$ |
(0.35 |
) |
|
$ |
(0.39 |
) |
|
$ |
0.11 |
|
|
$ |
(1.19 |
) |
Weighted-average common shares outstanding, basic |
|
|
62,409 |
|
|
|
61,823 |
|
|
|
62,200 |
|
|
|
61,121 |
|
Weighted-average common shares outstanding, diluted |
|
|
62,409 |
|
|
|
61,823 |
|
|
|
63,688 |
|
|
|
61,121 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive (loss) income: |
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(21,696 |
) |
|
$ |
(24,017 |
) |
|
$ |
6,843 |
|
|
$ |
(72,579 |
) |
Other comprehensive gain (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain (loss) on marketable securities |
|
|
745 |
|
|
|
314 |
|
|
|
515 |
|
|
|
(89 |
) |
Total other comprehensive gain (loss) |
|
|
745 |
|
|
|
314 |
|
|
|
515 |
|
|
|
(89 |
) |
Comprehensive (loss) income |
|
$ |
(20,951 |
) |
|
$ |
(23,703 |
) |
|
$ |
7,358 |
|
|
$ |
(72,668 |
) |
The accompanying notes are an integral part of these financial statements.
Fulcrum Therapeutics, Inc.
Consolidated Statements of Stockholders’ Equity
(In thousands, except share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock |
|
|
Additional
Paid-In |
|
|
Accumulated
Other
Comprehensive |
|
|
Accumulated |
|
|
Total
Stockholders’ |
|
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Gain (Loss) |
|
|
Deficit |
|
|
Equity |
|
Balance at December 31, 2022 |
|
|
52,099,211 |
|
|
|
52 |
|
|
|
612,025 |
|
|
|
(797 |
) |
|
|
(412,338 |
) |
|
|
198,942 |
|
Issuance of common stock in connection with public offering, net of issuance costs |
|
|
9,615,384 |
|
|
|
10 |
|
|
|
117,336 |
|
|
|
— |
|
|
|
— |
|
|
|
117,346 |
|
Issuance of common stock under employee benefit plans |
|
|
38,903 |
|
|
|
— |
|
|
|
348 |
|
|
|
— |
|
|
|
— |
|
|
|
348 |
|
Vesting of restricted stock awards |
|
|
5,496 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
4,253 |
|
|
|
— |
|
|
|
— |
|
|
|
4,253 |
|
Unrealized gain on marketable securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
146 |
|
|
|
— |
|
|
|
146 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(24,779 |
) |
|
|
(24,779 |
) |
Balance at March 31, 2023 |
|
|
61,758,994 |
|
|
$ |
62 |
|
|
$ |
733,962 |
|
|
$ |
(651 |
) |
|
$ |
(437,117 |
) |
|
$ |
296,256 |
|
Issuance of common stock under employee benefit plans |
|
|
50,912 |
|
|
|
— |
|
|
|
141 |
|
|
|
— |
|
|
|
— |
|
|
|
141 |
|
Vesting of restricted stock awards |
|
|
12,648 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
3,363 |
|
|
|
— |
|
|
|
— |
|
|
|
3,363 |
|
Unrealized loss on marketable securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(549 |
) |
|
|
— |
|
|
|
(549 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(23,783 |
) |
|
|
(23,783 |
) |
Balance at June 30, 2023 |
|
|
61,822,554 |
|
|
$ |
62 |
|
|
$ |
737,466 |
|
|
$ |
(1,200 |
) |
|
$ |
(460,900 |
) |
|
$ |
275,428 |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
3,737 |
|
|
|
— |
|
|
|
— |
|
|
|
3,737 |
|
Unrealized gain on marketable securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
314 |
|
|
|
— |
|
|
|
314 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(24,017 |
) |
|
|
(24,017 |
) |
Balance at September 30, 2023 |
|
|
61,822,554 |
|
|
$ |
62 |
|
|
$ |
741,203 |
|
|
$ |
(886 |
) |
|
$ |
(484,917 |
) |
|
$ |
255,462 |
|
Balance at December 31, 2023 |
|
|
61,915,367 |
|
|
|
62 |
|
|
|
744,940 |
|
|
|
(136 |
) |
|
|
(509,673 |
) |
|
|
235,193 |
|
Issuance of common stock under employee benefit plans |
|
|
214,094 |
|
|
|
— |
|
|
|
1,651 |
|
|
|
— |
|
|
|
— |
|
|
|
1,651 |
|
Vesting of restricted stock awards |
|
|
11,550 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
3,916 |
|
|
|
— |
|
|
|
— |
|
|
|
3,916 |
|
Unrealized loss on marketable securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(298 |
) |
|
|
— |
|
|
|
(298 |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(26,870 |
) |
|
|
(26,870 |
) |
Balance at March 31, 2024 |
|
|
62,141,011 |
|
|
$ |
62 |
|
|
$ |
750,507 |
|
|
$ |
(434 |
) |
|
$ |
(536,543 |
) |
|
$ |
213,592 |
|
Issuance of common stock under employee benefit plans |
|
|
98,844 |
|
|
|
— |
|
|
|
377 |
|
|
|
— |
|
|
|
— |
|
|
|
377 |
|
Vesting of restricted stock awards |
|
|
10,776 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
4,344 |
|
|
|
— |
|
|
|
— |
|
|
|
4,344 |
|
Unrealized gain on marketable securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
68 |
|
|
|
— |
|
|
|
68 |
|
Net income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
55,409 |
|
|
|
55,409 |
|
Balance at June 30, 2024 |
|
|
62,250,631 |
|
|
$ |
62 |
|
|
$ |
755,228 |
|
|
$ |
(366 |
) |
|
$ |
(481,134 |
) |
|
$ |
273,790 |
|
Issuance of common stock under employee benefit plans |
|
|
188,030 |
|
|
|
— |
|
|
|
635 |
|
|
|
— |
|
|
|
— |
|
|
|
635 |
|
Issuance of pre-funded warrants in exchange for common stock |
|
|
(9,350,000 |
) |
|
|
(9 |
) |
|
|
9 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Issuance of common stock pursuant to pre-funded warrant exercise |
|
|
850,000 |
|
|
|
1 |
|
|
|
(1 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
3,817 |
|
|
|
— |
|
|
|
— |
|
|
|
3,817 |
|
Unrealized gain on marketable securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
745 |
|
|
|
— |
|
|
|
745 |
|
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(21,696 |
) |
|
|
(21,696 |
) |
Balance at September 30, 2024 |
|
|
53,938,661 |
|
|
$ |
54 |
|
|
$ |
759,688 |
|
|
$ |
379 |
|
|
$ |
(502,830 |
) |
|
$ |
257,291 |
|
The accompanying notes are an integral part of these financial statements.
Fulcrum Therapeutics, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, |
|
|
|
2024 |
|
|
2023 |
|
Operating activities |
|
|
|
|
|
|
Net income (loss) |
|
$ |
6,843 |
|
|
$ |
(72,579 |
) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
Depreciation expense |
|
|
1,224 |
|
|
|
1,664 |
|
Stock-based compensation expense |
|
|
12,077 |
|
|
|
11,353 |
|
Net accretion of discounts on marketable securities |
|
|
(3,447 |
) |
|
|
(4,663 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Unbilled accounts receivable |
|
|
(3,119 |
) |
|
|
(351 |
) |
Prepaid expenses and other current assets |
|
|
(1,158 |
) |
|
|
(450 |
) |
Operating lease assets and liabilities |
|
|
(524 |
) |
|
|
(526 |
) |
Other assets |
|
|
1,935 |
|
|
|
115 |
|
Accounts payable |
|
|
1,104 |
|
|
|
(36 |
) |
Accrued expenses and other liabilities |
|
|
(392 |
) |
|
|
(1,734 |
) |
Deferred revenue |
|
|
— |
|
|
|
(600 |
) |
Net cash provided by (used in) operating activities |
|
$ |
14,543 |
|
|
$ |
(67,807 |
) |
Investing activities |
|
|
|
|
|
|
Purchases of marketable securities |
|
|
(157,185 |
) |
|
|
(169,818 |
) |
Maturities of marketable securities |
|
|
187,202 |
|
|
|
115,203 |
|
Purchases of property and equipment |
|
|
(47 |
) |
|
|
(431 |
) |
Net cash provided by (used in) investing activities |
|
|
29,970 |
|
|
|
(55,046 |
) |
Financing activities |
|
|
|
|
|
|
Proceeds from issuance of common stock in connection with public offerings, net of issuance costs |
|
|
— |
|
|
|
117,345 |
|
Proceeds from issuance of common stock under benefit plans, net |
|
|
2,663 |
|
|
|
490 |
|
Net cash provided by financing activities |
|
|
2,663 |
|
|
|
117,835 |
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
|
47,176 |
|
|
|
(5,018 |
) |
Cash, cash equivalents, and restricted cash, beginning of period |
|
|
26,655 |
|
|
|
36,190 |
|
Cash, cash equivalents, and restricted cash, end of period |
|
$ |
73,831 |
|
|
$ |
31,172 |
|
Supplemental cash flow information |
|
|
|
|
|
|
Cash paid for operating lease liabilities |
|
$ |
2,131 |
|
|
$ |
2,489 |
|
Non-cash investing and financing activities: |
|
|
|
|
|
|
Property and equipment purchases unpaid at end of period |
|
$ |
180 |
|
|
$ |
— |
|
The following table provides a reconciliation of the cash, cash equivalents, and restricted cash balances as of each of the periods shown above:
|
|
|
|
|
|
|
|
|
|
|
September 30,
2024 |
|
|
September 30,
2023 |
|
Cash and cash equivalents |
|
$ |
72,630 |
|
|
$ |
30,080 |
|
Restricted cash |
|
|
1,201 |
|
|
|
1,092 |
|
Total cash, cash equivalents, and restricted cash |
|
$ |
73,831 |
|
|
$ |
31,172 |
|
The accompanying notes are an integral part of these financial statements.
Fulcrum Therapeutics, Inc.
Notes to Consolidated Financial Statements
1. Nature of the Business and Basis of Presentation
Fulcrum Therapeutics, Inc. (the “Company” or “Fulcrum”) was incorporated in Delaware on August 18, 2015. The Company is focused on developing small molecules to improve the lives of patients with genetically-defined rare diseases in areas of high unmet medical need.
The Company is subject to a number of risks similar to other companies in the biotechnology industry, including, but not limited to, risks of failure of preclinical studies and clinical trials, dependence on key personnel, protection of proprietary technology, reliance on third party organizations, risks of obtaining regulatory approval for any product candidate that it may develop, development by competitors of technological innovations, compliance with government regulations, and the need to obtain additional financing. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing, and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure and extensive compliance-reporting capabilities. Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.
Basis of Presentation
The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).
The accompanying consolidated financial statements and footnotes to the financial statements have been prepared on the same basis as the most recently audited annual consolidated financial statements and, in the opinion of management, reflect all normal recurring adjustments necessary for the fair presentation of the Company’s financial position as of September 30, 2024 and the results of its operations and its cash flows for the three and nine months ended September 30, 2024 and 2023. The results for the three and nine months ended September 30, 2024 are not necessarily indicative of results to be expected for the year ending December 31, 2024, any other interim periods, or any future year or period. These consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 27, 2024 (the “Annual Report on Form 10-K”).
Sales of Common Stock
In January 2023, the Company completed a public offering of its common stock and issued and sold 9,615,384 shares of common stock at a public offering price of $13.00 per share, resulting in net proceeds of $117.3 million after deducting underwriting discounts and commissions and offering expenses.
Liquidity
The Company has incurred recurring losses and negative cash flows from operations since inception and has primarily funded its operations with proceeds from the sale of shares of its capital stock and from upfront payments received from collaboration and license agreements. As of September 30, 2024, the Company had an accumulated deficit of $502.8 million. The Company expects its operating losses and negative operating cash flows to continue into the foreseeable future as it continues to expand its research and development efforts. The Company expects to finance its future cash needs through a combination of equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements.
The Company expects that its cash, cash equivalents, and marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months from the date of issuance of these financial statements. However, the Company has based this estimate on assumptions that may prove to be wrong, and its operating plan may change as a result of many factors currently unknown to it. As a result, the Company could deplete its capital resources sooner than it currently expects. If the Company is unable to raise additional funds through equity or debt financings when needed, it may be required to delay, limit, reduce or terminate development or future commercialization efforts or grant rights to develop and market product candidates that it would otherwise prefer to develop and market itself.
2. Summary of Significant Accounting Policies
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, Fulcrum Therapeutics Securities Corp., which is a Massachusetts subsidiary created to buy, sell, and hold securities. All intercompany transactions and balances have been eliminated.
Summary of Significant Accounting Policies
The significant accounting policies and estimates used in the preparation of the accompanying consolidated financial statements are described in the Company’s audited consolidated financial statements for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K. There have been no material changes in the Company’s significant accounting policies during the nine months ended September 30, 2024, except as noted below with respect to the Company's accounting policies related to collaborative arrangements and common stock warrants.
Collaborative Arrangements
At contract inception, the Company analyzes its collaboration arrangements to assess whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and are exposed to significant risks and rewards dependent on the commercial success of such activities, and therefore within the scope of ASC Topic 808, Collaborative Arrangements (ASC 808). This assessment is performed on an ongoing basis throughout the collaboration based on changes in the responsibilities of the parties in the arrangement. For collaboration arrangements within the scope of ASC 808 that contain multiple elements, the Company first determines which elements of the collaboration are deemed to be within the scope of ASC 808 and which elements of the collaboration are more reflective of a vendor-customer relationship and are therefore within the scope of ASC 606, Revenue from Contracts with Customers (ASC 606).
For elements of collaboration arrangements that are accounted for pursuant to ASC 808, an appropriate recognition method is determined and applied consistently, either by analogy to authoritative accounting literature or by applying a reasonable and rational policy election. The Company evaluates the income statement classification for presentation of amounts due from or owed to collaborators associated with multiple activities in a collaboration arrangement based on the nature of each separate activity. The Company made an accounting policy election to account for research and development reimbursements received from its collaboration partner that are outside of the scope of ASC 606 as a reduction of research and development expenses to best reflect the economics and nature of the transaction in the context of the unit-of-account.
See Note 2, “Summary of Significant Accounting Policies”, in the Company’s audited consolidated financial statements for the year ended December 31, 2023 included in the Company’s Annual Report on Form 10-K for the Company's accounting policies for arrangements within the scope of ASC 606.
The Company accounts for common stock warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity (ASC 480) and ASC 815, Derivatives and Hedging (ASC 815). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether the warrants meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance and remeasured each balance sheet date thereafter. Changes in the estimated fair value of the liability-classified warrants are recognized as a non-cash gain or loss in the accompanying consolidated statements of operations and comprehensive loss.
Use of Estimates
The preparation of financial statements in accordance with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, and the reported amount of expenses during the reported periods. Estimates inherent in the preparation of these consolidated financial statements include, but are not limited to, estimates related to revenue recognition, accrued expenses, stock-based compensation expense, and income taxes. The Company bases its estimates on historical experience and other market specific or other relevant assumptions it believes to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates as there are changes in circumstances, facts and experience. Actual results could differ from those estimates or assumptions.
Off-Balance Sheet Risk and Concentrations of Credit Risk
The Company has no significant off-balance sheet risk such as foreign exchange contracts, option contracts, or other foreign hedging arrangements. Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash, cash equivalents, marketable securities, and restricted cash. The Company’s cash, cash equivalents, and restricted cash are deposited in accounts at large financial institutions. The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the cash, cash equivalents and restricted cash are held. The Company maintains its cash equivalents in money market funds that invest in U.S. Treasury securities, U.S. Treasury securities, and commercial paper. The Company’s marketable securities consist of U.S. Treasury securities, corporate bonds, and commercial paper, and potentially subject the Company to concentrations of credit risk. The Company has adopted an investment policy that limits the amounts the Company may invest in any one type of investment. The Company has not experienced any credit losses and does not believe it is exposed to any significant credit risk on these funds.
Recent Accounting Pronouncements
In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The standard updates reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance and requires companies to disclose all annual disclosures about segments in interim periods. The standard also requires companies with a single reportable segment to provide all disclosures required by Topic 280 – Segment Reporting. The new standard will become effective for the Company on January 1, 2025. The Company is currently evaluating the impact that the adoption of this standard will have on its consolidated financial statements and disclosures.
3. Fair Value Measurements
The following tables present information about the Company’s financial assets measured at fair value on a recurring basis and indicate the fair value hierarchy classification of such fair values as of September 30, 2024 and December 31, 2023 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at
September 30, 2024 |
|
|
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds |
|
$ |
54,263 |
|
|
$ |
54,263 |
|
|
$ |
— |
|
|
$ |
— |
|
U.S. Treasury securities |
|
|
18,367 |
|
|
|
— |
|
|
|
18,367 |
|
|
|
— |
|
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury securities |
|
|
10,241 |
|
|
|
— |
|
|
|
10,241 |
|
|
|
— |
|
Government agency securities |
|
|
13,273 |
|
|
|
— |
|
|
|
13,273 |
|
|
|
— |
|
Corporate bonds |
|
|
161,090 |
|
|
|
— |
|
|
|
161,090 |
|
|
|
— |
|
Total |
|
$ |
257,234 |
|
|
$ |
54,263 |
|
|
$ |
202,971 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at
December 31, 2023 |
|
|
|
Total |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds |
|
$ |
25,563 |
|
|
$ |
25,563 |
|
|
$ |
— |
|
|
$ |
— |
|
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury securities |
|
|
14,215 |
|
|
|
— |
|
|
|
14,215 |
|
|
|
— |
|
Government agency securities |
|
|
65,107 |
|
|
|
— |
|
|
|
65,107 |
|
|
|
— |
|
Commercial paper |
|
|
17,889 |
|
|
|
— |
|
|
|
17,889 |
|
|
|
— |
|
Corporate bonds |
|
|
113,447 |
|
|
|
— |
|
|
|
113,447 |
|
|
|
— |
|
Total |
|
$ |
236,221 |
|
|
$ |
25,563 |
|
|
$ |
210,658 |
|
|
$ |
— |
|
There were no transfers between fair value levels during the three and nine months ended September 30, 2024.
4. Cash Equivalents and Marketable Securities
Cash equivalents and marketable securities consisted of the following as of September 30, 2024 and December 31, 2023 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at
September 30, 2024 |
|
|
|
Amortized
Cost |
|
|
Gross
Unrealized
Gains |
|
|
Gross
Unrealized
Losses |
|
|
Fair Value |
|
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds |
|
$ |
54,263 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
54,263 |
|
U.S. Treasury securities |
|
|
18,364 |
|
|
|
3 |
|
|
|
— |
|
|
|
18,367 |
|
Total cash equivalents |
|
|
72,627 |
|
|
|
3 |
|
|
|
— |
|
|
|
72,630 |
|
Marketable securities: |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. Treasury securities |
|
|
10,235 |
|
|
|
6 |
|
|
|
— |
|
|
|
10,241 |
|
Government agency securities |
|
|
13,233 |
|
|
|
40 |
|
|
|
— |
|
|
|
13,273 |
|
Corporate bonds |
|
|
160,760 |
|
|
|
350 |
|
|
|
(20 |
) |
|
|
161,090 |
|
Total marketable securities |
|
|
184,228 |
|
|
|
396 |
|
|
|
(20 |
) |
|
|
184,604 |
|
Total cash equivalents and marketable securities |
|
$ |
256,855 |
|
|
$ |
399 |
|
|
$ |
(20 |
) |
|
$ |
257,234 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements at
December 31, 2023 |
|
|
|
Amortized
Cost |
|
|
Gross
Unrealized
Gains |
|
|
Gross
Unrealized
Losses |
|
|
Fair Value |
|
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
Money market funds |
|
$ |
25,563 |
|
|
$ |
— |
|