Fulcrum Therapeutics - Earnings Call - Q4 2024

Executive Summary

• Q4 2024 delivered tighter OpEx and a narrower net loss as Fulcrum pivoted resources to hematology; R&D fell to $11.7M (from $19.0M y/y) and G&A to $7.7M (from $9.9M y/y), driving a smaller net loss of $16.6M (vs. $24.8M y/y).
• Cash, cash equivalents and marketable securities ended 2024 at $241.0M with runway into at least 2027; 2025 cash burn guided to $55–$65M (midpoint $60M).
• Lead program pociredir (oral HbF inducer for SCD) advanced: 10 patients enrolled in the 12 mg cohort; mid‑2025 data for 12 mg and YE‑2025 for 20 mg remain on track—a key stock catalyst path over the next 6–12 months.
• No Q4 collaboration revenue (vs. $0.9M y/y); FY24 recognized $80.0M from Sanofi’s upfront license payment earlier in the year, underscoring reliance on financing/collaboration rather than recurring revenue near‑term.

What Went Well and What Went Wrong

• What Went Well

  • Enrollment momentum and timeline confidence: “We remain on track to share…data from the 12 mg dose cohort in mid‑2025 and…20 mg…by the end of the year.” – Alex Sapir, CEO.
  • Operating discipline post‑portfolio realignment: Q4 R&D $11.7M (vs. $19.0M y/y) and G&A $7.7M (vs. $9.9M y/y) as workforce reduction and Sanofi cost sharing reduced spend.
  • Liquidity and burn visibility: Ended 2024 with $241.0M; runway into at least 2027; 2025 cash burn plan $55–$65M (midpoint ~$60M).

• What Went Wrong

  • No quarterly revenue: Collaboration revenue was $0 in Q4 (vs. $0.9M y/y), highlighting lack of recurring revenue catalysts pre‑pociredir readouts.
  • Restructuring costs: FY24 included $2.1M restructuring expense tied to workforce reduction (none in FY23), reflecting the cost of strategic pivoting.
  • Losmapimod discontinued: Phase 3 REACH failure and program suspension reduce diversification; management will present full data (March 19, 2025) but has no plans to invest further in FSHD.

Transcript

Operator (participant)

Good morning. Welcome to Fulcrum Therapeutics' Fourth Quarter and Full Year 2024 Financial Results and Business Update Conference Call. Currently, all participants are in listen-only mode. This call is being webcast live and can be accessed on the investor section of Fulcrum's website at www.fulcrumtx.com, and it's being recorded. Please be reminded that remarks during this call may contain forward-looking statements within the meaning of Private Securities Litigation Reform Act of 1995. They may include statements about the company's future expectations and plans, clinical development timelines, and financial projections. While these forward-looking statements represent Fulcrum's views as of today, this should not be relied upon as representing the company's views in the future. Fulcrum may update these statements in the future but is not taking on any obligations to do so.

Please refer to Fulcrum's most recent filings with the Securities and Exchange Commission for discussions of certain risks and uncertainties associated with the company's business. Joining the call today will be Alex Sapir, CEO and President of Fulcrum. Joining Alex on the call are Alan Musso, Chief Financial Officer, and Dr. Iain Fraser, Senior Vice President of Early Development. After providing updates on the company's key programs, there will be a brief Q&A in which Alex, Alan, and Iain will be available to answer your questions. With that, it's my pleasure to turn the call over to Alex.

Alex Sapir (President and CEO)

That's great. Thanks so much, Marvin. Good morning, everyone, and thank you for joining us today. The latter part of 2024 and early 2025 has been an exciting period for Fulcrum, with notable progress for our lead program, Pociredir, currently in development for the treatment of sickle cell disease. With the team we have in place, a year-end cash position of $241 million, and lastly, two data readouts over the next 12 months, 2025 is poised to be an important year for Fulcrum and, more critically, for patients with sickle cell disease and other benign hematological conditions. So let me get into some of the details, and I'll begin by giving an update on Pociredir, our oral HbF inducer for the treatment of sickle cell disease.

Now, as many of you know, sickle cell disease is a lifelong inherited blood disorder that severely impacts quality of life for approximately 100,000 people in the U.S. and 4.4 million people worldwide. Historically, the standard treatment for sickle cell disease has involved blood transfusions, pain medications, and hydroxyurea, focusing primarily on symptom relief. And despite the approval of gene editing therapies and their ability to increase fetal hemoglobin levels to transformational levels for patients, there remains a significant unmet need for safe and accessible oral therapeutic options that are broadly protective of sickle cell symptomatology. This unmet need is further underscored by the recent global withdrawal of Oxbryta. And as the first-in-class oral small-molecule HbF inducer, we believe pociredir has the potential to address this high unmet need.

In our phase I-b trial of pociredir, which we call the PIONEER trial, we have made good progress enrolling patients and activating sites, and I am pleased to report that we recently enrolled our 10th patient in the 12-milligram cohort, with the potential to enroll additional patients currently in screening prior to the next cohort, the 20-milligram cohort, being open for enrollment. Based on the progress that we've made with enrollment, we remain committed to share data from the 12-milligram cohort in mid-2025 and the 20-milligram cohort by year-end. Now, just as a quick reminder, patients enrolled in cohort three are receiving 12 milligrams of pociredir once daily, while patients in cohort four will receive 20 milligrams once daily. Each cohort has a dosing duration of three months, followed by a one-month follow-up visit by the patient.

We believe that inducing fetal hemoglobin is the optimal strategy for treating sickle cell disease. Evidence for the benefits of fetal hemoglobin continues to grow, as highlighted by the recent data presented at ASH last December, showing that even modest increases in HbF correlate to reduced disease severity. Specifically, each 1% increase in HbF was shown to provide a 4%-8% reduction in painful and, at times, debilitating vaso-occlusive crises, or VOCs. Furthermore, once HbF levels reach into their mid-20s, patients experience a near abolition of VOCs. Based on pociredir's mechanism of action and the data that we have previously disclosed, we believe that pociredir has the potential to provide a differentiated therapeutic option for patients living with sickle cell. Beyond pociredir, we continue to make progress in other rare benign hematological conditions.

In particular, we are currently conducting IND-enabling studies for an oral compound we believe has the potential to treat inherited aplastic anemias, such as Diamond-Blackfan Anemia, or DBA for short, Shwachman-Diamond Syndrome, and Fanconi Anemia. And we plan to submit an IND for Diamond-Blackfan Anemia in the fourth quarter of this year. With that, let me now turn it over to our Chief Financial Officer, Alan Musso, to run through the financials. Alan, over to you.

Alan Musso (CFO)

Thanks, Alex. I'll now go over our results for the fourth quarter and for the full year ended December 31st, 2024, beginning with results for the quarter. We had no collaboration revenues in the fourth quarter of 2024, compared to $900,000 for the fourth quarter of 2023. The decrease was due to the completion of our research services under our MyoKardia Collaboration Agreement during the fourth quarter of 2023. Our research and development expenses were $11.7 million for the fourth quarter of 2024, compared to $19 million for the fourth quarter of 2023. The decrease of $7.3 million was primarily due to decreased costs associated with the discontinuation of our Losmapimod Program and global development cost-sharing reimbursements under the collaboration with Sanofi, partially offset by increased costs related to the advancement of the phase I-b PIONEER trial.

General administrative expenses were $7.7 million for the fourth quarter of 2024, compared to $9.9 million for the fourth quarter of 2023. The decrease of $2.2 million was primarily due to decreased employee compensation costs resulting from the workforce reduction implemented in the third quarter of 2024. Our net loss was $16.6 million for the fourth quarter of 2024, compared to a net loss of $24.8 million for the fourth quarter of 2023. I'll now review the results for the full year ended December 31st, 2024. Collaboration revenue was $80 million for the year ended December 31st, 2024, compared to $2.8 million for the same period in 2023. The increase of $77.2 million was primarily due to recognition of the $80 million upfront license payment received from Sanofi during 2024.

The research and development expenses were $63.4 million for the year ended December 31st, 2024, compared to $71.8 million for the same period in 2023. The decrease of $8.4 million was primarily due to global development cost-sharing reimbursements under the collaboration with Sanofi, partially offset by increased costs related to the advancement of the phase I-b PIONEER trial. General administrative expenses were $36.4 million for the year ended December 31st, 2024, compared to $41.7 million for the same period in 2023. The decrease of $5.3 million was primarily due to decreased employee compensation costs as a result of the workforce reduction implemented in the third quarter of 2024. Our restructuring expenses were $2.1 million for the year ended December 31st, 2024, compared to no restructuring expenses during the same period of 2023.

The increase was due to the workforce reduction implemented in the third quarter of 2024, primarily related to severance costs. Our net loss was $9.7 million for the year ended December 31st, 2024, as compared to $97.3 million for the same period in 2023. Now turning to the balance sheet, we ended 2024 with cash, cash equivalents, and marketable securities of $241 million, compared to $236.2 million as of December 31st, 2023. The increase in our cash position was due to the $80 million upfront payment we received from Sanofi in the second quarter of 2024, partially offset by the cash used to fund our operating activities in 2024. Finally, turning to cash guidance, based on our current operating plans, we continue to expect that our existing cash, cash equivalents, and marketable securities will be sufficient to fund our operating requirements into at least 2027.

With that, let me turn the call back over to Alex.

Alex Sapir (President and CEO)

That's great. Thanks so much, Alan. And so with that overview of the business and the financials that Alan just went through, Marvin, let's go ahead and open it up for questions.

Operator (participant)

Thank you. At this time, we will conduct a question-and-answer session. As a reminder to ask a question, you'll need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while I compile the Q&A roster, and our first question comes from the line of Kristen Kluska of Cantor Fitzgerald. Your line is now open.

Rick Miller (Analyst)

Hi, this is Rick Miller on for Kristen. Thanks for taking our questions. We've just got two for you today. Can you give us any color on when you would look to meet with the FDA as it relates to the 12-milligram and 20-milligram cohort readouts? And also, what do you think the bar is on fetal hemoglobin and VOC reduction now that there have been changes in the sickle cell space? Thanks.

Alex Sapir (President and CEO)

Yeah, I think to answer that question, Rick, thanks for asking. It's a good question. I think to answer that, let me, I'll turn it over to Iain, and then if I've got any sort of additional comments to make, I can add those after Iain. Iain, over to you.

Iain Fraser (SVP of Early Development)

Yeah, thanks, Alex, and thanks, Rick, for the question. So what we've said in the past is that we aim to complete the 12-milligram and the 20-milligram cohorts before going back to FDA to review the next steps in the program. However, we've also said that depending on the data emerging from the study, we could potentially go back to the agency earlier with the data from the 12-milligram cohort itself. So all dependent on the data emerging from that cohort, and we will review it and make that decision at the time.

To your second question, which relates to the extent of fetal hemoglobin induction, I think there have been a number of movements in the space that have really reinforced the importance of fetal hemoglobin in the overall treatment of sickle cell disease, both from the gene therapy side, where increases in fetal hemoglobin that extended up into the low 40% range have shown to be clearly transformational for those patients in terms of their reductions of acute symptoms. The overall data, epidemiologic, pharmacologic, and genetic, suggest that there's clearly benefit to be gained from increases of fetal hemoglobin that are even lower than that.

We know, as Alex mentioned in his remarks at the beginning of this meeting, that work published by Novo Nordisk at ASH just this last December, which was a review of previously conducted studies in the sickle cell space, indicated that a one percentage point increase in fetal hemoglobin was associated with a 4%-8% reduction in acute VOCs. So even at that relatively low increase in fetal hemoglobin, there is benefit to be had. If we look at what's being approved based on VOCs, L-glutamine was approved by FDA with a 25% reduction in VOCs. So that at least was one benchmark for what was considered to be clinically meaningful in that space. So I think that's the one piece of it.

And then the other piece is some work that we've done ourselves, and this is in our corporate deck, an analysis of real-world data from PicnicHealth, indicating that as you increase fetal hemoglobins from very low levels up to around the mid-20% range, you get an incremental reduction in the likelihood that you'll experience a VOC during the year. And at that mid-20% range, the curve flattens out, and the probability of having a VOC in the following year is close to zero. And so putting those two together, small increases can be clinically meaningful and beneficial once you get to the mid-20% range, transformational for the patients.

Alex Sapir (President and CEO)

And then, Rick, this is Alex. The only other thing I would add related to your first question in terms of engagement with the agency, and we've stated this in the past as well as a separate work stream, we do plan to engage with the agency on the use of fetal hemoglobin as a surrogate endpoint, potentially for our next study that we would conduct with pociredir. So those discussions are ongoing, but I think, as Iain said, any increase in fetal hemoglobin shows a marked reduction in VOCs. And then once you get to that mid-25%, that's when you see a near abolition of VOCs. So I think there's a tremendous amount of data on the use of HbF and its impact on clinical manifestations of the disease.

We will be engaging with the agency on the possibility of using HbF as a surrogate endpoint for the next study that we plan to conduct with pociredir.

Rick Miller (Analyst)

That's great. Thank you for the color.

Alex Sapir (President and CEO)

Yeah, thanks so much.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from the line of Joe Schwartz of Leerink Partners. Your line is now open.

Joseph Schwartz (Senior Research Analyst)

Great. Thanks very much. I was wondering if you can give us any insight into the types of patients who have been enrolling in PIONEER to date, given the detailed rubric required to identify those who are eligible to enroll. It involves a number of criteria. I'm just wondering if any particular patterns are presenting themselves, especially now that the withdrawal of Oxbryta might be influencing things, and then I have a follow-up. Thanks.

Alex Sapir (President and CEO)

Yeah, thanks, Joe. It's a good question. Appreciate you asking. I'll start, and then I'll turn it over to Iain for any additional color that I miss. So the 10 patients that we have enrolled to date come from both South Africa and the U.S. As you articulated in your question, these patients do tend to be on the more severe side. So it would not be unexpected to see their baseline fetal hemoglobin lower than what we showed in the first 15 patients that were enrolled in this study. But we have yet to share details, any of the details around baseline fetal hemoglobin, and I think, as we previously have said, you know, our plan is to release the full data set once that does become available. And again, we do remain on track to share that data in the 12-milligram cohort by mid-year.

Anything else you would add to that, Iain?

Iain Fraser (SVP of Early Development)

We've spoken about the specific inclusion/exclusion criteria for the new part of the study emerging from the clinical hold, and the patients are conforming to those new inclusion/exclusion criteria, so I don't think there's anything surprising, different, or any unusual patterns that are emerging from that to date. It's pretty much in line with what we expected based on those inclusion/exclusion criteria. We do obviously have benefit of patients now not being able to access Oxbryta. Those patients have to wash out of that therapy, and so that process is sort of just coming to fruition now. Not everybody stopped immediately on the day it was withdrawn, but those patients are obviously lacking in other options, and they do have the option of enrolling in our study.

Alex Sapir (President and CEO)

Maybe, Joe, the only other thing I would add is the high level of adherence to study drug that we are seeing. So we're using a pretty innovative AI tool from this company called AiCure that really sort of monitors the patient taking the drug on a daily basis, and we're seeing adherence rates across these 10 patients that have enrolled. We don't have a lot of data on the 10 patients. They were only recently enrolled. But we're seeing adherence to study drug rates in the north of 90%. So that's also been really pleasing to see.

Joseph Schwartz (Senior Research Analyst)

Okay, great. Thanks. That was going to be my second question, so I appreciate that color. But maybe I can just ask whether there's a particular hurdle that the DSMB needs pociredir to clear before you can advance to the 20-milligram cohort. Can you talk about how that process of evaluation will go with the DSMB?

Alex Sapir (President and CEO)

Yeah, sure. I'll sort of provide a couple of facts, and I'll turn it over to Iain to get into more specifics in terms of exactly what the DMC, the Data Monitoring Committee, is looking for. So just to remind everybody, once the eighth patient has completed their 30 days of dosing, that is when we can call the DMC together to review the data, and I'll have Iain just touch on that in just a minute. So that meeting with the DMC is in the process of being scheduled. As you can imagine, these are busy thought leaders. So in addition to making sure that that eighth patient has completed their 30 days of dosing, it's also just logistically making sure that the schedules of all of these busy people are aligning.

But the scheduling of that DMC meeting to review that data is in the process of being scheduled. Do you want to maybe talk a little bit about what the DMC is actually looking for?

Iain Fraser (SVP of Early Development)

Sure. Happy to do that, and maybe just to add that there always was, right from the beginning of the study, which is a first in patient dose escalation, there always was a pause between sequential cohorts with a review of the data in order to allow the subsequent cohort to proceed. And that review is always primarily focused on safety and tolerability. The DMC now will convene to review the 12-milligram cohort with respect to advancing to the 20-milligram cohort, and their focus is, again, primarily around safety and tolerability, the acute safety and tolerability of the compound. They will have access to and will review the HbF data and any other associated hematological data, with the primary motivator or the primary decision around progression to 20 milligrams will be based on the safety and tolerability observed.

Joseph Schwartz (Senior Research Analyst)

Thanks for all the colors.

Alex Sapir (President and CEO)

Yeah, thanks, Joe.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from the line of Matthew Biegler of Oppenheimer. Your line is now open.

Matthew Biegler (Senior Analyst)

Hey, good morning, guys. Thanks for the update. Maybe just a little bit more granularity on the type of data that we're going to be getting first mid-year and then year-end. Do you think it'll be mature enough to have a readout on any early VOC events mid-year? I mean, I'd imagine you're probably seeing a pretty high baseline rate of VOC given kind of the sicker new patient population you're enrolling. So maybe just any details around kind of what we should expect in terms of the types of data would be super helpful. Thanks.

Alex Sapir (President and CEO)

Yeah, great question, Matt. I appreciate you asking it, and I'll start and then maybe turn it over to Iain for any additional color, so I think if you look at the data that we shared in the first 15 patients where we showed HbF levels at baseline and then at the end of the study, I think we will certainly be sharing that. We'll also be sharing other biomarkers such as reticulocyte counts, red cell distribution width. I believe that VOCs is something that we are obviously tracking. But I think given the fact that this is only a three-month study where the patients are on drug for a period of three months, I think it would be sort of unlikely to see a reduction in VOCs during that relatively short period of time.

But maybe let me kick it over to Iain to see what additional color he can add.

Iain Fraser (SVP of Early Development)

Yeah, we'll certainly provide that data. The study obviously is not focused on that as an efficacy readout for the reasons that Alex just mentioned. But we are collecting the data. And what I think we will have at a higher level than we did have with the previous cohorts is what the frequency of VOCs of these patients coming into the study was. Originally, when the study was an all-comers study, there was no requirement for severity, and so those VOC frequencies were not captured in the database in the same way as they are being now because of the inclusion/exclusion criteria. So we will have a little more granularity around the baseline VOCs of these patients.

Then we'll report out the VOCs that occur on study as well, but purely in a descriptive sense, given the number of patients, the short duration of the study, and so on.

Alex Sapir (President and CEO)

Yeah. And then maybe, Matt, just the other thing to add, which I failed to, which is probably important given the fact that this is a phase I-b safety study, is obviously we'll be sharing all of the important safety data as well that generates from these 20 or some odd patients that we'll have across these two cohorts.

Matthew Biegler (Senior Analyst)

Awesome. Looking forward to it. Thanks.

Alex Sapir (President and CEO)

Yeah. Thanks so much, Matt.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from the line of Tazeen Ahmad of Bank of America Securities. Your line is now open.

Jeremiah Lorentz (Analyst)

Hi, this is Jeremiah Lorentz on for Tazeen. Thanks for taking our question. Maybe a quick question on the FSHD readout that's expected in March. Just wondering what the key takeaways you guys are thinking will be from the presentation, and if there's any potential interest in exploring FSHD with another follow-on program, just given your past experiences. Thanks.

Alex Sapir (President and CEO)

Yeah, Jeremiah, it's a really good question. I appreciate you asking. I'll start, and then I'll turn it over to Iain to provide additional color. So as we said when we shared the data to the top line late last year, we are committed to make sure that we present this at the MDA conference, which is now scheduled for March the 19th, I believe. And then we will obviously be publishing it sometime around mid-year. I think what's interesting about this data set is the drug performed as we would have expected, and it performed very consistently with what we saw in the phase II study. The challenge was that during that 52 weeks, the placebos performed better than we had expected. So on a placebo-adjusted basis, there was no change.

Obviously, the prevailing hypothesis is, could it be during that year that the mind overtook the disease, recognizing that while this is a relentlessly progressing disease, it is slow to progress? And so the prevailing hypothesis is, could you do a longer-term study, two years, for example, where the mind does not have the ability to continue to overtake the disease during that two-year period, but the disease overtakes the mind? And I think we feel that that is not the most appropriate way to deploy our capital right now. So we do not have any plans to continue with losmapimod. But it is quite possible that one of the other players in the losmapimod—I'm sorry, in the FSHD field—may have an interest in looking at that data when it finally gets presented and published and possibly sort of taking it and conducting that longer-term study.

But for us as a company, we feel the most appropriate way to deploy our precious and scarce capital is really focus on the exciting things that we have going on in benign hematology, in particular sickle cell, and then some of these other inherited aplastic anemias that I spoke about. Iain, anything you want to add?

Iain Fraser (SVP of Early Development)

No, just to be specific, the MDA oral presentation, which Alex alluded to, is focused on the primary endpoint, the key secondary endpoints, and the safety. So those will be the highlights from that presentation. And then we're also preparing a more detailed manuscript that will include those endpoints, but also a broader array of the secondary endpoints as well. So that's the manuscript that we intend to publish later on. We also have additional work going on to ensure that the work that we did around the reachable workspace, the validation of that, and so on, that that too will be made public.

Jeremiah Lorentz (Analyst)

Great. Thanks for that color. And then maybe a quick question for Alan. Just curious on how we should be thinking about operating expenses in 2025 relative to 2024. Should we expect to see some additional restructuring fees in 2025, or has that largely been completed?

Alan Musso (CFO)

Yeah. Good question. The restructuring activities are completed, but we do now have a smaller organization. We've guided that we anticipate our cash burn in 2025 to be between—I'm sorry—$55 million and $65 million. So yeah, midpoint of that's about $60 million. So rough estimate, that's what we're thinking.

Jeremiah Lorentz (Analyst)

Great. Thanks.

Alex Sapir (President and CEO)

Yeah. Thanks, Jeremiah, for the question.

Operator (participant)

Thank you. One moment for our next question. Our next question comes from the line of Edward Tenthoff of Piper Sandler. Your line is now open.

Edward Tenthoff (Managing Director and Senior Research Analyst)

Great. Thank you very much. And congrats on the progress. Two quick questions. Firstly, when it comes to the enrollment, has the requirement of HU plus another advanced therapy and the removal of Oxbryta complicated enrollment at all? Or are there still enough patients who were on Oxbryta that they meet that enrollment criteria? And then secondly, when it comes to sort of the safety assessment that the DSMB is going to be doing, are there any special things we should be aware of beyond the standard that FDA is requiring? Thank you.

Alex Sapir (President and CEO)

Yeah. Two really good questions, Ted. Appreciate you asking them. I think you answered those. I'll turn those over to Iain.

Iain Fraser (SVP of Early Development)

Yeah, absolutely. And Ted, thanks for the question. The issue around the HU and the advanced therapies is actually probably simpler now for the study than prior to the withdrawal of Oxbryta. And it's simply because the language of the protocol specified prior experience with HU and at least one of the three at the time available therapies, which were Oxbryta, crizanlizumab, and L-glutamine. We know that both crizanlizumab and L-glutamine have not had very wide uptake in the patient population. Oxbryta was being used fairly widely. But with the withdrawal of Oxbryta, it's essentially fulfilled that criterion as being not available because that was one of the potential reasons for not being on that particular therapy. So to some extent, the withdrawal has made it somewhat easier for the patient recruitment perspective.

With respect to the second question around the DSMB, there's no specific safety signal that they're targeting. You may recall we had conducted previously a first-in-human study in healthy volunteers. There were approximately 100 healthy volunteers in that study, and there were no dose-limiting toxicities or safety signals, acute safety signals of concern in that study, and in the initial cohorts of the PIONEER study, the two, six, and the few patients that were enrolled at the 12-milligram dose, again, there were no consistent concerning acute safety signals or any dose-limiting toxicities, so they're going to be casting a broad net looking at all of the safety labs, all of the clinical manifestations, and so on, but there's no specific issue that they'll be looking at.

Alex Sapir (President and CEO)

Ted, maybe just to add a little bit more color on the first question around concomitant meds. I think, as Iain said, although L-glutamine and crizanlizumab are not broadly used in the U.S. and outside of the U.S., our estimate is there are probably a couple of thousand patients in the U.S. that are on crizanlizumab and L-glutamine, and in the original protocol, patients could not be on either one of those therapies in our trial. But now, based on a recent protocol amendment, which we have received approval on from the agency, patients can be on concomitant crizanlizumab and L-glutamine while being in the study. So I think that's also an important point to make in addition to the Oxbryta point that Iain spent time on.

Edward Tenthoff (Managing Director and Senior Research Analyst)

Yeah. That's super helpful. And just one quick additional one, if I may. When it comes to sort of patient profile for use of the drug, again, accepting it's very early, do you anticipate this would be used after HU failure because of sort of the limitation of not being able to be on both HU and pociredir? Or where do you really see pociredir fitting in the treatment landscape? Again, accepting that it's still pretty early and we don't have really the data yet. But where do you anticipate it being used? Thanks.

Alex Sapir (President and CEO)

Yeah. It's an excellent question, Ted. And again, I really appreciate you asking it. I think, yeah, so two points I'll make, and then I'll turn it over to Iain. You are correct. And it is an early study. And at this point, the agency has said, out of an abundance of caution, let's exclude hydroxyurea for this current study. I think as we gather more data and have ongoing discussions with the agency at the end of this year, once we have the 12 and 20 milligram in hand, obviously, one of the things that we'll be asking for from the agency is to possibly relax some of that inclusion/exclusion criteria. Because many patients are on hydroxyurea, and I think from a commercial standpoint, that would be quite challenging if our pivotal study for this drug at some point in the future excluded the use of hydroxyurea.

So that's obviously something that we would reengage with the agency on, very similar to the Oxbryta label that did allow the use of hydroxyurea. In terms of where the drug will be used, I'll just go back to what I said earlier. Based on the data that we've generated to date and based on what we know about fetal hemoglobin, with any increase in fetal hemoglobin being beneficial to the patients, even a 1% increase in fetal hemoglobin. But once you can get patients to 25, these patients really do become asymptomatic in the presentation of their disease, as evidenced by the near-abolition of VOCs. We would expect this drug to be sort of broadly used across many, many patients based on, again, what we're seeing and what we believe we will see mid-year and by the end of the year with the 12 and the 20 milligram.

Whether it actually becomes first line in place of HU, I just don't think we have enough information at this point of the profile of the drug to really sort of provide any accuracy in terms of where we think ultimately it will be positioned. But it really, truly does have the potential, as we believe, to transform how patients are treated if we can get to the levels of HbF that we believe we can get to with not only the 12 but the 20-milligram cohort.

Edward Tenthoff (Managing Director and Senior Research Analyst)

Great. Thank you very much for all that color, and excited for the data coming up in the middle of this year.

Alex Sapir (President and CEO)

Yeah. It's great. Thanks so much, Ted.

Operator (participant)

Thank you. One moment for our next question. Again, as a reminder to ask the question, you'll need to press star one one on your telephone. Our next question comes from the line of Gregory Renza of RBC Capital Markets. Your line is now open.

Hi, Alex and team. It's Anish for Greg. Thanks for the updates this quarter and for taking our questions. Just a couple from us. First, how receptive is the FDA to data either historic or currently showing an association between HbF induction and VOC reduction? What are the hangups here? And second, as you think about pipeline, where else outside of hematological diseases might you be able to leverage your platform? What's of interest on the BD front? Thanks so much.

Alex Sapir (President and CEO)

Yeah. Great question. Maybe I'll turn the first question over to Iain, and then I'm happy to talk a little bit about, give you a little bit of color into the second question that you asked.

Iain Fraser (SVP of Early Development)

Yeah. The first one, Anish, is around HbF and the agency's view. That's something, as Alex mentioned earlier, that we're directly going to be addressing with the agency. This is independent of our interactions with them around the clinical data from the PIONEER study, but more generally around the data that exists that support the use of HbF as a surrogate endpoint. That interaction is going to take place this year, and we're actively pursuing that. We'll get some specific feedback from them. As you're aware, I'm sure there haven't been drugs previously approved for sickle cell on the basis of HbF induction alone.

But we believe that there are abundant data now that are both genetic, epidemiologic, pharmacologic, and gene therapy that speak to the importance of HbF induction in sickle cell disease and would support its use as a surrogate endpoint. So that's why we're specifically going to be asking the agency about that.

Alex Sapir (President and CEO)

Yeah. And then, Anish, from a BD standpoint, we're always evaluating opportunities. And again, I think you were right to point out that our sweet spot is really benign hematological diseases where there is an unmet need that remains quite high. What we feel is that the good news is that we don't necessarily have to transact, but we obviously do have a robust balance sheet that we could transact if we found a really interesting asset in a rare benign hematological disease where the unmet need was high. But we certainly don't need to, I think, given the high level of interest with sickle cell, but also some of the other inherited aplastic anemias that we're studying for which we'll have our first IND submitted by the end of the year.

I think the only other one that I will highlight, and this is some data that Pfizer recently presented at ASCO GU, and that's the use of PRC2 inhibitors in prostate cancers. They have a PRC2 inhibitor. It's actually an EZH2 inhibitor, not an EED inhibitor like pociredir. But they have a product called mevrometostat, and the reason I'm bringing this up, we've had a lot of investors sort of ask about this. They showed in 80 patients a marked reduced risk of disease progression and death by about 50%. And so there is some belief that targeting the EED subunit of the PRC2 complex may have some potential advantages over targeting the EZH2 subunit, which mevrometostat is doing with Pfizer. So we're conducting some preclinical experiments now using some xenograft models to evaluate several compounds in our library.

Going into oncology is not something we're intending to do, but I think given the high level of interest in the use of PRC2 inhibitors in prostate cancer with Pfizer's product and ORIC product, it's something that we are looking at from a preclinical standpoint. Again, given some of the potential advantages that an EED inhibitor may have over mevrometostat and ORIC product, which are EZH2 inhibitors.

Great. Thanks so much for the color. Really appreciate it.

Yeah. Thanks, Anish.

Operator (participant)

Thank you. I'm showing no further questions at this time. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.