Shares of Fulcrum Therapeutics Inc. (NASDAQ:FULC) plunged about 30% in after-hours trading Monday after the company disclosed it will discontinue clinical development of pociredir for sickle cell disease and begin a strategic review of its business and assets.
The company said the decision followed feedback from the Food and Drug Administration. In meeting minutes from end-of-phase discussions received on May 28, the agency indicated that pharmacological approaches directed at the PRC2 complex carry a similar risk of secondary hematologic malignancies, regardless of which PRC2 subunit is targeted. That assessment was informed in part by an unexpectedly high rate of such malignancies seen with Tazverik (tazemetostat), another PRC2 inhibitor that was removed from the global market in March.
Fulcrum noted that it had provided the FDA with material arguing that mechanistic distinctions between EED - the molecular target of pociredir - and EZH2 - the target of tazemetostat - should factor into any benefit-risk evaluation. Despite those submissions, the FDA maintained its position, and the agency's view left no viable regulatory path forward for continued clinical development of pociredir, the company said.
In response to the regulatory roadblock, Fulcrum said it will pursue strategic alternatives that could include a merger, acquisition, business combination or other transactions involving the company or its assets. Concurrently, the company announced plans to materially reduce operating expenses and preserve capital while it assesses those options.
Fulcrum reported $333.3 million in cash, cash equivalents and marketable securities as of March 31. The company did not provide additional forecasts or timelines tied to the strategic review in its announcement.
Market reaction and immediate implications
The after-hours decrease in Fulcrum's share price followed the company statement outlining the cessation of the pociredir program and the initiation of a strategic review. The disclosure highlighted the FDA's safety concerns around PRC2-targeted therapies and the impact of those concerns on Fulcrum's development prospects for pociredir.
Next steps from the company
- Explore strategic alternatives - including potential mergers, acquisitions, business combinations, or other transactions involving Fulcrum or its assets.
- Undertake significant reductions in operating expenses to conserve capital while evaluating options.
Fulcrum's announcement did not indicate a timeline for the strategic review or for any potential transaction process.
Context preserved from company disclosures
Key factual elements in Fulcrum's statement include the FDA's end-of-phase meeting minutes dated May 28, the agency's conclusion about PRC2-targeting pharmacology and the reference point of Tazverik's observed malignancy rate and subsequent withdrawal from the global market in March. Fulcrum's reported cash position as of March 31 was $333.3 million.