Fulcrum Therapeutics, Inc. (FULC) Misled Investors Regarding the Efficacy and Viability of a Lead Product Candidate
A shareholder filed a class action on behalf of all persons and entities that purchased Fulcrum Therapeutics, Inc. (NASDAQ: FULC) common stock between March 3, 2022 and March 8, 2023. Fulcrum is a clinical-stage biopharmaceutical company focused on improving the lives of patients with genetically defined rare diseases in areas of high unmet medical need. One of the Company’s lead product candidates is FTX-6058, an investigational oral fetal hemoglobin inducer for the treatment of sickle cell disease and other hemoglobinopathies.
According to the complaint, defendants failed to disclose that: (i) the preclinical data submitted in support of FTX-6058 showed safety concerns regarding potential hematological malignancies; (ii) the foregoing safety concerns increased the likelihood that the FDA would place a clinical hold on preclinical studies of FTX-6058; (iii) accordingly, the Company had overstated FTX-6058’s clinical and/or commercial prospects; and (iv) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On February 24, 2023, Fulcrum issued a press release “announc[ing] that on February 23, 2023, the U.S. Food and Drug Administration (FDA) verbally informed the company that it has issued a full clinical hold regarding the Investigational New Drug (IND) application for FTX-6058 for the potential treatment of sickle-cell disease. The Agency indicated that it would provide a formal Clinical Hold Letter to the company within 30 days.” Fulcrum further disclosed that “[t]he clinical hold was initiated by the Agency due to previously reported preclinical data. Fulcrum will suspend dosing in the Phase 1b trial of FTX-6058 and intends to work diligently with the Agency to resolve the hold as soon as possible.” On this news, Fulcrum’s stock price fell $7.23 per share, or 56.09%, to close at $5.66 per share on February 24, 2023.
Then, on March 9, 2023, before the market opened, Fulcrum issued a press release announcing recent business highlights and the Company’s Q4 and full year 2022 financial results. The press release provided that in the clinical hold letter the Company received on February 24, 2023, the FDA referenced “preclinical data previously submitted in April, October and December 2022, and non-clinical and clinical evidence of hematological malignancies observed with other inhibitors of polycomb repressive complex 2 (PRC2),” and noted that “the profile of hematological malignancies observed in the non-clinical studies of FTX-6058 is similar to that observed with other inhibitors of PRC2, and that hematological malignancies have been reported clinically with other PRC2 inhibitors.” Finally, the FDA requested that Fulcrum “further define the population where the potential benefit of continued treatment with FTX-6058 outweighs potential risk.” On this news, Fulcrum’s stock price fell $1.44, or 23%, to close at $4.82 per share on March 9, 2023.
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