Fusion Pharmaceuticals Inc. (FUSN) Reports Q1 Earnings; Provides Clinical Program Updates

Fusion Pharmaceuticals Inc. (Nasdaq: FUSN), a clinical-stage oncology company focused on developing next-generation radiopharmaceuticals as precision medicines, today announced financial results for the first quarter ended March 31, 2023 and provided an update on clinical and corporate developments.

Chief Executive Officer John Valliant, Ph.D. commented, "In the first quarter, we further diversified our pipeline of alpha-emitting radiopharmaceuticals while progressing our multiple ongoing clinical programs. FPI-2265, our recently acquired small molecule-based radiopharmaceutical targeting prostate specific membrane antigen (PSMA) for the treatment of metastatic castration-resistant prostate cancer (mCRPC), holds the potential to be the first-to-market actinium-based PSMA agent to meet a significant and growing need for patients.

"Continuing our mission to build out a multi-asset portfolio, we received investigational new drug (IND) clearance from the FDA for FPI-2068, a bispecific antibody targeting EGFR-cMET, and the first candidate nominated under our broad collaboration agreement with AstraZeneca. We are also pleased that the first patient has been dosed in the Phase 1 study of FPI-2059 targeting neurotensin receptor 1 (NTSR1). These are both important milestones as we demonstrate the potential to develop novel targets for radiopharmaceuticals that reach beyond prostate and neuroendocrine cancers.

"In parallel with the progress across our pipeline, we are actively growing our actinium supply and manufacturing capabilities to ensure our ability to execute on our multiple clinical programs, most recently through our partnership with BWXT Medical and the recent opening of Fusion's cGMP targeted alpha therapy (TAT) manufacturing facility," Dr. Valliant concluded.

Portfolio Update

FPI-2265

In February 2023, Fusion acquired an investigational new drug application (IND) for an ongoing Phase 2 clinical trial (the "TATCIST" trial) evaluating ²²⁵Ac-PSMA I&T, a small molecule targeting PSMA expressed in prostate cancers. The alpha-emitting radiopharmaceutical being evaluated in the TATCIST trial is now known as FPI-2265.

The TATCIST trial is designed to evaluate patients with mCRPC with progressive disease, including patients who are naïve to PSMA-targeted radiopharmaceuticals and those who have been pre-treated with ¹⁷⁷Lu-based PSMA radiopharmaceuticals such as PLUVICTO™. Fusion expects to report data on approximately 20 to 30 patients in the first quarter of 2024.

FPI-1434

In the Phase 1 trial, Fusion is exploring various dose levels of FPI-1434 as well as two dosing regimens: one with FPI-1434 alone ("hot only"), and another in which a small dose of cold antibody (naked IGF-1R antibody without the isotope) is administered prior to each dose of FPI-1434 ("cold/hot"). The Company anticipates reporting a clinical data update from the Phase 1 trial in a poster presentation at the Society of Nuclear Medicine and Molecular Imaging (SNMMI) Annual Meeting on Tuesday, June 27^th from 12:30 – 2:00pm CT, followed by a webcast investor presentation (details to be provided).

Fusion expects to report molecular imaging, safety, and pharmacokinetics (PK) for both the hot only and cold/hot dosing regimens. Previously reported results from the cold antibody sub-study (CASS), in conjunction with preclinical toxicity studies, demonstrated improved biodistribution with the cold/hot regimen, potentially leading to increased tumor absorbed dose compared to healthy tissues. As a result, Fusion has prioritized patient dosing with the cold/hot regimen. The Company expects to report the data across all dose escalation cohorts, including the first cohort (n=3) of the cold/hot regimen, which began after the hot only regimen and the completion of the CASS.

Chief Medical Officer Dmitri Bobilev, M.D. commented, "As the first industry study of its kind, the FPI-1434 Phase 1 clinical trial has produced key learnings about the development of antibody-based targeted alpha therapies. Given the encouraging safety, dosimetry and PK results suggesting an improved therapeutic index using the cold/hot administration, this method has become the preferred way of administration of FPI-1434 going forward. The study is currently enrolling patients in the second cohort of the cold/hot dose arm of the study."

FPI-2059

The Phase 1, non-randomized, open-label clinical trial of FPI-2059 in patients with solid tumors expressing NTSR1 is intended to investigate safety, tolerability and pharmacokinetics and to establish the recommended Phase 2 dose. Site initiation and patient screening is ongoing. Fusion plans to provide guidance on timelines for the FPI-2059 program following site activations and initial experience with patient screening and patient enrollment.

FPI-2068

In April 2023, Fusion announced U.S. Food and Drug Administration (FDA) clearance of IND applications for [²²⁵Ac]-FPI-2068 (FPI-2068) and corresponding imaging analogue [¹¹¹In]-FPI-2107 (FPI-2107). Fusion is jointly developing FPI-2068 with AstraZeneca under the companies' multi-asset collaboration agreement. FPI-2068 is a targeted alpha therapy (TAT) designed to deliver actinium-225 to various solid tumors that express EGFR and cMET. EGFR and cMET are both validated targets that are co-expressed in multiple tumor types, including head and neck squamous cell carcinoma, non-small cell lung cancer, colorectal cancer, and pancreatic ductal adenocarcinoma. Fusion plans to provide additional guidance on timelines for the FPI-2068 program following initial experience with patient screening to better predict the cadence of patient enrollment.

FPI-1966

Fusion announced that it is discontinuing the Phase 1, non-randomized, open-label clinical trial of FPI-1966 in patients with solid tumors expressing FGFR3. As part of a portfolio prioritization decision to focus resources on the Company's lead program, FPI-2265, and assessment of the relative portfolio value contributions of our clinical assets, Fusion no longer plans to pursue development of FPI-1966.

Recent Updates

• In May, Fusion announced the opening of its state-of-the-art radiopharmaceutical manufacturing facility. The 27,000 square foot good manufacturing practice (GMP) compliant facility, which is located adjacent to the Company's research and development labs, has clinical and commercial manufacturing scale capabilities designed to support the Company's growing pipeline of targeted alpha therapies (TATs). The facility is expected to be fully operational in 2024.
• In April, Fusion announced the clearance of investigational new drug (IND) applications for [²²⁵Ac]-FPI-2068 (FPI-2068) and corresponding imaging analogue [¹¹¹In]-FPI-2107 (FPI-2107) to the U.S. Food and Drug Administration (FDA).

Private Placement Financing

Fusion has agreed to sell an aggregate of approximately 4.8 million common shares to Federated Hermes Kaufmann Funds in a private placement in public equity financing (the "Offering"). The Offering is expected to result in gross proceeds to Fusion of approximately $20.0 million, before deducting offering expenses payable by Fusion.

Pursuant to the terms of the securities purchase agreement, at the closing of the Offering, Fusion will issue approximately 4.8 million of its common shares at a price of $4.18 per share. The closing of the Offering is subject to customary closing conditions and is expected to occur on or about May 15, 2023.

Upon the closing of the Offering, Fusion anticipates having sufficient cash, cash equivalents, and investments to fund its planned operating expenses and capital expenditure requirements into the second quarter of 2025.

The offer and sale of the foregoing shares are being made in a transaction not involving a public offering and have not been registered under the Securities Act of 1933, as amended (the "Securities Act"). The shares being issued in the private placement may not be offered or sold in the United States or Canada absent registration or pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws or pursuant to an exemption from the prospectus requirements of Canadian securities laws, as applicable. Fusion has agreed to file a registration statement with the Securities and Exchange Commission covering the resale of the shares acquired by the investors in the private placement.

This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any state in which such offer or sale would be unlawful prior to the registration or qualification under the securities laws of such state. Any offering of the shares under the resale registration statement will only be by means of a prospectus.

First Quarter 2023 Financial Results

• Cash and Investments: As of March 31, 2023, Fusion held cash, cash equivalents and investments of $221.2 million, compared to cash, cash equivalents and investments of $186.6 million as of December 31, 2022. The increase in cash, cash equivalents and investments was attributable to $60.0 million of gross proceeds received from a private placement financing that closed in February 2023.
• Collaboration Revenue: For the first quarter of 2023, Fusion recorded less than $0.1 million of revenue under the AstraZeneca collaboration agreement, compared to $0.6 million for the same period in 2022.
• R&D Expenses: Research and development expenses for the first quarter of 2023 were $15.9 million, compared to $12.7 million for the same period in 2022. The increase was primarily due to costs associated with the acquisition of the FPI-2265 Phase 2 clinical trial during the first quarter of 2023, as well as an increase in personnel-related costs.
• G&A Expenses: General and administrative expenses for the first quarter of 2023 were $9.0 million, compared to $8.4 million for the same period in 2022. The increase was primarily due to increased corporate and patent-related legal expenses, as well as an increase in personnel-related costs.
• Net Loss: For the first quarter of 2023, Fusion reported a net loss of $24.3 million, or $0.45 per share, compared with a net loss of $19.9 million, or $0.46 per share, for the same period in 2022.

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