On March 2, Fusion announced it has entered into an asset purchase agreement (APA) to acquire Ipsen’s intellectual property and assets related to IPN-1087. IPN-1087 is a small molecule targeting neurotensin receptor 1 (NTSR1), a protein expressed on multiple solid tumor types. Fusion intends to utilize its expertise and IPN-1087 to create an alpha-emitting radiopharmaceutical, FPI-2059, targeting solid tumors expressing NTSR1. The Company expects to submit an investigational new drug application in the first half of 2022.

In December 2020, Fusion announced that the first patient had been dosed in the multi-dose portion of the Phase 1 study evaluating FPI-1434 in patients with advanced solid tumors. The multi-dose portion follows completion of the single-ascending dose portion of the Phase 1 study, which showed that FPI-1434 was generally well tolerated with no dose limiting toxicities or treatment-related serious adverse events reported to date. The multi-dose portion of the study is enrolling patients at sites in Canada, the United States and Australia. The current patient cohort is being dosed with FPI-1434 at 75kBq/kg with repeat cycles every six weeks up to allowable limits.

Fusion anticipates reporting Phase 1 multi-dose safety and imaging data, and the recommended Phase 2 dose/schedule, in the first half of 2022.

Fusion has evaluated FPI-1434 in preclinical studies in combination with approved checkpoint and DNA damage response inhibitors, including PARP inhibitors, and believes the synergies observed could expand the addressable patient populations for FPI-1434 and allow for potential use in earlier lines of treatment.

Fusion anticipates the initiation of a Phase 1 combination study with FPI-1434 to occur six to nine months following determination of the recommended Phase 2 dose of FPI-1434 monotherapy.

FPI-1966 is designed to target and deliver actinium-225 to tumors expressing FGFR3, a protein that is overexpressed in head and neck and bladder cancers. Following the completion of pre-clinical studies, the Company expects to submit an IND for FPI-1966 in the second quarter of 2021.

Cash and Investments: As of December 31, 2020, Fusion held cash, cash equivalents and investments of $299.5 million, compared to cash of $65.3 million as of December 31, 2019. Fusion expects its cash, cash equivalents and investments as of December 31, 2020 will enable the Company to fund its operations through the end of 2023.

R&D Expenses: Research and development expenses for the fourth quarter of 2020 were $5.0 million, compared to $3.4 million for the same period in 2019. The increase was primarily related to increased employee-related costs associated with hiring and increases in clinical, preclinical and discovery activities, partially offset by lower manufacturing expenses.

G&A Expenses: General and administrative expenses for the fourth quarter of 2020 were $6.6 million, compared to $2.7 million for the same period in 2019. The increase was primarily related to increased salaries, benefits and stock compensation costs due to increased hiring, and increased professional and consulting fees as a result of public company activities.

Net Loss: For the fourth quarter of 2020, Fusion reported a net loss of $13.4 million, or $0.32 per share, compared with a net loss of $8.2 million, or $4.25 per share, for the same period in 2019. On a non-GAAP basis, excluding a change in fair value of preferred share tranche right liability, net loss was $5.9 million for the fourth quarter of 2019.

Assets

Current assets:

Cash and cash equivalents

Short-term investments

Prepaid expenses and other current assets

Restricted cash

Total current assets

Property and equipment, net

Deferred tax assets

Restricted cash

Long-term investments

Other non-current assets

Total assets

Liabilities, Non-Controlling Interest, Convertible Preferred Shares and Shareholders’ Equity (Deficit)

Current liabilities:

Accounts payable

Accrued expenses

Income taxes payable

Deferred revenue

Total current liabilities

Deferred rent, net of current portion

Deferred revenue, net of current portion

Preferred share tranche right liability

Income taxes payable, net of current portion

Special voting shares redemption right liability

Total liabilities

Commitments and contingencies

Non-controlling interest in Fusion Pharmaceuticals (Ireland) Limited

Convertible preferred shares, no par value; 0 shares and 132,207,290 shares authorized as of December 31, 2020 and 2019, respectively; 0 shares and 73,125,790 shares issued and outstanding as of December 31, 2020 and 2019, respectively; aggregate liquidation preference of $0 and $77,965 as of December 31, 2020 and 2019, respectively

Shareholders’ equity (deficit):

Common shares, no par value, unlimited shares authorized as of December 31, 2020 and 2019; 41,725,797 shares and 1,929,555 shares issued and outstanding as of December 31, 2020 and 2019, respectively

Additional paid-in capital

Accumulated other comprehensive income

Accumulated deficit

Total shareholders’ equity (deficit)

Total liabilities, non-controlling interest, convertible preferred shares and shareholders’ equity (deficit)

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense):

Change in fair value of preferred share tranche right liability

Change in fair value of preferred share warrant liability

Interest income (expense), net

Refundable investment tax credits

Other income (expense), net

Total other income (expense), net

Loss before provision for income taxes

Income tax provision

Net loss

Unrealized loss on investments

Comprehensive loss

Reconciliation of net loss to net loss attributable to common shareholders:

Net loss

Dividends paid to preferred shareholders in the form of warrants issued

Net loss attributable to common shareholders

Net loss per share attributable to common shareholders—basic and diluted

Weighted-average common shares outstanding—basic and diluted

Cash flows from operating activities:

Net loss

Adjustments to reconcile net loss to net cash used in operating activities:

Share-based compensation expense

Depreciation and amortization expense

Non-cash rent expense

Change in fair value of preferred share tranche right liability

Change in fair value of preferred share warrant liability

Amortization of premiums (accretion of discounts) on investments, net

Deferred tax benefit

Changes in operating assets and liabilities:

Prepaid expenses and other current assets

Other non-current assets

Accounts payable

Accrued expenses

Deferred revenue

Income taxes payable

Net cash used in operating activities

Cash flows from investing activities:

Purchases of investments

Maturities of investments

Purchases of property and equipment

Net cash used in investing activities

Cash flows from financing activities:

Proceeds from issuance of Class B convertible preferred shares and Class B preferred share tranche right, net of issuance costs

Proceeds from issuance of Class B preferred exchangeable shares of Fusion Pharmaceuticals (Ireland) Limited and Class B preferred share tranche right, net of issuance costs

Proceeds from the issuance of common shares upon closing of initial public offering, net of underwriter fees

Payment of offering costs

Proceeds from issuance of common shares upon exercise of stock options

Net cash provided by financing activities

Net increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

Cash, cash equivalents and restricted cash at end of period

Supplemental disclosure of cash flow information:

Cash paid for income taxes

Supplemental disclosure of non-cash investing and financing activities:

Purchases of property and equipment included in accounts payable and accrued expenses

Issuance of warrants to purchase Class B preferred shares and Class B preferred

exchangeable shares as a non-cash dividend to preferred shareholders

Issuance of common shares upon net settlement of stock option exercise

GAAP Net loss

Less: Adjustments

Change in fair value of preferred share tranche right liability

Change in fair value of preferred share warrant liability

Non-GAAP Net loss