Group 1 - Foghorn Therapeutics Inc. (FHTX) closed at $5.06, with a 1.4% gain over the past four weeks, and a mean price target of $11.67 suggests a 130.6% upside potential [1] - The average of six short-term price targets ranges from $9.00 to $14.00, indicating a potential increase of 77.9% to 176.7%, with a standard deviation of $2.25 reflecting the variability of estimates [2] - Analysts show strong agreement in revising earnings estimates higher, which correlates with potential stock price movements, as the Zacks Consensus Estimate for the current year has increased by 8% [4][12] Group 2 - FHTX holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates, indicating a strong potential upside [13] - While price targets may not be reliable indicators of actual stock price movements, the direction implied by these targets can serve as a useful guide for further research [14]

Core Viewpoint - Foghorn Therapeutics Inc. (FHTX) has experienced a recent decline in share price, but the formation of a hammer chart pattern suggests a potential trend reversal due to increased buying interest and positive earnings estimate revisions from analysts [1][2][7]. Group 1: Technical Analysis - The hammer chart pattern indicates that the stock may have found support, with bulls potentially counteracting the bears, signaling a possible trend reversal [1][5]. - A hammer pattern forms when there is a small candle body with a long lower wick, typically occurring during a downtrend, suggesting that selling pressure may be exhausting [4][5]. - The effectiveness of the hammer pattern as a bullish indicator is enhanced when used alongside other bullish indicators [6]. Group 2: Fundamental Analysis - There has been a positive trend in earnings estimate revisions for FHTX, with the consensus EPS estimate increasing by 8% over the last 30 days, indicating analysts' optimism about the company's future earnings [7][8]. - FHTX holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [9][10]. - The Zacks Rank serves as a timing indicator, suggesting that the company's prospects are improving, further supporting the potential for a turnaround in share price [10].

Company Performance - Foghorn Therapeutics Inc. reported a quarterly loss of $0.28 per share, which was better than the Zacks Consensus Estimate of a loss of $0.31, and an improvement from a loss of $0.45 per share a year ago, representing an earnings surprise of +9.68% [1] - The company posted revenues of $7.56 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 0.85%, but showing an increase from year-ago revenues of $6.89 million [2] - Over the last four quarters, Foghorn Therapeutics has surpassed consensus EPS estimates two times, but has not been able to beat consensus revenue estimates [2] Market Outlook - Foghorn Therapeutics shares have increased by approximately 8.9% since the beginning of the year, outperforming the S&P 500's gain of 7.6% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is -$0.31 on revenues of $7.93 million, and for the current fiscal year, it is -$1.27 on revenues of $29.82 million [7] Industry Context - The Medical - Biomedical and Genetics industry, to which Foghorn Therapeutics belongs, is currently ranked in the bottom 43% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor decisions [5]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Foghorn Therapeutics Inc.'s unaudited condensed consolidated financial statements and detailed notes for the interim periods ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheets show a decrease in total assets and an increase in total stockholders' deficit from December 31, 2024, to June 30, 2025, primarily driven by a reduction in marketable securities and an accumulated deficit | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--------------------------------- | :----------------------------- | :------------------------------- | | Cash and cash equivalents | $72,572 | $55,454 | | Marketable securities | $126,093 | $188,293 | | Total current assets | $203,842 | $249,601 | | Total assets | $226,236 | $283,982 | | Total current liabilities | $77,786 | $66,989 | | Total liabilities | $302,895 | $329,510 | | Total stockholders' deficit | $(76,659) | $(45,528) | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The company reported a reduced net loss for both the three and six months ended June 30, 2025, compared to the same periods in 2024, driven by lower operating expenses, particularly in research and development, despite a slight increase in collaboration revenue | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Collaboration revenue | $7,557 | $6,888 | $13,509 | $11,938 | | Research and development | $21,792 | $23,797 | $43,418 | $49,331 | | General and administrative | $6,862 | $7,325 | $14,101 | $15,035 | | Impairment of long-lived assets | $— | $2,398 | $— | $2,398 | | Total operating expenses | $28,654 | $33,520 | $57,519 | $66,764 | | Net loss | $(17,936) | $(22,979) | $(36,770) | $(47,995) | | Net loss per share (basic and diluted) | $(0.28) | $(0.45) | $(0.58) | $(1.02) | [Condensed Consolidated Statements of Stockholders' Deficit](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Deficit) The statements of stockholders' deficit show an increase in the accumulated deficit from **$558.2 million** at December 31, 2024, to **$595.0 million** at June 30, 2025, primarily due to net losses incurred during the period, partially offset by stock-based compensation and common stock issuances | Metric | December 31, 2024 (in thousands) | March 31, 2025 (in thousands) | June 30, 2025 (in thousands) | | :-------------------------------- | :------------------------------- | :---------------------------- | :--------------------------- | | Common Stock (Shares) | 55,594,131 | 55,721,340 | 55,803,195 | | Additional Paid-in Capital | $512,515 | $515,346 | $518,333 | | Accumulated Deficit | $(558,184) | $(577,018) | $(594,954) | | Total Stockholders' Deficit | $(45,528) | $(61,652) | $(76,659) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by investing activities significantly increased, while net cash used in operating activities decreased, and net cash provided by financing activities substantially declined compared to the same period in 2024, leading to an overall net increase in cash, cash equivalents, and restricted cash | Cash Flow Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net cash used in operating activities | $(44,968) | $(54,882) | | Net cash provided by investing activities | $63,235 | $9,120 | | Net cash provided by financing activities | $393 | $104,373 | | Net increase in cash, cash equivalents and restricted cash | $18,660 | $58,611 | | Cash, cash equivalents and restricted cash at end of period | $75,822 | $140,655 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures for the unaudited condensed consolidated financial statements, covering key accounting policies, agreements, and financial positions [1. Nature of Business, Going Concern and Basis of Presentation](index=8&type=section&id=1.%20Nature%20of%20Business,%20Going%20Concern%20and%20Basis%20of%20Presentation) Foghorn Therapeutics Inc. is a clinical-stage biopharmaceutical company with recurring losses, anticipating current capital to fund operations for at least 12 months, with future funding needs - Foghorn Therapeutics Inc. is a clinical-stage biopharmaceutical company developing medicines targeting the chromatin regulatory system using its proprietary Gene Traffic Control platform[23](index=23&type=chunk) - The company has incurred net losses of **$36.8 million** and **$48.0 million** for the six months ended June 30, 2025 and 2024, respectively, with an accumulated deficit of **$595.0 million** as of June 30, 2025[26](index=26&type=chunk) - Management expects current cash, cash equivalents, and marketable securities to fund operating expenses and capital expenditure requirements for at least 12 months, but additional funding will be necessary thereafter[26](index=26&type=chunk)[27](index=27&type=chunk) [2. Summary of Significant Accounting Policies](index=9&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) The company's interim financial reporting follows GAAP and SEC rules, leveraging the extended transition period for new accounting standards as an emerging growth company - The company's accounting policies for interim financial reporting are consistent with its 2024 Annual Report on Form 10-K[30](index=30&type=chunk) - As an 'emerging growth company,' Foghorn has elected the extended transition period for complying with new or revised accounting standards[31](index=31&type=chunk) - The company is evaluating the impact of ASU 2024-03, 'Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures,' effective for annual periods beginning after December 15, 2026[32](index=32&type=chunk) [3. Marketable Securities and Fair Value Measurements](index=9&type=section&id=3.%20Marketable%20Securities%20and%20Fair%20Value%20Measurements) The company's marketable securities, primarily U.S. treasury notes, commercial paper, and corporate notes and bonds, decreased from **$188.3 million** at December 31, 2024, to **$126.1 million** at June 30, 2025, with fair value measurements predominantly classified as Level 2 | Security Type | Estimated Fair Value (June 30, 2025, in thousands) | Estimated Fair Value (December 31, 2024, in thousands) | | :------------------------------------ | :--------------------------------------------- | :----------------------------------------------- | | U.S. treasury notes (due within one year) | $11,468 | $35,394 | | Commercial paper (due within one year) | $27,048 | $44,994 | | Corporate notes and bonds (due within one year) | $87,577 | $100,744 | | Corporate notes and bonds (due after one year through two years) | $— | $7,161 | | Total marketable securities | $126,093 | $188,293 | - The majority of the company's marketable securities and cash equivalents are measured at fair value using Level 2 inputs (observable inputs other than quoted prices)[34](index=34&type=chunk) [4. Property and Equipment, Net](index=10&type=section&id=4.%20Property%20and%20Equipment,%20Net) Net property and equipment decreased slightly from **$9.96 million** at December 31, 2024, to **$9.51 million** at June 30, 2025, with depreciation and amortization expense increasing for both the three and six months ended June 30, 2025, compared to the prior year | Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------- | :--------------------------- | :------------------------------- | | Laboratory equipment | $8,326 | $7,119 | | Leasehold improvements | $17,023 | $17,023 | | Total property and equipment, net | $9,514 | $9,964 | - Depreciation and amortization expense was **$0.9 million** for the three months ended June 30, 2025 (vs. **$0.8 million** in 2024) and **$1.7 million** for the six months ended June 30, 2025 (vs. **$1.6 million** in 2024)[35](index=35&type=chunk) [5. Accrued Expenses and Other Current Liabilities](index=11&type=section&id=5.%20Accrued%20Expenses%20and%20Other%20Current%20Liabilities) Accrued expenses and other current liabilities remained relatively stable, increasing slightly from **$8.53 million** at December 31, 2024, to **$8.56 million** at June 30, 2025, with an increase in accrued external research and development expenses and a decrease in accrued employee compensation and benefits | Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------------------------------------ | :--------------------------- | :------------------------------- | | Accrued external research and development expenses | $4,562 | $3,076 | | Accrued employee compensation and benefits | $2,922 | $4,742 | | Total accrued expenses | $8,564 | $8,531 | [6. Common Stock and Net Loss Per Share](index=11&type=section&id=6.%20Common%20Stock%20and%20Net%20Loss%20Per%20Share) The number of common shares outstanding increased to **55,803,195** as of June 30, 2025, with net loss per share improving to **$(0.28)** for the three months and **$(0.58)** for the six months ended June 30, 2025, compared to **$(0.45)** and **$(1.02)** for the respective periods in 2024 - As of July 28, 2025, the registrant had **56,529,969** shares of common stock outstanding[4](index=4&type=chunk) - In May 2024, the company issued **12,743,039** shares of common stock and pre-funded warrants for **7,220,794** shares, generating net proceeds of **$102.8 million**[38](index=38&type=chunk)[90](index=90&type=chunk) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss per share attributable to common stockholders— basic and diluted | $(0.28) | $(0.45) | $(0.58) | $(1.02) | | Weighted average common shares outstanding—basic and diluted | 62,978,219 | 51,580,310 | 62,913,804 | 47,004,561 | [7. Stock-Based Compensation](index=11&type=section&id=7.%20Stock-Based%20Compensation) Stock-based compensation expense decreased for both the three and six months ended June 30, 2025, compared to the prior year, with the 2020 Equity Incentive Plan and 2020 Employee Stock Purchase Plan (ESPP) seeing automatic annual increases in reserved shares | Expense Category | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Research and development expenses | $1,129 | $1,324 | $2,279 | $2,666 | | General and administrative expenses | $1,604 | $1,844 | $3,146 | $3,726 | | Total Stock-based compensation expense | $2,733 | $3,168 | $5,425 | $6,392 | - As of June 30, 2025, total unrecognized compensation cost related to unvested options was **$18.2 million**, to be recognized over a weighted average period of 2.3 years[48](index=48&type=chunk) - The 2020 Equity Incentive Plan and 2020 Employee Stock Purchase Plan (ESPP) had automatic annual increases in reserved shares effective January 1, 2025[44](index=44&type=chunk)[46](index=46&type=chunk) [8. Collaboration Agreement](index=12&type=section&id=8.%20Collaboration%20Agreement) The collaboration agreement with Eli Lilly and Company (Lilly) involves co-development and co-commercialization for SMARCA2 oncology targets and additional discovery programs, with increased collaboration revenue for the periods ended June 30, 2025, and **$266.6 million** in deferred revenue remaining - The Lilly Collaboration Agreement, entered in December 2021, focuses on creating novel oncology medicines using Foghorn's Gene Traffic Control platform, including co-development for SMARCA2 and other targets, and three discovery programs[49](index=49&type=chunk)[97](index=97&type=chunk) - For Joint Programs, Foghorn and Lilly share 50/50 in U.S. profits and Foghorn receives royalties on ex-U.S. sales; for Discovery Programs, Foghorn is eligible for up to **$1.3 billion** in milestones and tiered royalties[51](index=51&type=chunk)[52](index=52&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :-------------------- | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Collaboration revenue | $7,557 | $6,888 | $13,509 | $11,938 | | Deferred revenue (as of period end) | $266,600 (June 30, 2025) | $337,800 (initial) | $266,600 (June 30, 2025) | $337,800 (initial) | [9. Leases](index=14&type=section&id=9.%20Leases) The company entered into a new 10-year lease for laboratory and office space in Watertown, MA, and amended its existing Cambridge Office Lease to reduce fixed payments and shorten the term for a portion of the space, resulting in an **$8.8 million** reduction to the ROU asset and lease liability due to remeasurement - In June 2025, Foghorn entered a new 10-year lease for 72,846 square feet in Watertown, MA, with estimated minimum lease payments of **$61.0 million**[60](index=60&type=chunk) - The existing Office Lease in Cambridge was amended, reducing fixed lease payments by **$8.5 million** and shortening the term for a portion of the space to December 31, 2026[61](index=61&type=chunk) - A remeasurement of the Office Lease due to the amendment resulted in an **$8.8 million** reduction to the Right-of-Use (ROU) asset and lease liability[62](index=62&type=chunk) [10. Commitments and Contingencies](index=17&type=section&id=10.%20Commitments%20and%20Contingencies) The company has commitments under its leases and various license agreements, which may require royalty payments and annual maintenance fees, and provides indemnification agreements in the ordinary course of business but is not currently a party to any material litigation - The company has license agreements that may require sales-based royalties (low single-digit), annual maintenance fees (less than **$0.3 million**), and regulatory milestones (up to **$1.1 million** per licensed product)[72](index=72&type=chunk) - Foghorn provides indemnification to vendors, lessors, and officers, with potential unlimited future payments, but has not incurred material costs from such indemnifications[73](index=73&type=chunk) - The company is not currently a party to any material litigation or legal proceedings[74](index=74&type=chunk)[141](index=141&type=chunk) [11. Related Parties](index=17&type=section&id=11.%20Related%20Parties) Related party transactions include payments to a scientific founder and payments to Eli Lilly and Company, which is a 5% or greater shareholder, with payments to Lilly increasing for the three months ended June 30, 2025, but decreasing for the six months ended June 30, 2025, compared to the prior year - Eli Lilly and Company is a related party, holding 5% or more of the company's shares since December 2021[76](index=76&type=chunk) | Payments to Lilly | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :------------------ | :--------------------------------------------- | :--------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Total Payments | $1.4 | $1.2 | $2.0 | $2.9 | [12. Segment Reporting](index=18&type=section&id=12.%20Segment%20Reporting) The company manages its operations as a single segment, focusing on the discovery and development of medicines targeting the chromatin regulatory system, with revenue derived entirely from the Lilly collaboration agreement - Foghorn Therapeutics Inc. operates as a single segment, focused on discovering and developing medicines targeting the chromatin regulatory system[78](index=78&type=chunk) - The segment's revenue is entirely derived from the recognition of deferred revenue related to the collaboration agreement with Eli Lilly and Company[78](index=78&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and operational results, detailing revenue, expenses, and liquidity, and highlighting future funding requirements [Overview](index=19&type=section&id=Overview) Foghorn is a clinical-stage biotechnology company with FHD-909 in Phase 1 development, having discontinued FHD-286, and requires substantial additional funding due to significant operating losses - Foghorn is a clinical-stage biotechnology company pioneering medicines targeting the chromatin regulatory system for oncology and other diseases[81](index=81&type=chunk)[82](index=82&type=chunk) - The company discontinued independent development of FHD-286 in AML and uveal melanoma in December 2024[85](index=85&type=chunk)[119](index=119&type=chunk) - FHD-909, a selective allosteric ATPase inhibitor of SMARCA2, developed in collaboration with Eli Lilly, dosed its first patient in a Phase 1 study in October 2024[85](index=85&type=chunk) - Foghorn reported net losses of **$36.8 million** for the six months ended June 30, 2025, and **$86.6 million** for the year ended December 31, 2024, with an accumulated deficit of **$595.0 million**[91](index=91&type=chunk) [Components of Our Results of Operations](index=21&type=section&id=Components%20of%20Our%20Results%20of%20Operations) This section details the company's financial results, including collaboration revenue, operating expenses (R&D, G&A), other income, and income taxes, noting net operating loss carryforwards - Collaboration revenue increased to **$7.6 million** for the three months and **$13.5 million** for the six months ended June 30, 2025, due to continued advancement of programs under the Lilly Collaboration Agreement[116](index=116&type=chunk)[117](index=117&type=chunk) - Research and development expenses decreased by **$2.0 million** for the three months and **$5.9 million** for the six months ended June 30, 2025, primarily due to the discontinuation of FHD-286 development and reduced preclinical research costs, partially offset by increased costs for Lilly partnered programs (FHD-909)[118](index=118&type=chunk)[119](index=119&type=chunk) - General and administrative expenses decreased by **$0.5 million** for the three months and **$0.9 million** for the six months ended June 30, 2025, mainly due to lower professional and consulting costs and facilities/IT expenses[120](index=120&type=chunk)[121](index=121&type=chunk) - Other income, net, was **$3.2 million** for the three months ended June 30, 2025 (down from **$3.7 million** in 2024) and **$7.2 million** for the six months ended June 30, 2025 (up from **$6.8 million** in 2024), influenced by changes in interest income and increased sublease income[123](index=123&type=chunk)[124](index=124&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) The company's net loss decreased by **$5.0 million** for the three months and **$11.2 million** for the six months ended June 30, 2025, compared to the prior year, primarily driven by reduced operating expenses, particularly in R&D, and the absence of long-lived asset impairment charges | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Change (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | Change (in thousands) | | :-------------------------- | :-------------------------------------------- | :-------------------------------------------- | :-------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | | Collaboration revenue | $7,557 | $6,888 | $669 | $13,509 | $11,938 | $1,571 | | Research and development | $21,792 | $23,797 | $(2,005) | $43,418 | $49,331 | $(5,913) | | General and administrative | $6,862 | $7,325 | $(463) | $14,101 | $15,035 | $(934) | | Impairment of long-lived assets | $— | $2,398 | $(2,398) | $— | $2,398 | $(2,398) | | Net loss | $(17,936) | $(22,979) | $5,043 | $(36,770) | $(47,995) | $11,225 | [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company held **$198.7 million** in cash and marketable securities, expecting to fund operations for at least 12 months, but requiring substantial additional capital for future activities - As of June 30, 2025, the company had **$198.7 million** in cash, cash equivalents, and marketable securities[125](index=125&type=chunk) - Management expects current capital to fund operations for at least 12 months, but substantial additional funding will be needed for future clinical activities and growth[132](index=132&type=chunk) | Cash Flow Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net cash used in operating activities | $(44,968) | $(54,882) | | Net cash provided by investing activities | $63,235 | $9,120 | | Net cash provided by financing activities | $393 | $104,373 | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Foghorn Therapeutics Inc. is not required to provide quantitative and qualitative disclosures about market risk - Foghorn Therapeutics Inc. is a smaller reporting company and is exempt from providing quantitative and qualitative disclosures about market risk[137](index=137&type=chunk) [Item 4. Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the Principal Executive Officer and Principal Financial Officer, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - As of June 30, 2025, the company's disclosure controls and procedures were deemed effective at the reasonable assurance level[138](index=138&type=chunk) - No material changes to internal control over financial reporting occurred during the three months ended June 30, 2025[139](index=139&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material litigation or legal proceedings that are expected to have a material adverse effect on its business - The company is not currently a party to any material litigation or legal proceedings[141](index=141&type=chunk) [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - No material changes to the risk factors disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024, have occurred[142](index=142&type=chunk) [Item 5. Other Information](index=29&type=section&id=Item%205.%20Other%20Information) During the three months ended June 30, 2025, no directors or officers entered into, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No directors or officers entered into, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025[143](index=143&type=chunk) [Item 6. Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including lease agreements, certifications from executive officers, and XBRL taxonomy documents - Exhibits include a Lease Agreement and a Lease Termination Agreement dated June 27, 2025[145](index=145&type=chunk) - Certifications of the Principal Executive Officer and Principal Financial Officer pursuant to the Sarbanes-Oxley Act of 2002 are filed/furnished[145](index=145&type=chunk) SIGNATURES

[Executive Summary & Corporate Update](index=1&type=section&id=Executive%20Summary%20%26%20Corporate%20Update) Foghorn Therapeutics provides an update on its clinical programs, including FHD-909 and selective CBP degrader, alongside a strong financial position with cash runway into 2028 - **FHD-909 (LY4050784) Phase 1 dose escalation trial** in SMARCA4 mutated cancers, with **non-small cell lung cancer (NSCLC)** as the primary target population, is enrolling well and remains on track[1](index=1&type=chunk) - Preclinical synergistic benefit of **FHD-909** in combination with **pembrolizumab** and **KRAS inhibitors** reinforces significant potential in **NSCLC**[1](index=1&type=chunk) - Selective **CBP degrader** is on track for IND-enabling studies, targeting an **IND in 2026**, and has shown encouraging activity in **ER+ breast cancer**[1](index=1&type=chunk) - Strong balance sheet with cash, cash equivalents, and marketable securities of **$198.7 million** as of **June 30, 2025**, providing a cash runway into **2028**[1](index=1&type=chunk) [Program Overview and Upcoming Milestones](index=1&type=section&id=Program%20Overview%20and%20Upcoming%20Milestones) This section details the progress of Foghorn's clinical and preclinical programs, highlighting key developments and anticipated milestones across its therapeutic pipeline [FHD-909 (LY4050784)](index=2&type=section&id=FHD-909%20(LY4050784)) FHD-909, a first-in-class oral SMARCA2 selective inhibitor, is progressing well in its Phase 1 trial for SMARCA4 mutated solid tumors, with NSCLC as the primary target. Preclinical data supports its use in combination therapies - **FHD-909** is a first-in-class oral **SMARCA2 selective inhibitor** that has demonstrated high selectivity over its closely related paralog **SMARCA4** in preclinical studies[3](index=3&type=chunk)[13](index=13&type=chunk) - Enrollment in the first-in-human **Phase 1 multi-center trial of FHD-909** is progressing well, with the first patient dosed in **October 2024**, targeting **NSCLC** as the primary population[5](index=5&type=chunk) - Preclinical data presented at **AACR** demonstrates enhanced anti-tumor activity of **FHD-909** in combination with standard-of-care chemotherapies, **anti-PD-1 pembrolizumab**, and several novel **KRAS inhibitors** in **NSCLC** animal models[5](index=5&type=chunk) [Ongoing Strategic Collaboration with Lilly](index=2&type=section&id=Ongoing%20strategic%20collaboration%20with%20Lilly) Foghorn's collaboration with Lilly includes a 50/50 U.S. co-development and co-commercialization agreement for its selective SMARCA2 oncology program and three discovery programs from Foghorn's Gene Traffic Control platform - Collaboration with **Lilly** includes a **U.S. 50/50 co-development and co-commercialization agreement** for its selective **SMARCA2 oncology program**, which includes both a selective inhibitor and a selective degrader[4](index=4&type=chunk) - The collaboration also encompasses **three discovery programs** from Foghorn's proprietary **Gene Traffic Control platform**[4](index=4&type=chunk) [Selective CBP Degrader Program](index=2&type=section&id=Selective%20CBP%20degrader%20program) The Selective CBP degrader program targets EP300-mutated cancer cells, showing promising preclinical combination benefits in ER+ breast cancer and other solid tumors, with an IND target in 2026 - Selectively targets **CBP** in **EP300-mutated cancer cells**, exploiting a synthetic lethal relationship when **EP300** is mutated[4](index=4&type=chunk) - Preclinical data presented at **AACR** showed combination benefit with approved chemotherapies and targeted agents in solid tumors beyond **EP300-mutant cancers**, including synergistic activity with **paclitaxel** and **CDK4/6 inhibitor abemaciclib** in **ER+ breast cancer**[6](index=6&type=chunk)[11](index=11&type=chunk) - On track for **IND-enabling studies**, targeting an Investigational New Drug (**IND**) application in **2026**[1](index=1&type=chunk)[11](index=11&type=chunk) [Selective EP300 Degrader Program](index=3&type=section&id=Selective%20EP300%20degrader%20program) Foghorn is developing a Selective EP300 degrader for hematological malignancies and prostate cancer, demonstrating robust anti-tumor activity and synergistic effects with standard-of-care treatments, with a program update expected in Q4 2025 - Developing a Selective **EP300 degrader** for the treatment of **hematological malignancies** and **prostate cancer**, addressing challenges due to high similarity between **EP300** and **CBP**[7](index=7&type=chunk) - Demonstrated robust anti-tumor activity across a range of **hematological malignancies** in vitro (**DLBCL, MM, follicular lymphoma**) and synergistic combination activity with **SoC** in both **DLBCL** and **MM**[11](index=11&type=chunk) - Program update expected in **Q4 2025**[1](index=1&type=chunk)[11](index=11&type=chunk) [Selective ARID1B Degrader Program](index=3&type=section&id=Selective%20ARID1B%20degrader%20program) The Selective ARID1B degrader program targets ARID1B in ARID1A-mutated cancers, having successfully achieved selective degradation with potent and selective small molecule binders. A program update is anticipated in Q4 2025 - Selectively targets and degrades **ARID1B** in **ARID1A-mutated cancers**, which are implicated in up to **5% of all solid tumors**[8](index=8&type=chunk) - Developed highly potent and selective small molecule binders to **ARID1B** and successfully achieved selective degradation of **ARID1B**[12](index=12&type=chunk) - Program update expected in **Q4 2025**[1](index=1&type=chunk)[12](index=12&type=chunk) [Chromatin Biology and Degrader Platform](index=3&type=section&id=Chromatin%20Biology%20and%20Degrader%20Platform) Foghorn continues to invest in and advance its proprietary chromatin biology and degrader platform, focusing on innovations in novel ligases, long-acting injectables, oral delivery, and induced proximity - Continued advancement of the **chromatin biology and degrader platform** with investments in **novel ligases, long-acting injectables, oral delivery, and induced proximity**[9](index=9&type=chunk) [Second Quarter 2025 Financial Highlights](index=3&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) This section presents the key financial results for the second quarter of 2025, including collaboration revenue, operating expenses, net loss, and cash position [Collaboration Revenue](index=3&type=section&id=Collaboration%20Revenue) Collaboration revenue increased by 9.7% in Q2 2025, primarily driven by the continued advancement of programs under the Lilly Collaboration Agreement Collaboration Revenue Performance | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :------------------- | :--------------------- | :--------------------- | :----------- | | Collaboration Revenue | $7,557 | $6,888 | +9.7% | [Operating Expenses](index=4&type=section&id=Operating%20Expenses) Both Research and Development (R&D) and General and Administrative (G&A) expenses decreased in Q2 2025 compared to Q2 2024, contributing to improved operational efficiency Operating Expenses Breakdown | Expense Type | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :------------------------ | :--------------------- | :--------------------- | :----------- | | Research and Development | $21,792 | $23,797 | -8.4% | | General and Administrative | $6,862 | $7,325 | -6.3% | - **R&D decrease** attributed to lower **FHD-286 costs**, personnel-related costs, early development and other research external costs, and facilities and IT-related expenses, partially offset by an increase in **Lilly-partnered programs**[16](index=16&type=chunk) - **G&A decrease** primarily due to lower consulting costs and lower facilities and IT related expenses[16](index=16&type=chunk) [Net Loss](index=4&type=section&id=Net%20Loss) The company reported a reduced net loss of $17.9 million in Q2 2025, an improvement from the $23.0 million net loss in Q2 2024 Net Loss Summary | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :------- | :--------------------- | :--------------------- | :----------- | | Net Loss | $(17,936) | $(22,979) | -22.0% | Net Loss Per Share and Shares Outstanding | Metric | Q2 2025 | Q2 2024 | | :------------------------------------------------ | :------ | :------ | | Net loss per share attributable to common stockholders—basic and diluted | $(0.28) | $(0.45) | | Weighted average common shares outstanding—basic and diluted | 62,978,219 | 51,580,310 | [Cash Position and Runway](index=4&type=section&id=Cash%2C%20Cash%20Equivalents%2C%20and%20Marketable%20Securities) As of June 30, 2025, Foghorn maintained a strong cash position of $198.7 million in cash, cash equivalents, and marketable securities, extending its cash runway into 2028 Cash, Cash Equivalents, and Marketable Securities | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------------- | :----------------------------- | :------------------------------- | | Cash, cash equivalents and marketable securities | $198,665 | $243,747 | - Cash runway extends into **2028**[1](index=1&type=chunk)[16](index=16&type=chunk) [About Foghorn Therapeutics](index=4&type=section&id=About%20Foghorn%20Therapeutics) Foghorn Therapeutics is a biotechnology company focused on developing novel medicines by targeting genetically determined dependencies within the chromatin regulatory system - **Foghorn Therapeutics** is discovering and developing a novel class of medicines targeting genetically determined dependencies within the **chromatin regulatory system**[14](index=14&type=chunk) - Utilizes its proprietary scalable **Gene Traffic Control platform** to systematically study, identify, and validate potential drug targets[14](index=14&type=chunk) - The company is developing **multiple product candidates in oncology**[1](index=1&type=chunk)[14](index=14&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section outlines the nature of forward-looking statements within the report, emphasizing inherent risks and uncertainties that could cause actual results to differ - This press release contains **forward-looking statements** regarding the Company's ongoing **Phase 1 trial of FHD-909**, pre-clinical product candidates, expected timing of clinical data, expected cash runway, expected timing of regulatory filings, and research efforts[15](index=15&type=chunk) - **Forward-looking statements** are based on current expectations and assumptions but are subject to inherent uncertainties, risks, and changes in circumstances that could cause actual results to differ materially[15](index=15&type=chunk) - Important factors that could cause actual results to differ materially are set forth under the heading **'Risk Factors'** in the Company's **Annual Report on Form 10-K**[15](index=15&type=chunk)[17](index=17&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) This section provides the company's condensed consolidated financial statements, including balance sheets and statements of operations, for the reported periods [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The condensed consolidated balance sheets show the company's financial position, with total assets decreasing from $283.98 million at December 31, 2024, to $226.24 million at June 30, 2025 Condensed Consolidated Balance Sheets Data | (In thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------------------- | :------------ | :---------------- | | Cash, cash equivalents and marketable securities | $198,665 | $243,747 | | All other assets | $27,571 | $40,235 | | **Total assets** | **$226,236** | **$283,982** | | Deferred revenue, total | $266,554 | $280,063 | | All other liabilities | $36,341 | $49,447 | | **Total liabilities** | **$302,895** | **$329,510** | | Total stockholders' deficit | $(76,659) | $(45,528) | | **Total liabilities and stockholders' deficit** | **$226,236** | **$283,982** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The condensed consolidated statements of operations reflect an increase in collaboration revenue and a decrease in operating expenses, leading to a reduced net loss for the three months ended June 30, 2025, compared to the prior year Condensed Consolidated Statements of Operations Data | (In thousands, except share and per share amounts) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :------------------------------------------------- | :------------------------------- | :------------------------------- | | Collaboration revenue | $7,557 | $6,888 | | Operating expenses: | | | | Research and development | $21,792 | $23,797 | | General and administrative | $6,862 | $7,325 | | Impairment of long-lived assets | — | $2,398 | | **Total operating expenses** | **$28,654** | **$33,520** | | Loss from operations | $(21,097) | $(26,632) | | Total other income, net | $3,161 | $3,653 | | **Net loss** | **$(17,936)** | **$(22,979)** | | Net loss per share attributable to common stockholders—basic and diluted | $(0.28) | $(0.45) | | Weighted average common shares outstanding—basic and diluted | 62,978,219 | 51,580,310 | [Contact Information](index=7&type=section&id=Contact) This section provides contact details for inquiries regarding Foghorn Therapeutics - Contact person for **Foghorn Therapeutics Inc.** is Karin Hellsvik[22](index=22&type=chunk) - Email for inquiries: **khellsvik@foghorntx.com**[22](index=22&type=chunk)

Core Insights - Foghorn Therapeutics is advancing its pipeline, particularly focusing on FHD-909, a first-in-class oral SMARCA2 selective inhibitor, which is currently in a Phase 1 dose escalation trial targeting non-small cell lung cancer (NSCLC) [1][3][4] - The company has shown promising preclinical data indicating synergistic effects of FHD-909 when combined with pembrolizumab and KRAS inhibitors, suggesting significant potential in treating difficult-to-treat NSCLC [2][4] - Foghorn's selective degrader programs targeting CBP, EP300, and ARID1B are progressing well, with updates expected in Q4 2025 and an IND application for the Selective CBP degrader anticipated in 2026 [2][6][12] Financial Overview - As of June 30, 2025, Foghorn reported cash, cash equivalents, and marketable securities totaling $198.7 million, providing a cash runway into 2028 [1][18] - Collaboration revenue for the three months ended June 30, 2025, was $7.6 million, an increase from $6.9 million in the same period in 2024, driven by advancements in programs under the Lilly Collaboration Agreement [10][21] - The net loss for the three months ended June 30, 2025, was $17.9 million, compared to a net loss of $23.0 million for the same period in 2024, indicating improved financial performance [18][21] Pipeline and Development Programs - FHD-909 is designed to selectively inhibit SMARCA2, which is crucial for the survival of tumors with SMARCA4 mutations, and has shown significant anti-tumor activity in preclinical models [3][13] - The Selective CBP degrader program targets EP300-mutated cancer cells and has shown encouraging activity in ER+ breast cancer, with potential applications beyond EP300-mutant tumors [2][6][11] - The Selective EP300 degrader is being developed for hematological malignancies and prostate cancer, with updates expected in Q4 2025 [7][11] - The Selective ARID1B degrader targets ARID1B in ARID1A-mutated cancers, which are prevalent in various solid tumors, and has achieved selective degradation in preclinical studies [8][12] Strategic Collaborations - Foghorn is collaborating with Lilly under a 50/50 co-development and co-commercialization agreement for FHD-909, which is currently enrolling patients in a Phase 1 trial [4][5] - The collaboration aims to develop novel oncology medicines, leveraging both companies' strengths in drug development [4][5]

Summary of Foghorn Therapeutics (FHTX) Conference Call Company Overview - **Company**: Foghorn Therapeutics (FHTX) - **Event**: Jefferies Global Healthcare Conference - **Date**: June 05, 2025 Industry Focus - **Industry**: Biotechnology, specifically targeting chromatin regulatory systems and cancer therapies Key Points and Arguments Chromatin Regulatory System and BAF Complex - Foghorn Therapeutics focuses on the chromatin regulatory system, which is crucial for gene expression, likening it to an architect (regulatory system) and blueprints (genes) [3][4] - Approximately **20% of all cancers** have mutations in the BAF complex, and about **50% of cancers** relate to chromatin biology [4] Clinical Pipeline - The company is currently in clinical stages with a **Phase 1 trial** for a selective SMARCA2 inhibitor (FHD-909) in collaboration with Eli Lilly [6] - The next **12 to 18 months** are expected to be significant for the company with potential data releases [6][7] Challenges in Drug Development - Developing drugs targeting the chromatin system is challenging due to the complexity of proteins and their paralogs, which often share high sequence similarity [10][11] - Issues include purification difficulties and the intrinsic disorder of some proteins, making it hard to find selective chemical matter [12] Patient Enrollment and Selection Criteria - The Phase 1 trial includes patients with various tumor types, specifically those with **SMARCA4 mutations** [15] - Approximately **10% of non-small cell lung cancer (NSCLC)** patients have SMARCA4 mutations, with **60-70%** of those being loss-of-function mutations [19][20] Efficacy Expectations - The company aims for a response rate of **10-20%** in refractory patients, which would be considered promising compared to existing treatments [25][26] - Patients with SMARCA4 mutations have a worse prognosis and lower response rates to existing therapies [20][21][22] Combination Therapy Potential - There is interest in exploring combination therapies with KRAS inhibitors and immune checkpoint inhibitors, pending monotherapy efficacy results [39][40] - The timeline for potential combination studies is expected around **2026**, depending on the results of the ongoing trials [41] CBP and EP300 Programs - Foghorn is developing selective degraders for CBP and EP300, with potential applications in various cancers, including gastric and bladder cancers [44][48] - The CBP program is set to begin IND-enabling studies in the second half of 2025, with EP300 following closely behind [47][48] Upcoming Milestones - Key milestones include updates on the FHD-909 program, CBP, and EP300, with potential IND submissions in the next year [54][58] - The company anticipates significant data releases in the **October timeframe** related to ongoing studies [57] Additional Important Information - The company emphasizes the importance of a homogeneous patient population for clinical trials to avoid confusion in data interpretation [31] - Foghorn aims to avoid interim data releases to provide clearer insights into trial outcomes [32] - The therapeutic window for their compounds appears promising based on preclinical data, suggesting better tolerability compared to previous dual inhibitors [35][36] This summary encapsulates the critical insights from the conference call, highlighting the company's strategic focus, clinical developments, and future expectations in the biotechnology sector.

Core Insights - Foghorn Therapeutics Inc. is a clinical-stage biotechnology company focused on developing a new class of medicines aimed at correcting abnormal gene expression to treat serious diseases, with an initial emphasis on oncology [1][3] Company Participation in Events - Management will participate in several key industry events, including the Evercore Biotech Diamonds in the Rough Virtual Event, TD Cowen's 6th Annual Oncology Innovation Summit, Jefferies Global Healthcare Conference 2025, and Goldman Sachs 46th Annual Global Healthcare Conference 2025 [1][2] - A webcast of the presentations will be available for 30 days on the company's website [2] Company Overview - Foghorn Therapeutics is developing its proprietary Gene Traffic Control® platform to identify and validate drug targets within the chromatin regulatory system, focusing on genetically determined dependencies [3] - The company is advancing multiple product candidates specifically in the oncology sector [3]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=page&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Foghorn Therapeutics Inc.'s unaudited condensed consolidated financial statements, detailing financial position, operations, and cash flows, alongside notes on accounting policies and significant events [Condensed Consolidated Balance Sheets](index=4&type=page&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets decreased to **$258.7 million** from **$284.0 million** at year-end 2024, primarily due to reduced marketable securities, resulting in a total stockholders' deficit of **$61.7 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $61,026 | $55,454 | | Marketable securities | $159,561 | $188,293 | | **Total Assets** | **$258,691** | **$283,982** | | Deferred revenue (Current & Non-current) | $274,112 | $280,063 | | **Total Liabilities** | **$320,343** | **$329,510** | | **Total stockholders' deficit** | **($61,652)** | **($45,528)** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=page&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the three months ended March 31, 2025, collaboration revenue increased to **$6.0 million**, operating expenses decreased to **$28.9 million**, and the net loss narrowed to **$18.8 million** or **($0.30)** per share Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Collaboration revenue | $5,952 | $5,050 | | Research and development | $21,626 | $25,534 | | General and administrative | $7,239 | $7,710 | | **Loss from operations** | **($22,913)** | **($28,194)** | | **Net loss** | **($18,834)** | **($25,016)** | | Net loss per share | ($0.30) | ($0.59) | [Condensed Consolidated Statements of Cash Flows](index=7&type=page&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For Q1 2025, net cash used in operating activities improved to **$24.0 million**, with **$29.4 million** provided by investing activities, resulting in **$62.7 million** in cash, cash equivalents, and restricted cash at period-end Q1 2025 vs Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($23,968) | ($29,345) | | Net cash provided by investing activities | $29,401 | $27,095 | | Net cash provided by financing activities | $139 | $1,167 | | **Net increase (decrease) in cash** | **$5,572** | **($1,083)** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=page&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's business, going concern assessment, accounting policies, and financial statement line items, including the Lilly collaboration and a recent **$102.8 million** stock offering - In May 2024, the company completed a public offering of common stock and pre-funded warrants, resulting in net proceeds of **$102.8 million**[27](index=27&type=chunk)[40](index=40&type=chunk) - The company has a significant collaboration with Eli Lilly, which includes co-development and co-commercialization for two programs and discovery activities for three additional programs, serving as the sole source of the company's revenue[51](index=51&type=chunk) - As of March 31, 2025, the unsatisfied performance obligation related to the Lilly collaboration was **$274.1 million**, expected to be recognized as revenue through 2029 or beyond[59](index=59&type=chunk) - Management has concluded that the company's cash, cash equivalents, and marketable securities are sufficient to fund operations and capital expenditures for at least 12 months from the financial statement issuance date[28](index=28&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=page&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's business overview, Q1 2025 financial results, and liquidity, highlighting the Gene Traffic Control platform, pipeline updates, and a **$102.8 million** May 2024 financing [Overview](index=16&type=page&id=Overview) Foghorn is a clinical-stage biotech company focused on correcting abnormal gene expression through its Gene Traffic Control platform, with key pipeline updates including the discontinuation of FHD-286 and the dosing of FHD-909 in collaboration with Lilly, supported by a recent **$102.8 million** equity financing - The company is focused on its proprietary Gene Traffic Control platform to develop medicines targeting the chromatin regulatory system, which is implicated in about **50%** of all cancers[74](index=74&type=chunk)[75](index=75&type=chunk) - Key pipeline updates include discontinuing the independent development of FHD-286 in AML and dosing the first patient in the Phase 1 study of FHD-909, a SMARCA2 inhibitor, in collaboration with Lilly[77](index=77&type=chunk) - In May 2024, the company raised net proceeds of **$102.8 million** from a public offering of common stock and pre-funded warrants[81](index=81&type=chunk)[82](index=82&type=chunk) [Results of Operations](index=21&type=page&id=Results%20of%20Operations) For Q1 2025, collaboration revenue increased to **$6.0 million**, while research and development expenses decreased by **$3.9 million** due to program discontinuations, leading to a narrowed net loss Comparison of Results of Operations (in thousands) | Line Item | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Collaboration revenue | $5,952 | $5,050 | $902 | | Research and development | $21,626 | $25,534 | ($3,908) | | General and administrative | $7,239 | $7,710 | ($471) | | **Net loss** | **($18,834)** | **($25,016)** | **$6,182** | - The **$3.9 million** decrease in R&D expenses was primarily driven by a **$2.5 million** reduction in FHD-286 costs and a **$1.8 million** decrease in other research costs, partially offset by a **$0.7 million** increase in costs for Lilly-partnered programs like FHD-909[109](index=109&type=chunk)[110](index=110&type=chunk) [Liquidity and Capital Resources](index=22&type=page&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company held **$220.6 million** in cash, cash equivalents, and marketable securities, expecting current capital to fund operations for at least the next twelve months - As of March 31, 2025, the company held **$220.6 million** in cash, cash equivalents, and marketable securities[113](index=113&type=chunk) - The company expects its current cash position is sufficient to fund operating expenses and capital expenditure requirements for at least the next twelve months[120](index=120&type=chunk) Cash Flow Summary (in thousands) | Period | Net cash used in operating activities | | :--- | :--- | | Q1 2025 | ($23,968) | | Q1 2024 | ($29,345) | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=24&type=page&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is a smaller reporting company and is not required to provide the information for this item - As a smaller reporting company, Foghorn Therapeutics is not required to provide quantitative and qualitative disclosures about market risk[125](index=125&type=chunk) [Item 4. Controls and Procedures](index=24&type=page&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2025[126](index=126&type=chunk) - No material changes to the internal control over financial reporting occurred during the three months ended March 31, 2025[127](index=127&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=25&type=page&id=Item%201.%20Legal%20Proceedings) The company reports that it is not currently a party to any material legal proceedings - The company is not currently involved in any litigation or legal proceedings that are expected to have a material adverse effect on its business[129](index=129&type=chunk) [Item 1A. Risk Factors](index=25&type=page&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - No material changes have been made to the risk factors disclosed in the company's 2024 Annual Report on Form 10-K[130](index=130&type=chunk) [Item 5. Other Information](index=25&type=page&id=Item%205.%20Other%20Information) The company states that none of its directors or officers entered into, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the first quarter of 2025 - During the three months ended March 31, 2025, no directors or officers entered into, modified, or terminated any Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements[131](index=131&type=chunk) [Item 6. Exhibits](index=26&type=page&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the Principal Executive Officer and Principal Financial Officer, and XBRL data files

Financial Performance - Foghorn Therapeutics reported collaboration revenue of $6.0 million for Q1 2025, up from $5.1 million in Q1 2024, driven by advancements in programs under the Lilly Collaboration Agreement[15] - Research and development expenses decreased to $21.6 million in Q1 2025 from $25.5 million in Q1 2024, attributed to reduced costs in FHD-286 and personnel-related expenses[15] - General and administrative expenses were $7.2 million for Q1 2025, down from $7.7 million in Q1 2024, primarily due to lower consulting costs[19] - The net loss for Q1 2025 was $18.8 million, compared to a net loss of $25.0 million in Q1 2024, reflecting improved financial performance[19] - As of March 31, 2025, Foghorn had cash, cash equivalents, and marketable securities totaling $220.6 million, providing a cash runway into 2027[19] Clinical Development - The ongoing Phase 1 trial of FHD-909 is targeting SMARCA4 mutated cancers, with non-small cell lung cancer (NSCLC) as the primary focus[5] - FHD-909 has shown synergistic activity in combination with pembrolizumab and KRAS inhibitors, supporting further clinical exploration[1] - The Selective CBP degrader program is on track for IND-enabling studies, targeting an IND submission in 2026[1] - Foghorn's Selective EP300 degrader program demonstrated anti-proliferative activity in various hematological malignancies, with updates expected in H2 2025[14] - The company has successfully achieved selective degradation of ARID1B and plans to provide an update on this program in H2 2025[15]