Core Insights - Foghorn Therapeutics is advancing its clinical programs, particularly FHD-909, a first-in-class oral SMARCA2 selective inhibitor, in a Phase 1 trial targeting SMARCA4-mutated cancers, primarily non-small cell lung cancer (NSCLC) [1][2][3] - The company is developing several selective degrader programs, including Selective CBP, EP300, and ARID1B degraders, with promising preclinical data indicating robust anti-tumor activity and favorable tolerability [2][6][7][8] - Foghorn has a strong financial position with $180.3 million in cash and equivalents as of September 30, 2025, providing a cash runway into 2028 [1][19] FHD-909 Program - FHD-909 is designed to selectively inhibit SMARCA2, showing significant anti-tumor activity in preclinical models of SMARCA4-mutant lung tumors [3][14] - The ongoing Phase 1 trial is progressing well, with enrollment on track and preclinical data supporting its combination with standard therapies [4][2] Selective Degrader Programs - The Selective CBP degrader is entering non-GLP toxicology studies with potential applications in EP300-mutant cancers and ER+ breast cancer, aiming for IND readiness in 2026 [1][12] - The Selective EP300 degrader is showing broad efficacy across hematological malignancies, with IND-enabling studies expected in 2026 [1][7][12] - The Selective ARID1B degrader is advancing towards in vivo proof of concept in 2026, targeting ARID1A-mutated cancers, which represent up to 5% of solid tumors [1][8][13] Financial Performance - Collaboration revenue increased to $8.2 million for Q3 2025, up from $7.8 million in Q3 2024, driven by advancements in programs under the Lilly collaboration [19] - Research and development expenses decreased to $20.0 million in Q3 2025 from $24.7 million in Q3 2024, attributed to reduced costs in various areas [19] - The net loss for Q3 2025 was $15.8 million, an improvement from a net loss of $19.1 million in the same quarter of the previous year [19][22] Leadership Update - The Chief Financial Officer, Kristian Humer, will be leaving the company, with a search for a successor already underway [10]

Core Viewpoint - The conference call focuses on Foghorn's proprietary programs, particularly the selective ARID1B degrader, along with updates on other programs like selective CBP and EP300 degraders [2][4]. Group 1: Company Overview - Karin Hellsvik, Vice President of Investor Relations and Corporate Affairs, leads the call and emphasizes the focus on Foghorn's selective ARID1B degrader and other proprietary programs [2]. - Adrian Gottschalk, President and CEO, will provide an overview of the company's recent progress [4]. Group 2: Pipeline Updates - The call will include updates on the progress of Foghorn's proprietary pipeline programs, specifically ARID1B, CBP, and EP300, along with new data presented [4].

Group 1 - The article does not provide any specific content related to a company or industry [1]

Foghorn Therapeutics FY Conference Call Summary Company Overview - **Company**: Foghorn Therapeutics (NasdaqGM:FHTX) - **Date of Call**: October 30, 2025 - **Focus**: Updates on proprietary programs including selective ARID1B, CBP, and EP300 degraders [1][2][3] Key Industry Insights - **Chromatin Regulatory System**: Foghorn Therapeutics targets the chromatin regulatory system, which is implicated in cancer, with mutations found in up to 50% of tumors [4][5] - **Market Opportunity**: Successful drugs targeting this biology represent multi-billion-dollar opportunities [5] Core Programs and Developments 1. **FHD-909** - **Description**: First-in-class selective oral small molecule inhibitor of SMARCA2, targeting tumors with SMARCA4 mutations [7] - **Clinical Trial**: Currently enrolling patients in a phase 1 dose escalation trial in the US and Japan, focusing on non-small cell lung cancer patients with SMARCA4 mutations [8] - **Timeline**: Anticipated decision on dose expansion by Lilly in the first half of 2026 [8] 2. **Selective ARID1B Degrader** - **Significance**: First to publicly demonstrate robust degradation of ARID1B, targeting a population with ARID1A mutations found in approximately 5% of solid tumors [9][10] - **Clinical Context**: ARID1A mutations accelerate tumor genesis and promote metastases, indicating a high unmet medical need [17] - **Progress**: Achieved 80% degradation in preclinical models, with in vivo proof of concept expected in 2026 [19][20] 3. **Selective CBP Degrader** - **Target Population**: Potential in EP300 mutated cancers and ER-positive breast cancer, with over 200,000 cases diagnosed annually in the US [24][25] - **Mechanism**: Selective degradation of CBP could provide a wider therapeutic window than dual CBP/EP300 inhibitors, avoiding hematological toxicities [24][27] - **Development Status**: Pre-development candidate CBP degrader (CPPD171) is on track for IND readiness in 2026 [10][28] 4. **Selective EP300 Degrader** - **Target Indications**: Significant potential in hematological malignancies, particularly multiple myeloma, with approximately 100,000 patients in the US potentially benefiting [31][32] - **Clinical Validation**: Previous dual CBP/EP300 inhibitors have shown compelling results in multiple myeloma, supporting the approach [34] - **Development Timeline**: Tracking towards IND-enabling studies in 2026 [38] Additional Insights - **Mechanistic Understanding**: Foghorn emphasizes a biology-first approach, focusing on novel biology and targets, with a deep mechanistic understanding of the chromatin regulatory system [5][6] - **Partnership Strategy**: The company is considering partnerships for larger tumor types, particularly in breast cancer and multiple myeloma, to leverage resources for clinical studies [80][81] - **Feedback from Conferences**: Positive feedback received on the selective degradation of ARID1B, indicating significant interest and curiosity from industry peers [83] Conclusion Foghorn Therapeutics is advancing a robust pipeline of selective degraders targeting critical components of the chromatin regulatory system, with significant potential to address unmet medical needs in various cancers. The company is on track for key milestones in 2026, including IND readiness for multiple programs.

Core Insights - Foghorn Therapeutics Inc. is advancing its Selective ARID1B, Selective CBP, and Selective EP300 degrader programs, showcasing significant progress in addressing challenging cancer targets [1][2] Selective ARID1B Degrader Program - The Selective ARID1B degrader targets a dependency found in up to 5% of solid tumors, including endometrial, gastric, gastroesophageal junction, bladder, and non-small cell lung cancer [3][5] - The program is advancing towards in vivo proof of concept expected in 2026, with recent data presented at the TPD and Induced Proximity Summit [4][5] Selective CBP Degrader Program - The Selective CBP degrader is on track for non-GLP toxicology studies in Q4 2025, with potential applications in EP300-mutant cancers and ER+ breast cancer, aiming for IND readiness in 2026 [5][8] - The program is designed to overcome challenges associated with dual inhibition of CBP and EP300, which have shown dose-limiting toxicities [7][9] Selective EP300 Degrader Program - The Selective EP300 degrader is focused on hematological malignancies such as multiple myeloma and diffuse large b-cell lymphoma, with IND-enabling studies planned for 2026 [9][10] - This program demonstrates encouraging anti-tumor efficacy and favorable tolerability in preclinical studies, differentiating itself from dual CBP/EP300 approaches [5][10] Company Overview - Foghorn Therapeutics is developing a novel class of medicines targeting genetically determined dependencies within the chromatin regulatory system, utilizing its Gene Traffic Control platform [11]

Core Insights - Foghorn Therapeutics is hosting a virtual investor event on October 30, 2025, to discuss updates on its Selective ARID1B, Selective CBP, and Selective EP300 degrader programs [1][3] - The company will present significant progress on its Selective ARID1B degrader program at the TPD and Induced Proximity Summit, highlighting its potential for treating endometrial, gastric, and bladder cancers [2] Company Overview - Foghorn Therapeutics is focused on discovering and developing a novel class of medicines that target genetically determined dependencies within the chromatin regulatory system [4] - The company utilizes its proprietary Gene Traffic Control platform to systematically study and validate potential drug targets within this system, with multiple product candidates in oncology [4] Event Details - The Keynote Plenary session will feature a presentation titled "Harnessing Degradation to Achieve Selectivity & First-in-Class Targeting of Challenging Chromatin Regulatory Proteins" on October 29, 2025 [3] - The virtual investor event will provide pipeline updates and will be accessible via the company's website after the conference [3]

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