Part I [Business](index=5&type=section&id=Item%201.%20Business) Foghorn Therapeutics is a clinical-stage biopharmaceutical company focused on developing medicines for cancer by targeting the chromatin regulatory system, with lead candidates FHD-286 and FHD-609 - Foghorn is pioneering medicines targeting the chromatin regulatory system, associated with **over 50% of all cancers**, potentially impacting **over 2.5 million patients**[19](index=19&type=chunk) - The company's proprietary Gene Traffic Control platform offers an integrated understanding of the chromatin regulatory system for drug target identification and validation[19](index=19&type=chunk)[21](index=21&type=chunk) - Lead product candidate **FHD-286** is in Phase 1 studies for metastatic uveal melanoma and AML, while **FHD-609** is a protein degrader for synovial sarcoma with an IND planned for **Q2 2021**[19](index=19&type=chunk)[27](index=27&type=chunk) - In July 2020, Foghorn collaborated with Merck for oncology therapeutics, receiving a **$15.0 million upfront payment** and eligible for up to **$410.0 million in milestones** plus royalties[30](index=30&type=chunk)[169](index=169&type=chunk) - As of December 31, 2020, the company had **95 full-time employees**, with **79** in research and development[31](index=31&type=chunk)[277](index=277&type=chunk) [Risk Factors](index=57&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks including a limited operating history, substantial financial losses, dependence on early-stage product candidates and an unproven platform, and challenges in clinical trials, intellectual property, and third-party reliance - The company has a limited operating history, no approved products, and incurred significant losses since inception, with an accumulated deficit of **$162.9 million** as of December 31, 2020[285](index=285&type=chunk)[288](index=288&type=chunk) - The business is heavily dependent on the success of its early-stage product candidates, **FHD-286** and **FHD-609**, which face a high risk of failure[303](index=303&type=chunk)[313](index=313&type=chunk) - The company's Gene Traffic Control platform approach to drug discovery is unproven and may not successfully build a commercially valuable pipeline[328](index=328&type=chunk) - The company's intellectual property portfolio is in early stages, with no issued patents for lead candidates **FHD-286** and **FHD-609**, relying on difficult-to-protect trade secrets for its core platform technology[359](index=359&type=chunk)[361](index=361&type=chunk)[371](index=371&type=chunk) - The company relies on third parties for manufacturing, preclinical studies, and clinical trials, increasing vulnerability to delays, quality issues, and non-compliance[336](index=336&type=chunk)[397](index=397&type=chunk) - The COVID-19 pandemic poses a risk of disrupting the supply chain, manufacturing, clinical trials, and regulatory processes, potentially adversely affecting business operations[356](index=356&type=chunk) [Unresolved Staff Comments](index=89&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[454](index=454&type=chunk) [Properties](index=89&type=section&id=Item%202.%20Properties) The company's corporate headquarters in Cambridge, Massachusetts, comprises approximately 81,441 square feet of leased office and laboratory space, with the lease expiring in September 2028 - The company leases approximately **81,441 square feet** of office and laboratory space for its corporate headquarters at 500 Technology Square, Cambridge, MA[455](index=455&type=chunk) - The current lease term expires in **September 2028**, with a five-year extension option[455](index=455&type=chunk) [Legal Proceedings](index=89&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings expected to have a material adverse effect on its business - The company is not currently a party to any material litigation or legal proceedings[457](index=457&type=chunk) [Mine Safety Disclosures](index=89&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[458](index=458&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=90&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock began trading on Nasdaq under 'FHTX' on October 23, 2020, raising approximately $122.1 million net proceeds from its IPO - The company's common stock began trading on the Nasdaq Global Market under the symbol **"FHTX"** on **October 23, 2020**[461](index=461&type=chunk) - The company closed its IPO on **October 27, 2020**, receiving aggregate net proceeds of approximately **$122.1 million** after the underwriters' option exercise[465](index=465&type=chunk)[467](index=467&type=chunk) - As of December 31, 2020, approximately **$12.1 million** of the net IPO proceeds had been used to advance product candidates and for working capital[468](index=468&type=chunk) [Selected Financial Data](index=90&type=section&id=Item%206.%20Selected%20Financial%20Data) As a smaller reporting company, Foghorn Therapeutics is not required to provide the information for this item - The company is a smaller reporting company and is not required to provide the information under this item[470](index=470&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=91&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) For 2020, the company reported an increased net loss of $68.8 million driven by higher R&D and G&A expenses, with $185.8 million in cash expected to fund operations into Q3 2022 Results of Operations (in thousands) | | Year Ended December 31, 2020 | Year Ended December 31, 2019 | Change | |:---|---:|---:|---:| | Collaboration revenue | $430 | $0 | $430 | | Research and development | $57,715 | $44,362 | $13,353 | | General and administrative | $11,246 | $6,722 | $4,524 | | **Loss from operations** | **($68,531)** | **($51,084)** | **($17,447)** | | **Net loss** | **($68,800)** | **($51,128)** | **($17,672)** | Research and Development Expenses (in thousands) | Category | Year Ended December 31, 2020 | Year Ended December 31, 2019 | Change | |:---|---:|---:|---:| | FHD-286 | $5,570 | $5,458 | $112 | | FHD-609 | $7,137 | $5,266 | $1,871 | | Platform and other early stage | $13,707 | $13,522 | $185 | | Personnel related | $17,822 | $13,176 | $4,646 | | Facility related and other | $13,479 | $6,940 | $6,539 | | **Total R&D Expenses** | **$57,715** | **$44,362** | **$13,353** | - As of December 31, 2020, the company had cash, cash equivalents, and marketable securities of **$185.8 million**, which management believes are sufficient to support operations into the **third quarter of 2022**[525](index=525&type=chunk)[537](index=537&type=chunk) Cash Flows (in thousands) | | Year Ended December 31, 2020 | Year Ended December 31, 2019 | |:---|---:|---:| | Cash used in operating activities | ($31,286) | ($46,335) | | Cash used in investing activities | ($108,914) | ($964) | | Cash provided by financing activities | $217,473 | $23,969 | [Quantitative and Qualitative Disclosures About Market Risk](index=102&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Foghorn Therapeutics is not required to provide the information for this item - The company is a smaller reporting company and is not required to provide the information under this item[541](index=541&type=chunk) [Consolidated Financial Statements and Supplementary Data](index=103&type=section&id=Item%208.%20Consolidated%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2020 and 2019, along with the independent auditor's report from Deloitte & Touche LLP Consolidated Balance Sheet Data (in thousands) | | Dec 31, 2020 | Dec 31, 2019 | |:---|---:|---:| | **Assets** | | | | Cash, cash equivalents & marketable securities | $185,770 | $14,981 | | Total current assets | $190,687 | $16,885 | | **Total assets** | **$255,594** | **$22,342** | | **Liabilities & Equity** | | | | Total current liabilities | $18,846 | $12,652 | | Total liabilities | $109,407 | $23,814 | | Total stockholders' equity (deficit) | $146,187 | ($88,016) | | **Total liabilities & stockholders' equity (deficit)** | **$255,594** | **$22,342** | Consolidated Statement of Operations Data (in thousands) | | Year Ended Dec 31, 2020 | Year Ended Dec 31, 2019 | |:---|---:|---:| | Collaboration revenue | $430 | $0 | | Total operating expenses | $68,961 | $51,084 | | Loss from operations | ($68,531) | ($51,084) | | **Net loss** | **($68,800)** | **($51,128)** | | Net loss per share | ($6.23) | ($12.20) | - The independent registered public accounting firm is Deloitte & Touche LLP, serving as the company's auditor since 2018[549](index=549&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=131&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[696](index=696&type=chunk) [Controls and Procedures](index=131&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of December 31, 2020, with no material changes to internal controls during Q4 2020 - Management concluded that as of December 31, 2020, the company's disclosure controls and procedures were effective at the reasonable assurance level[697](index=697&type=chunk) - The annual report does not include a management assessment or auditor attestation on internal control over financial reporting, as permitted for newly public companies[698](index=698&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended December 31, 2020[699](index=699&type=chunk) [Other Information](index=131&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[700](index=700&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=131&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information for this item will be incorporated by reference from the company's definitive proxy statement for its 2021 Annual Meeting of Stockholders - Information is incorporated by reference from the definitive proxy statement for the 2021 Annual Meeting of Stockholders[702](index=702&type=chunk) [Executive Compensation](index=132&type=section&id=Item%2011.%20Executive%20Compensation) Information for this item will be incorporated by reference from the company's definitive proxy statement for its 2021 Annual Meeting of Stockholders - Information is incorporated by reference from the definitive proxy statement for the 2021 Annual Meeting of Stockholders[703](index=703&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=132&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information for this item will be incorporated by reference from the company's definitive proxy statement for its 2021 Annual Meeting of Stockholders - Information is incorporated by reference from the definitive proxy statement for the 2021 Annual Meeting of Stockholders[704](index=704&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=132&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information for this item will be incorporated by reference from the company's definitive proxy statement for its 2021 Annual Meeting of Stockholders - Information is incorporated by reference from the definitive proxy statement for the 2021 Annual Meeting of Stockholders[705](index=705&type=chunk) [Principal Accounting Fees and Services](index=132&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information for this item will be incorporated by reference from the company's definitive proxy statement for its 2021 Annual Meeting of Stockholders - Information is incorporated by reference from the definitive proxy statement for the 2021 Annual Meeting of Stockholders[706](index=706&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=132&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements and exhibits filed with the Form 10-K, noting the omission of financial statement schedules as not required or applicable - A list of the financial statements included in the report is provided on page **103**[708](index=708&type=chunk) - Financial statement schedules have been omitted because they are not required or applicable[709](index=709&type=chunk) - Required exhibits are listed in the Exhibit Index and incorporated by reference[710](index=710&type=chunk) [Form 10-K Summary](index=132&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports no Form 10-K summary - None[711](index=711&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________________ to __________________ Commission File Number: 001-39634 Foghorn Therapeutics Inc. (Exact Name of Registrant as Specifie ...