Foghorn Therapeutics(FHTX) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (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 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 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 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 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][40] - 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] - 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] - 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] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 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 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][75] - 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] - In May 2024, the company raised net proceeds of $102.8 million from a public offering of common stock and pre-funded warrants[81][82] Results of Operations 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][110] Liquidity and Capital Resources 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] - 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] 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 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] Item 4. Controls and Procedures 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] - No material changes to the internal control over financial reporting occurred during the three months ended March 31, 2025[127] PART II. OTHER INFORMATION Item 1. Legal Proceedings 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] Item 1A. Risk Factors 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] Item 5. Other Information 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] Item 6. Exhibits 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