fhtx-20250930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

______________________

FORM 10-Q

_____________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025


¨			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 Specified in its Charter)

______________________


Delaware (State or other jurisdiction of incorporation or organization)			47-5271393 (I.R.S. Employer Identification No.)

500 Technology Square, Ste 700 Cambridge MA (Address of principal executive offices)			02139 (Zip Code)

Registrant’s telephone number, including area code: 617-586-3100

______________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value per share

FHTX

The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	¨	Accelerated filer	¨

Non-accelerated filer	x	Smaller reporting company	x

		Emerging growth company	x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of October 31, 2025, the registrant had 56,551,289 shares of common stock, $0.0001 par value per share, outstanding.

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		Page
PART I.	FINANCIAL INFORMATION	2
Item 1.	Financial Statements (Unaudited)	2
	Condensed Consolidated Balance Sheets	2
	Condensed Consolidated Statements of Operations and Comprehensive Loss	3
	Condensed Consolidated Statements of Stockholders’ Deficit	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24
PART II.	OTHER INFORMATION	25
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 5.	Other Information	25
Item 6.	Exhibits	26
Signatures		27

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements that are based on management’s beliefs and assumptions and on information currently available to management. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements include, but are not limited to, statements concerning:

•the initiation, timing, progress, enrollment, results, and timing of results and regulatory filings of our research and development programs and our preclinical and clinical studies, including those included in our collaboration with Eli Lilly and Company (“Lilly”);

•our ability to advance any product candidates that we may develop and to successfully complete preclinical and clinical studies;

•our ability to leverage our initial programs to develop additional product candidates using our Gene Traffic Control® platform;

•developments related to our competitors and our industry;

•our ability to expand the target populations of our programs and the availability of patients for clinical testing;

•our ability to obtain regulatory approval for FHD-909 and any future product candidates from the U.S. Food and Drug Administration (the “FDA”) and other regulatory authorities;

•our ability to identify and enter into future license agreements and collaborations;

•our ability to continue to rely on our contract development and manufacturing organizations (“CDMOs”) or contract research organizations (“CROs”), including those located outside the United States, such as those located in China, for our manufacturing and research needs;

•regulatory developments in the United States and foreign countries;

•general financial and economic conditions, including recessionary conditions, interest rates, monetary fluctuations, supply chain constraints, tariff uncertainty, and stock market volatility;

•the impact of inflation, interest rates, and stock market volatility on our operation and our ability to raise additional capital;

•the expected trends in our expenses and capital requirements as they relate to our ongoing activities;

•geopolitical events and uncertainty, including effects of a prolonged U.S. government shutdown and armed conflicts in Ukraine, Gaza, and the Red Sea;

•our ability to attract and retain key scientific and management personnel; and

•the scope of protection we are able to establish, maintain and enforce for intellectual property rights covering FHD-909, our future products and our Gene Traffic Control platform.

The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions and are based largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of known and unknown risks, uncertainties and assumptions, including those described under the section entitled “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. Moreover, we operate in an evolving environment. New risks and uncertainties may emerge from time to time, and it is not possible for management to predict all risks and uncertainties. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise.

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (unaudited)

Foghorn Therapeutics Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

(Unaudited)


	September 30, 2025		December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	89,334	$	55,454
Marketable securities	90,944		188,293
Restricted cash	1,250		—

Prepaid expenses and other current assets	2,589		5,854
Total current assets	184,117		249,601
Property and equipment, net	8,662		9,964
Restricted cash	2,000		1,708
Other assets	5		68
Operating lease right-of-use assets	10,178		22,641
Total assets	$	204,962	$	283,982
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable	$	3,212	$	3,785
Accrued expenses and other current liabilities	9,822		8,531
Operating lease liabilities	6,755		9,067
Deferred revenue	65,299		45,606
Total current liabilities	85,088		66,989
Operating lease liabilities, net of current portion	15,774		28,064
Deferred revenue, net of current portion	193,102		234,457
Other liabilities	656		—
Total liabilities	294,620		329,510
Commitments and contingencies (Note 10)
Stockholders’ deficit:
Preferred stock, $0.0001 par value; 25,000,000 shares authorized at September 30, 2025 and December 31, 2024; no shares issued and outstanding at September 30, 2025 and December 31, 2024	—		—
Common stock, $0.0001 par value; 175,000,000 shares authorized at September 30, 2025 and December 31, 2024; 56,542,877 shares issued and outstanding at September 30, 2025 and 55,594,131 shares issued and outstanding at December 31, 2024	6		6
Additional paid-in capital	521,115		512,515
Accumulated other comprehensive gain	24		135
Accumulated deficit	(610,803)		(558,184)
Total stockholders’ deficit	$	(89,658)	$	(45,528)
Total liabilities and stockholders’ deficit	$	204,962	$	283,982

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Foghorn Therapeutics Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss

(In thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Collaboration revenue	$	8,153	$	7,808	$	21,662	$	19,746
Operating expenses:
Research and development	20,002		24,689		63,420		74,020
General and administrative	6,652		6,971		20,753		22,006
Impairment of long-lived assets	—		—		—		2,398
Total operating expenses	26,654		31,660		84,173		98,424
Loss from operations	(18,501)		(23,852)		(62,511)		(78,678)
Other income, net:
Interest income	2,032		3,495		7,033		8,804
Other income, net	620		1,235		2,859		2,757
Total other income, net	2,652		4,730		9,892		11,561


Net loss	$	(15,849)	$	(19,122)	$	(52,619)	$	(67,117)
Net loss per share attributable to common stockholders—basic and diluted	$	(0.25)	$	(0.31)	$	(0.84)	$	(1.28)
Weighted average common shares outstanding—basic and diluted	63,029,293		62,602,848		62,952,723		52,241,942
Comprehensive loss:
Net loss	$	(15,849)	$	(19,122)	$	(52,619)	$	(67,117)
Other comprehensive gain (loss):
Unrealized gains (losses) on marketable securities	68		698		(111)		1,186
Total other comprehensive gain (loss)	68		698		(111)		1,186
Total comprehensive loss	$	(15,781)	$	(18,424)	$	(52,730)	$	(65,931)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Foghorn Therapeutics Inc.

Condensed Consolidated Statements of Stockholders’ Deficit

(In thousands, except share amounts)

(Unaudited)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Gain (Loss)		Accumulated Deficit		Total Stockholders’ Deficit
	Shares	Amount
Balances at December 31, 2024	55,594,131	$	6	$	512,515	$	135	$	(558,184)	$	(45,528)
Issuance of common stock upon exercise of stock options and employee stock purchase plan	127,209	—		139		—		—		139
Stock-based compensation expense	—	—		2,692		—		—		2,692
Unrealized losses on marketable securities	—	—		—		(121)		—		(121)
Net loss	—	—		—		—		(18,834)		(18,834)
Balances at March 31, 2025	55,721,340	6		515,346		14		(577,018)		(61,652)

Issuance of common stock upon exercise of stock options and employee stock purchase plan	81,855	—		254		—		—		254
Stock-based compensation expense	—	—		2,733		—		—		2,733
Unrealized losses on marketable securities	—	—		—		(58)		—		(58)
Net loss		—		—		—		(17,936)		(17,936)
Balances at June 30, 2025	55,803,195	6		518,333		(44)		(594,954)		(76,659)
Issuance of common stock upon exercise of stock options and employee stock purchase plan	13,733	—		49		—		—		49
Issuance of common stock upon exercise of pre-funded warrants	725,949	—		—		—		—		—
Stock-based compensation expense	—	—		2,733		—		—		2,733
Unrealized gains on marketable securities	—	—				68		—		68
Net loss	—	—		—		—		(15,849)		(15,849)
Balances at September 30, 2025	56,542,877	$	6	$	521,115	$	24	$	(610,803)	$	(89,658)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Gain (Loss)		Accumulated Deficit		Total Stockholders’ Deficit
	Shares	Amount
Balances at December 31, 2023	42,282,040	$	4	$	395,196	$	(826)	$	(471,564)	$	(77,190)
Issuance of common stock upon exercise of stock options and employee stock purchase plan	303,576	—		1,167		—		—		1,167
Stock-based compensation expense	—	—		3,224		—		—		3,224
Unrealized gains on marketable securities	—	—		—		329		—		329
Net loss	—	—		—		—		(25,016)		(25,016)
Balances at March 31, 2024	42,585,616	4		399,587		(497)		(496,580)		(97,486)
Issuance of common stock and pre-funded warrants, net of underwriting discounts, commissions and offering costs	12,743,039	2		102,814		—		—		102,816

Stock-based compensation expense	—	—		3,168		—		—		3,168
Unrealized gains on marketable securities	—	—		—		159		—		159
Net loss	—	—		—		—		(22,979)		(22,979)
Balances at June 30, 2024	55,328,655	6		505,569		(338)		(519,559)		(14,322)

Issuance of common stock upon exercise of stock options and employee stock purchase plan	264,476	—		1,441		—		—		1,441
Stock-based compensation expense	—	—		3,018		—		—		3,018
Unrealized gains on marketable securities	—	—		—		698		—		698
Net loss	—	—		—		—		(19,122)		(19,122)
Balances at September 30, 2024	55,593,131	$	6	$	510,028	$	360	$	(538,681)	$	(28,287)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Foghorn Therapeutics Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Nine Months Ended September 30,
	2025		2024
Cash flows from operating activities:
Net loss	$	(52,619)	$	(67,117)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	8,158		9,410
Depreciation and amortization expense	2,530		2,359

Impairment of long-lived assets	—		2,398
Noncash lease expense	3,663		4,254

Accretion of discount on marketable securities	(1,620)		(3,044)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	3,328		2,554

Accounts payable	(573)		(2,809)
Accrued expenses and other liabilities	769		1,857
Operating lease liabilities	(5,802)		(6,003)
Deferred revenue	(21,662)		(19,746)

Net cash used in operating activities	(63,828)		(75,887)
Cash flows from investing activities:
Purchases of property and equipment	(50)		(427)

Purchases of marketable securities	(97,266)		(221,821)
Proceeds from maturities of marketable securities	196,124		170,053
Net cash provided by (used in) investing activities	98,808		(52,195)
Cash flows from financing activities:
Proceeds from offerings of common stock and pre-funded warrants, net of underwriting discounts and commissions	—		103,401
Payments of public offering costs	—		(585)
Proceeds from issuance of common stock upon exercise of stock options and employee stock purchase plan	442		2,608

Net cash provided by financing activities	442		105,424
Net increase (decrease) in cash, cash equivalents and restricted cash	35,422		(22,658)
Cash, cash equivalents and restricted cash at beginning of period	57,162		82,044
Cash, cash equivalents and restricted cash at end of period	$	92,584	$	59,386


Supplemental disclosure and noncash investing and financing information:
Cash paid for taxes	$	8	$	813
Purchases of property and equipment included in accounts payable and accrued expenses	$	—	$	289
Asset acquired in finance lease	$	1,200	$	—

Decrease in operating lease liabilities and right-of-use assets due to lease remeasurement	$	8,800	$	—
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	89,334	$	57,678
Restricted cash	3,250		1,708
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	92,584	$	59,386

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Foghorn Therapeutics Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1. Nature of Business, Going Concern and Basis of Presentation

Nature of Business

Foghorn Therapeutics Inc. (the “Company”) is a clinical-stage biopharmaceutical company discovering and developing a new class of medicines targeting genetically determined dependencies within the chromatin regulatory system. The Company uses its proprietary Gene Traffic Control platform to identify, validate and potentially drug targets within the system. The Company was founded in October 2015 as a Delaware corporation. The Company is headquartered in Cambridge, Massachusetts.

The Company is subject to risks similar to those of other clinical-stage companies in the biopharmaceutical industry, including dependence on key individuals, the need to develop commercially viable products, competition from other companies, many of whom are larger and better capitalized, and the need to obtain adequate additional financing to fund the development of its products. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s intellectual property will be maintained, that any products developed will obtain required regulatory approval or that any approved products will be commercially viable. Even if the Company’s development efforts are successful, it is uncertain when, if ever, the Company will generate significant revenue from the sale of its products.

In May 2024, the Company entered into an underwriting agreement with Jefferies LLC, TD Securities (USA) LLC and Evercore Group LLC relating to the issuance and sale of an aggregate of 12,743,039 shares of its common stock at a public offering price of $5.51 per share to certain investors. In addition, the Company issued and sold pre-funded warrants to purchase 7,220,794 shares of its common stock (the “Pre-funded Warrants”) at a public offering price of $5.5099 per pre-funded warrant, which equals the public offering price per share of the common stock less the $0.0001 exercise price per share of each pre-funded warrant. The offering closed on May 22, 2024, resulting in net proceeds of $102.8 million, after deducting underwriting discounts, commissions and other offering expenses.

Going concern

The accompanying unaudited condensed consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the ordinary course of business. Since inception, the Company has funded its operations primarily with proceeds from sales of preferred stock, upfront and milestone payments from collaboration agreements, public offerings and a stock purchase agreement. The Company has incurred recurring losses, including net losses of $52.6 million and $67.1 million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, the Company had an accumulated deficit of $610.8 million. The Company expects to continue to generate operating losses in the foreseeable future. As of the issuance date of these interim unaudited condensed consolidated financial statements the Company expects that its cash, cash equivalents and marketable securities will be sufficient to fund its operating expenses and capital expenditure requirements for at least 12 months.

The Company will need to obtain additional funding through public or private equity offerings, debt financings, collaborations, strategic alliances and/or licensing arrangements to continue to fund its operations. The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into collaborative or strategic alliances or licensing arrangements. The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders. Arrangements with collaborators or others may require the Company to relinquish rights to certain of its technologies or programs. If the Company is unable to obtain funding, the Company could be forced to delay, reduce or eliminate some or all of its research and development programs, pipeline expansion or commercialization efforts, which could adversely affect its business prospects. Although management will continue to pursue these plans, there is no assurance that the Company will be successful in obtaining sufficient funding in the future on terms acceptable to the Company to fund continuing operations when needed or at all.

Basis of presentation

The Company’s unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All intercompany accounts and transactions have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting

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Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

2. Summary of Significant Accounting Policies

The accounting policies of the Company are set forth in Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements contained in the Company’s 2024 Annual Report on Form 10-K, and the accounting policies followed by the Company for interim financial reporting are consistent with the accounting policies therein.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the specified effective date. The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 and has elected not to “opt out” of the extended transition related to complying with new or revised accounting standards, which means that when a standard is issued or revised and it has different application dates for public and nonpublic companies, the Company can adopt the new or revised standard at the time nonpublic companies adopt the new or revised standard and can do so until such time that the Company either (i) irrevocably elects to opt out of such extended transition period or (ii) no longer qualifies as an emerging growth company.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures , which is intended to improve disclosures about a public company’s expenses including the disclosure of certain expenses included and aggregated in captions such as cost of sales, selling general & administrative and research and development expenses on the consolidated financial statements on an interim and annual basis. The standard is effective for annual periods beginning after December 15, 2026 and interim periods within annual periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of the standard on the presentation of its condensed consolidated financial statements and footnotes.

3. Marketable Securities and Fair Value Measurements

As of September 30, 2025, available for sale marketable securities by security type consisted of (in thousands):


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value


Commercial paper (due within one year)	18,259		3		(1)		18,261
Corporate notes and bonds (due within one year)	72,661		25		(3)		72,683


Total	$	90,920	$	28	$	(4)	$	90,944

As of December 31, 2024, available for sale marketable securities by security type consisted of (in thousands):


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
U.S. treasury notes (due within one year)	$	35,366	$	28	$	—	$	35,394

Commercial paper (due within one year)	44,959		35		—		44,994
Corporate notes and bonds (due within one year)	100,662		112		(30)		100,744
Corporate notes and bonds (due after one year through two years)	7,171		—		(10)		7,161
Total	$	188,158	$	175	$	(40)	$	188,293

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The following tables present the Company’s fair value hierarchy for its assets and liabilities, which are measured at fair value on a recurring basis (in thousands):


	Fair Value Measurements at September 30, 2025 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	85,230	$	—	$	—	$	85,230

Commercial paper	—		3,870		—		3,870
Marketable securities:


Commercial paper	—		18,261		—		18,261
Corporate notes and bonds	—		72,683		—		72,683
Total	$	85,230	$	94,814	$	—	$	180,044
	Fair Value Measurements at December 31, 2024 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	28,027	$	—	$	—	$	28,027
U.S. treasury notes	—		14,500		—		14,500
Commercial paper	—		2,748		—		2,748
Marketable securities:
U.S. treasury notes	—		35,394		—		35,394

Commercial paper	—		44,994		—		44,994
Corporate notes and bonds	—		107,905		—		107,905
Total	$	28,027	$	205,541	$	—	$	233,568

For the three and nine months ended September 30, 2025 and 2024, there were no transfers between Level 1, Level 2 and Level 3.

4. Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):


	September 30, 2025		December 31, 2024
Laboratory equipment	$	8,340	$	7,119
Furniture and fixtures	839		839
Computer equipment and software	46		67
Leasehold improvements	17,023		17,023

	26,248		25,048
Less: Accumulated depreciation and amortization	(17,586)		(15,084)
	$	8,662	$	9,964

Depreciation and amortization expense was $0.9 million and $0.7 million for the three months ended September 30, 2025 and 2024, respectively, and $2.5 million and $2.4 million for the nine months ended September 30, 2025 and 2024, respectively. The Company recognized a non-cash impairment of leasehold improvements of $0.8 million for the nine months ended September 30, 2024, see Note 10 Commitments and Contingencies for additional information.

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5. Accrued Expenses and Other Current Liabilities

Accrued expenses consisted of the following (in thousands):


	September 30, 2025		December 31, 2024
Accrued external research and development expenses	$	4,719	$	3,076
Accrued employee compensation and benefits	4,237		4,742

Accrued professional fees	470		712

Other	396		1
	$	9,822	$	8,531

6. Common Stock and Net Loss Per Share

Common Stock

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are not entitled to receive dividends, unless declared by the board of directors.

In May 2024, the Company entered into an underwriting agreement with Jefferies LLC, TD Securities (USA) LLC and Evercore Group LLC relating to the issuance and sale of an aggregate of 12,743,039 shares of its common stock at a public offering price of $5.51 per share to certain investors. In addition, the Company issued and sold to certain investors in lieu of common stock the Pre-funded Warrants to purchase 7,220,794 shares of its common stock at a public offering price of $5.5099 per pre-funded warrant, which represents the public offering price per share of the common stock less the $0.0001 exercise price per share of each pre-funded warrant. The offering closed on May 22, 2024, resulting in net proceeds of $102.8 million after deducting underwriting discounts and commissions and other offering expenses.

As the Pre-funded Warrants are indexed to the Company’s common stock (and otherwise meet the requirements to be classified in equity), the Company recorded the consideration received from the issuance of the pre-funded warrants as additional paid-in capital on the Company’s condensed consolidated balance sheets and statements of stockholders’ equity.

The Pre-funded Warrants are exercisable at any time.

Net Loss Per Share

The following pre-funded warrants outstanding at each period end were included in the basic and diluted net loss per share calculation:


	September 30,
	2025	2024
Pre-funded warrants to purchase common stock	6,494,829	7,220,794

During the three and nine months ended September 30, 2025, 725,965 pre-funded warrants were exercised.

The following common stock equivalents presented based on amounts outstanding at each period end have been excluded from the calculation of diluted net loss per share because including them would have had an anti-dilutive impact:


	September 30,
	2025	2024
Stock options to purchase common stock	10,620,530	9,016,562
Warrants to purchase common stock	18,445	18,445
	10,638,975	9,035,007

7. Stock-Based Compensation

2020 Equity Incentive Plan

The Company’s 2020 Equity Incentive Plan (the “2020 Plan”) provides for the grant of incentive stock options, non-qualified options, stock appreciation rights, restricted stock awards, restricted stock units and other stock-based awards. The number of shares initially reserved for issuance under the 2020 Plan was (i) 2,200,000 shares (the “share pool”), plus (ii) the number of shares of common stock available for issuance under the Company’s 2016 Stock Incentive Plan (the “2016 Plan”) as of the

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effective date of the 2020 Plan, plus the number of shares of common stock underlying awards under the 2016 Plan that on or after the date of adoption expire or become unexercisable without delivery of shares, are forfeited to, or repurchased for cash, are settled in cash, or otherwise become available again for grant under the 2016 Plan, in each case, in accordance with its terms (up to an aggregate of 5,078,295 shares). As of September 30, 2025, 3,136,864 shares remained available for future grant under the 2020 Plan.

The share pool will automatically increase on January 1 of each year from 2021 to 2030 by the lesser of (i) four percent of the number of shares of our common stock outstanding as of the close of business on the immediately preceding December 31 and (ii) the number of shares determined by the board of directors on or prior to such date for such year. The number of shares reserved for issuance under the 2020 Plan was increased by 2,223,765 shares effective January 1, 2025.

The 2020 Plan is administered by the board of directors or, at the discretion of the board of directors, by a committee of the board of directors. The exercise prices, vesting and other restrictions are determined at the discretion of the board of directors, or its committee if so delegated. Stock options granted with service-based vesting conditions generally vest over four years and expire after ten years. The exercise price for stock options granted is not less than the fair value of common stock on the date of grant. The Company bases fair value of common stock on the quoted market price.

2020 Employee Stock Purchase Plan

On October 21, 2020, the Company’s board of directors adopted and its stockholders approved the 2020 Employee Stock Purchase Plan (the “ESPP”), which became effective on October 21, 2020. The aggregate number of shares of common stock available for purchase pursuant to the exercise of options under the ESPP is 360,000 shares, plus an automatic annual increase, as of January 1 of each year from 2021 to 2030, equal to the lesser of one percent of the number of shares of common stock outstanding as of the close of business on the immediately preceding December 31 and (ii) the number of shares determined by the board of directors on or prior to such date for such year (up to a maximum of 3,220,520 shares). The number of shares reserved for issuance under the ESPP was increased by 555,941 shares effective January 1, 2025. As of September 30, 2025, 2,077,652 shares remained available for future grant under the ESPP.

Eligible employees may authorize payroll deductions of up to 15% of their eligible compensation during an offering period. The purchase of shares is done at a 15% discount on the lesser of (i) the Fair Market Value of a share of Stock on the first day of the offering period and (ii) the Fair Market Value of a share of Stock on the last day of the offering period. The Company currently holds two offering periods, September 1 and March 1, respectively. The Company recognized a de minimis amount and less than $0.1 million of expense related to the ESPP for the three and nine months ended September 30, 2025 and 2024, respectively.

Stock-Based Compensation

Stock-based compensation expense was classified in the condensed consolidated statements of operations and comprehensive loss as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Research and development expenses	$	1,060	$	1,255	$	3,339	$	3,921
General and administrative expenses	1,673		1,763		4,819		5,489
	$	2,733	$	3,018	$	8,158	$	9,410

As of September 30, 2025, total unrecognized compensation cost related to unvested options was $15.2 million, which is expected to be recognized over a weighted average period of 2.3 years.

8. Collaboration Agreement

Lilly Collaboration Agreement and Stock Purchase Agreement

In December 2021, the Company entered into a collaboration agreement (the “Lilly Collaboration Agreement”) with Eli Lilly and Company (“Lilly”) to create novel oncology medicines by applying Foghorn’s proprietary Gene Traffic Control platform. The collaboration includes a co-development and co-commercialization agreement for the Company’s selective SMARCA2 (BRM) oncology target, consisting of two programs, and one additional undisclosed oncology target (collectively, the “Joint Programs”). The collaboration also includes three additional discovery targets or programs (collectively, the “Discovery Programs”) for a total of six programs directed at five targets.

With respect to the Joint Programs, the Company will lead discovery and early research activities through the successful completion of dose finding toxicity studies for the identified compound, while Lilly will lead development and

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commercialization activities of the identified compound with participation from the Company in development activities and 50% cost sharing until registrational clinical trials. The Company and Lilly may jointly develop and commercialize the Joint Program compound though the Company may, in its sole discretion, opt-out on a program-by-program basis of further participation in the development and commercialization efforts prior to the first registrational clinical trial. If the Company does not opt-out, Lilly and the Company will continue to share in the costs to further develop and commercialize the Joint Program compound on a worldwide basis, equally share in the U.S. profits on product sales, subject to certain adjustments and receive royalties on sales outside of the United States (“Ex-U.S.”) at royalty rates ranging from low double digits to high twenties. If the Company opts-out of further development and commercialization efforts, it will have no further obligations to share in the development and commercialization costs, will receive royalties rather than profit share on U.S. sales and will receive royalties at a lower rate on Ex-U.S. sales.

With respect to the Discovery Programs, the Company will lead discovery and early research activities through the successful completion of dose finding toxicity studies for the identified compounds. The Company may, in its sole discretion, opt-in on a program-by-program basis after the successful completion of dose finding toxicity to participate in the further development and commercialization efforts of the Discovery Program compounds. If the Company opts-in to the development and commercialization of the Discovery Program compounds, it will be eligible to receive milestone payments of up to $10.0 million per program upon specified research and development milestones and up to $180.0 million per program upon achievement of specified regulatory and commercial milestones and will also be eligible to share in the U.S. profits at pre-determined percentages on product sales. The Company would also be eligible to receive tiered Ex-U.S. royalty rates, calculated on a product-by-product and country-by-country basis, on net sales outside of the United States, if any, ranging from low single digits to low double digits, but less then teens. If the Company does not opt-in to further development and commercialization efforts for the Discovery Programs, it will be eligible to receive milestone payments of up to $70.0 million per program upon specified research and development milestones and up to $360.0 million per program upon achievement of specified regulatory and commercial milestones per approved product, if any. The Company would also be eligible to receive tiered royalties on net sales of products worldwide at royalty rates ranging from low single digits to low double digits, but less than teens.

Lilly has the right to make substitutions for each of the five targets during the research term of each program, subject to certain limitations. Pursuant to the Lilly Collaboration Agreement, the Company will also participate in joint decision-making through the joint steering committee and subcommittees. Unless terminated earlier, the Lilly Collaboration Agreement will continue on a product-by-product basis until the expiration of all royalty obligations under the Lilly Collaboration Agreement and when neither the Company nor Lilly is developing, commercializing or manufacturing any product under the Lilly Collaboration Agreement. The Company or Lilly may terminate the Lilly Collaboration Agreement upon an uncured material breach by the other party. Lilly may also terminate the Lilly Collaboration Agreement in its entirety or on a target-by-target, program-by-program or product-by-product basis for any reason upon certain notice to the Company.

The Company determined that (1) the research activities performed by the Company for both the Joint Programs and the Discovery Programs (2) the development activities and cost sharing for the Joint Program development efforts after dose finding toxicity until registrational clinical trials (3) the research, development, manufacture and commercialization licenses and (4) service on the joint steering committee and subcommittees represent a single performance obligation under the Lilly Collaboration Agreement. The Company determined that Lilly cannot benefit from the licenses separately from the research activities, the development activities until registrational clinical trials and participation on the joint steering committee and subcommittees because these services are specialized and rely on the Company’s expertise such that these activities are highly interrelated and therefore not distinct. Accordingly, the promised goods and services represent one combined performance obligation, and the entire transaction price was allocated to that single combined performance obligation. The performance obligation will be satisfied over time as the Company performs the research activities, participates and shares in the cost of the development activities for the Joint Programs and participates in a joint steering committee and subcommittees to oversee these activities.

The Company’s options to share in further development and commercialization efforts via its opt-in/opt-out rights will be assessed and accounted for as separate units of accounting under the relevant guidance if, and when, such options are exercised by the Company.

During the third quarter of 2023, the Company has transitioned the SMARCA2 (BRM) Selective inhibitor, FHD-909, into development activities for which Lilly will lead and the Company will participate and share in 50% of the costs until at least registrational trials. Costs incurred will contin

SEC Form 10-Q filed by Foghorn Therapeutics Inc.