fhtx-20260630

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 June 30, 2026


¨			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.)

99 Coolidge Avenue, Suite 500 Watertown, Massachusetts (Address of principal executive offices)			02472 (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	¨

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 July 31, 2026, the registrant had 59,385,315 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	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25
PART II.	OTHER INFORMATION	26
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 5.	Other Information	26
Item 6.	Exhibits	27
Signatures		28

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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;

•statutory and regulatory developments in the United States and foreign countries, especially in China, including China’s Anti-Foreign Sanctions Law and its implementing regulations;

•general economic conditions, including recessionary conditions, interest rates, monetary fluctuations and supply chain constraints;

•ongoing and potential geopolitical instability and armed conflicts;

•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 our current and future product candidates, 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, 2025. 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)


	June 30, 2026		December 31, 2025
Assets
Current assets:
Cash and cash equivalents	$	68,080	$	80,876
Marketable securities	99,502		78,018
Restricted cash	—		1,250

Prepaid expenses and other current assets	2,464		3,091
Total current assets	170,046		163,235
Property and equipment, net	1,497		1,915
Restricted cash	2,000		2,000
Other assets	3		4
Operating lease right-of-use assets	29,847		30,949
Total assets	$	203,393	$	198,103
Liabilities and Stockholders’ Deficit
Current liabilities:
Accounts payable	$	3,207	$	4,266
Accrued expenses and other current liabilities	7,960		11,357
Operating lease liabilities	2,819		923
Deferred revenue	36,593		43,192
Total current liabilities	50,579		59,738
Operating lease liabilities, net of current portion	40,283		40,347
Deferred revenue, net of current portion	193,222		205,962
Other liabilities	350		556
Total liabilities	284,434		306,603
Commitments and contingencies (Note 10)
Stockholders’ deficit:
Preferred stock, $0.0001 par value; 25,000,000 shares authorized at June 30, 2026 and December 31, 2025; no shares issued and outstanding at June 30, 2026 and December 31, 2025	—		—
Common stock, $0.0001 par value; 175,000,000 shares authorized at June 30, 2026 and December 31, 2025; 58,714,272 shares issued and outstanding at June 30, 2026 and 56,657,329 shares issued and outstanding at December 31, 2025	6		6
Additional paid-in capital	578,620		523,937
Accumulated other comprehensive gain (loss)	(134)		24
Accumulated deficit	(659,533)		(632,467)
Total stockholders’ deficit	$	(81,041)	$	(108,500)
Total liabilities and stockholders’ deficit	$	203,393	$	198,103

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 June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Collaboration revenue	$	16,072	$	7,557	$	19,339	$	13,509
Operating expenses:
Research and development	18,523		21,792		36,782		43,418
General and administrative	6,354		6,862		12,935		14,101

Total operating expenses	24,877		28,654		49,717		57,519
Loss from operations	(8,805)		(21,097)		(30,378)		(44,010)
Other income, net:
Interest income	1,609		2,309		3,351		5,001
Other income (expense), net	5		852		(39)		2,239
Total other income, net	1,614		3,161		3,312		7,240


Net loss	$	(7,191)	$	(17,936)	$	(27,066)	$	(36,770)
Net loss per share attributable to common stockholders—basic and diluted	$	(0.10)	$	(0.28)	$	(0.39)	$	(0.58)
Weighted average common shares outstanding—basic and diluted	70,629,419		62,978,219		70,087,756		62,913,804
Comprehensive loss:
Net loss	$	(7,191)	$	(17,936)	$	(27,066)	$	(36,770)
Other comprehensive loss:
Unrealized losses on marketable securities	(1)		(58)		(158)		(179)
Total other comprehensive loss	(1)		(58)		(158)		(179)
Total comprehensive loss	$	(7,192)	$	(17,994)	$	(27,224)	$	(36,949)

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, 2025	56,657,329	$	6	$	523,937	$	24	$	(632,467)	$	(108,500)
Issuance of common stock from direct offering, net of offering costs	2,030,314	—		10,213		—		—		10,213
Issuance of pre-funded warrants from direct offering, net of offering costs	—	—		27,271		—		—		27,271
Issuance of series 1 warrants from direct offering, net of offering costs	—	—		2,942		—		—		2,942
Issuance of series 2 warrants from direct offering, net of offering costs	—	—		9,226		—		—		9,226
Issuance of common stock upon exercise of stock options and employee stock purchase plan	22,847	—		89		—		—		89

Stock-based compensation expense	—	—		2,383		—		—		2,383
Unrealized losses on marketable securities	—	—		—		(157)		—		(157)
Net loss	—	—		—		—		(19,875)		(19,875)
Balances at March 31, 2026	58,710,490	6		576,061		(133)		(652,342)		(76,408)










Issuance of common stock upon exercise of stock options and employee stock purchase plan	3,782	—		9		—		—		9

Stock-based compensation expense	—	—		2,550		—		—		2,550
Unrealized losses on marketable securities	—	—		—		(1)		—		(1)
Net loss	—	—		—		—		(7,191)		(7,191)
Balances at June 30, 2026	58,714,272	$	6	$	578,620	$	(134)	$	(659,533)	$	(81,041)


	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)

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)


	Six Months Ended June 30,
	2026		2025
Cash flows from operating activities:
Net loss	$	(27,066)	$	(36,770)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense	4,933		5,425
Depreciation and amortization expense	468		1,678


Noncash lease expense	1,102		2,967

Accretion of discount on marketable securities	(1,006)		(1,264)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	628		1,989

Accounts payable	(1,059)		(463)
Accrued expenses and other liabilities	(3,397)		(388)
Operating lease liabilities	1,626		(4,633)
Deferred revenue	(19,339)		(13,509)

Net cash used in operating activities	(43,110)		(44,968)
Cash flows from investing activities:
Purchases of property and equipment	(50)		(50)

Purchases of marketable securities	(104,021)		(93,264)
Proceeds from maturities of marketable securities	83,385		156,549
Net cash provided by (used in) investing activities	(20,686)		63,235
Cash flows from financing activities:
Proceeds from offerings of common stock, pre-funded warrants, and series warrants net of underwriting discounts and commissions	49,999		—
Payments of public offering costs	(347)		—
Proceeds from issuance of common stock upon exercise of stock options and employee stock purchase plan	98		393

Net cash provided by financing activities	49,750		393
Net increase (decrease) in cash, cash equivalents and restricted cash	(14,046)		18,660
Cash, cash equivalents and restricted cash at beginning of period	84,126		57,162
Cash, cash equivalents and restricted cash at end of period	$	70,080	$	75,822


Supplemental disclosure and noncash investing and financing information:
Cash paid for taxes	$	2	$	8




Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	68,080	$	72,572
Restricted cash	2,000		3,250
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	70,080	$	75,822

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 Watertown, 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.

Liquidity

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 $27.1 million and $36.8 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, the Company had an accumulated deficit of $659.5 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 Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).

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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 2025 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.

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 June 30, 2026, 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)	69,394		—		(68)		69,326
Corporate notes and bonds (due within one year)	30,242		—		(66)		30,176


Total	$	99,636	$	—	$	(134)	$	99,502

As of December 31, 2025, 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. government agencies (due within one year)	1,500		—		—		1,500
Commercial paper (due within one year)	35,286		4		(3)		35,287
Corporate notes and bonds (due within one year)	41,208		23		—		41,231

Total	$	77,994	$	27	$	(3)	$	78,018

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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 June 30, 2026 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	63,000	$	—	$	—	$	63,000

Commercial paper	—		4,922		—		4,922
Marketable securities:


Commercial paper	—		69,326		—		69,326
Corporate notes and bonds	—		30,176		—		30,176
Total	$	63,000	$	104,424	$	—	$	167,424
	Fair Value Measurements at December 31, 2025 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	56,357	$	—	$	—	$	56,357

Commercial paper	—		24,227		—		24,227
Marketable securities:

U.S. government agencies	—		1,500		—		1,500
Commercial paper	—		35,287		—		35,287
Corporate notes and bonds	—		41,231		—		41,231
Total	$	56,357	$	102,245	$	—	$	158,602

For the three and six months ended June 30, 2026 and 2025, 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):


	June 30, 2026		December 31, 2025
Laboratory equipment	$	8,085	$	8,035
Furniture and fixtures	839		839
Computer equipment and software	46		46


	8,970		8,920
Less: Accumulated depreciation and amortization	(7,473)		(7,005)
	$	1,497	$	1,915

Depreciation and amortization expense was $0.2 million and $0.9 million for the three months ended June 30, 2026 and 2025, respectively, and $0.5 million and $1.7 million for the six months ended June 30, 2026 and 2025, respectively.

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5. Accrued Expenses and Other Current Liabilities

Accrued expenses consisted of the following (in thousands):


	June 30, 2026		December 31, 2025
Accrued external research and development expenses	$	3,962	$	4,194
Accrued employee compensation and benefits	3,062		5,921

Accrued professional fees	528		842

Other	408		400
	$	7,960	$	11,357

6. Common Stock and Net Loss Per Share

Common Stock

Each share of common stock, par value $0.0001 per share (“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.

On January 9, 2026, the Company entered into securities purchase agreements (the “Purchase Agreements”) with certain leading life sciences investors (the “Investors”), relating to the issuance and sale of 2,030,314 shares of its Common Stock and, in lieu of Common Stock, pre-funded warrants to purchase 5,421,250 shares of Common Stock (the “Pre-Funded Warrants”). The Company sold the shares of Common Stock and Pre-Funded Warrants together with two series of warrants, Series 1 Warrants and Series 2 Warrants, to purchase an aggregate of 7,451,564 shares of the Common Stock (the “Series Warrants”). The Pre-Funded Warrants were exercisable immediately upon issuance at an initial exercise price of $0.0001 per share and have a term of 20 years. The shares of Common Stock, or Pre-Funded Warrants, and the accompanying Series Warrants were immediately separable and were issued separately, but they were purchased together in the offering.

The offering price for the shares of Common Stock is $6.71 per share (or $6.7099 for each Pre-Funded Warrant, which equals the price per share of the Common Stock less the exercise price of the Pre-Funded Warrants). The aggregate gross proceeds to the Company from this offering were approximately $50.0 million before any offering expenses, and excluding any proceeds the Company may receive upon exercise of the Pre-Funded Warrants and Series Warrants. The Company incurred offering costs of approximately $0.3 million, which were treated as a reduction to equity. No underwriter or placement agent participated in the offering. As the Pre-funded Warrants are indexed to the Company’s common stock (and otherwise meet the requirements to be classified in equity), the Pre-Funded Warrants were classified as a component of permanent equity on the Company’s condensed consolidated balance sheets and statements of stockholder’s deficit.

The Series Warrants are also immediately exercisable. Each of the 3,725,782 Series 1 Warrants have an initial exercise price of $13.42 per share of Common Stock, subject to certain customary anti-dilution adjustments, and expires on June 30, 2027. Each of the 3,725,782 Series 2 Warrants have an initial exercise price of $20.13 per share of Common Stock, subject to certain customary anti-dilution adjustments, and expires on December 31, 2030. For the Series Warrants, the Investor may elect to receive, in lieu of shares of Common Stock, pre-funded warrants to purchase an equivalent number of shares of Common Stock.

If, prior to the expiration date of the Series Warrant, the Company sells additional capital stock or derivative securities convertible into or exercisable for capital stock (other than Exempted Securities as defined by the Series Warrant) in one or more related transactions primarily for the purpose of raising capital at a Weighted-Average Price (as described below) below $13.42 per share, then the initial exercise price of the Series Warrants will be automatically reset upon exercise to an exercise price (the “Adjusted Exercise Price”) that is the midpoint between the initial exercise price and the lowest Weighted-Average Price per share at which the Company sells capital stock or derivative securities convertible into or exercisable for capital stock in a subsequent offering prior to the exercise date; provided, however, that the Adjusted Exercise Price will not be reduced below $6.71 per share. The Weighted-Average Price shall be calculated as the weighted-average common stock equivalent price of the equity securities sold in such transaction(s) (excluding any derivative securities with an exercise or conversion price that is above the closing sale price as of the time of pricing such offering(s)). In no event will the exercise price for the Series Warrants be adjusted more than once pursuant to this adjustment mechanism.

The Series Warrants (and the Pre-Funded Warrants) may not be exercised by the holder to the extent that the holder, together with its affiliates, would beneficially own, after such exercise more than 9.99% of the shares of the Company’s common stock then outstanding (subject to the right of the holder to increase or decrease such beneficial ownership limitation upon notice to the Company, provided that such limitation cannot exceed 19.99%) and provided that any increase in the beneficial ownership

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limitation shall not be effective until 61 days after such notice is delivered. As of June 30, 2026, no Pre-Funded or Series Warrants have been exercised.

The Series Warrants are also indexed to the Company’s common stock (and otherwise meet the requirements to be classified in equity) and were classified as a component of permanent equity on the Company’s condensed consolidated balance sheets and statements of stockholder’s deficit.

Because each of the instruments issued are classified within permanent equity, the Company allocated the financing proceeds among the Common Stock, Pre-Funded Warrants, and Series Warrants based on each instrument’s relative fair value. The Company valued the Series Warrants at issuance using Monte Carlo Simulation model and determined the fair value of the 7,451,564 Series Warrants to be $12.2 million. The key inputs to the valuation model included the weighted average volatility of 88.2% and the weighted average expected term of 4.13 years.

On April 15, 2022, the Company entered into a sales agreement (the “Sales Agreement”) with Cowen and Company, LLC (“Cowen”) with respect to an at-the-market offering (the “ATM Offering”) pursuant to which the Company, at its discretion, may offer and sell shares of its Common Stock having an aggregate offering price of up to $200.0 million from time to time through Cowen as its sales agent. Sales of Common Stock through Cowen, if any, will be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) under the Securities Act of 1933, as amended. The Company will pay Cowen a commission of up to 3.0% of the gross sales price of any Common Stock sold through Cowen under the Sales Agreement.

On March 20, 2025, the Company and TD Securities (USA) LLC, as successor to Cowen (“TD Cowen”) entered into amended the sales agreement (the “Amended Sales Agreement”), which, among other things, reduced the amount of shares of Common Stock that may be sold under the ATM Offering to up to $100 million of shares of Common Stock.

During the three and six months ended June 30, 2026, the Company issued and sold no shares of its Common Stock under the ATM Facility.

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:


	June 30,
	2026	2025
Pre-funded warrants to purchase common stock	11,916,079	7,220,794

During the three and six months ended June 30, 2026 and 2025, no 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:


	June 30,
	2026	2025
Stock options to purchase common stock	14,069,909	10,813,194
Warrants to purchase common stock	7,470,009	18,445
	21,539,918	10,831,639

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 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 June 30, 2026, 1,924,115 shares remained available for future grant under the 2020 Plan.

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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 2,266,293 shares effective January 1, 2026.

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 566,573 shares effective January 1, 2026. As of June 30, 2026, 2,633,981 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 of expense related to the ESPP for the three and six months ended June 30, 2026 and 2025.

Stock-Based Compensation

During the three months ended June 30, 2026, the Company updated its methodology for estimating expected volatility used in the Black‑Scholes option pricing model to determine the fair value of stock-based compensation awards.

Previously, as disclosed in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2025, the Company historically estimated expected volatility based on the historical volatility of a group of publicly traded peer companies. This approach was utilized because the Company did not have sufficient historical trading data for its common stock to provide a reasonable basis for estimating expected volatility.

During the current period, the Company determined that it now has adequate historical trading information to support the use of the volatility of its own common stock. Accordingly, the Company has commenced estimating expected volatility based on the historical volatility of its own share price over a period commensurate with the expected term of the awards. The Company believes this change better reflects the expected volatility of its common stock and is consistent with the guidance in ASC 718, Compensation—Stock Compensation.

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Research and development expenses	$	1,025	$	1,129	$	2,018	$	2,279
General and administrative expenses	1,525		1,604		2,915		3,146
	$	2,550	$	2,733	$	4,933	$	5,425

As of June 30, 2026, total unrecognized compensation cost related to unvested options was $23.0 million, which is expected to be recognized over a weighted average period of 2.8 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.

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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 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 transitioned the SMARCA2 (BRM) Selective inhibitor, FHD-909, into development activities for which Lilly leads and the Company participates and shares in 50% of the costs until at least

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registrational trials. Costs incurred will continue to be included in research and development expenses on the condensed consolidated statements of operations and comprehensive loss.

As of June 30, 2026, the aggregate amount of the transaction price related to the unsatisfied portion of the performance obligation was $229.8 million, which is expected to be recognized as revenue through 2029 or beyond depending on the timing of certain clinical development activities. The Company does not expect collaboration revenue to be recognized evenly over this period as it will be recognized on a percentage of completion basis (using cost-to-cost method) as the Company performs the research and development activities and participates on the joint steering committee and subcommittees, which will likely vary from period to period. In estimating the total costs to satisfy its single performance obligation pursuant to the Lilly Collaboration Agreement, the Company is required to make significant estimates including the expected time and expected costs to fulfill the performance obligation. If estimates of the total estimated cost change, or if contract amendments change the scope of the performance obligations, the impacts could be material. The cumulative effect of revisions to the total estimated costs to complete the Company’s single performance obligation will be recorded in the period in which the changes are identified, and amounts can be reasonably estimated. A significant change in these assumptions and estimates could have a material impact on the timing and amount of revenue recognized in future periods and the classification of deferred revenue between short-term and long-term.

For the three months ended June 30, 2026 and 2025, the Company recorded $16.1 million and $7.6 million, respectively, of revenue under the Lilly Collaboration Agreement, which was included in deferred revenue at the beginning of the respective periods. For the six months ended June 30, 2026 and 2025, the Company recorded $19.3 million and $13.5 million, respectively, of revenue under the Lilly Collaboration Agreement, which was included in deferred revenue at the beginning of the respective periods. Included in the three and six months ended June 30, 2026 revenue amounts was a $14.2 million cumulative catch-up adjustment to reflect updated future costs primarily due to the scheduled expiration of the research term in December 2026. As of June 30, 2026 and December 31, 2025, the Company had a payable to Lilly of $3.0 million and $1.0 million, respectively, recorded in accrued expenses and other current liabilities on the Company’s condensed consolidated balance sheets.

9. Leases

The Company leases laboratory and office space under a non-cancelable operating lease (the “Operating Lease”). There have been no material changes to the Company's Operating Lease during the three and six months ended June 30, 2026. For additional information, see Note 10, Leases, to the consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.

The components of lease expense were as follows for the three and six months ended June 30, 2026 and 2025 (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Operating lease cost	$	1,285	$	1,881	$	2,570	$	3,813
Variable lease cost	—		699		—		1,507
	$	1,285	$	2,580	$	2,570	$	5,320

Supplemental disclosure of cash flow information related to leases was as follows (in thousands):


	Six Months Ended June 30,
	2026		2025
Supplemental cash flow information:
Cash paid for amounts included in the measurement of operating lease liabilities	$	—	$	5,480
Non-cash investing and financing activities:


Financing lease liabilities arising from obtaining right-of-use assets	—		1,200
Decrease in operating lease liabilities and right-of-use assets due to lease remeasurement	—		8,800

The weighted average remaining lease term and discount rate was as follows: