fhtx-20230331

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 March 31, 2023


¨			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 April 28, 2023, the registrant had 41,824,758 shares of common stock, $0.0001 par value per share, outstanding.


		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss	2
	Condensed Consolidated Statements of Stockholders’ Equity	3
	Condensed Consolidated Statements of Cash Flows	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4.	Controls and Procedures	20
PART II.	OTHER INFORMATION	22
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 6.	Exhibits	23
Signatures		24


	March 31, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	50,641	$	52,214
Marketable securities	265,329		293,584


Prepaid expenses and other current assets	4,729		5,601
Total current assets	320,699		351,399
Property and equipment, net	15,225		15,311
Restricted cash	1,708		1,708
Other assets	2,364		2,379
Operating lease right-of-use assets	32,887		34,086
Total assets	$	372,883	$	404,883
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	7,288	$	5,414
Accrued expenses and other current liabilities	8,831		11,001
Operating lease liabilities	6,346		5,970
Deferred revenue	33,331		32,820
Total current liabilities	55,796		55,205
Operating lease liabilities, net of current portion	43,493		45,537
Deferred revenue, net of current portion	298,180		304,000
Other liabilities	—		29
Total liabilities	397,469		404,771
Commitments and contingencies (Note 10)
Stockholders’ equity (deficit):
Preferred stock, $0.0001 par value; 25,000,000 shares authorized at March 31, 2023 and December 31, 2022; no shares issued and outstanding at March 31, 2023 and December 31, 2022	—		—
Common stock, $0.0001 par value; 175,000,000 shares authorized at March 31, 2023 and December 31, 2022; 41,824,758 shares issued and outstanding at March 31, 2023 and 41,803,436 shares issued and outstanding at December 31, 2022	4		4
Additional paid-in capital	381,906		377,232
Accumulated other comprehensive loss	(2,870)		(3,986)
Accumulated deficit	(403,626)		(373,138)
Total stockholders’ equity (deficit)	$	(24,586)	$	112
Total liabilities and stockholders’ equity (deficit)	$	372,883	$	404,883


	Three Months Ended March 31,
		2023		2022
Collaboration revenue		$	5,309	$	3,920
Operating expenses:
Research and development		29,985		24,508
General and administrative		8,641		7,216
Total operating expenses		38,626		31,724
Loss from operations		(33,317)		(27,804)
Other income (expense):
Interest income		2,669		235
Other income, net		720		655
Total other income, net		3,389		890
Loss before income taxes		(29,928)		(26,914)
Provision for income taxes		(560)		—
Net loss		$	(30,488)	$	(26,914)
Net loss per share attributable to common stockholders—basic and diluted		$	(0.73)	$	(0.65)
Weighted average common shares outstanding—basic and diluted		41,811,087		41,370,186
Comprehensive loss:
Net loss		$	(30,488)	$	(26,914)
Other comprehensive loss:
Unrealized gains (losses) on marketable securities		1,116		(1,184)
Total other comprehensive gain (loss)		1,116		(1,184)
Total comprehensive loss		$	(29,372)	$	(28,098)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Stockholders’ Equity (Deficit)
	Shares	Amount
Balances at December 31, 2022	41,803,436	$	4	$	377,232	$	(3,986)	$	(373,138)	$	112
Issuance of common stock upon exercise of stock options and employee stock purchase plan	21,322	—		102		—		—		102
Stock-based compensation expense	—	—		4,572		—		—		4,572
Unrealized Gains on marketable securities	—	—		—		1,116		—		1,116
Net loss	—	—		—		—		(30,488)		(30,488)










Balances at March 31, 2023	41,824,758	$	4	$	381,906	$	(2,870)	$	(403,626)	$	(24,586)


	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Gain (Loss)		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balances at December 31, 2021	41,299,720	$	4	$	361,133	$	(10)	$	(264,256)	$	96,871
Issuance of common stock upon exercise of stock options	129,895	—		384		—		—		384
Stock-based compensation expense	—	—		3,244		—		—		3,244
Unrealized losses on marketable securities	—	—		—		(1,184)		—		(1,184)
Net loss	—	—		—		—		(26,914)		(26,914)










Balances at March 31, 2022	41,429,615	$	4	$	364,761	$	(1,194)	$	(291,170)	$	72,401


	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
U.S. treasury notes (due within one year)	$	2,992	$	—	$	(80)	$	2,912
U.S. government agencies (due within one year)	7,998		1		(4)		7,995
Commercial paper (due within one year)	38,436		—		(102)		38,334
Corporate notes and bonds (due within one year)	165,157		7		(1,565)		163,599
U.S. government agencies (due after one year through two years)	2,862		3		—		2,865
Corporate notes and bonds (due after one year through three years)	50,754		2		(1,132)		49,624
Total	$	268,199	$	13	$	(2,883)	$	265,329


	Fair Value Measurements at March 31, 2023 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	33,219	$	—	$	—	$	33,219

U.S. treasury notes	—		16,998		—		16,998
Marketable securities:
U.S. treasury notes	—		2,912		—		2,912
U.S. government agencies	—		10,860		—		10,860
Commercial paper	—		38,334		—		38,334
Corporate notes and bonds	—		213,223		—		213,223
Total	$	33,219	$	282,327	$	—	$	315,546
	Fair Value Measurements at December 31, 2022 Using:
	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	28,077	$	—	$	—	$	28,077
U.S. treasury notes	—		1,998		—		1,998
Commercial paper	—		22,139		—		22,139
Marketable securities:
U.S. treasury notes	—		7,872		—		7,872
Commercial paper	—		56,398		—		56,398
Corporate notes and bonds	—		229,314		—		229,314
Total	$	28,077	$	317,721	$	—	$	345,798


	March 31, 2023		December 31, 2022
Laboratory equipment	$	6,337	$	5,884
Furniture and fixtures	815		815
Computer equipment and software	115		100
Leasehold improvements	17,235		17,123
Assets not yet placed in service	193		—
	24,695		23,922
Less: Accumulated depreciation and amortization	(9,470)		(8,611)
	$	15,225	$	15,311


	March 31, 2023		December 31, 2022
Accrued external research and development expenses	$	5,891	$	5,262
Accrued income taxes	560		—
Accrued employee compensation and benefits	1,671		4,743
Accrued professional fees	574		678

Other	135		318
	$	8,831	$	11,001


	March 31,
	2023	2022
Stock options to purchase common stock	9,666,311	7,772,058
Warrants to purchase common stock	18,445	18,445
	9,684,756	7,790,503


		Three Months Ended March 31,
			2023		2022		Change
	(in thousands)
Research and development program expenses:
FHD-286			$	4,031	$	4,475	$	(444)
FHD-609			2,686		2,319		367
Platform, research and discovery, and unallocated expenses:
Platform and other early stage research external costs			7,104		5,164		1,940
Personnel related (including stock-based compensation)			10,373		7,911		2,462
Facility related and other			5,791		4,639

SEC Form 10-Q filed by Foghorn Therapeutics Inc.