CAMBRIDGE, Mass. - Foghorn Therapeutics Inc. (NASDAQ: FHTX), a biotech firm engaged in developing a new class of gene expression-targeted medicines, announced today its decision to halt the solo development of its drug candidate FHD-286, which was being tested in combination with decitabine for relapsed and refractory acute myeloid leukemia (AML). The company cited that the response rates in the Phase 1 dose escalation trial did not meet its efficacy threshold for continued independent development. The news has impacted investor sentiment, with the stock dropping nearly 16% in the past week, according to InvestingPro data.
Despite the observed clinical responses, Foghorn will now prioritize its proprietary pipeline and collaboration programs with Lilly, including the clinical-stage selective SMARCA2 inhibitor FHD-909 (LY4050784). The company reported a strong financial position with $267.4 million in cash, equivalents, and marketable securities as of September 30, 2024, ensuring a cash runway into 2027. InvestingPro analysis shows the company maintains a healthy current ratio of 4.77, with liquid assets well exceeding short-term obligations. However, investors should note that the company is quickly burning through cash, as indicated by one of the 13 available InvestingPro Tips for FHTX.
FHD-286 is an orally available small-molecule inhibitor targeting SMARCA2 and SMARCA4, proteins essential in the chromatin regulatory system. While it has shown potential in preclinical studies across various malignancies, Foghorn is now considering partnerships or Investigator Sponsored Trials (ISTs) to further the development of FHD-286.
Adrian Gottschalk, President and CEO of Foghorn, expressed gratitude to the clinical investigators, patients, and their families for their participation in the FHD-286 trial and highlighted the company's commitment to advancing its pipeline of potential oncology medicines with therapeutic expansion possibilities.
AML is a blood and bone marrow cancer chiefly affecting adults, with approximately 20,000 new cases diagnosed annually in the United States. Foghorn Therapeutics continues its work on discovering and developing medicines by targeting the chromatin regulatory system through its Gene Traffic Control® platform.
The company anticipates presenting the detailed results of the FHD-286 trial at a medical conference in 2025 and continues its Phase 1 trial of FHD-909 for SMARCA4-mutated cancers. With a market capitalization of approximately $295 million, analysts maintain a bullish outlook, setting price targets ranging from $9 to $20 per share. For deeper insights into Foghorn's financial health and detailed analysis, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US stocks. This update is based on a press release statement from Foghorn Therapeutics.
In other recent news, Foghorn Therapeutics has seen significant updates from financial analysts. Morgan Stanley (NYSE:MS) has revised its outlook on the biotech company, raising the stock's price target to $9.00 from $6.00, while maintaining an Equalweight rating. This adjustment precedes an anticipated update on the Phase I FHD-286 dose escalation for relapsed/refractory acute myeloid leukemia, expected in the fourth quarter of 2024, which could potentially validate Foghorn's strategy in chromatin biology.
In addition to the Morgan Stanley update, Jefferies has initiated coverage on Foghorn Therapeutics with a Buy rating, as the company continues to progress with its drug development programs, specifically its FHD-909 and FHD-286 compounds.
Moreover, Foghorn Therapeutics has recently appointed Dr. Anna Rivkin as its new Chief Business Officer. With over 20 years of industry experience, Dr. Rivkin is expected to play a significant role in the company's business development, leveraging her expertise in strategic alliances, research, development partnerships, and mergers and acquisitions. These are recent developments in the company's trajectory.
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