- Stifel cut its price target for Foghorn Therapeutics after a major partnership update with Eli Lilly.
- Foghorn and Eli Lilly will not advance FHD-909 or a separate selective SMARCA2 degrader program.
- Foghorn plans to reduce its workforce by about 40% and focus on wholly owned programs to extend its cash runway.
Foghorn Therapeutics (NASDAQ: FHTX), a biotechnology company developing treatments for cancer and other serious diseases, came under pressure after Stifel analyst Laura Prendergast cut her price target on the stock to $5.00 from $12.00. A price target is an analyst’s estimate of where a stock may trade. The new target was about 87% above the $2.68 share price at the time it was announced.
The lower target followed a major update in Foghorn’s partnership with Eli Lilly and Company (NYSE: LLY). After reviewing Phase 1 dose-escalation data for FHD-909, the companies decided not to move the cancer drug into the clinical development expansion phase. They also decided not to advance a separate selective SMARCA2 degrader program and do not expect further collaboration activities.
Foghorn will now focus on its wholly owned programs, including a selective EP300 degrader, an oral immunology and inflammation program, a selective CBP degrader, and its induced proximity platform. Owning these programs gives Foghorn more control over development, but it also leaves the company responsible for funding them.
The strategic shift includes a plan to cut about 40% of Foghorn’s workforce. Foghorn expects the workforce reduction and revised priorities to extend its cash runway into the second half of 2029. Cash runway shows how long a company expects its available funds to cover spending, which is especially important for biopharmaceutical companies with ongoing research and development costs.
Foghorn Therapeutics stock traded sharply lower after the news, with trading volume far above its average level. The increase in investor activity shows how strongly the market reacted to the partnership update, pipeline changes, workforce reduction, and price target cut.
