Foghorn Therapeutics cuts 40% of staff after Eli Lilly partnership fails

Key points

• Foghorn and Eli Lilly agreed to discontinue the development of FHD-909, a SMARCA2 inhibitor, following disappointing results from the Phase 1 dose-escalation cohort.
• The collaboration, which began in 2021 with $300 million in upfront cash and an $80 million equity investment, is ending entirely, including the termination of a SMARCA2 degrader program.
• Foghorn is reducing its workforce from 106 to 65 employees to align its operating structure with its remaining proprietary pipeline.
• The company retains $167.6 million in cash, providing a runway to fund priority programs into the second half of 2029.
• Future development will focus on an EP300 degrader for hematological malignancies, an oral immunology small molecule, and a CBP degrader program.

Background

This marks the second major pipeline pivot for Foghorn in 18 months. In late 2024, the company abandoned FHD-286, its only solely owned clinical-stage candidate, after it failed in a Phase 1 trial for acute myeloid leukemia. The current restructuring follows a pattern of rapid strategic shifts as the company attempts to validate its Gene Traffic Control platform in the face of clinical setbacks.

How outlets are covering it

Fierce Biotech and GlobeNewswire report the core facts of the partnership termination and layoffs, with the latter providing the official corporate statement. Barron’s emphasizes the financial impact, noting that Foghorn’s stock fell 16% to $3.00, marking its worst single-day drop since November 2025. StocksToTrade offers a more speculative view, highlighting that despite the 42.3% drop in share price, the company’s strong cash position and low enterprise value keep it in 'speculative territory' for traders. While all sources agree on the 40% workforce reduction, only Barron’s and StocksToTrade provide specific market reaction data, whereas Fierce Biotech notes that Prelude Therapeutics also recently paused similar SMARCA2 programs, suggesting broader challenges in this therapeutic area.

Why it matters

The failure of FHD-909 highlights the risks associated with synthetic lethality targets in oncology. For investors, the event signals a shift from large-cap partnerships to a high-risk, high-reward strategy focused on preclinical assets. The ability to maintain a cash runway through 2029 despite significant layoffs suggests that Foghorn is prioritizing long-term pipeline validation over short-term market stability, a move that could define its survival in the competitive biotech landscape.

What to watch

Foghorn aims to advance its EP300 degrader program into Phase 1 trials next year, targeting multiple myeloma and other hematological malignancies. The company also plans to move forward with its oral small molecule for immunology and inflammation. However, the CBP degrader program (CBPd-171) faces delays due to an 'unexpected operational issue' at a third-party contract research organization, pushing back its development timeline.