Foghorn Therapeutics Raises Approximately $110 Million Through Registered Direct Offering to Advance Pipeline
Foghorn Therapeutics has successfully closed a registered direct offering, raising approximately $110 million. This funding will bolster the company’s platform and advance its diverse pipeline of treatments for diseases, especially in oncology. The offering, which includes new and existing investors like BVF Partners and Flagship Pioneering, strengthens Foghorn's balance sheet, extending its cash runway into 2027. With $310 million in cash, cash equivalents, and short-term investments, the company is well-positioned for upcoming data readouts and clinical milestones. The offering priced 12,743,039 common shares at $5.51 each, and pre-funded warrants to buy 7,220,794 shares at $5.5099 each.
- Raised $110 million through direct offering.
- Extended cash runway into 2027 with $310 million in cash, cash equivalents, and short-term investments.
- New and existing reputable investors participated, enhancing credibility.
- Funds will support multiple data readouts and clinical milestones.
- Potential dilution from issuing 12,743,039 new shares and pre-funded warrants for 7,220,794 shares.
- Stock offering price of $5.51 per share could imply lower market valuation.
Insights
The recent fundraising activity by Foghorn Therapeutics, raising approximately
From a financial perspective, the participation of prominent investors such as BVF Partners and Deerfield Management is noteworthy. These firms are seasoned in the healthcare sector and their investment could be interpreted as a vote of confidence in Foghorn's potential. The involvement of joint book-running managers like Jefferies, TD Cowen and Evercore ISI also underscores the credibility of the offering.
However, investors should also be aware of potential dilution. The issuance of over 12 million shares and pre-funded warrants could dilute existing shareholders' equity. In the short term, this might exert some downward pressure on the stock price until the market fully digests the offering.
In summary, the fundraising strengthens the company's balance sheet and extends its operational runway, reducing immediate financial risks. However, equity dilution is a factor to consider.
Foghorn Therapeutics' direct offering aims to accelerate its pipeline, particularly in oncology. The company's focus on correcting abnormal gene expression positions it uniquely within the biopharmaceutical industry. This niche approach could potentially differentiate it from competitors, particularly if it can deliver successful clinical outcomes.
The infusion of capital will support several data readouts and clinical value inflection points, which are important in validating their technology and approach. For investors, this means there could be multiple catalysts over the coming years that might drive the stock's performance. However, it's important to monitor the progress of these clinical trials closely, as any setbacks could impact investor sentiment.
Another point of interest is the pre-funded warrants. These essentially allow certain investors to buy shares at a slightly discounted rate, which can be seen as an attractive proposition for those investors but may raise questions about why the company chose this route over traditional stock issuance.
Overall, while the long-term potential seems promising, the path to success will hinge on the outcomes of their clinical trials and the broader acceptance of their Gene Traffic Control® Platform.
Foghorn Therapeutics' focus on oncology and their innovative Gene Traffic Control® Platform could have significant implications for the treatment landscape. By targeting abnormal gene expression, they are exploring a novel mechanism that could address unmet needs in oncology. The funds raised will enable the company to advance their pipeline through critical clinical stages, particularly those that offer data readouts and value inflection points.
For patients, the successful development of these therapeutics could potentially offer new treatment options for serious diseases that currently have limited solutions. However, the clinical journey for new oncological therapies is often fraught with challenges, including rigorous regulatory scrutiny and the need for robust clinical trial data to demonstrate efficacy and safety.
From an investor's perspective, the key will be to watch for updates on clinical progress and any early indications of therapeutic success. These milestones can significantly influence the stock's performance, given their potential impact on the company's valuation and future prospects.
In conclusion, while the scientific approach is promising, the road ahead will require careful navigation through clinical and regulatory hurdles.
Positions company to further leverage strength of platform and advance programs through multiple data readouts and clinical value inflection points
Strengthens balance sheet with cash, cash equivalents and short-term investments of
CAMBRIDGE, Mass., May 22, 2024 (GLOBE NEWSWIRE) -- Foghorn® Therapeutics Inc. (Nasdaq: FHTX), a clinical-stage biotechnology company pioneering a new class of medicines that treat serious diseases by correcting abnormal gene expression, today announced the closing of its previously announced registered direct offering of common stock and of pre-funded warrants, with gross proceeds of the offering totaling approximately
The offering includes new investors BVF Partners, Deerfield Management and other leading healthcare specialist investors as well as other new and previous investors, including founding investor Flagship Pioneering. Jefferies, TD Cowen and Evercore ISI acted as joint book-running managers for the offering.
“We are pleased with the continued support from existing long-term investors and the quality of the new investors as we further advance our pipeline and our programs with the goal of delivering meaningful therapeutics to patients,” said Adrian Gottschalk, President and Chief Executive Officer of Foghorn. “This financing allows us to advance our programs through multiple data readouts and clinical value inflection points as we continue to develop medicines for patients and create value for shareholders. It supports our already strong balance sheet and extends our runway into 2027.”
The Company issued 12,743,039 shares of its common stock at a public offering price of
About Foghorn Therapeutics
Foghorn® Therapeutics is discovering and developing a novel class of medicines targeting genetically determined dependencies within the chromatin regulatory system. Through its proprietary scalable Gene Traffic Control® platform, Foghorn is systematically studying, identifying and validating potential drug targets within the chromatin regulatory system. The Company is developing multiple product candidates in oncology. Visit our website at www.foghorntx.com for more information on the Company, and follow us on X (formerly Twitter) and LinkedIn.
Forward-Looking Statements
This press release contains “forward-looking statements.” Forward-looking statements include statements regarding the Company’s cash runway, the Company’s clinical trials, including its ongoing Phase 1 study of FHD-286 in combination with decitabine or low-dose cytarabine (LDAC) in relapsed and/or refractory AML patients, pre-clinical product candidates, including the planned Phase 1 study of FHD-909 and our Selective CBP degrader program, expected timing of clinical data, expected timing of regulatory filings, and research efforts and other statements identified by words such as “could,” “may,” “might,” “will,” “likely,” “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “continues,” “projects” and similar references to future periods. Forward-looking statements are based on our current expectations and assumptions regarding capital market conditions, our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions, including risks relating to our clinical trials and other factors set forth under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission. Any forward-looking statement made in this press release speaks only as of the date on which it is made.
Contacts:
Greg Dearborn, Foghorn Therapeutics Inc. (Investors)
gdearborn@foghorntx.com
Karin Hellsvik, Foghorn Therapeutics Inc. (Investors & Media)
khellsvik@foghorntx.com
Adam Silverstein, ScientPR (Media)
adam@scientpr.com
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