Foghorn 2025 Q2 Earnings Narrowed Losses, 21.9% Net Income Improvement

Foghorn Therapeutics Inc. (FHTX) reported its second-quarter 2025 earnings on August 5, 2025, showing a 21.9% reduction in net loss year-over-year. The company did not meet earnings expectations, as it remains unprofitable and continues to post losses for the sixth consecutive year. No material guidance adjustments were announced alongside the report.

Revenue
Foghorn’s total revenue for Q2 2025 rose to $7.56 million, representing a 9.7% year-over-year increase from $6.89 million in Q2 2024. This growth was driven entirely by collaboration revenue, which stood at $7.56 million for the quarter. The company does not report revenue by multiple business segments, as the entire revenue figure is attributed to its collaboration activities under the Lilly partnership.

Earnings/Net Income
Foghorn narrowed its net loss to $17.94 million in Q2 2025, or $0.28 per share, a 21.9% improvement compared to a net loss of $22.98 million, or $0.45 per share, in Q2 2024. Despite this reduction, the company has reported losses for six consecutive years, underscoring ongoing financial pressures.

Price Action
The stock experienced a decline across multiple time frames, with a 4.40% drop on the most recent trading day, a 15.33% drop for the week, and a 2.53% decline month-to-date. This negative momentum reflects investor skepticism amid the earnings miss and continued losses.

Post-Earnings Price Action Review
A buy-and-hold strategy executed on the day of the earnings report, based on the revenue increase quarter-over-quarter, underperformed significantly. The investment returned -63.04% over 30 days, lagging the benchmark by 111.62%. The strategy exhibited no maximum drawdown and a Sharpe ratio of -0.29, signaling high risk and poor risk-adjusted returns. These results highlight the stock's vulnerability to market sentiment and poor performance following the earnings release.

CEO Commentary
Adrian Gottschalk, CEO of Foghorn, highlighted key advancements in the company’s oncology pipeline. These include on-track enrollment in the FHD-909 Phase 1 trial and promising preclinical synergies with pembrolizumab and KRAS inhibitors. Gottschalk expressed confidence in the progress of wholly owned programs targeting CBP, EP300, and ARID1B, with an IND filing for the Selective CBP degrader expected in 2026 and updates on other programs in Q4 2025. He emphasized the company’s strong balance sheet, with $198.7 million in cash as of June 30, 2025, providing a financial runway into 2028.

Guidance
Foghorn expects continued enrollment in the FHD-909 Phase 1 trial for SMARCA4-mutated cancers, with potential clinical exploration in non-small cell lung cancer (NSCLC). The company remains on track for an IND filing for the Selective CBP degrader in 2026 and anticipates program updates for its Selective EP300 and ARID1B degraders in Q4 2025. Foghorn also expects to advance preclinical combinations with pembrolizumab, KRAS inhibitors, and chemotherapies.

Additional News
Foghorn announced significant progress across its drug development pipeline. The FHD-909 Phase 1 trial in SMARCA4-mutated cancers, primarily targeting NSCLC, is enrolling patients and remains on schedule. Preclinical data also showed promising synergies when FHD-909 is combined with pembrolizumab and KRAS inhibitors, supporting its potential in difficult-to-treat cancers. The company remains on track for IND-enabling studies for its Selective CBP degrader and anticipates updates for its Selective EP300 and ARID1B degraders in Q4 2025. Foghorn’s continued collaboration with Lilly supports the development of its SMARCA2 programs. As of June 30, 2025, the company held $198.7 million in cash and equivalents, ensuring financial runway into 2028 and reinforcing its capacity to advance its pipeline.