All right, good morning. Thanks, everybody, for joining Jefferies Healthcare Conference in London. My name is Clara Dunn. I am one of the Jefferies biotech analysts. I am joined by the Chief Executive Officer, Adrian Gottschalk, from Foghorn Therapeutics. Very welcome.
Thanks for having me.
Maybe you can just start kicking things off by, you know, talk about the company overall. Why don't you just give us an overview of, you know, what have kept you busy for the past few months and what's the company focusing on right now?
Sure, thanks. And thanks again, Clara, for having me here at the Jefferies Conference. Foghorn is a clinical-stage oncology company. We've been around and focused in an area of chromatin biology for just over 9 years now. This area of biology has been of interest to us since the inception of the company. It's essentially regulating gene expression. Initially, we were focused on complexes that open and close chromatin, more recently on other proteins that are also regulating gene expression. We built a drug discovery engine that allows us to systematically interrogate this biology and go after targets that historically have not been able to be drugged selectively. We'll talk about some of those this morning. Our main compound, if you will, or program, is in partnership with Eli Lilly. This was part of a deal that we did with Lilly about 4 years ago.
It was about a $300 million upfront in cash, $80 million equity. The focus there has predominantly been on this target called SMARCA2, which I'm sure we'll spend quite a bit of time talking about later in the session. We're also really excited by some of the proprietary programs that we have, whether it's CBP, EP300, or ARID. Again, these are also targets that have, by and large, resisted selective drugging by industry. We're in a really good position. We've got data or a dose expansion decision from our colleagues at Lilly. We predict sometime in the first half of next year and progressing a whole number of programs towards IND also over the coming 12-18 months. An exciting 2026 is in our future.
Great. As you mentioned, the chromatin regulatory system, it's a complex biology, and you do have the drug discovery engine, and you have this very unique platform. Maybe just tell us about, you know, what's really the biggest unknown in this field and how, you know, what's differentiated with your methodology, with your platform here.
Right. You know, if you take a step back on some of these targets, our predominant interest has been where, and I'll use SMARCA2 as maybe a leading example here, you know, SMARCA2 and SMARCA4 are both enzymes. They're found in a particular remodeling complex. In this case, it's the BAF chromatin remodeling complex. The challenge historically has been finding selective chemical matter, selective drugs to hit one, but not both of these targets. For a long time, there was not a really accessible way to doing this. What we've built within our platform is a way to study large assemblies of proteins, which has caused us to become really good at dealing with single polypeptides or single proteins, let alone the complexes that we also deal with.
We've also had to become expert at protein degradation because a large number of these proteins, unlike SMARCA2, are non-enzymatic in nature. So the chemistry build for us has been pretty seminal in terms of figuring out how to selectively drug these different targets. And we've done this now not once and not twice, not thrice, but multiple times over where our colleagues in some of the larger pharma companies have unfortunately not been able to do what we've done. That's effectively been the challenge is finding very selective chemical matter that hits the specific protein and not the sister protein, if you will. I should just mention, again, just to use the SMARCA2 as an example, those proteins are about 90% the same. If you look at the enzymatic binding pocket or the ATPase binding pocket, they're almost 100% the same.
That's what's been the challenge for our colleagues in large pharma is actually finding that selective chemical matter. That's where our platform, which allows us to study the proteins, has actually been very helpful.
Maybe let's talk about the SMARCA2 inhibitor. I mean, you alluded earlier to the partnership with Eli Lilly. Can you just walk us through, you know, what's the structure of this partnership look like and what's the current status of this program?
Sure. As I mentioned previously, we did this deal with Lilly back in December of 2021. It was set up as basically a five-target deal. The only target that has been publicly disclosed is SMARCA2. As I mentioned, this was $300 million in cash at the time, $80 million in equity, which was at $20 a share when we did that. For SMARCA2, we're actually now in the 50/50 cost-sharing phase of that program or on that target. We share, obviously, 50% of the costs, but, you know, knock on wood, the upside will be 50% of the economics when the drug actually is commercialized. That is for the United States. Outside the United States, we have a royalty stack that goes up into the 20% range. We did not take, by the way, any milestone payments on the SMARCA2 program.
That's because we wanted to actually have the 50/50 economic share. And that is on not only the inhibitor FHD-909, but it's also on the selective degrader that we're working on. There's a second target, not yet disclosed, which would also be subject to a 50/50. We think that there'll be a decision by Lilly on that sometime within the next six months as to whether to take that into the clinic or not. It's in a bit more of a competitive space. So, you know, we'll have to see. And then there were three other targets that Lilly could designate where we would use our platform. I think of these as the more classic biobucks, you know, milestone royalties. We do have an opt-in for some economic sharing down the road if we want to, but those are further from the clinic.
Just pragmatically then, in terms of how things work in the collaboration, Lilly for FHD-909, they're responsible for all the day-to-day operations. We can talk about how that's going, but that's basically the setup of the collaboration for 909.
That being said, when should we expect the next data readout?
Right. 909, and maybe just to set context, is in a phase I dose- escalation study. This is taking all histologies, right? You can have any cancer type, but you must have a SMARCA4 mutation. Just again, as a reminder and setting context, this is a synthetic lethal relationship. You know, to simplify that analogy, imagine a bicycle with two wheels. In the case of a cancer cell, it loses one of those wheels. It's losing SMARCA4. Now that cancer cell or that bicycle has become a unicycle and it's completely reliant on the SMARCA2 protein. That's what we're trying to hit in this case of this particular drug. The study is in dose escalation. We have not as of yet hit our maximum tolerated dose. We've recently dose escalated again.
We believe we're starting to get into therapeutic range based on PK and some other parameters. Based on all of those assumptions and sort of how we're projecting the cohorts and some backfilling, I believe that Lilly will be in a position sometime in the first half, going back to your question, Clara, the first half of 2026 to make a decision on whether to proceed into a dose expansion study with 909.
Maybe just to help us set the expectation for this data readout as well, what might be the most relevant efficacy benchmark for 909 in SMARCA4 mutant non-small cell lung cancer and any other indications that 909 will likely pursue if the data comes out, you know, very promising?
Yeah. I'll throw some numbers out and I'll try and keep it sort of connected here. If you look at frontline non-small cell lung in a metastatic setting, patients who receive a checkpoint inhibitor plus chemotherapy, if you are wild type, not mutated for SMARCA4, if you're just a general non-small cell lung cancer patient, you get a response rate of about 40+%. If you are an unfortunate person to have the SMARCA4 mutation, that response rate's cut in half to about 20%. This is in frontline, right? Your median progression-free survival also in that frontline setting is about 2.7 months, right, as opposed to, I think, north of 8 or so months. In the second line setting, most patients get dose of Taxol. That's about a 20% response rate. We're treating patients predominantly in the third and fourth line setting.
In that setting for SMARCA4 mutation, the response rate, depending on the literature prior to intervening with a SMARCA2 inhibitor, is somewhere between 0%-10%, and the median progression-free survival is somewhere between one to two months. The biggest challenge actually, if you chat to lung cancer doctors, is actually getting their patients into a study when they're in third, fourth line with a SMARCA4 mutation, because unfortunately, these individuals are so ill, they sometimes pass away before they can get into a study. From my perspective, the relevant determination of success here is going to be whether Lilly decides to go to expansion.
In terms of, you know, what I would, if I were the sole decision maker, I'd want to see something again in this fourth line setting of a 15% or so plus response rate and, you know, at least, you know, three or so months of duration of therapy. The goal, by the way, when you step back, is not to develop this as a third, fourth line agent. It's really to move this into the frontline setting where, again, we've demonstrated preclinically, you know, very nice combination data with pembrolizumab, but also with a variety of KRAS inhibitors, which obviously Lilly has a franchise of KRAS assets that I think over time they'll figure out how to develop this with.
Perfect. Recently we also saw a SMARCA2 degrader. You know, they showed some activities in SMARCA4 mutant tumors, but the program was later discontinued. What were the key learnings from that effort and maybe how 909 is differentiated to kind of maximize the therapeutic impact of SMARCA2 targeting?
Yeah. I think you're probably referring to our colleagues at Prelude who, unfortunately, I think this was a few weeks back, stopped all their SMARCA2 efforts. You know, again, just to set context and take a step back here, what we know from studying this target for the last eight plus years is you actually have to hit this really hard, whether it's an inhibitor or a degrader. For an inhibitor, which 909 is, you need to be at an IC90 and you have to cover that in a very sustained way. If you're a degrader, we know based on all of our experience there, you have to be at a DC90 or better. You have to have degraded 90+% of the protein in a sustained manner.
Unfortunately, when you look at both the VHL degrader that our colleagues at Prelude have, as well as the cereblon degrader, they're getting to about 80% degradation. The kinetics, or said otherwise, the speed with which they degrade is actually a really important determinant of the degradation. Unfortunately, at least based on what we've seen and we've made their clinical candidates, we actually have some slides in the back of our investor deck where we show those data. The molecules are just not up to the task. With that said, I think they showed very nice proof of concept and validation of this target with their VHL-based degrader. They've not released any clinical data on the cereblon where you saw resist qualifying partial responses in non-small cell in a gastric tumor as well as in esophageal cancer.
Going back to the other part of your question, certainly we and Lilly are very interested in non-small cell lung cancer given the prevalence of this mutation in that cancer type. My guess is we'll also look at gastric esophageal and to the extent we see other responses in dose escalation. There may be other tumor types that we want to look at in the dose expansion phase.
With all the current efforts in SMARCA2, are there any resistance mechanisms for maybe either a degrader or inhibitor that we are aware of right now?
Not as of yet. You know, I mean, the speculative component on that, which I won't go too far into, is like all drugs that, and certainly inhibitors that are binding in a binding pocket, you can have a mutation that causes the drug not to function. So that we'll only, I guess, find out as we get further in the clinic. I think the beauty of what we have with the collaboration with Lilly is we have both the inhibitor and we have the degrader. You can imagine that if you get resistance to the inhibitor, you can switch to a degrader or vice versa, or you could potentially even combine the two, I suppose, down the road to see if you could mitigate that. Right now, that's sort of premature in terms of what we would expect so far.
Can we also talk about the SMARCA4 mutation screenings and like how established is the screening process at study centers?
Yeah. So SMARCA4 is part of the very standard, whether it's Tempus or FoundationOne Medicine Panel. You know, certainly within the lung cancer groups, this is something that's routinely screened for, in part because it portends a much worse prognosis, as I mentioned. Certainly in the United States, that is something that is readily accessible at the major centers. You know, our experience so far that the study itself right now has sites in Japan as well as the US, where Lilly's actually opening sites in Germany, France, Spain, and South Korea as we talk. That doesn't seem to be an issue in terms of having access to the NGS, the next-generation sequencing. That seems to be pretty readily available.
Last question on 909. As you alluded earlier, the potential for the program to be studied in combination. Just maybe, what percentage of SMARCA4 mutant patients are actually also PD-L1 + or have KRAS mutations, et cetera, and they might be eligible for those combo opportunities?
Right. As you look at mutational overlap, there's very little overlap actually with EGFR, ALK, RET, or MET. To your point though, with KRAS, for every 10 patients that have a SMARCA4 mutation, roughly three of those 10 will have a concomitant KRAS mutation. The prognosis for those patients is abysmal. It's almost a 0% response rate. There are some curves that we have in our investor deck. It looks like patients fall off a cliff there, unfortunately. Those poor souls are really in a bad way. As it relates to what we're interested in, obviously pembrolizumab is combining there as a priority given the desire to move straight into frontline after the escalation study. The plan, I think, in expansion, if we decide to go there, will be to immediately combine with pembro plus a chemotherapy.
In terms of overlap or expression level, I believe it's sort of uniformly distributed. I don't think SMARCA4 patients are worse off in terms of expression level, but that's probably something I'll have to get back to you with a more definitive answer. My current understanding is that's not an issue. As we think, just to back up, as we think about dose expansion, you'll see combination with pembrolizumab at some point, given that Lilly has multiple KRAS assets, they'll have to decide which of those assets they ultimately want to combine with 909. Again, the data for these patients is extremely clear. Frontline, they do very poorly, as I mentioned. Certainly with KRAS overlap, it's even worse than some of the numbers I mentioned for pembro.
Maybe move on to other programs. Recently you had an R&D day and really highlighting, you know, the preclinical asset. One of the biggest takeaways for me is you're among the few companies really capable of developing degraders based on two different E3 ligases, cereblon and VHL. Tell us what advantage does that really offer, especially for the EP300 degrader?
Sure. So we've been predominantly focused, as you just mentioned, Clara, on heterobifunctional degraders. You know, we certainly try and develop degraders with cereblon because it lends itself to oral bioavailability. But sometimes just, you know, when you look at VHL, VHL is actually a very, very productive and efficient ligase. In our experience, we tend to get really rapid kinetics and really deep degradation with VHL. The challenge with VHL is it's a higher molecular weight, so you tend not to get oral bioavailability. You end up with some parenteral delivery. No one, you know, really wants to take a once-a-day subcu or intramuscular injection. Consequently, we've actually developed, and we spent a lot of time over the last probably 5 years developing long-acting injectable formulation technology.
In the case of our CBP program, and I'll come to EP300 in a moment, we have a VHL-based degrader that we can deliver once a week subcutaneously, potentially once every other week as well, which we think, again, in the space of oncology, is a very competitive profile. For EP300, and this is a program I'm tremendously excited about, our colleagues at CellCentric actually have done a beautiful job demonstrating some clinical proof of concept. They have a dual bromodomain inhibitor to both CBP and EP300. I think the challenge there is that comes with some tox liabilities. We have developed a selective EP300 degrader that we believe dials out some of those myelosuppressive tox issues like thrombocytopenia and neutropenia and anemia.
Interestingly, for EP300, in the space of multiple myeloma, we have actually both a cereblon-based degrader, which is oral, and we have a VHL-based degrader that will be likely once a week subcu. I think, as you know, folks in this room probably know, the IMIDs use cereblon as their handle to induce degradation. If you put a cereblon-based degrader with an IMID, you start competing for that cereblon interaction, and you do not actually end up with great efficacy. This is something we showed in our investor deck as well or in our analyst day. We are prioritizing the VHL-based degrader for multiple myeloma, certainly in the near term. We are really excited by this program, again, given the clinical validation that we have seen for CellCentric. That program is on track to have IND-enabling studies towards the end of 2026.
You mentioned that multiple myeloma will be the initial priority. Maybe just talk to us why multiple myeloma.
Yeah. I mean, sometimes these things are maybe less interesting than one would imagine. You know, we looked across a panel of heme malignancies. And again, when you look at multiple myeloma, every single cell line that we tested the EP300 degrader in for multiple myeloma, we were able to kill the cells. We know it's a proapoptotic mechanism. We see increases in caspase activity. Then you start looking across diffuse large B-cell, B-cell ALL, chronic myelogenic leukemia. We see an effect across a range of hematologic malignancies. Multiple myeloma stood out as, you know, working across the cell lines. Then again, because of some of the existing data from our colleagues at CellCentric, it makes sense to prioritize multiple myeloma initially. There's also some solid tumor options as well. Prostate cancer is certainly on the radar screen.
Again, you know, we'll get the drug to IND, and then we'll sort of figure out further how we want to develop it and all these indications.
Can you also give us an update of the status for the rest of the preclinical pipeline as well?
Sure. The other two assets that we have are our selective CBP degrader. That is both for synthetic lethal approach where you have mutations now in this EP300 protein, different again from the selective EP300 program. We also see a frank lineage dependency, meaning that, you know, irrespective of what the mutation is in EP300, we see some interesting results in positive breast. We are actually working through some in vivo models there. This program is, as I may have mentioned, right now actually going through the non-GLP tox in rat and dog. That should wrap up by the end of this year, early next. Our goal is to have that be IND ready by the middle part of next year. EP300 is about 6-9 months behind that, as I mentioned.
ARID1B, this is actually a super interesting target, another synthetic lethal relationship with its sister protein, ARID1A. ARID1A is amongst the most mutated proteins in cancer. It has completely eluded, as far as we can tell, based on the conversations we've had with our colleagues at all the large pharma companies, it's completely eluded drugging for everyone. We actually, we believe we're the only ones to actually have found selective binders as well, now having made selective degraders. Our goal with that program is to get that into in vivo proof of concept in the coming year and, knock on wood, you know, potentially an IND sometime towards the end of 2027. That's where we find ourselves with the wholly owned pipeline.
With all these efforts of advancing those programs, are you thinking about any possibility for partnership?
Yeah. So my own personal philosophy for small biotechs is in oncology, we have no business running registrational studies in large tumor types, prostate, breast, lung, multiple myeloma I'd actually include in that. Longer- term, we will absolutely need partnerships. I think as we've demonstrated with our partnership with Lilly, and they've done just an outstanding job with the SMARCA2 program. Partnering early also makes sense if you can get the right terms with the right partner and they bring the right strategic capabilities. The ability to operationalize, as Lilly is doing right now, sites on multiple continents and whatnot is not something that a small biotech can easily do. You know, we're certainly open-minded about partnering any of our proprietary programs as long as it's in the right terms and with the right partner. We're not going to be able to do it all.
We've got an embarrassment of riches from that perspective.
Lastly, remind us of your cash position.
Like all small biotechs, and as the CEO of small biotechs, you always want more money. As of the end of Q3, we had $180 million on the balance sheet. That gets us into early 2028 with the assumption that we're fully funding our 909 program into dose expansion. We're funding the second target from Lilly. Then we progress all of the proprietary programs I mentioned to IND. Obviously, you know, once we do that, at some point, we'll either need to, through equity financing or strategic partnership, put more money into the company to take those in the clinic.
Great. We are looking forward to all those exciting updates coming up. Thank you so much, Adrian, for joining us. Thank you to the audience for joining us. Enjoy the rest of the conference. Thank you, everyone.
Thanks, Clara.