Key Highlights

  • Foghorn Therapeutics Penny Stock is trading at $2.84 in Thursday's session, down 20.59%.
  • The company discontinued FHD-909, a cancer drug partnered with Eli Lilly, after it failed to show enough benefit in an early-stage trial.
  • The 2021 collaboration, originally valued at up to $1.6 billion, will not be extended, and a separate SMARCA2 program is also ending.
  • Foghorn will cut about 40% of its workforce and refocus on its own pipeline.

Partnered Cancer Drug Fails and the Alliance Ends

Foghorn Therapeutics (NASDAQ:FHTX), a penny stock trading near $2.84, is falling sharply in Thursday's session after announcing it has stopped developing FHD-909, an experimental cancer drug partnered with Eli Lilly (NYSE:LLY). The Watertown, Massachusetts-based biotech develops medicines that target the chromatin regulatory system, and FHD-909 was intended for lung and other solid tumors with changes in a gene called SMARCA4.

The companies said the drug was generally safe but its novel approach did not deliver the effectiveness required to continue. They will not advance it to the next stage of testing or extend their 2021 partnership, originally valued at up to $1.6 billion, and a separate program targeting SMARCA2 is being discontinued as well.

Shares Claw Back From a Much Steeper Early Drop

The stock opened far lower and has recovered a good part of its loss, but it is still down about 21% and sits near the bottom of its 52-week range of $1.79 to $7.61. Penny stocks can swing sharply on heavy volume, and Thursday's turnover has been large.

A 40% Workforce Cut Follows the Setback

Foghorn will reduce its workforce by about 40%, with the cuts expected to be completed in the fourth quarter, leaving about 65 employees compared with 106 at the end of 2025. It expects to record about $2.3 million in related charges.

Back to the Internal Pipeline With One Partner Fewer

Foghorn said it will concentrate on its own pipeline, including potential treatments for blood cancer, prostate cancer and hormone-sensitive breast cancer, as well as an experimental oral drug for inflammatory diseases. With the Lilly alliance gone, the question for investors is whether those programs can Fill the gap.