Foghorn Therapeutics stock price target cut to $5 by H.C. Wainwright on program halt

H.C. Wainwright recently reduced its price target for Foghorn Therapeutics Inc. (NASDAQ: FHTX) stock to $5.00 from $13.00, while keeping the company's rating as Buy. The current stock price stands at $2.92, which has declined by 16.57% over the past week and 45.93% year-to-date. The downgrade comes after the company disclosed the discontinuation of their Lilly-partnered FHD-909 program, following a review of the Phase 1 dose escalation clinical data.

Despite showing promising safety at higher exposures, the SMARCA2/4 synthetic lethality relationship did not yield sufficient efficacy to warrant further development. This program, which was co-developed with Eli Lilly, will no longer progress, and both companies do not plan on further collaboration. Foghorn has decided to focus on its in-house pipeline, including selective degraders for EP300 and CBP, as well as a novel oral immunology and inflammation program.

The company has also downsized its workforce by approximately 40% and anticipates its cash reserves will last into the second half of 2029. H.C. Wainwright expressed disappointment in the clinical and strategic outcomes of the synthetic lethal target approach, but remains cautiously optimistic about the potential of Foghorn's selective EP300 lineage-dependent preclinical program in treating hematologic malignancies.

Recent news has also highlighted other challenges for Foghorn, with several analyst firms adjusting their outlook due to the company's drug development setbacks.