All right, everyone, good morning. Thanks for joining. Let's go ahead and get started. My name is Vikram Prahlad. I'm one of the biotech analysts with the Morgan Stanley Research Team. Happy to have with me on the stage, a CEO of Foghorn Therapeutics, Adrian Gottschalk. Adrian, thank you for joining us. Thank you. Good morning. Early good morning. Yes, definitely. Before we get into it, I need to read a brief disclosure statement. For important disclosures, please see the Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures, and if you have any questions, please reach out to your Morgan Stanley sales representative. With that, let's dive into it. Adrian, thank you again for joining us. I'm sure a lot of people at this point are familiar with Foghorn's platform and the general approach, but could you just kind of recap for us the potential you see in addressing chromatin biology and Foghorn's kind of general your methodology for finding differentiated medicines in oncology, and then we can go from there? Go from there. Absolutely. So, we're a clinical stage oncology company, focused on the regulation of gene expression through chromatin related biology. This is an area of biology, as we've talked about, before, that's been really underappreciated, from a target perspective, as well as a therapeutic intervention perspective. And I think it's really the last decade or so, with all the various omics coming online, that a big arrow was pointed at this area of biology, for potential intervention. So, one example, one of the remodeling complexes we work on is mutated in about 20% of all cancer. You can look at transcription factors, obviously, which are relevant to regulating gene expression, and it goes almost north of 50%. So I think the potential is massive. The challenge has been a systematic approach to actually finding very selective chemical matter. A lot of this molecular machinery is non-enzymatic in nature. A lot of it is very similar in terms of amino acid sequence between various paralogs or proteins in the biology at play. And so what we've done over the course now of roughly about eight years is try to build a platform that really intersects three disciplines, which is the deep biological understanding and mechanistic understanding of this area of biology. A whole suite of assays which are very specific to chromatin and some various pieces of machinery. That's coupled, by the way, with, I believe, very exquisite expertise in protein production and assaying those proteins. These are not necessarily very simple, run-of-the-mill proteins. In some cases, they are in complex with each other. And then the third piece of this is what I like to call the small molecule modality agnostic approach, where we're equally facile with, you know, classic enzymatic inhibitors. The bulk of these are allosteric, and now, even more so with protein degradation, which has become a very important part of our platform. Taken in its totality, we believe there's tremendous opportunity in this area. Even though we're about eight years in, I still feel like we're at the beginning of the beginning of what's actually possible. Maybe just as a preview to the future, I think there's many other different angles one can take with this biology, not just as well as the protein degradation part of our platform, not just in oncology, but potentially beyond. So, I'm really excited about what the future holds for this area. That's a great overview. I guess on that point, eight years in, at this point, what do you think are some of the key unknowns and the leaps of faith that, you kind of need to make in order to kind of bridge from where we are now to the point where there is, a differentiated medicine that comes out of this field? Yeah. You know, in some ways, it's the classic sort of issue with any new therapeutic, right? Are you gonna achieve a sufficient therapeutic index such that whatever you're hitting does what it needs to do to the cancer cell in this case, or some other piece of the biology, without perturbing you know, regular healthy tissue or cells? I don't think that's novel to Foghorn. I think that's pretty much run-of-the-mill biotech or pharma company. I think in the case of the area that we're focused on, I have no doubt in my mind there are blockbuster drugs within this area. I think it's a question of discerning some of the biology and really understanding what you're actually hitting, and that's what we've been learning over the course of the last several years as we put some stuff in the clinic. Where it was biologically active, we saw some clinical results, but it wasn't sufficient, and that's because we probably didn't have the right therapeutic window in that specific disease, or we needed some combination therapy. So I think sussing that out remains one of the ongoing challenges, but equally, it gives me confidence that this is actually relevant in the setting. I think the other piece of it, which is why I think what we do is unique, is we're still figuring out how to drug some of the components of this machinery. Transcription factors, as an example, have been notoriously difficult to drug in a systematic fashion. Different folks have tried different angles, but there's not a whole lot of those proteins which have been drugged very successfully. So I think we're still trying to figure some of those things out. I think we've made some really great progress. I can only go into so much in a public setting, but I'm very confident that, you know, we're making progress on some of those things. So those are a couple of the things that I think are the unknowns, if you will. Fair. Fair enough. That's helpful. Also, maybe a good segue into talking about FHD-286. Yeah. So first question here, just remind us of the development history for FHD-286, the previous work that you've done, and I guess some of the early work that gave you conviction that FHD-286 could be a useful therapy for AML patients. Let's start there. Yeah, sure. So maybe I'll start at the 50,000 foot level. So FHD-286 is a dual inhibitor of two enzymatic proteins known as SMARCA2, SMARCA4, or also known as BRM/BRG1. They form, that's mutually exclusive in terms of their enzymatic activity. They are a part of what is known as the BAF complex, this large chromatin remodeling complex that is responsible for decompressing, if you will, chromatin. It effectively exposing the double-stranded DNA, which is highly compacted, exposing that for transcriptional machinery. I'll actually take some of the question in reverse order. So you know, why do we think it's important? Well, if you look at... and this is it being examined in the literature pretty extensively, but if you look at both the literature, you look at some of the phenotypic screens, you see an exquisite sensitivity across a range of different cancers. So initially for us, there was a whole bunch of hematologic cell lines, malignant heme cell lines, that sort of dropped out, if you will, of the screen. AML was among those. Uveal melanoma was sensitive, but you also see things like prostate and non-small cell. You know, then to go to the history of what we did, we ended up running two phase I monotherapy studies. One was in metastatic uveal melanoma, one was in relapsed/refractory AML and MDS. In the case of the metastatic uveal melanoma study, that read out in 2023. We ended up with one PR in a patient, which went about 16-17 months. We had a whole bunch of stable disease. We had, in a retrospective analysis, meaningful impact on ctDNA. But we decided not to advance that, in part because we felt that we would need to do combination study in some of the competitive environment, and we thought we were sort of limited, at least in that solid tumor, based on the impact various pieces of the disease, as well as the molecule, that we're gonna be limited at the upper end by some tolerability. There was no gross safety-related issues, but it was sort of a general, generally not well tolerated as we got higher. In the case of AML, as you probably recall, there we had treated about 40 patients, but we ended up on a partial hold due to suspected cases of differentiation syndrome, potentially linked to Grade 5s, and then a full hold. That was ultimately resolved with the FDA, where an adjudication committee concluded that we had one definitive case of DS, five cases of indeterminate DS, none of which were linked to issues with patients passing while on study. And so that led us to where we are today, which is we've started a combination study in relapsed/refractory AML, combination of 286 with the cytarabine. That study has been ongoing since very late part of August of last year. We're tracking to a go/no go on proceeding with that sometime in the fourth quarter timeframe. And we've been dose escalating in that study. We've got two arms looking at the drug in combination with the cytarabine, but also with strong CYP3A4 azoles, which are antifungals, and low CYP3A4 azoles. So just to remind everyone this, you know, we saw meaningful blast reduction in the systemic circulation. We saw meaningful blast reduction in the bone marrow in the phase I monotherapy. We just didn't get the CRs. Like, we were actually below 5% in some case, but you need cell line recovery and for a certain duration, et cetera. So, the hope obviously is in the combination study, we'll get some better control of the blast with the cytarabine, and we'll be able to see CRs, and then we'll figure out the development path and path forward once we have that data in hand. Got it. And what do you see as the threshold for feeling confident that you have a good signal with this 4Q readout, both in terms of efficacy and then also in terms of safety? Yeah, sure. So, the efficacy in some ways is relatively straightforward. We need roughly 20% or so plus response rate in this setting. And so just for context, the vast majority of the patients that we are seeing in the study have received Ven/Aza. That regimen has now, I think really, at least in the settings that we're in, made its way from an unfit population into the fit, and so almost every patient has received that. There's literature and studies out there that show if you are refractory or relapse refractory to Ven/Aza, your median overall survival is roughly three months, and with sort of best care agent clinical trial variety of different combinations, you can maybe eke out something in the high teens. And so for us to get excited in this sort of setting and context, we have to see CRs, and we've got to be at least at that 20% plus, sort of level to wanna be excited about going forward, either in the relapse setting or then thinking about potential combinations, in the front line setting. Got it. Maybe then tease out for us what the next steps could look like. If you hit that threshold, what's the path to a pivotal program? Yeah, sure. So I think one of the things that we believed all along, and certainly the biology and what we've seen in the phase I monotherapy study, is this seems to be a broad-based differentiation agent. So, we're not slicing this based on specific mutations, whether it's IDH1/2, or FLT3, or some of the menin sort of slicing. And as a consequence, we think there's a couple different paths, and obviously, the data will sort of guide us on this. But we certainly believe that there could be a path in the relapse refractory setting, where you combine 286, again, whether it's with the cytarabine or maybe, you know, LDAC or whatnot. So we could see that as a potential path forward, potentially an accelerated path, depending on the sort of level of efficacy we see. Again, because the unmet need, once you're in that setting, and the survival is pretty abysmal. We can also see a path forward in a frontline setting, either, I, I'm not sure we would do a triplet combination, at least not in the current incarnation that things are being used, but in a way that maybe you're titrating down with some of the existing agents. So we could see that as a potential path as well. And again, I think it's just gonna have to be driven by the quality of the data that we see, the number of responses, duration, all of that good stuff. Got it. And how much of a gating item do you think this upcoming readout is to indication expansion for 286? In some ways, it's a bit of an independent activity. I think, you know, the thing that we were wanting to really, again, understand is some of the safety, tolerability-related aspects, given that we've sort of understood that, you know, there's the CYP3A4 competition with agents could change some of the PK profile. So, I think that's gonna be an important gating step for us to wanna pursue additional expansion. We do get a lot of inbound inquiries. There's certainly a lot of IST interest- Mm-hmm. In taking the agent into other areas in solid tumors. But I think we've just got to figure those pieces out, and I think as we're deploying our capital, given the rest of the pipeline that we have, we wanna make sure that we're just sort of discharging more risk before we jump into sort of other studies with 286. I know we'll get to the rest of the pipeline, which I find equally exciting. You know, I think we're just gonna be very, very thoughtful about how we deploy our capital. Understood. How many indications or how much work with 286 do you feel like Foghorn could scale to manage independently? And where would it make sense to seek a partnership? Yeah, I think it always comes down to, you know, the cost of capital that we're finding ourselves in and how much money you wanna do. Right. I don't worry in the hypothetical, right? If you give me a lot of money, we can scale the company. I mean, we know how to do that. I've got plenty of people who've operated in much larger companies and can do it. I think it's a question of how much capital does that require, and where do you want to deploy it relative to other parts of your platform? Obviously, you can't do an infinite number of things, but you know, if we so desire and we think it's a good place to allocate capital, certainly an additional one or two indications is not off the table. With that said, and to your question about partnering, I think it may make sense in the case of FHD-286 to find that strategic partner where they can help us more fully exploit it, because there are multiple different solid tumors that could be in play, let alone just AML. You know, and I know we'll talk about the FHD-909 program that's partnered with Lilly. And I can tell you, you know, Lilly knows what they're doing in oncology, and their ability to operate the clinical studies on a global basis is something that no small biotech can do at the same scale. Once they get going, that is going to move with haste. And so I think thinking about FHD-286 in that manner, where we think there's meaningful indication expansion, if that turns out to be true and we see good data out of the AML study, I think a strategic partnership can make a lot of sense for that asset as well. Got it. Got it. Okay. On the topic of partnerships, maybe it just makes sense to go to the Lilly agreement next. Yeah. So to level set for us, just remind us, what are the terms of that agreement? What does it cover, and what have been, from your perspective, some of the key areas of knowledge transfer between the two companies? Yeah. So, again, just to maybe set context here, this was a collaboration, a strategic collaboration that we entered into at the end of 2021. That was for $300 million in cash and an $80 million equity investment. That was at $20 a share at the time, and it was really a five-target deal, if you will. The only one that's been disclosed is the SMARCA2 target or BRM. There's... and the economics on that are basically a 50/50 cost sharing with then down the road, we have you know the ability to field a sales force 50/50 and participate in that. There's a second program, undisclosed, same general terms. There's no milestones attached with that, and that was in part 'cause we wanted to be more engaged in the economic share and the back-end royalties, as opposed to getting milestones, which if the studies are working, in theory, you should be able to go finance the company, and getting a $15 million-$20 million payment is neither here nor there. And then there's three discovery programs, which Lilly picks the target, and then we use our platform to drug it. That is more of a classic biobuck, where we have an opt-in right at a certain lower level of economics than with the first two, or we can just stay silent and take royalty milestones on that. So that's the basic setup. You know, to your question of knowledge transfer and whatnot, I mean, I would say, in a very complimentary way to our colleagues at Lilly, they've been excellent partners. You know, the program teams we lead all the research-related activities, but, you know, they meet on a frequent basis. There's certainly capabilities, without getting into the specifics, around some of the later stages as you're getting closer to the IND, that Lilly has been, you know, fantastic and gracious enough to help out on, where, you know, we've got, you know, one or two people that do it. They've got, you know, vast experience in this space, and those are the things that, again, help accelerate programs. Obviously, as we're about to enter the clinic with 909, you know, that is, they are going to lead the clinical operation piece. They are the IND sponsor and holder. It is some of what I think, without getting again into the details and the weeds, it's some of the usual stuff in biotech, where when you've got a very well-oiled machine, you know, it can execute and move things faster. You know, there's obviously other intellectual exchanges. We're optimizing molecules, and their chemists are looking at the same stuff we're looking at, so it's been very collaborative. I couldn't be happier with the dialogue there. Great. Great, and with the SMARCA2 efforts, I know you have an inhibitor and a degrader- Yeah in the works for 909. That's right. Just talk us through the strategy for pursuing both efforts at the same time. Yeah, I'll speak for ourselves and can let my Lilly colleagues comment on that at some point. I think this is such an important target. Actually, maybe let's take a step back on this. Yeah. So, when you look at synthetic lethality, right, which is loss of one gene or protein, which then causes a over reliance or dependency on the residual protein, you hit that, then you kill the cancer cell. This is among the top synthetic lethal targets that have been out there in cancer. And it's been a target that I think the industry, and to my knowledge, most, if not all, pharma companies in oncology have tried to drug in a selective manner and have been generally unsuccessful in that. So this is something that we think, from a, from an opportunity perspective, warrants taking a agnostic approach to, right? If we think it's gonna be this big... I personally think this is gonna be one of the next major programs in cancer, and a multi-billion-dollar opportunity. I think it warrants taking an approach where you can think about an enzymatic inhibitor, you can think about a degrader. There may be other things that will be warranted in the life cycle management over time. The reason we started off with an enzymatic inhibitor is because it is an enzyme and, you know, this was one of the first things that we looked at in the inception of the company. A degrader makes sense as well, because it's another way that one can engineer selectivity to SMARCA2, which is almost 90+ homologous, maybe even more so to the SMARCA4 protein, which is lost in BRG1 in the ATPase pocket. So, we took a bit of an agnostic approach to say, "Let's just figure out how we get the selectivity." How one then develops it and which asset one picks, again, I think that's premature to comment on, other than to say, I think you're gonna wanna see if they're differentiated. It may even be a case that you want both an inhibitor and a degrader. Maybe you combine them at a certain point, maybe you start with one, you see, if you see some resistance, the other one can help, depending on how that plays out. So I think at this point, what I'd feel comfortable saying is we're just taking an empiric approach to it, but both of these programs are obviously moving forward. FHD-909, again, tracking to dosing patients here in the near future. And then the degrader, you know, nothing I can say publicly on exact timing, other than, you know, the goal is obviously to get that to an IND, and I think that could be possible in the 2025 timeframe. Got it, and give us a sense of the patient profile of the patients coming into the 909 study. Yeah. So, the key factor for any of these patients is they're gonna be required to have a SMARCA4 mutation. I think at the outset, in a dose escalation study, we're going to take, you know, all histologies, in part just so that you can accelerate through the escalation. I think by virtue of the rate of the mutation across the various cancers, and this is a slide we have in our investor deck, I think there's gonna be some natural enrichment for non-small cell, right? If you enroll enough patients, you should be skewed a little bit more in that direction. So at this point, we're not, to my knowledge, going to rule out specific SMARCA4 mutations. I think as the study progresses, as we learn, you know, who could be a responder, non-responder, there may be some mutations that we call out, but my guess is that would happen after the dose escalation portion, and again, just the reason I bring that up, and as an important reminder to people, is not all mutations are equal, so you need to have loss of function of that SMARCA4 protein, and if you have a mutation that just changes an amino acid that doesn't, you know, have a deleterious effect on the protein, that's not really loss of function. You need the catalytic activity to be dead or the protein to be meaningfully truncated, deleted, or so perturbed in a way that it's not gonna provide any functional activity. But again, we'll see what that study brings. I think we're gonna be off to the races here in a little bit. Got it. Maybe a bit of an admittedly naive question, but in the real-world setting, is testing for these mutations, like SMARCA4 mutations, is that easy to do? Is that commonplace? Yeah. So my understanding is that the NGS, the next-gen sequencing, is very active in this. This is a gene that's part of the Foundation panel. And so certainly, within the major cancer centers and the places that you know, the sites will be activated, I don't see that as a material issue. So that's something, you know, even five years ago, when we were having some conversations with KOLs- At some of these centers, 'cause we were trying to understand the unmet need here. It was clear they were looking at SMARCA4 in particular, and there's data in our investor deck on this as well, is that, unfortunately, individuals who have non-small cell that harbor this mutation, their prognosis is worse than folks that don't, so their survival is lower. And the other data that we've seen and read through and talked about with physicians is that, for folks who are on checkpoint inhibitors, they tend to be less responsive if they have the SMARCA4 mutation. So that may portend combination therapy down the road, but I think people in the field are paying attention to it, and it is accessible from a NGS perspective. Got it. Got it. Okay, that's helpful. In the interest of time, maybe we should move on to CBP and EP300. I know that these are- Great targets. Yeah, I know that these are programs that you seem pretty excited about. Yeah. I'd just love to get some context on what drove you towards these programs and where they stand now? Yeah. So these are great examples of how our platform has evolved from an initial focus on a chromatin remodeling complex, like the BAF complex, and some of where our scientific founders started to other related pieces of chromatin biology, which historically have also been really difficult to drug selectively. So just for context, these are histone acetyltransferases, right? They're moving acetyl groups around on chromatin. And others have certainly gone after these targets, but they've done it generally in a dual inhibition approach. And so there's some molecules from other companies that are in clinical studies right now, I believe in multiple myeloma. The issue tends to be, though, that you end up with some heme toxicity that may be a bit masked in the multiple myeloma- setting 'cause some of those patients are neutropenic or thrombocytopenic to begin with, so it's masking maybe some of the effect of the drug. But in a broader sense, the issues, at least from conversations we've had with other pharma companies and experts in the field, is the limitation here is thrombocytopenia, and in some cases, also anemia. Again, it's a nice story to sort of the SMARCA2/4. In this case, we've got a program against CBP, selective degrader there, and we've got a program against EP300, a selective degrader there. Different indications, different dependencies, and in some cases, just frank dependency, irrespective of whether the paralog protein is mutated. What we've shown, and what I'm particularly excited about, is we've got exclusively selective degraders for CBP and EP300. In the preclinical work we've done, we've demonstrated that we have no impact on megakaryocytes, so we're not impacting platelets. There's no thrombocytopenia. We don't observe anemia in these mouse models, and we've put a control molecule in there that was a dual inhibitor. This is published in the literature from Genentech, and we basically replicate what they've shown, which is a dual inhibitor will unfortunately give you thrombocytopenia and some of the anemia effects. So we're really excited about these programs. You know, in the CBP case, I believe we've got potential opportunities in gastric and colorectal, and in the urology setting. EP300 potentially in prostate, potentially some heme malignancies, which are just frank dependencies, let alone the synthetic lethality with the reciprocal CBP. So CBP's tracking to IND, sort of our non-GLP tox stuff here by the end of the year, with the goal of having an IND for that program, obviously in 2025. EP300's a little bit further behind. We're doing some really interesting, cool stuff on the degraders that we have there. And we're applying. I should note, which is an important piece of our platform, we're applying this long-acting formulation technology. We've shown that we can actually, in the case of CBP, dose once every two weeks with this molecule and get really incredible coverage and degradation. And I think that's an advantage because it doesn't mean you have to spend just your time trying to get to an oral molecule, which is, by and large, you have to do through cereblon. Um Right. And sometimes it's possible, but sometimes it's not. So, we think that gives us an advantage as we play in the degrader space. So really excited by these programs. And I think, you know, I'd say watch that, watch this space soon over the course of the coming six to nine months. Got it. Got it. Okay. In the little bit of time we have left, let me ask you, kind of a bit more of a broad-based question. Degraders versus inhibitors, I know we've had this discussion before, but, what is your view on, I guess, the relative value of each, of each modality in your platform, and how do you think about, designing degraders versus inhibitors as you uncover novel targets from your work in chromatin biology? Yeah. At the risk of an oversimplification, I think it's really about the biology. And so, when we look at a target, if it's an enzyme, the first question we ask is: Can we make an enzymatic inhibitor, right? You know, ideally something that's allosteric, especially if it's something that's, you know, an ATPase, because you know, a lot of those molecules can be dirty across different molecules. One of the benefits actually, as we look at the FHD-909 program, as we've said historically, it's an allosteric inhibitor, and so it really doesn't touch anything else. You know, simultaneously, we may say, well, even if it's an enzyme, depending on the type of selectivity we want to engineer, do we think we can get there? We often start off a little bit in parallel, trying to figure out, you know, an enzyme versus a degrader. In the cases where it's a non-enzymatic target, like transcription factors are a great example of that, you obviously can't develop an enzymatic. So you have to think about a different way, whether it's perturbing sort of the folding of the protein or degradation, it becomes a real viable approach. So it's the oversimplification. It's really led by the biology. I think the considerations and this is a bit of a categorical, which is always dangerous when you say that, you know, enzymatic inhibitors generally are a bit easier than degraders because you're dealing with just the inhibitor. With that said, we know the story of KRAS and other areas where it's taken twenty years in some cases for certain targets, so there's no right or wrong. We try to be very empirical, very data-driven on all of this, and there's... The piece I'd say about degraders is, I think it's just an amazing field. It's still very early days in that field, and I think what's coming down the pipe from us, from other companies as well, it's going to be really interesting. So that is featuring a bigger and bigger part of our company. We're not a pure play degrader company. I'm not sure we want to become that, because you do want to maintain optionality on some of these targets. You don't want to just say, you know, everything has to be a nail to the hammer, as it were, so. Got it. Got it. And, do you think that there's applicability for the platform broadly outside of oncology? I would say 100%, yes. Okay. I think that's a function of capital in some ways. There's definitely targets and other disease areas that I know we can go after today. It's a question of how we want to allocate our capital, discharge risk, ensure we're lowering that cost to capital, and not spreading ourselves too thin too early. But unequivocally, whether it's through the chromatin biology, we know there's a raft of different disorders that are impacted there. Because, again, it's gene expression, it's Right fundamental in some ways. And then, you know, if we so choose, the protein, the greater part of the platform, we can go after pretty much any target there. It's a question of what's the right one? Should we do it ourselves? Should we find a partner in different disease areas, where we can leverage that? But unequivocally, the answer is yes. Got it, and then a question to close this out, then. On the point of capital, just remind us of your current cash balance, your associated runway, and kind of where your current cash gets your current programs, whether it's FHD-286 or Yeah, certainly. Any other one. So, you know, we did a financing back in middle of May. We took gross proceeds of about $110 million. Our cash balance as of the end of the second quarter is roughly $285 million. That gives us cash runway into the early part of 2027. That fully funds the FHD-909 program through the dose escalation portion. You know, FHD-286, you know, we've sort of gated on the clinical readout. If the data are positive, we'd probably look to contemplate a financial raise or partner. We'll see where that goes. It gets CBP, EP300 into INDs and into, depending on timelines, CBP probably towards the end of dose escalation. It will get EP300 certainly to the IND, ARID1B, which we didn't talk a lot about, but super excited about that program. Also pretty close to IND there, and obviously it allows us to continue to support all the other Lilly targets that I can't talk about in an appropriate way. You know, we're well capitalized, but you know, it's biotech. You always need more money at some point. Sure. Sure. Sounds good. With that, we're at time, so we'll go ahead and close out. Adrian, thank you so much for joining us. Thanks for having me. It's a pleasure, everyone, for listening.