When his wife got out the Christmas lights from the garage a few days ago, Foghorn Therapeutics President and CEO Adrian Gottschalk recalled, the decorations she carried out presented an apt analogy for explaining the science behind his company, a developer of precision therapies.
Just as the string of lights was bunched up into a ball, so too DNA is wound up in the body like a spool of thread around a scaffold of proteins called histones, creating a structure called chromatin. When information stored in DNA is not in use, the chromatin is wound up and tightly packed. But when the cell needs to access that information, it has to unpack the chromatin, relying on a regulatory system to open and close the right sections in order for the cell to properly function.
“In order to get out the gene at the DNA, you have to pull out a loop, and that’s what the chromatin regulatory system does: It provides access to the underlying DNA so that that gene can be expressed and the DNA can be transcribed,” Gottschalk explained. “When it works well, we’re healthy. When it goes awry, one gets sick.”
The disorders that result from breakdowns in chromatin regulation, he said, include autoimmune disorders, neurological disorders—and multiple forms of cancer.
Foghorn strengthened its initial focus on cancer this week, when it joined Loxo Oncology at Lilly to launch an up-to-$1.68 billion collaboration. The companies plan to co-develop and co-commercialize novel oncology therapies by applying Foghorn’s Gene Traffic Control® platform for understanding and modulating the chromatin regulatory system, which regulates gene expression by directing the movement of molecules that turn genes on and off.
The companies agreed to partner on Foghorn’s selective Brahma (BRM) oncology program, applying enzyme inhibitor and protein degrader modalities; an additional undisclosed oncology target; and three additional discovery programs that also apply Gene Traffic Control, also for undisclosed targets.
Loxo Oncology at Lilly, a research and development group formed within Eli Lilly after it acquired Loxo in 2019 for $8 billion, agreed to pay Foghorn $300 million in upfront cash, plus an $80 million equity investment in Foghorn shares at $20 a share—nearly double the share price the morning the deal was announced on Monday. “I think that’s obviously some validation of the biology of the platform and the work we’re doing,” Gottschalk said.
Loxo also committed up to $1.3 billion in payments tied to achieving development and commercialization milestones, plus royalties on sales.
55% Stock jump, 10+ programs
Investors roared their approval of the Loxo collaboration by sending Foghorn’s shares up 55% that day, to $18.58, though the price dipped to $17.58 at the close of trading Wednesday.
The companies first connected early this year, Gottschalk said, drawing in part on relationships between Loxo executives and some members of Foghorn’s management team. The companies also connected, he said, following indications of interest by Loxo about Foghorn’s approach to synthetic lethality, a cancer-fighting approach in which mutations in two genes together result in cell death, but a mutation in either gene alone does not.
Foghorn has grown its pipeline to more than 10 programs targeting a variety of cancers. Three of those programs, involving the company’s two lead candidates, are expected to read out initial clinical data in 2022 after reaching the clinic this year. Foghorn has Phase I studies in progress for FHD-286 in metastatic uveal melanoma (NCT04879017) and relapsed or refractory acute myeloma (NCT04891757), as well as for FHD-609 in advanced synovial sarcoma (NCT04965753).
The company says its BRM-selective program is being developed to address BRG1 mutated cancers by using protein degradation and enzymatic inhibition.
“In this case with the BRM target, we are using our platform to study the target of interest here and then actually find chemical matter or small molecules that can interfere with it, so we’re trying to disrupt that dependency that the cancer cell has,” Gottschalk said.
Under Chairman and CEO David A. Ricks, Lilly has sharpened its focus on cancer in recent years, growing its portfolio to seven marketed oncology drugs and a pipeline of eight candidates in 20 clinical trials. In August, Lilly promoted Loxo Oncology CEO Jacob Van Naarden to senior vice president, CEO of Loxo Oncology at Lilly and president, Lilly Oncology, with the intent of unifying Lilly’s two centers of cancer drug development. At Lilly Oncology, Van Naarden succeeded Anne White, who was named senior vice president and president of Lilly Neuroscience.
In a statement, Van Naarden said: “We’ve been very impressed by the progress the Foghorn team has made against this product profile and are excited to work with this highly talented team.”
“Difficult Chemistry Challenge”
“Oncogenic mutations in BRG1 impact a large population of cancer patients and we believe are best addressed therapeutically with a highly selective BRM inhibitor, though designing such a drug is a difficult chemistry challenge,” Van Naarden added.
The reason, Gottschalk explained, lies with the similarity between BRG1 and BRM.
“Finding chemical matter that is selective for BRM but not for BRG1 has been something that the field has not been able to do, to our knowledge,” he said. “We’ve used our platform to find that chemical matter that is very selective for the BRM protein but will not touch as much the BRG1 protein.”
Protein degradation is an area of interest to a growing number of drug developers. Months before the Foghorn collaboration, Lilly inked an up-to-$1.6 billion partnership in August with Lycia Therapeutics to discover and develop novel degraders for up to five targets that aim to address key unmet medical needs in Lilly’s therapeutic areas of focus, including immunology and pain.
In July, Pfizer committed up-to-about $2 billion in launching a collaboration with Arvinas to develop and commercialize ARV-471, an oral PROTAC® (PROteolysis TArgeting Chimera) estrogen receptor protein degrader under study in a Phase II dose expansion trial (NCT04072952) in estrogen receptor (ER) positive / human epidermal growth factor receptor 2 (HER2) negative (ER+/HER2-) locally advanced or metastatic breast cancer.
Pfizer agreed to pay Arvinas $650 million upfront, plus a $350 million equity investment in Arvinas and up to $1.4 billion tied to achieving approval and commercial milestones.
Among other drug developers pursuing protein degradation therapies are C4 Therapeutics, Kymera Therapeutics, and Nurix Therapeutics.
Foghorn has cited data suggesting there are over 30 different cancers with BRG1 mutations accounting for approximately 5% of all tumors, including up to 10% of non-small cell lung cancer (NSCLC) tumors, with minimal overlap with other driver mutations. NSCLC is potentially an indication for FHD-286, Gottschalk said—“It is obviously a key area to look at”—though he added that a decision on that or any other indications will be made in partnership with Loxo.
“A range of different cancers”
“There’s certainly potential implications in colorectal cancer, bladder cancer, cervical cancer, esophagogastric cancers. There’s a range of different cancers. Those are just some of the more prevalent ones,” Gottschalk said. “Because this BRG1 mutation is so heavily mutated, we haven’t yet studied in that and will obviously be working with our colleagues at Loxo to figure out where exactly to develop this.”
In preclinical studies, FHD-286 showed anti-tumor activity across a broad range of malignancies including both blood and solid tumors. Foghorn is seeking to add indications for FHD-286 in multiple solid tumors.
FHD-609 is a selective protein degrader of BRD9 (bromodomain-containing protein 9), a subunit of the non-canonical BAF complex that is required for synovial sarcoma cells to survive. “It’s going to basically take that protein to the cell’s recycling bin and get rid of it,” Gottschalk analogized.
Substantially all synovial sarcoma cancers contain a translocation, a type of mutation between a BAF subunit gene, SS18, and another set of genes known as SSX. These mutations render the cancer genetically dependent upon BRD9, what is commonly referred to as a synthetic lethal relationship.
Foghorn says its initial indications for -286 and -609 entail significant potential patient populations: More than 20,000 relapsed or refractory AML patients, more than 5,000 uveal melanoma patients, and more than 1,800 patients a year with synovial sarcoma.
Also in Foghorn’s pipeline, all preclinical and heading into IND-enabling phases, are a selective ARID1B program targeting ARID1A-mutated cancers via a protein degrader; a program focused on “multiple” synthetic lethal targets using enzyme inhibitors and protein degraders; “multiple” transcription factors using transcription factor disrupters and protein degraders—and an undisclosed single transcription factor disruptor program being co-developed with Merck & Co.
According to a regulatory filing, Merck paid Foghorn $15 million when the collaboration launched in July 2020, and agreed to pay Foghorn up to $245 million upon achieving research, development, and regulatory milestones; up to $165 million upon reaching sales-based milestones; plus royalties on net sales of approved products from the collaboration.
For the BRM-selective and undisclosed target programs, Foghorn will lead discovery and early research activities, while Lilly will lead development and commercialization activities with Foghorn participating in operational activities and cost sharing. Foghorn will lead discovery and early research activities for the additional discovery programs.
How Foghorn Got Its Name
Based in Cambridge, MA, Foghorn was incorporated in 2015 as a spinout company of Flagship Pioneering, and emerged from stealth mode in 2018 when Flagship committed an initial $50 million to the startup. Foghorn got its name from a co-founder and board member, Cigall Kadoch, PhD, of Dana Farber Cancer Institute, Harvard Medical School, and the Broad Institute of MIT and Harvard. Kadoch grew up in the San Francisco Bay Area, where foghorns have long prevented shipping accidents on the foggy inlet.
“It’s an elegant way, as she was thinking about this biology, of how precisely things get signaled, and which genes to turn on and when. That’s why she wanted to name the company Foghorn,” Gottschalk shared. “The formation of the company really was centered around the question of, What if we could have a dramatic impact on patients by providing a whole new set of treatments? And what if those treatments were based on biology that is effectively changing how gene expression occurs—in other words, changing when genes are turned on and off? If one could do that, one could potentially help millions of people.”
The biology that could change gene expression occurrence, Foghorn found, was the chromatin regulatory system: “It is implicated in a raft of different diseases, so it’s very, very much relevant for patients,” he added.
A year before coming out of stealth, Gottschalk joined Flagship to lead Foghorn following 13 years at Biogen, where he advanced to senior vice president and neurodegeneration therapeutic area head. In that role, he oversaw late-stage development and commercialization of medicines for amyotrophic lateral sclerosis (ALS), Parkinson’s disease, and Alzheimer’s disease, including the controversial Aduhelm® (aducanumab), approved by the FDA in June.
After a Biogen colleague joined Flagship, Gottschalk looked into joining the firm: “They do amazing innovation work and Foghorn was one of the companies that sort of drew my attention, just for the potential to make a huge difference in cancer and other diseases. That’s what attracted me,” Gottschalk said. “It’s been a great ride so far.”
Since Gottschalk joined Foghorn, the company went public in October 2020, through an initial public offering that generated net proceeds of $122.1 million, including $14.2 million raised after underwriters partially exercised their option to purchase additional shares at the IPO price.
Foghorn’s cash, cash equivalents and marketable securities have shrunk since then, from $185.8 million as of December 31, 2020, to $120.8 million as of September 30, 2021. The company finished the third quarter with a net loss of $26.08 million, up from a net loss of $18.367 million in Q3 2020. During the first nine months of 2021, Foghorn’s net loss was $72.177 million, up from a $48.042 million net loss a year earlier.
Also growing during Gottschalk’s tenure at the helm has been Foghorn’s workforce, which has multiplied 10-fold from 12 people to about 120, with plans to grow in 2022.
“As we expand our pipeline, as we continue to focus on our clinical programs, as we work with our collaboration partners, we’re obviously going to be growing in every dimension,” Gottschalk said. “It should be an exciting year to join the company.”