Foghorn Therapeutics Inc.FHTX
Foghorn Therapeutics Inc. Leases Disclosure
Leases
Lease agreements
Through December 2025, the Company occupied space in 500 Tech Square, Cambridge, Massachusetts under a lease agreement for 81,441 square feet of office and laboratory space that was set to expire in September 2028 (the “Office Lease”). In June 2025, the Company entered into a new lease agreement with its existing landlord of the Office Lease for new premises consisting of 72,846 square feet of laboratory and office space in Watertown, Massachusetts (the “New Lease”). The term of the New Lease commenced in December 2025 once the landlord completed its building improvements as defined in the New Lease (the “New Premises Delivery Date”) and extends through September 2035. The lease is subject to fixed-rate rent escalations and the option to extend the lease for two terms of five years each, which were not reasonably certain of exercise as of December 31, 2025. The estimated minimum lease payments under the New Lease total $60.8 million over the term, inclusive of free and reduced rent periods in the first three years of the term. Additionally, the Company is obligated to pay real estate taxes and other costs related to the premises, including operating costs and management of the leased premises, which are
variable in nature. The variable costs are expensed as incurred and are disclosed as variable lease costs. The lease contains a tenant improvement allowance of $3.6 million and the landlord holds rights to the tenant improvements. The construction of the building improvements made prior to the New Premises Delivery Date were conducted by the landlord. The Company moved operations from its existing premises to the new premises in December 2025.
The Company is required to maintain a cash balance of $2.0 million to secure a letter of credit associated with the New Lease. This amount was classified as restricted cash (non-current) on the consolidated balance sheet as of December 31, 2025.
In conjunction and concurrent with the New Lease, in June 2025, the Company amended the Office Lease, which originally had a term through September 2028, to reduce the fixed lease payments and shorten the remaining term for a portion of the leased space from September 2028 to December 31, 2026, to provide for the termination of space the Company was subleasing contingent upon the New Premises Delivery Date and the landlord entering into a direct lease with the Company’s subtenant, to provide for the reduction of payments contingent upon the New Premises Delivery Date, and to provide for the early termination of the Office Lease contingent upon the New Premises Delivery Date.
In December 2025, upon the New Premises Delivery Date, contingencies related to the New Premises Delivery Date were resolved. The lease related to the portion of space being sublet was terminated immediately upon the New Premises Delivery Date. Additionally, under the amended Office Lease, the term of the remaining portions of the lease was shortened from September 2028 to the date the landlord provides a 15-day notice of termination, which the landlord can provide starting February 1, 2026, with an outside termination date of December 31, 2026. As of the New Premises Delivery Date in December 2025 the Company is not obligated to make any further payments with respect to the Office Lease and the Company vacated the Office Lease space in December 2025.
Lease accounting
The Company accounted for the amendment to the Office Lease and the New Lease as one combined contract under ASC 842, Leases (Topic 842) because the agreements were entered into at the same time, with the same counterparty and were negotiated as a package with the same commercial objective.
In June 2025, in connection with the shortened term to December 31, 2026 for a portion of the leased space and the reduction of fixed payments, the Company remeasured the right-of-use asset and lease liability related to the Office Lease for the non-contingent modification at the modification date, which resulted in a reduction to the right-of-use asset and lease liabilities of $8.8 million. With respect to the contingent modifications of other portions of the lease, as the New Premises Delivery Date and the related Office Lease termination dates were not in the control of the Company, the Company did not remeasure the term for these portions of the Office Lease for financial accounting purposes until the contingencies were resolved in December 2025.
In December 2025, upon resolution of contingencies related to the New Premises Delivery Date, the Company remeasured the right-of-use asset and lease liabilities related to the shortened lease term and elimination of remaining payments for the Office Lease, which resulted in a reduction to lease liabilities of $21.3 million related to the elimination of future payments under the Office Lease and a reduction to the remaining right-of-use asset of $9.6 million to reduce the right-of-use asset balance to zero. The reduction to the lease liability that would have reduced the right-of-use asset to below zero, or negative amount, was first recorded as a gain on lease modification of $1.6 million in the consolidated statement of operations and comprehensive loss, representing a previous impairment amount recorded on the Office Lease. Because the portion related to the previously recognized impairment is not an element of the arrangement with the lessor, and therefore, it is not akin to a lease incentive. The remaining negative amount $10.1 million was recorded as a lease incentive to reduce the right-of-use asset related to the New Lease, as the amendment to the Office Lease and the New Lease were combined and accounted for as a single transaction with the same counterparty.
In December 2025, upon commencement of the New Lease, which was the date the landlord made the premises available to the Company for its use, the Company recorded a right-of-use asset of $31.0 million, net of the $10.1 million remaining negative amount from the Office Lease, and lease liabilities of $41.1 million. As of December 31, 2025, the balances of the lease liability and right-of-use asset for the Office Lease were zero.
The components of lease expense were as follows for the years ended December 31, 2025 and 2024 (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Operating lease cost | $ | 6,060 | $ | 7,921 | |||||||
| Variable lease cost | 2,655 | 3,054 | |||||||||
| $ | 8,715 | $ | 10,975 | ||||||||
Supplemental disclosure of cash flow information and non-cash investing and financing activities related to leases was as follows (in thousands):
| Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Supplemental cash flow information: | |||||||||||
| Cash paid for amounts included in the measurement of operating lease liabilities | $ | 8,775 | $ | 10,736 | |||||||
| Non-cash investing and financing activities: | |||||||||||
| Financing lease liabilities arising from obtaining right-of-use assets | 1,200 | — | |||||||||
| Reduction of right-of-use assets from remeasurement of lease liabilities | 18,382 | — | |||||||||
| Operating lease liabilities arising from obtaining right-of-use assets | 41,143 | — | |||||||||
The weighted average remaining lease term and discount rate was as follows:
| 2025 | 2024 | ||||||||||
| Weighted-average remaining lease term—operating leases (in years) | 9.7 | 3.7 | |||||||||
| Weighted-average discount rate—operating leases | 7.24 | % | 5.30 | % | |||||||
As the Company’s leases do not provide an implicit rate, the Company’s estimated incremental borrowing rate was used to calculate the present value of the leases. In determining its incremental borrowing rate, the Company considered its credit quality and assessed interest rates available in the market for similar borrowings, adjusted for the impact of collateral over the term of the leases.
Future payments for the Company’s operating lease liabilities as of December 31, 2025 are as follows (in thousands):
| 2026 | $ | 979 | |||
| 2027 | 4,280 | ||||
| 2028 | 5,713 | ||||
| 2029 | 6,774 | ||||
| 2030 | 6,977 | ||||
| Thereafter | 36,088 | ||||
| Total future minimum lease payments | 60,811 | ||||
| Less: estimated tenant improvement allowance | (364) | ||||
| Less: imputed interest | (19,177) | ||||
| Total operating lease liabilities | $ | 41,270 | |||
| Year Ended December 31, | |||||||||||
| Included in the consolidated balance sheets (in thousands): | 2025 | 2024 | |||||||||
| Current operating lease liabilities | $ | 923 | $ | 9,067 | |||||||
| Operating lease liabilities, net of current portion | 40,347 | 28,064 | |||||||||
| Total operating lease liabilities | $ | 41,270 | $ | 37,131 | |||||||
Impairments and sublease agreement
In connection with the New Premises Delivery and relocating operations from premises under the Office Lease to premises under the New Lease, the Company recognized an impairment charge during the year ended December 31, 2025 of $5.9 million in the consolidated statements of operations and comprehensive loss for the abandoned leasehold improvements related to the Office Lease.
In connection with a sublease for a portion of the Office Lease entered into in May 2024, which qualified as a triggering event for an asset impairment assessment, the Company recognized a non-cash impairment charge during the year ended December 31, 2024 of $2.4 million in the consolidated statements of operations and comprehensive loss of which $1.6 million was allocated to its right-of-use asset and $0.8 million was allocated to leasehold improvements.
Through December 2025, the Company had subleased portions of premises under the Office Lease. For the years ended December 31, 2025 and 2024, the Company recorded other income of $3.4 million and $4.2 million, respectively, related to its subleases. As of December 31, 2025, the Company has no subleases.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 11, 2026 | Showing above |
| 2024 | Mar 6, 2025 | |
| 2023 | Mar 7, 2024 | |
| 2022 | Mar 9, 2023 | |
| 2021 | Mar 10, 2022 | |
| 2020 | Mar 18, 2021 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.