Foghorn Therapeutics said it would be slashing nearly half of its workforce after scrapping a drug development partnership with Eli Lilly, forcing the biotech into defensive mode as it attempts to conserve cash.

The Massachusetts-based biotech, valued at roughly $212 million, announced Thursday that it and Lilly had decided not to advance a cancer drug candidate into the next phase of clinical testing following an early-stage dose escalation trial.

Foghorn added that the companies also were scrapping a second collaborative cancer program and don't anticipate any further joint projects.

Trading in Foghorn was paused prior to the announcement. Shares sank 49% to $1.84 after it resumed, putting them on pace for their worst single-day percentage drop and lowest closing level on record.

The biotech plans to reduce its workforce by roughly 40% and cut expenses to extend its cash runway. Foghorn expects to be able to fund its most important research projects into the second half of 2029, including a novel immunology program and two cancer programs for drugs targeting specific proteins.

Lilly, through its Loxo Oncology division, partnered with Foghorn Therapeutics in December 2021 to create novel oncology medicines. The deal included $300 million in upfront cash for the collaboration, plus an $80 million equity investment from Lilly at $20 a share.