SCHEDULE: Fairmount Funds Management Increases Stake in Cogent Biosciences to 9.9% Following Public Offering

Fairmount Funds Management LLC and Fairmount Healthcare Fund II GP LLC have increased their beneficial ownership in Cogent Biosciences, Inc. to 9.9% after purchasing 2,777,777 shares of common stock for approximately $25 million in a recent public offering.

Summary

• Fairmount Funds Management LLC and Fairmount Healthcare Fund II GP LLC (Reporting Persons) now beneficially own 14,324,918 shares of Cogent Biosciences, Inc. common stock, representing 9.9% of the outstanding class.
• This ownership includes 9,003,418 shares of common stock and 5,325,500 shares of common stock convertible from approximately 21,302 shares of Series A Convertible Preferred Stock.
• On July 10, 2025, Fairmount Healthcare Fund II L.P. (Fund II) purchased 2,777,777 shares of common stock in an underwritten public offering for an aggregate of $24,999,993.00, at a price of $9.00 per share.
• The purchase was made for investment purposes using working capital.
• The total outstanding common stock of Cogent Biosciences, Inc. is 139,412,010 shares, comprising 113,856,454 shares outstanding as of May 2, 2025, plus 25,555,556 shares sold in the Offering.
• The conversion of Series A Preferred Stock is subject to a beneficial ownership limitation of 9.9% of the outstanding Common Stock.

Sentiment

Score: 7

Explanation: The filing indicates a significant new investment by a specialized fund in the company, suggesting confidence. While it's a routine disclosure, the substantial capital deployed and the 'investment purposes' stated intent are positive signals. The lock-up agreement is a standard practice in offerings and not inherently negative.

Positives

• Significant investment by Fairmount Funds Management and Fairmount Healthcare Fund II GP LLC, indicating confidence in Cogent Biosciences, Inc.
• The purchase was made for investment purposes, suggesting a long-term view from the institutional investor.

Risks

• The conversion of Series A Preferred Stock is subject to a beneficial ownership limitation of 9.9% of the outstanding Common Stock, which could limit full conversion if it exceeds this threshold.
• Fund II, along with company directors and officers, is subject to a 60-day lock-up agreement preventing the sale or transfer of shares following the offering, which restricts liquidity for that period.

Future Outlook

The filing primarily details a past transaction and current ownership structure. The only forward-looking aspect is the termination of the 60-day lock-up agreement, which will allow for potential future sales or transfers of shares by the involved parties.

Industry Context

This filing indicates a significant investment by a healthcare-focused fund in a biotechnology company. Such investments are common in the biotech sector, where specialized funds often take substantial stakes to support drug development and commercialization, reflecting confidence in the company's pipeline or strategic direction.

Comparison to Industry Standards

• This document is a Schedule 13D filing detailing an ownership stake and a purchase transaction, not a performance report. Therefore, direct comparison to industry standards for operational or financial results is not applicable.
• The investment itself is a standard practice for institutional investors in the biotech sector, where capital raises and strategic investments are frequent.

Legal Proceedings

• Neither Fairmount Funds Management LLC nor Fairmount Healthcare Fund II GP LLC has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) in the last five years.
• Neither Fairmount Funds Management LLC nor Fairmount Healthcare Fund II GP LLC has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction resulting in a judgment, decree, or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violations with respect at such laws in the last five years.

Related Party Transactions

• Fairmount Funds Management is entitled to a fee for managing and advising Fund II based upon a percentage of the net asset value of Fund II.

Stakeholder Impact

• Shareholders: The public offering increased the total outstanding shares, potentially diluting existing shareholders. However, the capital raised from the offering could strengthen the company's financial position for future operations. The significant investment by Fairmount Funds Management may be viewed positively as a vote of confidence.
• Company (Cogent Biosciences, Inc.): The capital raise provides additional funding for operations and strategic initiatives.

Next Steps

• The 60-day lock-up agreement, restricting the sale or transfer of shares by Fund II and company insiders, will terminate after the close of trading on the 60th day following the prospectus supplement date relating to the Offering.

Key Dates

Keywords

Cogent Biosciences, Fairmount Funds Management, Fairmount Healthcare Fund II, Schedule 13D, Common Stock, Series A Preferred Stock, Beneficial Ownership, Public Offering, Investment, Biotechnology, Pharmaceuticals, SEC Filing, Institutional Investor