Form 4: Fairmount Funds Sells 3.5M Cogent Bio Shares for $127.4M

Fairmount Funds Management LLC, a 10% owner and director of Cogent Biosciences, Inc., reported the sale of 3.5 million shares of common stock for $36.40 per share under a pre-arranged plan.

Summary

• Fairmount Funds Management LLC, identified as a director and 10% owner of Cogent Biosciences, Inc. (COGT), reported a transaction.
• The transaction involved the disposition of 3,500,000 shares of COGT Common Stock.
• The sale occurred on January 22, 2026, at a price of $36.40 per share, totaling approximately $127.4 million.
• Following the sale, Fairmount Funds Management LLC indirectly beneficially owns 5,503,418 shares of Common Stock through Fairmount Healthcare Fund II LP.
• The reporting person also indirectly beneficially owns 67,414 shares of Series A Convertible Preferred Stock, which are convertible into 16,853,500 shares of Common Stock (subject to a 9.9% beneficial ownership limit upon conversion).
• The transaction was made pursuant to a contract, instruction, or written plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c).

Sentiment

Score: 3

Explanation: The significant sale of common stock by a director and 10% owner, even under a Rule 10b5-1 plan, typically generates negative sentiment as it can be perceived as a lack of confidence or a move to reduce exposure.

Negatives

• Fairmount Funds Management LLC, a director and 10% owner, executed a significant sale of 3,500,000 shares of Common Stock.
• A large insider sale, even if pre-planned, can be perceived by the market as a reduction in confidence or a move to decrease exposure to the company's equity.

Risks

• A substantial insider sale by a director and significant shareholder could be interpreted by investors as a negative signal regarding the company's future prospects or valuation, potentially leading to downward pressure on the stock price.

Future Outlook

N/A

Industry Context

N/A

Related Party Transactions

• Sale of 3,500,000 shares of Common Stock by Fairmount Funds Management LLC, which is identified as a director (by deputization) and 10% owner of Cogent Biosciences, Inc.
• The beneficial ownership is held indirectly through Fairmount Healthcare Fund II LP, where Fairmount Funds Management LLC and Fairmount Healthcare Fund II GP LLC exercise voting and investment power.

Stakeholder Impact

• Shareholders: May react negatively to a large insider sale, potentially leading to downward pressure on the stock price due to perceived lack of confidence.
• Management: While the sale is pre-planned, it could still raise questions among stakeholders about the long-term commitment or outlook of a significant insider.

Key Dates

Recommendation

While the sale by a director and 10% owner is a significant event, the transaction was executed under a Rule 10b5-1 plan, indicating it was pre-scheduled and not necessarily a reaction to new, adverse information. Investors should monitor future insider activity and company performance, but this single pre-planned sale may not warrant an immediate 'sell' recommendation without further context. A 'hold' position is advisable for existing shareholders, with a focus on evaluating the company's fundamentals independently.

Keywords

Cogent Biosciences, COGT, Form 4, insider trading, stock sale, Fairmount Funds Management, beneficial ownership, director transaction, 10b5-1 plan, preferred stock