Edgewise Therapeutics, Inc. [EWTX] Filings

10-Q 1 ewtx-20240630x10q.htm 10-Q

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-40236

Edgewise Therapeutics, Inc.

(Exact name of registrant as specified in its charter)


Delaware	82-1725586
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

1715 38^th St.

Boulder, CO 80301

(Address of principal executive offices) (Zip Code)

(720) 262-7002

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001 per share	EWTX	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒	Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of July 31, 2024, there were 93,772,288 of the registrant’s ordinary shares outstanding.

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		Page

Part I	Financial Information

Item 1.	Financial Statements (Unaudited)	6

	Condensed Balance Sheets	6

	Condensed Statements of Operations and Comprehensive Loss	7

	Condensed Statements of Stockholders’ Equity	8

	Condensed Statements of Cash Flows	9

	Notes to Condensed Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29

Item 4.	Controls and Procedures	29

Part II	Other Information	30

Item 1.	Legal Proceedings	30

Item 1A.	Risk Factors	30

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	99

Item 3.	Defaults Upon Senior Securities	100

Item 4.	Mine Safety Disclosures	100

Item 5.	Other Information	100

Item 6.	Exhibits	100


Signatures		102

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (Quarterly Report) contains forward-looking statements that involve risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report, including statements regarding our future results of operations and financial position, business strategy, development plans, planned preclinical studies and clinical trials, future results of clinical trials, expected research and development costs, regulatory strategy, timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “could,” “would,” “should,” “likely,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “projects,” “potential,” “continue” or the negative of these terms or other comparable terminology. These forward-looking statements include, but are not limited to, statements about:

●

the safety and efficacy, and the ability of our preclinical studies and clinical trials to demonstrate the safety and efficacy, of our product candidates, and other positive results;

●

our ability to utilize our proprietary drug discovery platform to develop a pipeline of product candidates to address muscle diseases;

●

the timing, progress and results of preclinical studies and clinical trials for sevasemten (EDG-5506), EDG-7500, product candidates from our EDG-003 cardiometabolic discovery program and other product candidates we may develop, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the studies or trials will become available, potential registrational studies or cohorts and our research and development programs;

●

the timing, scope and likelihood of domestic and foreign regulatory filings and approvals, including timing of final U.S. Food & Drug Administration (FDA) approval of or Investigational New Drugs of sevasemten, EDG-7500, product candidates from our EDG-003 cardiometabolic discovery program and any other future product candidates;

●

our ability to develop and advance our current product candidates and programs into, and successfully complete, clinical studies;

●

our manufacturing, commercialization, operations and marketing capabilities, relationships with other businesses and other business strategies, systems and relationships;

●

our plans relating to commercializing our product candidates, if approved, including the geographic areas of focus and sales strategy;

●

the need to hire additional personnel and our ability to attract and retain such personnel;

●

the size of the market opportunity for our product candidates, including our estimates of the number of patients who suffer from the diseases we are targeting and our expectations regarding the implementation of newborn screening for muscular dystrophy;

●

our expectations regarding the approval and use of our product candidates in combination with other drugs;

●

our competitive position and the success of competing product candidates and therapies that are or may become available;

●

our estimates of the number of patients that we will enroll in our clinical trials;

●

the beneficial characteristics, and the potential safety, efficacy and therapeutic effects, of our product candidates;

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●

our ability to obtain and maintain regulatory approval of our product candidates, and the timing or likelihood of regulatory filings and approvals, including our expectations to maintain the Orphan Drug Designation (ODD) and Rare Pediatric Disease Designation (RPDD) for sevasemten and our expectation to seek special designations for our other product candidates;

●

our plans relating to the further development of our product candidates, including additional indications we may pursue;

●

existing regulations and regulatory developments in the United States, Europe and other jurisdictions;

●

our expectations regarding the impact of public health pandemics, including the COVID-19 pandemic, on our business;

●

our expectations regarding the upcoming U.S. presidential elections;

●

our expectations regarding the impact of Russia’s war with Ukraine, and war and instability in Israel and the surrounding region on our business;

●

our expectations regarding the impact of instability in the U.S. banking and financial services sector and other macroeconomic trends;

●

our intellectual property position, including the scope of protection we are able to establish and maintain for intellectual property rights covering sevasemten, EDG-7500, product candidates from our EDG-003 cardiometabolic discovery program and other product candidates we may develop, including the extensions of existing patent terms where available, the validity of intellectual property rights held by third parties, and our ability not to infringe, misappropriate or otherwise violate any third-party intellectual property rights;

●

our continued reliance on third parties to conduct additional preclinical studies and planned clinical trials of our product candidates, and for the manufacture of our product candidates for preclinical studies and clinical trials;

●

our relationships with patient advocacy groups, key opinion leaders, regulators, the research community and payors;

●

our ability to obtain, and negotiate favorable terms of, any collaboration, licensing or other arrangements that may be necessary or desirable to develop, manufacture or commercialize our product candidates;

●

the pricing and reimbursement of sevasemten, EDG-7500, product candidates from our EDG-003 cardiometabolic discovery program and other product candidates we may develop, if approved;

●

the rate and degree of market acceptance and clinical utility of sevasemten, EDG-7500, product candidates from our EDG-003 cardiometabolic discovery program and other product candidates we may develop;

●

our estimates regarding expenses, future revenue, capital requirements and needs for additional financing which may be impacted by many factors including inflation;

●

our financial performance;

●

the period over which we estimate our existing cash, cash equivalents and marketable securities will be sufficient to fund our future operating expenses and capital expenditure requirements;

●

the impact of laws and regulations; and

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●

our expectations regarding the period during which we will qualify as an emerging growth company under The Jumpstart Our Business Startups Act of 2012 and a smaller reporting company under the Securities Exchange Act of 1934, as amended.

We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate and financial trends that we believe may affect our business, financial condition, results of operations and prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements speak only as of the date of this Quarterly Report and are subject to a number of risks, uncertainties and assumptions described in the section titled “Risk Factors” and elsewhere in this Quarterly Report. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events or otherwise.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.

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PART I —FINANCIAL INFORMATION

Item 1. Financial Statements

EDGEWISE THERAPEUTICS, INC.

Condensed Balance Sheets

(In thousands, except share and per share data)


	As of		As of
	June 30,		December 31,
	2024		2023
Assets	(unaudited)
Current assets
Cash and cash equivalents	$	43,485	$	86,097
Marketable securities, available for sale		468,266		232,296
Prepaid expenses and other assets		7,690		8,604
Total current assets		519,441		326,997

Property and equipment, net		9,897		10,443
Operating lease right-of-use asset		2,047		2,247
Other non-current assets		262		348

Total assets	$	531,647	$	340,035

Liabilities and stockholders' equity

Current liabilities
Accounts payable	$	6,801	$	4,025
Accrued compensation		4,244		5,695
Accrued other expenses		5,143		6,071
Operating lease liability, current portion		988		980
Total current liabilities		17,176		16,771
Operating lease liability, net of current portion		3,997		4,434

Total liabilities		21,173		21,205

Commitments and contingencies (see note 5)

Stockholders' equity:
Preferred stock, $.0001 par value per share; 200,000,000 shares authorized and no shares issued or outstanding as of June 30, 2024 and December 31, 2023		—		—
Common stock, $.0001 par value per share; 1,000,000,000 shares authorized as of June 30, 2024 and December 31, 2023; 93,643,341 shares and 70,453,342 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively		9		7
Additional paid-in capital		816,304		563,487
Accumulated other comprehensive income (loss)		(1,054)		99
Accumulated deficit		(304,785)		(244,763)
Total stockholders' equity		510,474		318,830

Total liabilities and stockholders' equity	$	531,647	$	340,035

The accompanying notes are an integral part of these condensed financial statements.

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EDGEWISE THERAPEUTICS, INC.

Condensed Statements of Operations and Comprehensive Loss

(In thousands, except share and per share data)

(Unaudited)


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023

Operating expenses
Research and development	$	30,680	$	19,559	$	58,374	$	39,435
General and administrative		7,427		5,780		14,486		11,608
Total operating expenses		38,107		25,339		72,860		51,043

Loss from operations		(38,107)		(25,339)		(72,860)		(51,043)

Other income
Interest income		6,610		3,870		12,838		6,736
Total other income		6,610		3,870		12,838		6,736

Net loss		(31,497)		(21,469)		(60,022)		(44,307)

Other comprehensive income (loss):
Unrealized gain (loss) on available-for-sale securities		(193)		(296)		(1,153)		808
Total comprehensive loss	$	(31,690)	$	(21,765)	$	(61,175)	$	(43,499)

Net loss per share, basic and diluted	$	(0.34)	$	(0.34)	$	(0.66)	$	(0.70)
Weighted-average shares outstanding, basic and diluted		93,515,356		63,380,430		90,541,332		63,323,509

The accompanying notes are an integral part of these condensed financial statements.

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EDGEWISE THERAPEUTICS, INC.

Condensed Statements of Stockholders’ Equity

(In thousands, except share data)

(Unaudited)


						Accumulated
	Common Stock			Additional		Other Comprehensive		Accumulated
	Shares	Amount		Paid-In Capital		Loss		Deficit		Total
Balance as of December 31, 2022	63,257,376	$	6	$	492,665	$	(1,355)	$	(144,600)	$	346,716
Exercise of stock options	17,356		—		21		—		—		21
Stock-based compensation	—		—		3,837		—		—		3,837
Other comprehensive income	—		—		—		1,104		—		1,104
Net loss	—		—		—		—		(22,838)		(22,838)
Balance as of March 31, 2023	63,274,732	$	6	$	496,523	$	(251)	$	(167,438)	$	328,840
Exercise of stock options and vesting of restricted stock	135,326		—		31		—		—		31
Purchase of common stock under employee stock purchase plan	48,874		—		338		—		—		338
Stock-based compensation	—		—		4,011		—		—		4,011
Other comprehensive loss	—		—		—		(296)		—		(296)
Net loss	—		—		—		—		(21,469)		(21,469)
Balance as of June 30, 2023	63,458,932	$	6	$	500,903	$	(547)	$	(188,907)	$	311,455



						Accumulated
	Common Stock			Additional		Other Comprehensive		Accumulated
	Shares	Amount		Paid-In Capital		Loss		Deficit		Total
Balance as of December 31, 2023	70,453,342	$	7	$	563,487	$	99	$	(244,763)	$	318,830
Issuance of common stock, net of offering costs	22,450,206		2		238,797		—		—		238,799
Exercise of stock options	380,980		—		1,926		—		—		1,926
Stock-based compensation	—		—		4,871		—		—		4,871
Other comprehensive loss	—		—		—		(960)		—		(960)
Net loss	—		—		—		—		(28,525)		(28,525)
Balance as of March 31, 2024	93,284,528	$	9	$	809,081	$	(861)	$	(273,288)	$	534,941
Exercise of stock options and vesting of restricted stock	283,039		—		1,577		—		—		1,577
Purchase of common stock under employee stock purchase plan	75,774		—		422		—		—		422
Stock-based compensation	—		—		5,224		—		—		5,224
Other comprehensive loss	—		—		—		(193)		—		(193)
Net loss	—		—		—		—		(31,497)		(31,497)
Balance as of June 30, 2024	93,643,341	$	9	$	816,304	$	(1,054)	$	(304,785)	$	510,474

The accompanying notes are an integral part of these condensed financial statements.

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EDGEWISE THERAPEUTICS, INC.

Condensed Statements of Cash Flows

(In thousands)

(Unaudited)


	Six months ended June 30,
	2024		2023
Cash flows from operating activities
Net loss	$	(60,022)	$	(44,307)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		953		619
Stock-based compensation		10,095		7,848
Amortization (accretion) of (discount) on marketable securities, net		(6,703)		(4,970)
Amortization of right-of-use asset		106		83
Changes in assets and liabilities:
Prepaid expenses and other assets		914		(2,017)
Accounts payable		2,673		(472)
Accrued compensation		(1,451)		(907)
Accrued other expenses and other liabilities		(927)		947
Lease liability		(335)		116
Net cash used in operating activities		(54,697)		(43,060)

Cash flows from investing activities
Purchases of marketable securities		(368,558)		(131,413)
Sales of marketable securities		1,759		5,146
Maturities of marketable securities		136,377		183,878
Purchases of property and equipment		(518)		(5,127)
Net cash (used in) provided by investing activities		(230,940)		52,484

Cash flows from financing activities
Proceeds from issuance of common stock, net of underwriting discounts and commissions and offering costs		239,147		—
Exercise of stock options		3,503		52
Payment of deferred offering costs		(48)		—
Proceeds from Employee Stock Purchase Plan		423		338
Net cash provided by financing activities		243,025		390

Net change in cash and cash equivalents		(42,612)		9,814
Cash and cash equivalents at beginning of period		86,097		21,993
Cash and cash equivalents at end of period	$	43,485	$	31,807
Supplemental disclosures of non-cash investing and financing activities:
Right-of-use asset obtained in exchange for new operating lease liability, net of tenant improvement receivable	$	—	$	1,118
Property and equipment purchases included in accounts payable and accrued other expenses	$	116	$	324
Deferred offering costs included in accounts payable and accrued other expenses	$	214	$	168

The accompanying notes are an integral part of these condensed financial statements.

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EDGEWISE THERAPEUTICS, INC.

Notes to Condensed Financial Statements

(Unaudited)

NOTE 1 DESCRIPTION OF BUSINESS

Organization and Description of Business

Edgewise Therapeutics, Inc. (the Company) was incorporated as a Delaware corporation in May 2017, and it is headquartered in Boulder, Colorado. The Company is a clinical stage biopharmaceutical company focused on the discovery, development and commercialization of innovative treatments for severe muscle diseases for which there is significant unmet medical need. The Company’s lead product candidate, sevasemten (EDG-5506), is an orally administered small molecule designed to address the root cause of dystrophinopathies including Duchenne muscular dystrophy (Duchenne) and Becker muscular dystrophy (Becker). The Company is currently studying sevasemten in Phase 2 trials, which are being held in the U.S. and certain countries in Europe and Australasia. In addition, the Company has initiated a Phase 2 trial of EDG-7500, for the potential treatment of hypertrophic cardiomyopathy (HCM). The Company is using its proprietary drug discovery platform to develop a pipeline of precision medicine product candidates that target key muscle proteins and modulators to address a broad array of serious muscle disorders.

Risks and Uncertainties

The board of directors of the Company discusses with management macroeconomic and geopolitical developments, including inflation, instability in the banking and financial services sector, tightening of the credit markets, the upcoming U.S. presidential election, international conflicts, public health pandemics, cybersecurity and sanctions so that the Company can be prepared to react to new developments as they arise. The board of directors and the management of the Company are carefully monitoring these developments and the resulting economic impact on its financial condition and results of operations.

Liquidity and Capital Resources

The Company has an accumulated deficit of $304.8 million and cash, cash equivalents and marketable securities of $511.8 million as of June 30, 2024. The Company’s ability to fund ongoing operations is highly dependent upon raising additional capital through the issuance of equity securities and issuing debt or other financing vehicles.

On June 16, 2023, the Company entered into a Sales Agreement (Sales Agreement) with BofA Securities, Inc. (BofA Securities) under which the Company could offer and sell shares of common stock, having aggregate sales proceeds of up to $125,000,000 from time to time, through an “at the market offering” program (ATM Program) under which BofA Securities acted as sales agent. Effective January 19, 2024, the Company suspended and terminated the prospectus related to the Company’s common stock (the ATM Prospectus) issuable pursuant to the terms of the Sales Agreement. As of the date of the suspension of the ATM Prospectus, the Company had sold 7,560,068 shares of our common stock at a weighted average price of $7.93 per share. The gross proceeds were $59.9 million, and the net proceeds were $59.4 million after deducting underwriting discounts and commissions of $0.2 million and offering expenses of $0.3 million.

On January 23, 2024, the Company closed an underwritten registered direct offering of 21,818,182 shares of common stock at a public offering price of $11.00 per share (the January 2024 Offering). The aggregate gross proceeds from the January 2024 Offering were $240.0 million, and the net proceeds were $231.9 million after deducting underwriting discounts and commissions of $7.5 million and offering expenses of $0.6 million.

On May 10, 2024, we entered into a sales agreement with Leerink Partners LLC (Leerink Sales Agreement) under which we may offer and sell shares of common stock, having aggregate sales proceeds of up to $175,000,000 from time to time, through an “at the market offering” program (Leerink ATM) under which Leerink Partners LLC will act as sales agent. We have not yet offered or sold any shares of common stock related to the Leerink ATM.

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The Company’s ability to secure capital is dependent upon success in developing its technology and product candidates. The Company cannot provide assurance that additional capital will be available on acceptable terms, if at all. The issuance of additional equity or debt securities will likely result in substantial dilution to the Company’s stockholders. Should additional capital not be available to the Company in the near term, or not be available on acceptable terms, the Company may be unable to realize value from the Company’s assets or discharge liabilities in the normal course of business, which may, among other alternatives, cause the Company to delay, substantially reduce, or discontinue operational activities to conserve cash balances, which could have a material adverse effect on the Company’s ability to achieve its intended business objectives.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The financial statements do not reflect any adjustments relating to the recoverability and reclassification of assets and liabilities that might be necessary if the Company is unable to continue as a going concern. The Company believes that the $511.8 million of cash, cash equivalents and marketable securities on hand as of June 30, 2024 will be sufficient to fund its operations in the normal course of business and meet its liquidity needs through at least the next 12 months from the issuance of these financial statements.

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP).

Segment Information

The Company operates in one operating segment and, accordingly, no segment disclosures have been presented herein. All equipment and other fixed assets are physically located within the United States.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Cash Equivalents

The Company considers all liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cash equivalents as of June 30, 2024 and December 31, 2023 primarily consist of money market funds and cash.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash, cash equivalents and marketable securities. Periodically, the Company may maintain deposits in financial institutions in excess of government insured limits. The Company believes that it is not exposed to significant credit risk as its deposits are held at financial institutions that management believes to be of high credit quality. The Company has not experienced any losses on deposits since inception. The Company regularly invests excess cash with major financial institutions in money market funds, corporate debt securities, and commercial paper, all of which can be readily purchased and sold using established markets. The Company believes that the market risk arising from our holdings of these financial instruments is mitigated based on the fact that many of these securities are of high credit rating.

Deferred Offering Costs

The Company capitalizes certain legal, professional, accounting and other third-party fees that are directly associated with in-process equity issuances as deferred offering costs until such equity issuances are consummated. After consummation of the equity issuance, these costs are recorded as a reduction in the capitalized amount associated with the equity issuance. Should the equity issuance be abandoned, the deferred offering costs are expensed immediately as a

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charge to operating expenses in the statement of operations. Deferred offering costs were $0.3 million as of June 30, 2024 and December 31, 2023. Such costs are classified in other non-current assets in the accompanying balance sheets.

Property and Equipment

Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is computed using the straight-line method over the estimated useful life of the related asset, which is generally three to seven years, and in the case of leasehold improvements, the shorter of the estimated useful lives of the assets or the term of the lease.

Leases

The Company accounts for its leases under Accounting Standards Codification (ASC) Topic 842, Leases (ASC 842). At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement. Leases with a term greater than 12 months are recognized on the balance sheet as Right-of-Use (ROU) assets and current and non-current lease liabilities, as applicable. The Company has elected not to recognize on the balance sheet leases with terms of 12 months or less. The Company typically only includes an initial lease term in its assessment of a lease arrangement. Options to renew a lease are not included in the Company’s assessment unless there is reasonable certainty that the Company will renew. The Company monitors its material leases on a quarterly basis.

Operating lease liabilities and their corresponding ROU assets are recorded based on the present value of future lease payments over the expected remaining lease term. Lease cost for operating leases is recognized on a straight-line basis over the lease term as an operating expense. Certain adjustments to the ROU asset may be required for items such as lease prepayments or incentives received. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rate, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment.

For all asset classes of its leases, the Company has elected to account for the lease and non-lease components together for existing classes of underlying asset. Costs determined to be variable and not based on an index or rate are not include in the measurement of the lease liability.

Impairment of Long-Lived Assets

The Company reviews long-lived assets for impairment whenever events or circumstances indicate that the carrying value of such assets may not be fully recoverable. Impairment is evaluated based on the sum of undiscounted estimated future cash flows expected to result from use of the related asset compared to its carrying value. If impairment is recognized, the carrying value of the impaired asset is reduced to its fair value. There were no impairment charges or long-lived assets disposed of during three and six months ended June 30, 2024 and 2023.

Income Taxes

Deferred income taxes are provided on temporary differences between financial statement and income tax reporting. Temporary differences are differences between the amounts of assets and liabilities reported for financial statement purposes and their tax bases.

Deferred tax assets are recognized for temporary differences that will be deductible in future years’ tax returns and for operating loss and tax credit carryforwards. Deferred tax assets are reduced by a valuation allowance if such deferred tax assets are deemed more likely than not that some or all of the deferred tax assets will not be realized. Historically, the Company has not recognized these potential benefits in its financial statements and has fully reserved for such net deferred tax assets, as it believes it is more likely than not that the full benefit of these net deferred tax assets will not be realized. Deferred tax liabilities are recognized for temporary differences that will be taxable in future years. The Company evaluated its tax positions and determined it has no uncertain tax positions as of June 30, 2024.

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Fair Value of Financial Instruments

The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. The Financial Accounting Standards Board (FASB) ASC Topic 820, Fair Value Measurements and Disclosures (ASC 820), establishes a hierarchy of inputs used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are those that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of financial instruments and is not a measure of the investment credit quality. The three levels of the fair value hierarchy are described below:

Level 1—quoted prices in active markets for identical assets and liabilities.

Level 2—other significant observable inputs (including quoted prices for similar assets and liabilities, interest rates, credit risk, etc.).

Level 3—significant unobservable inputs (including the Company’s own assumptions in determining the fair value of assets and liabilities).

Marketable Securities, Available for Sale

All marketable securities have been classified as “available-for-sale” and are carried at fair value, based upon quoted market prices. The Company considers its available-for-sale portfolio as available for use in current operations. Accordingly, the Company classifies its investments as short-term marketable securities, even though the stated maturity date may be one year or more beyond the current balance sheet date. Unrealized gains and losses, net of any related tax effects, are excluded from earnings and are included in other comprehensive income (loss) and reported as a separate component of stockholders’ equity until realized. Interest income, realized gains and losses, and declines in value judged to be other than temporary, if any, on available-for-sale securities are included in other income. The cost of securities sold is based on the specific-identification method. The amortized cost of securities is adjusted for amortization of premiums and accretion of discounts to maturity. In accordance with the Company’s investment policy, management invests in money market funds, corporate bonds, commercial paper, asset-backed securities and government securities. The Company has not experienced any realized losses on its deposits of cash, cash equivalents, and marketable securities since inception.

The following tables summarize the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands):


	As of June 30, 2024
	Fair Value	Amortized		Unrealized		Unrealized		Fair Market
	Hierarchy	Cost Basis		Gains		Losses		Value
Cash equivalents:
Money market funds	Level 1	$	43,289	$	—	$	—	$	43,289
Marketable securities, available for sale:
Asset-backed securities	Level 2		51,995		1		(155)		51,841
Corporate debt securities	Level 2		159,931		8		(305)		159,634
Commercial paper	Level 2		24,943		—		(24)		24,919
U.S. government treasury and agency securities	Level 2		199,150		2		(503)		198,649
Supranational and sovereign government securities	Level 2		33,301		—		(78)		33,223
Total financial assets		$	512,609	$	11	$	(1,065)	$	511,555

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	As of December 31, 2023
	Fair Value	Amortized		Unrealized		Unrealized		Fair Market
	Hierarchy	Cost Basis		Gains		Losses		Value
Cash equivalents:
Money market funds	Level 1	$	85,897	$	—	$	—	$	85,897
Marketable securities, available for sale:
Asset-backed securities	Level 2		10,228		12		(2)		10,238
Corporate debt securities	Level 2		82,514		66		(113)		82,467
Commercial paper	Level 2		19,457		13		(8)		19,462
U.S. government treasury and agency securities	Level 2		116,579		151		(26)		116,704
Supranational and sovereign government securities	Level 2		3,419		6		—		3,425
Total financial assets		$	318,094	$	248	$	(149)	$	318,193

The Company’s money market funds are classified as Level 1 because they are valued using quoted market prices. Investments in asset-backed securities, corporate debt securities, commercial paper and U.S. government treasury and agency securities, and supranational and sovereign government securities have been classified as Level 2 as they are valued using quoted prices in less active markets or other directly or indirectly observable inputs. Fair values of asset-backed securities, corporate debt securities, commercial paper, U.S. government treasury and agency securities, and supranational and sovereign government securities were derived based on input of market prices from multiple sources at each reporting period. With regard to commercial paper, all of the securities had high credit ratings and one year or less to maturity; therefore, fair value was derived from accretion of purchase price to face value over the term of maturity or quoted market prices for similar instruments if available. There were no transfers of financial assets between Level 1, Level 2, or Level 3, during the periods presented. As of June 30, 2024, the remaining contractual maturities of $417.6 million of marketable securities were less than one year and $51.7 million of marketable securities were between 1 and 2 years.

The Company periodically reviews its portfolio of debt securities to determine if any investment is impaired due to credit loss or other potential valuation concerns. For debt securities where the fair value of the investment is less than the amortized cost basis, the Company has assessed at the individual security level for various quantitative factors including, but not limited to, the nature of the investments, changes in credit ratings, interest rate fluctuations, industry analyst reports, and the severity of impairment. Unrealized losses on marketable securities at June 30, 2024 were primarily due to changes in interest rates, including market credit spreads, and not due to increased credit risks associated with specific securities.

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and/or circumstances from non-owner sources. The Company’s only element of other comprehensive income (loss) was net unrealized gain (loss) on marketable securities.

Stock-Based Compensation

In accordance with ASC Topic 718, Compensation—Stock Compensation, the Company recognizes compensation expense for all stock-based awards issued to employees based on the estimated grant-date fair value, which is recognized as expense on a straight-line basis over the requisite service period. The Company has elected to recognize forfeitures as they occur. For restricted stock unit awards, the fair value is based on the closing price of the Company's common stock on the date of grant. The fair value of stock options is determined using the Black-Scholes option-pricing model. The determination of fair value for stock-based awards on the date of grant using an option-pricing model requires management to make certain assumptions including expected volatility, expected term, risk-free interest rate and expected dividends in addition to the Company’s common stock valuation (see Note 4).

Research and Development Expenses and Accrued Research and Development Expenses

Expenditures made for research and development are charged to expense as incurred. External costs consist primarily of payments to contract research organizations (CROs), contract development and manufacturing organizations

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(CDMOs), sample acquisition costs and laboratory supplies purchased in connection with the Company’s discovery and preclinical activities, and process development and clinical development activities. Internal costs consist primarily of employee-related costs, facilities, depreciation and costs related to compliance with regulatory requirements. Non-refundable advance payments for goods and services that will be used in future research and development activities are capitalized and recorded as an expense in the period that the Company receives the goods or when services are performed.

The Company records expenses related to external research and development services based on its estimates of the services received and efforts expended pursuant to quotes and contracts with multiple CROs and CDMOs that supply, conduct and manage preclinical studies and clinical trials on its behalf. The financial terms of these contracts vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. In accruing service fees, the Company estimates the time period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company adjusts the accrual or the amount of prepaid expenses accordingly.

Emerging Growth Company Status

The Company is an “emerging growth company”, as defined in the Jumpstart Our Business Startups Act of 2012 (JOBS Act). Under the JOBS Act, emerging growth companies can take advantage of an extended transition period for complying with new or revised accounting standards, delaying the adoption of these accounting standards until they would apply to private companies. The Company has elected to use this extended transition period for complying with certain new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (1) no longer an emerging growth company or (2) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, these financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

Accounting Standards Not Yet Adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures to update reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. This update is effective beginning with the Company’s 2024 fiscal year annual reporting period, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU is expected to enhance the transparency and decision usefulness of income tax disclosures by requiring public business entities on an annual basis to disclose specific categories in the rate reconciliation, additional information for reconciling items that meet a quantitative threshold, and certain information about income taxes paid. This ASU is effective beginning with the Company’s 2025 fiscal year annual reporting period, with early adoption permitted. The Company is currently evaluating the impact that the adoption of this standard will have on its financial statements.

NOTE 3 PREFERRED STOCK AND COMMON STOCK

The Company is authorized to issue two classes of stock designated as common stock and preferred stock. As of June 30, 2024, the total number of shares authorized was 1,200,000,000. The total number of shares of common stock authorized was 1,000,000,000. The total number of shares of preferred stock authorized was 200,000,000. All shares of the Company’s capital stock have a par value of $0.0001 per share.

Common stockholders are entitled to dividends if and when declared by the board of directors of the Company and after any convertible preferred share dividends are fully paid. The holder of each share of common stock is entitled to one vote.

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NOTE 4 STOCK-BASED COMPENSATION AWARDS

Equity Incentive Plans

In March 2021, the Company’s board of directors adopted, and its stockholders approved, the Company’s 2021 Equity Incentive Plan (the 2021 Plan), which became effective in March 2021 in connection with the IPO. Upon adoption of the 2021 Plan, the Company restricted the grant of future equity awards under its 2017 Equity Incentive Plan, as amended and restated (the 2017 Plan).

The 2021 Plan provides for the grant of incentive stock options, within the meaning of Section 422 of the Internal Revenue Code, to the Company’s employees and any of its parent and subsidiary corporations’ employees, and for the grant of nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights, performance units, and performance shares to its employees, directors, and consultants and its subsidiary corporations’ employees and consultants.

The vesting of stock options is stated in each individual grant agreement, which is generally four years. Options granted expire 10 years after the date of grant. A total of 5,040,000 shares of the Company’s common stock were initially reserved for issuance pursuant to the 2021 Plan. The 2021 Plan share reserve increases by the number of shares under the 2017 Plan that are repurchased, forfeited, expired or cancelled after the effective date of the 2021 Plan up to the limit under the 2021 Plan. The number of shares available for issuance under the 2021 Plan increases annually on the first day of each fiscal year beginning with the Company’s 2022 fiscal year, equal to the least of (1) 5,040,000 shares, (2) five percent (5%) of the outstanding shares of its common stock as of the last day of the immediately preceding fiscal year; or (3) such other amount as the Company’s board of directors may determine. As of June 30, 2024, there were 4,163,037 shares available for future issuance under the 2021 Plan.

Founder Stock Options

On September 19, 2017, the Company granted one of its founders the option to purchase 1,795,880 shares of the Company’s common stock at an exercise price of $0.18 per share which vest monthly over a four-year period that expires 15 years after the date of grant. This grant is separate from the Company’s equity incentive plans discussed above. As of June 30, 2024, 1,531,780 options were both outstanding and exercisable. There were no options exercised during the three and six months ended June 30, 2024.

Total stock-based compensation expense related to all equity plans, including Founder Stock Options was allocated as follows (in thousands):


	Three months ended June 30,				Six months ended June 30,
	2024		2023		2024		2023
Research and development	$	2,924	$	2,274	$	5,624	$	4,389
General and administrative		2,300		1,737		4,471		3,459
Total stock-based compensation expense	$	5,224	$	4,011	$	10,095	$	7,848

NOTE 5 COMMITMENTS AND CONTINGENCIES

Lease Agreements

In January 2022, the Company entered into a lease agreement for approximately 18,614 square feet of office and laboratory space in Boulder, Colorado (the Boulder Lease) with aggregate base rent payments of approximately $3.3 million over the initial 8.2-year term of the lease. Further, the Company provided a standby letter of credit (LOC) of $0.8 million during the term of the lease as collateral for the Company’s obligations under the lease. Provided there has been no event of default by the Company during the initial 36-month term, the Company will replace the initial LOC with a replacement LOC in the amount of $0.5 million. The Boulder Lease includes two tenant improvement allowances, which includes one for $1.0 million in construction costs to be fully reimbursed by the lessor (the First Allowance) and one for $2.0 million in construction costs to be repaid to the lessor as additional rent payments over the initial term of the lease (the Second Allowance). Both the First Allowance and Second Allowance have been received in full. The receipt of $2.0

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million under the Second Allowance resulted in an increase to operating lease liabilities and an increase to aggregate base rent payments totaling $2.5 million.

In February 2023, the Boulder Lease was modified to occupy an additional 9,624 square feet of office space (the Expansion Space) with aggregate payments of approximately $1.5 million over the initial 7.3 year term of the lease. The Expansion Space includes an improvement allowance in the amount of $0.5 million to be fully reimbursed by the lessor. As of June 30, 2024, $0 was received by the lessor under the allowance associated with the Expansion Space.

Under the Boulder Lease and the Expansion Space (collectively, the Lease), the Company has the option to extend the Lease for two additional terms of five years each. The Company is obligated to pay the lessor an amount not to exceed 5% of the net rents from the property for operating costs. Such amounts are not included in the measurement of the lease liabilities and are recognized as variable lease expense when they are incurred. Variable lease expense was $0.1 million and $0.2 million for the three and six months ended June 30, 2024, respectively and $0.1 million and $0.2 million for the three and six months ended June 30, 2023, respectively. The Lease is classified as an operating lease.

The Company recorded lease liabilities and ROU lease assets for the Lease based on the present value of lease payments over the expected lease term, discounted using the Company’s incremental borrowing rate. The option to extend the Lease was not recognized as part of the Company’s lease liabilities and ROU lease assets, as such extensions are not reasonably certain to occur. As of June 30, 2024, the weighted-average remaining lease term and the weighted-average discount rate for the Lease was 5.8 years and 6.4%, respectively. Rent expense under the Lease was $0.1 million and $0.3 million for the three and six months ended June 30, 2024, respectively and $0.1 million and $0.3 million for the three and six months ended June 30, 2023, respectively.

Future minimum lease payments under the Lease as of June 30, 2024 are as follows (in thousands):


Year Ending December 31,
2024, remaining	$	509
2025		1,031
2026		1,048
2027		1,066
2028		1,084
Thereafter		1,378
Total undiscounted future minimum lease payments		6,116
Less: discount		(1,030)
Less: tenant improvement receivable		(101)
Total lease liability	$	4,985

Litigation

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. From time to time, the Company may become involved in legal proceedings arising in the ordinary course of business. The Company was not subject to any material legal proceedings during the three and six months ended June 30, 2024 and no material legal proceedings are currently pending or threatened.

Indemnification Agreements

In the ordinary course of business, the Company may provide indemnification of varying scope and terms to vendors, lessors, business partners and other parties with respect to certain matters including, but not limited to, losses arising of breach of such agreements or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with members of its board of directors that will require the Company, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is, in many cases, unlimited. To date, the Company has not incurred any material costs as a result of such indemnifications. The Company is not aware of any claims under indemnification arrangements, and it has not accrued any liabilities related to such obligations in its financial statements as of June 30, 2024.

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NOTE 6 NET LOSS PER SHARE

Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, common stock options and unvested restricted stock units are considered to be potentially dilutive securities. The Company’s participating securities do not have a contractual obligation to share in the Company’s losses. As such, the net loss was attributed entirely to common stockholders. As the Company has reported a net loss for all periods presented, diluted net loss per common share is the same as basic net loss per common share for those periods.

The following table sets forth the computation of the basic and diluted net loss per share (in thousands, except share and per share data):


	Three months ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Numerator
Net loss	$	(31,497)	$	(21,469)	$	(60,022)	$	(44,307)
Denominator
Weighted-average shares outstanding used in computing net loss per share, basic and diluted		93,515,356		63,380,430		90,541,332		63,323,509
Net loss per share, basic and diluted	$	(0.34)	$	(0.34)	$	(0.66)	$	(0.70)

The following weighted average outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share attributable to common stockholders for the periods presented because including them would have been anti-dilutive:


	Three months ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Options to purchase common stock		15,656,198		12,418,932		15,735,754		12,322,736
Unvested restricted stock units		113,796		208,510		142,800		237,879
Total		15,769,994		12,627,442		15,878,554		12,560,615

NOTE 7 PROPERTY AND EQUIPMENT

Property and equipment consisted of the following amounts (in thousands):


	As of June 30,		As of December 31,
	2024		2023
Leasehold improvements	$	8,738	$	8,728
Laboratory equipment		3,695		3,473
Computers and software		296		281
Furniture and fixtures		497		497
Construction in process		240		80
Property and equipment, at cost		13,466		13,059
Less: accumulated depreciation		(3,569)		(2,616)
Property and equipment, net	$	9,897	$	10,443

Depreciation expense was $0.5 million and $1.0 million for the three and six months ended June 30, 2024 and $0.4 million and $0.6 million for the three and six months ended June 30, 2023, respectively.

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NOTE 8 ACCRUED OTHER EXPENSES

Accrued other expenses consisted of the following amounts (in thousands):


	As of June 30,		As of December 31,
	2024		2023
Accrued research and development costs	$	4,381	$	5,672
Accrued other		762		399
Total accrued other expenses	$	5,143	$	6,071

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of the financial condition and results of operations of Edgewise Therapeutics, Inc. should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q (Quarterly Report), and the audited financial statements and notes included in our Annual Report on Form 10-K (Annual Report), filed with the Securities and Exchange Commission, on February 22, 2024. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Quarterly Report, our actual results could differ materially from the results described in or implied by these forward-looking statements. You should carefully read the “Risk Factors” to gain an understanding of the factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section titled “Special Note Regarding Forward-Looking Statements.”

Overview

Since our inception in 2017, we have been drawing on our deep expertise in muscle physiology and small molecule drug discovery to drive the next generation of first-in-class therapeutics to address a variety of severe muscle diseases. We are advancing two clinical-stage programs in muscular dystrophies and severe cardiac diseases. Sevasemten (EDG-5506) is an orally administered skeletal myosin inhibitor in a pivotal stage trial for Becker muscular dystrophy as well as ongoing Phase 2 programs in Duchenne muscular dystrophy. EDG-7500, currently in a Phase 2 trial, is a novel cardiac sarcomere modulator for the treatment of hypertrophic cardiomyopathy (HCM) and other disorders of diastolic dysfunction. We also continue to advance our preclinical pipeline, including characterization of novel cardiometabolic targets. From this foundation and our dedication to muscle physiology and function, we will build a leading global biopharmaceutical company driving advances to improve the lives of people suffering from muscle diseases.

As a clinical-stage biopharmaceutical company, we are focused on the discovery, development and commercialization of innovative treatments for severe muscle diseases for which there is significant unmet medical need. Guided by our holistic drug discovery approach to targeting the muscle as an organ, we have combined our foundational expertise in muscle biology and small molecule engineering to build our proprietary, muscle focused drug discovery platform. Our platform utilizes custom-built high throughput and translatable systems that measure integrated muscle function in whole organ extracts to identify small molecule precision medicines regulating key proteins in muscle tissue, initially focused on addressing rare neuromuscular and cardiac diseases. We have developed and characterized a library of novel sarcomere modulators exhibiting a broad range of pharmacological and pharmacokinetic properties regulating disease-related muscle biology.

We have incurred significant losses since the commencement of our operations. Our net losses were $31.5 million and $60.0 million for the three and six months ended June 30, 2024, respectively and $21.5 million and $44.3 million for the three and six months ended June 30, 2023, respectively, and we expect to continue to incur significant losses for the foreseeable future as we advance our product candidates through preclinical development and clinical trials and seek regulatory approval of our product candidates. Our net losses may fluctuate significantly from period to period, depending on the timing of and expenditures on our planned research and development activities.

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As of June 30, 2024, we had an accumulated deficit of $304.8 million. To date, we have financed our operations primarily through private placements of convertible preferred stock and public offerings of our common stock. From inception through June 30, 2024, these private placements have provided gross proceeds of $160.7 million, and the initial public offering, follow-on public offering, issuance of our common stock under an “at the market offering” program (the ATM Program), and underwritten registered direct offering have generated net proceeds of $606.6 million. We believe that our existing cash and cash equivalents and marketable securities of $511.8 million will enable us to fund our planned operating expenses and capital expenditure requirements through at least the next 12 months.

Macroeconomic and Geopolitical Developments

We are monitoring macroeconomic and geopolitical developments, such as inflation, instability in the banking and financial services sector, tightening of the credit markets, the upcoming U.S. presidential election, international conflicts, public health pandemics, cybersecurity and sanctions so that the Company can be prepared to react to new developments as they arise.

Components of Our Results of Operations

Operating expenses

Research and development expenses

Research and development expenses consist primarily of costs incurred in connection with the discovery and development of our product candidates. We record research and development expenses when these are incurred. Such expenses include:

●

employee and external consultant-related expenses including salaries, bonuses, benefits and stock-based compensation expense for employees engaged in research and development functions;

●

external expenses incurred in connection with the clinical development of our product candidates including under agreements with third parties, such as consultants and contract research organizations (CROs);

●

the cost of external manufacturing drug products for use in our preclinical studies and ongoing and planned clinical trials including under agreements with third parties such as consultants and contract development and manufacturing organizations (CDMOs);

●

expenses incurred in connection with the preclinical development of our product candidates including external, or outsourced professional scientific development services, consulting research fees and payments made under sponsored research arrangements with third parties;

●

laboratory supplies;

●

facilities, depreciation and other expenses, which include direct or allocated expenses for rent and maintenance of facilities;

●

expenses related to compliance with regulatory requirements; and

●

payments made under third-party licensing agreements.

The majority of these expenses have been incurred to advance our lead product candidate, sevasemten and to a lesser degree EDG-7500. We expect that significant additional spending will be required to progress these and other potential discoveries through the remainder of the clinical development phases. These expenses will primarily consist of expenses for the administration of clinical trials as well as manufacturing costs for clinical material supply.

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We track our direct research and development expenses on a program-by-program basis once a lead compound has been selected and clinical trials have been initiated. These direct costs consist primarily of external costs such as fees paid to outside consultants, CROs, CDMOs, clinical trial sites and central laboratories in connection with our discovery and preclinical activities, process development, manufacturing and clinical development activities. These expenses are recognized based on an evaluation of the progress to completion of specific tasks using information provided to us by our service providers or our estimate of the level of service that has been performed at each reporting date. Our direct research and development expenses by program also include costs of laboratory supplies that can be directly attributed to a specific program as well as any fees incurred under license agreements. We do not allocate employee-related costs, including stock-based compensation, or facility expenses, including rent, depreciation or other indirect costs, to specific programs because these costs are deployed across multiple programs and, as such, are not separately classified. We use internal resources primarily to conduct our research and discovery activities and to manage our preclinical development, manufacturing and clinical development activities.

Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages, primarily due to the increased size and duration of later-stage clinical trials. We are currently conducting four Phase 2 clinical trials for sevasemten (CANYON, LYNX, FOX and DUNE), a potentially registrational, or pivotal cohort in individuals with Becker (GRAND CANYON), and a Phase 2 study for EDG-7500 (CIRRUS-HCM). As a result, we expect that our research and development expenses will increase substantially over the next several years as we advance sevasemten, EDG-7500, a product from our EDG-003 cardiometabolic discovery program through clinical trials and additional product candidates; continue to develop our proprietary drug discovery platform; continue to discover and develop additional product candidates; and hire additional personnel.

The successful development of our product candidates is highly uncertain, and we do not believe it is possible at this time to accurately project the nature, timing and extent of expenses necessary to complete the development of our product candidates. We are also unable to predict when, if ever, we will generate revenue from our product candidates to offset these expenses. Our expenditures on current and future preclinical and clinical development programs are subject to numerous uncertainties in timing and cost to completion. The duration, costs and timing of preclinical studies and clinical trials and development of our product candidates will depend on a variety of factors, including:

●

the timing and progress of preclinical and clinical development activities;

●

the number and scope of preclinical and clinical programs we decide to pursue;

●

our ability to maintain our current research and development programs and to establish new ones;

●

establishing an appropriate safety profile with IND-enabling studies;

●

successful patient enrollment in, and the initiation and completion of, clinical trials;

Edgewise Therapeutics, Inc. [EWTX] Filings
10-Q	[2024-08-08]
10-Q	[2024-05-09]
10-K	[2024-02-22]
10-Q	[2023-11-09]
10-Q	[2023-08-10]
10-Q	[2023-05-11]
10-K	[2023-02-23]
10-Q	[2022-11-03]
10-Q	[2022-08-04]
10-Q	[2022-05-11]
10-K	[2022-02-24]
10-Q	[2021-11-10]
10-Q	[2021-08-09]
10-Q	[2021-05-13]
S-1	[2021-03-05]