Edgewise Therapeutics(EWTX) - 2025 Q1 - Quarterly Report

Part I Item 1. Financial Statements (Unaudited) The company reported a net loss of $40.8 million for Q1 2025, an increase from $28.5 million in Q1 2024, driven by higher R&D expenses, and saw total assets decrease to $454.4 million Condensed Balance Sheets As of March 31, 2025, total assets decreased to $454.4 million from $486.8 million, primarily due to reduced marketable securities, while stockholders' equity fell to $429.7 million Condensed Balance Sheet Data (in thousands) | Account | March 31, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $49,921 | $41,666 | | Marketable securities, available for sale | $386,466 | $428,504 | | Total current assets | $443,178 | $475,483 | | Total assets | $454,391 | $486,817 | | Liabilities and Stockholders' Equity | | | | Total current liabilities | $21,115 | $23,860 | | Total liabilities | $24,672 | $27,601 | | Total stockholders' equity | $429,719 | $459,216 | | Total liabilities and stockholders' equity | $454,391 | $486,817 | Condensed Statements of Operations and Comprehensive Loss Net loss for Q1 2025 increased to $40.8 million ($0.43 per share) from $28.5 million ($0.33 per share) in Q1 2024, driven by higher operating expenses, particularly R&D Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Research and development | $36,757 | $27,694 | | General and administrative | $9,202 | $7,059 | | Total operating expenses | $45,959 | $34,753 | | Loss from operations | ($45,959) | ($34,753) | | Interest income | $5,161 | $6,228 | | Net loss | ($40,798) | ($28,525) | | Net loss per share, basic and diluted | ($0.43) | ($0.33) | Condensed Statements of Stockholders' Equity Total stockholders' equity decreased to $429.7 million from $459.2 million, primarily due to a $40.8 million net loss, partially offset by stock-based compensation and option exercises - Key changes in stockholders' equity for Q1 2025 include a $40.8 million net loss, a $9.1 million increase from stock-based compensation, and a $2.3 million increase from the exercise of stock options[20] Condensed Statements of Cash Flows Net cash used in operating activities was $37.9 million, while investing activities provided $43.9 million and financing activities provided $2.2 million, resulting in a net $8.3 million increase in cash Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($37,866) | ($28,598) | | Net cash provided by (used in) investing activities | $43,898 | ($268,308) | | Net cash provided by financing activities | $2,223 | $241,073 | | Net change in cash and cash equivalents | $8,255 | ($55,833) | | Cash and cash equivalents at end of period | $49,921 | $30,264 | Notes to Condensed Financial Statements Notes detail the company's clinical-stage biopharmaceutical focus, significant accumulated deficit, reliance on equity financing, and sufficient cash reserves of $436.4 million to fund operations for at least 12 months - The company is a clinical-stage biopharmaceutical company focused on treatments for severe muscle diseases, with lead candidates sevasemten (for Duchenne and Becker muscular dystrophy) and EDG-7500 (for hypertrophic cardiomyopathy)[24] - As of March 31, 2025, the company had an accumulated deficit of $419.4 million and cash, cash equivalents, and marketable securities of $436.4 million, which management believes is sufficient to fund operations for at least the next 12 months[26][33] - The company raised net proceeds of $231.9 million from a direct offering in January 2024 and an additional $188.0 million (before expenses) from a direct offering in April 2025[28][31] Stock-Based Compensation Expense (in thousands) | Category | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Research and development | $5,867 | $2,700 | | General and administrative | $3,192 | $2,171 | | Total | $9,059 | $4,871 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's clinical program advancements, increased net loss to $40.8 million in Q1 2025 due to higher R&D expenses, and its belief that current cash, supplemented by a recent offering, will fund operations for at least 12 months Overview Edgewise is a clinical-stage biopharmaceutical company advancing sevasemten and EDG-7500, incurring a $40.8 million net loss in Q1 2025, but expects its $436.4 million cash reserves to fund operations for at least 12 months - The company is advancing two clinical-stage programs: sevasemten for muscular dystrophies and EDG-7500 for hypertrophic cardiomyopathy (HCM)[64] - Net loss for Q1 2025 was $40.8 million, and the company expects to continue incurring significant losses as it advances its product candidates[66] - The company believes its cash, cash equivalents, and marketable securities of $436.4 million as of March 31, 2025, will fund operations for at least the next 12 months[67] Results of Operations Operating expenses increased by $11.2 million to $46.0 million in Q1 2025, primarily due to a $9.1 million rise in R&D expenses driven by clinical trial advancements and personnel costs Comparison of Results of Operations (in thousands) | Account | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Research and development | $36,757 | $27,694 | $9,063 | | General and administrative | $9,202 | $7,059 | $2,143 | | Total operating expenses | $45,959 | $34,753 | $11,206 | | Net loss | ($40,798) | ($28,525) | ($12,273) | - The $9.1 million increase in R&D expenses was due to: $1.9 million for the sevasemten program due to increased trial activity, $0.2 million for the EDG-7500 program related to the Phase 2 CIRRUS-HCM trial, $1.3 million for discovery and preclinical expenses for the EDG-003 program, and $5.7 million in internal costs, mainly from increased employee headcount and stock-based compensation[83][86] Liquidity and Capital Resources The company funds operations through equity offerings, holding $436.4 million in cash and marketable securities as of March 31, 2025, and expects these funds to cover operating expenses for at least the next 12 months - As of March 31, 2025, the company had $436.4 million in cash, cash equivalents, and marketable securities, with an additional $188.0 million raised in April 2025[85] Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($37,866) | ($28,598) | | Net cash provided by (used in) investing activities | $43,898 | ($268,308) | | Net cash provided by financing activities | $2,223 | $241,073 | - The company expects its existing cash and marketable securities to be sufficient to fund planned operating expenses and capital expenditure requirements for at least the next 12 months[105] - Long-term cash requirements include total operating lease liabilities of $4.6 million as of March 31, 2025[110] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company faces interest rate risk on its $436.4 million portfolio of short-term, low-risk investments, but a 10% interest rate change is not expected to materially affect its fair value - The company's primary market risk is interest rate sensitivity on its $436.4 million portfolio of cash and marketable securities[116] - Due to the short-term duration and low-risk profile of investments, a 10% change in interest rates is not expected to have a material effect on the portfolio's fair market value[116] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of March 31, 2025, the company's disclosure controls and procedures were effective[117] - No material changes occurred in the company's internal control over financial reporting during the first quarter of 2025[118] Part II Item 1. Legal Proceedings The company is not currently a party to any material legal proceedings, though it may be involved in ordinary course claims not deemed material - The company is not currently a party to any material legal proceedings[121] Item 1A. Risk Factors This section outlines numerous risks, including the company's limited operating history, net losses, dependence on lead product candidates, clinical development uncertainties, regulatory hurdles, competition, reliance on third parties, intellectual property protection, and stock market volatility - The company has a limited operating history, has incurred significant net losses since inception ($419.4 million accumulated deficit as of March 31, 2025), and expects to continue incurring losses[127][130] - The business is substantially dependent on the success of its two lead product candidates, sevasemten and EDG-7500[123][166] - Clinical drug development is a lengthy, expensive, and uncertain process; positive results from early trials may not be predictive of future results, and product candidates may cause serious adverse events[123][175][186] - The company relies on third parties to conduct clinical trials and manufacture its product candidates, which increases risks related to quality, quantity, and cost[125][428][433] - The company faces significant competition from major pharmaceutical and biotechnology companies with greater resources, particularly in the development of treatments for Duchenne and HCM[203][205][210] - The company's success depends on its ability to obtain and maintain patent protection and trade secret protection for its product candidates and technologies[125][351] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details net proceeds from multiple public offerings, including a March 2021 IPO ($186.1 million) and an April 2025 direct offering ($188.0 million), with no material change in the planned use of proceeds - There were no unregistered sales of equity securities during the period[488] Summary of Net Proceeds from Public Offerings | Offering | Date | Net Proceeds (approx.) | | :--- | :--- | :--- | | Initial Public Offering (IPO) | Mar 2021 | $186.1 million | | Follow-On Offering | Sep 2022 | $129.2 million | | ATM Program | Jun 2023 - Jan 2024 | $59.4 million | | Underwritten Direct Offering | Jan 2024 | $231.9 million | | Underwritten Direct Offering | Apr 2025 | $188.0 million | - There has been no material change in the use of proceeds from these offerings; funds were invested in interest-bearing, investment-grade securities[493][495][497][499][501] Item 3. Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[501] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not applicable[502] Item 5. Other Information No directors or officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the last fiscal quarter - No directors or officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the last fiscal quarter[503] Item 6. Exhibits This section lists exhibits filed with the quarterly report, including director compensation policy, officer certifications, and XBRL data files - The report includes several exhibits, such as officer certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents[507]