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Item 7. Management’s Discussion and Analysis

2026-02-26 compared with 2025-03-03 · 54 added, 47 removed, 190 unchanged (35% of the section changed)

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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 Annual Report on Form 10-K.

should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this Annual Report on Form 10-K (Annual Report).

Discussion of our financial condition and results of operations for the fiscal year ended December 31, 2024 compared to the fiscal year ended December 31, 2023 is included in Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 3, 2025.

In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions.

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Since our inception in 2017, our precision medicine muscle platform has generated several programs to address a variety of muscle diseases.

We are advancing two clinical-stage programs in muscular dystrophies, severe cardiac diseases, and a number of preclinical programs.

Our muscular dystrophy program includes sevasemten, an orally administered skeletal myosin inhibitor.

Sevasemten is currently being studied in multiple Phase 2 clinical trials, including a pivotal cohort, in patients with either Becker muscular dystrophy (Becker) or Duchenne muscular dystrophy (Duchenne).

Our cardiovascular program includes EDG-7500, a novel, oral, selective cardiac sarcomere modulator.

We are advancing multiple clinical-stage programs in muscular dystrophies and severe cardiac diseases, as well as a number of preclinical programs.

Our muscular dystrophy program includes sevasemten, an orally administered allosteric, selective, fast myofiber (type II) myosin small molecule inhibitor designed to address contraction-induced muscle injury and is currently being studied in multiple late-stage clinical trials in Becker muscular dystrophy (Becker) and Duchenne muscular dystrophy (Duchenne), including an ongoing pivotal cohort trial in patients with Becker.

Our cardiovascular program includes novel, oral, selective cardiac sarcomere modulators EDG-7500 and EDG-15400.

EDG-7500 is currently being studied in a multipart Phase 2 trial in both obstructive and non-obstructive hypertrophic cardiomyopathy (HCM).

EDG-15400 is currently in a Phase 1 trial of healthy adults with the future disease target of heart failure with preserved ejection fraction (HFpEF).

We are also continuing to advance our preclinical exploration, including 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.

The entire team at Edgewise is dedicated to our mission:

changing the lives of patients and families affected by serious muscle diseases.

As a late-stage clinical 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.

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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 December 31, 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.

From inception to our initial public offering, private placements provided gross proceeds of $160.7 million, and as of December 31, 2025, we generated net proceeds from our initial public offering, follow-on public offering, issuance of our common stock under an “at the market offering” program (the ATM Program), and the January 2024 and April 2025 underwritten registered direct offerings of $793.7 million.

We believe that our existing cash and cash equivalents and marketable securities of $530.1 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 change in the U.S.

presidential administration, international conflicts, public health pandemics, cybersecurity and sanctions so that the Company can be prepared to react to new developments as they arise.

We are monitoring macroeconomic and geopolitical developments, such as inflation, instability in the banking and financial services sector, tightening of the credit markets, changes in the U.S.

government administration and policy positions, international conflicts, public health pandemics, cybersecurity, sanctions, and changes in tariffs, and evaluating potential impacts on our operations, clinical development timelines, supply chain continuity and capital markets access.

The extent, severity, and duration of the impacts of these events and conditions on our business, operations and research and development timelines and plans cannot be predicted and will depend on numerous factors.

For more information regarding the risks related to macroeconomic and geopolitical developments, see the section titled “Risk Factors” found elsewhere in this Annual Report.

Components of Our Results of Operations

Operating expenses

Operating expenses primarily consist of research and development activities and general and administrative functions that support our clinical programs and corporate infrastructure.

Research and development expenses

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The majority of these expenses have been incurred to advance our lead product candidates, sevasemten and 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.

We expect that significant additional spending will be required to progress these, EDG-15400, and other potential discoveries through later-stage clinical development phases and potentially registrational activities.

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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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 with sevasemten for people with muscular dystrophy (CANYON, LYNX, FOX and DUNE), including a potentially registrational, or pivotal cohort, in individuals with Becker (GRAND CANYON) as part of the CANYON trial, and a multipart Phase 2 trial with EDG-7500 for people with HCM (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;

We are currently conducting three Phase 2 clinical trials with sevasemten for people with muscular dystrophy (LYNX, FOX, and GRAND CANYON, a potentially registrational, or pivotal cohort, in individuals with Becker as part of the CANYON trial), a multipart Phase 2 trial with EDG-7500 for people with HCM (CIRRUS-HCM), and a Phase 1 trial with EDG-15400 of healthy adults with the future disease target of HFpEF.

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, EDG-15400, and candidates from our EDG-003 cardiometabolic discovery program through clinical trials and additional product candidates;

continue to develop our proprietary drug discovery platform;

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Any changes in the outcome of any of these factors could significantly impact the costs and timing associated with the development of our product candidates.

We may also adjust program prioritization or resource allocation based on emerging clinical data, regulatory feedback or capital availability.

General and administrative expenses

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General and administrative expenses also include facilities and other expenses, which include direct or allocated expenses for rent and maintenance of facilities and insurance, not otherwise included in research and development expenses, as well as professional fees for legal, patent, consulting, investor and public relations, accounting and audit services.

We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support the continued research and development of our programs.

We continue to expand our administrative infrastructure to support the growth of our clinical programs and public company operations.

We anticipate that our general and administrative expenses will increase in the future as we scale our organization to support clinical advancement, regulatory readiness, and future commercial planning activities.

Interest income

Interest income primarily consists of interest income generated from our cash, cash equivalents and marketable securities.

Interest income may fluctuate in future periods based on cash deployment and prevailing market conditions.

Results of Operations

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Total operating expenses

Loss from operations

Interest income

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EDG-7500 clinical program

EDG-15400 clinical program

Discovery and preclinical

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The increase of $24.4 million was attributed to the following:

● an increase of $16.8 million in sevasemten clinical program expenses which was primarily due a $10.9 million increase in our GRAND CANYON cohort, a $4.0 million increase in our FOX trial, a $2.4 million increase in our MESA trial, and a $2.2 million increase in our LYNX trial related to site activation and patient enrollment as the trials were in startup phases in the third and fourth quarter of 2023.

These increases were partially offset by a $2.2 million decrease in our CANYON trial, which was completed in October 2024 vs.

full-year activity in 2023 and a $0.5 million decrease in other development activity;

● an increase in EDG-7500 clinical program expenses of $8.9 million primarily due to the activation of our Phase 2 CIRRUS-HCM trial in 2024 incurring costs of $4.4 million related to manufacturing, site activation, and patient enrollment, a $2.1 million increase in clinical trial expenses related to our Phase 1 trial that was activated in late 2023 and completed in 2024, and a $2.5 million increase in other Phase 1 trial costs, nonclinical costs, and other development costs;

● an increase of $13.4 million in internal costs, primarily related to an $8.3 million increase in personnel costs for salaries, benefits, and employee expenses resulting from increased employee headcount to support the growth of our research and development programs, a $3.9 million increase in stock-based compensation

related to increased headcount and overall higher stock prices driving increased option fair values, and a $1.2 million increase related to depreciation and other facilities costs.

● an increase in sevasemten clinical program expenses of $0.8 million which was primarily related to a $3.7 million increase in clinical activity in the MESA trial due to the rollover of substantially all patients from the CANYON, ARCH, and DUNE trials, and patients from the GRAND CANYON pivotal cohort beginning in April 2025, $2.6 million in additional clinical program expenses in GRAND CANYON compared to the same period in 2024 due to fully enrolling the pivotal cohort in February 2025, and $0.8 million in other program and clinical development expenses.

This was offset by a $6.3 million decrease in the CANYON and ARCH trials that were completed in 2024 and the DUNE trial that was completed in 2025 ;

● an increase in EDG-7500 clinical program expenses of $0.5 million primarily related to an increase of $4.3 million from pharmacokinetic studies and an increase of $3.4 million from continued patient activity for Part B and Part C and site activation and completion of patient enrollment of Part D of our multipart Phase 2 CIRRUS-HCM trial, for which Part A was active and Part B and Part C were enrolling in the comparable period in 2024.

This was offset by a decrease of $7.2 million in expenses caused by the completion of our Phase 1 trial and a drug interaction study in 2024 for which there was no significant comparable activity in 2025;

● an increase in EDG-15400 clinical program expenses of $7.6 million which are now shown separately in the above table due to advancing into a Phase 1 trial in the third quarter of 2025.

These expenses include clinical trial and nonclinical costs, as well as manufacturing costs to support current and future trials;

● an increase in internal costs of $16.7 million, primarily related to personnel-related costs, including stock-based compensation, resulting from increased employee headcount to support the growth of our research and development programs.

Partially offset by:

● a decrease in discovery and preclinical expenses of $3.1 million due to costs incurred in 2023 related to EDG-7500 development prior to entering clinical trials, which were a significant portion of the first nine months of 2023’s discovery and preclinical expenses, now shown separately.

The decrease related to EDG-7500 advancing to clinical development was offset with increases in other costs from our development efforts in our EDG-003 program .

● a decrease in discovery and preclinical expenses of $1.2 million primarily driven by a decrease in EDG-15400 related costs, now shown separately, which were a significant portion of the discovery and preclinical expenses in the comparable period in 2024, offset by additional nonclinical costs related to our EDG-003 cardiometabolic program.

General and administrative expenses

General and administrative expenses were $31.9 million for the year ended December 31, 2024 compared to $23.5 million for the year ended December 31, 2023.

The increase of $8.4 million was primarily related to $2.9 million in increased personnel-related costs from increased headcount, including a $3.2 million increase in stock-based compensation, to support our growing research and development efforts and $2.8 million in increased professional and consulting costs and other administrative costs which was partially offset by a $0.5 million decrease in directors’ and officers’ insurance.

General and administrative expenses were $40.0 million and $31.9 million for the years ended December 31, 2025 and 2024, respectively.

The increase of approximately $8.2 million was primarily due to $6.6 million in increased personnel-related costs, including stock-based compensation, from increased headcount and $1.6 million in increased professional and consulting costs and other administrative costs.

Interest income

Interest income was $23.6 million and $25.0 million for the years ended December 31, 2025 and 2024, respectively.

The increase of $10.8 million was primarily due to higher balances for our marketable securities and higher interest rates.

The decrease of $1.4 million was primarily due to lower average treasury yields during the twelve months ended December 31, 2025 as compared to the twelve months ended December 31, 2024, driven by decreases in market interest rates, partially offset by higher average securities balances during the twelve months ended December 31, 2025.

Liquidity and Capital Resources

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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 December 31, 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 the ATM Program, and underwritten registered direct offering have generated net proceeds of $606.6 million.

From inception to our initial public offering, private placements provided gross proceeds of $160.7 million, and, as of December 31, 2025, we generated net proceeds from our initial public offering, follow-on public offering, issuance of our common stock under the ATM Program, and the January 2024 and April 2025 underwritten registered direct offerings of $793.7 million.

As of December 31, 2025, we had cash, cash equivalents and marketable securities in the amount of $530.1 million.

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Net cash used in operating activities

Net cash (used in) provided by investing activities

Net cash used in investing activities

Net cash provided by financing activities

Net (decrease) increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Operating activities

Cash used in operating activities in the year ended December 31, 2024 was $109.0 million primarily driven by our net loss for the period of $133.8 million, and was also impacted by changes in operating assets and liabilities which

decreased net working capital by $10.3 million.

Cash used in operating activities was reduced by non-cash charges of $14.5 million related to stock-based compensation expense of $24.7 million, depreciation of $2.1 million, and amortization of right-of-use asset of $0.2 million, partially offset by accretion of discounts on marketable securities of $12.5 million.

Cash used in operating activities in the year ended December 31, 2025 was $143.8 million primarily driven by our net loss for the period of $167.8 million, and was also impacted by changes in operating assets and liabilities which increased net working capital by $5.4 million.

Cash used in operating activities was reduced by non-cash charges of $9.8 million related to stock-based compensation expense of $17.6 million, depreciation of $1.6 million, and amortization of right-of-use asset of $0.2 million, partially offset by amortization of premium and accretion of discounts, net on marketable securities of $9.5 million.

Cash used in operating activities was reduced by non-cash charges of $29.4 million related to stock-based compensation expense of $34.8 million, depreciation of $2.1 million, and amortization of right-of-use asset of $0.2 million, partially offset by accretion of discounts on marketable securities of $7.7 million.

Investing activities

Cash used in investing activities during the year ended December 31, 2025 amounted to $32.8 million which was due to $527.2 million in purchases of marketable securities and $0.3 million for leasehold improvements and the purchase of equipment, which was partially offset by $427.3 million in maturities of marketable securities and $67.4 million in sales of marketable securities.

Cash used in investing activities during the year ended December 31, 2024 amounted to $184.7 million which was due to $477.1 million in purchases of marketable securities and $1.3 million for leasehold improvements for our new facility and the purchase of equipment, which was partially offset by $277.9 million in maturities of marketable securities and $15.8 million in sales of marketable securities.

Cash provided by investing activities during the year ended December 31, 2023 amounted to $102.9 million which was due to $255.9 million in purchases of marketable securities and $5.7 million for leasehold improvements for our new facility and the purchase of equipment, which was partially offset by $344.4 million in maturities of marketable securities and $20.1 million in sales of marketable securities.

Financing activities

Cash provided by financing activities during the year ended December 31, 2024 was $249.3 million, which was due to $239.1 million in net proceeds from the issuance of common stock during the year (consisting of $232.1 million from the underwritten registered direct offering and $7.0 million from the ATM Program), cash proceeds of $9.5 million from the issuance of common stock upon the exercise of stock options, and $0.9 million in proceeds from the employee stock purchase plan, which was offset by $0.3 million for the payment of deferred offering costs.

Cash provided by financing activities during the year ended December 31, 2023 was $53.2 million, which was due to $52.6 million in net proceeds from the ATM Program, cash proceeds $0.6 million in proceeds from the employee stock purchase plan and $0.1 million from the issuance of common stock upon the exercise of stock options, which was offset by $0.2 million for the payment of deferred offering costs.

Cash provided by financing activities during the year ended December 31, 2025 was $196.1 million, due to cash proceeds of $200.0 million from the April 2025 underwritten registered direct offering, cash proceeds of $7.8 million from the issuance of common stock upon the exercise of stock options, and $0.9 million in proceeds from the employee stock purchase plan, which was partially offset by $12.6 million for the payment of underwriting discounts and commissions and offering costs.

Cash provided by financing activities during the year ended December 31, 2024 was $249.3 million, which was due to $239.1 million in net proceeds from the issuance of common stock during the year (consisting of $232.1 million from the January 2024 underwritten registered direct offering and $7.0 million from the ATM Program), cash proceeds of $9.5 million from the issuance of common stock upon the exercise of stock options, and $0.9 million in proceeds from the employee stock purchase plan, which was offset by $0.3 million for the payment of deferred offering costs.

Funding requirements

We will continue to require substantial additional capital to develop our product candidates and fund operations for the foreseeable future.

On May 10, 2024, we filed an automatic shelf registration statement on Form S-3ASR that allows us to undertake various equity and debt offerings and entered into the 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 the Leerink ATM.

On May 10, 2024, we filed an automatic shelf registration statement on Form S-3ASR that allows us to undertake various equity and debt offerings and entered into the Leerink Sales Agreement under which we may offer and sell shares of common stock, having aggregate sales proceeds of up to $175.0 million from time to time, through the Leerink ATM.

We expect our expenses to increase in connection with our ongoing activities, particularly as we continue the development of and seek regulatory approvals for our product candidates and begin to commercialize any approved products.

We are subject to all of the risks incident in the development of new products, and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may harm our business.

In addition, we expect to continue to incur additional costs associated with operating as a public company.

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In January 2022, we entered into a lease agreement for approximately 18,614 square feet of office and laboratory space in Boulder, Colorado which includes escalating rent payments and an 8.2 year term, plus our share of operating expenses.

In February 2023, the lease was modified to occupy an additional 9,624 square feet of office space, with aggregate payments of approximately $1.5 million over the initial 7.3 year term, plus our share of operating expenses.

In February 2023,

the lease was modified to occupy an additional 9,624 square feet of office space, with aggregate payments of approximately $1.5 million over the initial 7.3 year term, plus our share of operating expenses.

As of December 31, 2025, our total operating lease liability balance is $4.0 million, of which $1.0 million is a current liability.

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We believe that the accounting policies discussed below are critical to understanding our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

While our significant accounting policies are described in the notes to our financial statements appearing elsewhere in this Annual Report, we believe that the following critical accounting policies are most important to understanding and evaluating our reported financial results.

While our significant accounting policies are described in the notes to our financial statements appearing elsewhere in this Annual Report, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.

Accrued research and development expenses

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If the actual timing of the performance of services or the level of effort varies from the estimate, we adjust the accrual or the amount of prepaid expenses accordingly.

Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low in any particular period.

performed may vary and may result in reporting amounts that are too high or too low in any particular period.

To date, there have not been any material adjustments to our prior estimates of accrued research and development expenses.

Recently Issued Accounting Pronouncements

Refer to Note 2, “Summary of Significant Accounting Policies,” in the accompanying notes to the consolidated financial statements for a discussion of recent accounting pronouncements that were adopted in 2024.

Refer to Note 2, “Summary of Significant Accounting Policies,” in the accompanying notes to the financial statements for a discussion of recent accounting pronouncements that were adopted in 2025.

Transition from Emerging Growth Company and Smaller Reporting Company Status

On December 31, 2024, we ceased to be an “emerging growth company” (EGC), as defined in the JOBS Act, due to our large accelerated filer status.

On December 31, 2024, we ceased to be an “emerging growth company,” as defined in the JOBS Act, due to our large accelerated filer status.

Accordingly, we may no longer take advantage of EGC-related reduced reporting requirements that are otherwise applicable to public companies.

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EGC status also exempted us from having to provide an auditor attestation of internal control over financial reporting under Sarbanes-Oxley Act Section 404(b).

On December 31, 2024, we also ceased to be a “smaller reporting company” because the market value of our stock held by non-affiliates plus the aggregate amount of gross proceeds to us as a result of our initial public offering exceeded $700 million as of June 30, 2024.

However, we are complying with certain scaled disclosure requirements available to smaller reporting companies in this Annual Report (including, for example, presenting only the two most recent fiscal years of audited consolidated financial statements), which we are permitted to do under SEC rules because we were a smaller reporting company in 2024.

As a result, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests.

Due to the loss of EGC and smaller reporting company status, we expect our public company compliance costs to increase.

On December 31, 2024, we also ceased to be a “smaller reporting company,” as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (Exchange Act), because the market value of our common stock held by non-affiliates exceeded $700 million as of June 30, 2024.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis