0001558370-21-015395.txt : 20211110 0001558370-21-015395.hdr.sgml : 20211110 20211110080108 ACCESSION NUMBER: 0001558370-21-015395 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 48 CONFORMED PERIOD OF REPORT: 20210930 FILED AS OF DATE: 20211110 DATE AS OF CHANGE: 20211110 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Edgewise Therapeutics, Inc. CENTRAL INDEX KEY: 0001710072 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 821725586 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-40236 FILM NUMBER: 211394483 BUSINESS ADDRESS: STREET 1: 3415 COLORADO AVE. CITY: BOULDER STATE: CO ZIP: 80303 BUSINESS PHONE: 303-735-8373 MAIL ADDRESS: STREET 1: 3415 COLORADO AVE. CITY: BOULDER STATE: CO ZIP: 80303 10-Q 1 ewtx-20210930x10q.htm 10-Q
0001710072--12-312021Q3falseP3Y0012954423065276540.000107888392081871000.528001009479492958400001710072ewtx:ConvertiblePreferredStocksMember2020-07-012020-09-300001710072ewtx:SeriesCConvertiblePreferredStockMember2021-09-300001710072ewtx:SeriesB1ConvertiblePreferredStockMember2021-09-300001710072ewtx:SeriesaConvertiblePreferredStockMember2021-09-300001710072ewtx:SeriesCConvertiblePreferredStockMemberewtx:ConvertiblePreferredStocksMember2020-12-310001710072ewtx:SeriesB2ConvertiblePreferredStockMemberewtx:ConvertiblePreferredStocksMember2020-12-310001710072ewtx:SeriesB1ConvertiblePreferredStockMemberewtx:ConvertiblePreferredStocksMember2020-12-310001710072ewtx:SeriesaConvertiblePreferredStockMemberewtx:ConvertiblePreferredStocksMember2020-12-310001710072ewtx:SeriesB2ConvertiblePreferredStockMemberewtx:ConvertiblePreferredStocksMember2020-09-300001710072ewtx:SeriesB1ConvertiblePreferredStockMemberewtx:ConvertiblePreferredStocksMember2020-09-300001710072ewtx:SeriesaConvertiblePreferredStockMemberewtx:ConvertiblePreferredStocksMember2020-09-300001710072ewtx:ConvertiblePreferredStocksMember2020-09-300001710072ewtx:SeriesB1ConvertiblePreferredStockMemberewtx:ConvertiblePreferredStocksMember2020-06-300001710072ewtx:SeriesaConvertiblePreferredStockMemberewtx:ConvertiblePreferredStocksMember2020-06-300001710072ewtx:ConvertiblePreferredStocksMember2020-06-300001710072ewtx:SeriesB1ConvertiblePreferredStockMemberewtx:ConvertiblePreferredStocksMember2020-03-310001710072ewtx:SeriesaConvertiblePreferredStockMemberewtx:ConvertiblePreferredStocksMember2020-03-310001710072ewtx:ConvertiblePreferredStocksMember2020-03-310001710072ewtx:SeriesB1ConvertiblePreferredStockMemberewtx:ConvertiblePreferredStocksMember2019-12-310001710072ewtx:SeriesaConvertiblePreferredStockMemberewtx:ConvertiblePreferredStocksMember2019-12-310001710072ewtx:ConvertiblePreferredStocksMember2019-12-310001710072ewtx:SeriesCConvertiblePreferredStockMember2020-12-310001710072ewtx:SeriesB2ConvertiblePreferredStockMember2020-12-310001710072ewtx:SeriesB1ConvertiblePreferredStockMember2020-12-310001710072ewtx:SeriesaConvertiblePreferredStockMember2020-12-310001710072ewtx:ConvertiblePreferredStocksMember2021-01-012021-03-310001710072us-gaap:CommonStockMember2021-07-012021-09-300001710072us-gaap:CommonStockMember2021-04-012021-06-300001710072ewtx:FounderStockOptionsMember2021-01-012021-09-300001710072us-gaap:CommonStockMember2020-07-012020-09-300001710072us-gaap:CommonStockMember2020-04-012020-06-300001710072us-gaap:CommonStockMember2020-01-012020-03-310001710072us-gaap:OverAllotmentOptionMember2021-03-302021-03-300001710072ewtx:SeriesCConvertiblePreferredStockMemberewtx:ConvertiblePreferredStocksMember2021-01-012021-03-310001710072ewtx:SeriesB2ConvertiblePreferredStockMemberewtx:ConvertiblePreferredStocksMember2021-01-012021-03-310001710072ewtx:SeriesB1ConvertiblePreferredStockMemberewtx:ConvertiblePreferredStocksMember2021-01-012021-03-310001710072ewtx:SeriesaConvertiblePreferredStockMemberewtx:ConvertiblePreferredStocksMember2021-01-012021-03-310001710072us-gaap:CommonStockMember2021-01-012021-03-310001710072us-gaap:IPOMember2021-03-192021-03-190001710072us-gaap:RetainedEarningsMember2021-09-300001710072us-gaap:AdditionalPaidInCapitalMember2021-09-300001710072us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-300001710072us-gaap:RetainedEarningsMember2021-06-300001710072us-gaap:AdditionalPaidInCapitalMember2021-06-300001710072us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-3000017100722021-06-300001710072us-gaap:RetainedEarningsMember2021-03-310001710072us-gaap:AdditionalPaidInCapitalMember2021-03-310001710072us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-3100017100722021-03-310001710072us-gaap:RetainedEarningsMember2020-12-310001710072us-gaap:AdditionalPaidInCapitalMember2020-12-310001710072ewtx:ConvertiblePreferredStocksMember2020-12-310001710072us-gaap:RetainedEarningsMember2020-09-300001710072us-gaap:AdditionalPaidInCapitalMember2020-09-300001710072us-gaap:RetainedEarningsMember2020-06-300001710072us-gaap:AdditionalPaidInCapitalMember2020-06-3000017100722020-06-300001710072us-gaap:RetainedEarningsMember2020-03-310001710072us-gaap:AdditionalPaidInCapitalMember2020-03-3100017100722020-03-310001710072us-gaap:RetainedEarningsMember2019-12-310001710072us-gaap:AdditionalPaidInCapitalMember2019-12-310001710072ewtx:SeriesCConvertiblePreferredStockMember2020-12-030001710072us-gaap:IPOMember2021-03-300001710072ewtx:TwoThousandTwentyOneEquityIncentivePlanMember2021-01-012021-09-300001710072ewtx:FounderStockOptionsMember2017-09-190001710072ewtx:TwoThousandSeventeenEquityIncentivePlanMember2021-09-300001710072ewtx:FounderStockOptionsMember2021-09-300001710072ewtx:TwoThousandSeventeenEquityIncentivePlanMember2021-01-012021-09-300001710072ewtx:TwoThousandTwentyOneEquityIncentivePlanMember2021-03-012021-03-310001710072ewtx:FounderStockOptionsMember2017-09-192017-09-190001710072srt:MinimumMember2021-01-012021-09-300001710072srt:MaximumMember2021-01-012021-09-300001710072ewtx:SeriesCConvertiblePreferredStockMember2020-12-032020-12-030001710072us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300001710072us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-300001710072us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001710072us-gaap:RetainedEarningsMember2021-07-012021-09-300001710072us-gaap:RetainedEarningsMember2021-04-012021-06-300001710072us-gaap:RetainedEarningsMember2021-01-012021-03-310001710072us-gaap:RetainedEarningsMember2020-07-012020-09-300001710072us-gaap:RetainedEarningsMember2020-04-012020-06-300001710072us-gaap:RetainedEarningsMember2020-01-012020-03-310001710072us-gaap:OtherNoncurrentAssetsMember2021-09-300001710072us-gaap:OtherNoncurrentAssetsMember2020-12-310001710072ewtx:SeriesB2ConvertiblePreferredStockMember2021-09-300001710072us-gaap:ConvertiblePreferredStockMemberus-gaap:IPOMember2021-03-302021-03-300001710072ewtx:SeriesaAndSeriesB1ConvertiblePreferredStockMember2021-01-012021-09-300001710072us-gaap:CommonStockMember2021-09-300001710072us-gaap:CommonStockMember2021-06-300001710072us-gaap:CommonStockMember2021-03-310001710072us-gaap:ConvertiblePreferredStockMemberus-gaap:IPOMember2021-03-300001710072us-gaap:CommonStockMember2020-12-310001710072us-gaap:CommonStockMember2020-09-300001710072us-gaap:CommonStockMember2020-06-300001710072us-gaap:CommonStockMember2020-03-310001710072us-gaap:CommonStockMember2019-12-310001710072us-gaap:EmployeeStockOptionMemberewtx:TwoThousandTwentyOneEquityIncentivePlanMember2021-09-300001710072ewtx:EmployeesDirectorsAndConsultantsMemberewtx:TwoThousandTwentyOneEquityIncentivePlanMember2021-09-300001710072ewtx:TwoThousandTwentyOneEquityIncentivePlanMember2021-09-300001710072us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2021-09-300001710072us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:MoneyMarketFundsMember2020-12-3100017100722020-09-3000017100722019-12-310001710072us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:SovereignDebtSecuritiesMember2021-01-012021-09-300001710072us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2021-01-012021-09-300001710072us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2021-01-012021-09-300001710072us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2021-01-012021-09-300001710072us-gaap:FairValueMeasurementsRecurringMember2021-01-012021-09-300001710072us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:USTreasurySecuritiesMember2021-09-300001710072us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:SovereignDebtSecuritiesMember2021-09-300001710072us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2021-09-300001710072us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2021-09-300001710072us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2021-09-300001710072us-gaap:FairValueMeasurementsRecurringMember2021-09-300001710072us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CorporateDebtSecuritiesMember2020-12-310001710072us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:CommercialPaperMember2020-12-310001710072us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMemberus-gaap:AssetBackedSecuritiesMember2020-12-310001710072us-gaap:FairValueMeasurementsRecurringMember2020-12-310001710072us-gaap:EmployeeStockOptionMember2021-07-012021-09-300001710072us-gaap:EmployeeStockOptionMember2021-01-012021-09-300001710072us-gaap:ConvertiblePreferredStockMember2021-01-012021-09-300001710072us-gaap:EmployeeStockOptionMember2020-07-012020-09-300001710072us-gaap:ConvertiblePreferredStockMember2020-07-012020-09-300001710072us-gaap:EmployeeStockOptionMember2020-01-012020-09-300001710072us-gaap:ConvertiblePreferredStockMember2020-01-012020-09-300001710072us-gaap:ResearchAndDevelopmentExpenseMember2021-07-012021-09-300001710072us-gaap:GeneralAndAdministrativeExpenseMember2021-07-012021-09-300001710072us-gaap:ResearchAndDevelopmentExpenseMember2021-01-012021-09-300001710072us-gaap:GeneralAndAdministrativeExpenseMember2021-01-012021-09-300001710072us-gaap:ResearchAndDevelopmentExpenseMember2020-07-012020-09-300001710072us-gaap:GeneralAndAdministrativeExpenseMember2020-07-012020-09-300001710072us-gaap:ResearchAndDevelopmentExpenseMember2020-01-012020-09-300001710072us-gaap:GeneralAndAdministrativeExpenseMember2020-01-012020-09-3000017100722020-01-012020-09-300001710072us-gaap:CommonStockMember2021-01-012021-03-310001710072ewtx:SeriesB2ConvertiblePreferredStockMember2020-07-012020-09-300001710072us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-3000017100722021-07-012021-09-300001710072us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-3000017100722021-04-012021-06-300001710072us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-3100017100722021-01-012021-03-310001710072us-gaap:AdditionalPaidInCapitalMember2020-07-012020-09-3000017100722020-07-012020-09-300001710072us-gaap:AdditionalPaidInCapitalMember2020-04-012020-06-3000017100722020-04-012020-06-300001710072us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-3100017100722020-01-012020-03-310001710072us-gaap:IPOMember2021-03-302021-03-300001710072ewtx:SeriesB2ConvertiblePreferredStockMember2021-01-012021-09-300001710072ewtx:SeriesB2ConvertiblePreferredStockMemberewtx:ConvertiblePreferredStocksMember2020-07-012020-09-300001710072srt:MinimumMemberewtx:TwoThousandTwentyOneEquityIncentivePlanMember2021-01-012021-09-300001710072ewtx:LicenseAgreementsWithOhioStateInnovationFoundationMember2020-11-2000017100722021-09-3000017100722020-12-3100017100722021-10-3100017100722021-01-012021-09-30xbrli:sharesiso4217:USDewtx:Voteiso4217:USDxbrli:sharesewtx:segmentxbrli:pure

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 September 30, 2021

or

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 Number)

3415 Colorado Ave.

Boulder, CO 80303

(Address of Principal Executive Offices)

(303) 735-8373

(Registrant’s telephone number)

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

Title of Each Class

Trading Symbol

Name of 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 October 31, 2021, there were 49,295,840 of the registrant’s ordinary shares outstanding.

TABLE OF CONTENTS

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 Convertible Preferred Stock and Stockholders’ Equity (Deficit)

8

Condensed Statements of Cash Flows

10

Notes to Condensed Financial Statements

11

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

21

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

31

Item 4.

Controls and Procedures

32

Part II

Other Information

33

Item 1.

Legal Proceedings

33

Item 1A.

Risk Factors

33

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

97

Item 3.

Defaults Upon Senior Securities

97

Item 4.

Mine Safety Disclosures

97

Item 5.

Other Information

97

Item 6.

Exhibits

97

Signatures

99

2

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or 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”, “should”, “expects”, “intends”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “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 ability of our preclinical studies and planned clinical trials to demonstrate 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 disorders;

• the timing, progress and results of preclinical studies and clinical trials for EDG-5506, product candidates in our EDG-6289, EDG-002 and EDG-003 programs, 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, and our research and development programs;

• the timing, scope and likelihood of regulatory filings and approvals, including timing of INDs and final FDA approval of EDG-5506, product candidates in our EDG-6289, EDG-002 and EDG-003 programs and any other future product candidates;

• the timing, scope or likelihood of foreign regulatory filings and approvals;

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

• our manufacturing, commercialization, and marketing capabilities and strategy;

• 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 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;

• our ability to obtain and maintain regulatory approval of our product candidates;

3

• 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 the COVID-19 pandemic on our business;


our intellectual property position, including the scope of protection we are able to establish and maintain for intellectual property rights covering EDG-5506, product candidates in our EDG-6289, EDG-002 and EDG-003 programs, 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 EDG-5506, product candidates in our EDG-6289, EDG-002 and EDG-003 programs, and other product candidates we may develop, if approved;

• the rate and degree of market acceptance and clinical utility of EDG-5506, product candidates in our EDG-6289, EDG-002 and EDG-003 programs, and other product candidates we may develop;

• our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

• our financial performance;

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

• the impact of laws and regulations; and

• 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

4

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.

5

PART I —FINANCIAL INFORMATION

Item 1. Financial Statements

EDGEWISE THERAPEUTICS, INC.

Condensed Balance Sheets

(In thousands, except per share data)

As of

As of

September 30, 

December 31, 

Assets

    

2021

2020

(Unaudited)

Current assets

 

  

  

Cash and cash equivalents

$

10,571

$

104,916

Marketable securities, available for sale

 

279,913

 

24,178

Prepaid expenses and other assets

 

2,758

 

551

Total current assets

 

293,242

 

129,645

Property and equipment

 

1,535

 

946

Less: accumulated depreciation

 

(624)

 

(430)

Total property and equipment

 

911

 

516

Other non-current assets

 

295

 

975

Total assets

$

294,448

$

131,136

Liabilities, convertible preferred stock, and stockholders' equity (deficit)

 

  

 

  

Current liabilities

 

  

 

  

Accounts payable

$

2,292

$

1,580

Accrued compensation

 

2,030

 

1,175

Accrued other expenses

 

4,432

 

1,587

Total current liabilities

 

8,754

 

4,342

Other long term liabilities

295

Total liabilities

 

9,049

 

4,342

Commitments and contingencies (see note 5)

 

  

 

Convertible preferred stock

 

  

 

  

Series A preferred stock, $.0001 par value, no shares and 15,500,000 shares authorized, no shares and 8,187,100 shares issued and outstanding with an aggregate liquidation preference of $0 and $15,500 as of September 30, 2021 and December 31, 2020, respectively

 

 

15,484

Series B-1 preferred stock, $.0001 par value, no shares and 14,934,484 shares authorized, no shares and 7,888,392 issued and outstanding with an aggregate liquidation preference of $0 and $25,075 as of September 30, 2021 and December 31, 2020, respectively

 

 

24,778

Series B-2 preferred stock, $.0001 par value, no shares and 12,358,305 shares authorized, no shares and 6,527,654 shares issued and outstanding with an aggregate liquidation preference of $0 and $25,075 as of September 30, 2021 and December 31, 2020, respectively

 

 

25,056

Series C preferred stock, $.0001 par value, no shares and 24,525,629 shares authorized, no shares and 12,954,423 shares issued and outstanding with aggregate liquidation preference of $0 and $95,000 as of September 30, 2021 and December 31, 2020, respectively

 

 

94,896

Total convertible preferred stock

 

 

160,214

Stockholders' equity (deficit)

 

  

 

  

Preferred stock, $.0001 par value per share; 200,000,000 shares and no shares authorized as of September 30, 2021 and December 31, 2020, respectively; no shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

Common stock, $.0001 par value per share; 1,000,000,000 shares and 88,000,000 shares authorized, 49,295,840 shares and 1,009,479 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

 

5

 

Additional paid-in capital

 

349,682

 

727

Accumulated other comprehensive loss

(24)

Accumulated deficit

 

(64,264)

 

(34,147)

Total stockholders' equity (deficit)

 

285,399

 

(33,420)

Total liabilities, convertible preferred stock and stockholders' equity (deficit)

$

294,448

$

131,136

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

6

EDGEWISE THERAPEUTICS, INC.

Condensed Statements of Operations and Comprehensive Loss

(In thousands, except per share data)

(Unaudited)

Three months ended September 30, 

Nine months ended September 30, 

    

2021

    

2020

    

2021

    

2020

Operating expenses

 

  

  

  

 

  

Research and development

$

9,880

$

3,238

$

23,101

$

9,844

General and administrative

 

3,196

 

405

 

7,292

 

1,004

Total operating expenses

 

13,076

 

3,643

 

30,393

 

10,848

Loss from operations

 

(13,076)

 

(3,643)

 

(30,393)

 

(10,848)

Other income

 

  

 

  

 

  

 

  

Interest income

 

127

 

1

 

276

 

67

Total other income

 

127

 

1

 

276

 

67

Net loss

(12,949)

(3,642)

(30,117)

(10,781)

Other comprehensive income (loss):

Unrealized gain (loss) on available-for-sale securities

9

(24)

Total comprehensive loss

$

(12,940)

$

(3,642)

$

(30,141)

$

(10,781)

Net loss per share, basic and diluted

$

(0.26)

$

(3.68)

$

(0.90)

$

(16.62)

Weighted-average shares outstanding, basic and diluted

 

49,264,938

 

989,203

 

33,535,829

 

648,611

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

7

EDGEWISE THERAPEUTICS, INC.

Condensed Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(In thousands, except share data)

(Unaudited)

Series A

Series B-1

Series B-2

Series C

Accumulated

Convertible

Convertible

Convertible

Convertible

Convertible

Other

Preferred Stock

Preferred Stock

Preferred Stock

Preferred Stock

Preferred Stock

Common Stock

Additional

Comprehensive

Accumulated

  

Shares

  

Amount

  

Shares

  

Amount

  

Shares

  

Amount

  

Shares

  

Amount

  

Total

 

 

Shares

  

Amount

  

Paid-In Capital

  

(Loss) Income

  

Deficit

  

Total

Balance as of December 31, 2020

8,187,100

$

15,484

7,888,392

$

24,778

6,527,654

$

25,056

12,954,423

$

94,896

$

160,214

1,009,479

$

$

727

$

$

(34,147)

$

(33,420)

Convertible preferred stock converted into shares of common stock

 

(8,187,100)

 

(15,484)

 

(7,888,392)

 

(24,778)

 

(6,527,654)

 

(25,056)

 

(12,954,423)

 

(94,896)

 

(160,214)

 

35,557,569

 

4

 

160,210

 

 

160,214

Initial public offering of common stock, net of $16.3 million in issuance costs

 

 

 

 

 

 

 

 

 

 

12,650,000

 

1

 

186,147

 

 

186,148

Exercise of stock options

 

 

 

 

 

 

 

 

 

 

37,263

 

 

25

 

 

25

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

296

 

 

296

Other comprehensive loss

 

 

 

 

 

 

 

 

 

 

(54)

(54)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(6,815)

 

(6,815)

Balance as of March 31, 2021

 

 

 

 

 

49,254,311

5

347,405

(54)

(40,962)

306,394

Exercise of stock options

 

 

 

 

 

 

 

 

 

7,684

 

 

5

 

 

5

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

687

 

 

687

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

21

21

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

(10,353)

 

(10,353)

Balance as of June 30, 2021

 

 

 

 

 

 

 

 

49,261,995

5

348,097

(33)

(51,315)

296,754

Exercise of stock options

 

 

 

 

 

 

 

 

33,845

37

37

Stock-based compensation

 

 

 

 

 

 

 

 

1,548

1,548

Other comprehensive income

 

 

 

 

 

 

 

 

9

9

Net loss

 

 

 

 

 

 

 

 

(12,949)

(12,949)

Balance as of September 30, 2021

$

 

$

 

$

 

$

$

 

49,295,840

$

5

$

349,682

$

(24)

$

(64,264)

$

285,399

8

EDGEWISE THERAPEUTICS, INC.

Condensed Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)

(In thousands, except share data)

(Unaudited)

Series A Convertible

Series B-1 Convertible

Series B-2 Convertible

Series C Convertible

Convertible

Accumulated

Preferred Stock

Preferred Stock

Preferred Stock

Preferred Stock

Preferred Stock

Common Stock

Additional

Other Comprehensive

Accumulated

  

Shares

  

Amount

  

Shares

  

Amount

  

Shares

  

Amount

  

Shares

  

Amount

  

Total

 

 

Shares

  

Amount

  

Paid-In Capital

  

(Loss) Income

  

Deficit

  

Total

Balance as of December 31, 2019

 

8,187,100

$

15,484

 

7,888,392

$

24,778

 

$

 

$

$

40,262

 

419,004

$

$

171

$

$

(17,024)

$

(16,853)

Exercise of stock options

 

 

 

 

 

 

 

 

 

 

33,631

 

 

15

 

 

15

Stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

45

 

 

45

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,185)

 

(3,185)

Balance as of March 31, 2020

 

8,187,100

15,484

 

7,888,392

24,778

 

 

40,262

 

452,635

231

(20,209)

(19,978)

Exercise of stock options

254,518

120

120

Stock-based compensation

49

49

Net loss

(3,954)

(3,954)

Balance as of June 30, 2020

8,187,100

15,484

7,888,392

24,778

40,262

707,153

400

(24,163)

(23,763)

Issuance of Series B-2 preferred stock, net of offering costs of $19 thousand

6,527,654

25,056

25,056

Exercise of stock options

297,294

67

67

Stock-based compensation

70

70

Net loss

(3,642)

(3,642)

Balance as of September 30, 2020

8,187,100

$

15,484

 

7,888,392

$

24,778

 

6,527,654

$

25,056

 

$

$

65,318

 

1,004,447

$

$

537

$

$

(27,805)

$

(27,268)

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

9

EDGEWISE THERAPEUTICS, INC.

Condensed Statements of Cash Flows

(In thousands)

(Unaudited)

Nine months ended September 30, 

   

2021

   

2020

Cash flows from operating activities

 

Net loss

$

(30,117)

$

(10,781)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

  

Depreciation

194

 

135

Stock-based compensation

 

2,531

 

164

Changes in assets and liabilities:

 

 

  

Prepaid expenses and other assets

 

(1,951)

 

(383)

Accounts payable

 

1,103

 

384

Accrued compensation

 

855

 

351

Accrued other expenses

 

3,297

 

134

Net cash used in operating activities

 

(24,088)

 

(9,996)

Cash flows from investing activities

 

 

  

Purchases of marketable securities

 

(273,159)

 

Maturities of marketable securities

17,400

Purchases of property and equipment

 

(589)

 

(203)

Net cash used in investing activities

 

(256,348)

 

(203)

Cash flows from financing activities

 

  

 

  

Proceeds from initial public offering of common stock, net of underwriting discounts and commissions and offering costs

 

186,148

 

Proceeds from issuance of Series B-2 convertible preferred stock

25,075

Payment of preferred stock issuance costs

(124)

Exercise of stock options

 

67

 

202

Net cash provided by financing activities

 

186,091

 

25,277

Net change in cash and cash equivalents

 

(94,345)

 

15,078

Cash and cash equivalents at beginning of period

 

104,916

 

23,653

Cash and cash equivalents at end of period

$

10,571

$

38,731

Supplemental disclosures of non-cash financing activities:

 

  

 

  

Conversion of convertible preferred stock upon closing of initial public offering

$

160,214

$

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

10

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, rare muscle disorders for which there is significant unmet medical need. The Company’s lead product candidate, EDG-5506, is an orally administered small molecule designed to address the root cause of dystrophinopathies including Duchenne muscular dystrophy (DMD) and Becker muscular dystrophy (BMD). 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 genetically defined muscle disorders.

Initial Public Offering and Reverse Stock Split

On March 30, 2021, the Company completed its initial public offering (IPO) in which it issued and sold 12,650,000 shares of common stock at a price of $16.00 per share, including 1,650,000 shares sold pursuant to the underwriters’ full exercise of their option to purchase additional shares. The aggregate net proceeds received by the Company from the IPO was $186.1 million after deducting underwriting discounts and commissions of $14.2 million and offering expenses of approximately $2.1 million. In addition, in connection with the IPO, all shares of convertible preferred stock outstanding at the time of the IPO converted into 35,557,569 shares of common stock. On March 19, 2021, the Company amended its certificate of incorporation to effect a 1-for-1.8932 reverse stock split of its issued and outstanding common and convertible preferred stock. The accompanying financial statements and related notes give retroactive effect to the reverse stock split for all periods presented.

Risks and Uncertainties

In March 2020, the World Health Organization declared the novel coronavirus disease (COVID-19) outbreak a pandemic. The Company cannot at this time predict the specific extent, duration, or full impact that the COVID-19 outbreak will have on its financial condition and operations. Disruptions caused by the COVID-19 pandemic, including the effects of the stay-at-home orders and work-from-home policies, have impacted productivity, have resulted in increased operational expenses, certain adjustments to the operations of the Company’s clinical trial, the suspension of enrollment of new patients at the Company’s clinical trial site, and delays in certain supply chain activities and collecting and analyzing data from patients in the Company’s clinical trial, and may further disrupt the business and delay the development programs and regulatory timelines, the magnitude of which will depend, in part, on the length and severity of the restrictions and other limitations on the Company’s ability to conduct business in the ordinary course as well as the spread, severity and potential resurgence of COVID-19, the impact of new COVID-19 variants, and vaccination deployment efforts. As a result, research and development expenses and general and administrative expenses may vary significantly if there is an increased impact from COVID-19 on the costs and timing associated with the conduct of the clinical trial and other related business activities. The Company is carefully monitoring the pandemic and the potential length and depth of the resulting economic impact on its financial condition and results of operations.

Liquidity and Capital Resources

The Company has an accumulated deficit of $64.3 million and, cash, cash equivalents and marketable securities of $290.5 million as of September 30, 2021. 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. The Company’s ability to secure capital is dependent upon success in developing its

11

technology and product candidates. The Company cannot provide assurance that additional capital will be available on acceptable terms, if at all.

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 $290.5 million of cash, cash equivalents and marketable securities on hand as of September 30, 2021 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 U.S. generally accepted accounting principles (U.S. GAAP) and applicable rules and regulations of the U.S. Securities and Exchange Commission (SEC) for interim reporting. As permitted under those rules and regulations, certain notes or other financial information normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The interim condensed financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal, recurring adjustments that are necessary to present fairly the Company’s results for the interim periods presented. The condensed balance sheet as of December 31, 2020, is derived from the Company’s audited financial statements. The results of operations for the three months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021, or for any other future annual or interim period.

The accompanying interim unaudited condensed financial statements should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2020, which are included in the Company’s prospectus related to the Company’s IPO, filed with the SEC on March 26, 2021, pursuant to Rule 424(b) under the Securities Act of 1933, amended.

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 September 30, 2021 primarily consist of money market accounts and cash equivalents as of December 31, 2020 primarily consist of money market accounts and commercial paper.

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 may classify certain investments as short-term marketable securities, even though the stated maturity date may be one year or more beyond the current balance sheet date.

12

Unrealized gains and losses, net of any related tax effects, are excluded from earnings and are included in other comprehensive income and reported as a separate component of stockholders’ equity (deficit) 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, net. 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 losses on its deposits of cash, cash equivalents, and marketable securities since inception.

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 charge to operating expenses in the statement of operations. Deferred offering costs as of September 30, 2021 and December 31, 2020 were $0 and $0.7 million, respectively. 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 five years, and in the case of leasehold improvements, the shorter of the estimated useful lives of the assets or the term of the lease. Depreciation expense was $64,000 and $194,000 for the three and nine months ended September 30, 2021, respectively and $49,000 and $135,000 for the three and nine months ended September 30, 2020, respectively.

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 the three and nine months ended September 30, 2021 and 2020, respectively.

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

13

will not be realized. Historically, we have not recognized these potential benefits in our financial statements and have fully reserved for such net deferred tax assets, as we believe it is more likely than not that the full benefit of these net deferred tax assets will not be realized before expiration. 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 September 30, 2021.

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) Accounting Standard Codification (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).

14