Annual Report for Fiscal Year Ending 12-31, 2025 (Form 10-K)

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 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.

As a result of many factors, including those factors set forth in the "Risk Factors" section of this Annual Report on Form 10-K, 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, our precision medicine muscle platform has generated several programs to address a variety of muscle diseases. 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. 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. 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 $167.8 million and $133.8 million for the years ended December 31, 2025 and 2024, 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.

As of December 31, 2025, we had an accumulated deficit of $546.4 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 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, 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

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:

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, 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.

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 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; 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:

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

General and administrative expenses consist primarily of salaries, related benefits and stock-based compensation expense for personnel in executive, finance, accounting, legal and administrative functions. 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 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.

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Results of Operations

Comparison of the years ended December 31, 2025 and 2024

The following table summarizes our results of operations for the years ended December 31, 2025 and 2024:

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Research and development expenses

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The following table summarizes our research and development expenses:

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Research and development expenses were $151.4 million and $127.0 million for the years ended December 31, 2025 and 2024, respectively. The increase of $24.4 million was attributed to the following:

Partially offset by:

General and administrative expenses

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 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

Sources of liquidity

Since our inception, we have not generated any revenue and have incurred significant operating losses and negative cash flows from our operations. To date, we have financed our operations primarily through private placements of convertible preferred stock and public offerings of our common stock. 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.

Cash flows

The following table summarizes our sources and uses of cash for each of the periods presented:

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Operating activities

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 $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.

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.

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.

Financing activities

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 $175.0 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. Our expenses will also increase if, and as, we:

We do not currently have any long-term material capital requirements other than what will be required to fund operations for the foreseeable future and the amounts disclosed on the contractual obligations and commitments section below. In order to complete the process of obtaining regulatory approval for our product candidates and to build the sales, marketing and distribution infrastructure that we believe will be necessary to commercialize our product candidates, if approved, we will require substantial additional funding.

We have based our projections of operating capital requirements on assumptions that may prove to be incorrect and we may use all of our available capital resources sooner than we expect. Because of the numerous risks and uncertainties associated with research, development and commercialization of product candidates, we are unable to estimate the exact amount and timing of our working capital requirements. Our future funding requirements will depend on many factors, including:

A change in the outcome of any of these or other factors with respect to the development of any of our product candidates could significantly change the costs and timing associated with the development of that product candidate. Furthermore, our operating plans may change in the future, and we may need additional funds to meet operational needs and capital requirements associated with such operating plans.

If we are unable to raise additional funds when needed, we may be required to delay, reduce or eliminate our product development or future commercialization efforts. We may also be required to grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

The issuance of additional equity securities may cause our stockholders to experience dilution. Future equity or debt financings may contain terms that are not favorable to us or our stockholders including debt instruments imposing covenants that restrict our operations and limit our ability to incur liens, issue additional debt, pay dividends, repurchase our common stock, make certain investments or engage in merger, consolidation, licensing or asset sale transactions.

Operating and Capital Expenditure Requirements and Contractual Obligations

We expect that our existing cash and cash equivalents and marketable securities, will be sufficient to enable us to fund our planned operating expenses and capital expenditure requirements through at least the next 12 months.

Our short-term material cash requirements as of December 31, 2025 are to fund our operations, which consist primarily of research and development expenses related to our programs, and to a lesser extent, general and administrative expenses. We have entered into contracts in the normal course of business with CROs, CDMOs and other third parties for preclinical research studies and testing, clinical trials and manufacturing services. These contracts do not contain any minimum purchase commitments and are cancelable by us upon prior notice. Payments due upon cancellation consist only of payments for services provided and expenses incurred, including non-cancelable obligations of our service providers, up to the date of cancellation.

Our long-term cash requirements as of December 31, 2025 includes our lease obligations. 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. As of December 31, 2025, our total operating lease liability balance is $4.0 million, of which $1.0 million is a current liability.

Critical Accounting Estimates

Our financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of our financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on a periodic basis. Our actual results may differ from these estimates. 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 accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.

Accrued research and development expenses

As part of the process of preparing our financial statements, we are required to estimate our accrued research and development expenses. This process involves reviewing open contracts and purchase orders, communicating with our personnel and external service providers to identify services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual costs. The majority of our service providers invoice us in arrears for services performed, based on a pre-determined schedule or when contractual milestones are met, but some require advance payments. We make estimates of our accrued expenses as of each balance sheet date in the financial statements based on facts and circumstances known to us at that time. If timelines or contracts are modified based upon changes in the clinical trial protocol or scope of work to be performed, we modify our estimates of clinical trial accruals accordingly on a prospective basis. Examples of estimated accrued research and development expenses include fees paid to:

We base our expenses related to external research and development services on our 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 our behalf. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows. There may be instances in which payments made to our vendors will exceed the level of services provided and result in a prepayment of the expense. Payments under some of these contracts depend on factors such as the successful enrollment of patients and the completion of clinical trial milestones. In accruing service fees, we estimate 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, 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. 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 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," 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. For example, we have previously elected to take advantage of the extended transition period for complying with new or revised accounting standards. 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," 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.

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