EWTX

Edgewise Therapeutics, Inc.

NASDAQ · HEALTH CARE · PHARMACEUTICAL PREPARATIONS

39.53

+0.36 +0.92%

USD · close Oct 27

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MKT CAP $4.3BP/E —DIV YIELD —FCF YIELD -3.70%REV TTM —NET INCOME −$197.2MNET CASH $72.3M52W 16.33 – 48.35SEC XBRL · TTM TO Invalid Date

How EWTX rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

73%

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219

new sentences

Dropped

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+2,776

words, now 49,373

New in FY2025

The principal factors and uncertainties that make investing in shares of our common stock risky include, among others: Risks Related to Our Financial Position, Need for Additional Capital and Limited Operating History ● We have a limited operating history and while we are moving toward becoming a commercial-ready biopharmaceutical company, some of our product candidates are early in development and we have no products approved for commercial sale, which may make it difficult for you to evaluate our current business and likelihood of success and future viability. ● We have not generated any revenue to date, have incurred significant net losses since our inception, and expect to continue to incur significant net losses for the foreseeable future. ● Our ability to generate revenue and achieve profitability depends significantly on our ability to achieve several objectives relating to the discovery, development and commercialization of our product candidates, if approved. ● We will require substantial additional capital to finance our operations.
If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our research and drug development programs or future commercialization efforts. ● Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.
If we are unable to complete further development of, obtain approval for and commercialize sevasemten or EDG-7500 for one or more indications in a timely manner, our business will be harmed. ● In addition to sevasemten and EDG-7500 , our prospects depend in part upon developing and commercializing EDG-15400 and product candidates from our EDG-003 cardiometabolic discovery program and discovering, developing and commercializing product candidates in future programs, which may fail or suffer delays that adversely affect their commercial viability. ● Clinical drug development involves a lengthy and expensive process with an uncertain outcome.
The clinical trials of our product candidates may not demonstrate safety and efficacy to the satisfaction of the FDA, European Medicines Agency (EMA) or other comparable foreign regulatory authorities or otherwise produce positive results and the results of preclinical studies and early clinical trials may not be predictive of future results.
We may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates. ● Our product candidates may cause serious adverse events, toxicities or other undesirable side effects when used alone or in combination with other approved products or investigational new drugs that may result in a safety profile that could prevent regulatory approval, prevent market acceptance, limit their commercial potential or result in significant negative consequences. ● The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and the results of our clinical trials may not satisfy the requirements of the FDA, EMA or other comparable foreign regulatory authorities. ● If we experience delays or difficulties in the enrollment and/or maintenance of patients in clinical trials, our regulatory submissions or receipt of necessary marketing approvals could be delayed or prevented. ● We have limited resources and are currently focusing the majority of our efforts on developing sevasemten and EDG-7500 for particular indications.
As a result, we may fail to capitalize on other indications or product candidates that may ultimately have proven to be more profitable. ● We face significant competition and if our competitors develop and market technologies or products more rapidly than we do or that are more effective, safer or less expensive than the products we develop, our commercial opportunities will be negatively impacted. ● Interim, topline and preliminary data from our clinical trials that we announce or publish may change as more patient data becomes available and are subject to audit and verification procedures that could result in material changes in the final data. ● We may not be successful in our efforts to develop a proprietary drug discovery platform to build a pipeline of product candidates. ● We may develop sevasemten and potentially other programs in combination with other therapies, which would expose us to additional risks. ● The manufacture of drugs is complex, and our third-party manufacturers may encounter difficulties in production.
If any of our third-party manufacturers encounter such difficulties, our ability to provide adequate supply of our product candidates for clinical trials or our products for patients, if approved, could be delayed or prevented. ● Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay. ● Our product candidates may not achieve adequate market acceptance among physicians, patients, healthcare payors and others in the medical community necessary for commercial success. ● The patient population suffering from Duchenne muscular dystrophy (Duchenne), Becker muscular dystrophy (Becker) and Limb-girdle muscular dystrophy (LGMD) is small and has not been established with precision.
Risks Related to Our Intellectual Property ● Our success depends on our ability to protect our intellectual property and our proprietary technologies. Risks Related to Our Dependence on Third Parties ● We rely, and expect to continue to rely, on third parties to conduct our clinical trials and those third parties may not perform satisfactorily, including failing to meet deadlines for the completion of such trials, research and studies, which may harm our business. ● We contract with third parties for the production of sevasemten, EDG-7500, and EDG-15400 for our ongoing clinical trials and the production of product candidates from our EDG-003 cardiometabolic discovery program for our ongoing preclinical studies, and expect to continue to do so for additional clinical trials, preclinical studies and ultimately for commercialization.
This reliance on third parties increases the risk that we will not have sufficient quality and quantities of our product candidates or such quantities at an acceptable cost, which could delay, prevent or impair our development or commercialization efforts. ● Our reliance on third parties may require us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed. ● If we engage in future acquisitions or strategic partnerships, this may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks.
Risks Related to Our Financial Position, Need for Additional Capital and Limited Operating History We have a limited operating history and while we are moving toward becoming a commercial-ready biopharmaceutical company, some of our product candidates are early in development and we have no products approved for commercial sale, which may make it difficult for you to evaluate our current business and likelihood of success and future viability.
We are a late-stage clinical biopharmaceutical company with a limited operating history upon which you can evaluate our business and prospects.
In July 2022, we initiated the first of four Phase 2 clinical trials for our product candidate sevasemten, in April 2024, we began enrolling a multipart Phase 2 clinical trial with our product candidate EDG-7500 for people with hypertrophic cardiomyopathy (HCM), and in September 2025, we initiated a Phase 1 trial of healthy adults with our product candidate EDG-15400 with future disease target of heart failure with preserved ejection fraction (HFpEF).
Since our inception in 2017, we have devoted substantially all of our focus and financial resources to discovering, identifying and developing potential product candidates, including advancing our development programs, conducting preclinical studies of our product candidates and initiating clinical trials, organizing and staffing our company, business planning, raising capital and securing related intellectual property rights. We have not yet demonstrated our ability to obtain marketing approvals, manufacture a commercial-scale product or arrange for a third-party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization.
Our net loss was $167.8 million for the year ended December 31, 2025.
As of December 31, 2025, we had an accumulated deficit of $546.4 million.
We are advancing sevasemten , EDG-7500, and EDG-15400 in clinical development.
As a result, we expect that it will be a couple of years, if ever, before we receive approval to commercialize a product and generate revenue from product sales.
For example, 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.
We have no products approved for commercial sale and do not anticipate generating any revenue from product sales for the next couple of years, if ever.
Our ability to generate revenue and achieve profitability depends significantly on our ability, or any future collaborator’s ability, to achieve several objectives, including: ● successful and timely completion of preclinical and clinical development of sevasemten , EDG-7500, EDG-15400, product candidates from our EDG-003 cardiometabolic discovery program and our other future product candidates and programs; ● establishing and maintaining relationships with CROs and clinical sites for the clinical development of sevasemten , EDG-7500, EDG-15400, product candidates from our EDG-003 cardiometabolic discovery program and any other future product candidates and programs; ● the initiation and successful patient enrollment and completion of additional clinical trials on a timely basis; ● acceptable frequency and severity of adverse events in the clinical trials; ● the efficacy and safety profiles that are satisfactory to the FDA or any comparable foreign regulatory authority for marketing approval; ● timely receipt of marketing approvals from applicable regulatory authorities for any product candidates for which we successfully complete clinical development; ● complying with any required post-marketing approval commitments to applicable regulatory authorities; ● developing an efficient and scalable manufacturing process for our product candidates; ● establishing and maintaining commercially viable supply and manufacturing relationships with third parties that can provide adequate, in both amount and quality, products and services to support clinical development and meet the market demand for our product candidates, if approved; ● successful commercial launch following any marketing approval, including the development of a commercial infrastructure, whether in-house or with one or more collaborators; ● a continued acceptable safety profile following any marketing approval of our product candidates; ● commercial acceptance of our product candidates by patients, the medical community and third-party payors; ● timely receipt of reimbursement from applicable authorities for any product candidates for which we successfully receive regulatory approval; ● satisfying any required post-marketing approval commitments to applicable regulatory authorities; ● identifying, assessing and developing new product candidates; ● obtaining, maintaining and expanding patent protection, trade secret protection and regulatory exclusivity, both in the United States and internationally; ● protecting our rights in our intellectual property portfolio; ● defending against third-party infringement claims, if any; ● entering into, on favorable terms, any collaboration, licensing or other arrangements that may be necessary or desirable to develop, manufacture or commercialize our product candidates; ● obtaining coverage and adequate reimbursement by third-party payors for our products and patients’ willingness to pay in the absence of such coverage and adequate reimbursement; ● obtaining additional funding to develop and potentially manufacture and commercialize our product candidates; ● addressing any competing therapies and technological and market developments; ● managing costs, including any unforeseen costs, that we may incur as a result of nonclinical study or clinical trial delays due to public health pandemics or emergencies, inflation or other causes; and ● attracting, hiring and retaining qualified personnel, including clinical, scientific, management and administrative personnel.
As of December 31, 2025, we had $530.1 million in cash, cash equivalents and marketable securities.
We additionally filed a prospectus supplement to the shelf registration statement and entered into a sales agreement with Leerink Partners LLC (Leerink Sales Agreement) on May 10, 2024, 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 an “at the market offering” program (Leerink ATM).
Pursuant to the automatic shelf registration statement, on April 3, 2025, we closed an underwritten registered direct offering of 9,935,419 shares of our common stock for net proceeds of $187.1 million after deducting underwriting discounts and commissions and offering expenses.
Our operations have consumed substantial amounts of cash since inception, and we expect our expenses to increase in connection with our ongoing activities, particularly as we conduct clinical trials of, and seek marketing approval for, sevasemten , EDG-7500, EDG-15400, product candidates from our EDG-003 cardiometabolic discovery program, as well as develop our proprietary drug discovery platform.
We are not permitted to market or promote sevasemten , EDG-7500, EDG-15400, product candidates from our EDG-003 cardiometabolic discovery program or any other product candidate before we receive marketing approval from the FDA.
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.
Pursuant to the automatic shelf registration statement, on April 3, 2025, we closed an underwritten registered direct offering of 9,935,419 shares of our common stock for net proceeds $187.1 million after deducting underwriting discounts and commissions and offering expenses.
Our federal NOLs generated in tax years beginning after December 31, 2017 may be carried forward indefinitely, but for taxable years beginning after December 31, 2020, the deductibility of federal NOLs generated in tax years beginning after December 31, 2017 is limited to 80% of our current year taxable income.
As of December 31, 2025, we had available federal NOL carryforwards of approximately $319.7 million, of which $318.5 million do not expire, and state NOL carryforwards of approximately $333.3 million, of which $32.7 million do not expire.
On July 4, 2025, the U.S. federal tax legislation commonly referred to as the One Big Beautiful Bill Act (the OBBB Act) was enacted, which makes a number of changes to U.S. federal income tax law, including permanently suspending the requirement to capitalize and amortize domestic research and development expenditures and permitting such deductions on a current basis.
The OBBB Act did not have a material impact on us.
Further, many countries, and organizations such as the Organization for Economic Cooperation and Development (the OECD) have proposed implementing changes to existing tax laws, including a proposed 15% global minimum tax (Pillar Two) that has been implemented by several countries in 2024 and is being considered for implementation by other jurisdictions.
On January 5, 2026, the OECD announced a “side-by-side” elective safe harbor that exempts U.S.-parented multinational entities from some of the Pillar Two rules (including the fifteen percent global minimum tax) for fiscal years beginning on or after January 1, 2026.
Any of these developments or changes in U.S. federal or state or non-U.S. tax laws or tax rulings could adversely affect our effective tax rate and our operating results.
To the extent we may experience any disruptions directly or indirectly through our contractors or partners as a result of any ongoing pandemic, outbreaks or other public health emergencies or disruptions that could severely impact our business and clinical trials, including: ● further delays or difficulties in enrolling and retaining patients in our clinical trials or those conducted by third parties and further incurrence of additional costs as a result of preclinical study and clinical trial delays and adjustments; ● challenges related to ongoing and increased operational expenses related to pandemics or public health emergencies or disruptions; ● delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; ● delays, difficulties or increased costs to comply with public health related protocols at our leased facilities and clinical sites; ● diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of clinical trials; ● interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others; ● delays in receiving approval from local regulatory authorities to initiate our planned clinical trials; ● delays in preclinical and clinical sites receiving the supplies and materials needed to conduct our clinical trials; ● interruption in global shipping that may affect the transport of clinical trial materials, such as investigational drug products used in our clinical trials; ● changes in regulations as part of a response to public health emergencies or disruptions which may require us to change the ways in which our clinical trials are conducted, or to discontinue the clinical trials altogether, or which may result in unexpected costs; ● delays in necessary interactions with regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government or contractor personnel; ● refusal of the FDA to accept data from clinical trials in affected geographies outside the United States; and ● increased competition for contract research organizations (CROs), suppliers and vendors.
Additionally, certain third parties with whom we engage, including our collaborators, contract organizations, third-party manufacturers, suppliers, clinical trial sites, regulators and other third parties with whom we conduct business may adjust their operations in light of public health emergencies.
In addition, our clinical trial sites could experience delays in collecting, receiving, and analyzing data from patients enrolled in our clinical trial for sevasemten due to limited staff at such sites, limitation or suspension of on-site visits by patients, or patients’ reluctance to visit the clinical trial sites during a public health emergency.
As a result, research and development expenses and general and administrative expenses may vary significantly if there is an increased impact from public health emergencies on the costs and timing associated with the conduct of our clinical trial and other related business activities.
In the event of a public health emergency, we could be required to develop and implement additional clinical trial policies and procedures designed to help protect subjects from such diseases.
During the COVID-19 pandemic, the FDA issued various COVID-19 related guidance documents for sponsors and manufacturers, many of which have expired or were withdrawn with the expiration of the COVID-19 public health emergency declaration on May 11, 2023, although some COVID-19 related guidance documents continue in effect.

and 179 more.

Gone since FY2024

The principal factors and uncertainties that make investing in shares of our common stock risky include, among others: ● We have a limited operating history and while we are moving toward becoming a commercial-ready biopharmaceutical company, some of our product candidates are early in development and we have no products approved for commercial sale. ● We have not generated any revenue to date, have incurred significant net losses since our inception, and expect to continue to incur significant net losses for the foreseeable future. ● Our ability to generate revenue and achieve profitability depends significantly on our ability to achieve several objectives relating to the discovery, development and commercialization of our product candidates, if approved. ● We will require substantial additional capital to finance our operations.
If we are unable to raise such capital when needed, or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our research and drug development programs or future commercialization efforts. ● Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates. ● We are substantially dependent on the success of our lead product candidates, sevasemten and EDG-7500 . ● In addition to sevasemten , our prospects depend in part upon developing and commercializing EDG-7500 and product candidates from our EDG-003 cardiometabolic discovery program and discovering, developing and commercializing product candidates in future programs, which may fail or suffer delays that adversely affect their commercial viability. ● Clinical drug development involves a lengthy and expensive process with an uncertain outcome.
The clinical trials of our product candidates may not demonstrate safety and efficacy to the satisfaction of the FDA, European Medicines Agency (EMA) or other comparable foreign regulatory authorities or otherwise produce positive results and the results of preclinical studies and early clinical trials may not be predictive of future results. ● Our product candidates may cause serious adverse events, toxicities or other undesirable side effects when used alone or in combination with other approved products or investigational new drugs. ● The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, and the results of our clinical trials may not satisfy the requirements of the FDA, EMA or other comparable foreign regulatory authorities. ● If we experience delays or difficulties in the enrollment and/or maintenance of patients in clinical trials, our regulatory submissions or receipt of necessary marketing approvals could be delayed or prevented. ● We have limited resources and are currently focusing the majority of our efforts on developing sevasemten and EDG-7500 for particular indications.
As a result, we may fail to capitalize on other indications or product candidates that may ultimately have proven to be more profitable. ● We face significant competition and if our competitors develop and market technologies or products more rapidly than we do or that are more effective, safer or less expensive than the products we develop, our commercial opportunities will be negatively impacted. ● Interim, topline and preliminary data from our clinical trials that we announce or publish may change as more patient data becomes available and are subject to audit and verification procedures that could result in material changes in the final data. ● We may not be successful in our efforts to develop a proprietary drug discovery platform to build a pipeline of product candidates. ● We may develop sevasemten and potentially other programs in combination with other therapies, which would expose us to additional risks. ● The manufacture of drugs is complex, and our third-party manufacturers may encounter difficulties in production. ● Changes in methods of product candidate manufacturing or formulation may result in additional costs or delay. ● Our product candidates may not achieve adequate market acceptance among physicians, patients, healthcare payors and others in the medical community necessary for commercial success. ● The patient population suffering from Duchenne muscular dystrophy (Duchenne), Becker muscular dystrophy (Becker) and Limb-girdle muscular dystrophy (LGMD) is small and has not been established with precision. ● The regulatory approval processes of the FDA, EMA and other comparable foreign regulatory authorities are lengthy, time consuming and inherently unpredictable. ● Our success is highly dependent on our ability to attract and retain highly skilled executive officers and employees. ● Our success depends on our ability to protect our intellectual property and our proprietary technologies. ● We rely, and expect to continue to rely, on third parties to conduct our clinical trials and those third parties may not perform satisfactorily. ● We contract with third parties for the production of our product candidates. ● Our reliance on third parties may require us to share our trade secrets, which increases the possibility that a competitor will discover them or that our trade secrets will be misappropriated or disclosed. ● If we engage in future acquisitions or strategic partnerships, this may increase our capital requirements, dilute our stockholders, cause us to incur debt or assume contingent liabilities, and subject us to other risks. Risks Related to Our Financial Position, Need for Additional Capital and Limited Operating History We have a limited operating history, some of our product candidates are early in development and we have no products approved for commercial sale, which may make it difficult for you to evaluate our current business and likelihood of success and future viability.
We are a clinical stage biopharmaceutical company with a limited operating history upon which you can evaluate our business and prospects.
In July 2022, we initiated the first of four Phase 2 clinical trials for our product candidate, sevasemten, and we are enrolling Part B and Part C of a multipart Phase 2 clinical trial with our product candidate EDG-7500 for people with HCM.
Since our inception in 2017, we have devoted substantially all of our focus and financial resources to discovering, identifying and developing potential product candidates, including advancing our development programs, conducting preclinical studies of our product candidates and initiating clinical trials, organizing and staffing our company, business planning, raising capital and securing related intellectual property rights. Although we are moving toward becoming a commercial-ready biopharmaceutical company, we have not yet demonstrated our ability to obtain marketing approvals, manufacture a commercial-scale product or arrange for a third-party to do so on our behalf, or conduct sales and marketing activities necessary for successful product commercialization.
Our net loss was $133.8 million for the year ended December 31, 2024.
As of December 31, 2024, we had an accumulated deficit of $378.6 million.
We are advancing sevasemten and EDG-7500 in clinical development.
As a result, we expect that it will be several years, if ever, before we receive approval to commercialize a product and generate revenue from product sales.
We have no products approved for commercial sale and do not anticipate generating any revenue from product sales for the next several years, if ever.
Our ability to generate revenue and achieve profitability depends significantly on our ability, or any future collaborator’s ability, to achieve several objectives, including: ● successful and timely completion of preclinical and clinical development of sevasemten , EDG-7500, and product candidates from our EDG-003 cardiometabolic discovery program and our other future product candidates and programs; ● establishing and maintaining relationships with CROs and clinical sites for the clinical development of sevasemten , EDG-7500, product candidates from our EDG-003 cardiometabolic discovery program and any other future product candidates and programs; ● the initiation and successful patient enrollment and completion of additional clinical trials on a timely basis; ● acceptable frequency and severity of adverse events in the clinical trials; ● the efficacy and safety profiles that are satisfactory to the FDA or any comparable foreign regulatory authority for marketing approval; ● timely receipt of marketing approvals from applicable regulatory authorities for any product candidates for which we successfully complete clinical development; ● complying with any required post-marketing approval commitments to applicable regulatory authorities; ● developing an efficient and scalable manufacturing process for our product candidates; ● establishing and maintaining commercially viable supply and manufacturing relationships with third parties that can provide adequate, in both amount and quality, products and services to support clinical development and meet the market demand for our product candidates, if approved; ● successful commercial launch following any marketing approval, including the development of a commercial infrastructure, whether in-house or with one or more collaborators; ● a continued acceptable safety profile following any marketing approval of our product candidates; ● commercial acceptance of our product candidates by patients, the medical community and third-party payors; ● timely receipt of reimbursement from applicable authorities for any product candidates for which we successfully receive regulatory approval; ● satisfying any required post-marketing approval commitments to applicable regulatory authorities; ● identifying, assessing and developing new product candidates; ● obtaining, maintaining and expanding patent protection, trade secret protection and regulatory exclusivity, both in the United States and internationally; ● protecting our rights in our intellectual property portfolio; ● defending against third-party infringement claims, if any; ● entering into, on favorable terms, any collaboration, licensing or other arrangements that may be necessary or desirable to develop, manufacture or commercialize our product candidates; ● obtaining coverage and adequate reimbursement by third-party payors for our products and patients’ willingness to pay in the absence of such coverage and adequate reimbursement; ● obtaining additional funding to develop and potentially manufacture and commercialize our product candidates; ● addressing any competing therapies and technological and market developments; ● managing costs, including any unforeseen costs, that we may incur as a result of nonclinical study or clinical trial delays due to COVID-19 or other public health pandemics or emergencies, inflation or other causes; and ● attracting, hiring and retaining qualified personnel, including clinical, scientific, management and administrative personnel.
As of December 31, 2024, we had $470.2 million in cash, cash equivalents and marketable securities.
We additionally filed a prospectus supplement to the shelf registration statement and entered into a sales agreement with Leerink Partners LLC (Leerink Sales Agreement) on May 10, 2024, under which we may offer and sell shares of common stock, having aggregate sales proceeds of up to $175,000,000 from time to time, through an “at the market offering” program (Leerink ATM).
Our operations have consumed substantial amounts of cash since inception, and we expect our expenses to increase in connection with our ongoing activities, particularly as we conduct clinical trials of, and seek marketing approval for, sevasemten , EDG-7500, product candidates from our EDG-003 cardiometabolic discovery program, as well as develop our proprietary drug discovery platform.
We are not permitted to market or promote sevasemten , EDG-7500, product candidates from our EDG-003 cardiometabolic discovery program or any other product candidate before we receive marketing approval from the FDA.
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.
Our NOLs generated in tax years beginning before January 1, 2018 are only permitted to be carried forward for 20 taxable years under applicable U.S. federal tax law, and therefore could expire unused.
Under tax legislation commonly referred to as the Tax Cuts and Jobs Act of 2017 (Tax Act) as amended by the Coronavirus Aid, Relief, and Economic Security Act, our federal NOLs generated in tax years beginning after December 31, 2017 may be carried forward indefinitely, but for taxable years beginning after December 31, 2020, the deductibility of federal NOLs generated in tax years beginning after December 31, 2017 is limited to 80% of our current year taxable income.
As of December 31, 2024, we had available federal NOL carryforwards of approximately $146.3 million, of which $145.1 million do not expire, and state NOL carryforwards of approximately $155.6 million, of which $32.7 million do not expire.
For example, in August 2022, the United States enacted the Inflation Reduction Act of 2022, which imposes a 1% non-deductible excise tax on certain stock buybacks and a 15% alternative minimum tax on global adjusted financial statement income.
In addition, beginning in 2022, the Tax Act eliminated the option to deduct research and development expenditures currently and requires taxpayers to capitalize and amortize them over five or fifteen years, and this requirement may impact our effective tax rate and our cash tax liability in future years.
When and if we achieve profitability, these changes may cause us to pay federal income taxes earlier than under prior law and may increase our total federal tax liability attributable to orphan drug programs and other research and development activities.
Further, many countries, and organizations such as the Organization for Economic Cooperation and Development have proposed implementing changes to existing tax laws, including a proposed 15% global minimum tax that has been and is being adopted by several countries, with implementation beginning in 2024.
Any of these developments or changes in U.S. federal, state, or international tax laws or tax rulings could adversely affect our effective tax rate and our operating results.
There can be no assurance that our effective tax rates, tax payments, or tax credits and incentives will not be adversely affected by these or other developments or changes in law.
To the extent we may experience any disruptions directly or indirectly through our contractors or partners as a result of any ongoing pandemic, outbreaks or other public health emergencies or disruptions, including any resurgence in COVID-19 cases in the future, that could severely impact our business and clinical trials, including: ● further delays or difficulties in enrolling and retaining patients in our clinical trials or those conducted by third parties and further incurrence of additional costs as a result of preclinical study and clinical trial delays and adjustments; ● challenges related to ongoing and increased operational expenses related to pandemics or public health emergencies or disruptions; ● delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; ● delays, difficulties or increased costs to comply with COVID-19 or other public health related protocols at our leased facilities and clinical sites; ● diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospitals serving as our clinical trial sites and hospital staff supporting the conduct of clinical trials; ● interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others; ● delays in receiving approval from local regulatory authorities to initiate our planned clinical trials; ● delays in preclinical and clinical sites receiving the supplies and materials needed to conduct our clinical trials; ● interruption in global shipping that may affect the transport of clinical trial materials, such as investigational drug products used in our clinical trials; ● changes in regulations as part of a response to the COVID-19 pandemic or other public health emergencies or disruptions which may require us to change the ways in which our clinical trials are conducted, or to discontinue the clinical trials altogether, or which may result in unexpected costs; ● delays in necessary interactions with regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government or contractor personnel; ● refusal of the FDA to accept data from clinical trials in affected geographies outside the United States; and ● increased competition for contract research organizations (CROs), suppliers and vendors.
Additionally, certain third parties with whom we engage, including our collaborators, contract organizations, third-party manufacturers, suppliers, clinical trial sites, regulators and other third parties with whom we conduct business may adjust their operations in light of the COVID-19 pandemic or other public health emergencies.
For example, we experienced delays in trial initiation for our Phase 1 clinical trial of sevasemten and switched from an international third-party manufacturer to a third-party manufacturer based in the United States to minimize manufacturing supply chain disruptions as a result of COVID-19.
In addition, our clinical trial sites could experience delays in collecting, receiving, and analyzing data from patients enrolled in our clinical trial for sevasemten due to limited staff at such sites, limitation or suspension of on-site visits by patients, or patients’ reluctance to visit the clinical trial sites during the pandemic.
As a result, research and development expenses and general and administrative expenses may vary significantly if there is an increased impact from COVID-19 or other public health emergencies on the costs and timing associated with the conduct of our clinical trial and other related business activities.
In the event of a resurgence of COVID-19 or other public health emergencies, we could be required to develop and implement additional clinical trial policies and procedures designed to help protect subjects from such diseases.
During the COVID-19 pandemic, the FDA has issued various COVID-19 related guidance documents for sponsors and manufacturers, many of which have expired or were withdrawn with the expiration of the COVID-19 public health emergency declaration on May 11, 2023, although some COVID-19 related guidance documents continue in effect.
Any continued and prolonged public health crisis, such as the COVID-19 pandemic, could have a material negative impact on our business, financial condition and operating results.
To the extent the COVID-19 pandemic or other public health emergencies or outbreaks adversely affect our business, financial condition and operating results, it may also have the effect of heightening many of the risks described in this “Risk Factors” section.
We are not permitted to market or promote sevasemten, EDG-7500 , or any other product candidate before we receive marketing approval from the FDA and comparable foreign regulatory authorities, and we may never receive such marketing approvals.
While we announced topline results from the Phase 2 CANYON trial of sevasemten in individuals with Becker and from the Phase 1 and Phase 2 CIRRUS-HCM Part A trials of EDG-7500 in patients with obstructive hypertrophic cardiomyopathy (oHCM), the FDA may disagree with our interpretation of the data and may require additional clinical testing before we can seek regulatory approval and begin commercialization, if at all.
The success of sevasemten and EDG-7500 will depend on several factors, including the following: ● the successful and timely completion of our ongoing nonclinical studies and clinical trials of sevasemten and EDG-7500 ; ● the initiation and successful patient enrollment and completion of additional clinical trials of sevasemten and EDG-7500 on a timely basis; ● maintaining and establishing relationships with CROs and clinical sites for the clinical development of sevasemten and EDG-7500 ; ● the frequency and severity of adverse events in clinical trials; ● demonstrating efficacy, safety and tolerability profiles that are satisfactory to the FDA, EMA or any comparable foreign regulatory authority for marketing approval; ● the timely receipt of marketing approvals for sevasemten and EDG-7500 from applicable regulatory authorities; ● maintaining the Orphan Drug Designation (ODD) and Rare Pediatric Disease Designation (RPDD) for sevasemten ; ● the extent of any required post-marketing approval commitments to applicable regulatory authorities; ● the maintenance of existing or the establishment of new supply arrangements with third-party drug product suppliers and manufacturers for clinical development and, if approved, commercialization of sevasemten and EDG-7500 ; ● obtaining and maintaining patent protection, trade secret protection and regulatory exclusivity, both in the United States and internationally; ● protecting our rights in our intellectual property portfolio; ● our ability to expand sevasemten and EDG-7500 into multiple indications; ● the successful launch of commercial sales following any marketing approval; ● a continued acceptable safety profile following any marketing approval; ● the actual market-size, ability to identify patients and the demographics of patients eligible for our product candidates, which may be different than expected; ● commercial acceptance by patients, the medical community and third-party payors, particularly since the product candidates we develop may be novel; ● our ability to compete or combine with other therapies; and ● addressing any delays, necessary adjustments and additional costs in nonclinical study and clinical trials resulting from factors related to public health pandemics, including the COVID-19 pandemic.
In addition to sevasemten and EDG-7500 , our prospects depend in part upon developing and commercializing product candidates from our EDG-003 cardiometabolic discovery program and discovering, developing and commercializing product candidates in future programs, which may fail or suffer delays that adversely affect their commercial viability.

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