# Wave Life Sciences Ltd. (WVE) Informational only - not investment advice. CIK: 0001631574 SIC: 2834 Pharmaceutical Preparations SIC breadcrumb: [Manufacturing](/division/D/) > [Chemicals And Allied Products](/major-group/28/) > [SIC 2834 Pharmaceutical Preparations](/industry/2834/) Latest 10-K filed: 2026-02-26 SEC page: https://www.sec.gov/edgar/browse/?CIK=1631574 Filing source: https://www.sec.gov/Archives/edgar/data/1631574/000119312526073472/wve-20251231.htm ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 42727000 | USD | 2025 | 2026-02-26 | | Net income | -204378000 | USD | 2025 | 2026-02-26 | | Assets | 638499000 | USD | 2025 | 2026-02-26 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-26. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001631574.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | 1,092,000 | 3,893,000 | 14,414,000 | 15,983,000 | 20,077,000 | 40,964,000 | 3,649,000 | 113,305,000 | 108,302,000 | 42,727,000 | | Net income | -55,660,000 | -101,980,000 | -146,653,000 | -193,638,000 | -149,910,000 | -122,245,000 | -161,823,000 | -57,513,000 | -97,008,000 | -204,378,000 | | Operating income | -55,720,000 | -102,391,000 | -159,523,000 | -208,317,000 | -153,377,000 | -127,016,000 | -162,720,000 | -67,996,000 | -110,403,000 | -215,383,000 | | Diluted EPS | | | | | | -2.36 | -2.05 | -0.54 | -0.70 | -1.21 | | Operating cash flow | -31,925,000 | -83,671,000 | -22,862,000 | -188,231,000 | -115,982,000 | -88,993,000 | -127,781,000 | -19,431,000 | -151,026,000 | -187,493,000 | | Capital expenditures | 5,567,000 | 18,887,000 | 9,938,000 | 3,918,000 | 1,338,000 | 560,000 | 1,361,000 | 1,115,000 | 938,000 | 718,000 | | Assets | 164,811,000 | 181,843,000 | 295,940,000 | 284,250,000 | 279,238,000 | 207,007,000 | 146,386,000 | 274,949,000 | 352,207,000 | 638,499,000 | | Liabilities | 22,074,000 | 34,359,000 | 214,718,000 | 212,644,000 | 188,586,000 | 166,635,000 | 183,603,000 | 227,445,000 | 134,818,000 | 112,268,000 | | Stockholders' equity | 134,604,000 | 139,610,000 | 73,348,000 | 63,732,000 | 82,778,000 | 32,498,000 | -45,091,000 | 39,630,000 | 209,515,000 | 518,357,000 | | Cash and cash equivalents | 150,293,000 | 142,503,000 | 174,819,000 | 147,161,000 | 184,497,000 | 150,564,000 | 88,497,000 | 200,351,000 | 302,078,000 | 602,068,000 | | Free cash flow | -37,492,000 | -102,558,000 | -32,800,000 | -192,149,000 | -117,320,000 | -89,553,000 | -129,142,000 | -20,546,000 | -151,964,000 | -188,211,000 | ### Ratios ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Net margin | | | | | | | | -50.76% | -89.57% | | | Operating margin | | | | | | | | -60.01% | -101.94% | | | Return on equity | -41.35% | -73.05% | -199.94% | -303.83% | -181.10% | -376.16% | | -145.12% | -46.30% | -39.43% | | Return on assets | -33.77% | -56.08% | -49.55% | -68.12% | -53.69% | -59.05% | -110.55% | -20.92% | -27.54% | -32.01% | | Liabilities / equity | 0.16 | 0.25 | 2.93 | 3.34 | 2.28 | 5.13 | | 5.74 | 0.64 | 0.22 | | Current ratio | 12.50 | 8.27 | 1.56 | 1.57 | 1.90 | 2.53 | 1.38 | 1.26 | 2.89 | 6.47 | ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-04-28. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001631574.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q2 | 2022-06-30 | 375,000 | | -0.62 | reported discrete quarter | | 2022-Q3 | 2022-09-30 | 285,000 | | -0.42 | reported discrete quarter | | 2022-Q4 | 2022-12-31 | 1,239,000 | | | derived Q4 = FY annual - nine-month YTD | | 2023-Q1 | 2023-03-31 | 12,929,000 | | -0.27 | reported discrete quarter | | 2023-Q2 | 2023-03-31 | | -27,405,000 | | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 22,106,000 | | -0.20 | reported discrete quarter | | 2023-Q3 | 2023-06-30 | | -21,104,000 | | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 49,214,000 | | 0.07 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | 29,056,000 | -16,256,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 12,538,000 | -31,558,000 | -0.24 | reported discrete quarter | | 2024-Q2 | 2024-03-31 | | -31,558,000 | | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 19,692,000 | | -0.25 | reported discrete quarter | | 2024-Q3 | 2024-06-30 | | -32,923,000 | | reported discrete quarter | | 2024-Q3 | 2024-09-30 | | | -0.47 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | | 29,253,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 9,175,000 | -46,878,000 | -0.29 | reported discrete quarter | | 2025-Q2 | 2025-03-31 | | -46,878,000 | | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 8,699,000 | | -0.31 | reported discrete quarter | | 2025-Q3 | 2025-06-30 | | -50,469,000 | | reported discrete quarter | | 2025-Q3 | 2025-09-30 | | | -0.32 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | | -53,179,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 38,246,000 | -26,087,000 | -0.13 | reported discrete quarter | ## Macro Cross-References - [CPIAUCSL](/indicator/CPIAUCSL/): Consumer Price Index for All Urban Consumers: All Items in U.S. City Average - [UNRATE](/indicator/UNRATE/): Unemployment Rate - [FEDFUNDS](/indicator/FEDFUNDS/): Federal Funds Effective Rate - [CES0500000003](/indicator/CES0500000003/): Average Hourly Earnings of All Employees, Total Private - [DFEDTARU](/indicator/DFEDTARU/): Federal Funds Target Range - Upper Limit - [DFEDTARL](/indicator/DFEDTARL/): Federal Funds Target Range - Lower Limit - [DGS3MO](/indicator/DGS3MO/): Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity - [DGS2](/indicator/DGS2/): Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [DGS30](/indicator/DGS30/): Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity - [T10Y2Y](/indicator/T10Y2Y/): 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity - [CPILFESL](/indicator/CPILFESL/): Consumer Price Index for All Urban Consumers: All Items Less Food and Energy - [CPIUFDSL](/indicator/CPIUFDSL/): Consumer Price Index for All Urban Consumers: Food - [CPIENGSL](/indicator/CPIENGSL/): Consumer Price Index for All Urban Consumers: Energy - [CUSR0000SAH1](/indicator/CUSR0000SAH1/): Consumer Price Index for All Urban Consumers: Shelter - [PCEPI](/indicator/PCEPI/): Personal Consumption Expenditures: Chain-type Price Index - [PCEPILFE](/indicator/PCEPILFE/): Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index - [PPIACO](/indicator/PPIACO/): Producer Price Index by Commodity: All Commodities - [T10YIE](/indicator/T10YIE/): 10-Year Breakeven Inflation Rate - [U6RATE](/indicator/U6RATE/): Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons - [PAYEMS](/indicator/PAYEMS/): All Employees, Total Nonfarm - [CIVPART](/indicator/CIVPART/): Labor Force Participation Rate - [EMRATIO](/indicator/EMRATIO/): Employment-Population Ratio - [UNEMPLOY](/indicator/UNEMPLOY/): Unemployed - [CE16OV](/indicator/CE16OV/): Employment Level - [ICSA](/indicator/ICSA/): Initial Claims - [JTSJOL](/indicator/JTSJOL/): Job Openings: Total Nonfarm - [JTSQUR](/indicator/JTSQUR/): Quits: Total Nonfarm - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [A191RL1Q225SBEA](/indicator/A191RL1Q225SBEA/): Real Gross Domestic Product: Percent Change from Preceding Period - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [HOUST](/indicator/HOUST/): New Privately-Owned Housing Units Started: Total Units - [PERMIT](/indicator/PERMIT/): New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units - [RSAFS](/indicator/RSAFS/): Advance Retail Sales: Retail Trade - [PCE](/indicator/PCE/): Personal Consumption Expenditures - [DSPIC96](/indicator/DSPIC96/): Real Disposable Personal Income - [PSAVERT](/indicator/PSAVERT/): Personal Saving Rate - [M2SL](/indicator/M2SL/): M2 - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance - [MSPUS](/indicator/MSPUS/): Median Sales Price of Houses Sold for the United States - [HSN1F](/indicator/HSN1F/): New One Family Houses Sold: United States - [RHORUSQ156N](/indicator/RHORUSQ156N/): Homeownership Rate in the United States - [TTLCONS](/indicator/TTLCONS/): Total Construction Spending: Total Construction in the United States - [RRVRUSQ156N](/indicator/RRVRUSQ156N/): Rental Vacancy Rate in the United States - [TOTALSL](/indicator/TOTALSL/): Total Consumer Credit Owned and Securitized - [REVOLSL](/indicator/REVOLSL/): Revolving Consumer Credit Owned and Securitized - [DRCCLACBS](/indicator/DRCCLACBS/): Delinquency Rate on Credit Card Loans, All Commercial Banks - [GDP](/indicator/GDP/): Gross Domestic Product - [GPDI](/indicator/GPDI/): Gross Private Domestic Investment - [GCE](/indicator/GCE/): Government Consumption Expenditures and Gross Investment - [PCEC](/indicator/PCEC/): Personal Consumption Expenditures - [NETEXP](/indicator/NETEXP/): Net Exports of Goods and Services - [GFDEBTN](/indicator/GFDEBTN/): Federal Debt: Total Public Debt - [GFDEGDQ188S](/indicator/GFDEGDQ188S/): Federal Debt: Total Public Debt as Percent of Gross Domestic Product - [FYFSD](/indicator/FYFSD/): Federal Surplus or Deficit - [FGRECPT](/indicator/FGRECPT/): Federal Government Current Receipts - [FGEXPND](/indicator/FGEXPND/): Federal Government: Current Expenditures - [MANEMP](/indicator/MANEMP/): All Employees, Manufacturing - [USCONS](/indicator/USCONS/): All Employees, Construction - [USTRADE](/indicator/USTRADE/): All Employees, Retail Trade - [USFIRE](/indicator/USFIRE/): All Employees, Financial Activities - [USGOVT](/indicator/USGOVT/): All Employees, Government - [AWHAETP](/indicator/AWHAETP/): Average Weekly Hours of All Employees, Total Private - [DGORDER](/indicator/DGORDER/): Manufacturers' New Orders: Durable Goods - [NEWORDER](/indicator/NEWORDER/): Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft - [BUSINV](/indicator/BUSINV/): Total Business Inventories - [EXPGS](/indicator/EXPGS/): Exports of Goods and Services - [IMPGS](/indicator/IMPGS/): Imports of Goods and Services - [IR](/indicator/IR/): Import Price Index (End Use): All Commodities - [PPIFIS](/indicator/PPIFIS/): Producer Price Index by Commodity: Final Demand ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/1631574/000119312526183587/wve-20260331.htm Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high Filing date: 2026-04-28 Report date: 2026-03-31 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (“SEC”) on February 26, 2026 (the “2025 Annual Report on Form 10-K”). Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report on Form 10-Q, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Quarterly Report on Form 10-Q and the “Risk Factors” section of our 2025 Annual Report on Form 10-K, our actual results could differ materially from the results described in, or implied by, these forward-looking statements. Overview We are a clinical-stage biotechnology company focused on unlocking the broad potential of ribonucleic acid (“RNA”) medicines (also known as oligonucleotides), or those targeting RNA, to transform human health. Our RNA medicines platform, PRISM®, combines multiple modalities, chemistry innovation and deep insights into human genetics to deliver scientific breakthroughs that treat both rare and common disorders. Our toolkit of RNA-targeting modalities, including RNAi interference (“RNAi”) (SpiNA) and RNA editing (AIMers), provides us with unmatched capabilities for designing and sustainably delivering candidates that optimally address disease biology. Our pipeline is focused on our obesity (WVE-007), alpha-1 antitrypsin deficiency (“AATD”) (WVE-006) and PNPLA3 I148M liver disease (WVE-008) programs, and also includes clinical programs for Duchenne muscular dystrophy (“DMD”) and Huntington’s disease (“HD”), as well as several preclinical programs utilizing our versatile RNA medicines platform. We were founded on the recognition that there was a significant, untapped opportunity to use chemistry innovation to tune the pharmacological properties of oligonucleotides. We have more than a decade of experience challenging convention related to oligonucleotide design and pioneering novel chemistry modifications to optimize the pharmacological properties of our molecules. We have seen in clinical trials that these chemistry modifications enhance potency, distribution, and durability of effect of our molecules. Our novel chemistry also allows us to avoid using complex delivery vehicles, such as lipid nanoparticles and viruses, and instead use clinically proven conjugates (e.g., N-acetylgalactosamine or (“GalNAc”)) or free uptake for delivery to a variety of cell and tissue types. We maintain strong and broad intellectual property, including for our novel chemistry modifications. Our best-in-class chemistry capabilities have also unlocked new areas of biology, such as harnessing adenosine deaminases acting on RNA (“ADAR”) enzymes for messenger RNA (“mRNA”) correction and upregulation, selectively silencing a mutant allele, and more. By opening up new areas of biology, we have also opened up new opportunities to slow, stop, or reverse disease and have expanded the possibilities offered through our platform. The inspiration for our multimodal platform is based on the recognition that the biological machinery (i.e., enzymes) needed to address human disease already exists within our cells and can be harnessed for therapeutic purposes with the right tools. We believe that we have built the most versatile toolkit of RNA-targeting modalities in the industry, with multiple means of repairing, restoring, or reducing proteins and designing best-fit solutions based on the unique biology of a given disease target. We are actively advancing programs across modalities, including RNAi (silencing), RNA editing, which uses novel A-to-I RNA editing oligonucleotides (“AIMers”), antisense silencing, and splicing. We have also advanced novel bifunctional modalities designed to silence multiple targets or silence one target while simultaneously editing or upregulating another unique target. 16 We intentionally focus on targeting the transcriptome using oligonucleotides rather than other nucleic acid modalities such as gene therapy and DNA editing. This focus enables us to: • Leverage diversity of expression across cell types by modulating the many regulatory pathways that impact gene expression, including transcription, endogenous RNAi pathways, splicing, and translation; • Address diseases that have historically been difficult to treat with small molecules or biologics; • Access a variety of tissue types or cell types throughout the body and modulate the frequency of dosing for broad distribution in tissues over time; • Avoid the risk of permanent off-target genetic changes and other challenges associated with DNA editing or gene therapy approaches; and • Leverage well-established industry manufacturing processes and regulatory, access, and reimbursement pathways. We are currently prioritizing lead programs that use GalNAc delivery for hepatic and metabolic diseases, each of which has potential to translate powerful human genetic insights into potentially transformational RNA medicines: • WVE-007 is a GalNAc-conjugated siRNA (SpiNA design) targeting inhibin βE (“INHBE”) for obesity; • WVE-006 is a GalNAc-conjugated RNA editing oligonucleotide (AIMer) for AATD; • WVE-008 is a GalNAc-conjugated RNA editing oligonucleotide (AIMer) for PNPLA3 I148M liver disease. Our clinical-stage portfolio also includes WVE-N531, an exon 53 splicing oligonucleotide for DMD, and WVE-003, an allele-selective oligonucleotide designed to lower mutant huntingtin (“mHTT”) protein and preserve healthy, wild-type huntingtin (“wtHTT”) protein. We are also advancing several emerging siRNA and RNA editing programs targeting both hepatic and extra-hepatic tissues. 17 Our Current Programs Additional details regarding our lead therapeutic programs are set forth below. Obesity WVE-007 is a GalNAc-siRNA, that utilizes Wave’s proprietary design (“SpiNA”). WVE-007 is designed to silence INHBE mRNA to induce fat loss by stimulating lipolysis (fat breakdown) while preserving muscle mass to promote and maintain a healthy metabolic profile. There are approximately 175 million people in the United States and Europe, and over one billion people globally, living with obesity, and therapeutic options beyond GLP-1 receptor agonists are needed. GLP-1 receptor agonists lead to weight loss at the expense of muscle, suppress the general reward system, and are associated with a poor tolerability profile and high discontinuation rates. Heterozygous INHBE loss-of-function (“LoF”) human carriers exhibit a healthy metabolic profile, including reduced waist-to-hip ratio and reduced odds of developing type 2 diabetes or coronary artery disease, and reduction of INHBE by 50% or more is expected to promote a healthy metabolic profile. In preclinical diet-induced obesity (“DIO”) mouse models, a single dose of our INHBE GalNAc-siRNA has demonstrated highly potent and durable INHBE silencing (and 70% Activin E reductions), supporting once or twice a year subcutaneous dosing in humans. Weight loss was driven by visceral fat loss, and muscle mass was preserved in the mice, which is consistent with the profile of human INHBE LoF carriers. In DIO mice studies, a single dose of our INHBE GalNAc-siRNA led to a weight loss effect that was similar to daily subcutaneous injections of semaglutide for 28 days. We also observed a decrease in high fat diet-induced expansion of visceral adipose mass. This reduction of visceral fat mass was associated with significant shrinkage of adipocyte enlargement induced by a high fat diet compared with phosphate-buffered saline (“PBS”) treatment. Collectively, these results support the promotion of healthy adipose tissue with this mechanism of action, while muscle mass was preserved. In a head-to-head study in DIO mice, treatment with our INHBE GalNAc-siRNA prior to cessation of semaglutide treatment curtailed expected rebound weight gain. When administered as an add-on to semaglutide, a single dose of our INHBE GalNAc-siRNA doubled the weight loss observed with semaglutide alone, and this effect was sustained throughout the duration of the preclinical study. In preclinical studies, we have also observed that infiltration of macrophages into visceral adipose was significantly decreased by a single dose of INHBE GalNAc-siRNA compared with PBS controls. INHBE GalNAc-siRNA also significantly reduced proinflammatory M1 macrophage (CD11c positive) while sustaining levels of anti-inflammatory M2 macrophages in visceral fat, indicating an overall shift away from a pro-inflammatory state. Further, RNA sequencing data from subcutaneous adipose tissue indicates that INHBE GalNAc-siRNA leads to the upregulation of genes promoting insulin sensitivity, fatty acid utilization and beiging of white adipose, while downregulating adipose inflammation and fibrosis pathways. RNA sequencing data from visceral adipose tissue demonstrate that our INHBE GalNAc-siRNA increased glucose and fatty acid utilization, and reduced inflammation and fibrosis in adipose tissue. INLIGHT™ is our first-in-human clinical trial of WVE-007 in individuals living with obesity. The Phase 1 single ascending dose (“SAD”) portion of INLIGHT includes otherwise healthy adults living with overweight or obesity to assess safety, tolerability, pharmacokinetics (“PK”), Activin E, body weight, biomarkers and body composition as measured by Dual-Energy X-ray Absorptiometry (“DEXA”). 18 In December 2025, we announced positive interim data from the ongoing Phase 1, SAD portion of INLIGHT, including three-month follow-up from the single subcutaneous 240 mg dose cohort in 32 individuals. These data demonstrated improvements in body composition including reduction in visceral fat, reduction in total fat mass, and preservation of muscle as measured by DEXA. Additionally, we shared that we observed consistent and durable serum Activin E reductions across participants, which support WVE-007’s potential for once or twice-yearly dosing. WVE-007 was generally safe and well tolerated across all dose levels (75 mg, 240 mg, 400 mg, and 600 mg). In March 2026, we announced additional interim data from the Phase 1, SAD portion of INLIGHT. Participants had an average BMI of 32 kg/m², a population with less fat and lower BMI than those in Phase 2 and 3 obesity studies. Key highlights from the update in March 2026 include: - At six-month follow-up, a single 240 mg dose of WVE-007 demonstrated significant placebo-adjusted reductions in visceral fat (-14%; p0.05) and total fat (-5%), stabilization of lean mass (+2%), and reductions in waist circumference (-3%) and body weight (-1%). - The 400 mg cohort had a leaner baseline body composition, with lower BMI and more participants (10 out of 24 individuals) with healthy levels of visceral fat (≤500 g). A post-hoc analysis of the three-month 400 mg cohort results demonstrated robust and statistically significant average reduction in visceral fat (-7.8%, p0.05) in individuals with higher baseline visceral fat (500g), emphasizing the impact of baseline body composition on therapeutic effect. - Consistent, durable, and dose-dependent serum Activin E reductions sustained through at least seven months continue to support WVE-007’s potential for once or twice-yearly dosing, with a mean maximum reduction of up to 88%. - WVE-007 was generally safe and well tolerated across all dose levels (75 mg, 240 mg, 400 mg, and 600 mg). The INLIGHT clinical trial is currently ongoing with 240 mg (n=32), 400 mg (n=32), and 600 mg (n=32) cohorts [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks and uncertainties. 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. Overview We are a clinical-stage biotechnology company focused on unlocking the broad potential of ribonucleic acid (“RNA”) medicines (also known as oligonucleotides), or those targeting RNA, to transform human health. Our RNA medicines platform, PRISM®, combines multiple modalities, chemistry innovation and deep insights into human genetics to deliver scientific breakthroughs that treat both rare and common disorders. Our toolkit of RNA-targeting modalities, including RNAi (SpiNA) and RNA editing (AIMers), provides us with unmatched capabilities for designing and sustainably delivering candidates that optimally address disease biology. Our pipeline is focused on our obesity (WVE-007), alpha-1 antitrypsin deficiency (“AATD”) (WVE-006) and PNPLA3 I148M liver disease (WVE-008) programs, and also includes clinical programs for Duchenne muscular dystrophy (“DMD”) and Huntington’s disease (“HD”), as well as several preclinical programs utilizing our versatile RNA medicines platform. We were founded on the recognition that there was a significant, untapped opportunity to use chemistry innovation to tune the pharmacological properties of oligonucleotides. We have more than a decade of experience challenging convention related to oligonucleotide design and pioneering novel chemistry modifications to optimize the pharmacological properties of our molecules. We have seen in clinical trials that these chemistry modifications enhance potency, distribution, and durability of effect of our molecules. Our novel chemistry also allows us to avoid using complex delivery vehicles, such as lipid nanoparticles and viruses, and instead use clinically proven conjugates (e.g., N-acetylgalactosamine or (“GalNAc”)) or free uptake for delivery to a variety of cell and tissue types. We maintain strong and broad intellectual property, including for our novel chemistry modifications. Our best-in-class chemistry capabilities have also unlocked new areas of biology, such as harnessing adenosine deaminases acting on RNA (“ADAR”) enzymes for messenger RNA (“mRNA”) correction and upregulation, selectively silencing a mutant allele, and more. By opening up new areas of biology, we have also opened up new opportunities to slow, stop, or reverse disease and have expanded the possibilities offered through our platform. The inspiration for our multimodal platform is based on the recognition that the biological machinery (i.e., enzymes) needed to address human disease already exists within our cells and can be harnessed for therapeutic purposes with the right tools. We believe that we have built the most versatile toolkit of RNA-targeting modalities in the industry, with multiple means of repairing, restoring, or reducing proteins and designing best-fit solutions based on the unique biology of a given disease target. We are actively advancing programs across modalities, including RNA interference (“RNAi”) (silencing), RNA editing, which uses novel A-to-I RNA editing oligonucleotides (“AIMers”), antisense silencing, and splicing. We have also advanced novel bifunctional modalities designed to silence multiple targets or silence one target while simultaneously editing or upregulating another unique target. We intentionally focus on targeting the transcriptome using oligonucleotides rather than other nucleic acid modalities such as gene therapy and DNA editing. This focus enables us to: • Leverage diversity of expression across cell types by modulating the many regulatory pathways that impact gene expression, including transcription, endogenous RNAi pathways, splicing, and translation; • Address diseases that have historically been difficult to treat with small molecules or biologics; • Access a variety of tissue types or cell types throughout the body and modulate the frequency of dosing for broad distribution in tissues over time; • Avoid the risk of permanent off-target genetic changes and other challenges associated with DNA editing or gene therapy approaches; and • Leverage well-established industry manufacturing processes and regulatory, access, and reimbursement pathways. We are currently prioritizing lead programs that use GalNAc delivery for hepatic and metabolic diseases, each of which have potential to translate powerful human genetic insights into potentially transformational RNA medicines: • WVE-007 is a GalNAc-conjugated siRNA (SpiNA design) targeting inhibin βE (“INHBE”) for obesity; • WVE-006 is a GalNAc-conjugated RNA editing oligonucleotide (AIMer) for AATD; • WVE-008 is a GalNAc-conjugated RNA editing oligonucleotide (AIMer) for PNPLA3 I148M liver disease. Our clinical-stage portfolio also includes WVE-N531, an exon 53 splicing oligonucleotide for DMD, and WVE-003, an allele-selective oligonucleotide designed to lower mutant huntingtin (“mHTT”) protein and preserve healthy, wild-type huntingtin (“wtHTT”) protein. We are also advancing several emerging siRNA and RNA editing programs targeting both hepatic and extra-hepatic tissues. Financial Operations Overview We have never been profitable, and since our inception, we have incurred significant operating losses. Our net loss was $204.4 million in 2025, $97.0 million in 2024, and $57.5 million in 2023. As of December 31, 2025 and 2024, we had an accumulated deficit of $1,326.2 million and $1,121.9 million, respectively. We expect to incur significant expenses and operating losses for the foreseeable future. Revenue We recognize collaboration revenue under the GSK Collaboration Agreement, which became effective in January 2023, and the Takeda Collaboration Agreement, which became effective in April 2018 and expired in the fourth quarter of 2024, (both of which are defined in Note 5 in the notes to the consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K). We have not generated any product revenue since our inception and do not expect to generate any revenue from the sale of products for the foreseeable future. Operating Expenses Our operating expenses since inception have consisted primarily of research and development expenses and general and administrative expenses. Research and Development Expenses Research and development expenses consist primarily of costs incurred for our research activities, including development of our RNA medicines platform, our discovery efforts, and the development of our product candidates, which include: • compensation-related expenses, including employee salaries, bonuses, share-based compensation expense and other related benefits expenses for personnel in our research and development organization; • expenses incurred under agreements with third parties, including CROs that conduct research, preclinical and clinical activities on our behalf, as well as CMOs that manufacture drug product for use in our preclinical studies and clinical trials; • expenses incurred related to our internal manufacturing of drug substance for use in our preclinical studies and clinical trials; • expenses related to compliance with regulatory requirements; • expenses related to third-party consultants; • research and development supplies and services expenses; and • facility-related expenses, including rent, maintenance and other general operating expenses. We recognize research and development costs as incurred. We recognize external development costs based on an evaluation of the progress to completion of specific tasks using information provided to us by our vendors. Payments for these activities are based on the terms of the individual agreements, which may differ from the pattern of costs incurred, and are reflected in our financial statements as prepaid or accrued expenses. Our primary research and development focus has been the development of our RNA medicines platform, PRISM. We are using PRISM, which combines multiple modalities, chemistry innovation and deep insights in human genetics, to deliver scientific breakthroughs that treat both rare and common disorders, and advance our pipeline of RNA medicines. Our research and development expenses consist primarily of expenses related to our CROs, CMOs, consultants, other external vendors and fees paid to global regulatory agencies to conduct our clinical trials, in addition to compensation-related expenses, internal manufacturing expenses, facility-related expenses and other general operating expenses. These expenses are incurred in connection with research and development efforts and our preclinical studies and clinical trials. We track certain external expenses on a program-by-program basis. However, we do not allocate compensation-related expenses, internal manufacturing expenses, equipment repairs and maintenance expense, facility-related expenses or other operating expenses to specific programs. These expenses, which are not allocated on a program-by-program basis, are included in the “Other research and development expenses(1), including PNPLA3, additional preclinical programs, PRISM” category along with other external expenses related to our discovery and development programs, as well as platform development and identification of potential drug discovery candidates. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect to continue to incur significant research and development expenses in the foreseeable future as we continue to manage our existing clinical trials, initiate additional clinical trials for certain product candidates, pursue later stages of clinical development for certain product candidates, maintain our manufacturing capabilities and continue to discover and develop additional product candidates in multiple therapeutic areas. General and Administrative Expenses General and administrative expenses consist primarily of compensation-related expenses, including salaries, bonuses, share-based compensation and other related benefits costs for personnel in our executive, finance, corporate, legal and administrative functions, as well as compensation-related expenses for our Board. General and administrative expenses also include legal fees; expenses associated with being a public company; professional fees for accounting, auditing, tax and consulting services; insurance costs; travel expenses; other operating costs; and facility-related expenses. Other Income, Net Other income, net is comprised primarily of interest income on cash and cash equivalents and refundable tax credits from tax authorities. We recognize refundable tax credits when there is reasonable assurance that we will comply with the requirements of the refundable tax credit and that the refundable tax credit will be received. Income Taxes We are a Singapore multi-national company subject to taxation in the United States and various other jurisdictions. As of December 31, 2025 and 2024, we have recorded a full valuation allowance against our net operating loss carryforwards and federal and state tax credits in all jurisdictions due to uncertainty regarding future taxable income. Results of Operations In this section, we discuss the results of our operations for the year ended December 31, 2025 compared to the year ended December 31, 2024 and for the year ended December 31, 2024 compared to the year ended December 31, 2023. Comparison of the Year Ended December 31, 2025 to the Year Ended December 31, 2024 The following table summarizes our results of operations for 2025 and 2024: For the Year Ended December 31, 2025 2024 Increase (Decrease) (in thousands) Revenue $ 42,727 $ 108,302 $ (65,575 ) Operating expenses: Research and development 182,779 159,682 23,097 General and administrative 75,331 59,023 16,308 Total operating expenses 258,110 218,705 39,405 Loss from operations (215,383 ) (110,403 ) 104,980 Total other income, net 11,005 13,395 (2,390 ) Loss before income taxes (204,378 ) (97,008 ) 107,370 Income tax benefit — — — Net loss $ (204,378 ) $ (97,008 ) $ 107,370 Revenue Revenue for the year ended December 31, 2025 was $42.7 million, and was earned under the GSK Collaboration Agreement. Revenue for the year ended December 31, 2024 was $108.3 million, and was earned under the GSK Collaboration Agreement ($37.0 million) and the Takeda Collaboration Agreement ($71.3 million). The $65.6 million decrease in revenue year over year was driven by the revenue recognized under the Takeda Collaboration Agreement in 2024, partially offset by the increase in revenue recognized under the GSK Collaboration Agreement. The decrease in the Takeda Collaboration revenue earned year over year was primarily due to the termination of the collaboration agreement in October 2024, which led to the recognition of the remainder of the deferred revenue related to the research and development services, as well as the license related to the HD program. Research and Development Expenses The following table summarizes our research and development expenses incurred for the years ended December 31, 2025 and 2024: For the Year Ended December 31, 2025 2024 Increase (Decrease) (in thousands) INHBE program $ 15,715 $ 9,294 $ 6,421 AATD program 5,714 11,666 (5,952 ) DMD program 19,469 15,536 3,933 HD program 2,678 11,790 (9,112 ) Other research and development expenses(1), including PNPLA3, additional preclinical programs, PRISM 139,203 111,396 27,807 Total research and development expenses $ 182,779 $ 159,682 $ 23,097 (1) Includes expenses related to other research and development programs, identification of potential drug discovery candidates, compensation-related expenses, internal manufacturing expenses, equipment repairs and maintenance expense, facility-related expenses, and other operating expenses, which are not allocated to specific programs. Research and development expenses were $182.8 million for the year ended December 31, 2025, compared to $159.7 million for the year ended December 31, 2024. The increase of $23.1 million was due to the following: • an increase of $6.4 million in external expenses related to our INHBE program, including WVE-007 (RNAi); • a decrease of $5.9 million in external expenses related to our AATD program, WVE-006 (RNA editing); • an increase of $3.9 million in external expenses related to our DMD program, including WVE-N531 (splicing); • a decrease of $9.1 million in external expenses related to our HD program, including WVE-003 (silencing); and • an increase of $27.8 million in other research and development expenses, including PNPLA3, additional preclinical programs, PRISM, and internal and external research and development expenses that are not allocated on a program-by-program basis or are related to other discovery and development programs, and the identification of potential drug discovery candidates. This is mainly due to increases in compensation-related expenses and facilities-related expenses, partially offset by decreases in other external research and development expenses. General and Administrative Expenses General and administrative expenses were $75.3 million for the year ended December 31, 2025, compared to $59.0 million for the year ended December 31, 2024. The increase of $16.3 million is primarily driven by increases in compensation related expenses and administrative expenses. Other Income, Net Other income, net for the years ended December 31, 2025 and 2024 was $11.0 million and $13.4 million, respectively. The decrease of $2.4 million in other income, net was primarily driven by a decrease in estimated refundable tax credits during the year ended December 31, 2025. Income Tax Benefit During the years ended December 31, 2025 and 2024, we recorded no income tax benefit or provision. Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023 The following table summarizes our results of operations for 2024 and 2023: For the Year Ended December 31, 2024 2023 Increase (Decrease) (in thousands) Revenue $ 108,302 $ 113,305 $ (5,003 ) Operating expenses: Research and development 159,682 130,009 29,673 General and administrative 59,023 51,292 7,731 Total operating expenses 218,705 181,301 37,404 Loss from operations (110,403 ) (67,996 ) 42,407 Total other income, net 13,395 9,806 3,589 Loss before income taxes (97,008 ) (58,190 ) 38,818 Income tax benefit — 677 (677 ) Net loss $ (97,008 ) $ (57,513 ) $ 39,495 Revenue Revenue for the years ended December 31, 2024 and 2023, was $108.3 million and $113.3 million, respectively, and was earned under the GSK Collaboration Agreement and the Takeda Collaboration Agreement. The $5.0 million decrease in revenue year over year was driven by the revenue recognized under the GSK Collaboration Agreement, partially offset by the increase in revenue recognized under the Takeda Collaboration Agreement. The $108.3 million in revenue recognized during the year ended December 31, 2024 was comprised of $37.0 million in revenue recognized under the GSK Collaboration Agreement and $71.3 million of revenue recognized under the Takeda Collaboration Agreement. The $113.3 million in revenue recognized during the year ended December 31, 2023 was comprised of $66.3 million in revenue recognized under the GSK Collaboration Agreement and $47.0 million of revenue recognized under the Takeda Collaboration Agreement. The increase in the Takeda Collaboration revenue earned year over year was primarily due to the termination of the collaboration in October 2024, which led to the recognition of the remainder of the deferred revenue related to the research and development services, as well as the license related to the HD program. This was offset by the decrease in the GSK revenue earned year over year primarily related to the AATD program. Research and Development Expenses The following table summarizes our research and development expenses incurred for the years ended December 31, 2024 and 2023: For the Year Ended December 31, 2024 2023 Increase (Decrease) (in thousands) INHBE program $ 9,294 $ 229 $ 9,065 AATD program 11,666 8,453 3,213 DMD program 15,536 7,808 7,728 HD program 11,790 13,086 (1,296 ) Other research and development expenses(1), including PNPLA3, additional preclinical programs, PRISM 111,396 100,433 10,963 Total research and development expenses $ 159,682 $ 130,009 $ 29,673 (1) Includes expenses related to other research and development programs, identification of potential drug discovery candidates, compensation-related expenses, internal manufacturing expenses, equipment repairs and maintenance expense, facility-related expenses, and other operating expenses, which are not allocated to specific programs. Research and development expenses were $159.7 million for the year ended December 31, 2024, compared to $130.0 million for the year ended December 31, 2023. The increase of $29.7 million was due to the following: • an increase of $9.1 million in external expenses related to our INHBE program, including WVE-007 (RNAi); • an increase of $3.2 million in external expenses related to our AATD program, WVE-006 (RNA editing); • an increase of $7.7 million in external expenses related to our DMD program, including WVE-N531 (splicing); • a decrease of $1.3 million in external expenses related to our HD program, including WVE-003 (silencing); and • an increase of $11.0 million in other research and development expenses, including PNPLA3, additional preclinical programs, PRISM, and internal and external research and development expenses that are not allocated on a program-by-program basis or are related to other discovery and development programs, and the identification of potential drug discovery candidates. This is mainly due to increases in compensation-related expenses and facilities-related expenses, partially offset by decreases in other external research and development expenses. General and Administrative Expenses General and administrative expenses were $59.0 million for the year ended December 31, 2024, compared to $51.3 million for the year ended December 31, 2023. The increase of $7.7 million was primarily driven by increases in compensation related expenses and administrative expenses. Other Income, Net Other income, net for the years ended December 31, 2024 and 2023 was $13.4 million and $9.8 million, respectively. The increase of $3.6 million in other income, net was primarily driven by an increase in estimated refundable tax credits as well as an increase in interest income during the year ended December 31, 2024. Income Tax Benefit During the years ended December 31, 2024 and 2023, we recorded no income tax benefit or provision and an income tax benefit of $0.7 million, respectively. The income tax benefit for the year ended December 31, 2023 was due to a change in estimate in connection with U.S. tax guidance relating to the capitalization of research and development expenditures. Liquidity and Capital Resources Since our inception, we have not generated any product revenue and have incurred recurring net operating losses. To date, we have primarily funded our operations through public and other registered offerings of our ordinary shares and other securities, collaborations with third parties and private placements of debt and equity securities. Through December 31, 2025, we have received an aggregate of approximately $2,076.7 million in net proceeds from these transactions, consisting of $1,450.5 million in net proceeds from public and other registered offerings of our ordinary shares and other securities, $536.9 million from our collaborations and $89.3 million in net proceeds from private placements of our debt and equity securities. On December 11, 2025, we closed an underwritten public offering (the "December 2025 Offering") in which we issued and sold 18,552,632 of our ordinary shares, including 2,763,157 ordinary shares issued and sold pursuant to the underwriter's exercise in full of their option to purchase additional shares, and pre-funded warrants to purchase up to 2,631,578 of our ordinary shares (the "2025 Pre-Funded Warrants"). The gross proceeds to us from the December 2025 Offering were approximately $402.5 million before deducting underwriting discounts and commissions and other offering expenses, and including gross proceeds from the exercise of the Underwriters' option to purchase the additional shares in full. As of December 31, 2025, we had cash and cash equivalents of $602.1 million, restricted cash of $3.8 million and an accumulated deficit of $1,326.2 million. We expect that our existing cash and cash equivalents will be sufficient to fund our operations for at least the next twelve months from the issuance date of these financial statements. We have based this expectation on assumptions that may prove to be incorrect, and we may use our available capital resources sooner than we currently expect. In addition, we may elect to raise additional funds before we need them if the conditions for raising capital are favorable due to market conditions or strategic considerations, even if we expect we have sufficient funds for our current or future operating plans. Our operating lease commitments as of December 31, 2025 total $19.5 million, of which $9.6 million is related to payments in 2026 and approximately $9.9 million is related to payments beyond 2026. On November 12, 2024, we filed a shelf registration statement on Form S-3ASR with the SEC for which we registered for sale an indeterminate amount of any combination of our ordinary shares, debt securities, warrants, rights and/or units from time to time and at prices and on terms that we may determine, which we refer to as the “2024 WKSI Shelf”. Our 2024 WKSI Shelf includes a prospectus covering up to an aggregate of $250.0 million in ordinary shares that we are able to issue and sell from time to time, through Jefferies LLC (“Jefferies”) acting as our sales agent, pursuant to the Open Market Sale Agreement, dated May 10, 2019, as amended by Amendment No. 1, dated as of March 2, 2020, Amendment No. 2, dated as of March 3, 2022, and Amendment No. 3, dated November 12, 2024, (collectively, the “Sales Agreement”), for our “at-the-market” equity program. For the twelve months ended December 31, 2025, we received $94.6 million in net proceeds from sales under our “at-the-market" equity program. Adequate additional financing may not be available to us on acceptable terms, or at all. Our inability to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy. We will need to generate significant revenue to achieve profitability, and we may never do so. Cash Flows The following table summarizes our sources and uses of cash for each of the periods presented: For the Year Ended December 31, 2025 2024 2023 (in thousands) Net cash used in operating activities $ (187,493 ) $ (151,026 ) $ (19,431 ) Net cash used in investing activities (718 ) (938 ) (1,115 ) Net cash provided by financing activities 488,235 253,890 132,534 Effect of foreign exchange rates on cash 12 (138 ) (95 ) Net increase in cash, cash equivalents and restricted cash $ 300,036 $ 101,788 $ 111,893 Operating Activities During 2025, operating activities used $187.5 million of cash, primarily due to our net loss of $204.4 million and changes in our operating assets and liabilities of $16.9 million, partially offset by non-cash charges of $33.8 million The non-cash charges for 2025 related to share-based compensation expense of $25.0 million, amortization of right-of-use assets of $5.4 million, and depreciation expense of $3.4 million. The largest change in operating assets and liabilities was a $19.8 million decrease in deferred revenue, mainly driven by revenue recognized under the GSK Collaboration Agreement. During 2024, operating activities used $151.0 million of cash, primarily due to our net loss of $97.0 million, partially offset by non-cash charges of $21.8 million and changes in our operating assets and liabilities of $75.8 million. The non-cash charges for 2024 related to share-based compensation expense of $13.1 million, amortization of right-of-use assets of $4.8 million, and depreciation expense of $3.9 million. The largest change in operating assets and liabilities was a $93.6 million decrease in deferred revenue, mainly driven by our Takeda Collaboration Agreement, which was partially offset by the second largest change in operating assets and liabilities, the $19.7 million decrease in accounts receivable primarily due to the collection of receivables related to the GSK Collaboration Agreement. During 2023, operating activities used $19.4 million of cash, primarily due to our net loss of $57.5 million, partially offset by non-cash charges of $19.0 million and changes in our operating assets and liabilities of $19.1 million. The non-cash charges for 2023 related to share-based compensation expense of $9.8 million, amortization of right-of-use assets of $4.2 million, and depreciation expense of $5.0 million. The largest change in operating assets and liabilities was a $54.3 million increase in deferred revenue, mainly driven by our GSK Collaboration Agreement, which became effective in January 2023, which was partially offset by the second largest change in operating assets and liabilities, the $21.1 million increase in accounts receivable primarily related to the achievement of a milestone under the GSK Collaboration Agreement. Investing Activities During 2025, investing activities used $0.7 million of cash, primarily consisting of purchases of property and equipment. During 2024, investing activities used $0.9 million of cash, primarily consisting of purchases of property and equipment. During 2023, investing activities used $1.1 million of cash, primarily consisting of purchases of property and equipment. Financing Activities During 2025, net cash provided by financing activities was $488.2 million, primarily due to the $377.8 million in net proceeds from the December 2025 Offering of ordinary shares and the 2025 Pre-Funded Warrants, $94.6 million in net proceeds from sales under our “at-the-market” equity program, as well as $14.9 million in proceeds from the exercise of stock options. During 2024, net cash provided by financing activities was $253.9 million, primarily due to the $215.8 million in net proceeds from the September 2024 underwritten public offering of ordinary shares and the 2024 Pre-Funded Warrants (as defined below) (the "September 2024 Offering"); as well as the $14.0 million in net proceeds from the January 2024 exercise of the underwriters’ option to purchase an additional 3,000,000 shares under the December 2023 Offering. Additionally, we received $20.4 million in net proceeds from sales under our “at-the-market” equity program. During 2023, net cash provided by financing activities was $132.5 million, primarily due to the $93.6 million in net proceeds from the December 2023 Offering, which comprised of sales of ordinary shares, as well as $34.6 million in net proceeds from the GSK Equity Investment. Additionally, there were $3.1 million in net proceeds from our "at-the-market" equity program. Funding Requirements We expect to continue to incur significant expenses in connection with our ongoing research and development activities and our internal cGMP manufacturing activities. Furthermore, we anticipate that our expenses will continue to vary if and as we: • continue to conduct our clinical trials evaluating our product candidates in patients; • conduct research and preclinical development of discovery targets and advance additional programs into clinical development; • file clinical trial applications with global regulatory agencies and conduct clinical trials for our programs; • make strategic investments in continuing to innovate our research and development platform, PRISM, and in optimizing our manufacturing processes and formulations; • maintain our manufacturing capabilities through our internal facility and our CMOs; • maintain our intellectual property portfolio and consider the acquisition of complementary intellectual property; • seek and obtain regulatory approvals for our product candidates; • respond to the impacts of local and global health epidemics, geopolitical conflicts, global economic uncertainty, tariffs, rising inflation, rising interest rates or market disruptions on our business; and • establish and build capabilities to market, distribute and sell our product candidates. We may experience delays or encounter issues with any of the above, including but not limited to failed studies, complex results, safety issues or other regulatory challenges. Because of the numerous risks and uncertainties associated with the development of drug candidates and because the extent to which we may enter into collaborations with third parties for development of product candidates is unknown, we are unable to estimate the amounts of future capital outlays and operating expenses associated with completing the research and development for our therapeutic programs. Our future capital requirements for our therapeutic programs will depend on many factors, including: • the progress, results and costs of conducting research and continued preclinical and clinical development for our therapeutic programs and future potential pipeline candidates; • the number and characteristics of product candidates and programs that we pursue; • the cost of manufacturing clinical supplies of our product candidates; • whether and to what extent milestone events are achieved under our collaboration with GSK or any potential future licensee or collaborator; • the costs, timing and outcome of regulatory review of our product candidates; • our ability to obtain marketing approval for our product candidates; • the impacts of local and global health epidemics, geopolitical conflicts, global economic uncertainty, tariffs, rising inflation, rising interest rates or market disruptions on our business; • the costs and timing of future commercialization activities, including manufacturing, marketing, sales and distribution, for any of our product candidates for which we receive marketing approval; • market acceptance of our product candidates, to the extent any are approved for commercial sale, and the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; • the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; • the effect of competing technological and market developments; and • the extent to which we acquire or invest in businesses, products and technologies, including entering into licensing or collaboration arrangements for product candidates. Identifying potential product candidates and conducting preclinical testing and clinical trials is a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data or results required to obtain marketing approval and achieve product sales. In addition, our product candidates, if approved, may not achieve commercial success. Our product revenue, if any, will be derived from sales of products that we do not expect to be commercially available for many years, if ever. Accordingly, we will need to obtain substantial additional funds to achieve our business objectives. Adequate additional funds may not be available to us on acceptable terms when we need them, or at all. We do not currently have any committed external source of funds, except for possible future payments from GSK under our collaboration with them. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our existing shareholders will be diluted, and the terms may include liquidation or other preferences that adversely affect the rights of our shareholders. Additional debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends and may require the issuance of warrants, which could potentially dilute our shareholders’ ownership interests. If we raise additional funds through collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development programs or any future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. Recently Issued and Adopted Accounting Pronouncements For detailed information regarding recently issued and adopted accounting pronouncements and the expected impact on our consolidated financial statements, see Note 2 “Significant Accounting Policies” in the notes to the consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K. Critical Accounting Policies and Significant Judgments and Estimates Our consolidated financial statements are prepared in accordance with U.S. GAAP. The preparation of our financial statements and related disclosures requires us to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue, costs and expenses and related disclosures. We believe that our revenue recognition policy, particularly (a) assessing the number of performance obligations; (b) determining the transaction price; (c) allocating the transaction price to the performance obligations in the contract; and (d) determining the pattern over which performance obligations are satisfied, including estimates to complete performance obligations, and the assumptions and estimates used in our analysis of contracts with CROs and CMOs to estimate the contract expense, involve a greater degree of judgment, and therefore we consider them to be our critical accounting policies. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions and conditions. Revenue Recognition The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”). This standard applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases, insurance, and financial instruments. Under ASC 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of ASC 606, the entity performs the following five-step analysis: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step analysis to contracts when it is probable that the entity will collect the consideration to which it is entitled in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses the goods or services promised within each contract, determines those that are performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. The Company has entered into collaboration agreements for research, development, and commercial services, under which the Company licenses certain rights to its product candidates to third parties. The terms of these arrangements typically include payment to the Company of one or more of the following: non-refundable, upfront license fees; prepayment or reimbursement of certain costs; customer option exercise fees; development, regulatory and commercial milestone payments; and royalties on net sales of licensed products. Any variable consideration is constrained, and therefore, the cumulative revenue associated with this consideration is not recognized until it is deemed not to be at significant risk of reversal. In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under each of its agreements for which the collaboration partner is also a customer, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. As part of the accounting for these arrangements, the Company must use significant judgment to determine: (a) the number of performance obligations based on the determination under step (ii) above; (b) the transaction price under step (iii) above; and (c) the timing of satisfaction of performance obligations as a measure of progress in step (v) above. The Company uses significant judgment to determine whether milestones or other variable consideration, except for royalties, should be included in the transaction price as described further below. The transaction price is allocated to the optional goods and services the Company expects to provide. The Company uses estimates to determine the timing of satisfaction of performance obligations. Amounts received prior to being recognized as revenue are recorded as deferred revenue. Amounts expected to be recognized as revenue within the 12 months following the balance sheet date are classified as current portion of deferred revenue in the accompanying consolidated balance sheets. Amounts not expected to be recognized as revenue within the 12 months following the balance sheet date are classified as deferred revenue, net of current portion. Licenses of intellectual property: In assessing whether a promise or performance obligation is distinct from the other promises, the Company considers factors such as the research, development, manufacturing and commercialization capabilities of the customer and the availability of the associated expertise in the general marketplace. In addition, the Company considers whether the customer can benefit from a promise for its intended purpose without the receipt of the remaining promise, whether the value of the promise is dependent on the unsatisfied promise, whether there are other vendors that could provide the remaining promise, and whether it is separately identifiable from the remaining promise. For licenses that are combined with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Research and development services: If an arrangement is determined to contain a promise or obligation for the Company to perform research and development services, the Company must determine whether these services are distinct from other promises in the arrangement. In assessing whether the services are distinct from the other promises, the Company considers the capabilities of the customer to perform these same services. In addition, the Company considers whether the customer can benefit from a promise for its intended purpose without the receipt of the remaining promise, whether the value of the promise is dependent on the unsatisfied promise, whether there are other vendors that could provide the remaining promise, and whether it is separately identifiable from the remaining promise. For research and development services that are combined with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Customer options: If an arrangement is determined to contain customer options that allow the customer to acquire additional goods or services, the goods and services underlying the customer options are not considered to be performance obligations at the outset of the arrangement, as they are contingent upon option exercise. The Company evaluates the customer options for material rights, that is, the option to acquire additional goods or services for free or at a discount. If the customer options are determined to represent a material right, the material right is recognized as a separate performance obligation at the outset of the arrangement. The Company allocates the transaction price to material rights based on the standalone selling price. Amounts allocated to any material right are not recognized as revenue until the option is exercised and the performance obligation is satisfied. Milestone payments: At the inception of each arrangement that includes milestone payments, the Company evaluates whether a significant reversal of cumulative revenue provided in conjunction with achieving the milestones is probable, and estimates the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant reversal of cumulative revenue would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within the control of the Company or the licensee, such as regulatory approvals, are not considered probable of being achieved until those approvals are received. For other milestones, the Company evaluates factors such as the scientific, clinical, regulatory, commercial, and other risks that must be overcome to achieve the particular milestone in making this assessment. There is considerable judgment involved in determining whether it is probable that a significant reversal of cumulative revenue would not occur. At the end of each subsequent reporting period, the Company reevaluates the probability of achievement of all milestones subject to constraint and, if necessary, adjusts its estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and earnings in the period of adjustment. Royalties: For arrangements that include sales-based royalties, including milestone payments based on a level of sales, and the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, the Company has not recognized any royalty revenue resulting from any of its licensing arrangements. Contract costs: The Company recognizes as an asset the incremental costs of obtaining a contract with a customer if the costs are expected to be recovered. As a practical expedient, the Company recognizes the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that it otherwise would have recognized is one year or less. To date, the Company has not incurred any incremental costs of obtaining a contract with a customer. For additional discussion of accounting for collaboration revenues, see Note 5 of our consolidated financial statements. Prepaid and Accrued Research and Development Expenses As we prepare our consolidated financial statements, we are required to estimate our prepaid and accrued expenses. For certain contracts with our CROs and CMOs, if the billing terms do not align with the pattern in which the work is completed by the CRO or CMO as of the end of the period, we are required to perform an analysis to estimate the expense, for the period and to date for each contract. Contracts that are subject to this analysis generally relate to the following services: research and development services, manufacturing services, toxicology studies and clinical trial services. Once we have completed our analysis, we will record the estimated expense in the period for each contract and, depending on the invoicing activity related to each contract, we either have a prepayment or accrual as of the end of the period. We base our estimates on communications with internal study managers, our knowledge of the ongoing and past work at the CROs and CMOs, and communications and reporting from our CROs and CMOs, where applicable.