10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

    ☒     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

   

For the quarterly period ended March 31, 2024

    ☐     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

   

For the transition period from ______ to ______

Commission File Number: 001-37627

WAVE LIFE SCIENCES LTD.

(Exact name of registrant as specified in its charter)


Singapore (State or other jurisdiction of incorporation or organization)		98-1356880 (I.R.S. Employer Identification No.)

7 Straits View #12-00, Marina One East Tower Singapore (Address of principal executive offices)		018936 (Zip Code)

+65 6236 3388

(Registrant’s telephone number, including area code)

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


Title of each class	Trading symbol	Name of each exchange on which registered
$0 Par Value Ordinary Shares	WVE	The Nasdaq Global Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of ‘‘large accelerated filer,’’ ‘‘accelerated filer,’’ ‘‘smaller reporting company,’’ and ‘‘emerging growth company’’ in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of outstanding ordinary shares of the registrant as of May 7, 2024 was 122,460,160.

WAVE LIFE SCIENCES LTD.

QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS


		Page
PART I - FINANCIAL INFORMATION		5
Item 1. Financial Statements		5
Unaudited Consolidated Balance Sheets		5
Unaudited Consolidated Statements of Operations and Comprehensive Loss		6
Unaudited Consolidated Statements of Series A Preferred Shares and Shareholders' Equity (Deficit)		7
Unaudited Consolidated Statements of Cash Flows		8
Notes to Unaudited Consolidated Financial Statements		9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		19
Item 3. Quantitative and Qualitative Disclosures About Market Risk		31
Item 4. Controls and Procedures		31
PART II - OTHER INFORMATION		32
Item 1. Legal Proceedings		32
Item 1A. Risk Factors		32
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		32
Item 3. Defaults Upon Senior Securities		32
Item 4. Mine Safety Disclosures		32
Item 5. Other Information		32
Item 6. Exhibits		33

Special Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that relate to future events or to our future operations or financial performance. Any forward-looking statement involves known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statement. In some cases, forward-looking statements are identified by the words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “future,” “goals,” “intend,” “likely,” “may,” “might,” “ongoing,” “objective,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “strategy,” “target,” “will” and “would” or the negative of these terms, or other comparable terminology intended to identify statements about the future, although not all forward-looking statements contain these identifying words. Forward-looking statements include statements, other than statements of historical fact, about, among other things: our ability to fund our future operations; our financial position, revenues, costs, expenses, uses of cash and capital requirements; our need for additional financing or the period for which our existing cash resources will be sufficient to meet our operating requirements; the success, progress, number, scope, cost, duration, timing or results of our research and development activities, preclinical studies and clinical trials, including the timing for initiation or completion of or availability of results from any preclinical studies and clinical trials or for submission, review or approval of any regulatory filing; the timing of, and our ability to, obtain and maintain regulatory approvals for any of our product candidates; the potential benefits that may be derived from any of our product candidates; our strategies, prospects, plans, goals, expectations, forecasts or objectives; the success of our collaborations with third parties; any payment that our collaboration partners may make to us; our ability to identify and develop new product candidates; our intellectual property position; our commercialization, marketing and manufacturing capabilities and strategy; our ability to develop sales and marketing capabilities; our estimates regarding future expenses and needs for additional financing; our ability to identify, recruit and retain key personnel; our financial performance; developments and projections relating to our competitors in the industry; our liquidity and working capital requirements; the expected impact of new accounting standards; and our expectations regarding the impact of any local and global health epidemics on our business, including our research and development activities, preclinical studies and clinical trials, supply of drug product, and workforce.

Although we believe that we have a reasonable basis for each forward-looking statement contained in this report, we caution you that these statements are based on our estimates or projections of the future that are subject to known and unknown risks and uncertainties and other important factors that may cause our actual results, level of activity, performance or achievements expressed or implied by any forward-looking statement to differ. These risks, uncertainties and other factors include, among other things, our critical accounting policies; the ability of our preclinical studies to produce data sufficient to support the filing of global clinical trial applications and the timing thereof; our ability to continue to build and maintain the company infrastructure and personnel needed to achieve our goals; the clinical results and timing of our programs, which may not support further development of our product candidates; actions of regulatory agencies, which may affect the initiation, timing and progress of clinical trials; our effectiveness in managing current and future clinical trials and regulatory processes; the success of our platform in identifying viable candidates; the continued development and acceptance of nucleic acid therapeutics as a class of drugs; our ability to demonstrate the therapeutic benefits of our stereopure candidates in clinical trials, including our ability to develop candidates across multiple therapeutic modalities; our ability to obtain, maintain and protect intellectual property; our ability to enforce our patents against infringers and defend our patent portfolio against challenges from third parties; our ability to fund our operations and to raise additional capital as needed; competition from others developing therapies for similar uses; and any impacts on our business as a result of or related to any local and global health epidemics, the conflict involving Russia and Ukraine, the conflict in the Middle East, global economic uncertainty, rising inflation, rising interest rates or market disruptions on our business, as well as other risks and uncertainties under the caption “Risk Factors” and any other disclosures contained in this Quarterly Report on Form 10-Q and in other filings we make with the Securities and Exchange Commission (the “SEC”).

Each forward-looking statement contained in this report is based on a combination of facts and factors currently known by us and our expectations of the future, about which we cannot be certain. As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report on Form 10-Q will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, these statements should not be regarded as representations or warranties by us or any other person that we will achieve our objectives and plans in any specified timeframe, or at all. We caution you not to place undue reliance on any forward-looking statement.

In addition, any forward-looking statement in this report represents our views only as of the date of this report and should not be relied upon as representing our views as of any subsequent date. We anticipate that subsequent events and developments may cause our views to change. Although we may elect to update these forward-looking statements publicly at some point in the future, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make.

As used in this Quarterly Report on Form 10-Q, unless otherwise stated or the context otherwise indicates, references to “Wave,” the “Company,” “we,” “our,” “us” or similar terms refer to Wave Life Sciences Ltd. and our wholly owned subsidiaries. The Wave Life Sciences Ltd. and Wave Life Sciences Pte. Ltd. names, the Wave Life Sciences mark, PRISM and the other registered and pending trademarks, trade names and service marks of Wave Life Sciences Ltd. appearing in this Quarterly Report on Form 10-Q are the property of Wave Life Sciences Ltd. This Quarterly Report on Form 10-Q also contains additional trade names, trademarks and service marks belonging to Wave Life Sciences Ltd. and to other companies. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply, a relationship with, or endorsement or sponsorship of us by, these other parties. Solely for convenience, the trademarks and trade names in this Quarterly Report on Form 10-Q are referred to without the ® and ™ symbols, but such reference should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

WAVE LIFE SCIENCES LTD.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)


	March 31, 2024			December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	180,922		$	200,351
Accounts receivable		—			21,086
Prepaid expenses		11,139			9,912
Other current assets		4,706			4,024
Total current assets		196,767			235,373
Long-term assets:
Property and equipment, net of accumulated depreciation of $43,687 and $42,709 as of March 31, 2024 and December 31, 2023, respectively		12,418			13,084
Operating lease right-of-use assets		21,502			22,637
Restricted cash		3,715			3,699
Other assets		868			156
Total long-term assets		38,503			39,576
Total assets	$	235,270		$	274,949
Liabilities, Series A preferred shares, and shareholders’ equity
Current liabilities:
Accounts payable	$	11,730		$	12,839
Accrued expenses and other current liabilities		6,621			16,828
Current portion of deferred revenue		140,586			150,059
Current portion of operating lease liability		6,936			6,714
Total current liabilities		165,873			186,440
Long-term liabilities:
Deferred revenue, net of current portion		12,536			15,601
Operating lease liability, net of current portion		23,598			25,404
Total long-term liabilities		36,134			41,005
Total liabilities	$	202,007		$	227,445
Series A preferred shares, no par value; 3,901,348 shares issued and outstanding at March 31, 2024 and December 31, 2023	$	7,874		$	7,874
Shareholders’ equity:
Ordinary shares, no par value; 122,321,384 and 119,162,234 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively	$	949,877		$	935,367
Additional paid-in capital		132,118			129,237
Accumulated other comprehensive loss		(198	)		(124	)
Accumulated deficit		(1,056,408	)		(1,024,850	)
Total shareholders’ equity	$	25,389		$	39,630
Total liabilities, Series A preferred shares, and shareholders’ equity	$	235,270		$	274,949

The accompanying notes are an integral part of the unaudited consolidated financial statements.

WAVE LIFE SCIENCES LTD.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share amounts)


	Three Months Ended March 31,
	2024			2023
Revenue	$	12,538		$	12,929
Operating expenses:
Research and development		33,447			30,979
General and administrative		13,549			12,235
Total operating expenses		46,996			43,214
Loss from operations		(34,458	)		(30,285	)
Other income, net:
Dividend income and interest income		2,535			1,873
Other income, net		365			1,007
Total other income, net		2,900			2,880
Loss before income taxes		(31,558	)		(27,405	)
Income tax benefit (provision)		—			—
Net loss	$	(31,558	)	$	(27,405	)
Net loss per share attributable to ordinary shareholders—basic and diluted	$	(0.24	)	$	(0.27	)
Weighted-average ordinary shares used in computing net loss per share attributable to ordinary shareholders—basic and diluted		129,271,678			102,056,712
Other comprehensive loss:
Net loss	$	(31,558	)	$	(27,405	)
Foreign currency translation		(74	)		(21	)
Comprehensive loss	$	(31,632	)	$	(27,426	)

The accompanying notes are an integral part of the unaudited consolidated financial statements.

WAVE LIFE SCIENCES LTD.

UNAUDITED CONSOLIDATED STATEMENTS OF SERIES A PREFERRED SHARES AND SHAREHOLDERS’ EQUITY (DEFICIT)

(In thousands, except share amounts)


	Series A Preferred Shares				Ordinary Shares				Additional Paid-In-		Accumulated Other Comprehensive			Accumulated			Total Shareholders’
	Shares		Amount		Shares		Amount		Capital		Loss			Deficit			Equity (Deficit)
Balance at December 31, 2022		3,901,348	$	7,874		86,924,643	$	802,833	$	119,442	$	(29	)	$	(967,337	)	$	(45,091	)
Issuance of ordinary shares, pursuant to the GSK Collaboration Agreement		—		—		10,683,761		34,623		—		—			—			34,623
Share-based compensation		—		—		—		—		2,750		—			—			2,750
Vesting of RSUs		—		—		363,161		—		—		—			—			—
Option exercises		—		—		181		1		—		—			—			1
Issuance of ordinary shares under the ESPP		—		—		133,098		429		—		—			—			429
Other comprehensive loss		—		—		—		—		—		(21	)		—			(21	)
Net loss		—		—		—		—		—		—			(27,405	)		(27,405	)
Balance at March 31, 2023		3,901,348	$	7,874		98,104,844	$	837,886	$	122,192	$	(50	)	$	(994,742	)	$	(34,714	)


	Series A Preferred Shares				Ordinary Shares				Additional Paid-In-		Accumulated Other Comprehensive			Accumulated			Total Shareholders’
	Shares		Amount		Shares		Amount		Capital		Loss			Deficit			Equity (Deficit)
Balance at December 31, 2023		3,901,348	$	7,874		119,162,234	$	935,367	$	129,237	$	(124	)	$	(1,024,850	)	$	39,630
Issuance of ordinary shares, net of offering costs						3,000,000		14,038										14,038
Share-based compensation		—		—		—		—		2,881		—			—			2,881
Vesting of RSUs		—		—		21,683		—		—		—			—			—
Option exercises		—		—		35,925		123		—		—			—			123
Issuance of ordinary shares under the ESPP		—		—		101,542		349		—		—			—			349
Other comprehensive loss		—		—		—		—		—		(74	)		—			(74	)
Net loss		—		—		—		—		—		—			(31,558	)		(31,558	)
Balance at March 31, 2024		3,901,348	$	7,874		122,321,384	$	949,877	$	132,118	$	(198	)	$	(1,056,408	)	$	25,389

The accompanying notes are an integral part of the unaudited consolidated financial statements.

WAVE LIFE SCIENCES LTD.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


	Three Months Ended March 31,
	2024			2023
Cash flows from operating activities
Net loss	$	(31,558	)	$	(27,405	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Amortization of right-of-use assets		1,135			1,005
Depreciation of property and equipment		1,042			1,433
Share-based compensation expense		2,881			2,750
Changes in operating assets and liabilities:
Accounts receivable		21,086			—
Prepaid expenses		(1,227	)		(1,299	)
Other assets		(1,394	)		(1,804	)
Accounts payable		(1,068	)		(4,674	)
Accrued expenses and other current liabilities		(10,207	)		(9,930	)
Deferred revenue		(12,538	)		126,448
Operating lease liabilities		(1,584	)		(1,002	)
Net cash provided by (used in) operating activities		(33,432	)		85,522
Cash flows from investing activities
Purchases of property and equipment		(417	)		(489	)
Net cash used in investing activities		(417	)		(489	)
Cash flows from financing activities
Proceeds from the issuance of ordinary shares, net of offering costs		14,038			—
Proceeds from the issuance of ordinary shares pursuant to the GSK Collaboration Agreement		—			34,623
Proceeds from the exercise of share options		123			1
Proceeds from the ESPP		349			429
Net cash provided by financing activities		14,510			35,053
Effect of foreign exchange rates on cash, cash equivalents, and restricted cash		(74	)		(21	)
Net increase (decrease) in cash, cash equivalents, and restricted cash		(19,413	)		120,065
Cash, cash equivalents, and restricted cash, beginning of period		204,050			92,157

SEC Form 10-Q filed by Wave Life Sciences Ltd.