Wave Life Sciences Ltd. — FY2022 Form 10-K
Business context and reporting period. This annual report covers the fiscal year ended December 31, 2022. Wave is a Singapore-incorporated, clinical-stage genetic medicines company developing stereopure oligonucleotide therapies using its PRISM platform. It had no approved products or product sales; revenue was primarily collaboration-related.
Key financial metrics
| Metric | FY2022 / Dec. 31, 2022 | FY2021 / Dec. 31, 2021 |
|---|---|---|
| Revenue | $3.6 million | $41.0 million |
| Research and development expense | $115.9 million | $121.9 million |
| General and administrative expense | $50.5 million | $46.1 million |
| Operating loss | $162.7 million | $127.0 million |
| Net loss | $161.8 million | $122.2 million |
| Net loss per ordinary share | $2.05 | $2.36 |
| Net cash used in operating activities | $127.8 million | $89.0 million |
| Cash and cash equivalents | $88.5 million | $150.6 million |
| Current assets / current liabilities | $98.5 million / $71.5 million | $162.6 million / $64.2 million |
Wave reported no product revenue, so product margins are not meaningful. No conventional borrowings are listed on the balance sheet; liabilities include deferred collaboration revenue and operating leases. Lease liabilities totaled $37.6 million, with $8.7 million of lease payments due in 2023. Restricted cash was $3.7 million.
Material changes versus FY2021
- Revenue declined $37.3 million, largely because FY2021 included revenue recognized following the Takeda collaboration amendment and payment for discontinued Category 2 work. FY2022 revenue was primarily from Takeda.
- Net loss widened by $39.6 million, despite a $6.0 million reduction in R&D expense. Lower spending on discontinued earlier Huntington’s disease programs was partly offset by increased spending on AATD, DMD, ALS/FTD, and platform work.
- Operating cash use increased by $38.8 million. Cash and cash equivalents fell by $62.1 million during 2022.
- Wave raised approximately $65.5 million net in a June 2022 offering of ordinary shares and pre-funded warrants; it also raised approximately $1.2 million net through its at-the-market program.
Outlook, developments and risks
- Liquidity: Management stated that year-end cash and cash equivalents were expected to fund operations for at least 12 months, while noting that estimates depend on assumptions and additional funding may be needed. After year-end, Wave received $170 million in connection with its GSK arrangements: $120 million in collaboration cash and a $50 million equity investment. The GSK agreement became effective January 27, 2023.
- GSK collaboration: GSK received an exclusive global license to WVE-006, Wave’s preclinical AATD candidate. Wave is responsible through the initial Phase 1/2 study, after which development and commercialization responsibilities transfer to GSK. Wave may receive up to $525 million in WVE-006 development, launch and sales milestones, plus tiered royalties up to the high teens. Across the broader collaboration, potential milestones are up to $3.3 billion, subject to program advancement and achievement of milestones; these are not assured proceeds.
- Pipeline timing: Wave expected to begin WVE-N531 Phase 2 dosing in 2023 and report data in 2024. It expected to submit WVE-006 clinical trial applications in the second half of 2023. Further WVE-003 and WVE-004 single- and multiple-dose data were expected in the first half of 2023.
- Clinical evidence remains early: WVE-N531 showed muscle exposure and exon skipping in three participants, but measured dystrophin was 0.27% of normal and below the assay’s quantification threshold. WVE-003 showed biomarker reductions and appeared generally well tolerated in small single-dose cohorts; some participants had increases in neurofilament light. WVE-004 reduced a disease biomarker, but some participants had CSF neurofilament light elevations; four participants experienced severe and/or serious events, including one event the investigator attributed to study drug. The filing cautions that available datasets and follow-up were insufficient to establish clinical benefit.
- Key risks: Wave has a history of losses, expects continued losses, and may need additional financing; equity fundraising can dilute shareholders. Clinical, regulatory, manufacturing, supply-chain, collaboration, intellectual-property and market-acceptance risks could delay or prevent commercialization. The company also described potential delays from COVID-19 and macroeconomic conditions.
- Singapore patent-filing matter: The filing reports that approximately 140 patent applications were submitted to Singapore’s IP office following requests concerning Section 34 of the Singapore Patents Act. The office may consider some filings noncompliant; Wave was awaiting a decision and could not assure that violations would be compounded rather than prosecuted.
The company reported no material legal proceedings. KPMG issued an unqualified opinion on the consolidated financial statements and reported no critical audit matters. Management assessed disclosure controls and internal control over financial reporting as effective; the external auditor did not attest to internal-control effectiveness.
Investor facts to verify
- Cash runway assumptions and subsequent cash receipts, and how quickly operating cash use may change as trials advance.
- Whether clinical follow-up confirms meaningful functional benefit and acceptable safety, particularly in light of biomarker limitations and reported neurofilament elevations.
- WVE-006 clinical-trial application timing, GSK’s program decisions, and the conditions attached to potential milestones and royalties.
- Potential dilution from the June 2022 pre-funded warrants, equity compensation, the GSK share issuance, and future financing.
- The Singapore patent-filing authority’s final decision and any resulting compliance, financial or intellectual-property consequences.