Edgewise Therapeutics (NASDAQ: EWTX) books big gain on $1.55B sevasemten sale

Rhea-AI Filing Summary

Edgewise Therapeutics, Inc. completed the sale of its sevasemten muscular dystrophy program to Servier Pharmaceuticals LLC and Les Laboratoires Servier, receiving $1.55 billion in upfront cash and eligibility for up to $1.1 billion in additional regulatory and commercial milestones, for total potential consideration of $2.65 billion. The disposed assets are treated as a sale of nonfinancial assets under U.S. GAAP and do not qualify as discontinued operations. Edgewise has prepared unaudited pro forma condensed financial information under Article 11 of Regulation S-X to illustrate the effects.

Pro forma as of March 31, 2026, cash and cash equivalents rise to about $1.53 billion, total assets to $2.01 billion, and stockholders’ equity to roughly $1.75 billion, driven by an estimated pre-tax gain of $1,487,621 thousand and after-tax gain of $1,261,765 thousand. For 2025, pro forma results show net income of $1,135,527 thousand and earnings per share of $11.03, compared with a historical net loss of $167,795 thousand and a loss per share of $(1.63). For the three months ended March 31, 2026, the pro forma net loss is $27,937 thousand versus a historical loss of $49,013 thousand, reflecting removal of sevasemten-related expenses.

A Transition Services Agreement requires Edgewise to provide specified services to Servier at below-market rates; $17,880 thousand of consideration is allocated to this obligation and recorded as deferred income, with $5,364 thousand current and $12,516 thousand non-current, recognized in other income as services are performed. The pro forma statements present TSA costs in operating expenses and Servier reimbursements plus deferred income amortization in other income, with no net effect on pro forma earnings for the periods shown.

Positive

• Edgewise receives $1.55 billion in upfront cash and may earn up to an additional $1.1 billion in milestones, for total potential consideration of $2.65 billion from divesting the sevasemten muscular dystrophy program.
• Pro forma 2025 results shift from a historical net loss of $167,795 thousand to net income of $1,135,527 thousand, with earnings per share moving from $(1.63) to $11.03, driven by the gain on the transaction.
• Pro forma as of March 31, 2026, cash and cash equivalents increase to $1,532,431 thousand and total stockholders’ equity to $1,754,968 thousand, substantially strengthening Edgewise’s balance sheet.

Negative

• The transaction generates an estimated income tax expense of $259,843 thousand and pro forma income taxes payable of $225,856 thousand, representing a significant tax outflow associated with the gain.

Filing Explained

Only $1.55 billion was received at closing; the additional up to $1.1 billion remains contingent and excluded from the pro forma gain.

The July 16 Form 8-K/A adds Item 9.01(b) pro forma information to the July 13 report for the transaction completed on July 10, 2026.

The added balance-sheet mechanics record $1,550,000 thousand of upfront consideration, reduced by $50,000 thousand of estimated transaction costs and accrued employee obligations. The resulting pro forma net increase in cash and cash equivalents is $1,499,220 thousand.

The filing states that total potential consideration is up to $2.65 billion, but the additional up to $1.1 billion of regulatory and commercial milestones remains excluded from the pro forma gain because recognition is constrained until the relevant approvals or sales make reversal sufficiently unlikely.

These pro forma figures are illustrative transaction-accounting adjustments, not actual post-closing operating results or a forecast of future financial position; the filing says actual amounts could differ materially.

The transition-services agreement has an initial term of at least 18 months after closing, and its future net effect can vary with the services requested and is expected to decline as those services wind down.

The estimated transaction-related income-tax amounts are preliminary and remain subject to the Company's actual results and finalization of the related tax provision.

Sources and calculations

• Edgewise Therapeutics Form 8-K/A amending material event report (2026-07-16)

8-K Event Classification

2 items: 2.01, 9.01

2 items

Item 2.01 Completion of Acquisition or Disposition of Assets Financial

The company completed a significant acquisition or sale of business assets.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, and exhibit attachments filed with this report.

Key Figures

Upfront cash consideration: $1,550,000 thousand Potential milestone payments: $1,100,000 thousand Total potential consideration: $2,650,000 thousand +5 more

8 metrics

Upfront cash consideration $1,550,000 thousand Cash received at closing under the Asset Purchase Agreement

Potential milestone payments $1,100,000 thousand Additional regulatory and commercial milestones that may be received

Total potential consideration $2,650,000 thousand Aggregate upfront cash plus potential milestone payments for sevasemten program

Pre-tax gain on sale $1,487,621 thousand Estimated gain on sale of the sevasemten program before income taxes

Income tax expense $259,843 thousand Estimated income tax effect of the transaction in the 2025 pro forma statement

Pro forma cash and cash equivalents $1,532,431 thousand Balance as of March 31, 2026 after giving effect to the transaction

Pro forma net income 2025 $1,135,527 thousand Net income for the year ended December 31, 2025 including the gain on sale

Deferred income – transition services $17,880 thousand Consideration allocated to below-market Transition Services Agreement obligation

Key Terms

Asset Purchase Agreement, sale of nonfinancial assets, Transition Services Agreement, Section 382 of the Internal Revenue Code, +2 more

6 terms

Asset Purchase Agreement regulatory

"entered into a definitive Asset Purchase Agreement (the “APA”) with Servier"

An asset purchase agreement is a legal contract in which a buyer agrees to buy specific assets and contracts of a business rather than buying the company’s stock or ownership. It matters to investors because it determines exactly what is being bought and what liabilities stay behind — like buying the furniture and equipment from a store but not the building or past debts — which affects the deal’s value, taxes and future risk exposure.

sale of nonfinancial assets financial

"Accordingly, the Transaction is accounted for as a sale of nonfinancial assets."

Transition Services Agreement financial

"entered into a Transition Services Agreement (the "TSA") under which the Company will provide"

A transition services agreement is a formal arrangement where one company continues to provide essential services—such as IT, human resources, or accounting—to another company after a business deal or change in ownership. It acts like a temporary bridge, ensuring smooth operations during a transition period. For investors, it provides clarity on how long support will last and helps assess potential costs and stability during the change.

Section 382 of the Internal Revenue Code regulatory

"after giving effect to the annual limitations imposed under Section 382 of the Internal Revenue Code."

deferred income – transition services financial

"recorded as a deferred income – transition services liability and released to income"

valuation allowance financial

"the Company maintains a full valuation allowance against its deferred tax assets"

A valuation allowance is a reserve set aside to reduce the value of certain assets on a company's financial records when there is uncertainty about whether they will generate the expected benefits. It acts like a caution sign, indicating that some assets might not be fully recoverable or worth their recorded amount. This matters to investors because it provides a more realistic picture of a company's financial health and potential risks.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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FAQ

What did Edgewise Therapeutics (EWTX) sell to Servier in the sevasemten transaction?

Edgewise transferred its sevasemten muscular dystrophy program to Servier, including related intellectual property, know-how, select employees, contracts, regulatory filings and clinical data. The transaction closed on July 10, 2026 under a definitive Asset Purchase Agreement.

How much consideration does Edgewise Therapeutics (EWTX) receive from the sevasemten sale?

Edgewise receives $1.55 billion in upfront cash and is eligible for up to $1.1 billion in additional regulatory and commercial milestone payments, giving total potential consideration of $2.65 billion for the sevasemten muscular dystrophy program.

How does the sevasemten sale affect Edgewise Therapeutics (EWTX) pro forma 2025 earnings?

Pro forma for 2025, Edgewise reports net income of $1,135,527 thousand and earnings per share of $11.03, versus a historical net loss of $167,795 thousand and $(1.63) per share, reflecting a pre-tax gain of $1,487,621 thousand on the sale.

What is Edgewise Therapeutics’ (EWTX) pro forma cash position after the transaction?

As of March 31, 2026, pro forma cash and cash equivalents are $1,532,431 thousand, compared with $33,211 thousand historically. The balance reflects net upfront proceeds after $50,000 thousand of transaction costs and $780 thousand of employee-related payments.

How are income taxes reflected in Edgewise Therapeutics (EWTX) pro forma results?

The company records estimated income tax expense of $259,843 thousand related to the taxable gain, with income taxes payable of $225,856 thousand on the pro forma balance sheet. No tax adjustment is included for the three months ended March 31, 2026, which remain in a pre-tax loss.

What obligations does Edgewise Therapeutics (EWTX) have under the Transition Services Agreement with Servier?

Under the TSA, Edgewise provides transitional services and is reimbursed for 50% of FTE and third-party costs (certain contracts reimbursed in full). About $17,880 thousand of consideration is allocated to this below-market obligation and recognized as deferred income – transition services over the service period.

How did the sevasemten sale change Edgewise Therapeutics’ (EWTX) operating expenses?

Pro forma adjustments eliminate sevasemten-related costs: operating expenses are reduced by $21,076 thousand for the three months ended March 31, 2026 and by $75,544 thousand for 2025, reflecting removed external clinical costs and personnel tied directly to the divested program.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 OR 15(d)
of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

July 10, 2026

Edgewise Therapeutics, Inc.

(Exact name of registrant as specified in its charter)

Delaware		001-40236		82-1725586
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

1715 38th St.

Boulder, CO 80301

(Address of principal executive offices) (Zip Code)

(720) 262-7002 

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.0001 par value per share		EWTX		The Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ¨

Explanatory Note

On July 13, 2026, Edgewise Therapeutics, Inc. (the “Company”) filed a Current Report on Form 8-K (the “Initial Report”) with the Securities and Exchange Commission to report, among other things, the completion of the acquisition of the Company’s sevasemten compound and certain other related assets collectively constituting the Company’s muscular dystrophy program by Servier Pharmaceuticals LLC and Les Laboratoires Servier (together, the “Buyers”, and such transaction, the “Transaction”), pursuant to the terms and conditions of the previously announced Asset Purchase Agreement by and among the Company and the Buyers.

This Current Report on Form 8-K/A is being filed solely to amend the Initial Report to include the pro forma financial information required by Item 9.01(b) of Form 8-K. This Current Report on Form 8-K/A should be read in conjunction with the Initial Report, which provides a more complete description of the Transaction.

Item 9.01 Financial Statements and Exhibits

(b) Pro forma financial information.

The unaudited pro forma condensed financial information required by Item 9.01(b) of Form 8-K is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

(d) Exhibits:

Exhibit No.		Description
99.1		Unaudited pro forma condensed financial information
104		Cover Page Interactive Data File (embedded within the Inline XBRL documents)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

EDGEWISE THERAPEUTICS, INC.
By:	/s/ Michael Nofi
	Michael Nofi
	Chief Financial Officer

Date: July 16, 2026

Exhibit 99.1

EDGEWISE THERAPEUTICS, INC.

UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION

On May 31, 2026, Edgewise Therapeutics, Inc. (“Edgewise” or the “Company”) entered into a definitive Asset Purchase Agreement (the “APA”) with Servier Pharmaceuticals LLC and Les Laboratoires Servier (together, “Servier” or the “Buyers”), pursuant to which Servier acquired the Company's sevasemten muscular dystrophy program, including the related intellectual property, know-how, select employees, contracts, regulatory filings and clinical data (the “Transaction”). On July 10, 2026, the Company completed the Transaction. Following the closing of the Transaction, Edgewise is a cardiovascular-focused company, with a pipeline comprised of EDG-7500, EDG-15400 and EDG-003. Under the terms of the APA, the Company received $1.55 billion in upfront cash consideration and is eligible to receive up to $1.1 billion in additional regulatory and commercial milestone payments, for aggregate potential consideration of up to $2.65 billion.

The disposed assets do not meet the definition of a business under U.S. generally accepted accounting principles ("U.S. GAAP"). Accordingly, the Transaction is accounted for as a sale of nonfinancial assets. Because the Transaction constitutes a significant disposition for purposes of Item 2.01 of Form 8-K, the Company has prepared the following unaudited pro forma condensed financial information in accordance with Article 11 of Regulation S-X. The unaudited pro forma condensed balance sheet as of March 31, 2026 gives effect to the Transaction as if it had occurred on March 31, 2026. The unaudited pro forma condensed statements of operations for the three months ended March 31, 2026 and for the year ended December 31, 2025 give effect to the Transaction as if it had occurred on January 1, 2025, the beginning of the earliest period presented.

The unaudited pro forma condensed financial information is derived from, and should be read together with, the Company’s audited financial statements, related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for the year ended December 31, 2025 included in its Annual Report on Form 10-K filed February 26, 2026, and its unaudited condensed financial statements, related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as of and for the three months ended March 31, 2026 included in its Quarterly Report on Form 10-Q filed May 7, 2026.

The pro forma adjustments are based on currently available information and certain assumptions that management believes are reasonable. The historical financial information has been adjusted to give effect to transaction accounting adjustments include all necessary transaction accounting adjustments, including those that are not expected to have a continuing impact. The transaction accounting adjustments giving effect to the sale of the sevasemten program in the unaudited pro forma condensed financial information include:

· the receipt of $1.55 billion of upfront cash consideration payable at closing under the APA;

· the derecognition of the assets and liabilities of the disposal group transferred to, and assumed by, Servier;

· the recognition of the estimated gain on the sale;

· the elimination of operating expenses and personnel-related costs directly attributable to the sevasemten program that will not continue following the Transaction;

· the estimated income tax effect of the Transaction and of the pro forma adjustments;

· the net impact of the Transition Services Agreement entered into with Servier; and

· estimated transaction-related employee separation and related benefit costs.

The upfront cash consideration reflects the amount payable at closing. The up to $1.1 billion of contingent regulatory and commercial milestones is excluded from the pro forma gain, as it remains constrained for recognition purposes until it is probable that a significant reversal will not occur, a threshold not met for milestones dependent on future approvals or sales outside the Company's control. The unaudited pro forma condensed financial information does not reflect any anticipated cost savings, dis-synergies or other operating efficiencies that may result from the Transaction, and is not necessarily indicative of the results of operations or financial position that would have been achieved had the Transaction occurred on the dates indicated, nor is it indicative of future results. Actual amounts could differ materially from these estimates.

EDGEWISE THERAPEUTICS, INC.

UNAUDITED PRO FORMA CONDENSED BALANCE SHEET

AS OF MARCH 31, 2026

(In thousands, except share and per share data)

(Unaudited)

		Edgewise Historical (As Reported)				Transaction Accounting Adjustments				Note		Pro Forma
Assets
Current assets
Cash and cash equivalents		$	33,211				1,499,220			(A), (G)			1,532,431
Marketable securities, available for sale			466,351										466,351
Prepaid expenses and other assets			10,230				(4,055	)		(B)			6,175
Total current assets			509,792				1,495,165						2,004,957
Property and equipment, net			7,396										7,396
Operating lease right-of-use asset			1,334										1,334
Total assets			518,522				1,495,165						2,013,687
Liabilities and stockholders’ equity
Current liabilities
Accounts payable		$	7,293				(4,310	)		(B)			2,983
Accrued compensation			5,678				(780	)		(G)			4,898
Accrued other expenses			8,555				(5,246	)		(B)			3,309
Operating lease liability, current portion			1,017										1,017
Income taxes payable							225,856			(E)			225,856
Deferred income – transition services, current portion							5,364			(F)			5,364
Total current liabilities			22,543				220,884						243,427
Operating lease liability, net of current portion			2,776										2,776
Deferred income – transition services							12,516			(F)			12,516
Total liabilities			25,319				233,400						258,719
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.0001 par value per share; 200,000,000 shares authorized and no shares issued or outstanding as of March 31, 2026			-										-
Common stock, $.0001 par value per share; 1,000,000,000 shares authorized as of March 31, 2026; 107,481,522 shares shares issued and outstanding as of March 31, 2026			10										10
Additional paid-in capital			1,088,829										1,088,829
Accumulated other comprehensive income (loss)			(252	)									(252	)
(Accumulated deficit) / retained earnings			(595,384	)			1,261,765			(C)			666,381
Total stockholders’ equity			493,203				1,261,765						1,754,968
Total liabilities and stockholders’ equity		$	518,522				1,495,165						2,013,687

See accompanying notes to unaudited pro forma condensed financial information.

EDGEWISE THERAPEUTICS, INC.

UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2026

(In thousands, except share and per share data)

(Unaudited)

		Edgewise Historical (As Reported)				Transaction Accounting Adjustments				Note		Pro Forma
Operating expenses
Research and development		$	42,651				(15,946	)		(D), (F)			26,705
General and administrative			11,464				(1,554	)		(D), (F)			9,910
Total operating expenses			54,115				(17,500	)					36,615
Loss from operations			(54,115	)			17,500						(36,615	)
Other income
Interest income			5,102										5,102
Other income			-				3,576			(F)			3,576
Total other income			5,102				3,576						8,678
Net loss			(49,013	)			21,076						(27,937	)
Other comprehensive income (loss):
Unrealized gain on available-for-sale securities, net			(929	)									(929	)
Total comprehensive loss		$	(49,942	)			21,076						(28,866	)
Net loss per share, basic and diluted		$	(0.46	)									(0.27	)
Weighted-average shares outstanding, basic and diluted			107,116,709										107,116,709

See accompanying notes to unaudited pro forma condensed financial information.

EDGEWISE THERAPEUTICS, INC.

UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS

YEAR ENDED DECEMBER 31, 2025

(In thousands, except share and per share data)

(Unaudited)

		Edgewise Historical (As Reported)				Transaction Accounting Adjustments				Note		Pro Forma
Operating expenses
Research and development		$	151,389				(57,852	)		(D), (F)			93,537
General and administrative			40,017				(3,388	)		(D), (F)			36,629
Total operating expenses			191,406				(61,240	)					130,166
Loss from operations			(191,406	)			61,240						(130,166	)
Other income
Interest income			23,611										23,611
Other income			-				14,304			(F)			14,304
Gain on sale of sevasemten program			-				1,487,621			(C)			1,487,621
Total other income			23,611				1,501,925						1,525,536
Net income (loss) before income taxes			(167,795	)			1,563,165						1,395,370
Income tax expense / (benefit)			-				259,843			(E)			259,843
Net income (loss)			(167,795	)			1,303,322						1,135,527
Other comprehensive income (loss):
Unrealized gain on available-for-sale securities, net			257										257
Total comprehensive income (loss)		$	(167,538	)			1,303,322						1,135,784
Net earnings (loss) per share, basic and diluted		$	(1.63	)									11.03
Weighted-average shares outstanding, basic and diluted			102,930,744										102,930,744

See accompanying notes to unaudited pro forma condensed financial information.

EDGEWISE THERAPEUTICS, INC.

NOTES TO UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION

(In thousands, unless disclosed otherwise)

(Unaudited)

Note 1 — Basis of Presentation

The unaudited pro forma condensed financial information has been prepared in accordance with Article 11 of Regulation S-X. The historical financial information has been adjusted to give effect to transaction accounting adjustments include all necessary transaction accounting adjustments, including those that are not expected to have a continuing impact. The sevasemten program has historically been an in-process research and development program and the Company expenses research and development costs as incurred and, accordingly, sevasemten carries no capitalized intangible or in-process research and development balance on the historical balance sheet. The operations of the disposal group did not meet the criteria to be presented as discontinued operations. Amounts are presented in thousands unless otherwise noted.

Note 2 — Transaction Accounting Adjustments

(A) Upfront Cash Proceeds — Reflects the receipt of $1,550,000 of upfront cash consideration payable at closing under the APA, less $50,000 of estimated transaction costs directly attributable to the Transaction and paid at closing and less $780 of transaction-related employee payments the Company remains obligated to settle at closing (see note (G)), resulting in a net increase in Cash and cash equivalents of $1,499,220. The estimated transaction costs are also reflected as a reduction of the gain on sale (see note (C)). Amounts that may be earned in the future under the milestone provisions are excluded from the pro forma adjustments.

(B)  Derecognition of Net Liabilities Assumed — Reflects the derecognition of the assets and liabilities of the disposal group transferred to, and assumed by, Servier under the APA. The disposal group comprises prepaid expenses and other assets, accounts payable and accrued other expenses. Because the sevasemten intellectual property, know-how, regulatory filings, clinical data and related contracts were internally generated and the related costs were expensed as incurred, no intangible asset is derecognized. The following table summarizes the carrying value of the assets disposed and liabilities assumed in connection with the Transaction:

(in thousands)		As of March 31, 2026
Prepaid expenses and other assets		$	4,055
Total Assets			4,055
Accounts payable			4,310
Accrued other expenses			5,246
Total Liabilities			9,556
Net Liabilities		$	5,501

(C) Gain on Sale — Reflects the recognition of an estimated $1,487,621 gain on the Transaction, directly attributable to and resulting from the sale of sevasemten to Servier. The gain is calculated as the upfront cash consideration, plus the carrying amount of net liabilities assumed by Servier, less the carrying amount of assets transferred and directly attributable transaction costs, as set forth in the table below. The gain is further reduced by the portion of the total consideration allocated to the Company's below-market transition services obligation, which is deferred as a transition services liability and recognized as the related services are performed, rather than recognized in the gain at closing (see note (F)). The gain is nonrecurring and is not expected to have a continuing impact on the Company's operations. Because the pro forma statement of operations for the year ended December 31, 2025 assumes the Transaction occurred on January 1, 2025, the same estimated gain is presented as a separate line item in that statement of operations and is reflected within the accumulated deficit (retained earnings) balance in stockholders' equity on the pro forma balance sheet as of March 31, 2026.

Gain on Sale of Sevasemten Program

(in thousands)
Upfront cash consideration received at closing		$	1,550,000
Add: Carrying amount of total liabilities of the disposal group assumed by Servier			9,556
Less: Carrying amount of assets of the disposal group transferred to Servier			4,055
Less: Estimated transaction costs directly attributable to the Transaction			50,000
Less: Consideration allocated to the transition services obligation			17,880
Gain on sale of sevasemten program before income taxes			1,487,621
Less: Estimated income tax effect (see note (E))			225,856
Gain on sale of sevasemten program, net of income taxes		$	1,261,765

(D)  Elimination of Divested Operating Expenses — Reflects the elimination of operating expenses directly attributable to the sevasemten program that will not continue following the Transaction, as summarized in the table below. The eliminated expenses comprise (i) external clinical program costs directly attributable to the divested program and (ii) internal personnel-related costs associated with employees who directly support the muscular dystrophy business and who were separated from the Company at the time of the Transaction and may transfer to Servier.

Eliminated operating expenses

(in thousands)		Three months ended March 31, 2026				Year ended December  31, 2025
Research and development		$	18,939			$	69,821
General and administrative			2,137				5,723
Total operating expenses		$	21,076			$	75,544

(E)  Income Tax Effect — Reflects the estimated income tax effect of the Transaction and of the pro forma adjustments. Although the Company maintains a full valuation allowance against its deferred tax assets, the estimated taxable gain on the Transaction exceeds the federal and state net operating loss carryforwards and tax credits available to offset it after giving effect to the annual limitations imposed under Section 382 of the Internal Revenue Code. No income tax adjustment is reflected in the pro forma statement of operations for the three months ended March 31, 2026, as the Company is projected to be in a pre-tax loss position for the period. The income tax expense reflected in the pro forma statement of operations (which gives effect to the Transaction as of January 1, 2025) differs from the income taxes payable reflected in the pro forma balance sheet (which gives effect to the Transaction as of March 31, 2026) because each is computed using the taxable income, net operating loss carryforwards and tax attributes available as of the respective assumed transaction date. These amounts are preliminary and subject to change based on the Company's actual results for the period and finalization of the related income tax provision.

(F)  Transition Services Agreement — In connection with the Transaction, and effective at closing, the Company and Servier entered into a Transition Services Agreement (the "TSA") under which the Company will provide specified transitional services to Servier for a period of time following closing. Under the TSA, Servier reimburses the Company for 50% of the FTE costs and 50% of the out-of-pocket third-party costs the Company incurs in performing the services (other than costs under the purchased contracts, which Servier reimburses in full until those contracts transfer). The TSA has an initial term of at least 18 months following closing and may extend to the first marketing approval of sevasemten (including any supplemental approvals for Duchenne muscular dystrophy) or completion of all service periods, with individual services extendable for one additional six-month period.

Because Servier reimburses only 50% of the Company's cost of performing the services, a portion of the total consideration received in the Transaction is attributable to the Company's obligation to provide those services at below-market rates. That portion, estimated at $17,880, is not recognized in the gain at closing (see note (C)). Instead it is recorded as a deferred income – transition services liability and released to income as the related services are performed. Of this amount, $5,364 is expected to be recognized within twelve months and is classified as current, with the remaining $12,516 classified as non-current.

The pro forma statements of operations reflect the TSA on a gross basis: the full cost of performing the services is presented within operating expenses in its natural classification (research and development and general and administrative), and the cash reimbursements from Servier, together with the release of the deferred income liability, are presented within Other income. The pro forma effect of the TSA on the statements of operations is summarized below:

(in thousands)		Three months ended March 31, 2026				Year ended December 31, 2025
Cost of transition services (in operating expense)		$	(3,576	)		$	(14,304	)
Reimbursements from Servier (50% of costs) — other income			1,788				7,152
Release of deferred income – transition services — other income			1,788				7,152
Net effect on net income (loss)		$	-			$	-

The estimated TSA amounts presented reflect only the periods presented and are not necessarily indicative of the costs, reimbursements, or net charges the Company will incur under the TSA in periods after March 31, 2026. The net impact in future periods is expected to vary based on the level of services requested by Servier and to decline as the transition services wind down.

(G) Transaction-Related Employee Separation Costs — Pursuant to the APA, the Company remains responsible for settling $780 of previously accrued employee obligations (accrued annual bonuses and accrued paid time off) relating to employees who were separated from the Company at the time of the Transaction and may transfer to Servier. Because these amounts were already accrued in the historical financial statements, their settlement does not represent an incremental charge to results of operations. The obligation is reflected as a decrease to accrued compensation of $780, with a corresponding reduction of cash and cash equivalents (see note (A)), in the pro forma condensed balance sheet as of March 31, 2026.

Filing Exhibits & Attachments

4 documents

Press Releases

• EX-99.1 EXHIBIT 99.1 147.4 KB

Other Documents

• EX-101 XBRL TAXONOMY EXTENSION SCHEMA 2.9 KB
• EX-101 XBRL TAXONOMY EXTENSION LABEL LINKBASE 33.4 KB
• EX-101 XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE 21.8 KB