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Investing.com -- Shares of Edgewise Therapeutics , Inc. (NASDAQ:EWTX) plummeted 29% following announcements that cast a shadow over the biopharmaceutical company’s recent developments. The company reported top-line results from its Phase 2 trial of EDG-7500 in Hypertrophic Cardiomyopathy (HCM), which, despite showing promise, included two serious adverse events of atrial fibrillation requiring cardioversion. Additionally, Edgewise announced a $200 million underwritten offering of common stock, further pressuring the stock price.
The clinical trial, which assessed the efficacy of EDG-7500 in participants with obstructive or nonobstructive HCM, demonstrated meaningful reductions in left ventricular outflow tract gradient and improvements in the Kansas City Cardiomyopathy Questionnaire Overall Summary Score. However, the occurrence of atrial fibrillation in two participants has raised safety concerns among investors.
Separately, the company’s pricing of its common stock offering at $20.13 per share, with an expected closing date of April 3, 2025, aims to fund the potential U.S. commercial launch of sevasemten for Becker muscular dystrophy, advancement of a Phase 3 trial with sevasemten in Duchenne muscular dystrophy, Phase 3 trials of EDG-7500 in HCM, and other research and development activities.
The stock’s downturn reflects investor reaction to the mixed clinical trial results and the dilutive effect of the stock offering. The company’s shares were trading at $16 preopen after closing at $22 the previous day.
Dr. Ahmad Masri from the Hypertrophic Cardiomyopathy Center at Oregon Health and Science University and a CIRRUS-HCM Investigator, commented on the early data from EDG-7500, noting favorable changes across multiple domains. Dr. Anjali T. Owens of the Perelman School of Medicine at the University of Pennsylvania echoed these sentiments, expressing encouragement by the improvements in diastolic function and overall symptom relief.
Edgewise’s CEO, Kevin Koch, Ph.D., emphasized the potential of EDG-7500 to be a significant advancement for patients with HCM without causing systolic dysfunction. The company is now focusing on optimizing dosing strategy in Part D of the CIRRUS-HCM trial to inform plans for Phase 3, with an initial data read-out from Part D expected in the second half of 2025 and Phase 3 initiation planned for the first half of 2026.
Despite the setbacks, the company’s underwritten offering attracted participation from notable funds, with Leerink Partners, Piper Sandler, Guggenheim Securities, and Truist Securities acting as joint book-running managers.
The recent developments at Edgewise Therapeutics underscore the complex balance between clinical promise and investor concerns, particularly in the high-stakes biopharmaceutical industry where both efficacy and safety play critical roles in a company’s success.
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