7. SHARE-BASED COMPENSATION

The Wave Life Sciences Ltd. 2021 Equity Incentive Plan was approved by the Company’s shareholders and went into effect on August 10, 2021 and was amended effective as of August 9, 2022 and August 1, 2023 (as amended, the “2021 Plan”). The 2021 Plan serves as the successor to the Wave Life Sciences Ltd. 2014 Equity Incentive Plan, as amended (the “2014 Plan”), such that outstanding awards granted under the 2014 Plan continue to be governed by the terms of the 2014 Plan, but no awards may be made

under the 2014 Plan after August 10, 2021. The aggregate number of ordinary shares authorized for issuance of awards under the 2021 Plan was originally 5,450,000 ordinary shares, and was subsequently increased to 11,450,000 and 17,950,000 in August 2022 and August 2023, respectively, plus the number of ordinary shares underlying any awards under the 2014 Plan that are forfeited, cancelled or otherwise terminated (other than by exercise or withheld by the Company to satisfy any tax withholding obligation) on or after August 10, 2021.

The 2021 Plan authorizes (and the 2014 Plan previously authorized) the board of directors or a committee of the board of directors to, among other things, grant non-qualified share options, restricted awards, which include restricted shares and restricted share units (“RSUs”), and performance awards to eligible employees and directors of the Company. The Company accounts for grants to its board of directors as grants to employees.

As of December 31, 2023, 8,101,005 ordinary shares remained available for future grant under the 2021 Plan. In accordance with Nasdaq Listing Rule 5635(c)(4), the board of directors or a committee of the board may also issue inducement grants outside of the 2021 Plan, as an inducement material to an individual's entering into employment with the Company.

Options and RSUs

Options generally vest over periods of one to four years, and options that are forfeited or cancelled are available to be granted again. The contractual life of options is generally five or ten years from the grant date.

In October 2022, the compensation committee of the Company’s board of directors granted Dr. Verdine, one of the Company’s founders and a member of the Company’s board of directors, a non-qualified share option for 163,467 ordinary shares (“Verdine Scientific Advisory Grant”) as form of payment under Dr. Verdine’s consulting agreement for scientific advisory services (as

described in Note 13) for the service period of October 1, 2022 through December 31, 2024, the vesting of which is subject to Dr. Verdine’s continued service under the consulting agreement.

The Verdine Scientific Advisory Grant was the only non-employee grant made during the year ended December 31, 2022, and there were no equity grants made to non-employees during the year ended December 31, 2023. The assumptions used in the Black-Scholes option pricing model to determine the fair value of the Verdine Scientific Advisory Grant were as follows:

RSUs can be time-based or performance-based. Vesting of the performance-based RSUs is contingent on the occurrence of certain regulatory or commercial milestones. In March 2021, the Compensation Committee approved an amendment and restatement of the Company’s outstanding 2019 performance-based RSUs to add an additional milestone to the existing milestones. In 2021, the Company also granted performance-based RSUs with the same terms to certain employees who did not receive the 2019 performance-based RSUs. The Company did not recognize expense in 2023 related to the performance-based RSUs as the remaining milestones were not considered probable of achievement. In April 2022, the Company determined that a performance-based RSU milestone was achieved and consequently 50% of the outstanding performance-based RSUs vested, which resulted in the issuance of 384,646 ordinary shares. During the year ended December 31, 2022, the Company recorded share-based compensation expense of approximately $3.8 million related to the performance-based RSUs, which represents all of the expense related to the achievement of this performance-based RSU milestone. During the years ended December 31, 2023 and 2022, the Company recognized share-based compensation expense of $1.0 million and $10.3 million, respectively, related to RSUs.

RSUs that are forfeited are available to be granted again. During the year ended December 31, 2023, 208,875 time-based RSUs were granted to employees. Of the RSUs outstanding at December 31, 2023, 342,876 are time-based RSUs and 294,681 are performance-based RSUs. Time-based RSUs generally vest over periods of one to four years.

During the years ended December 31, 2023 and 2022, the Company recognized share-based compensation expense related to options of $8.5 million and $6.7 million, respectively. The total intrinsic value of options exercised was $0.3 million and $0.4 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, the unrecognized compensation cost related to outstanding options was $18.8 million. The unrecognized compensation cost related to outstanding options is expected to be recognized over a weighted-average period of approximately 2.62 years. For the years ended December 31, 2023 and 2022, the weighted-average grant date fair value per granted option was $3.45 and $2.06, respectively. The aggregate fair value of options that vested during the years ended December 31, 2023 and 2022 was $8.4 million and $6.9 million, respectively.

The unrecognized compensation costs related to outstanding time-based RSUs was $1.3 million as of December 31, 2023, and is expected to be recognized over a weighted-average period of approximately 2.93 years. The total fair value of RSUs vested during the years ended December 31, 2023 and 2022 was $2.0 million and $1.3 million, respectively.

Employee Share Purchase Plan

The Wave Life Sciences Ltd. Employee Share Purchase Plan, as amended (“ESPP”), allows full-time and certain part-time employees to purchase the Company’s ordinary shares at a discount to fair market value. Eligible employees may enroll in a six-month offering period beginning every January 15th and July 15th. Shares are purchased at a price equal to 85% of the lower of the fair market value of the Company’s ordinary shares on the first business day or the last business day of an offering period. During the years ended

December 31, 2023 and 2022, 225,913 and 166,061 ordinary shares were issued under the ESPP, respectively. The aggregate number of ordinary shares authorized for issuance under the ESPP was originally 1,000,000 and was subsequently increased to 3,000,000 in August 2023. As of December 31, 2023, there were 2,490,500 ordinary shares available for issuance under the ESPP.

Share-Based Compensation Expense

Of the total share-based compensation expense recorded for the years ended December 31, 2023 and 2022, $0.2 million and less than $0.1 million, respectively, were related to non-employee option grants, specifically the Verdine Scientific Advisory Grant, and all of the related expense is included in research and development expenses on the consolidated statements of operations and comprehensive loss.