Prelude Therapeutics Incorporated (PRLD) Earnings Call Transcript & Summary

Welcome to the Morgan Stanley Global Healthcare Conference. I'm Jeff Hung, one of the biotech analysts. For important disclosures, please see the Morgan Stanley research disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. For this session, we have Prelude Therapeutics with CEO, Kris Vaddi; and CMO, Jane Huang. Welcome.

So for those who may not be as familiar with Prelude, can you provide a brief introduction?

Sure. Sure. First, thank you very much for the opportunity to participate in your meeting. So Prelude's mission is really to create potent selective small molecule treatment options for patients who are really seeking what's next. They have been receiving -- just received a diagnosis of cancer for which there are no really good options or they're no longer benefiting from those treatments, right? So that's -- really, our mission is to deliver those options to patients. And the reason why we think we can do that effectively is 3 things to remember. The team that came together to drive our mission is really a very experienced team that has done this before, delivered multiple highly impactful medicines, including Jakafi that my team led. And Jane led the discovery and development of BTK inhibitors that are approved in numerous countries and really making a difference for a number of patients. And the strategy that we have is really to go across target classes, to go across platforms because we think to effectively address cancer, which really uses any pathway to evade treatments, you need to be -- you need to have those abilities to do that. And our capabilities, our expertise really positions us. And the third and most important thing is really the progress that the team has already made. We have 4 highly selective potent molecules that are already in the clinic and advancing in the most important phase of development and are demonstrating the data that we think will really show the differentiation and promise. And in the next 6 to 12 months, we expect to generate a significant amount of data that really helps us to advance the company. So Jane, I don't know if you want to add anything.

Yes, I was just going to add that I joined Prelude about 1.5 years ago. And what really impressed me and is a testament to the research group's success is that everything that they produced and sent over to the clinic has performed as expected in the preclinical models. And I think that's a very powerful way for us to rapidly advance therapies for patients as quickly as we can.

Great. Let's start with PRT3789. What is the rationale for targeting SMARCA2 when trying to treat cancers with SMARCA4 mutations?

Yes, sure. So let me just first start with why do we -- why are we interested in this pathway, right? So SMARCA2 and SMARCA4, 2 members, offer an important regulatory -- gene regulatory pathway in which one can compensate for the other. So now we know that from years of research that there are patients with mutations in primarily SMARCA4 that some of which lead to loss of function, so they no longer have functioning SMARCA4. So they're dependent on SMARCA2, right? So the idea has been around for a long time that if you can selectively hit SMARCA2, you could potentially induce cell death in those cells that don't have SMARCA4, and so called -- it's called synthetic lethality. The challenge had been is to create such molecules because they're very, very similar proteins. And our -- what our team has been able to do is really using our medicinal chemistry strength in cancer biology and really set up the right type of discovery process in which we were able to identify. 3789 is our first molecule to the clinic in that -- from that class but really create a very, very strong portfolio of molecules from which we've chosen 3789 to advance to the clinic.

And how are your SMARCA2 candidates differentiated from what others have done? And what gives you confidence in its potential success?

So first of all, we are the -- 3789 is the first molecule to enter clinic from this. There have been a number of preclinical molecules that published some data. And they really do not have the level of selectivity that you need. And the reason for that is because unless you selectively inhibit SMARCA2, you're not going to be selective for cancer cells, right? Like normal cells have both, and cells need them. So by making them highly selective for SMARCA2, you can make it selective for cancer cells and, thereby, have good therapeutic index. I don't know, Jane, if you want to mention about how patients with these mutations are actually currently treated.

Yes. I mean -- so as a first-in-class molecule, I think we're very different because there are no other degraders in the clinic. And specifically targeting SMARCA patients that harbor the SMARCA4 mutation is a unique approach to how we're going about this patients as the data is evolving, have a pretty poor prognosis, so -- if they harbor a SMARCA4 mutation. So some recent papers that came out show that overall response rates in frontline non-small cell lung cancer in those patients who have the SMARCA4 mutation or loss of function have an overall response rate of 20%. Normal is about 40% to chemoimmunotherapy. For the progression-free survival, it's under 4 months. So these patients have a high unmet need, and we do believe that this -- our degrader will be able to help change the outcome for these patients.

Now your Phase I study remains ongoing. And what should we expect from the program update this year?

Yes. So the program update, just to remind people, is a Phase I dose escalation with a Bayesian design selected for patients who have the SMARCA4 mutations. We'll be enriching for some patients as we approach higher doses, specifically lung cancer patients that have a loss of function. We have a trials in progress that will be forthcoming at ESMO and will show some of the design elements and give you a status update of the study. And then toward mid next year, we will give a very robust data set of the full dose escalation experience.

Now you have the potential to be first-in-class. How far ahead are you from others?

So I mean it is -- one thing we can say relatively with a high degree of certainty that we are the only molecule in the clinic that really is SMARCA2 selective. A number of companies mentioned that their programs or it's on their pipelines, but it's really not -- to our knowledge, there hasn't been another development candidate. So it's hard to guess, in terms of time, how far ahead we are, but what we are doing is given a high level of investigator enthusiasm and high unmet need, we are moving our program pretty aggressively, being we're opening a lot of the major sites where we have key opinion leaders who all of them have a high level of interest in our molecule. And so we'll continue to build the lead, and we'll see when someone else enters the clinic.

And you've nominated an oral SMARCA2 degrader candidate. How is this different from 3789? And why have 2 SMARCA2 programs?

Yes. Jane, do you want to...

Yes. So there's a -- it's a different molecular entity. So it has the oral. We use a different ligase, the cereblon, whereas the IV has a VHL. And we think it's important because we're just learning about the different properties of the molecules and SMARCA2. So whether or not you need to hit a high peak, whether you need to have constant suppression, whether or not you have a threshold, those are the things that are emerging out of our IV program. So we do think that there may be different situations which may warrant an oral or an IV and/or maybe only one or the other works. So having multiple different options for the program, we think, is very important. And we are hoping that the oral will go into the clinic sometime next year.

And just to add to that, there's going to be a lot of learnings in terms of types of mutations these patients present with the types of cancers that have these mutations. And I think it enables us to really design a program with our oral where we can really demonstrate its potential, whether it's in same cancers or different cancers pretty effectively. So we see a lot of value in having 2 molecules moving one behind the other to be able to make the right decisions for our patients.

Okay. Great. Let's shift to PRT2527. Can you give an overview of your CDK9 inhibitor and how it's differentiated from other CDK9 inhibitors?

Yes, I'll start, and I'll let Jane talk about the clinical data to date and our plans. So it is an interesting mechanism because it is one of the few transcriptional CD case, right? So if you want to really modulate oncogenes that are known to be important in cancer, it could be one important approach. But you really need a highly selective compound. And a number of companies have taken molecules with varying degrees of selectivity. And what we know so far is many of them had while -- impact on the pathway had side effects that precluded them to widely advance forward. So we set for ourselves a goal of identifying highly selective potent molecule that we could take to the clinic and really focus. And the other point I'll make is that there is rationale in both solid tumors and hematological malignancies. So we've taken the approach of advancing it in both tumor types and really try to understand where the opportunity is, and I'll let Jane kind of walk you, take it from there and...

Yes. So in terms of the data that we presented at AACR, we gave our dose escalation experience with the CDK9 inhibitor in solid tumors and demonstrated that it's -- they've got a very clean profile with very little GI tox, no liver function abnormalities and decided on our dose expansion dose. Toward the later -- latter half of this year, we will be updating that information in the solid tumors with -- at the recommended Phase II dose. And I think what you'll see is that the product itself is very differentiated in terms of its toxicity profile. The externally validated data for the CDK9s in terms of activity really lies more on the heme side right now. We've seen reports throughout the years, where there's good responses, but it's been hampered by the toxicity. And so we do believe that our molecule will be able to overcome that toxicity to give that dose intensity to the patients so that there can be durable responses for either monotherapy and/or in combination with other agents.

Now for hematologic malignancies, you expanded the study to include global sites. How has recruitment gone in the sites outside the U.S.?

Yes. So that process is just starting. And it's -- the reason we did this is twofold. It is a competitive area for heme. And in the United States, a lot of the patients get CAR-Ts. And as a result, they actually can't enroll in clinical trials post because they have persistent cytopenias. And so we did go global, and it is going well. These sites are starting to get up and going and looking for patients. And we also will be providing that recommended Phase II dose or dose confirmation dose at an update of the clinical data early next year.

And so then you're expecting also to provide a clinical update by year-end for hematologic malignancies, right?

A little bit more of a status update. We also have the trials in progress, so that's forthcoming.

Okay. Okay. And then you're also evaluating 2527 in combination with zanubrutinib. What are you hoping to learn from this combination?

Yes. I think it's to recapitulate and reverify the activity as well as the safety of the combination. Those are the traditional things that need to be done for Phase I. But as soon as we get our preliminary information from that, we will be able to advance to registration trials.

Great. Maybe moving on to PRT1419, can you provide an overview of your MCL1 inhibitor? And how is 1419 differentiated from other MCL1 inhibitors?

Yes. So I'll start with the design of the molecule, why we chose to develop our own version of MCL1, and Jane can provide the clinical update. So when we looked at the field, MCL1 was a very, very interesting target in heme malignancies, particularly given the success of venetoclax, and when patients fail venetoclax, there is a role for another member of the same family to compensate, right? So if you inhibited both or even MCL1 inhibitor with other standard-of-care agents, there is a strong scientific rationale and preclinical data. What hampered the field was that the 3 companies have taken their MCL burdens into the clinic, had cardiotoxicities, right? So some of them went down to clinical hold, and recent presentations demonstrated a very high incidence of cardiovascular toxicity. So what we hypothesized is that for this mechanism, particularly from the Bcl-2 family, if you can minimize exposure to nontumor cells by designing the PK profile, the properties of the molecule, you can minimize and avoid the cardiotoxicity while achieving high levels of target inhibition in the tumor cells because the prime cells, you can induce apoptosis in those cells, so you don't need to linger like other kinase inhibitors, right? So that was our hypothesis. And we've advanced that into -- again, there is rationale in solid tumors and heme malignancies, just like CDK9, but we felt that we can -- it's important -- I think I'm going to say this for -- that's applicable to both programs. It's a stage-wise derisking we have to do. It's important to show that our compound is really safety differentiated, right? That's an important piece of drug development. So the data we were able to generate in solid tumors was able to accomplish that. That's very, very important. And we are now in the phase of really asking, can we demonstrate meaningful efficacy in these patients where, ultimately, this could be impactful medicines, right? So in terms of clinical data...

Yes. I just want to add to that. I like to think of it as shock and awe, meaning you want to hit the cells really hard. Those that are prime for apoptosis will be tipped over into cell death. So -- and then you can spare the myocytes. And that's the differentiating factor between our MCL1 and others. The clinical program is advancing. We'll be giving an update on the Phase I experience in heme in the dose escalation and recommended Phase II dose later this year. We already did show our -- AACR our solid tumor experience in the patients in solid tumors where we didn't demonstrate the cardiotox. And as we advance, we'll be thinking about how we view the different molecules. Obviously, they're in the 2 similar indications, and we want to provide the most safe and efficacious molecules and therapies for the patients.

Great. Maybe if I can push on that last part. So then as you mentioned, given the overlap of the -- potential overlap of the indications, how are you thinking about future development of these 2 programs?

Yes. So where there has been externally validated activity already is the CDK9. And so in our minds, we are weighing the options of can you get to the same place with an indirect MCL1 inhibitor as with a direct MCL1 inhibitor. And so that's the data and choices that we will be thinking through strategically towards the end of the year as we get our body of evidence together.

Okay. Great. Let's talk about PRT3645. How is that one differentiated from current CDK4/6 inhibitors?

Yes, sure. So like other programs, as we think about the mechanisms that we're going after, the pathways we're going after, we're really asking, how can we either differentiate from ones that before us? Can we -- in this particular case, it's a validated mechanism, right? But it was only the previous drugs are only approved in hormone receptor-positive breast cancer. So in order for us to really expand the reach of this pathway to other indications, it needs to have properties that differentiate. So the way we thought about is that it needs to have exquisite selectivity and potentially having some bias for CDK4 because it's been shown that CDK6 was causing -- was the reason for neutropenia that was seen with the previous-generation compounds. And if we can build high tissue penetration and brain penetration, there are certainly evidences or genomic basis for going into CNS cancers for this mechanism. So those are the features that we built into 3645. It's a very, very attractive molecule from the standpoint of its overall profile. And so we've brought the compound to the clinic earlier this year. And maybe Jane can an update on where we're studying and...

Yes. So I think you're hearing a theme from us, which is we are trying to have therapies for patients and medicines for patients that are highly selective, highly potent with decreased toxicity. And ultimately, that's the goal for many of the CDK4/6s that are out there right now, around 50% of patients either dose reduced, dose interrupt or have to discontinue. And they can't get that dose intensity. Additionally, there's drug-drug interactions where it's difficult to combine with other agents. We hope to expand the reach of the CDK4/6s because I think there is far more potential if you're able to have higher tissue penetration in the brain, in the tissues with a safer molecule. And so areas that we, as an entree, could be like first looking at things like endometrial cancer. Additionally, there's other combinations we want to look at like KRAS or tucatinib-type combinations where brain mets, tissue penetration and combos are important.

Now you have multiple programs with different targets. How do you prioritize these programs?

Yes. So it's a great question, the one that we ask ourselves all the time. So first of all, we are in a phase of development for these molecules, where we want to be guided by clinical data, number one. Number two, demonstrate the -- clinically, are they actually delivering the type of data we expect to deliver? And we're generating the data right now, right? There's already some data out there. We'll be presenting more later this year. So the question that you raised is a good one when you have an MCL1 and the CDK9 where there are overlapping indications that there is a potential to just use one over the other, and we will be looking at the totality of the data to make that decision. So -- and SMARCA2 is a really exciting program. Although it started later, it's -- there's a tremendous amount of interest and enthusiasm, and this is -- it's moving really well. So our decisions will really be based on how best we can develop these drugs and rapidly and serve as many patients as possible. And so we believe that we're going to have that data in the very near future, and it will be partly strategic decision and partly whether some of these programs require more capital that we can really push the program faster if we can apply that capital. So it's the kind of important phase of drug development that we're in right now. So we're excited to really have that optionality that we can make those choices and not have to take programs beyond the point where they don't need to be taken.

The other thing we always look at, of course, is the competitive landscape as well as the registration path. We want to be laser-focused on making sure we get to an end point that is reasonable for a company our size as well as something that will really make a difference for patients and make a difference in the therapies.

Great. It looks like we'll leave it there. Thanks so much for your time.

Yes. Thank you. And we're very excited to be at a place where we're generating this really important data, and it could form a very strong foundation to build the company into a fully integrated oncology company. So thank you for the opportunity to discuss.

Great. Thanks.