Prelude Therapeutics Incorporated (PRLD) Earnings Call Transcript & Summary

All right. Well, thanks, everyone, for joining us here and online for the Goldman Sachs Global Healthcare Conference. Really appreciate you joining us. The team from Prelude Therapeutics is here to join us today. Maybe I'll let you guys first introduce yourselves, and then we can get a quick overview of the business.

Absolutely. I'm Kris Vaddi, Founder and the CEO.

Jane Huang, President and Chief Medical Officer.

And I'm Bryant Lim, the company's Chief Financial Officer. Thanks for having us.

Yes. Great. And maybe if you could, we could start with just a brief overview of the business. Maybe focus on key value drivers as you see them over the next 12 to 24 months.

Absolutely. Absolutely. So first of all, thank you for the opportunity to participate in your conference. So Prelude is a precision oncology company. We've built the company from ground up about 8 years or so to create novel treatment options for patients with aggressive cancers who are not currently served with available therapies. And we really chose first-in-class science to develop very selective and potent small molecules. And over the years, we've kind of expanded our treatment approaches to even include some of the novel precision ADCs by combining degraders as payloads to ADCs. So the teams really -- we do all the work internally, and we have tremendous medicinal chemistry, biology, all the aspects and clinical development led by Jane in-house as opposed to outsourced or in-licensed. So very proud of the team that we have, and we made a lot of progress. In terms of the programs itself, the clinical program that I'm sure we're going to spend a fair amount of time talking about is targeting a very important chromatin remodeling protein. It's a part of the complex that drives the gene transcription, and there are a clear biomarker selection opportunity going after SMARCA4-mutated patients that currently really do not have any treatment options because these mutations, for the most part, do not overlap with other actionable mutations across multiple tumor types. So we have 2 agents that are in the clinic. The first one is 3789, which is delivered by IV, and that's been in the clinic for a little over 1.5 years, 2 years. And we recently moved an oral compound, 7732 into the clinic. That's towards the later part of last year, I think, October of last year. These are 2 distinct entities, molecular entities. They're not really different formulations of the same molecule. So they're entirely novel different molecules. And they have different pharmacological properties that are allowing us to understand the best way to target this mechanism and potentially develop a novel important treatment option for these patients. Beyond that, we continue to invest in research. And we recently disclosed a novel degrader of epigenetic target called KAT6. We can talk a little bit about that. It's actually now clinically validated with only one molecule, which is an inhibitor that is currently in development, and we have opportunities to potentially improve on that. And we have a lot of exciting work going on, on the degrader antibody conjugates that also really allows us to target cancers that are not currently able to be addressed by existing ADCs or chemotherapy payloads. And we believe that our precision approach is expand the reach of the ADCs as well as our SMARCA2/4 program. And so a lot of very interesting stuff happening led by SMARCA in the clinic.

Okay. Maybe we'll start with the SMARCA2 programs then. Let's start with just the patient population for whom SMARCA2 degraders might be effective. How large is that group? You mentioned this already, but is it overlapping with addressable genetic mutations that already exist? And just like how well identified is this patient population?

Yes. So thanks for the question. The patient population is around 5% to 10% of multiple different cancers, most notably non-small cell lung cancer. And it's actually through our efforts, we worked really hard in the last 2 years being a first-in-class novel degrader that we had to put them on multiple different panel. So it's actually now readily available on the foundation panel, Caris, Tempus, homegrown next-generation sequencing. And so these are -- in lung cancer, the loss of function is about half of that, so 5% of all non-small cell lung cancer. And similarly, in multiple other tumor types like esophageal, 5% to 10% is the known epidemiology, could be a little bit higher based on if we start testing more and more people and it's more recognized.

So for among patients who do have those mutations, I guess how are these patients currently treated? And how well do those therapies work?

Yes. So for frontline treatment, most everyone for lung, for instance, gets triplet chemotherapy plus IO. And the prognosis is very poor in those patients who receive that front line, which is that the overall survival is about 8 months. Overall response rate is 20% and progression-free survival is 2.7 months. So this is a group that has really high unmet need. As you go into second line, the prognosis is probably equally poor. So I would estimate the response rate to be about 5% to 10%.

Okay. Can you spend a few minutes on the mechanistic rationale for how SMARCA2 degradation works? And maybe help us understand why selectivity over SMARCA4 matters for these particular agents?

Yes. In the most, let's call it, simple, it's -- there's SMARCA4, SMARCA2 as part of the chromatin remodeling complex opening up your access to the DNA. And so in terms of -- there are mutations in the SMARCA4, and SMARCA2 compensates for that in cancer. So if you take out SMARCA2 and 4 is already gone, then essentially, you have initiated synthetic lethality. And the beauty of having a degrader over using other modalities to target this is that the degrader can be very, very specific for the SMARCA2. So in normal tissues, if you degrade SMARCA2, the 4 is still there to compensate.

Okay. And then in terms of key properties that you think are necessary for a successful SMARCA2 directed agent, obviously, it sounds like degrader over inhibitor is one of the things. But what are some of the key properties you think are necessary for this kind of agent to be successful?

Yes. So we know from our preclinical models that if you hit both 4 and 2 that you have quite a bit of toxicity. And so the degradation of 2 allows and selectivity and potency for 2 actually allows you to be able to have a wider therapeutic index as well as the ability to avoid off-target toxicity.

Okay. You do have 2 SMARCA2 degraders in the clinic, one's oral, one's IV. How do these 2 agents kind of like compare and contrast given the same target? And how do you think then about the best role for each of them?

Yes. So the IV went into the clinic first, and it's the one we had available to go to the clinic. And it's a VHL-based versus cereblon. So those are slightly different molecules, the IV and the oral. I think the oral has -- the IV has provided really nice proof of concept for the pathway because this is a novel pathway. We show responses using the IV. And there are some patient populations where the IV may be more applicable, for instance, someone where we showed activity upper GI, where people might have trouble swallowing pills, those areas. So I think they're complementary. Of course, if the oral catches up, which we are rapidly advancing due to our knowledge that we gained from the IV that we will be able to think about what is the best way to deploy one or both.

Okay. Maybe let's start then to dig a little deeper on each of those agents. PRT3789, I believe, is the IV. Dose escalation is still ongoing. There's been, I think, 11 doses in the clinic to date. Maybe talk to us about that a pretty extensive dose escalation program.

Yes. So we actually just completed a selection of the dose. We went through up to 10 doses and we did not do the 11th. And because it was a novel epigenetic mechanism, first-in-class, we were required by the health authorities to go very slow because it was through a Fibonacci sequence of dose escalation. So you couldn't do your 67% steps. And so from that, we really just went into the clinic quite quickly. But the...

Maybe just to add to that, if there was toxicities like with some other agents that were seen, then you would stop, right? But in this case, because the way that the molecules were designed to be very, very selective for 2, we didn't see the toxicities that allowed us to continue to push the doses to see -- to try to get the maximum degradation possible.

Yes. So we selected our dose recently that was announced this last quarter at 500 per meter squared, which is dose level 9, not the top dose. And really, we actually just stopped not because of DLTs, but because we looked at the totality of data and thought that 500 would give us the maximum benefit.

Okay. Maybe to follow up on that, what were you using to judge kind of like the maximum level of benefit? What are the key kind of properties of the drug that you saw that gave you confidence in moving forward at the 500?

Yes. We looked at tissue degradation of SMARCA2 as well as peripheral blood, the PK properties, the safety properties and activity.

Okay. You've reported some early efficacy across a number of tumor types. Maybe you could walk through the efficacy data to date.

Yes. So the important part to recognize is -- when we started the program, we went a little bit broad. We looked at all SMARCA4 mutations because there was very little known. It's possible that there's 2 types, Class I and Class II. Class I are known to be loss of function of the SMARCA4 protein. Class II, you can detect the protein and it may or may not be loss of function. And so we wanted to understand the whole landscape. As we narrowed in, in our backfill cohorts, we looked specifically at loss of function, and we see that the activity is in the upper GI and non-small cell lung cancer tumor types. That's not to say that there might not be other activity in other tumor types. But that's where we saw it. And in the other tumor types, for instance, we had a couple of breast cancer patients that were enrolled, but they were like ninth or tenth line. So in the Phase I for us, lowest hanging fruit is to really hone in on the upper GI in lung cancer.

Okay. I think you reported an objective response rate around 23% at some of the higher dose levels. How does this compare to kind of expectations for this patient population? As you mentioned, this is a Phase I study, so pretty beat up patients usually.

Yes. So for lung cancer, as I mentioned, docetaxel would have been what would have been -- the patients would have gotten. And docetaxel at best is a 15% response rate, and that's all comers, including those that don't harbor a SMARCA4 mutation. So based on my discussions with the investigators, the target overall response rate would be around 5% to 10%. So a 23% response rate, we're very encouraged by.

Okay. You mentioned that you selected a dose now. So maybe you can talk to us about the next steps for the monotherapy study here? And what sort of like data readouts should we be expecting over the intermediate term?

Yes. So we will report on the full data set toward the end of the year in terms of the outcomes and the efficacy and activity based on the dose that we selected. And in terms of -- there's also a chemo combo as part of it with docetaxel that we'll report out on around 10 to 15 patients worth of data in the specific populations, looking really down at the loss of function, lung and upper GI. As I sort of alluded to and Kris alluded to, the oral is really catching up quite quickly because we just went into the clinic in October. We're at the sixth dose cohort now, and we have learned so much from the IV that we were able to really focus in not only on the investigators, but also the patient population, so able to accelerate that. If the oral catches up, we'll have some decisions to make on how we want to develop.

Okay. We're going to move to the oral in a second, but let me just put a bow on the conversation around the IV. As we think about the data that is coming, I guess, what would you think are like metrics for success that give you additional confidence in moving forward with either one of the programs given the same mechanism?

Yes. Even though the overall historical control, let's say, is around -- would be guessed to be around 5% to 10%, you want a comfortable margin, right? You want to see at least 30%, 30% to 40% in a reasonable number of patients to be able to move it for single arm towards registration, and that would be the typical bar.

Okay. Maybe we can talk about the oral then. Let's talk first about the key features of the oral program and what are the advantages you see between this and IV?

Yes. Certainly, because of targeted therapies that are out there right now, I'm still seeing patients in the clinic. And so I know that the patients far prefer the oral that you don't use chair time, et cetera. You don't have to come back to the clinic every week, which is the IV. And so the oral as a convenience as well as -- in addition to having the convenience, you also have the ability to really target SMARCA2 on a daily basis, so really inhibited 24/7 basically or degraded 24/7 and drive those levels even lower, thus potentially increasing the activity even further.

Can you talk about the key like technical features or challenges that you had to overcome to get an oral with the right properties versus an IV?

Maybe Kris can take that.

Yes, I can take that. So when we started the program, it wasn't -- oral wasn't an afterthought. We wanted to actually go with both VHL and cereblon-based degrader or ligand. And the reason for that is that VHLs are very big molecules, right? So it's hard to get on, right? There's really no known VHL-based degraders that actually have good oral bioavailability. So we went down the path of cereblon. And it is actually because the technology leverages the sort of ubiquitination of lysines, it is a significant challenge to design a cereblon-based molecule that only ubiquitinated SMARCA2 and SMARCA4, right? So that took longer than VHL. We were able to crack that with VHL first, and that allowed us to identify specific lysines that we iterated on using the cereblon. So once the binders are -- we understood the properties. And then -- and getting oral bioavailability is another challenge because these are very large molecules, right? On the positive side, because you're degrading, as Jane was saying, that you are actually -- it's not like an inhibitor where you need it to cover -- we do want to cover around the clock where we don't take it out as much as possible. As in the case of epigenetic mechanisms, the more the better, right? So it gave us an opportunity with oral like daily dosing, even though these are large molecules, we don't need enormous concentrations in the blood to be able to really achieve our intended pharmacology and target engagement. So that's kind of how we thought about it. And we're very, very pleased with the molecule we were able to -- our team was able to design and come up with the 7732.

Perfect. Maybe you could spend some time on the development program. As you mentioned, it's sort of catching up. So where are we today in terms of development? And kind of what should we expect to see in terms of data over the near term?

Yes. So we're in dose escalation, as I mentioned, at 60 milligrams for the oral, which is approaching the DC50 that you want to achieve. And so if we're at this same clip, assuming we have the same safety profile as we continue to dose escalate, we should be able to select our dose by the end of the year and then decide on what our registration path would be.

What are the like patient populations included in these early studies? And how should we think about when you do report data, like the number of patients, the time on therapy, like what are the key things to understand with that?

Yes. So while the design is very similar where we allow more patients because when you're trying to go through dose escalation, you do want to amass as much safety information as you can. But really, we are trying to focus in on the lung, upper GI loss of function patients. And so we'll have a pretty robust data set around that.

You mentioned a couple of times that one of the keys for these type of drugs is to keep pretty good kind of target coverage over the dosing like over the treatment period. How do you then think about dose selection, making sure that you don't have doses where dose reductions or any sort of holds, et cetera, are required to keep patients on therapy?

The beauty of our molecule being a specific degrader right now is that we're having a very clean safety profile. So we haven't seen any cumulative toxicity. If you looked at them and if you look at the IV, you can see that our adverse event profile is really quite good as monotherapy in terms of there were no DLTs. And you can -- from the oral, we're progressing so rapidly, you can basically ascertain that we have a very similar safety profile. And so from that perspective, I think we feel quite good that we should not have to have that many dose reductions. This is a sick population. And so naturally, as you go into earlier lines, you would expect less and less dose hold, for instance, for drug holds.

Okay. Once you have the dose selection, I guess, what is the path forward in terms of is there like an accelerated approval path? Or what's the kind of like registrational plan for this kind of program?

Yes. Certainly, while we haven't had those discussions yet with the health authorities, we have certainly thought about this being a biomarker selected population, really lends itself towards a faster pathway because, as I said, there's no other really good options for this, and it's an aggressive disease. So a potential would be to pick a tumor type and do the single-arm accelerated approval pathway.

Okay. In terms of combination strategies, are there any combinations that are kind of like make a lot of sense with this mechanism? And could you speak to that?

Yes. Preclinically, we did see combinatorial synergies in terms of both immunotherapy. So we tested pembrolizumab preclinically, and we saw that you had increased T-cell engagement and that you could turn the cold tumors hot essentially is how I think about it. And so knowing that these patients have specifically SMARCA4 loss of function patients often have low PD-L1 that could be a reason that they're not responding as well to frontline therapy with chemoimmunotherapy. So we certainly, for the IV actually have an ongoing study looking at the combination with pembrolizumab. And then with chemotherapy, there also is thought to be synergistic activity if you combine. So those are the 2 things that we would be looking at quite carefully.

And so is the role of combinations in your view, I guess, will that kind of be in specific patient populations, whether it's line of therapy or different tumor types? Or is this going to be kind of like where you move with the whole program?

Yes. I think the natural progression would be to target frontline non-small cell lung cancer, knowing that the progression-free survival in these patients is 2.7 months. We need to get to the front line as quickly as possible because these -- there really are -- we didn't cover overlapping co-mutations, but really, there are no other overlapping targetable co-mutations. EGFR is nonoverlapping. KRAS is a very small percentage. ALK, none of them overlap. So this would be a very specific patient population for us to go after.

Okay. Understood. Anything else you want us to understand about this program before I spend a few minutes on KAT6?

No. We're just happy about the progress we've made and looking forward to the completion of the Phase I towards the end of the year.

And just strategically, as Jane said that we -- because of the attractiveness of the oral as an approach for these and other patients and the progress we've made and based on the learnings from IV and the PoC from IV, we are planning to make a decision on which one, prioritize one over the other relatively soon. So I think we're almost there.

So on the KAT6 degrader, you did allude to this earlier, but let's go back. It's been an emerging target of some interest. Maybe first, you can speak to the proposed mechanism of action and sort of the tumor types that are going to be most sensitive to it.

Yes. So this is -- I mean this is KAT6 as a target, which is an epigenetic target. And it's been -- there's been observed reported amplifications in KAT6A, which is what originally got people to be interested to look at this. So Pfizer actually generated the first clinical data with an inhibitor that there is A and B, just like everything seems to be there more than one family members. In this case, there is A and B. And there are others. Some people are targeting KAT7, for instance. So there are a number of these proteins that are part of the large complex. And so when we saw -- I mean, we've been interested in it from the standpoint of, again, as a precision oncology company, targeting amplifications that could potentially be -- allow us to go after tumors or cancers that have no good therapies. So we saw the -- so we've been working on it as a degrader approach because we've built a lot of expertise on degraders internally. And when we first looked at this as a target, we felt that we could actually go after this and be selective for one versus the other, right? That was our initial hook. And then when the clinical data came out, and in fact, Pfizer's work kind of narrowed it down to ER-positive breast cancer. So the jury is still out there with regard to other tumor types where there is also KAT6 amplification and what happens or can you target those. But for now, the focus from everybody is ER-positive breast cancer because high response rates when you combine with fulvestrant 37% response rate that they just recently reported at ASCO. And from a biology standpoint, what we've been able to show, and we had a recent publication or presentation at AACR that we were able to design KAT6A selective molecules. What's interesting is although there's genetic evidence pointing to potential role for both of them, A and B in bone marrow function, when we were able to selectively target A, we were able to show in vitro and preclinically less impact on bone marrow. And obviously, this has to be proven further. But at the moment, there is a therapeutic rationale of going selectively after A as an approach to reducing one of the key toxicities of the Pfizer [ comer ], which is neutropenia. So that's kind of the idea. And the team has been able to make really good progress in terms of not only identifying highly selective, exquisitely selective A degraders, but also coming up with really attractive molecules that have all the other properties you want, not just biochemical cellular properties, but the PK and PD and all the safety profile. So that's kind of where we are with that program.

Okay. And I think you mentioned this, but the degrader versus inhibitor advantages, maybe you can just quickly enumerate those.

Yes. So again, in some ways, there are certain similarities with our SMARCA2 and 4 program here. These proteins are fairly similar, right? So designing an inhibitor is a challenge. I'm not saying it can't be done, but it looks like some people are trying to do that. But I think from our standpoint, there's 2 benefits. We were able to design degraders that are exquisitely selective for A, right? So that's one benefit. And we were able to prove preclinically, targeting A was sufficient, meaning you have similar or even better activity than dual inhibitors, but just only selective but degrading, right? So that's the second benefit. So just in terms of overall target coverage with the degraders, that's the reason why many companies have gone after or going after degraders is that you're taking the protein out. So your pharmacology is based on how fast the protein regenerates rather than whether you're able to keep the levels around the clock. So it just gives you a little more flexibility in terms of the target doses and target concentrations.

Okay. Maybe quickly the next steps for this program.

So as I said, that not only we have good preclinical PoC, but we actually have molecules that we think are pretty attractive as development candidates. So we're evaluating those. And depending on the amount of capital that we're able to allocate -- or other ways of funding it, we would like to take this into the IND next year, sometime in the first half next year.

You also have an ADC pipeline. You mentioned this earlier. I guess why think about moving into ADCs? You've already got this kind of like degrader technology. So why is that attractive?

Yes. Again, this is all kind of built around the same theme, right? As I said in the very beginning, our approach in building company, the company and our vision is to come up with novel treatment options for patients with highly aggressive cancers. And the same mechanism is not obviously going to be effective in all tumor types, depending on what's driving it. And we've already seen how powerful ADCs with the cytotoxic chemotherapy payloads are. So what it allowed us to do is to combine the technologies like the degrader technology that we've developed internally. Now we have 2 -- SMARCA2/4, 2 different molecules moving forward with KAT6 behind. And all the learnings, we just asked the question, can you deliver degraders that are otherwise not tolerated systemically directly to tumors where you can take advantage of the tumor specificity and be able to target the pathways you couldn't otherwise target systemically. And so we presented some data at, I think, triple meeting last year. And we're collaborating with AbCellera. We're not an antibody company. And AbCellera and we're obviously very, very powerful antibody discovery company, and we discussed this potential collaboration. It seemed very logical to be able to actually kind of expand the reach of this market. We talked about how you couldn't tolerate 2 and 4, taking 2 and 4 out, right? But there are tumor types where they're very, very dependent on both of them. So we made picomolar 2/4 dual degraders that we couldn't give it systemically orally or IV. So we were able to put them on antibody and safely deliver to tumors. So it's -- and we're not doing all of this on our own. We're really working with a very, very capable company in the antibody space. So we see a great future in this space. Obviously, we're very early stages, but it does allow us to potentially bring in some interesting collaboration BD opportunities as well, having this technology in our possession.

Maybe we can wrap with a quick question on cash runway. What's the current balance sheet and runway? And what activities are embedded in that?

Sure. So our cash position, as recently reported in our Q1 press release, is $103 million. That takes us into Q2 of 2026. Everything that Jane and Kris has been talking about as it relates to smart IV, oral, KAT6, our collaboration with AbCellera are all assumed and subsumed, if you will, in that number.

Perfect. I think that probably brings me to the end of my questions. It was great having you guys here this morning, great chatting with you, love learning about the story. Thanks to everyone who joined us here and online. Thank you.

Appreciate the opportunity and look forward to reporting the progress in the next coming months.

Beautiful. Beautiful. Thank you.

Thank you.