Prelude Therapeutics Incorporated ($PRLD)

All right. Good morning, everyone. Thanks for joining us here and I think what is our final session of the Goldman Sachs Global Healthcare Conference. I'm thrilled to be joined on stage is team from Prelude Therapeutics. And maybe I'll let you ourselves.

And then I'd love if you could just start with a conversation on what you view as the core competencies for Prelude. And how has that informed the portfolio construction and your process kind of for business development over the years?

Thank you. Thank you, and thanks for the opportunity to participate in Goldman content. The straightforward answer to your question is really to start with why because we didn't build the competencies first, the mission came first. So we really exist to bring better treatment options for patients with cancer, right? And when you hold that standard seriously, it forces us to build a set of capabilities, right? So it he told us that you cannot be -- could not be modality constrained because different cancers, different pathways, different vulnerabilities. So the problems call for different solutions. And so we had to build the capabilities to be able to really design new molecular entities across multiple target classes, not because we really want it to be a broad technology target platform, but the patient problem demanded it, right? And it also told us to be really focused because capabilities with our focus because it's a very expensive experiment. And so we had to be the same why that kind of told us to be broad also forces us to concentrate on the rigor of the science that really tells us which patients to go after the trend of evidence affording a particular mechanism. And so it's basically the why build the how in the situation. It same largely flows into our portfolio construction. We really look at each of these potential opportunities on 3 axes. The first o- being how strong is the evidence that this particular patient population need a better therapy. And what are the molecular interventions in these patients, number one. Number two, what is the strength of data that validates and obviously, the more clinical data, the more validation that we have on a particular target, and most importantly, the target candidate profile and really what's out there because what we can do really well is to design and build those molecules that are truly differentiated that can address something that could be addressed by what's out there. And finally, your question regarding the business development. I just want to be clear that we're building a fully integrated biopharmaceutical company. right? So the question that we actually don't have [indiscernible] of the programs is can we do a deal on this. It's more about if we actually -- can we bring this to patients faster and with a broader [ REIT ], a strategic collaboration that we can do it on our own. The capital realities, as you very well know, depending on the point in time where we are or sometimes dictate what we do, but it truly -- we think about Prelude as fully integrated biopharmaceutical company, which means that we bring to the market some of the discoveries that we make.

All right. Great. Maybe we could talk about some of the specific programs with that in mind then. And we'll start with the Cat-6 program. I guess, first, just why did you find Cat-6 a relevant target in oncology and specifically in breast cancer against the paradigm you just described?

Yes. Maybe you can take that topic question and then I'll come back.

Sure. It is emerging as a really important target in a number of malignancies, especially ER-positive breast cancer. You ask why [CAP 6]? It's known that it's on the 811 amplicon is amplified in a number of malignancies 12% to 15% of breast cancer, and it's overexpressed and an even greater percentage. It was also shown in the early preclinical studies that if you knock it down that you can impact tumor cell growth colony formation, even cancer stem cells and that normal cells were not impacted if you knock down CAT 6 specifically. And I think that led to the development of small molecule inhibitors first. that showed a similar biology to the knockdown experiment, and that led Pfizer first to move into the clinic and really have some early compelling clinical data that supported the clinical work. There are limitations in terms of toxicities, and that's what led us to really go after a cask-based selective degrader.

Yes. With the data that you just shared like the inhibitors that are more advanced, I guess how meaningful do you think this target has been validated at this point?

Yes. Again, I think on the early clinical data suggests that there is activity across a broad range of ER-positive breast cancer is independent of PIK3CA mutation or ESR1 status and especially in combination with fulvestrant, I think Pfizer is showing really compelling data that led them to initiate a Phase III study. As I mentioned, there are some toxicities associated with the approach. Pfizer has taken an approach to inhibit both Cat 6A and Cat 6B. And that leads to dose-limiting toxicities like neutropenia as well as discuss in of patients. And so we do believe it's a validated target, but there's room for improvement.

Yes. You're starting to speak to my next question, which is with that in mind, where do you see the residual unmet need that you could address with your own approach?

Yes. So we've taken an approach where we want to target CAT 6A selectively. As I mentioned, CAT 6A is amplified in tumors. CAT 6 is not but both of them seem to play a role in bone marrow development, and that's where the toxicity comes in with the dual inhibitors that Pfizer and others are taking forward. So with our approach by selectively degrading CAT 6A, we think we can more completely impact the Cat 6A biology, the tumor biology and spare some of the bone marrow toxicity associated, especially the neutropenia. So our approach has really been to go after CAT 6A selective degrader to inhibit the pathway more deeply and have some better tolerability. So I think that's the area for improvement. It's important, I think, when you think about combinations, specialty, CDK4/6 inhibitors, which are a backbone therapy in ER-positive breast cancer, also have neutropenia. So abbreviating some of the neutropenia with a CAT 6A selective approach would really allow us to combine effectively 4/6 inhibitors as well as SERDs, kinase inhibitors.

Can you talk a little bit more about the evidence that backs up your -- the hypothesis you just laid out in terms of not touching Cat 6b and then being able to show these kind of differential benefit on safety?

There's preclinical data, again, that supports -- if you knock out both CAP6A and Cat6b that the bone marrow toxicity is much more severe. It has an impact on the hematopoietic stem cells. Whereas if you knock out either one as a single knockout that, that toxicity is mitigated, there's almost no impact. So it's really our thinking because you need to knock down Cat6a for the tumor biology. Sparing Cat 6 should then allow you to have less effect on the bone marrow. So that's been our hypothesis. And I think some of our preclinical data supports that.

What degree of mitigation do you think you can achieve with a selective approach? Like what's realistic here?

In terms of like...

Mitigating the site profile yes?

Yes. I think in the preclinical models, it suggests that there's certainly a wide window. We can be at concentrations or doses that have really strong efficacy in the models and not have an impact on neutrophils. I'm sure if you get to really high doses, maybe 100x where we think we need, they'll start to have an effect. But the preclinical data suggests there's a window.

Speaking of preclinical data, you had a poster at AACR recently. Maybe you could just walk through the key highlights from those results and speak to both the efficacy and the safety you were able to achieve.

Sure. I think we showed 3 pretty compelling points in that preclinical poster at AACR. One was the monotherapy activity of our lead molecule, PRT13722. We showed deep progressions, complete regressions in multiple models in all of the animals. And if you compare that to the dual inhibitors, [Audio Gap] really only tumor growth inhibition [Audio Gap] as I said, complete regression, the cross models where the inhibitors really didn't show strong activity. So that was one. I think the combined activity that we also showed with a number of standard-of-care agents in ER-positive breast cancer like SERD and PI3 kinase inhibitors as well as CDK4/6 inhibitors; it was really remarkable, the efficacy that we were able to see in the models with all of those agents at really well-tolerated doses. So that was the second point, I think that was really important in our poster. And lastly, it goes back to your question of the safety. And at those doses where we saw the marked efficacy in the models, we really saw various minimal effects on neutrophils. So again, better efficacy and better safety.

Can you talk about any like benchmarking you're able to do in the preclinical setting to show how this stack up versus the other agents that are more advanced in the setting?

Yes. We did a lot of benchmarking to the Pfizer CAT 6 AV dual inhibitor for [indiscernible] which they have in the clinic that the structure of that molecule is new, so we were able to do head-to-head studies. And in terms of efficacy, whereas they achieve as monotherapy tumor growth inhibition, we have progressions in combination with something like fulvestrant that they're taking forward in the clinic. They showed -- in our models, we could show some better efficacy in that combination. But again, with our molecule, our Cat6 selected to greater, we had complete regressions in all of the animals. And then in terms of safety, when we benchmark at doses where they achieve that efficacy and remodel, there's a clear effect on neutrophils, whereas we can show efficacy at doses that don't have the neutrophilia.

So looking towards the clinic, I guess, how would you expect these data to translate to clinical results? And in particular, how will it show up as this differentiation is real?

Yes. I think we're hoping to see that pretty quickly in terms of the safety effects. We can see the effects on the neutrophils and the other dose slimming or other effect that the Pfizer compound shows is Discusia, which is the negative taste effects. We think both those things will read out really quickly. In the clinic, I think at the recent ASCO Pfizer had data that the neutropenia shows up within the first cycle, the first week. So the safety readout should come quickly. And then efficacy may take longer. But as a monotherapy, Pfizer showed around 11% overall response rate. So again, if the preclinical data translates, we should see effects there as well.

Great. So on that point, you're now moving towards IND and clinical development. I guess, what do you envision in terms of initial study design for 13722?

I can take that. So just to take a step back, right, the ER-positive breast cancer treatment landscape has dramatically changed. And so if you look at the backbone therapies like CDK4/6 and estrogen-targeted therapies, clearly evolving. And now we have PI3K inhibitors where initial compounds like [ Pick Ray ] had a lot of toxicities and now with much more mutant selective inhibitor side. So one of the interesting things, as I was saying earlier with the CAT 6 is that it has the potential to offer something truly unique that could be combined with each of these agents because it's a completely independent access that we've uncovered, right, as a community. So consistent with our portfolio strategy, we wanted to build something differentiated that can be readily combined with others. And we've learned that the neutropenia is creating a problem to a point where [ prefetrostat ] and the [ City Care ] 4 selective one, which is moving forward in that class, couldn't be combined, right? Although we don't know exactly reason why that wouldn't be, but you could suspect it related to the overlapping toxicity. So the way we're thinking about is really taking into account the changes on the evolving landscape. The first order of business is, as Peggy pointed out, our preclinical results indicated that we have the potential to have higher monotherapy activity. Just simply, we're taking down the whole oncogenic complex for whatever mechanism, maybe deeper hit of the target, all of those reasons. So that's the read out in the clinic. And it informs a certain path. If that is true, and you did didn't need a combination with public -- but that's -- our base case is that we want to demonstrate safety differentiation as a monotherapy, right, and see what the efficacy looks like. And the next step really is making sure that this particular Cat 6a selective grid not only safer but is as effective as Pfizer, right? So the pollutant combination is the next step that we will do. So and then the third of potentially parallel question that we want to address it can be combined safely with currently marketed CDK 4/6. Because if the answer is yes to that, I mean we have opportunities not only in second-line setting, but you can actually move to the frontline setting. So I think ultimately, it's going to be a lot of different combinations will be tested. But the sequence is that a monotherapy first, safety and potential efficacy differentiation followed by [indiscernible] in combination is what we are most focused on.

Okay. Could you speak a little bit about which doses you'll be taking forward into the clinic? And could you map from the preclinical data to where you would expect to start seeing clinical activity?

Yes. So again, having a molecule ahead of us with a lot of preclinical data and also the clinical PK/PD profile activity profile really is very, very helpful as we think through. So we use, we benchmark, as Peggy indicated against prepetitat. So we believe, based on all the data that we have to date, we would be starting at a pharmacologically active dose. So it's not -- we're not looking at somehow it's acquired in multiple doses to get to pharmacological. So we start right off the bat in the range of target inhibition that should be active, right? And then the question really is that we still have the dose has led. We still have a big dose right for expansion and et cetera. So the way we're thinking about it is that sort of parallel execution. So started a dose that has pharmacological activity, potential pharmacological activity or gives you the coverage that is associated with preclinical efficacy. And then as we have a number of questions we can ask there's a biomarker that we can look at Cat 6 levels in these patients if the patients already had either ESR1 or PI3 mutation, we can look at their CTDNA changes and then potentially backfill those cohorts or add focus trend at that point.

Okay. So with that in mind, I guess how long do you anticipate it could take before you start generating clinical proof of concept here?

Just before we -- it's hard to tell where we start. But I -- we've generally guided that we in the second half of 2027, we should be in a position to have enough patients to be able to start understanding the profile of the molecule. Like I said safety data will come first because we saw from Pfizer's recent ASCO presentation that the neutropenia shows up within 1 cycle, right? So -- but then you could always argue that have you dosed high enough, right, safer, you also need to be able to show that you're effective. And if it truly requires full western combo and enough patients to see it. I think probably months or so is a reasonable target.

Yes. You've talked a bit about this already. So this might be a little bit repetitive. But how are you thinking about the potential combination regimens in breast cancer? And what data specifically are you looking to generate before investing more kind of fulsomely into some of those combination of purchase?

Yes. I think if the safety differentiation emerges early in the development. Going to fullest and combo is the #1 thing because we want to be able to show that selectively hitting cat are sparing Cat 6 be not only give you safety improvements, but also can match the [indiscernible] that's a [ month ], right, that we should be able to show. If we can see the safety differentiation, we will rapidly move to CDK4/6 combo because that is something that I don't think this current generation of either Pfizer or some of the others that are hitting both Cat6 and we will be able to do because there's -- I mean, we've seen some more data from Olema. But generally speaking, the profile, maybe minor differences, but the they look like CAT 6 inhibitors, right? So our operating assumption at the moment is that if we can actually show a combination that with CDK4/6 it opens up a whole host of opportunities. We're not concerned that much on the PI3K inhibitor overlapping safety issue. I think we should be able to combine that. And so it's just really sequential. I think ensuring that we have a dose that we can take forward in combination with either starting with fulvestrant, followed by CDK4/6. And that data package is going to be very, very helpful. It's really constructing the next set of next set of combination an opportunity.

Would you anticipate the same dose going forward into the monotherapy versus combinations or across different combinations? And how much dose finding work will you have to do as you think about kind of pushing forward on the combination strategy?

I mean it's really hard to anticipate exactly except that CDK 4/6 is the #1. If we can combine full dose with CDK4/6, I think that's become fairly predictable. But if you needed to -- because if you just look at Pfizer data, right, even at the -- in the fullest combination, the 5-milligram dose, they had to do is modify most patients. So the starting dose was not the dose that patients are on. So being able to maintain the dose density itself is a major differentiation we're looking for. And so I think we just want to be guided by the clinical data once it emerges, but we'll be the first one to really asking this question in the clinic. So I think we just have to see.

Another stage tune question, but I wanted to ask briefly on market opportunities [Audio Gap] at this stage of your development is just what different opportunity sets do you unlock if you can move into the different combinations versus monotherapy, not therapy regimens?

I mean it's been said by many companies in ER-positive breast cancer and metastatic heading is is a significant commercial opportunity that $5 billion plus opportunity potentially. But if you could actually move into settings where can be used in newly diagnosed or adjuvant setting is where the biggest opportunities like if you look at ribociclib, they are growing in because they have that activity. So I mean, regardless of where exactly it's going to be used, which is going to be dictated by the data. I think we're going to be really driving into the right setting. And we just also have to see how [ bottlers ] are going to be playing out ultimately the ESR will type mutants and where CDK -- I mean terminal is fully undrawn, the Phase III versus all other CDK4 right? So I think the landscape is going to evolve and actually it's a great time to be in this space right now because I think the future of breast cancer treatment or ER-positive breast cancer treatment is about to be completely transformed.

On that point, are there any other mechanisms or strategies that you think are interesting in the breast cancer space that you're monitoring with respect to either learnings you can take away or how it will shape the competitive landscape?

Yes. I don't know, Peggy, you have any thoughts on that?

I think we're still, as Chris mentioned, focused on CDK4 selective versus I think the other point, and we look at it a lot is we've taken a selective cat 6a approach Others are moving into even less selective compound green and cat 6 try to expand that space. So those are areas we certainly keep in mind.

All right. I want to shift gears a little bit to the pipeline. One of the things you're working on is a degrader antibody conjugate targeting [ MLR ]. But first, can we just take a step back and explain that technology? I think you're calling it?

Yes. Maybe I can start and Peggy can add. So in the ADC space, broadly speaking, that because it is a drug and it is conjugated to an antibody. So we know we've seen tremendous advances and really transformational outcomes for patients with cancer with their ADC. There's a lot of antibody diversity with really discovery using AI-enabled technologies to identify novel antigens. But if you look at the payloads themselves, there's very, very little diversity. And so you really need -- I think, widely recognized, you need better payloads that are more sort of targeted to the cancer side than broad-spectrum cytotoxic. I think the degraders are uniquely capable of actually doing that because you couldn't deliver enough of an inhibitor regardless of how potent it is in enough quantities as a tailored to an antibody. So because the grades are catalytic that if you can give the concentrations you need to really get to the tumor are substantially lower. So they lend themselves to be good payroll. And because you can design them specific to the tumor cells, you almost get that precision squared. So I think that is a very unique opportunity to be able to do that. But a number of companies have been talking about it. But we've actually formed a collaboration with AbCellera almost 3 years ago. And the team worked very hard to try to solve the chemistries because it's just not like you take an antibody or degraded and slap it on an antibody and now you have a back or degraded antibiotic conjugate. There's a tremendous amount of chemistry, linkers and stability, all of that need to be solved, which the team has done. And so I think time has come to now really deploy it. The second interesting aspect of it is that these are not genotoxic and cytotoxic the way the chemotherapy drugs are. So it expands the reach of the ADC technology beyond life-threatening cancers to indications where you need to be able to deliver a particular inhibitor or a degrader to a particular tumor more effectively and where these are more benign indications. So I think that's generally a really promising way of taking ADCs to the next level.

Can you talk a little bit about selecting MLR as a target for your first DAC program? And why does that target in particular make sense for this today?

I'll start and then Peggy can add. So it was very interesting, right? So that mutation in KLR, which is Calais normally sitting inside the cell, right? So it's not presented on the cell surface. So when you have a mutation and this mutation is only present in a fraction of myeloproliferative neoplasm, right? So in essential almoytemia, about, I guess, 40%, 50% of the patients 30, 40 patients have it. and myelofibrosis similar numbers. So when this mutation happens, you lose the [ stem octane ]. Now it's all of a on-the-service MPN disease initiating cell. And so there, you have an antigen that is targetable with an antibody that is only -- that's been the holy grail to find antigens on the tumor cell, right? But in addition to just being there, it's actually signals right? It engages that pathway signal. So it allowed us to go after an antigen with this approach to truly maximize the benefits of just enabling the [indiscernible].

Okay. Great. And maybe you could just refresh us on what you've seen in the preclinical setting to validate the hypothesis you just laid out? And then what are you solving for as you push towards getting a development candidate here?

So with the naked antibodies, the whole mechanism there is to block signaling. And so it really requires almost complete coverage of the receptor saturation of the receptors to have that impact. So with the DAC approach, we are delivering a payload. And you don't need that coverage of the receptors. The receptors are just being used to deliver the payload to those mutant cells as Kris outlined. And so what we see preclinically then is a really significant greater than 100-fold shift in potency using the DAC versus the naked antibody. And that we also see a rapid killing of the mutant progenitor cells. That's we think is more effective than just blocking the signaling. And it's important if you follow the antibody, the insight antibody that's out there, they're really high doses and really frequent delivery of the antibody. So we think with this DAC approach, we will have a more potent effect and maybe a more rapid effect on patients.

And then in terms of next steps for development, what are kind of the next steps we should be monitoring for for this program?

Yes. So again, same as I described, our portfolio strategy, we have to be convinced that what we bring to the table truly move the needle for patients. So here, we see opportunities to really improve, as Peggy indicated. We want something that actually can be broadly used by all for all mutations, so that -- and across both PMT and [indiscernible]. And so from an antibody side, we've already sort of narrowing down onto the the antibody that can hit both type water-type limitations. We want to make sure that the payload is -- the overall safety profile of our DAC has to be as good as the naked antibody. So those are the main drivers, and we're going through the sell a final selection on these. And as soon as we have those, then we can talk more about the exact timelines of when [Audio Gap].

Maybe briefly, you have a next-generation JAK inhibitor, there's a partnership insight on that program. Could you just remind us the terms of the Insight potential opt-in? And what data will they kind of will be visible to you and your partner there before that option has to be determined?

Yes, sure. So what Insight has is an option to purchase the asset, right? So we entered into that agreement last year. in November time frame. So we have until February of next year. So it's -- the decision is not necessary. It's a time-based option. So it's particularly somewhat complex because Incyte has their own program, and they are advancing that program. And so they'll be generating their own data. And then our lead program is in the clinic and that in generating clinical data. And we have a very active backup program, which is actually generating more preclinical data. So I think they would have to look at totality of all of the data and decide, right, whether to exercise the option or not. And so again, they can exercise at any time. It's not like there's a specific trigger, but we have to have x number of patients and ex number of duration of therapy for them to -- they really have the flexibility to to make the decision at any time between now and February.

Yes. Okay. And then what are the financial terms of that if they do opt in?

So it's $100 million at the time of option exercise. -- and that's a onetime payment. Then they take the entirety of the program, then there's up to $775 million in milestone payments that are regulatory and clinical, sales and not sales-based milestones. And then there are low single-digit royalties that follow for the life of the program.

Okay. Maybe that's a good segue to my last question, which is what is your kind of current cash balance and runway? And what activities as we just described are embedded in that?

Yes. So our current cash is [Audio Gap] in '28, having completed the most recent financing. [Audio Gap] There are the 3 programs we discussed, right? Cat 6 fully funded MCLR fully funded as well, together with the JAK V617F program through the option period. And one of the nice things about doing the financing is that we now have that runway to see us into second quarter of 2028.

Great. how if at all, would the Insight opt-in kind of inform that runway? And is there a world in which you do the JAK2 program on your own like if insight doesn't?

So Kris can answer the sort of the second part of that question for sure. But as it relates to that second quarter of 2028, it's a great clarifying point that does not cover the potential $100 million option payment that Insight would hopefully exercise or be a part of the option agreement. Kris?

And we're pretty excited about the program. And whether inside this -- depending on whatever their business needs are, whatever decisions that we can make. We believe that this is a really exciting area and indeed a very targeted agents. And we certainly can take forward if there's a situation. If the data merits taking it forward and insight, that's not opting for business reasons, we're certainly prepared to take it forward.

Great. That brings us to time. Thank you so much for all of you for joining us here, and thanks everyone who joined us online and here in the room.

Thanks.