Prelude Therapeutics: Advancing Precision Cancer Medicines with a Diverse Pipeline

Prelude Therapeutics is a clinical-stage oncology company focused on developing novel precision cancer therapies. The company has built an efficient drug discovery engine and a robust pipeline of programs targeting high unmet medical needs.

Financial Performance Overview

In 2024, Prelude reported total revenue of $7 million, which was entirely attributable to a licensing agreement for its PRMT5 inhibitor PRT811. This represented a significant increase from the prior year, as Prelude had not generated any revenue in 2023.

The company’s operating expenses increased by $14.4 million to $146.7 million in 2024, driven primarily by higher research and development (R&D) costs. R&D expenses rose by $14.6 million to $118 million, as Prelude advanced multiple programs through clinical trials, including its lead SMARCA2 degrader PRT3789 and the oral SMARCA2 degrader PRT7732. General and administrative (G&A) expenses remained relatively flat at $28.7 million.

Despite the increase in operating expenses, Prelude’s net loss only grew by $5.3 million to $127.2 million in 2024. This was due to a $2.1 million increase in other income, which included higher research and development tax credits.

As of December 31, 2024, Prelude had $133.6 million in cash, cash equivalents, and marketable securities, which the company expects will fund its operations into the second quarter of 2026. The company has been able to raise significant capital, including $110.4 million from a common stock offering in 2023 and $24.8 million from a private placement of pre-funded warrants later that year.

Advancing a Diverse Pipeline of Precision Cancer Therapies

Prelude’s pipeline is focused on developing novel small molecules and antibody-drug conjugates (ADCs) that target key oncogenic drivers and mechanisms. The company’s lead program is PRT3789, a first-in-class SMARCA2 degrader that has shown promising efficacy and tolerability in early clinical trials for SMARCA4-mutated cancers.

In 2024, Prelude presented updated Phase 1 data on PRT3789, which demonstrated partial responses in 5 out of 32 evaluable patients with advanced non-small cell lung, esophageal, or gastric cancer harboring SMARCA4 mutations. The company is nearing completion of the PRT3789 monotherapy dose escalation study and is also evaluating the drug in combination with the PD-1 inhibitor pembrolizumab.

Prelude also advanced another SMARCA2 degrader, PRT7732, into a Phase 1 trial in 2024 after receiving IND clearance. This oral molecule demonstrates potent and selective activity against SMARCA2 in preclinical models of SMARCA4-deficient cancers.

Beyond the SMARCA2 degraders, Prelude’s pipeline includes a selective CDK9 inhibitor, PRT2527, which has shown activity across various relapsed/refractory lymphoid malignancies in early clinical testing. However, the company plans to seek a partner to advance this program further, as it is prioritizing the development of the SMARCA2 degraders.

Prelude is also leveraging its expertise in small molecule degraders to develop novel antibody-drug conjugates (ADCs) in collaboration with AbCellera Biologics. This partnership combines Prelude’s degrader payloads with AbCellera’s antibody capabilities to create precision ADCs targeting tumor-specific antigens.

Strengths and Weaknesses

Strengths:

• Robust pipeline of novel precision cancer therapies, including first-in-class SMARCA2 degraders
• Promising early clinical data for lead programs PRT3789 and PRT7732
• Efficient drug discovery engine and experienced R&D team
• Strong financial position with runway into 2026

Weaknesses:

• Heavy reliance on a single therapeutic approach (SMARCA2 degradation) for majority of pipeline
• No approved or revenue-generating products yet, with commercialization still several years away
• Significant ongoing R&D expenses and net losses, requiring continued capital raises

Outlook and Future Priorities

Prelude’s near-term focus will be on advancing its SMARCA2 degrader programs, PRT3789 and PRT7732, through later-stage clinical development. The company aims to generate proof-of-concept data that could support potential registration trials for these novel targeted therapies in SMARCA4-mutated cancers.

The partnership with AbCellera also represents an important strategic initiative, as Prelude seeks to expand the reach of its degrader technology beyond SMARCA4-deficient tumors through the development of precision ADCs. If successful, these ADCs could further diversify Prelude’s pipeline and open up new avenues for growth.

While the company’s CDK9 inhibitor PRT2527 has shown some promising early results, Prelude’s decision to seek a partner for its continued development reflects management’s disciplined focus on the SMARCA2 degrader programs as the top priority.

Overall, Prelude appears well-positioned to advance its precision oncology pipeline, supported by a strong balance sheet and the potential for meaningful clinical data readouts in the coming years. However, the company will need to continue executing on its R&D strategy and securing additional financing to fund its operations until it can potentially achieve product approvals and commercialization.