Prelude Therapeutics Inc Aktie

All right. Good morning, everyone. Thanks for joining us here and I think what is our final session at the Goldman Sachs Global Healthcare Conference. I'm thrilled to be joined on stage today with the team from Prelude Therapeutics.

And maybe I'll let you introduce yourselves. 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, Corinne. Thanks for the opportunity to participate in Goldman Conference. 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 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 wanted to be a broad technology or target platform, but the patient problem demanded it, right? And it also told us to be really focused because capabilities without focus because it's a very expensive research experiment.

And so we had to be -- the same why that kind of told us to be broad, but also forces us to concentrate on the rigor of the science that really tells us which patients to go after, the strength of evidence supporting a particular mechanism. And so it's basically the why builds the how, right, in this situation.

It -- same logic flows into our portfolio construction. We really look at each of these potential opportunities on three axes. The first one 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 on each of the programs is can we do a deal on this? It's more about if we actually -- can we bring these to patients faster and with a broader reach in a strategic collaboration than we can do it on our own?

The capital realities, as you very well know, sometimes depending on the point in time where we are, sometimes dictate what we do. But truly, we think about Prelude as a 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 KAT6 program. I guess, first, just why did you find KAT6 a relevant target in oncology and specifically in breast cancer against the paradigm you just described?

Yes. Maybe Peggy can take the scientific 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 asked why KAT6? It's known that it's on the 8p11 amplicon and is amplified in a number of malignancies, 12% to 15% of breast cancer, and it's overexpressed in 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 KAT6 specifically.

And I think that led to the development of small molecule inhibitors first that showed a similar biology to the knockdown experiments, and that led Pfizer first to move into the clinic and really had some early compelling clinical data that supported the preclinical work. There are limitations in terms of toxicities, and that's what led us to really go after a KAT6A selective degrader.

Yes. With the data that you just shared like the inhibitors that are more advanced, I guess, how meaningfully 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 cancers 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 KAT6A and KAT6B, and that leads to dose-limiting toxicities like neutropenia as well as [ dysgusio ] in a high percentage 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 KAT6A selectively. As I mentioned, KAT6A is amplified in tumors, KAT6B 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 KAT6A, we think we can more completely impact the KAT6A 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 a KAT6A 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, especially CDK4/6 inhibitors, which are a backbone therapy in ER-positive breast cancer, also have neutropenia. So alleviating some of the neutropenia with a KAT6A selective approach would really allow us to combine effective 4/6 inhibitors as well as SERD, PI3 kinase inhibitors.

Yes. 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 KAT6B and then being able to show these kind of differential benefit on safety?

Yes, sure. There's preclinical data, again, that supports if you knock out both KAT6A and KAT6B 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 KAT6A for the tumor biology, sparing KAT6B 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 side effect 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, you'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 three pretty compelling points in that preclinical poster at AACR. One was the monotherapy activity of our lead molecule, PRT13722. We showed deep regressions, 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 across 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 very 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 could stack up versus the other agents that are more advanced in the setting?

Yes. We did a lot of benchmarking to the Pfizer KAT6A, B dual inhibitor [ pfetrostat ], which they have in the clinic, that the structure of that molecule is known, so we were able to do head-to-head studies.

And in terms of efficacy, whereas they achieve as monotherapy tumor growth inhibition, we had regressions 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 KAT6A selective degrader, 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 in the models, there's a clear effect on neutrophils, whereas we can show efficacy at doses that don't have the neutrophil effect.

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 if 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 limiting or other effect that the Pfizer compound shows is dysgeusia, 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 4 weeks. 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 is dramatically changing, right? 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 PI had a lot of toxicities and now are much more mutant selective inhibitors, right?

So one of the interesting things, as I was saying earlier, with the KAT6 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 this neutropenia is creating a problem to a point where [ petrostat ] and the CDK4 selective one, which is moving forward in that class, couldn't be combined. right? Although we don't know exact reason why that couldn't be, but you could suspect it's related to the overlapping toxicity.

So the way we're thinking about it really is taking into account the changes of 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 on the target, all of those reasons.

So that should read out in the clinic, and it informs a certain path if that is true, and you really didn't need a combination for this drug. 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 KAT6A selective degrader not only is safer, but is as effective as Pfizer, right? So the fulvestrant combination is the next step that we do.

So -- and then the third or potentially parallel question that we want to address is can we combine safely with currently marketed CDK4/6 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 fulvestrant 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 [ pfetestat ].

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 requiring 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 to dose escalate. We still have the big doses, right, for expansion, et cetera.

So the way we're thinking about it is that sort of parallel execution. So start at a dose that has pharmacological activity, potential pharmacological activity or gives you the coverage that's associated with preclinical efficacy.

And then ask -- we have a number of questions we can ask there's a biomarker that we can look at KAT6 levels in these patients. If the patients already had either ESR1 or PI3K mutation, we can look at their ctDNA changes. and then potentially backfill those cohorts or add fulvestrant 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?

It's just before we -- it's hard to tell before we start. But I -- we've generally guided that we -- by 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, the 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 it's -- have you dosed high enough, right? It's safer, you also need to be able to show that you're effective. And if it truly requires fulvestrant combo and enough patients to see it. I think probably 18 months or so is a reasonable target.

Yes. You've talked a bit about this already. So some of 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 approaches?

Yes. I think if the safety differentiation emerges early in the development, going to fulvestrant combo is the #1 thing because we want to be able to show that selectively hitting KAT6 A and sparing KAT6B not only gives you safety improvements, but also can match the efficacy. 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 KAT6A and B will be able to do because the -- I mean, we've seen some more data from ALMA. But generally speaking, the profile may be minor differences, but they look like KAT6A, B inhibitors, right?

So our operating assumption at the moment is that if we can actually show combination data 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 in really constructing the next set of combination and 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 -- CDK4/6 is the #1 -- if we can combine full dose with CDK4/6, I think that's become fairly predictable. But if you need a dose -- because if you just look at Pfizer data, right, even the -- the fulvestrant combination at the 5-milligram dose, they had to dose modify in 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 ones to really ask this question in the clinic. So I think we just have to see the data.

Maybe another stay-tuned question, but I wanted to ask briefly on market opportunity [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 regimens?

I mean it's been said by many companies in ER-positive breast cancer and metastatic setting is a significant commercial opportunity, right, $5 billion-plus opportunity potentially. But if you could actually move into settings where it can be used in newly diagnosed or adjuvant settings is where the biggest opportunity is, if you look at ribociclib, it's growing 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 oral SERDs are going to be playing out ultimately in the ESR wild-type versus ESR mutants and where CDK -- I mean [ dermo ] is fully enrolled their Phase III versus all other CDK4/6, 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, do you have any thoughts on that?

I think we're still, as Kris mentioned, focused on CDK4 selective versus 4/6. I think the other point, and we look at it a lot, is we've taken a selective KAT6A approach. Others are moving into even less selective compounds bringing in KAT7 to try to expand that space. So those are areas we certainly keep in.

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 mCALR. But first, can we just take a step back and explain that technology? I think you're calling it a DAC.

Yes. Maybe I can start and Peggy can add. So in the ADC space, broadly speaking, right, 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 the ADCs.

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 it's widely recognized you need better payloads that are more sort of targeted to the cancers rather than broad spectrum cytotoxics.

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 payload to an antibody. So because degraders are catalytic that if you can give the concentrations you need to really get to a tumor are substantially lower, so they lend themselves to be good payload. And because you can design them specific to the tumor cells, you almost get that position squared, right?

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 and slap it on or a degrader and slap it on an antibody and now you have back or degraded antibody 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 this.

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 cell more effectively and where these are more benign indications, right? So I think that's generally really promising way of taking ADCs to the next level.

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

I'll start and then let Peggy add. So [ mCALR ] is very interesting, right? So that mutation in CALR, which is CALR is 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 neoplasms, right? So in essential thrombocytopenia, about, I guess, 40%, 50% of the patients -- 30% to 40% of patients have it and myelofibrosis, similar numbers.

So when this mutation happens, you lose the C-terminal tail. Now it's all of a sudden on the surface of NTM disease initiating cells. And so there, you have an antigen that is targetable with an antibody that is only -- but that's been the holy grail to find antigens on the tumor cell, right? But in addition to just being there, it actually signals, right? It engages pathway signals. So it allowed us to go after an antigen with this approach to truly maximize the benefits of just inhibiting the [ pathway ].

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?

Yes. Maybe can you take that.

Yes. So with the naked antibodies, the whole mechanism there is to block signaling. And so it really requires almost complete coverage of the receptors, 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 we think is more effective than just blocking the signaling.

And it's important if you follow the antibody, the Ist antibody that's out there, there are really high doses and really frequent delivery of the antibody. So we think with this DAC approach, we'll 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 this program?

Yes. So again, it's the same -- as I described our portfolio strategy, we have to be convinced that what we bring to the table truly moves 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 [ MPS, ET ] and MF.

And so from an antibody side, we've already sort of narrowing down on the -- are the antibodies that can hit both type 1 and type 2 mutations. 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 cell final selection of these. And as soon as we have those, then we can 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 with Incyte on that program. Could you just remind us the terms of the Incyte 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 Incyte 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's obviously moving 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 a totality of all of the data and decide, right, whether to exercise the option or not.

And so again, they could exercise at any time. It's not like that there's a specific trigger that we have to have x number of patients and number of duration of therapy for them to -- they really have the flexibility to make the decision at any time...

Between now and February?

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, 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] 2028, having completed the most recent financing [Audio Gap] are the 3 programs we discussed, right? KAT6 fully funded, mCALR fully funded as well, together with the [ JAK2V617F ] 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 Incyte opt-in kind of inform that runway? And is there a world in which you do the JAK2 program on your own like if Incyte 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 it does not cover the potential $100 million option payment that Incyte would hopefully exercise or be a part of the option agreement. Kris?

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

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

Thanks.

Thank you.

Good morning, everyone, and welcome, everyone, to the Prelude Therapeutics Investor Conference Call. Today's call is being recorded and is expected to last up to 45 minutes. At this time, I will now turn the call over to Prelude's Chief Financial Officer and Chief Legal Officer, Bryant Lim. Please go ahead.

Thank you, operator. During today's call, we will make forward-looking statements based on current expectations, including statements concerning anticipated discovery, preclinical and future clinical development activities for our product candidates; the potential safety, efficacy, benefits and addressable market for our product candidates and clinical trial results for our product candidates; together with other statements regarding our plans, prospects and expectations. Such statements represent our judgments as of today, are not promises or guarantees, and as you know, may involve risks and uncertainties that may cause actual results to differ from the results discussed in the forward-looking statements.

Please refer to our filings with the SEC, which are available through the Investor Relations section of our website for information concerning risk factors that may affect the company. We undertake no obligation to update forward-looking statements, except as required by law.

During this call, we will also be referring to certain slides from our corporate presentation that are available on the Investors section of our corporate website under Presentations and Events. Also on this call are Kris Vaddi, Prelude's Founder and Chief Executive Officer; as well as Peggy Scherle, our Chief Scientific Officer; and Sean Brusky, our Chief Business Officer.

I will now turn the call over to Kris to kick things off.

Thank you, Bryant, and good morning to everyone joining us today. Over the past quarter, we've made a series of strategic decisions designed to sharpen our R&D focus, optimize our capital allocation and align our business strategy with programs that we believe offer the highest probability of success. These steps strengthen our ability to deliver on our mission, to discover and develop transformative medicines that can meaningfully improve patient outcomes in cancer.

Importantly, as part of these efforts, we've also enhanced our financial position, providing us with additional cash runway to advance our lead programs into clinical development. Looking ahead, our primary focus will be on rapidly advancing 2 development candidates that we believe represent compelling opportunities for our investors with both programs expected to enter the clinic in 2026.

The first is a JAK2V617F selective inhibitor for myeloproliferative neoplasms or MPN. The second is a KAT6A selective degrader for ER-positive breast cancer. Both of these programs target clinically validated pathways and have the potential to demonstrate efficacy and safety differentiation in early clinical development. In addition, we believe that these molecules significantly expand the clinical options over currently available treatments for cancers we are targeting.

Meanwhile, our discovery team made significant progress in advancing next-generation ADCs called degrader antibody conjugates or DACs. Our early-stage DAC program targeting mutant calreticulin or mCALR, which is a very promising target in MPN, shows potential to drive deeper clinical and molecular responses in our preclinical studies. We look forward to presenting additional data from this program at the American Society of Hematology or ASH Meeting -- Annual Meeting in December.

I'll begin this morning with an overview of our JAK2V617F Selective Inhibitor program, which will also be featured as an oral presentation at the upcoming ASH. Given that the content of our oral presentation is embargoed until ASH, I will limit my remarks to our approach and the opportunity we see in targeting this mutation as a potential disease-modifying approach for a large subset of MPN patients.

Peggy will then review the KAT6A Selective Degrader program with our lead candidate poised to enter the clinic in 2026. Our Chief Business Officer, Sean Brusky, will then provide an overview of the exclusive option agreement with Incyte for the JAK program that we announced last week and future plans for our JAK programs, and I'll return for closing comments before opening up the call for your questions.

Let me draw your attention to the JAK-STAT pathway on Slide 7 of our corporate deck. One of the JAK enzymes called JAK2 plays a key role in a normal hematopoiesis by mediating growth factor signaling. These growth factors include erythropoietin for red blood cell production, thrombopoietin for platelet production and GM-CSF for white blood cell production.

In MPN, an activating mutation in JAK2 called JAK2V617F results in an unchecked activation of JAK-STAT signaling and hyperproliferation of myeloid and erythroid cells and platelets, which can lead to multiple forms of MPN, including polycythemia vera or PV; essential thrombocythemia or ET; and an even a more serious condition known as myelofibrosis or MF.

Currently approved JAK2 inhibitors inhibit normal and mutant JAK2 similarly. This lack of selectivity results in inhibiting normal and abnormal bone marrow function equally and to a very narrow therapeutic window. Ruxolitinib or Jakafi is the first approved JAK2 inhibitor for MPN. As the first targeted therapy to be approved for MF and the only JAK2 inhibitor approved for PV, ruxolitinib has been absolutely transformative for many patients.

It should be noted that several members of our team played significant roles in its discovery and development in our previous roles at Incyte. It was tremendously gratifying to see ruxolitinib become the gold standard in the treatment of MPN, especially in the spleen and symptom benefits it delivers to MPN patients with a debilitating disease. However, despite the clinical benefits it offers, ruxolitinib treatment is associated with high rates of anemia and thrombocytopenia that require dose modifications and often limit the use in patients that are anemic and/or thrombocytopenic at baseline, along with the limitation of dosing for maximal efficacy.

And because RUX does not specifically target V617F mutated progenitor cells, molecular responses occur at very low rates and take years to achieve. Ever since the discovery of JAK2V617F mutation in 2004, what we really wanted is an inhibitor that is selective for the mutant cells and one that does not interfere with the normal bone marrow function. Such a molecule to provide the same transformative treatment for MPNs, that BCR-ABL inhibitors like Gleevec delivered for CML. We are excited about the possibility of finally achieving that goal by the breakthroughs in designing molecules that can directly target JAK2V617F.

As shown on Slide 9, the challenge had been that the mutation occurs in the part of the enzyme called the JH2 domain that is distinct from the catalytic kinase domain called the JH1 domain, where the current JAK2 inhibitors bind. Our scientists were able to design potent inhibitors of JAK2 that bind an allosteric JH2 binding site where the V617F mutation resides.

We further achieved selectivity over normal JAK2 by directly targeting what we refer to as a deep pocket, which contains 3 phenylalanine residues that include the third phenylalanine coming from the V617F mutation. By utilizing X-ray structure-based approaches, our chemists identified a novel series of compounds that can access the deep pocket to selectively target mutant JAK2 over wild-type or normal JAK2 that is present in normal cells.

Digging a bit more into the specifics of our lead development candidate, the picomolar JAK2JH2 binder with significant selectivity for mutant JAK2 over normal JAK2. In addition to the biochemical and cellular potency and selectivity, our lead candidate has demonstrated the required physical, chemical and pharmacokinetic properties that enable achieving high levels of mutant JAK2 inhibition. In preclinical efficacy and toxicology studies, this molecule achieved a better efficacy compared to ruxolitinib without impacting wild-type JAK2 and normal bone marrow function.

We look forward to providing additional preclinical data once it's presented at ASH in December, but I can inform you that we're well along with our IND-enabling activities, and we're planning to file an IND in the first quarter of 2026 and expect to initiate the Phase I in the first half of 2026.

In terms of prevalence, market size and opportunity, the target patient population include greater than 95% of PV patients, 50% to 60% of patients with MF and ET that are V617F positive. Collectively, more than 200,000 MPN patients in U.S. alone could ultimately benefit from a JAK2V617F selective inhibitor with a disease-modifying potential.

We did announce last week, and Sean will provide more detail, that we entered into an exclusive option agreement with Incyte that provides them an opportunity to acquire the program during a defined time period as we aggressively drive forward the clinical development of our lead candidate and preclinical development of potential backup candidates during that option period. We look forward to sharing more details at ASH.

I'll now turn the call over to Peggy to provide an overview of our selective KAT6A degrader program. Peggy?

Thanks, Kris, and good morning, everyone. Today, I wanted to summarize our efforts that led to the successful discovery of our first-in-class oral KAT6A selective degrader and highlight how this is a differentiated approach to maximize the benefits of a clinically validated target in ER-positive breast cancer. Although multiple agents, including CDK4/6 inhibitors and oral SERDs have been developed for patients with ER-positive breast cancer, resistance to these agents continues to occur.

Thus, there remains an important need for additional treatment options that can complement the current therapies in the management of the breast cancer. Recent data that Pfizer presented on their KAT6A/B dual inhibitor suggests that targeting the KAT6 protein may provide a new avenue to address this important unmet need.

As summarized in Slide 14 in the corporate deck, the data Pfizer presented at ASCO earlier this year demonstrated that their KAT6A/B dual inhibitor in combination with fulvestrant had impressive activity in a heavily pretreated population of ER-positive metastatic breast cancer patients, showing high response rates of greater than 30% and significant improvement in progression-free survival.

Based on this, the program is now advancing into pivotal studies. Despite the promising efficacy, the safety and tolerability profile has left room for improvement as investigators noted rates of grade 3/4 neutropenia and also dysgeusia in most patients. This has resulted in the majority of patients requiring dose reductions or modifications to address the neutropenia issues. These findings likely suggest that there will be challenges combining with standard of care CDK4/6 inhibitors and as such, may initially be limited to second or third-line therapy. We believe that the safety and tolerability issues are the result of dual inhibition of KAT6A and KAT6B and that selective degradation of KAT6A provides a real opportunity for differentiation in the clinic.

Slide 15 of our corporate deck thematically shows the rationale for selective degradation of KAT6A. KAT6A amplification and overexpression in cancer leads to its increased activity. And because KAT6A regulates the expression of the estrogen receptor, MYC and other cell cycle genes, its increased activity drives ER-positive breast cancer growth.

Although KAT6A overexpression drives cancer growth, both KAT6A and its related family member, KAT6B, are important in driving normal hematopoiesis. And preclinical data demonstrates that loss of both KAT6A and KAT6B results in bone marrow toxicity. Based on this, our approach of selectively degrading KAT6A has the potential to deliver differentiated safety and efficacy over nonselective KAT6A/B inhibitors.

As shown in Slide 16, our lead compound is a highly potent degrader of KAT6A with selectivity for KAT6A over KAT6B of greater than 1,000-fold as shown in the middle panel of the slide. We've seen excellent oral PK across all species and compelling in vivo efficacy as monotherapy, as shown in the graph on the right, with complete regressions observed at well-tolerated, low once-daily oral doses in a model of KAT6A-amplified ER-positive breast cancer.

As shown on Slide 17, we also explored the in vivo activity of our KAT6A selective degraders in additional models that are more resistant to KAT6A/B inhibitors. In the more resistant T47D model, we still have significant efficacy with complete regressions observed at well-tolerated doses. Importantly, as shown on the right panel, when we benchmarked against a dual inhibitor, we seem to demonstrate much better efficacy as a monotherapy even when compared to a KAT6A/B dual inhibitor in combination with fulvestrant.

Our preclinical data clearly demonstrates that selective KAT6A degradation shows robust efficacy in ER-positive breast cancer models. We next asked if selective KAT6A degradation could mitigate the neutropenia observed with dual KAT6A inhibitors. As shown in Slide 18 on the left, ex vivo experiments with human bone marrow cells demonstrated a reduction in these cells that give rise to neutrophils, whereas we see a very limited effect in this assay with our selective KAT6A degrader. On the right, we ran an in vivo experiment to confirm these results. And after 10 days of treatment, we see there is transient neutropenia in the mice treated with the dual KAT6A/B inhibitor, but we have not observed significant neutropenia with our selective compounds.

In summary, Prelude has discovered and developed multiple first-in-class, highly selective KAT6A degraders, which in preclinical models show the potential to achieve best-in-class efficacy and to differentiate on safety and combinability early in clinical development. Our lead development candidate has completed dosing in non-GLP studies in rats and dogs and has a favorable tolerability profile and importantly, no dose-dependent hematologic toxicities were observed. With that as background, we are excited to note that we're on track for an IND filing in mid-2026 with a Phase I start expected in the second half of 2026.

And with that, I'll now turn the call over to Sean to provide an update on our recent business development activities.

Thank you, Peggy, and good morning, everyone. Today, I wanted to provide an overview of the exclusive option agreement we entered into last week with Incyte and also discuss our plans as it relates to degrader antibody conjugates.

The agreement with Incyte is a time-bound exclusive option agreement for the potential future purchase of our JAK2V617F program assets. The option period commenced upon executing the deal and is structured so that Incyte has up to 15 months with potential for a 3-month extension as needed to exercise its option, no more than 18 months in total. Importantly, Incyte has the ability to exercise its option at any point during the option period.

If at the end of the option period, Incyte elects to not exercise its option, Prelude retains full ownership and global rights to the JAK program. At the outset of the option agreement, Incyte paid an upfront fee of $35 million and also purchased $25 million of Prelude nonvoting common stock at a price of $4 per share, $60 million in total. If Incyte elects to exercise its option, an additional upfront payment of $100 million will be paid to Prelude upon closing of the asset purchase agreement, plus additional downstream milestones and royalties.

In fact, the deal includes up to $775 million in additional payments if certain clinical development and regulatory milestones are met, plus single-digit royalties on global sales as our JAK2 development candidates advance. In total, the deal can deliver up to $910 million in cash payments and future milestones to Prelude.

Next, I'd like to mention our business development work on degrader antibody conjugates. We've recently amended and expanded the scope of our existing collaboration with AbCellera. This agreement enables AbCellera to use Prelude's proprietary degrader payloads on additional undisclosed antibody targets of interest and importantly, also enables Prelude to license our payloads to other potential partners. The DAC field is really taking off and degrader payload licensing arrangements have the potential to further expand the impact of this new technology while bringing in nondilutive capital to support our ongoing R&D efforts as the field advances.

With that, I want to hand it back over to Kris.

Thanks, Sean. So before opening up the line for questions, I'd like to offer a few additional remarks related to our progress to date and where we expect to go moving forward.

As I mentioned at the outset, today marks a transformative day for Prelude. We are a company that is rooted in science and discovery excellence with a mission to develop precision oncology medicines to transform the treatment landscape for patients with cancer. We are energized to be entering 2026 with 2 lead programs with highly differentiated development candidates, well-understood and clinically validated mechanisms and clear development path, a strong and experienced team and the financial means to provide a runway for execution into 2027. We look forward to keeping you apprised of our progress and additional updates in the coming months.

With that, I'll take some time to answer your questions.

[Operator Instructions]

Our first question comes from the line of Reni Benjamin from Citizens.

Congratulations on this deal with Incyte and for kind of reorganizing the company to go after what I think are extremely well-validated targets. I have a couple of questions for you. I guess starting off, can you talk a little bit about how you're thinking about the clinical development of both the mute CALR and the KAT6 programs, especially given that you have competitors that are, call it, a couple of years ahead of you in development, how are you thinking about the clinical development of these assets? Do you want to be a fast follower into the same indications? Do you want to explore different indications? How should we be thinking about the path forward? And then I have a couple of follow-ups.

Thanks, Ren. This is Kris Vaddi. So as we discussed in the call, our molecule is a very potent and selective inhibitor of JAK2V617F, right? So as a result, V617F positive MPN that include myelofibrosis, polycythemia vera and essential thrombocytopenia are the 3 indications that we could look at.

As in first-in-human study, myelofibrosis, which is the most serious of the condition would be certainly the most -- one of the most appropriate initial first-in-man studies that we start with. High-risk polycythemia vera or high-risk essential thrombocythemia are additional indications that could be added either from the beginning as part of the dose escalation or once we demonstrate that we have a biologically or pharmacologically active dose. Those are the things that we are currently in the process of finalizing. And so hopefully, we will be underway shortly. So we'll be able to talk about it in more detail.

So, you actually answered -- sorry, go ahead.

No, no. I was also going to comment on the KAT6 program. And then, of course, happy to take any further follow-up questions. On the KAT6 program, again, our intent in developing a highly selective KAT6A is to fundamentally ask the question in ER-positive breast cancer where we see a clear proof of concept and clinical validation from Pfizer's molecule. And the hypothesis we have -- and that's based on genetic data, preclinical data that if you can selectively hit KAT6A, you can reduce and avoid the hematological toxicities.

So we're going to be focused in the Phase I development to initially, obviously, as a monotherapy, but rapidly advance to fulvestrant combinations and really asking the question do we see the differentiated profile that we're seeing in the preclinical studies in the clinic and if so, rapidly move into the combinations with the backbone therapies in ER-positive breast cancer. So we are really going to be focused on ER-positive breast cancer for our KAT6A program.

Got it. Okay. And I guess just as a follow-up, just to help us understand the Prelude platform and the kind of preclinical work that you do, is the chemistry so differentiated that the preclinical models predict -- for any of these molecules, by the way, does it predict a better efficacy, safety or both? And as part of your preclinical testing, and I didn't get a chance to see the slides, but what tests do you run to give you the confidence that you have a best-in-class drug on your hands versus, let's say, a competitor like Pfizer that's already in the clinic?

Sure. Let me just at a very high level, start and just say that there are really good preclinical models for JAK. I think that your question pertains to both programs for myeloproliferative neoplasm and of ER-positive breast cancers that we can profile head-to-head against already approved agents or the ones that are moving in the clinical development. But for details, I will just turn the question over to Peggy to answer.

Sure. So in terms of the preclinical models, both in vitro and in vivo, we really established a robust number of those models to characterize the compounds. But I think it's more than just the in vivo and in vitro assays. We also spend a lot of time building in the PK properties and really optimize those so that we know we have a molecule that will be optimal in the clinic in terms of covering the target and giving us the selectivity and the potency that we will need to really target this pathway.

So with KAT6A specifically, I think we have a number of differentiating features. We have KAT6A selectivity over the other family members. And we also took a degrader approach as opposed to an inhibitor approach. We thought that, that would be a differentiating feature. We can eliminate the protein as you know through degradation. And it also helps us build in that selectivity that we think is really critical, the selectivity and the potency. So in that setting, I think we have a very differentiated approach for KAT6A over the [ Pfizer one ].

Our next question comes from the line of Roger Song from Jefferies.

Okay. Great. Thanks for sharing additional information around those 2 new clinical program -- interclinical program. So on JAK2, can you just remind us how the current mutation testing for this mutation currently performing in the clinical? And then how likely you need to do the companion diagnosis as you continue the clinical development? And I have a question around the KAT6 as well.

Yes, absolutely. So V617F itself, now that we have multiple therapies in MPNs that are approved, even prior to that has really become a sort of a standard of care diagnostic test for MPN. In the case of PV, where greater than 95% of the patients are positive to V617F, there is not a huge need for a test. However, in myelofibrosis that do not progress from PV to MF, there are primary myelofibrosis patients for whom it is somewhat critical. Currently approved therapies really are not specific to V617F positive, so they don't really require the testing. But in our case, we were going to be relying on routinely used qPCR type testing that is performed as standard of care for these MPNs.

Got it. Okay. And then regarding the KAT6, given this is also a degrader approach, how do you differentiate this degrader approach versus your previous SMARCA2? And then what are the learnings you have applied from the previous degrader to KAT6? And maybe just lastly, you're moving those 2 programs into the clinical in 2026. With current cash runway, how much clinical data release we should expect in 2026? And then what will be the value inflection point for those data readouts?

Yes. I'll let Peggy answer the first part of the question, and I'll come back to the second part.

Sure. So I think we learned a lot from our SMARCA2 program in terms of building in potency and selectivity and also building in, as I mentioned, all those really important PK properties like oral bioavailability into the KAT6 program. So we really learned a lot, I think, from the SMARCA program in terms of building in all those features that you need to optimize the compound to take it forward in the clinic, especially selectivity for the KAT6A over KAT6B protein. We utilized a lot of the knowledge and experience that we gained through the SMARCA program to generate what we believe are really optimized degrader compounds to take into the clinic.

Yes. With regard to your question on how far the cash takes us, as we said, we are currently on track to file IND for the JAK program in the early part of '26 and initiate the trial in the second quarter. So for that program, we will be in dose escalation. And until we get into the clinic, we have certain projections in terms of how many dose cohorts that it might take to get to the levels that we would expect the pharmacological activity, but I can't provide exact guidance until we actually start to enroll patients.

So we think we'll be well underway in the Phase I program, and we'll be keeping the Street obviously updated with any progress we make. With regard to the KAT6 program, again, the major milestone is really successfully completed IND-enabling studies and opening up the IND and starting enrolling patients. So in terms of actual clinical update, we probably have to wait into 2027 to be providing them. But in terms of progress into the clinic, obviously, we will update as we advance in 2026.

Our next question comes from the line of Robert Burns from H.C. Wainwright.

On the deal with Incyte. Just a few for me, if I may. So obviously, the KAT6 competitive landscape, when we look at that, there's obviously numerous players in the space, not just Pfizer, obviously [indiscernible] as well. And I see the differentiation with the selective KAT6A degradation. So I was curious, for those more selective inhibitors or degraders that are in the landscape, how are you looking at them from a competitive landscape threat perspective? And then my second one would be, obviously, we're also seeing a lot of companies go straight from Phase I when they see encouraging efficacy straight into Phase III. Is that something that you would also consider? And are there ways that you could expedite the development time of that compound?

Yes. So I can start with that. I think in terms of the selectivity of the selective inhibitors that have been profiled, at least the ones that we've seen to date, they do show selectivity mitigates some of the bone marrow toxicity that we also see. I'd say with the degrader approach, it really allowed us to have more robust efficacy compared to even the selective inhibitors. We think that there's a different biology associated with degrading the protein because it is part of a complex than just inhibiting it. And we think that's really beneficial from the efficacy point of view. So I think there will be differentiation from the selective inhibitors, but I think they also provide additional abilities to mitigate some of the bone marrow toxicity.

Yes, I can just follow up on that. Again, fundamentally, the whole concept of degraders, right, that are currently being developed across multiple targets is the idea that you just get much more deeper target engagement. And given the potency of our KAT6A molecule and the PK properties that the team has built into should allow us to very rapidly get to the levels of target inhibition that would differentiate our molecule versus others. I think that is a very important aspect of it because the sooner you get there in the clinic, the faster we can move. And then the second part of this question.

Would we advance rapidly improve...

Yes. So good question. So I think there's a lot of learnings from the data that's out there in terms of PV as well as combinations. We would be looking to actually do more combinations early in the development because ultimately, we want to get to earlier lines of therapy, which currently are not being at least pursued by the existing clinical stage inhibitors, we would be looking to generate that data. And to answer your question, yes, we would be looking for ways to advance rapidly to registrational stage programs once we confirm some of the preclinical hypothesis we have in the clinic.

Our next question comes from the line of Reni Benjamin from Citizens.

Can you just talk a little bit about the genesis of kind of why and how the deal with Incyte took place given that they have their own inhibitor already in the clinic? Is it something that was ongoing for a while? Is this something once the new CEO took over, the discussion started? Anything that would give us a clue as to how this came up -- this nice deal came about?

Yes. Thanks, Ren. So as we were thinking throughout 2025 and even late '24 in terms of capitalizing the company and funding the programs that we had ongoing, right? So both JAK2 and JAK6 programs made significant advances, and we were really anticipating that they will be moving into the IND-enabling phase in this calendar year as well as SMARCA2 program that was moving forward in the clinic.

Obviously, companies of our size would always be looking at business development as one of the options to basically fund the really important program. So we've been in discussions with a number of companies for both KAT6A and all the programs. And obviously, Incyte is a leader in the MPN space. And there were several other companies that were very interested in the program as well.

So at the end of the day, when we look at all the options that the company had, the option agreement with Incyte actually was -- we believe was the best option to not only bring the capital that we need into the company, but also put the program in the hands of a company for whom it is fundamentally a core strategic area and not only they would move aggressively through the clinical development, but also commercialize the product if we're fortunate to get to that point. So we're excited to be working with Incyte in moving this program.

And with regard to your other question about their own program, and we really don't have any visibility into the program. But we hope that our novel chemical space that our scientists discovered to create our molecules would find a place ultimately in the patients' hands and the market.

Thank you. At this time, I would now like to turn the conference back over to Kris Vaddi for closing remarks.

Thank you, everyone, for your time, and have a great day.

This concludes today's conference call. Thank you for participating. You may now disconnect.

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.