PART I. FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) The unaudited interim financial statements show a net loss of $32.1 million and substantial doubt about the company's ability to continue as a going concern [Balance Sheets (Unaudited)](index=3&type=section&id=Balance%20Sheets%20%28Unaudited%29) Total assets decreased to $141.3 million, driven by a reduction in marketable securities and a decline in stockholders' equity Condensed Consolidated Balance Sheets | (in thousands) | March 31, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $40,269 | $12,474 | | Marketable securities | $58,805 | $121,140 | | Total current assets | $102,403 | $135,895 | | **Total assets** | **$141,260** | **$175,515** | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $19,787 | $25,641 | | **Total liabilities** | **$38,082** | **$44,056** | | Accumulated deficit | $(615,648) | $(583,563) | | **Total stockholders' equity** | **$103,178** | **$131,459** | [Statements of Operations and Comprehensive Loss (Unaudited)](index=4&type=section&id=Statements%20of%20Operations%20and%20Comprehensive%20Loss%20%28Unaudited%29) The company reported a net loss of $32.1 million for Q1 2025, a slight increase from the prior year, driven by higher R&D expenses Condensed Consolidated Statements of Operations and Comprehensive Loss | (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Research and development | $28,816 | $27,409 | | General and administrative | $5,790 | $6,934 | | **Total operating expenses** | **$34,606** | **$34,343** | | Loss from operations | $(34,606) | $(34,343) | | Other income, net | $2,521 | $2,912 | | **Net loss** | **$(32,085)** | **$(31,431)** | | Net loss per share | $(0.42) | $(0.42) | [Statements of Changes in Stockholders' Equity (Unaudited)](index=5&type=section&id=Statements%20of%20Changes%20in%20Stockholders%27%20Equity%20%28Unaudited%29) Stockholders' equity declined to $103.2 million, primarily due to the quarterly net loss of $32.1 million - The primary drivers for the change in stockholders' equity during the first quarter of 2025 were the **net loss of $32.1 million** and **stock-based compensation of $3.8 million**[16](index=16&type=chunk) [Statements of Cash Flows (Unaudited)](index=7&type=section&id=Statements%20of%20Cash%20Flows%20%28Unaudited%29) Net cash used in operations was $34.2 million, offset by $62.2 million provided by investing activities from maturities of marketable securities Condensed Consolidated Statements of Cash Flows | (in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(34,231) | $(31,791) | | Net cash provided by investing activities | $62,186 | $31,221 | | Net cash used in financing activities | $(160) | $(14) | | **Net increase (decrease) in cash** | **$27,795** | **$(584)** | [Notes to Unaudited Interim Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Interim%20Financial%20Statements) Notes highlight an accumulated deficit of $615.6 million and substantial doubt about the company's ability to continue as a going concern - The company has an **accumulated deficit of $615.6 million** as of March 31, 2025, and has incurred operating losses since inception[31](index=31&type=chunk) - Management has concluded that **substantial doubt exists about the company's ability to continue as a going concern**, as its cash, cash equivalents, and marketable securities of $103.1 million are not sufficient to fund operations for at least the next twelve months[32](index=32&type=chunk) - Total stock-based compensation expense was **$3.8 million** for the three months ended March 31, 2025, down from $5.5 million in the prior year period[80](index=80&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=23&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses its clinical-stage oncology focus, financial results, significant liquidity concerns, and a Nasdaq delisting notice [Overview](index=23&type=section&id=Overview) The company is a clinical-stage precision oncology firm focusing on its lead SMARCA2 degrader programs, PRT3789 and PRT7732 - The company's lead opportunities are its first-in-class SMARCA2 degrader compounds, **PRT3789 and PRT7732**, which are expected to demonstrate clinical proof-of-concept in 2025[94](index=94&type=chunk) - **PRT3789 (IV)** has completed monotherapy dose escalation, with 500 mg once weekly selected as the recommended Phase 2 dose[97](index=97&type=chunk) - The oral SMARCA2 degrader, **PRT7732**, has advanced rapidly in its Phase 1 trial, with an initial data update also expected in H2 2025[99](index=99&type=chunk) - On March 27, 2025, the company received a **delisting notice from Nasdaq** for failing to maintain a minimum bid price of $1.00 per share[104](index=104&type=chunk)[106](index=106&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) Operating expenses remained stable, with a $1.4 million increase in R&D costs offset by a $1.1 million decrease in G&A expenses Comparison of the Three Months Ended March 31, 2025 and 2024 | (in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Research and development | $28,816 | $27,409 | $1,407 | | General and administrative | $5,790 | $6,934 | $(1,144) | | **Total operating expenses** | **$34,606** | **$34,343** | **$263** | | **Net loss** | **$(32,085)** | **$(31,431)** | **$(654)** | - The increase in R&D expenses was primarily due to higher costs related to the company's **SMARCA2 clinical trials**[121](index=121&type=chunk) - The decrease in G&A expenses was primarily driven by a reduction in **non-cash stock-based compensation expense**[124](index=124&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) The company's $103.1 million in cash and securities is insufficient to fund operations for the next twelve months, raising going concern doubts - As of March 31, 2025, the company had **$103.1 million in cash, cash equivalents, restricted cash, and marketable securities**[127](index=127&type=chunk) - The company believes its existing cash will not be sufficient to fund operations for at least the next twelve months, which raises **substantial doubt about its ability to continue as a going concern**[127](index=127&type=chunk) - The company has a **$400 million shelf registration statement** and an **Open Market Sales Agreement for up to $75.0 million**, providing potential avenues for future financing[132](index=132&type=chunk)[133](index=133&type=chunk) [Cash Flows](index=35&type=section&id=Cash%20Flows) Cash from investing activities more than offset cash used in operations, resulting in a net cash increase for the quarter Cash Flow Summary | (in thousands) | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(34,231) | $(31,791) | | Net cash provided by investing activities | $62,186 | $31,221 | | Net cash used in financing activities | $(160) | $(14) | [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Prelude Therapeutics is not required to provide this information - The company is a smaller reporting company and is **not required to provide the information** required under this item[147](index=147&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period - Based on an evaluation as of March 31, 2025, the Principal Executive Officer and Principal Financial and Accounting Officer concluded that the company's **disclosure controls and procedures were effective**[148](index=148&type=chunk) - **No changes in internal control over financial reporting** occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[149](index=149&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings - The company is not presently a party to any legal proceedings that management believes would have a **material adverse effect** on its business[151](index=151&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) Key risks include potential Nasdaq delisting and substantial doubt about the company's ability to continue as a going concern - The company is at **risk of being delisted from Nasdaq** for failing to meet the minimum bid price requirement of $1.00 per share[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - The financial statements include a statement regarding **substantial doubt about the company's ability to continue as a going concern**, as existing cash will not be sufficient to fund operations for at least the next twelve months[158](index=158&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=40&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities during the period - None[160](index=160&type=chunk) [Defaults Upon Senior Securities](index=40&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the period - None[161](index=161&type=chunk) [Mine Safety Disclosures](index=40&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[162](index=162&type=chunk) [Other Information](index=40&type=section&id=Item%205.%20Other%20Information) There is no other information to report for the period - None[163](index=163&type=chunk) [Exhibits](index=41&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including officer certifications and Inline XBRL documents - The exhibits filed include **CEO and CFO certifications** pursuant to Sarbanes-Oxley Sections 302 and 906, and interactive data files (XBRL)[166](index=166&type=chunk)

[Corporate Update and Q1 2025 Highlights](index=1&type=section&id=Corporate%20Update%20and%20Q1%202025%20Highlights) The company achieved strong Q1 2025 execution, advancing SMARCA2 degrader programs and presenting initial KAT6A degrader preclinical data, with key clinical updates expected in H2 2025 - The company reported strong execution in Q1 2025, with rapid progress in its SMARCA2 degrader programs and the presentation of first preclinical data for its oral KAT6A degraders[2](index=2&type=chunk) - Key clinical updates for PRT3789 (SMARCA2 degrader) and PRT7732 (oral SMARCA2 degrader) are anticipated in the **second half of 2025**[1](index=1&type=chunk) Financial Position and Runway | Metric | Value | | :--- | :--- | | Cash, cash equivalents, restricted cash and marketable securities | $103.1 million (as of March 31, 2025) | | Cash Runway | Into the second quarter of 2026 | [Clinical Program Updates and Upcoming Milestones](index=1&type=section&id=Clinical%20Program%20Updates%20and%20Upcoming%20Milestones) This section details progress in SMARCA2 degrader clinical trials, KAT6A oral degrader development, and precision ADCs, with key milestones anticipated in 2025-2026 [PRT3789 (Intravenous SMARCA2 Degrader)](index=1&type=section&id=PRT3789%20%E2%80%93%20A%20first-in-class%2C%20highly%20selective%2C%20intravenous%20SMARCA2%20Degrader) PRT3789, an intravenous SMARCA2 degrader, completed monotherapy and docetaxel combination enrollment, established a 500 mg weekly Phase 2 dose, and is enrolling a KEYTRUDA® combination trial, with data expected in H2 2025 - PRT3789 is designed to treat patients with SMARCA4-mutated cancers, which represent approximately **10% of all non-small cell lung cancers (NSCLC)** and **5% of all cancers**, an area of high unmet medical need[3](index=3&type=chunk)[4](index=4&type=chunk) - Enrollment is complete for the monotherapy dose escalation (665 mg) and the combination with docetaxel. The recommended Phase 2 dose is **500 mg once weekly**[5](index=5&type=chunk) - A Phase 2 clinical trial is actively enrolling patients to evaluate PRT3789 in combination with KEYTRUDA® (pembrolizumab) under a collaboration with Merck[6](index=6&type=chunk) [PRT7732 (Oral SMARCA2 Degrader)](index=2&type=section&id=PRT7732%20%E2%80%93%20A%20potent%2C%20highly%20selective%20and%20orally%20bioavailable%20SMARCA2%20Degrader) PRT7732, an oral SMARCA2 degrader, is rapidly advancing in its Phase 1 dose escalation trial, with the fifth cohort (60 mg once daily) currently enrolling, and initial data expected in H2 2025 - PRT7732 is a distinct oral SMARCA2 degrader being evaluated in a Phase 1 trial for biomarker-selected SMARCA4 mutated cancers[8](index=8&type=chunk) - Enrollment has progressed quickly, with the trial currently enrolling patients in the **fifth dose escalation cohort at 60 mg once daily**[8](index=8&type=chunk) [Highly Selective KAT6A Oral Degrader Program](index=2&type=section&id=Highly%20selective%20KAT6A%20oral%20degrader%20program) Prelude is developing selective oral KAT6A degraders to improve efficacy and tolerability by avoiding KAT6B inhibition, with a development candidate expected in Q2 2025 and an IND filing in 2026 - The company believes its program is the industry's first to report a selective KAT6A degrader, which could improve the safety profile by avoiding KAT6B inhibition, a driver of hematologic toxicity[9](index=9&type=chunk) - A development candidate is expected to be nominated in the **second quarter of 2025**, with an Investigational New Drug (IND) application filing planned for **2026**[9](index=9&type=chunk) [Precision ADCs with SMARCA2/4 Dual Degrader Payload](index=3&type=section&id=Precision%20ADCs%20with%20SMARCA2%2F4%20dual%20degrader%20payload) In partnership with AbCellera, Prelude is developing precision ADCs with SMARCA2/4 dual degrader payloads, showing superior preclinical efficacy and tolerability, with the first development candidate expected in 2025 - The program uses potent SMARCA2/4 dual degraders as payloads for precision ADCs to inhibit cancer cell growth across multiple cancer types[12](index=12&type=chunk) - Prelude and its partner AbCellera anticipate nominating the first development candidate from this program in **2025**[12](index=12&type=chunk) [Upcoming Investor Conference](index=3&type=section&id=Upcoming%20Investor%20Conference) Company leadership will participate in a fireside chat at the Citizens 2025 Life Sciences Conference on May 7, 2025 - The company's leadership, including the CEO, President/CMO, and CSO, will participate in a fireside chat at the Citizens 2025 Life Sciences Conference on **May 7, 2025**[13](index=13&type=chunk) [First Quarter 2025 Financial Results](index=3&type=section&id=First%20Quarter%202025%20Financial%20Results) This section reviews Prelude Therapeutics' Q1 2025 financial performance, covering cash position, operating expenses, and net loss [Financial Position and Runway](index=3&type=section&id=Cash%2C%20Cash%20Equivalents%2C%20Restricted%20Cash%20and%20Marketable%20Securities) As of March 31, 2025, Prelude Therapeutics held **$103.1 million** in cash and equivalents, projected to fund operations into Q2 2026 Cash Position | Date | Cash, Cash Equivalents, Restricted Cash & Marketable Securities | | :--- | :--- | | March 31, 2025 | $103.1 million | - The existing cash is anticipated to fund operations into the **second quarter of 2026**[15](index=15&type=chunk) [Operating Expenses](index=3&type=section&id=Operating%20Expenses) Total operating expenses for Q1 2025 were **$34.6 million**, a slight increase driven by higher R&D for SMARCA2 clinical trials, partially offset by lower G&A due to reduced stock-based compensation [Research and Development (R&D) Expenses](index=3&type=section&id=Research%20and%20Development%20(R%26D)%20Expenses) R&D expenses increased to **$28.8 million** in Q1 2025, primarily due to higher costs associated with SMARCA2 clinical trials R&D Expense Comparison (in millions) | Period | R&D Expense | Non-cash Stock Comp. | Change Driver | | :--- | :--- | :--- | :--- | | Q1 2025 | $28.8 | $2.3 | Increased expense for SMARCA2 clinical trials | | Q1 2024 | $27.4 | $3.0 | - | [General and Administrative (G&A) Expenses](index=3&type=section&id=General%20and%20Administrative%20(G%26A)%20Expenses) G&A expenses decreased to **$5.8 million** in Q1 2025, primarily due to lower non-cash stock-based compensation from reduced grant valuation G&A Expense Comparison (in millions) | Period | G&A Expense | Non-cash Stock Comp. | Change Driver | | :--- | :--- | :--- | :--- | | Q1 2025 | $5.8 | $1.6 | Lower stock-based compensation | | Q1 2024 | $6.9 | $2.5 | - | [Net Loss](index=4&type=section&id=Net%20Loss) The company reported a net loss of **$32.1 million**, or **$0.42 per share**, for Q1 2025, comparable to the prior year Net Loss Comparison | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Loss | $(32.1) million | $(31.4) million | | Net Loss Per Share | $(0.42) | $(0.42) | [Financial Statements](index=6&type=section&id=Financial%20Statements) This section presents Prelude Therapeutics' unaudited statements of operations and comprehensive loss, and balance sheets for Q1 2025 and comparative periods [Statements of Operations and Comprehensive Loss](index=6&type=section&id=STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20LOSS) The unaudited Q1 2025 statement of operations shows a net loss of **$32.1 million**, with total operating expenses slightly increasing to **$34.6 million** year-over-year Q1 2025 Statement of Operations (Unaudited, in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Research and development | $28,816 | $27,409 | | General and administrative | $5,790 | $6,934 | | **Total operating expenses** | **$34,606** | **$34,343** | | Loss from operations | $(34,606) | $(34,343) | | Other income, net | $2,521 | $2,912 | | **Net loss** | **$(32,085)** | **$(31,431)** | | Net loss per share | $(0.42) | $(0.42) | [Balance Sheets](index=7&type=section&id=BALANCE%20SHEETS) The unaudited balance sheet as of March 31, 2025, shows total assets of **$141.3 million** and liabilities of **$38.1 million**, a decrease from December 31, 2024, primarily due to reduced cash and marketable securities Balance Sheet Highlights (Unaudited, in thousands) | Line Item | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $40,269 | $12,474 | | Marketable securities | $58,805 | $121,140 | | **Total current assets** | **$102,403** | **$135,895** | | **Total assets** | **$141,260** | **$175,515** | | Total current liabilities | $19,787 | $25,641 | | **Total liabilities** | **$38,082** | **$44,056** | | **Total stockholders' equity** | **$103,178** | **$131,459** |

Core Insights - Prelude Therapeutics reported strong execution in Q1 2025, focusing on the development of SMARCA2 degraders and KAT6A degraders for aggressive cancers [2][3] - The company has completed enrollment for the PRT3789 monotherapy and combination studies, with updated results expected in the second half of 2025 [1][4] - Prelude's financial position includes $103.1 million in cash and equivalents, projected to fund operations into Q2 2026 [1][14] Clinical Program Updates - PRT3789 is a first-in-class intravenous SMARCA2 degrader targeting SMARCA4 mutations, which are found in approximately 10% of non-small cell lung cancers [3][4] - The company has completed dose escalation for PRT3789 and selected a recommended Phase 2 dose of 500 mg once weekly [4] - A Phase 2 trial is underway evaluating PRT3789 in combination with KEYTRUDA® for patients with SMARCA4-mutated cancers [5] Financial Performance - R&D expenses for Q1 2025 increased to $28.8 million from $27.4 million in the prior year, primarily due to SMARCA2 clinical trials [15] - General and administrative expenses decreased to $5.8 million from $6.9 million, attributed to lower stock-based compensation [16][17] - The net loss for Q1 2025 was $32.1 million, consistent with the previous year, with a net loss per share of $0.42 [18][22] Upcoming Milestones - Initial data for the PRT7732 oral SMARCA2 degrader is expected in the second half of 2025, with rapid enrollment in the ongoing Phase 1 trial [1][8] - Prelude is advancing its KAT6A degrader program, with candidate nomination anticipated in Q2 2025 and an IND filing planned for 2026 [9][10] - The company will participate in the Citizens 2025 Life Sciences Conference on May 7, 2025, featuring key executives [12]

Company Participation - Prelude Therapeutics will participate in the Citizens Life Sciences Conference in New York on May 7, 2025 [1] - The company's CEO, President and Chief Medical Officer, and Chief Scientific Officer will engage in a fireside chat during the conference [2] Company Overview - Prelude Therapeutics is a clinical-stage precision oncology company focused on developing innovative medicines for cancer patients with high unmet needs [3] - The company's pipeline includes first-in-class SMARCA2 degraders and a potentially best-in-class CDK9 inhibitor, along with next-generation degrader antibody conjugates [3] - Prelude aims to extend the promise of precision medicine to all cancer patients in need [3]

Company Participation - Prelude Therapeutics will participate in the Citizens Life Sciences Conference in New York on May 7, 2025 [1] - The participation will include a fireside chat featuring key executives: Kris Vaddi, Jane Huang, and Peggy Scherle [2] Company Overview - Prelude Therapeutics is a clinical-stage precision oncology company focused on developing innovative medicines for cancer patients with high unmet needs [3] - The company's pipeline includes first-in-class SMARCA2 degraders and a potentially best-in-class CDK9 inhibitor [3] - Prelude is also working on next-generation degrader antibody conjugates (Precision ADCs) in collaboration with partners [3]

Core Insights - Prelude Therapeutics has presented new preclinical data on its first-in-class SMARCA2 degrader PRT3789 and selective KAT6A degraders at the AACR Annual Meeting, highlighting their potential in treating cancers with specific mutations [1][2]. Group 1: SMARCA2 Degrader (PRT3789) - PRT3789 is a first-in-human SMARCA2 degrader that selectively induces deep and sustained degradation of SMARCA2, achieving high selectivity through a stable ternary complex formation with VHL [4]. - The resynthesis rate of SMARCA2 is 2-3 times slower than that of SMARCA4, enhancing the selectivity profile and contributing to a favorable safety profile observed in clinical studies [4]. - PRT3789 is currently under evaluation in Phase 1 and Phase 2 studies for patients with advanced solid tumors that have lost SMARCA4 [4]. Group 2: KAT6A Degraders - KAT6A is associated with cancer growth and is recurrently amplified in various cancers, making it a clinically validated target [5]. - Prelude has identified a series of first-in-class, sub-nanomolar, selective, and orally bioavailable KAT6A degraders that are advancing to candidate nomination [5]. - Preclinical data indicate that Prelude's selective KAT6A degraders drive significantly deeper anti-cancer responses compared to non-selective KAT6A/B inhibitors across multiple KAT6A-amplified tumors [5]. Group 3: Clinical Implications - The selective degradation of KAT6A is expected to improve hematological safety and provide robust single-agent activity compared to existing KAT6-targeted therapies [5]. - Prelude's KAT6A degraders exhibit sustained activity in various cancer models, including those resistant to endocrine therapy and CDK4/6 inhibitors, and show potential for combination benefits with standard of care therapies [8].

Core Viewpoint - Prelude Therapeutics Incorporated (PRLD) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling actions that affect stock prices [4]. Company Performance and Outlook - Prelude Therapeutics is expected to report earnings of -$1.76 per share for the fiscal year ending December 2025, reflecting a -4.8% change from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Prelude Therapeutics has increased by 3.2%, indicating a positive trend in earnings outlook [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 (Strong Buy) stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Prelude Therapeutics to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Financial Performance - For the year ended December 31, 2024, the company reported a net loss of $127.2 million, compared to a net loss of $121.8 million for the year ended December 31, 2023[163]. - As of December 31, 2024, the company had an accumulated deficit of $583.6 million and does not expect to generate revenue from product sales for several years[163]. - The company's cash, cash equivalents, and marketable securities were $133.6 million as of December 31, 2024[164]. - The company expects to continue incurring operating losses for the foreseeable future as it advances product candidates through clinical development[165]. Research and Development - The company expects to incur significant research and development expenses related to ongoing clinical trials and potential commercialization efforts[165]. - Future capital requirements will depend on the progress and results of preclinical studies and clinical trials for current or future product candidates[173]. - The company will require additional capital to complete planned clinical development programs and may face delays or reductions in research programs if adequate funds are not available[174]. - The company is highly dependent on the success of its product candidates, which are currently in early clinical development, with no products approved for sale in any jurisdiction[178]. - The company faces significant risks related to the lengthy and expensive drug development process, with high failure rates in clinical trials[181]. Regulatory and Compliance Risks - Delays in obtaining regulatory approvals or completing clinical trials could materially adversely affect the company's business and financial condition[180]. - The company has no assurance that its product candidates will achieve success in clinical trials or obtain regulatory approval, which could hinder profitability[179]. - The FDA approval process is expensive and uncertain, with only a small percentage of drugs successfully completing the regulatory approval process[203]. - The company has not obtained FDA approval for any product, which may impede its ability to generate revenues and adversely affect its financial condition[208]. - Regulatory authorities may require additional studies or impose restrictions that could delay or prevent marketing approval[206]. Market and Competitive Landscape - The market opportunities for the company's product candidates may be smaller than estimated, affecting revenue potential and profitability[162]. - The company faces substantial competition from major pharmaceutical and biotechnology companies, which may have greater financial resources and expertise[290]. - The commercial opportunity could be reduced if competitors develop safer, more effective, or less expensive products[293]. Intellectual Property Risks - The patent application process is complex and costly, with uncertainty regarding the issuance and enforceability of patents, which could affect competitive advantage[329]. - The company faces potential challenges to its patents, which could lead to reduced scope or invalidation, impacting its ability to commercialize products[334]. - The complexity and uncertainty of European patent laws have increased, particularly with the introduction of the unitary patent system in early 2023, which may impact existing patents significantly[351]. Operational and Management Challenges - The company currently lacks a marketing and sales organization and has no experience in commercializing products, which may hinder revenue generation[284]. - Establishing sales and marketing capabilities is expected to be costly and time-consuming, potentially delaying product launches[285]. - The company is highly dependent on key personnel, including its CEO, and may struggle to retain qualified employees due to intense competition in the biotechnology sector[302][304]. Financial and Economic Risks - Unstable market conditions and economic downturns could adversely affect the company's ability to raise capital and meet commitments[177]. - Changes in tax laws, such as those from the Tax Cuts and Jobs Act, could materially affect cash flow and financial performance, with potential one-time charges and increased future tax expenses[325]. - The company's investment portfolio is subject to market, interest, and credit risks, which may lead to declines in value due to economic conditions and market instability[328]. Compliance with Healthcare Laws - The company may incur substantial costs to ensure compliance with various healthcare laws and regulations, which could adversely affect its financial condition[238]. - Non-compliance with healthcare laws may expose the company to criminal, civil, and administrative penalties, as well as reputational harm and diminished profits[237]. - The Inflation Reduction Act allows the U.S. Department of Health and Human Services to negotiate drug prices, which could adversely affect the company's revenues starting in 2026[243]. Supply Chain and Manufacturing Risks - The company does not have manufacturing facilities and depends on third-party suppliers for preclinical and clinical supplies, increasing the risk of insufficient quantities or quality issues[263]. - The company is dependent on a sole supplier for certain components, which could result in delays if disruptions occur[266]. - The company’s reliance on third-party manufacturers increases the risk of not having sufficient quantities of products at acceptable costs or quality[262]. Cybersecurity and Data Protection - The company may face significant costs and operational disruptions due to cybersecurity threats and data breaches, which could impact business continuity and reputation[311][313]. - Compliance with health and data protection laws, including GDPR and CCPA, is critical, with potential penalties for non-compliance reaching up to EUR 20 million or 4% of annual worldwide gross revenue[317][318]. Future Growth and Strategic Transactions - Strategic transactions, including acquisitions and partnerships, may increase expenses and present management distractions, potentially affecting operations and financial results[327]. - Future growth may lead to difficulties in managing operations, requiring improvements in managerial and operational systems[307].

Financial Performance - Prelude Therapeutics reported a net loss of $127.2 million for the year ended December 31, 2024, compared to a net loss of $121.8 million for the prior year, resulting in a loss per share of $1.68[20]. - The total operating expenses for the year ended December 31, 2024, were $146.7 million, up from $132.3 million in 2023[24]. - General and administrative (G&A) expenses decreased slightly to $28.7 million in 2024 from $28.9 million in 2023[19]. - Research and development (R&D) expenses increased to $118.0 million in 2024 from $103.4 million in 2023, driven by a higher number of patients enrolled in clinical trials[18]. Cash and Assets - Cash, cash equivalents, and marketable securities as of December 31, 2024, were $133.6 million, providing a runway into the second quarter of 2026[17]. - Total assets decreased from $277,665,000 in 2023 to $175,515,000 in 2024, a decline of approximately 36.8%[26]. - Current assets fell from $235,589,000 in 2023 to $135,895,000 in 2024, representing a decrease of about 42.4%[26]. - Cash and cash equivalents decreased significantly from $25,291,000 in 2023 to $12,474,000 in 2024, a drop of approximately 50.7%[26]. Liabilities and Equity - Total liabilities increased from $40,575,000 in 2023 to $44,056,000 in 2024, an increase of about 8.7%[26]. - Stockholders' equity declined from $237,090,000 in 2023 to $131,459,000 in 2024, a decrease of approximately 44.6%[26]. - Accumulated deficit increased from $(456,390,000) in 2023 to $(583,563,000) in 2024, reflecting a worsening of about 27.8%[26]. - Additional paid-in capital rose from $693,252,000 in 2023 to $714,982,000 in 2024, an increase of approximately 3.2%[26]. - Accounts payable increased from $4,580,000 in 2023 to $7,732,000 in 2024, a rise of about 68.8%[26]. - Operating lease liability increased from $1,481,000 in 2023 to $2,492,000 in 2024, an increase of approximately 68.1%[26]. - Total current liabilities rose from $21,829,000 in 2023 to $25,641,000 in 2024, an increase of about 17.5%[26]. Clinical Development - Prelude initiated a Phase 2 clinical trial for PRT3789 in combination with KEYTRUDA® in patients with SMARCA4-mutated cancers[5]. - PRT3789 demonstrated partial responses in 5 out of 32 patients with advanced NSCLC or esophageal cancer, indicating anti-tumor activity[7]. - The company is nearing completion of monotherapy dose escalation for PRT3789, currently at a 665 mg once weekly IV dose[4]. - Prelude expects to provide an interim data update for PRT7732 in the second half of 2025, which is currently in Phase 1 clinical development[10]. - The company plans to update its discovery pipeline in the first half of 2025, reflecting ongoing research and development efforts[2].

Core Insights - Prelude Therapeutics has demonstrated clinical proof-of-concept for PRT3789, a selective SMARCA2 degrader, showing safety and anti-tumor activity in patients with SMARCA4-deficient cancers [1][2] - The company is advancing its clinical pipeline, with ongoing studies for both PRT3789 and PRT7732, and plans to present additional results in the second half of 2025 [1][2] - Prelude reported a cash position of $133.6 million as of December 31, 2024, which is expected to fund operations into the second quarter of 2026 [1][18] Clinical Development Updates - PRT3789 is in Phase 1 clinical development targeting patients with SMARCA4 mutations, which are associated with poor clinical outcomes [3][4] - The company is nearing completion of monotherapy dose escalation for PRT3789 and is also conducting combination studies with docetaxel [4][9] - A Phase 2 trial evaluating PRT3789 in combination with KEYTRUDA® for SMARCA4-mutated cancers has been initiated [5] Clinical Trial Results - Interim data from the PRT3789 trial indicated that it was generally safe and well-tolerated, with partial responses observed in 5 out of 32 patients with advanced NSCLC or esophageal cancer [7][8] - Among patients treated at doses of 283 mg or higher, 3 out of 13 had confirmed partial responses, and tumor shrinkage was noted in both Class 1 and Class 2 SMARCA4 mutations [8] - The combination of PRT3789 with docetaxel has shown an acceptable safety profile in early cohorts [9] Financial Performance - For the year ended December 31, 2024, Prelude reported a net loss of $127.2 million, or $1.68 per share, compared to a net loss of $121.8 million, or $2.02 per share, in the prior year [21][25] - Research and development expenses increased to $118.0 million from $103.4 million in the previous year, driven by higher patient enrollment in clinical trials [19][25] - General and administrative expenses slightly decreased to $28.7 million from $28.9 million, primarily due to a reduction in stock-based compensation [20][25] Corporate Developments - In February 2025, the company appointed Bryant D. Lim as the permanent Chief Financial Officer [14] - Prelude plans to participate in the Barclays 27th Annual Global Healthcare Conference on March 11, 2025, featuring key executives [15]