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…

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…

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.