Prelude Therapeutics Pivots Strategy, Inks $60M Deal with Incyte

Prelude Therapeutics, a precision oncology biotech, has announced a significant strategic shift, including a new partnership with Incyte Therapeutics and changes to its drug development pipeline. The move comes as the company faces challenges with its SMARCA2 degrader program and seeks to extend its financial runway.

Incyte Deal Boosts Prelude's Finances

Prelude has entered into an agreement with Incyte Therapeutics, offering an exclusive option for its mutant selective JAK2V617F JH2 inhibitor program. The deal includes $35 million in upfront cash and a $25 million equity investment from Incyte. Should Incyte exercise its option to acquire the preclinical program, it would pay an additional $100 million, with potential milestone payments of up to $775 million.

This influx of capital is expected to more than double Prelude's current funding, extending its financial runway into 2027. If Incyte fully commits to the JAK2V617F JH2 inhibitors, Prelude could remain financially stable until the third quarter of 2028.

Pipeline Restructuring and Program Pauses

Alongside the Incyte deal, Prelude has announced a pause in its SMARCA2 degrader program. This decision follows disappointing phase 1 data for PRT3789, its lead SMARCA2 degrader, which was halted in August. CEO Kris Vaddi explained that the complex biology and aggressive nature of SMARCA4-deleted cancers would likely require early intervention and combination strategies, resources for which Prelude is currently lacking.

The company will now focus on two key areas:

1. The JAK2V617F JH2 inhibitor program, which Prelude will continue to lead unless Incyte exercises its acquisition option.
2. KAT6A degraders for ER+ breast cancer, with plans to advance the first candidate to clinical trials next year.

Leadership Changes and Market Response

In a separate announcement, Prelude revealed that its President and Chief Medical Officer, Jane Huang, M.D., has left the company. Victor Sandor, M.D., a board member and former CMO of Array Biopharma, will temporarily oversee clinical development operations.

The market's initial response to Prelude's strategic pivot was negative, with the company's stock dropping 45% to $2.19 in early trading following the announcements.