Prelude Therapeutics raises $25M in share sale
WILMINGTON – Prelude Therapeutics, one of Delaware’s burgeoning life science successes that is developing novel cancer treatments, closed a $25 million share sale that will help extend its funding runway.
The private share sale negotiated between Wilmington-based Prelude and the New York hedge fund firm Baker Brothers Advisors closed Wednesday. It included more than 7.93 million shares at a price of $3.1499 per share – a discount of about 4.5%, or 15 cents per share, from what the stock was trading at on the open market Monday before the deal was announced but above its volume-weighted average trading price of $3.04.
Baker Brothers, a hedge fund that focuses on the biotechnology industry, now owns more than a third of Prelude’s outstanding shares and would become Prelude’s largest shareholder after surpassing New York-based hedge fund OrbiMed Advisors, according to Securities and Exchange Commission filings and the FinTel database.
Prelude reported having cash or equivalents of $230.5 million at the end of the third quarter, giving it a current runway to 2026. The latest private share sale is not expected to change its financial runway outlook and will primarily fund the continued advancement of its drug portfolio as well as working capital and general corporate purposes, according to the company.
The company currently based at the Delaware Innovation Space at the DuPont Experimental Station is also preparing to soon move into a new headquarters and research lab at the Chestnut Run Innovation & Science Park.
“This additional funding allows us to further resource our SMARCA2 portfolio by rigorously advancing the clinical development of our IV molecule, PRT3789, and progressing the oral program into the clinic. We look forward to providing initial clinical results from PRT3789 and initiating clinical development of our oral program in the second half of 2024,” said Kris Vaddi, founder and CEO of Prelude, in a statement announcing the sale.
News of the additional institutional investor support combined with recent news that Prelude signed its first partnership agreement with a major Canadian drug development firm, AbCellera, pushed the company’s share value to a three-month high of $3.93 on Thursday.
The Abcellera collaboration combines Prelude’s “expertise in targeted protein degradation, medicinal chemistry, and clinical development” with AbCellera’s antibody discovery and development engine to generate new precision antibody drug conjugates (ADCs), or targeted medicines that can deliver drugs to cancer cells without damaging healthy cells.
The first program will include a panel of antibodies previously discovered by AbCellera and focus on ADCs to broaden the reach of Prelude’s small-molecule drugs to treat cancers connected to the SMARCA2 gene, which commonly includes head and neck cancers.
The partnership will help advance a Prelude drug candidate known as PRT3789, a first-in-class, highly selective degrader of SMARCA2 protein, which along with SMARCA4 controls gene regulation through chromatin remodeling. A year ago, Prelude received FDA clearance to begin Phase 1 clinical trials with PRT3789 as an intravenous drug and it plans to release initial results in mid-2024.
Prelude has reported that up to 70,000 cancer patients in the United States and European Union who currently have limited treatment options could benefit from the drug. The company is also planning to file an investigational new drug (IND) application for an oral SMARCA2 degrader drug that could further expand its potential patient population.