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Investing.com -- Prelude Therapeutics (NASDAQ:PRLD) stock initially rose 10% after announcing an exclusive option agreement with Incyte (NASDAQ:INCY) for its mutant selective JAK2V617F JH2 inhibitor program targeting myeloproliferative neoplasms. After spiking higher following a trading halt, shares later declined 2%.
The deal brings Prelude $60 million in immediate capital, including a $35 million upfront payment and a $25 million strategic equity investment from Incyte, which purchased 6.25 million shares of non-voting common stock at $4.00 per share. If Incyte exercises its option to acquire the program, Prelude would receive an additional $100 million, with potential for up to $775 million in further milestone payments plus royalties.
The agreement allows Prelude to continue developing the JAK2V617F program until Incyte potentially exercises its option. The inhibitors target the JH2 "deep pocket" where the V617F mutation resides and have demonstrated mutant-specific inhibition with disease-modifying potential in preclinical models.
"We’re pleased to put this agreement in place with Incyte, recognized global leaders in the MPN field," said Kris Vaddi, CEO of Prelude. "Today’s agreement with Incyte provides us with the capital needed to advance further our JAK2V617F program, while also allowing us to advance the development of our other pipeline programs."
Alongside this announcement, Prelude revealed it will prioritize development of its KAT6A selective degrader program for ER+ breast cancer, which it expects to advance into clinical development in 2026. The company is pausing clinical development of its SMARCA2 degrader program after a comprehensive review of clinical data.
Prelude now expects its cash runway to extend into 2027 based on preliminary estimates, potentially into Q3 2028 if Incyte exercises its option on the JAK2 program.
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