10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39527

PRELUDE THERAPEUTICS INCORPORATED

(Exact Name of Registrant as Specified in its Charter)

Delaware	81-1384762
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
200 Powder Mill Road Wilmington, Delaware	19803
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (302) 467-1280

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	PRLD	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 27, 2023, the registrant had 54,825,982 shares of voting and non-voting common stock, $0.0001 par value per share, outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Balance Sheets (Unaudited)	1
	Statements of Operations and Comprehensive Loss (Unaudited)	2
	Statements of Changes in Stockholders’ Equity (Unaudited)	3
	Statements of Cash Flows (Unaudited)	5
	Notes to Unaudited Interim Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	27
Signatures		28

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

PRELUDE THERAPEUTICS INCORPORATED

BALANCE SHEETS

(UNAUDITED)

(in thousands, except share data)	September 30, 2023			December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	15,896		$	30,605
Marketable securities		214,610			171,123
Prepaid expenses and other current assets		4,410			2,652
Total current assets		234,916			204,380
Restricted cash		4,044			4,044
Property and equipment, net		6,618			4,908
Right-of-use asset		464			1,792
Prepaid expenses and other non-current assets		12,469			5,376
Total assets	$	258,511		$	220,500
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	5,170		$	6,777
Accrued expenses and other current liabilities		11,248			13,093
Operating lease liability		475			1,832
Total current liabilities		16,893			21,702
Other liabilities		3,361			3,361
Total liabilities		20,254			25,063
Commitments (Note 8)
Stockholders’ equity:
Voting common stock, $0.0001 par value: 487,149,741 shares authorized; 41,965,472 and 36,496,994 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		4			4
Non-voting common stock, $0.0001 par value: 12,850,259 shares authorized; 12,850,259 and 11,402,037 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		1			1
Additional paid-in capital		662,172			531,682
Accumulated other comprehensive loss		(605	)		(1,692	)
Accumulated deficit		(423,315	)		(334,558	)
Total stockholders’ equity		238,257			195,437
Total liabilities and stockholders’ equity	$	258,511		$	220,500

See accompanying notes to unaudited interim financial statements.

1

PRELUDE THERAPEUTICS INCORPORATED

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands, except share and per share data)	2023			2022			2023			2022
Operating expenses:
Research and development	$	26,261		$	22,889		$	73,061		$	67,020
General and administrative		7,124			7,517			21,837			23,135
Total operating expenses		33,385			30,406			94,898			90,155
Loss from operations		(33,385	)		(30,406	)		(94,898	)		(90,155	)
Other income, net		2,777			448			6,141			3,358
Net loss	$	(30,608	)	$	(29,958	)	$	(88,757	)	$	(86,797	)
Per share information:
Net loss per share of common stock, basic and diluted	$	(0.45	)	$	(0.63	)	$	(1.55	)	$	(1.84	)
Weighted average common shares outstanding, basic    and diluted		67,639,993			47,449,811			57,278,795			47,265,712
Comprehensive loss:
Net loss	$	(30,608	)	$	(29,958	)	$	(88,757	)	$	(86,797	)
Unrealized (loss) gain on marketable securities, net of tax		106			(69	)		1,087			(1,652	)
Comprehensive loss	$	(30,502	)	$	(30,027	)	$	(87,670	)	$	(88,449	)

See accompanying notes to unaudited interim financial statements.

2

PRELUDE THERAPEUTICS INCORPORATED

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)

	Voting common stock				Non-voting common stock				Additional paid-in			Accumulated other comprehensive			Accumulated
(in thousands, except shares)	Shares		Amount		Shares		Amount		capital			loss			deficit			Total
Balance at January 1, 2023		36,496,994	$	4		11,402,037	$	1	$	531,682		$	(1,692	)	$	(334,558	)	$	195,437
Issuance of common stock upon exercise of stock options & vesting of RSUs		17,224		—		—		—		28			—			—			28
Unrealized gain on marketable securities, net of tax		—		—		—		—		—			1,294			—			1,294
Stock-based compensation expense		—		—		—		—		6,256			—			—			6,256
Net loss		—		—		—		—		—			—			(27,718	)		(27,718	)
Balance at March 31, 2023		36,514,218	$	4		11,402,037	$	1	$	537,966		$	(398	)	$	(362,276	)	$	175,297
Issuance of common stock and prefunded warrants, net of issuance costs of $2.6 million		5,312,978		—		1,448,222		—		110,423			—			—			110,423
Issuance of common stock upon exercise of stock options & vesting of RSU's		40,461		—		—		—		3			—			—			3
Issuance of common stock under ESPP		90,799		—		—		—		348			—			—			348
Unrealized loss on marketable securities, net of tax		—		—		—		—		—			(313	)		—			(313	)
Stock-based compensation expense		—		—		—		—		6,733			—			—			6,733
Net loss		—		—		—		—		—			—			(30,431	)		(30,431	)
Balance at June 30, 2023		41,958,456	$	4		12,850,259	$	1	$	655,473		$	(711	)	$	(392,707	)	$	262,060
Issuance of common stock upon vesting of RSU's, net of 3,609 shares withheld for employee taxes		7,016		—		—		—		(16	)		—			—			(16	)
Unrealized gain (loss) on marketable securities		—		—		—		—		—			106			—			106
Stock-based compensation expense, net of forfeitures of restricted stock awards		—		—		—		—		6,715			—			—			6,715
Net loss		—		—		—		—		—			—			(30,608	)		(30,608	)
Balance at September 30, 2023		41,965,472	$	4		12,850,259	$	1	$	662,172		$	(605	)	$	(423,315	)	$	238,257

See accompanying notes to unaudited interim financial statements.

3

PRELUDE THERAPEUTICS INCORPORATED

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (CONTINUED)

(UNAUDITED)

	Voting common stock					Non-voting common stock				Additional paid-in		Accumulated other comprehensive			Accumulated
(in thousands, except shares)	Shares			Amount		Shares		Amount		capital		loss			deficit			Total
Balance at January 1, 2022		36,200,299		$	4		11,402,037	$	1	$	505,723	$	(711	)	$	(219,120	)	$	285,897
Issuance of common stock upon exercise of stock options		93,032			—		—		—		153		—			—			153
Unrealized loss on marketable securities, net of tax		—			—		—		—		—		(1,602	)		—			(1,602	)
Stock-based compensation expense		—			—		—		—		6,829		—			—			6,829
Net loss		—			—		—		—		—		—			(29,465	)		(29,465	)
Balance at March 31, 2022		36,293,331		$	4		11,402,037	$	1	$	512,705	$	(2,313	)	$	(248,585	)	$	261,812
Issuance of common stock upon exercise of stock options		31,253			—		—		—		59		—			—			59
Issuance of common stock under ESPP		68,080			—		—		—		300		—			—			300
Unrealized gain on marketable securities		—			—		—		—		—		19			—			19
Stock-based compensation expense, net of forfeitures of restricted stock awards		(23,416	)		—		—		—		6,028		—			—			6,028
Net loss		—			—		—		—		—		—			(27,374	)		(27,374	)
Balance at June 30, 2022		36,369,248		$	4		11,402,037	$	1	$	519,092	$	(2,294	)	$	(275,959	)	$	240,844
Issuance of common stock upon exercise of stock options		75,528			—		—		—		148		—			—			148
Unrealized gain(loss) on marketable securities		—			—		—		—		—		(69	)		—			(69	)
Stock-based compensation expense, net of forfeitures of restricted stock awards		—			—		—		—		6,442		—			—			6,442
Net loss		—			—		—		—		—		—			(29,958	)		(29,958	)
Balance at September 30, 2022		36,444,776		$	4		11,402,037	$	1	$	525,682	$	(2,363	)	$	(305,917	)	$	217,407

See accompanying notes to unaudited interim financial statements.

4

PRELUDE THERAPEUTICS INCORPORATED

STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Nine months ended September 30,
(in thousands)	2023			2022
Cash flows used in operating activities:
Net loss	$	(88,757	)	$	(86,797	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		838			962
Noncash lease expense		1,328			1,281
Stock-based compensation		19,704			19,299
Amortization of premium and discount on marketable securities, net		(2,402	)		2,770
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(2,053	)		(3,591	)
Accounts payable		(1,805	)		2,893
Accrued expenses and other liabilities		(1,873	)		3,661
Long-term prepaid expenses and other long-term assets		(7,108	)		—
Operating lease liabilities		(1,357	)		(1,280	)
Net cash used in operating activities		(83,485	)		(60,802	)
Cash flows (used in) provided by investing activities:
Purchases of marketable securities		(162,248	)		(85,972	)
Proceeds from maturities of marketable securities		122,250			168,934
Purchases of property and equipment		(2,384	)		(2,626	)
Net cash (used in) provided by investing activities		(42,382	)		80,336
Cash flows provided by financing activities:
Proceeds from issuance of common stock and pre-funded warrants, net of offering costs		110,795			—
Proceeds from the issuance of common stock under ESPP		348			300
Proceeds from the issuance of common stock in connection with the exercise of stock options		31			360
Payment of withholding taxes related to stock-based compensation to employees		(16	)		—
Net cash provided by financing activities		111,158			660
Net (decrease) increase in cash, cash equivalents and restricted cash		(14,709	)		20,194
Cash, cash equivalents, and restricted cash at beginning of period		34,649			35,872
Cash, cash equivalents, and restricted cash at end of period	$	19,940		$	56,066
Supplemental disclosures:
Operating lease right-of-use assets obtained in exchange for operating lease liabilities	$	—		$	928
Property and equipment in accounts payable	$	254		$	323
Offering costs in accrued expenses and other current liabilities	$	28		$	—
Offering costs in accounts payable	$	34		$	—
Unrealized gain (loss) on marketable securities	$	1,087		$	(1,652	)

See accompanying notes to unaudited interim financial statements.

5

PRELUDE THERAPEUTICS INCORPORATED

NOTES TO UNAUDITED INTERIM FINANCIAL STATEMENTS

1. Background

Prelude Therapeutics Incorporated (the “Company”) is a clinical-stage fully integrated oncology company built on a foundation of drug discovery excellence to deliver novel precision cancer medicines to underserved patients. Since beginning operations in 2016, the Company has devoted substantially all its efforts to research and development, conducting preclinical and clinical studies, recruiting management and technical staff, administration, and raising capital.

2. Risks and liquidity

The Company is subject to a number of risks common to early-stage companies in the biotechnology industry. Principal among these risks are the uncertainties in the development process, development of the same or similar technological innovations by competitors, protection of proprietary technology, dependence on key personnel, compliance with government regulations and approval requirements, and the need to obtain additional financing to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure, and extensive compliance-reporting capabilities. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s technology will be obtained, that any products developed will obtain necessary government regulatory approval, or that any approved products will be commercially viable. The Company operates in an environment of rapid change in technology and substantial competition from pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees, consultants and contractors.

Since its inception, the Company has incurred operating losses and had an accumulated deficit of $423.3 million at September 30, 2023. The Company has no revenue to-date and devotes its efforts to research and development. The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales of its product candidates currently in development.

The Company believes that its cash, cash equivalents, and marketable securities as of September 30, 2023 will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next twelve months.

To fund its operating expenses and capital expenditure requirements after that date, the Company plans to seek additional funding through public or private equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into strategic alliances or other arrangements on favorable terms, or at all. The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders. If the Company is unable to obtain funding, the Company could be required to delay, reduce or eliminate research and development programs, product portfolio expansion or future commercialization efforts, which could adversely affect its business prospects.

Inflation has the potential to adversely affect the Company's liquidity, business, financial condition and results of operations by increasing the Company's overall cost structure. The existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, supply shortages, increased costs of labor, components, manufacturing and shipping, as well as weakening exchange rates and other similar effects. As a result of inflation, the Company has experienced, and may continue to experience cost increases. Although the Company may take measures to mitigate the effects of inflation, if these measures are not effective, the Company's business, financial condition, results of operations and liquidity could be materially adversely affected. Even if such measures are effective, there could be a difference between the timing of when these beneficial actions impact the Company's results of operations and when the costs of inflation are incurred.

6

3. Summary of significant accounting policies

The summary of significant accounting policies included in the Company’s financial statements for the year ended December 31, 2022 can be found in “Note 3. Summary of significant accounting policies” of the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 15, 2023. Those policies have not materially changed.

Basis of presentation

The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. The accompanying unaudited interim financial statements should be read in conjunction with the annual audited financial statements and related notes as of and for the year ended December 31, 2022 found in the Company's Annual Report on Form 10-K filed with the SEC on March 15, 2023. Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

Use of estimates

The preparation of the unaudited interim financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the unaudited interim financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Estimates and assumptions are periodically reviewed and the effects of the revisions are reflected in the accompanying unaudited interim financial statements in the period they are determined to be necessary. The most significant estimate relates to accrued clinical trial expenses.

Income taxes

Based upon the historical and anticipated future losses, management has determined that the deferred tax assets generated by net operating losses and research and development credits do not meet the more likely than not threshold for realizability. Accordingly, a full valuation allowance has been recorded against the Company’s net deferred tax assets as of September 30, 2023 and December 31, 2022.

Cash, Cash Equivalents and Restricted cash

The Company’s cash equivalents include short-term highly liquid investments with an original maturity of 90 days or less when purchased and are carried at fair value in the accompanying balance sheets.

Restricted cash consists of a letter of credit with Silicon Valley Bank, a division of First Citizens Bank, for the benefit of the landlord in connection with the Company’s Chestnut Run Lease. See Note 8 for further details.

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the balance sheet that total to the amounts shown in the statement of cash flows:

(in thousands)	September 30, 2023		December 31, 2022
Cash and cash equivalents	$	15,896	$	30,605
Restricted cash		4,044		4,044
Total cash, cash equivalents, and restricted cash shown in statement of cash flows	$	19,940	$	34,649

7

Marketable Securities

The Company’s marketable securities consist of investments in corporate debt securities, United States (“U.S.”) government debt securities, and agency securities that are classified as available-for-sale. The securities are carried at fair value with the unrealized gains and losses, net of tax, included in accumulated other comprehensive loss, a component of stockholders’ equity. Realized gains and losses as well as credit losses, if any, on marketable securities are included in the Company’s statements of operations. The Company classifies marketable securities that are available for use in current operations as current assets on the balance sheets.

Net Loss Per Share

Basic net loss per share of common stock is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during each period, including pre-funded warrants to purchase shares of common stock that were issued in a financing transaction in May 2023 (Note 7). The weighted-average number of shares of common stock outstanding used in the basic net loss per share calculation does not include unvested restricted stock awards as these instruments are considered contingently issuable shares until they vest. Diluted net loss per share of common stock includes the effect, if any, from the potential exercise of securities, such as stock options, and the effect from unvested restricted stock awards and restricted stock units which would result in the issuance of incremental shares of common stock. For diluted net loss per share, the weighted-average number of shares of common stock is the same for basic net loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation as the impact is anti-dilutive. The Company’s unvested restricted stock awards entitle the holder to participate in dividends and earnings of the Company, and, if the Company were to recognize net income, it would have to use the two-class method to calculate earnings per share. The two-class method is not applicable during periods with a net loss, as the holders of the unvested restricted stock awards have no obligation to fund losses.

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive:

	September 30,
	2023		2022
Unvested restricted stock awards		54,026		271,965
Unvested restricted stock units		114,375		170,000
Stock options		12,134,205		9,197,528
Employee stock purchase plan		74,248		46,560
		12,376,854		9,686,053

Amounts in the above table reflect the common stock equivalents.

Recently Issued Accounting Pronouncements

Emerging Growth Company Status

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these unaudited interim financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

Recently Adopted Accounting Pronouncements

In August 2020, the FASB issued ASU Update No. 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06) (“ASU 2020-06”). ASU 2020-06 eliminated the beneficial conversion and cash conversion accounting models in ASC 470-20 which required separate accounting for embedded conversion features and simplified the settlement assessment to determine whether an instrument qualifies for equity classification. The Company early adopted the new standard on January 1, 2023.

8

4. Cash, Cash Equivalents and Marketable Securities

The following provides detail of the Company's cash, cash equivalents, and marketable securities.

(in thousands)	Amortized Cost		Gross unrealized gain		Gross unrealized loss			Fair Value
September 30, 2023
Cash equivalents:
Money Market Funds	$	9,963	$	—	$	—		$	9,963
Commercial Paper		4,981		—		(1	)		4,980
Total cash equivalents		14,944		—		(1	)		14,943
Marketable securities:
Agency securities		10,508		—		(50	)		10,458
Corporate debt securities		101,396		11		(275	)		101,132
U.S. government securities		103,310		—		(290	)		103,020
Total marketable securities		215,214		11		(615	)		214,610
Total financial assets	$	230,158	$	11	$	(616	)	$	229,553
December 31, 2022
Cash equivalents:
Money Market Funds	$	25,996	$	—	$	—		$	25,996
Marketable securities:
Corporate debt securities		163,208		7		(1,672	)		161,543
U.S. government securities		9,607		—		(27	)		9,580
Total marketable securities		172,815		7		(1,699	)		171,123
Total financial assets	$	198,811	$	7	$	(1,699	)	$	197,119

The Company’s marketable securities generally have contractual maturity dates of 24 months or less. As of September 30, 2023, the Company had 49 securities with a total fair market value of $193.4 million in an unrealized loss position. The Company believes that any unrealized losses associated with the decline in value of its securities is temporary, is primarily related to market factors and believes that it is more likely than not that it will be able to hold its debt securities to maturity. Therefore, the Company anticipates a full recovery of the amortized cost basis of its debt securities at maturity and an allowance for credit losses was not recognized.

5. Fair Value of Financial Instruments

Fair value is the price that could be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value determination in accordance with applicable accounting guidance requires that a number of significant judgments be made. Additionally, fair value is used on a nonrecurring basis to evaluate assets for impairment or as required for disclosure purposes by applicable accounting guidance on disclosures about fair value of financial instruments. Depending on the nature of the assets and liabilities, various valuation techniques and assumptions are used when estimating fair value. The Company follows the provisions of ASC 820, Fair Value Measurement, for financial assets and liabilities measured on a recurring basis. The guidance requires fair value measurements be classified and disclosed in one of the following three categories:

•Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

•Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liabilities.

•Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

9

The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis:

	Fair value measurement at reporting date using
(in thousands)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
September 30, 2023
Assets
Cash equivalents:
Money Market Funds	$	9,963	$	—	$	—
Commercial Paper		—		4,980		—
Total cash equivalents		9,963		4,980		—
Marketable securities:
Agency securities		—		10,458		—
Corporate debt securities		—		101,132		—
U.S. government securities		—		103,020		—
Total marketable securities		—		214,610		—
Total financial assets	$	9,963	$	219,590	$	—
December 31, 2022
Assets
Cash equivalents:
Money Market Funds	$	25,996	$	—	$	—
Marketable securities:
Corporate debt securities		—		161,543		—
U.S. government securities		—		9,580		—
Total marketable securities		—		171,123		—
Total financial assets	$	25,996	$	171,123	$	—

6. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

(in thousands)	September 30, 2023		December 31, 2022
Compensation and related benefits	$	6,982	$	5,682
Research and development		3,447		6,887
Other		819		524
	$	11,248	$	13,093

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7. Common Stock

The Company has two classes of common stock; “voting common stock” and “non-voting common stock.” The holders of the voting common stock are entitled to one vote for each share of voting common stock held at all meetings of stockholders. Except as otherwise required by law, the holders of non-voting common stock shall not be entitled to vote at any meetings of stockholders (or written actions in lieu of meetings) and the shares of non-voting common stock shall not be included in determining the number of shares voting or entitled to vote on any matter. Unless required by law, there shall be no cumulative voting. Any holder of non-voting common stock may elect to convert each share of non-voting common stock into one fully paid and non-assessable share of voting common stock at any time by providing written notice to the Company; provided that as a result of such conversion, such holder, together with its affiliates and any members of a Schedule 13(d) group with such holder, would not beneficially own in excess of 9.99% of the Company’s common stock immediately prior to and following such conversion, unless otherwise as expressly provided for in the Company’s restated certificate of incorporation. However, this ownership limitation may be increased (not to exceed 19.99%) or decreased to any other percentage designated by such holder of non-voting common stock upon 61 days’ notice to the Company.

Second quarter 2023 financing

During the second quarter of 2023, the Company sold 6,761,200 shares of its common stock which comprised of (i) 5,312,978 shares of its voting common stock and (ii) 1,448,222 shares of its non-voting common stock at a price of $5.75 per share and to certain investors in lieu of common stock, the Company sold pre-funded warrants to purchase 12,895,256 shares of voting common stock at a price of $5.7499 per pre-funded warrant, resulting in gross proceeds of $113.0 million. Offering costs of $2.6 million, of which $0.3 million were previously paid and deferred, were recorded to additional paid-in capital in the accompanying balance sheets, resulting in net proceeds of $110.4 million.

The purchase price per share of each pre-funded warrant represents the per share offering price for the common stock, minus the $0.0001 per share exercise price of such pre-funded warrant. As of September 30, 2023, no pre-funded warrants had been exercised. Of the voting common stock issued, 2,264,456 shares were purchased by the Company’s underwriters in connection with a 30-day option at a price of $5.75 per share.

The pre-funded warrants were classified as a component of permanent stockholders’ equity within additional paid-in capital and were recorded at the issuance date using a relative fair value allocation method. The pre-funded warrants are equity classified because they (i) are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, (ii) are immediately exercisable, (iii) do not embody an obligation for the Company to repurchase its shares, (iv) permit the holders to receive a fixed number of shares of common stock upon exercise, (v) are indexed to the Company’s common stock and (vi) meet the equity classification criteria. In addition, such pre-funded warrants do not provide any guarantee of value or return.

8. Commitments

Leases

The Company leases office and laboratory space in Wilmington, Delaware under a noncancelable lease (the “Lease”).

Future minimum annual lease payments under the Lease at September 30, 2023 are as follows:

(in thousands)
2023 (remaining)	$	482
Total undiscounted lease payments		482
Less imputed interest		(7	)
Current lease liability	$	475

In August 2022, the Company entered into an amendment (the “Lease Amendment”) to the lease agreement for office and lab space at Chestnut Run Plaza in Wilmington, Delaware (the “Chestnut Run Lease”). The Chestnut Run Lease has a commencement date of the earlier of (i) the Landlord Work Substantial Completion Date (as such term is defined in the Chestnut Run Lease), or (ii) the date the Company takes possession of the premises for the conduct of the Company’s business (the “Commencement Date”). The Chestnut Run Lease premises includes approximately 81,000 rentable square feet, located at Chestnut Run Plaza in Wilmington, Delaware (the "Premises"). Under the terms of the Chestnut Run Lease, the landlord has provided an allowance towards the cost of completing tenant improvements for the Premises and improvements resulting from both the landlord's build-out and the Company's improvements are the landlord's assets for accounting purposes. Costs incurred by the Company related to the tenant improvements in

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excess of the landlord's allowance will be treated as prepaid rent and will increase the right-of-use asset once the accounting commencement date occurs. As of September 30, 2023, the Company recorded $12.2 million of prepaid rent. Upon the Commencement Date, which is expected to occur in the fourth quarter of 2023, the Company will recognize a right-of-use asset and operating lease liability in accordance with ASC 842, Leases. The Chestnut Run Lease has an initial term of 162 months with 3 five-year extension options and certain expansion rights. The estimated rent payments related to the Chestnut Run Lease are as follows:

(in thousands)
2023 (remaining)	$	—
2024		1,092
2025		2,746
2026		2,979
2027		3,054
2028		3,130
Thereafter		29,635

The Company paid a security deposit for the Chestnut Run Lease in the form of a letter of credit with Silicon Valley Bank, a division of First Citizens Bank, of $4.0 million, which is included in the balance sheet as restricted cash as of September 30, 2023. The security deposit may be reduced to $0.5 million over time in accordance with the terms of the Chestnut Run Lease.

In connection with the Company’s expansion of operations in the State of Delaware, the Company was approved for a grant from the State of Delaware in 2021 that will provide up to $5.5 million in reimbursements over three years for the development of lab space in addition to increasing jobs in Delaware to meet specific targeted levels through 2023. During the third quarter of 2022, the Company was approved for an additional grant from the State of Delaware for the development of lab space in the amount of $1.0 million. In 2022, the Company received cash of $3.4 million from the grants for the development of lab space. The Company has met the minimum requirements stated in the grant agreement in order to not be required to pay back any portion of the $3.4 million disbursed. The Company has deferred the recognition of these grant funds as they relate to capitalized costs and has classified them as long-term liabilities on the balance sheet. The Company will recognize the grant funds in other income as grant income over the useful life of the related assets. Additionally, if the Company leaves the State of Delaware within five years of the disbursement, the Company is required to return an amount equal to the amount of grant funds disbursed on a pro-rated basis.

Rent expense was $0.5 million for both the three months ended September 30, 2023 and 2022. Rent expense was $1.6 million for both the nine months ended September 30, 2023 and 2022.

Employment Agreements

The Company entered into employment agreements with key personnel providing for compensation and severance in certain circumstances, as defined in the respective employment agreements.

401(k) Defined Contribution Plan

The Company sponsors a 401(k) defined‑contribution plan covering all employees. Participants are permitted to contribute up to 100% of their eligible annual pretax compensation up to an established federal limit on aggregate participant contributions. The Company provides a match of a maximum amount of 3% of the participant’s compensation. For both the three months ended September 30, 2023 and 2022, the Company made matching contributions of $0.1 million. For the nine months ended September 30, 2023 and 2022, the Company made matching contributions of $0.5 million and $0.4 million, respectively.

Other Research and Development Arrangements

The Company enters into agreements with clinical research organizations ("CROs") to assist in the performance of research and development activities. Expenditures to CROs will represent a significant cost in clinical development for the Company.

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9. Stock-Based Compensation

The Company has two equity incentive plans: the 2016 Equity Incentive Plan, as amended, and the 2020 Equity Incentive Plan. New awards can only be granted under the 2020 Equity Incentive Plan (the “Plan”) and as of September 30, 2023, 4,773,019 shares were available for future grants. The number of shares of the Company’s common stock that may be issued pursuant to rights granted under the Plan shall automatically increase on January 1st of each year and continuing for ten years beginning on January 1, 2021, in an amount equal to five percent of the total number of shares of the Company’s common stock outstanding on December 31st of the preceding calendar year, subject to the discretion of the board of directors or compensation committee to determine a lesser number of shares shall be added for such year. The Plan provides for the granting of common stock, incentive stock options, nonqualified stock options, restricted stock awards, restricted stock units and/or stock appreciation rights to employees, directors, and other persons, as determined by the Company’s board of directors. The Company’s stock options vest based on the terms in each award agreement, generally over four-year periods with 25% of options vesting after one year and then monthly thereafter, and have a term of ten years.

The Company measures stock-based awards at their grant-date fair value and records compensation expense on a straight-line basis over the vesting period of the awards. The Company recorded stock-based compensation expense in the following expense categories in its accompanying statements of operations:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Research and development	$	3,319	$	3,214	$	9,544	$	8,886
General and administrative		3,396		3,228		10,160		10,413
	$	6,715	$	6,442	$	19,704	$	19,299

Stock Options

The following table summarizes stock option activity for the periods indicated:

	Number of shares			Weighted average exercise price per share		Weighted average remaining contractual term (years)
Outstanding at January 1, 2023		9,390,930		$	12.08		8.31
Granted		3,091,898		$	6.82
Exercised		(17,685	)	$	1.77
Forfeited		(330,938	)	$	15.59
Outstanding at September 30, 2023		12,134,205		$	10.66		8.01
Exercisable at September 30, 2023		5,583,116		$	11.55		7.14

At September 30, 2023, the aggregate intrinsic value of outstanding options and exercisable options was $2.6 million and $2.4 million, respectively.

The following table summarizes information about stock options outstanding at September 30, 2023 under the Plan:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$0.31 - $4.88		3,039,468		6.98	$	2.80		2,303,649	$	2.38
$4.89 - $7.50		4,053,164		9.25		6.58		242,049		6.02
$7.51 - $13.04		3,204,778		7.54		11.86		1,968,540		12.22
$13.05 - $88.98		1,836,795		7.81		30.55		1,068,878		31.36
		12,134,205						5,583,116

The weighted-average grant date fair value of options granted was $4.97 and $5.72 per option for the nine months ended September 30, 2023 and 2022, respectively. The aggregate intrinsic value of options exercised was $80 thousand for the nine months ended September 30, 2023. The Company recorded stock-based compensation expense of $6.5 million and $6.1 million for the three

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months ended September 30, 2023 and 2022, respectively, related to stock options. The Company recorded stock-based compensation expense of $18.9 million and $18.3 million for the nine months ended September 30, 2023 and 2022, respectively, related to stock options. As of September 30, 2023, the total unrecognized compensation expense related to unvested stock option awards was $44.1 million, which the Company expects to recognize over a weighted-average period of 2.19 years.

The fair value of each option was estimated on the date of grant using the weighted average assumptions in the table below:

	Nine months ended September 30,
	2023			2022
Expected volatility		83.53	%		84.91	%
Risk-free interest rate		3.81	%		2.52	%
Expected life (in years)		6.02			6.02
Expected dividend yield		—			—

Restricted Stock Awards and Units

The Company issues restricted stock awards (“RSA”) to employees that generally vest over a four-year period with 25% of awards vesting after one year and then monthly thereafter. Any unvested shares will be forfeited upon termination of services. The fair value of an RSA is equal to the fair market value price of the Company’s common stock on the date of grant. RSA expense is recorded on a straight-line basis over the vesting period.

The following table summarizes activity related to RSA stock-based payment awards:

	Number of shares			Weighted-average grant date fair value
Unvested balance at January 1, 2023		201,716		$	2.81
Vested		(147,690	)	$	2.64
Unvested balance at September 30, 2023		54,026		$	3.26

The Company recorded stock-based compensation expense of $0.1 million and $0.2 million for the three months ended September 30, 2023 and 2022, respectively, related to RSAs. The Company recorded stock-based compensation expense of $0.4 million and $0.6 million for the nine months ended September 30, 2023 and 2022, respectively, related to RSAs. As of September 30, 2023, the total unrecognized expense related to all RSAs was $0.2 million, which the Company expects to recognize over a weighted-average period of 0.49 years.

The Company granted restricted stock units (“RSU”) to employees that generally vest over a four-year period with 25% of awards vesting after one year and then quarterly thereafter. Any unvested units will be forfeited upon termination of services.

The following table summarizes activity related to RSU stock-based payment awards:

	Number of shares			Weighted-average grant date fair value
Unvested balance at January 1, 2023		165,000		$	6.08
Vested		(50,625	)	$	5.86
Unvested balance at September 30, 2023		114,375		$	6.18

The Company recorded stock-based compensation expense of $0.1 million for each of the three months ended September 30, 2023 and 2022, related to RSUs. The Company recorded stock-based compensation expense of $0.2 million for each of the nine months ended September 30, 2023 and 2022, related to RSUs. At September 30, 2023, the total unrecognized expense related to the RSUs was $0.6 million, which the Company expects to recognize over 2.36 years.

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Employee Stock Purchase Plan

The Company has an Employee Stock Purchase Plan (the “ESPP”), which, as of September 30, 2023, had 1,698,350 shares of common stock reserved for future issuance. The number of shares of the Company’s common stock that may be issued pursuant to rights granted under the ESPP shall automatically increase on January 1st of each year and continuing for ten years beginning in 2021, in an amount equal to one percent of the total number of shares of all classes of the Company’s common stock outstanding on December 31st of the preceding calendar year, subject to the discretion of the board of directors or compensation committee to determine a lesser number of shares shall be added for such year. On January 1, 2023, 478,990 shares were added to the ESPP.

Under the ESPP, eligible employees can purchase the Company’s common stock through accumulated payroll deductions at such times as are established by the compensation committee. Eligible employees may purchase the Company’s common stock at 85% of the lower of the fair market value of the Company’s common stock on the first day of the offering period or on the last day of the offering period. Eligible employees may contribute up to 15% of their eligible compensation. Under the ESPP, a participant may not accrue rights to purchase more than $25,000 worth of the Company’s common stock for each calendar year in which such right is outstanding.

The ESPP is considered compensatory under the FASB stock compensation rules. Accordingly, share-based compensation expense is determined based on the option’s grant-date fair value as estimated by applying the Black Scholes option-pricing model and is recognized over the withholding period. The Company recognized share-based compensation expense of $0.1 million for each of the three months ended September 30, 2023 and 2022, respectively, related to the ESPP. The Company recognized share-based compensation expense of $0.2 million and $0.3 million for the nine months ended September 30, 2023 and 2022, respectively, related to the ESPP.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q. In addition to historical financial information, this discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties, such as statements of our plans, objectives, expectations, intentions and belief. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth in the section titled “Risk Factors” under (i) Part I, Item 1A of our Annual Report on Form 10-K filed with the SEC on March 15, 2023, or our 2022 Annual Report on Form 10-K, and (ii) Part II, Item 1A of this Quarterly Report on Form 10-Q. These forward-looking statements may include, but are not limited to, statements regarding our future results of operations and financial position, inflation and interest rate risk, a potential recession, a potential temporary federal government shutdown, business strategy, market size, potential growth opportunities, preclinical and clinical development activities, efficacy and safety profile of our product candidates, use of net proceeds from our offerings, our ability to maintain and recognize the benefits of certain designations received by product candidates, the timing and results of preclinical studies and clinical trials, commercial collaborations with third parties and the receipt and timing of potential regulatory designations, approvals and commercialization of product candidates. The words “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “strive,” “predict,” “target,” “intend,” “could,” “would,” “should,” “project,” “plan,” “expect,” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.

Overview

We are a clinical-stage fully integrated oncology company built on a foundation of drug discovery excellence to deliver novel precision cancer medicines to underserved patients. By leveraging our core competencies in cancer biology and medicinal chemistry, combined with our clinical development capabilities, we have built an efficient, fully-integrated drug discovery engine and the development expertise necessary to identify compelling biological targets and create new chemical entities, or NCEs, and biologics that we rapidly advance into clinical trials. We believe our approach could result in better targeted cancer therapies. Our discovery excellence has been validated by our rapid progress in creating a wholly-owned, internally developed pipeline. Since our inception in 2016, we have received clearance from the U.S. Food and Drug Administration, or the FDA, for multiple investigational new drug applications, or INDs, and successfully advanced several programs into clinical trials. In addition, we have other unique programs in various stages of preclinical development.

By focusing on developing therapies using broad mechanisms that have multiple links to oncogenic driver pathways in select patients, we have developed a diverse pipeline consisting of multiple distinct programs spanning methyltransferases, kinases, protein-protein interactions, targeted protein degraders, and precision antibody drug conjugates. Our pipeline is designed to serve patients with high unmet medical need, where there are limited or no treatment options. We believe we can best address these diseases by developing therapies that target primary and secondary resistance mechanisms.

We have several drug candidates in clinical development and we believe we can generate proof-of-concept clinical data to guide our future regulatory pathways to approval. Our SMARCA2 molecule is a unique, first-in-class protein degrader, targeting specific patient populations. Our CDK9 and MCL1 inhibitors are selective and potent, with potentially superior safety profiles. Our next generation CDK4/6 inhibitor is specifically designed to be a brain and tissue penetrant.

On November 1, 2023, we announced that we will focus our resources on our novel, first-in-class SMARCA2 degrader compounds and our potent, highly selective and potentially best-in-class CDK9 inhibitor. These two proprietary and wholly-owned programs represent our best opportunities for demonstrating clinical proof-of-concept in 2024 and advancing into potential Phase 2/3 registration studies. We also announced a global partnership with AbCellera Biologics Incorporated ("AbCellera") to combine our small molecules expertise with their antibody expertise to develop precision antibody drug conjugates. We have already started work on our first program with a SMARCA payload on an antibody selected from a lead panel of antibodies previously discovered by AbCellera.

In October 2022, we received clearance for PRT3789, a first-in-class, highly selective degrader of SMARCA2 protein, which along with SMARCA4 controls gene regulation through chromatin remodeling. Cancer cells with SMARCA4 mutations are dependent on SMARCA2 for their growth and survival and selectively degrading SMARCA2 induces cell death in cancer cells while

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sparing normal cells. PRT3789 is efficacious and well tolerated in preclinical models of SMARCA4 deleted/mutated cancers as monotherapy and in combination with standards of care. We believe a selective SMARCA2 degrader has the potential to be of benefit in up to 70,000 cancer patients in the United States and European Union with the SMARCA4 mutation.

Patients with SMARCA4 mutations or deletions may have poor clinical outcomes and limited treatment options. Therefore, mutated or deleted SMARCA4 cancers provide a potential biomarker to select those patients most likely to respond to treatment with a highly selective SMARCA2 degrader.

A Phase 1 multi-dose escalation clinical trial of PRT3789 is ongoing (NCT05639751) in biomarker-selected SMARCA4 mutated cancers. We intend to evaluate PRT3789 as monotherapy as well as in combination and plan to share initial Phase 1 data in the middle of 2024.

We recently nominated a new chemical entity as a potent, orally bioavailable and highly selective SMARCA2 degrader candidate. This compound is >1000x more selective for SMARCA2 over SMARCA4 and we expect to file an IND in the first half of 2024.

Our CDK9 candidate, PRT2527, is designed to be a potent and selective CDK9 inhibitor. In preclinical studies, PRT2527 was shown to reduce MCL1 and MYC protein levels and was highly active in preclinical models at well-tolerated doses. Our preclinical studies suggest that PRT2527 demonstrates high kinase selectivity and potency, providing opportunity for a wider therapeutic index compared to less selective CDK9 inhibitors, allowing for rapid development in combinations.

Preclinical data demonstrated that treatment with PRT2527 depleted oncogenic drivers with short half-lives, such as MYC and MCL1, and effectively induced apoptosis. PRT2527 treatment demonstrated robust efficacy in both hematological malignancies and solid tumor models with MYC dysregulation. Dose dependent increases in exposure and target engagement were observed as evidenced by MYC and MCL1 depletion to levels associated with tumor regression in preclinical models.

PRT2527 has completed a Phase 1 multi-dose escalation study (NCT05159518) in patients with solid tumors. In this trial, PRT2527 was shown to achieve high levels of target inhibition and the potential to be better tolerated than existing CDK9 inhibitors, specifically, manageable neutropenia and an absence of meaningful gastrointestinal events or hepatotoxicity.

Our objective is to establish clinical proof-of concept data in both the monotherapy setting and in combination with zanubrutinib in 2024.

Our MCL1 candidate, PRT1419, is designed to be a potent and selective inhibitor of the anti-apoptotic protein, MCL1. The potency and selectivity of PRT1419 is supported by preclinical data demonstrating nanomolar inhibition of MCL1 and no inhibition of related enzymes at 200 times higher concentration of our product candidate. We concluded a Phase 1 development of PRT1419 and established a confirmation dose in hematological cancers. Based on the potential to address the intended patient population with the CDK9 inhibitor which potently inhibits MCL-1, we made a decision to prioritize our CDK9 inhibitor, PRT2527, over PRT1419.

In July 2022, we received IND clearance for PRT3645, a brain and tissue penetrant molecule that potently targets CDK4/6 with a biased selectivity for CDK4. A Phase 1 multi-dose escalation clinical trial of PRT3645 is underway and we intend to reach a biologically active dose confirmation. At the recent AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics, we presented data, showing that treatment with PRT3645 was associated with a substantial decrease in pRb and Ki67 expression, indicating a high level of target engagement at the doses evaluated. Also, PRT3645 was generally well tolerated in the initial three dose cohorts of patients with no clinically meaningful gastrointestinal, hematologic or neurological events reported to date, leveraging its enhanced selectivity profile. We intend to complete the dose escalation portion of the Phase 1 clinical trial of PRT3645 this year and following its completion to explore continued clinical development with external partners.

We were incorporated in February 2016 under the laws of the State of Delaware. Since inception, we have devoted substantially all of our resources to developing product and technology rights, conducting research and development, organizing and staffing our company, business planning and raising capital. We have incurred recurring losses, the majority of which are attributable to research and development activities, and negative cash flows from operations. We have funded our operations primarily through the sale of convertible preferred stock, common stock and pre-funded warrants. Our net loss was $88.8 million and $86.8 million for the nine months ended September 30, 2023 and 2022, respectively. As of September 30, 2023, we had an accumulated deficit of $423.3 million. Our primary use of cash is to fund operating expenses, which consist primarily of research and development expenditures, and to a lesser extent, general and administrative expenditures. Our ability to generate product revenue sufficient to achieve profitability will depend heavily on the successful development and eventual commercialization of one or more of our current or future product

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candidates. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we advance our product candidates through all stages of development and clinical trials and, ultimately, seek regulatory approval. In addition, if we obtain marketing approval for any of our product candidates, we expect to incur significant commercialization expenses related to product manufacturing, marketing, sales and distribution. Furthermore, we expect to incur additional costs associated with operating as a public company, including significant legal, accounting, investor relations and other expenses that we did not incur as a private company. Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical trials and our expenditures on other research and development activities.

We will need to raise substantial additional capital to support our continuing operations and pursue our growth strategy. Until such time as we can generate significant revenue from product sales, if ever, we plan to finance our operations through the sale of equity, debt financings or other capital sources, which may include collaborations with other companies or other strategic transactions. There are no assurances that we will be successful in obtaining an adequate level of financing as and when needed to finance our operations on terms acceptable to us or at all. Any failure to raise capital as and when needed could have a negative impact on our financial condition and on our ability to pursue our business plans and strategies. If we are unable to secure adequate additional funding, we may have to significantly delay, scale back or discontinue the development and commercialization of one or more product candidates or delay our pursuit of potential in-licenses or acquisitions.

As of September 30, 2023, we had $230.5 million in cash, cash equivalents, and marketable securities.

Components of Results of Operations

Revenue

To-date, we have not recognized any revenue from any sources, including from product sales, and we do not expect to generate any revenue from the sale of products in the foreseeable future. If our development efforts for our product candidates are successful and result in regulatory approval, or license agreements with third parties, we may generate revenue in the future from product sales. However, there can be no assurance as to when we will generate such revenue, if at all.

Operating Expenses

Research and Development Expenses

Research and development expenses consist primarily of costs incurred in connection with the discovery and development of our product candidates. We expense research and development costs as incurred, including:

•expenses incurred to conduct the necessary discovery-stage laboratory work, preclinical studies and clinical trials required to obtain regulatory approval;

•personnel expenses, including salaries, benefits and stock-based compensation expense for our employees engaged in research and development functions;

•costs of funding research performed by third parties, including pursuant to agreements with clinical research organizations, or CROs, that conduct our clinical trials, as well as investigative sites, consultants and CROs that conduct our preclinical and nonclinical studies;

•expenses incurred under agreements with contract manufacturing organizations, or CMOs, including manufacturing scale-up expenses and the cost of acquiring and manufacturing preclinical study and clinical trial materials;

•fees paid to consultants who assist with research and development activities;

•expenses related to regulatory activities, including filing fees paid to regulatory agencies; and

•allocated expenses for facility costs, including rent, utilities, depreciation and maintenance.

We track outsourced development costs and other external research and development costs to specific product candidates on a program-by-program basis, fees paid to CROs, CMOs and research laboratories in connection with our preclinical development, process development, manufacturing and clinical development activities. However, we do not track our internal research and development expenses on a program-by-program basis as they primarily relate to compensation, early research and other costs which are deployed across multiple projects under development.

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Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect our research and development expenses to increase significantly over the next several years as we increase personnel costs, including stock-based compensation, conduct our clinical trials, including later-stage clinical trials, for current and future product candidates and prepare regulatory filings for our product candidates.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel expenses, including salaries, benefits and stock-based compensation expense, for employees and consultants in executive, finance and accounting, legal, operations support, information technology and human resource functions. General and administrative expense also includes corporate facility costs not otherwise included in research and development expense, including rent, utilities, depreciation and maintenance, as well as legal fees related to intellectual property and corporate matters and fees for accounting and consulting services.

We expect that our general and administrative expense will increase in the future to support our continued research and development activities and potential commercialization efforts, and as a result of increased costs associated with operating as a public company. These increases will likely include increased costs related to the hiring of additional personnel and fees to outside consultants, legal support and accountants, among other expenses. The costs associated with being a public company include expenses related to services associated with maintaining compliance with the requirements of Nasdaq and the Securities and Exchange Commission, or SEC, insurance and investor relations costs. If any of our current or future product candidates obtains U.S. regulatory approval, we expect that we would incur significantly increased expenses associated with building a sales and marketing team.

Other Income, Net

Other income, net consists primarily of interest earned on our cash equivalents and marketable securities and grant income received from the State of Delaware. We anticipate re-applying for grants from the State of Delaware from time to time as long as we maintain qualifying headcount levels in the State of Delaware.

Income Taxes

Since our inception, we have not recorded any income tax benefits for the net operating losses, or NOLs, we have incurred or for our research and development tax credits, as we believe, based upon the weight of available evidence, that it is more likely than not that all of our NOLs and tax credits will not be realized.

Results of Operations

Comparison of the Three Months Ended September 30, 2023 and 2022

The following table sets forth our results of operations.

	Three months ended September 30,						Change
(in thousands)	2023			2022
Operating expenses:
Research and development	$	26,261		$	22,889		$	3,372
General and administrative		7,124			7,517			(393	)
Total operating expenses		33,385			30,406			2,979
Loss from operations		(33,385	)		(30,406	)		(2,979	)
Other income, net		2,777			448			2,329
Net loss	$	(30,608	)	$	(29,958	)	$	(650	)

Research and Development Expenses

Research and development expenses increased from $22.9 million for the three months ended September 30, 2022 to $26.3 million for the three months ended September 30, 2023. Research and development expenses increased primarily due to the timing of our clinical research programs. Research and development expenses may fluctuate from period to period depending upon the stage of certain projects and the level of preclinical and clinical trial-related activities.

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Research and development expenses by program are summarized in the table below:

	Three months ended September 30,
(in thousands)	2023			2022
PRT3789	$	2,684		$	—
PRT2527		2,181			611
PRT1419 (Oral and IV)		1,409			1,396
PRT3645		1,492			—
PRMT5 (PRT543 and PRT811)		(223	)		3,732
Discovery programs		5,481			6,227
Internal costs, including personnel related		13,237			10,923
	$	26,261		$	22,889

General and Administrative Expenses

General and administrative expenses decreased from $7.5 million for the three months ended September 30, 2022 to $7.1 million for three months ended September 30, 2023. General and administrative expenses decreased primarily due to our continued careful management of general and administrative expenses.

Other Income, net

Other income, net increased from $0.4 million for the three months ended September 30, 2022, to $2.8 million for the three months ended September 30, 2023 primarily due to interest earned on the investment of our cash balance.

Comparison of the Nine Months Ended September 30, 2023 and 2022

The following table sets forth our results of operations.

	Nine months ended September 30,						Change
(in thousands)	2023			2022
Operating expenses:
Research and development	$	73,061		$	67,020		$	6,041
General and administrative		21,837			23,135			(1,298	)
Total operating expenses		94,898			90,155			4,743
Loss from operations		(94,898	)		(90,155	)		(4,743	)
Other income, net		6,141			3,358			2,783
Net loss	$	(88,757	)	$	(86,797	)	$	(1,960	)

Research and Development Expenses

Research and development expenses increased from $67.0 million for the nine months ended September 30, 2022 to $73.1 million for the nine months ended September 30, 2023. Research and development expenses increased primarily due to the timing of our clinical research programs. Research and development expenses may fluctuate from period to period depending upon the stage of certain projects and the level of preclinical and clinical trial-related activities.

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Research and development expenses by program are summarized in the table below:

	Nine months ended September 30,
(in thousands)	2023			2022
PRT3789	$	6,151		$	—
PRT2527		4,983			2,312
PRT1419 (Oral and IV)		5,570			5,872
PRT3645		3,938			—
PRMT5 (PRT543 and PRT811)		(165	)		9,787
Discovery programs		14,124			17,068
Internal costs, including personnel related		38,460			31,981
	$	73,061		$	67,020

General and Administrative Expenses

General and administrative expenses decreased from $23.1 million for the nine months ended September 30, 2022 to $21.8 million for the nine months ended September 30, 2023. General and administrative expenses decreased primarily due to our continued careful management of general and administrative expenses.

Other Income, net

Other income, net increased from $3.4 million for the nine months ended September 30, 2022, to $6.1 million for the nine months ended September 30, 2023 primarily due to interest earned on the investment of our cash balance.

Liquidity and Capital Resources

Overview

Since our inception, we have not recognized any revenue and have incurred operating losses and negative cash flows from our operations. We have not yet commercialized any product and we do not expect to generate revenue from sales of any products for several years, if at all. Since our inception, we have funded our operations through the sale of convertible preferred stock, common stock, and pre-funded warrants. As of September 30, 2023, we had $230.5 million in cash, cash equivalents and marketable securities and had an accumulated deficit of $423.3 million.

During the second quarter of 2023, we sold 6,761,200 shares of common stock which comprised of (i) 5,312,978 shares of voting common stock and (ii) 1,448,222 shares of non-voting common stock at a price of $5.75 per share and to certain investors in lieu of common stock, we sold pre-funded warrants to purchase 12,895,256 shares of voting common stock at a price of $5.7499 per pre-funded warrant, resulting in gross proceeds of $113.0 million. We incurred offering costs of $2.6 million, of which $0.3 million were previously paid and deferred, which resulted in net proceeds of $110.4 million. The purchase price per share of each pre-funded warrant represents the per share offering price for the common stock, minus the $0.0001 per share exercise price of such pre-funded warrant. Of the voting common stock sold, 2,264,456 were purchased by our underwriters in connection with a 30-day option at a price of $5.75 per share.

Funding Requirements

Our primary use of cash is to fund operating expenses, primarily research and development expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable, accrued expenses and prepaid expenses.

Because of the numerous risks and uncertainties associated with research, development and commercialization of pharmaceutical products, we are unable to estimate the exact amount of our operating capital requirements. Our future funding requirements will depend on many factors, including, but not limited to:

•the scope, timing, progress and results of discovery, preclinical development, laboratory testing and clinical trials for our product candidates;

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•the costs of manufacturing our product candidates for clinical trials and in preparation for marketing approval and commercialization;

•the extent to which we enter into collaborations or other arrangements with additional third parties in order to further develop our product candidates;

•the costs of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending intellectual property-related claims;

•the costs and fees associated with the discovery, acquisition or in-license of additional product candidates or technologies;

•expenses needed to attract and retain skilled personnel;

•costs associated with being a public company;

•the costs required to scale up our clinical, regulatory and manufacturing capabilities;

•the costs of future commercialization activities, if any, including establishing sales, marketing, manufacturing and distribution capabilities, for any of our product candidates for which we receive marketing approval; and

•revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval.

We will need additional funds to meet operational needs and capital requirements for clinical trials, other research and development expenditures, and business development activities. We currently have no credit facility or committed sources of capital. Because of the numerous risks and uncertainties associated with the development and commercialization of our product candidates, we are unable to estimate the amounts of increased capital outlays and operating expenditures associated with our current and anticipated clinical studies.

Until such time, if ever, as we can generate substantial product revenue, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, ownership interests will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of common stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures or declaring dividends. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, limit, reduce or terminate our research, product development or future commercialization efforts, or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Cash Flows

The following table shows a summary of our cash flows for the periods indicated:

	Nine months ended September 30,
(in thousands)	2023			2022
Net cash used in operating activities	$	(83,485	)	$	(60,802	)
Net cash (used in) provided by investing activities		(42,382	)		80,336
Net cash provided by financing activities		111,158			660
Net (decrease) increase in cash, cash equivalents and restricted cash	$	(14,709	)	$	20,194

Operating Activities

During the nine months ended September 30, 2023, we used $83.5 million of cash in operating activities. Cash used in operating activities reflected our net loss of $88.8 million and a $14.2 million net increase in our operating assets and liabilities, offset by noncash charges of $19.5 million, which primarily consisted of $19.7 million in stock-based compensation. The primary use of cash was to fund our operations related to the development of our product candidates.

During the nine months ended September 30, 2022, we used $60.8 million of cash in operating activities. Cash used in operating activities reflected our net loss of $86.8 million offset by a $1.7 million net decrease in our operating assets and liabilities and noncash

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charges of $24.3 million, which consisted of $19.3 million in stock-based compensation, $2.7 million in amortization of premiums and discounts on marketable securities, $1.3 million noncash lease expense, and $1.0 million in depreciation. The primary use of cash was to fund our operations related to the development of our product candidates.

Investing Activities

During the nine months ended September 30, 2023, net cash used in investing activities of $42.4 million consisted primarily of $162.2 million in purchases of marketable securities, partially offset by $122.3 million in proceeds from maturities of marketable securities. During the nine months ended September 30, 2022, net cash provided by investing activities of $80.3 million consisted primarily of $168.9 million in proceeds from maturities of marketable securities partially offset by $86.0 million used for purchases of marketable securities.

Financing Activities

During the nine months ended September 30, 2023, net cash provided by financing activities was $111.2 million, which was primarily the result of $110.8 million in proceeds received from the sale of common stock and pre-funded warrants, net of issuance costs. For the nine months ended September 30, 2022 net cash provided by financing activities was $0.7 million from the exercise of stock options and purchases of stock under our Employee Stock Purchase Plan.

Critical Accounting Policies

During the three months ended September 30, 2023, there were no material changes to our critical accounting policies and estimates from those described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies and Estimates” in our 2022 Annual Report on Form 10-K.

JOBS Act Accounting Election

We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies.

We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

We will remain an emerging growth company until the earliest of (1) the last day of our first fiscal year (a) in which we have total annual gross revenues of at least $1.235 billion, or (b) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30th, (2) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period and (3) December 31, 2025.

Emerging Growth Company and Smaller Reporting Company Status

In April 2012, the JOBS Act was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of this exemption from complying with new or revised accounting standards and, therefore, will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

Subject to certain conditions, as an emerging growth company, we may rely on certain other exemptions and reduced reporting requirements, including without limitation, exemption to the requirements for providing an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act. We will remain an emerging growth company until the earlier to occur of (a) the last day of the fiscal year (i) following the fifth anniversary of the completion of our IPO, (ii) in which we have total annual gross revenues of at least $1.235 billion or (iii) in which we are deemed to be a “large

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accelerated filer” under the rules of the SEC, which means the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30th, or (b) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period.

We are also a “smaller reporting company,” meaning that the market value of our stock held by non-affiliates is less than $700.0 million and our annual revenue is less than $100.0 million during the most recently completed fiscal year. We may continue to be a smaller reporting company after if either (i) the market value of our stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedure

As of September 30, 2023, management, with the participation of our Principal Executive Officer and Principal Financial and Accounting Officer, performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Principal Executive Officer and the Principal Financial and Accounting Officer, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objective and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, our Principal Executive Officer and Principal Financial and Accounting Officer concluded that, as of September 30, 2023, the design and operation of our disclosure controls and procedures were effective at a reasonable assurance level.

Changes in Internal Control over Financial Reporting

Management determined that, as of September 30, 2023, there were no changes in our internal control over financial reporting that occurred during the fiscal quarter then ended that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II— OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may be involved in legal proceedings arising in the ordinary course of our business. In addition, we may receive letters alleging infringement of patents or other intellectual property rights. We are not presently a party to any legal proceedings that, in the opinion of management, would have a material adverse effect on our business, operating results, cash flows or financial conditions should such litigation be resolved unfavorably. Regardless of outcome, litigation can have an adverse impact on us due to defense and settlement costs, diversion of management resources, negative publicity and reputational harm, and other factors.

Item 1A. Risk Factors

Investing in our common stock involves a high degree of risk. Before making your decision to invest in shares of our common stock, you should carefully consider the risks and uncertainties described under Part I, Item 1A, “Risk Factors” in our 2022 Annual Report on Form 10-K. The following risk factors supplement and, to the extent inconsistent, supersede the risk factors disclosed in Part I, Item 1A, “Risk Factors” in our 2022 Annual Report on Form 10-K. You should consider carefully the risks and uncertainties described therein, together with all of the other information in this Quarterly Report on Form 10-Q, including Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes, before deciding whether to purchase share of our common stock. Our business, results of operations, financial condition, and prospects could also be harmed by risks and uncertainties that are not presently known to us or that we currently believe are not material. If any of these risks actually occur, our business, results of operations, financial condition, and prospects could be materially and adversely affected. If that were to happen, the trading price of our common stock could decline, and you could lose all or part of your investment.

Disruptions at the FDA, the SEC and other government agencies caused by funding shortages or government shutdowns could hinder their ability to hire and retain key leadership and other personnel, prevent new products and services from being developed or commercialized in a timely manner, or otherwise prevent those agencies from performing normal business functions, which could negatively impact our business.

The ability of the FDA to review and approve new products can be affected by a variety of factors, including government budget and funding levels, ability to hire and retain key personnel and accept the payment of user fees, and statutory, regulatory, and policy changes. Average review times at the agency have fluctuated in recent years as a result. In addition, government funding of the SEC and other government agencies on which our operations may rely is subject to the impacts of political events, which are inherently fluid and unpredictable.

Disruptions at the FDA and other agencies may slow the time necessary for new drugs to be reviewed and/or approved by necessary government agencies, which could adversely affect our business. For example, over the last several years, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA and the SEC, have had to furlough critical FDA, SEC and other government employees and stop critical activities. If a prolonged government shutdown occurs, it could significantly impact the ability of the FDA and the SEC to timely review and process our submissions, which could have a material adverse effect on our business.

Unstable market, economic and political conditions may have serious adverse consequences on our business, financial condition, results of operations and prospects.

Our business, financial condition, results of operations and prospects could be adversely affected by general conditions in the global economy and in the global financial markets. A severe or prolonged economic downturn could result in a variety of risks to our business, including our ability to raise additional capital when needed on acceptable terms, if at all. A weak or declining economy could also strain our suppliers, service providers, manufacturers or other partners and there is a risk that one or more would not survive or be able to meet their commitments to us under such circumstances. As widely reported, global credit and financial markets have experienced volatility and disruptions in the past several years and especially in 2020, 2021 and 2022 due to the impacts of the COVID-19 pandemic, and, more recently, the ongoing war in Ukraine and the global impact of restrictions and sanctions imposed on Russia, including severely diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. Moreover, the global impacts of the war in Israel are still unknown. To the extent the wars in Ukraine or Israel may adversely affect our business, it may also have the effect of heightening many of the other risks described herein. Such risks include, but are not limited to, adverse effects on macroeconomic conditions, including inflation; disruptions to our global technology infrastructure, including through cyberattack, ransom attack, or cyber-intrusion; adverse changes in international trade policies and relations; disruptions in global supply chains; and constraints, volatility, or disruption in the capital markets, any of which could negatively affect our business and financial condition. There can be no

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assurances that further deterioration in credit and financial markets and confidence in economic conditions will not occur. For example, U.S. debt ceiling and budget deficit concerns have increased the possibility of additional credit-rating downgrades and economic slowdowns, or a recession in the United States. Although U.S. lawmakers passed legislation to raise the federal debt ceiling on multiple occasions, including a suspension of the federal debt ceiling in June 2023, ratings agencies have lowered or threatened to lower the long-term sovereign credit rating on the United States. The impact of this or any further downgrades to the U.S. government’s sovereign credit rating or its perceived creditworthiness could adversely affect the U.S. and global financial markets and economic conditions. Any of the foregoing could harm our business and we cannot anticipate all of the ways in which the current economic climate and financial market conditions could adversely impact our business.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities.

Unregistered Sales of Equity Securities

None.

Use of Proceeds

In the third quarter of 2020, we completed our IPO and sold 9,573,750 shares of common stock at an IPO price of $19.00 per share. The offer and sale of all of the shares in the IPO were registered under the Securities Act pursuant to registration statements on Form S-1 (File No. 333-248628), which was declared effective by the SEC on September 24, 2020, as supplemented by a registration statement on Form S-1 filed pursuant to Rule 462(b) (File No. 333-248628). We received net proceeds from the IPO of approximately $166.6 million, after deducting underwriting discounts and commissions of approximately $12.7 million and offering expenses of approximately $2.5 million. Morgan Stanley, Goldman Sachs & Co. LLC and BofA Securities acted as joint book-running managers of the offering and as representatives of the underwriters. None of the expenses associated with the IPO were paid to directors, officers, persons owning 10% or more of any class of equity securities, or to their associates, or to our affiliates.

There has been no material change in the planned use of proceeds from our IPO as described in the prospectus filed with the SEC pursuant to Rule 424(b)(4) under the Securities Act on September 25, 2020.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

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Item 6. Exhibits.

Furnish the exhibits required by Item 601 of Regulation S-K (§ 229.601 of this chapter).

Exhibit Number	Description	Form	File No.	Exhibit No.	Exhibit Filing Date	Filed/Furnished Herewith
31.1	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					X
31.2	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.					X
32.1*	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					X
32.2*	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.					X
101.INS	Inline XBRL Instance Document					X
101.SCH	Inline XBRL Taxonomy Extension Schema Document.					X
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.					X
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.					X
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.					X
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.					X
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)					X

*The certifications furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Form 10-Q and are not deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall they be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Prelude Therapeutics Incorporated
Date: November 1, 2023	By:	/s/ Krishna Vaddi
		Krishna Vaddi, PhD
		Chief Executive Officer
		(Principal Executive Officer)
Date: November 1, 2023	By:	/s/ Laurent Chardonnet
		Laurent Chardonnet
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Krishna Vaddi, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Prelude Therapeutics Incorporated;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 1, 2023	By:	/s/ Krishna Vaddi
		Krishna Vaddi, PhD
		Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Laurent Chardonnet, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Prelude Therapeutics Incorporated;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 1, 2023	By:	/s/ Laurent Chardonnet
		Laurent Chardonnet
		Chief Financial Officer (Principal Accounting and Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Krishna Vaddi, Chief Executive Officer of Prelude Therapeutics Incorporated (the “Company”), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended September 30, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 1, 2023	By:	/s/ Krishna Vaddi
		Krishna Vaddi, PhD
		Chief Executive Officer (Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Laurent Chardonnet, Chief Financial Officer of Prelude Therapeutics Incorporated (the “Company”), do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

(1)the Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended September 30, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: November 1, 2023	By:	/s/ Laurent Chardonnet
		Laurent Chardonnet
		Chief Financial Officer (Principal Accounting and Financial Officer)

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2023	Oct. 27, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Trading Symbol	PRLD
Entity Registrant Name	PRELUDE THERAPEUTICS INC
Entity Central Index Key	0001678660
Entity Current Reporting Status	Yes
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Common Stock, Shares Outstanding		54,825,982
Entity Shell Company	false
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes
Entity File Number	001-39527
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	81-1384762
Entity Address, Address Line One	200 Powder Mill Road
Entity Address, City or Town	Wilmington
Entity Address, State or Province	DE
Entity Address, Postal Zip Code	19803
City Area Code	302
Local Phone Number	467-1280
Document Quarterly Report	true
Document Transition Report	false

XML

BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 15,896	$ 30,605
Marketable securities	214,610	171,123
Prepaid expenses and other current assets	4,410	2,652
Total current assets	234,916	204,380
Restricted cash	4,044	4,044
Property and equipment, net	6,618	4,908
Right-of-use asset	464	1,792
Prepaid expenses and other non-current assets	12,469	5,376
Total assets	258,511	220,500
Current liabilities:
Accounts payable	5,170	6,777
Accrued expenses and other current liabilities	11,248	13,093
Operating lease liability	475	1,832
Total current liabilities	16,893	21,702
Other liabilities	3,361	3,361
Total liabilities	20,254	25,063
Commitments (Note 8)
Stockholders’ equity:
Additional paid-in capital	662,172	531,682
Accumulated other comprehensive (loss)	(605)	(1,692)
Accumulated deficit	(423,315)	(334,558)
Total stockholders’ equity	238,257	195,437
Total liabilities and stockholders’ equity	258,511	220,500
Voting Common Stock
Stockholders’ equity:
Common stock	4	4
Non-voting Common Stock
Stockholders’ equity:
Common stock	$ 1	$ 1

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BALANCE SHEETS (PARENTHETICAL) (UNAUDITED) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Voting Common Stock
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	487,149,741	487,149,741
Common stock, shares, issued	41,965,472	36,496,994
Common stock, shares, outstanding	41,965,472	36,496,994
Non-voting Common Stock
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	12,850,259	12,850,259
Common stock, shares, issued	12,850,259	11,402,037
Common stock, shares, outstanding	12,850,259	11,402,037

XML

STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Operating expenses:
Research and development	$ 26,261	$ 22,889	$ 73,061	$ 67,020
General and administrative	7,124	7,517	21,837	23,135
Total operating expenses	33,385	30,406	94,898	90,155
Loss from operations	(33,385)	(30,406)	(94,898)	(90,155)
Other income, net	2,777	448	6,141	3,358
Net loss	$ (30,608)	$ (29,958)	$ (88,757)	$ (86,797)
Per share information:
Net loss per share of common stock, basic	$ (0.45)	$ (0.63)	$ (1.55)	$ (1.84)
Net loss per share of common stock, diluted	$ (0.45)	$ (0.63)	$ (1.55)	$ (1.84)
Weighted average common shares outstanding, basic	67,639,993	47,449,811	57,278,795	47,265,712
Weighted average common shares outstanding, diluted	67,639,993	47,449,811	57,278,795	47,265,712
Comprehensive loss
Net loss	$ (30,608)	$ (29,958)	$ (88,757)	$ (86,797)
Unrealized (loss) gain on marketable securities, net of tax	106	(69)	1,087	(1,652)
Comprehensive loss	$ (30,502)	$ (30,027)	$ (87,670)	$ (88,449)

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STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands	Total	Common Stock Voting Common Stock	Common Stock Non-voting Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit
Beginning balance at Dec. 31, 2021	$ 285,897	$ 4	$ 1	$ 505,723	$ (711)	$ (219,120)
Beginning balance (shares) at Dec. 31, 2021		36,200,299	11,402,037
Issuance of common stock upon exercise of stock options & vesting of RSU's	153			153
Issuance of common stock upon exercise of stock options (shares)		93,032
Unrealized gain (loss) on marketable securities, net of tax	(1,602)				(1,602)
Stock-based compensation expense	6,829			6,829
Net loss	(29,465)					(29,465)
Ending balance at Mar. 31, 2022	261,812	$ 4	$ 1	512,705	(2,313)	(248,585)
Ending balance (shares) at Mar. 31, 2022		36,293,331	11,402,037
Beginning balance at Dec. 31, 2021	285,897	$ 4	$ 1	505,723	(711)	(219,120)
Beginning balance (shares) at Dec. 31, 2021		36,200,299	11,402,037
Net loss	(86,797)
Ending balance at Sep. 30, 2022	217,407	$ 4	$ 1	525,682	(2,363)	(305,917)
Ending balance (shares) at Sep. 30, 2022		36,444,776	11,402,037
Beginning balance at Mar. 31, 2022	261,812	$ 4	$ 1	512,705	(2,313)	(248,585)
Beginning balance (shares) at Mar. 31, 2022		36,293,331	11,402,037
Issuance of common stock upon exercise of stock options & vesting of RSU's	59			59
Issuance of common stock upon exercise of stock options (shares)		31,253
Issuance of common stock under ESPP, (shares)		68,080
Issuance of common stock under ESPP	300			300
Unrealized gain (loss) on marketable securities, net of tax	19				19
Stock-based compensation expense	6,028			6,028
Stock-based compensation expense (shares)		(23,416)
Net loss	(27,374)					(27,374)
Ending balance at Jun. 30, 2022	240,844	$ 4	$ 1	519,092	(2,294)	(275,959)
Ending balance (shares) at Jun. 30, 2022		36,369,248	11,402,037
Issuance of common stock upon exercise of stock options & vesting of RSU's	148			148
Issuance of common stock upon exercise of stock options (shares)		75,528
Unrealized gain (loss) on marketable securities, net of tax	(69)				(69)
Stock-based compensation expense	6,442			6,442
Net loss	(29,958)					(29,958)
Ending balance at Sep. 30, 2022	217,407	$ 4	$ 1	525,682	(2,363)	(305,917)
Ending balance (shares) at Sep. 30, 2022		36,444,776	11,402,037
Beginning balance at Dec. 31, 2022	195,437	$ 4	$ 1	531,682	(1,692)	(334,558)
Beginning balance (shares) at Dec. 31, 2022		36,496,994	11,402,037
Issuance of common stock upon exercise of stock options & vesting of RSUs	28			28
Issuance of common stock upon exercise of stock options & vesting of RSUs, (shares)		17,224
Unrealized gain (loss) on marketable securities, net of tax	1,294				1,294
Stock-based compensation expense	6,256			6,256
Net loss	(27,718)					(27,718)
Ending balance at Mar. 31, 2023	175,297	$ 4	$ 1	537,966	(398)	(362,276)
Ending balance (shares) at Mar. 31, 2023		36,514,218	11,402,037
Beginning balance at Dec. 31, 2022	$ 195,437	$ 4	$ 1	531,682	(1,692)	(334,558)
Beginning balance (shares) at Dec. 31, 2022		36,496,994	11,402,037
Issuance of common stock and prefunded warrants, net of issuance costs of $2.6 million (shares)		2,264,456
Issuance of common stock upon exercise of stock options (shares)	17,685
Net loss	$ (88,757)
Ending balance at Sep. 30, 2023	238,257	$ 4	$ 1	662,172	(605)	(423,315)
Ending balance (shares) at Sep. 30, 2023		41,965,472	12,850,259
Beginning balance at Mar. 31, 2023	175,297	$ 4	$ 1	537,966	(398)	(362,276)
Beginning balance (shares) at Mar. 31, 2023		36,514,218	11,402,037
Issuance of common stock upon exercise of stock options & vesting of RSUs	3			3
Issuance of common stock upon exercise of stock options & vesting of RSUs, (shares)		40,461
Issuance of common stock and prefunded warrants, net of issuance costs of $2.6 million (shares)		5,312,978	1,448,222
Issuance of common stock and prefunded warrants, net of issuance costs of $2.6 million	110,423			110,423
Issuance of common stock under ESPP, (shares)		90,799
Issuance of common stock under ESPP	348			348
Unrealized gain (loss) on marketable securities, net of tax	(313)				(313)
Stock-based compensation expense	6,733			6,733
Net loss	(30,431)					(30,431)
Ending balance at Jun. 30, 2023	262,060	$ 4	$ 1	655,473	(711)	(392,707)
Ending balance (shares) at Jun. 30, 2023		41,958,456	12,850,259
Issuance of common stock upon vesting of RSU's, net of 3,609 shares withheld for employee taxes, (shares)		7,016
Issuance of common stock upon vesting of RSU's, net of 3,609 shares withheld for employee taxes	(16)			(16)
Unrealized gain (loss) on marketable securities, net of tax	106				106
Stock-based compensation expense	6,715			6,715
Net loss	(30,608)					(30,608)
Ending balance at Sep. 30, 2023	$ 238,257	$ 4	$ 1	$ 662,172	$ (605)	$ (423,315)
Ending balance (shares) at Sep. 30, 2023		41,965,472	12,850,259

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STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (PARENTHETICAL) - USD ($) $ in Millions	3 Months Ended
	Sep. 30, 2023	Jun. 30, 2023
Statement of Stockholders' Equity [Abstract]
Issuance costs		$ 2.6
Shares withheld for employee taxes	3,609

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STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows used in operating activities:
Net loss	$ (88,757)	$ (86,797)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	838	962
Noncash lease expense	1,328	1,281
Stock-based compensation	19,704	19,299
Amortization of premium and discount on marketable securities, net	(2,402)	2,770
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	(2,053)	(3,591)
Accounts payable	(1,805)	2,893
Accrued expenses and other liabilities	(1,873)	3,661
Long-term prepaid expenses and other long-term assets	(7,108)
Operating lease liabilities	(1,357)	(1,280)
Net cash used in operating activities	(83,485)	(60,802)
Cash flows (used in) provided by investing activities:
Purchases of marketable securities	(162,248)	(85,972)
Proceeds from maturities of marketable securities	122,250	168,934
Purchases of property and equipment	(2,384)	(2,626)
Net cash (used in) provided by investing activities	(42,382)	80,336
Cash flows provided by financing activities:
Proceeds from issuance of common stock and pre-funded warrants, net of offering costs	110,795
Proceeds from the issuance of common stock under ESPP	348	300
Proceeds from the issuance of common stock in connection with the exercise of stock options	31	360
Payment of withholding taxes related to stock-based compensation to employees	(16)
Net cash provided by financing activities	111,158	660
Net (decrease) increase in cash, cash equivalents and restricted cash	(14,709)	20,194
Cash, cash equivalents, and restricted cash at beginning of period	34,649	35,872
Cash, cash equivalents, and restricted cash at end of period	19,940	56,066
Supplemental disclosures:
Operating lease right-of-use assets obtained in exchange for operating lease liabilities		928
Property and equipment in accounts payable	254	323
Offering costs in accrued expenses and other current liabilities	28
Offering costs in accounts payable	34
Unrealized gain(loss) on marketable securities	$ 1,087	$ (1,652)

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Background

9 Months Ended

Sep. 30, 2023

Background [Abstract]

Background

1. Background

Prelude Therapeutics Incorporated (the “Company”) is a clinical-stage fully integrated oncology company built on a foundation of drug discovery excellence to deliver novel precision cancer medicines to underserved patients. Since beginning operations in 2016, the Company has devoted substantially all its efforts to research and development, conducting preclinical and clinical studies, recruiting management and technical staff, administration, and raising capital.

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Risks and Liquidity

9 Months Ended

Sep. 30, 2023

Risks And Liquidity [Abstract]

Risks and Liquidity

2. Risks and liquidity

The Company is subject to a number of risks common to early-stage companies in the biotechnology industry. Principal among these risks are the uncertainties in the development process, development of the same or similar technological innovations by competitors, protection of proprietary technology, dependence on key personnel, compliance with government regulations and approval requirements, and the need to obtain additional financing to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval, prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel infrastructure, and extensive compliance-reporting capabilities. There can be no assurance that the Company’s research and development will be successfully completed, that adequate protection for the Company’s technology will be obtained, that any products developed will obtain necessary government regulatory approval, or that any approved products will be commercially viable. The Company operates in an environment of rapid change in technology and substantial competition from pharmaceutical and biotechnology companies. In addition, the Company is dependent upon the services of its employees, consultants and contractors.

Since its inception, the Company has incurred operating losses and had an accumulated deficit of $423.3 million at September 30, 2023. The Company has no revenue to-date and devotes its efforts to research and development. The Company anticipates incurring additional losses until such time, if ever, that it can generate significant sales of its product candidates currently in development.

The Company believes that its cash, cash equivalents, and marketable securities as of September 30, 2023 will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next twelve months.

To fund its operating expenses and capital expenditure requirements after that date, the Company plans to seek additional funding through public or private equity offerings, debt financings, collaborations, strategic alliances and licensing arrangements. The Company may not be able to obtain financing on acceptable terms, or at all, and the Company may not be able to enter into strategic alliances or other arrangements on favorable terms, or at all. The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders. If the Company is unable to obtain funding, the Company could be required to delay, reduce or eliminate research and development programs, product portfolio expansion or future commercialization efforts, which could adversely affect its business prospects.

Inflation has the potential to adversely affect the Company's liquidity, business, financial condition and results of operations by increasing the Company's overall cost structure. The existence of inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, supply shortages, increased costs of labor, components, manufacturing and shipping, as well as weakening exchange rates and other similar effects. As a result of inflation, the Company has experienced, and may continue to experience cost increases. Although the Company may take measures to mitigate the effects of inflation, if these measures are not effective, the Company's business, financial condition, results of operations and liquidity could be materially adversely affected. Even if such measures are effective, there could be a difference between the timing of when these beneficial actions impact the Company's results of operations and when the costs of inflation are incurred.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

3. Summary of significant accounting policies

The summary of significant accounting policies included in the Company’s financial statements for the year ended December 31, 2022 can be found in “Note 3. Summary of significant accounting policies” of the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on March 15, 2023. Those policies have not materially changed.

Basis of presentation

The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. The accompanying unaudited interim financial statements should be read in conjunction with the annual audited financial statements and related notes as of and for the year ended December 31, 2022 found in the Company's Annual Report on Form 10-K filed with the SEC on March 15, 2023. Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

Use of estimates

The preparation of the unaudited interim financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the unaudited interim financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Estimates and assumptions are periodically reviewed and the effects of the revisions are reflected in the accompanying unaudited interim financial statements in the period they are determined to be necessary. The most significant estimate relates to accrued clinical trial expenses.

Income taxes

Based upon the historical and anticipated future losses, management has determined that the deferred tax assets generated by net operating losses and research and development credits do not meet the more likely than not threshold for realizability. Accordingly, a full valuation allowance has been recorded against the Company’s net deferred tax assets as of September 30, 2023 and December 31, 2022.

Cash, Cash Equivalents and Restricted cash

The Company’s cash equivalents include short-term highly liquid investments with an original maturity of 90 days or less when purchased and are carried at fair value in the accompanying balance sheets.

Restricted cash consists of a letter of credit with Silicon Valley Bank, a division of First Citizens Bank, for the benefit of the landlord in connection with the Company’s Chestnut Run Lease. See Note 8 for further details.

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the balance sheet that total to the amounts shown in the statement of cash flows:

(in thousands)	September 30, 2023		December 31, 2022
Cash and cash equivalents	$	15,896	$	30,605
Restricted cash		4,044		4,044
Total cash, cash equivalents, and restricted cash shown in statement of cash flows	$	19,940	$	34,649

Marketable Securities

The Company’s marketable securities consist of investments in corporate debt securities, United States (“U.S.”) government debt securities, and agency securities that are classified as available-for-sale. The securities are carried at fair value with the unrealized gains and losses, net of tax, included in accumulated other comprehensive loss, a component of stockholders’ equity. Realized gains and losses as well as credit losses, if any, on marketable securities are included in the Company’s statements of operations. The Company classifies marketable securities that are available for use in current operations as current assets on the balance sheets.

Net Loss Per Share

Basic net loss per share of common stock is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during each period, including pre-funded warrants to purchase shares of common stock that were issued in a financing transaction in May 2023 (Note 7). The weighted-average number of shares of common stock outstanding used in the basic net loss per share calculation does not include unvested restricted stock awards as these instruments are considered contingently issuable shares until they vest. Diluted net loss per share of common stock includes the effect, if any, from the potential exercise of securities, such as stock options, and the effect from unvested restricted stock awards and restricted stock units which would result in the issuance of incremental shares of common stock. For diluted net loss per share, the weighted-average number of shares of common stock is the same for basic net loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation as the impact is anti-dilutive. The Company’s unvested restricted stock awards entitle the holder to participate in dividends and earnings of the Company, and, if the Company were to recognize net income, it would have to use the two-class method to calculate earnings per share. The two-class method is not applicable during periods with a net loss, as the holders of the unvested restricted stock awards have no obligation to fund losses.

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive:

	September 30,
	2023		2022
Unvested restricted stock awards		54,026		271,965
Unvested restricted stock units		114,375		170,000
Stock options		12,134,205		9,197,528
Employee stock purchase plan		74,248		46,560
		12,376,854		9,686,053

Amounts in the above table reflect the common stock equivalents.

Recently Issued Accounting Pronouncements

Emerging Growth Company Status

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these unaudited interim financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

Recently Adopted Accounting Pronouncements

In August 2020, the FASB issued ASU Update No. 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06) (“ASU 2020-06”). ASU 2020-06 eliminated the beneficial conversion and cash conversion accounting models in ASC 470-20 which required separate accounting for embedded conversion features and simplified the settlement assessment to determine whether an instrument qualifies for equity classification. The Company early adopted the new standard on January 1, 2023.

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Cash, Cash Equivalents and Marketable Securities

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Cash, Cash Equivalents and Marketable Securities

4. Cash, Cash Equivalents and Marketable Securities

The following provides detail of the Company's cash, cash equivalents, and marketable securities.

(in thousands)	Amortized Cost		Gross unrealized gain		Gross unrealized loss			Fair Value
September 30, 2023
Cash equivalents:
Money Market Funds	$	9,963	$	—	$	—		$	9,963
Commercial Paper		4,981		—		(1	)		4,980
Total cash equivalents		14,944		—		(1	)		14,943
Marketable securities:
Agency securities		10,508		—		(50	)		10,458
Corporate debt securities		101,396		11		(275	)		101,132
U.S. government securities		103,310		—		(290	)		103,020
Total marketable securities		215,214		11		(615	)		214,610
Total financial assets	$	230,158	$	11	$	(616	)	$	229,553
December 31, 2022
Cash equivalents:
Money Market Funds	$	25,996	$	—	$	—		$	25,996
Marketable securities:
Corporate debt securities		163,208		7		(1,672	)		161,543
U.S. government securities		9,607		—		(27	)		9,580
Total marketable securities		172,815		7		(1,699	)		171,123
Total financial assets	$	198,811	$	7	$	(1,699	)	$	197,119

The Company’s marketable securities generally have contractual maturity dates of 24 months or less. As of September 30, 2023, the Company had 49 securities with a total fair market value of $193.4 million in an unrealized loss position. The Company believes that any unrealized losses associated with the decline in value of its securities is temporary, is primarily related to market factors and believes that it is more likely than not that it will be able to hold its debt securities to maturity. Therefore, the Company anticipates a full recovery of the amortized cost basis of its debt securities at maturity and an allowance for credit losses was not recognized.

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Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

5. Fair Value of Financial Instruments

Fair value is the price that could be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value determination in accordance with applicable accounting guidance requires that a number of significant judgments be made. Additionally, fair value is used on a nonrecurring basis to evaluate assets for impairment or as required for disclosure purposes by applicable accounting guidance on disclosures about fair value of financial instruments. Depending on the nature of the assets and liabilities, various valuation techniques and assumptions are used when estimating fair value. The Company follows the provisions of ASC 820, Fair Value Measurement, for financial assets and liabilities measured on a recurring basis. The guidance requires fair value measurements be classified and disclosed in one of the following three categories:

•Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

•Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liabilities.

•Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity).

The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis:

	Fair value measurement at reporting date using
(in thousands)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
September 30, 2023
Assets
Cash equivalents:
Money Market Funds	$	9,963	$	—	$	—
Commercial Paper		—		4,980		—
Total cash equivalents		9,963		4,980		—
Marketable securities:
Agency securities		—		10,458		—
Corporate debt securities		—		101,132		—
U.S. government securities		—		103,020		—
Total marketable securities		—		214,610		—
Total financial assets	$	9,963	$	219,590	$	—
December 31, 2022
Assets
Cash equivalents:
Money Market Funds	$	25,996	$	—	$	—
Marketable securities:
Corporate debt securities		—		161,543		—
U.S. government securities		—		9,580		—
Total marketable securities		—		171,123		—
Total financial assets	$	25,996	$	171,123	$	—

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Accrued Expenses and Other Current Liabilities

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Accrued Expenses and Other Current Liabilities

6. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

(in thousands)	September 30, 2023		December 31, 2022
Compensation and related benefits	$	6,982	$	5,682
Research and development		3,447		6,887
Other		819		524
	$	11,248	$	13,093

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Common Stock

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Common Stock

7. Common Stock

The Company has two classes of common stock; “voting common stock” and “non-voting common stock.” The holders of the voting common stock are entitled to one vote for each share of voting common stock held at all meetings of stockholders. Except as otherwise required by law, the holders of non-voting common stock shall not be entitled to vote at any meetings of stockholders (or written actions in lieu of meetings) and the shares of non-voting common stock shall not be included in determining the number of shares voting or entitled to vote on any matter. Unless required by law, there shall be no cumulative voting. Any holder of non-voting common stock may elect to convert each share of non-voting common stock into one fully paid and non-assessable share of voting common stock at any time by providing written notice to the Company; provided that as a result of such conversion, such holder, together with its affiliates and any members of a Schedule 13(d) group with such holder, would not beneficially own in excess of 9.99% of the Company’s common stock immediately prior to and following such conversion, unless otherwise as expressly provided for in the Company’s restated certificate of incorporation. However, this ownership limitation may be increased (not to exceed 19.99%) or decreased to any other percentage designated by such holder of non-voting common stock upon 61 days’ notice to the Company.

Second quarter 2023 financing

During the second quarter of 2023, the Company sold 6,761,200 shares of its common stock which comprised of (i) 5,312,978 shares of its voting common stock and (ii) 1,448,222 shares of its non-voting common stock at a price of $5.75 per share and to certain investors in lieu of common stock, the Company sold pre-funded warrants to purchase 12,895,256 shares of voting common stock at a price of $5.7499 per pre-funded warrant, resulting in gross proceeds of $113.0 million. Offering costs of $2.6 million, of which $0.3 million were previously paid and deferred, were recorded to additional paid-in capital in the accompanying balance sheets, resulting in net proceeds of $110.4 million.

The purchase price per share of each pre-funded warrant represents the per share offering price for the common stock, minus the $0.0001 per share exercise price of such pre-funded warrant. As of September 30, 2023, no pre-funded warrants had been exercised. Of the voting common stock issued, 2,264,456 shares were purchased by the Company’s underwriters in connection with a 30-day option at a price of $5.75 per share.

The pre-funded warrants were classified as a component of permanent stockholders’ equity within additional paid-in capital and were recorded at the issuance date using a relative fair value allocation method. The pre-funded warrants are equity classified because they (i) are freestanding financial instruments that are legally detachable and separately exercisable from the equity instruments, (ii) are immediately exercisable, (iii) do not embody an obligation for the Company to repurchase its shares, (iv) permit the holders to receive a fixed number of shares of common stock upon exercise, (v) are indexed to the Company’s common stock and (vi) meet the equity classification criteria. In addition, such pre-funded warrants do not provide any guarantee of value or return.

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Commitments

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments

8. Commitments

Leases

The Company leases office and laboratory space in Wilmington, Delaware under a noncancelable lease (the “Lease”).

Future minimum annual lease payments under the Lease at September 30, 2023 are as follows:

(in thousands)
2023 (remaining)	$	482
Total undiscounted lease payments		482
Less imputed interest		(7	)
Current lease liability	$	475

In August 2022, the Company entered into an amendment (the “Lease Amendment”) to the lease agreement for office and lab space at Chestnut Run Plaza in Wilmington, Delaware (the “Chestnut Run Lease”). The Chestnut Run Lease has a commencement date of the earlier of (i) the Landlord Work Substantial Completion Date (as such term is defined in the Chestnut Run Lease), or (ii) the date the Company takes possession of the premises for the conduct of the Company’s business (the “Commencement Date”). The Chestnut Run Lease premises includes approximately 81,000 rentable square feet, located at Chestnut Run Plaza in Wilmington, Delaware (the "Premises"). Under the terms of the Chestnut Run Lease, the landlord has provided an allowance towards the cost of completing tenant improvements for the Premises and improvements resulting from both the landlord's build-out and the Company's improvements are the landlord's assets for accounting purposes. Costs incurred by the Company related to the tenant improvements in

excess of the landlord's allowance will be treated as prepaid rent and will increase the right-of-use asset once the accounting commencement date occurs. As of September 30, 2023, the Company recorded $12.2 million of prepaid rent. Upon the Commencement Date, which is expected to occur in the fourth quarter of 2023, the Company will recognize a right-of-use asset and operating lease liability in accordance with ASC 842, Leases. The Chestnut Run Lease has an initial term of 162 months with 3 five-year extension options and certain expansion rights. The estimated rent payments related to the Chestnut Run Lease are as follows:

(in thousands)
2023 (remaining)	$	—
2024		1,092
2025		2,746
2026		2,979
2027		3,054
2028		3,130
Thereafter		29,635

The Company paid a security deposit for the Chestnut Run Lease in the form of a letter of credit with Silicon Valley Bank, a division of First Citizens Bank, of $4.0 million, which is included in the balance sheet as restricted cash as of September 30, 2023. The security deposit may be reduced to $0.5 million over time in accordance with the terms of the Chestnut Run Lease.

In connection with the Company’s expansion of operations in the State of Delaware, the Company was approved for a grant from the State of Delaware in 2021 that will provide up to $5.5 million in reimbursements over three years for the development of lab space in addition to increasing jobs in Delaware to meet specific targeted levels through 2023. During the third quarter of 2022, the Company was approved for an additional grant from the State of Delaware for the development of lab space in the amount of $1.0 million. In 2022, the Company received cash of $3.4 million from the grants for the development of lab space. The Company has met the minimum requirements stated in the grant agreement in order to not be required to pay back any portion of the $3.4 million disbursed. The Company has deferred the recognition of these grant funds as they relate to capitalized costs and has classified them as long-term liabilities on the balance sheet. The Company will recognize the grant funds in other income as grant income over the useful life of the related assets. Additionally, if the Company leaves the State of Delaware within five years of the disbursement, the Company is required to return an amount equal to the amount of grant funds disbursed on a pro-rated basis.

Rent expense was $0.5 million for both the three months ended September 30, 2023 and 2022. Rent expense was $1.6 million for both the nine months ended September 30, 2023 and 2022.

Employment Agreements

The Company entered into employment agreements with key personnel providing for compensation and severance in certain circumstances, as defined in the respective employment agreements.

401(k) Defined Contribution Plan

The Company sponsors a 401(k) defined‑contribution plan covering all employees. Participants are permitted to contribute up to 100% of their eligible annual pretax compensation up to an established federal limit on aggregate participant contributions. The Company provides a match of a maximum amount of 3% of the participant’s compensation. For both the three months ended September 30, 2023 and 2022, the Company made matching contributions of $0.1 million. For the nine months ended September 30, 2023 and 2022, the Company made matching contributions of $0.5 million and $0.4 million, respectively.

Other Research and Development Arrangements

The Company enters into agreements with clinical research organizations ("CROs") to assist in the performance of research and development activities. Expenditures to CROs will represent a significant cost in clinical development for the Company.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation

9. Stock-Based Compensation

The Company has two equity incentive plans: the 2016 Equity Incentive Plan, as amended, and the 2020 Equity Incentive Plan. New awards can only be granted under the 2020 Equity Incentive Plan (the “Plan”) and as of September 30, 2023, 4,773,019 shares were available for future grants. The number of shares of the Company’s common stock that may be issued pursuant to rights granted under the Plan shall automatically increase on January 1st of each year and continuing for ten years beginning on January 1, 2021, in an amount equal to five percent of the total number of shares of the Company’s common stock outstanding on December 31st of the preceding calendar year, subject to the discretion of the board of directors or compensation committee to determine a lesser number of shares shall be added for such year. The Plan provides for the granting of common stock, incentive stock options, nonqualified stock options, restricted stock awards, restricted stock units and/or stock appreciation rights to employees, directors, and other persons, as determined by the Company’s board of directors. The Company’s stock options vest based on the terms in each award agreement, generally over four-year periods with 25% of options vesting after one year and then monthly thereafter, and have a term of ten years.

The Company measures stock-based awards at their grant-date fair value and records compensation expense on a straight-line basis over the vesting period of the awards. The Company recorded stock-based compensation expense in the following expense categories in its accompanying statements of operations:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Research and development	$	3,319	$	3,214	$	9,544	$	8,886
General and administrative		3,396		3,228		10,160		10,413
	$	6,715	$	6,442	$	19,704	$	19,299

Stock Options

The following table summarizes stock option activity for the periods indicated:

	Number of shares			Weighted average exercise price per share		Weighted average remaining contractual term (years)
Outstanding at January 1, 2023		9,390,930		$	12.08		8.31
Granted		3,091,898		$	6.82
Exercised		(17,685	)	$	1.77
Forfeited		(330,938	)	$	15.59
Outstanding at September 30, 2023		12,134,205		$	10.66		8.01
Exercisable at September 30, 2023		5,583,116		$	11.55		7.14

At September 30, 2023, the aggregate intrinsic value of outstanding options and exercisable options was $2.6 million and $2.4 million, respectively.

The following table summarizes information about stock options outstanding at September 30, 2023 under the Plan:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$0.31 - $4.88		3,039,468		6.98	$	2.80		2,303,649	$	2.38
$4.89 - $7.50		4,053,164		9.25		6.58		242,049		6.02
$7.51 - $13.04		3,204,778		7.54		11.86		1,968,540		12.22
$13.05 - $88.98		1,836,795		7.81		30.55		1,068,878		31.36
		12,134,205						5,583,116

The weighted-average grant date fair value of options granted was $4.97 and $5.72 per option for the nine months ended September 30, 2023 and 2022, respectively. The aggregate intrinsic value of options exercised was $80 thousand for the nine months ended September 30, 2023. The Company recorded stock-based compensation expense of $6.5 million and $6.1 million for the three

months ended September 30, 2023 and 2022, respectively, related to stock options. The Company recorded stock-based compensation expense of $18.9 million and $18.3 million for the nine months ended September 30, 2023 and 2022, respectively, related to stock options. As of September 30, 2023, the total unrecognized compensation expense related to unvested stock option awards was $44.1 million, which the Company expects to recognize over a weighted-average period of 2.19 years.

The fair value of each option was estimated on the date of grant using the weighted average assumptions in the table below:

	Nine months ended September 30,
	2023			2022
Expected volatility		83.53	%		84.91	%
Risk-free interest rate		3.81	%		2.52	%
Expected life (in years)		6.02			6.02
Expected dividend yield		—			—

Restricted Stock Awards and Units

The Company issues restricted stock awards (“RSA”) to employees that generally vest over a four-year period with 25% of awards vesting after one year and then monthly thereafter. Any unvested shares will be forfeited upon termination of services. The fair value of an RSA is equal to the fair market value price of the Company’s common stock on the date of grant. RSA expense is recorded on a straight-line basis over the vesting period.

The following table summarizes activity related to RSA stock-based payment awards:

	Number of shares			Weighted-average grant date fair value
Unvested balance at January 1, 2023		201,716		$	2.81
Vested		(147,690	)	$	2.64
Unvested balance at September 30, 2023		54,026		$	3.26

The Company recorded stock-based compensation expense of $0.1 million and $0.2 million for the three months ended September 30, 2023 and 2022, respectively, related to RSAs. The Company recorded stock-based compensation expense of $0.4 million and $0.6 million for the nine months ended September 30, 2023 and 2022, respectively, related to RSAs. As of September 30, 2023, the total unrecognized expense related to all RSAs was $0.2 million, which the Company expects to recognize over a weighted-average period of 0.49 years.

The Company granted restricted stock units (“RSU”) to employees that generally vest over a four-year period with 25% of awards vesting after one year and then quarterly thereafter. Any unvested units will be forfeited upon termination of services.

The following table summarizes activity related to RSU stock-based payment awards:

	Number of shares			Weighted-average grant date fair value
Unvested balance at January 1, 2023		165,000		$	6.08
Vested		(50,625	)	$	5.86
Unvested balance at September 30, 2023		114,375		$	6.18

The Company recorded stock-based compensation expense of $0.1 million for each of the three months ended September 30, 2023 and 2022, related to RSUs. The Company recorded stock-based compensation expense of $0.2 million for each of the nine months ended September 30, 2023 and 2022, related to RSUs. At September 30, 2023, the total unrecognized expense related to the RSUs was $0.6 million, which the Company expects to recognize over 2.36 years.

Employee Stock Purchase Plan

The Company has an Employee Stock Purchase Plan (the “ESPP”), which, as of September 30, 2023, had 1,698,350 shares of common stock reserved for future issuance. The number of shares of the Company’s common stock that may be issued pursuant to rights granted under the ESPP shall automatically increase on January 1st of each year and continuing for ten years beginning in 2021, in an amount equal to one percent of the total number of shares of all classes of the Company’s common stock outstanding on December 31st of the preceding calendar year, subject to the discretion of the board of directors or compensation committee to determine a lesser number of shares shall be added for such year. On January 1, 2023, 478,990 shares were added to the ESPP.

Under the ESPP, eligible employees can purchase the Company’s common stock through accumulated payroll deductions at such times as are established by the compensation committee. Eligible employees may purchase the Company’s common stock at 85% of the lower of the fair market value of the Company’s common stock on the first day of the offering period or on the last day of the offering period. Eligible employees may contribute up to 15% of their eligible compensation. Under the ESPP, a participant may not accrue rights to purchase more than $25,000 worth of the Company’s common stock for each calendar year in which such right is outstanding.

The ESPP is considered compensatory under the FASB stock compensation rules. Accordingly, share-based compensation expense is determined based on the option’s grant-date fair value as estimated by applying the Black Scholes option-pricing model and is recognized over the withholding period. The Company recognized share-based compensation expense of $0.1 million for each of the three months ended September 30, 2023 and 2022, respectively, related to the ESPP. The Company recognized share-based compensation expense of $0.2 million and $0.3 million for the nine months ended September 30, 2023 and 2022, respectively, related to the ESPP.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of presentation

Basis of presentation

The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. The accompanying unaudited interim financial statements should be read in conjunction with the annual audited financial statements and related notes as of and for the year ended December 31, 2022 found in the Company's Annual Report on Form 10-K filed with the SEC on March 15, 2023. Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”).

Use of estimates

Use of estimates

The preparation of the unaudited interim financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and contingent liabilities at the date of the unaudited interim financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.

Estimates and assumptions are periodically reviewed and the effects of the revisions are reflected in the accompanying unaudited interim financial statements in the period they are determined to be necessary. The most significant estimate relates to accrued clinical trial expenses.

Income taxes

Income taxes

Based upon the historical and anticipated future losses, management has determined that the deferred tax assets generated by net operating losses and research and development credits do not meet the more likely than not threshold for realizability. Accordingly, a full valuation allowance has been recorded against the Company’s net deferred tax assets as of September 30, 2023 and December 31, 2022.

Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted cash

The Company’s cash equivalents include short-term highly liquid investments with an original maturity of 90 days or less when purchased and are carried at fair value in the accompanying balance sheets.

Restricted cash consists of a letter of credit with Silicon Valley Bank, a division of First Citizens Bank, for the benefit of the landlord in connection with the Company’s Chestnut Run Lease. See Note 8 for further details.

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the balance sheet that total to the amounts shown in the statement of cash flows:

(in thousands)	September 30, 2023		December 31, 2022
Cash and cash equivalents	$	15,896	$	30,605
Restricted cash		4,044		4,044
Total cash, cash equivalents, and restricted cash shown in statement of cash flows	$	19,940	$	34,649

Marketable Securities

Marketable Securities

The Company’s marketable securities consist of investments in corporate debt securities, United States (“U.S.”) government debt securities, and agency securities that are classified as available-for-sale. The securities are carried at fair value with the unrealized gains and losses, net of tax, included in accumulated other comprehensive loss, a component of stockholders’ equity. Realized gains and losses as well as credit losses, if any, on marketable securities are included in the Company’s statements of operations. The Company classifies marketable securities that are available for use in current operations as current assets on the balance sheets.

Net Loss Per Share

Net Loss Per Share

Basic net loss per share of common stock is computed by dividing net loss by the weighted-average number of shares of common stock outstanding during each period, including pre-funded warrants to purchase shares of common stock that were issued in a financing transaction in May 2023 (Note 7). The weighted-average number of shares of common stock outstanding used in the basic net loss per share calculation does not include unvested restricted stock awards as these instruments are considered contingently issuable shares until they vest. Diluted net loss per share of common stock includes the effect, if any, from the potential exercise of securities, such as stock options, and the effect from unvested restricted stock awards and restricted stock units which would result in the issuance of incremental shares of common stock. For diluted net loss per share, the weighted-average number of shares of common stock is the same for basic net loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation as the impact is anti-dilutive. The Company’s unvested restricted stock awards entitle the holder to participate in dividends and earnings of the Company, and, if the Company were to recognize net income, it would have to use the two-class method to calculate earnings per share. The two-class method is not applicable during periods with a net loss, as the holders of the unvested restricted stock awards have no obligation to fund losses.

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive:

	September 30,
	2023		2022
Unvested restricted stock awards		54,026		271,965
Unvested restricted stock units		114,375		170,000
Stock options		12,134,205		9,197,528
Employee stock purchase plan		74,248		46,560
		12,376,854		9,686,053

Amounts in the above table reflect the common stock equivalents.

Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

Emerging Growth Company Status

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these unaudited interim financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

Recently Adopted Accounting Pronouncements

In August 2020, the FASB issued ASU Update No. 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06) (“ASU 2020-06”). ASU 2020-06 eliminated the beneficial conversion and cash conversion accounting models in ASC 470-20 which required separate accounting for embedded conversion features and simplified the settlement assessment to determine whether an instrument qualifies for equity classification. The Company early adopted the new standard on January 1, 2023.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Schedule of Reconciliation of Cash and Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the balance sheet that total to the amounts shown in the statement of cash flows:

(in thousands)	September 30, 2023		December 31, 2022
Cash and cash equivalents	$	15,896	$	30,605
Restricted cash		4,044		4,044
Total cash, cash equivalents, and restricted cash shown in statement of cash flows	$	19,940	$	34,649

Schedule of Potentially Dilutive Securities Excluded from Computation of Diluted Weighted-average Shares of Common Stock Outstanding

The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive:

	September 30,
	2023		2022
Unvested restricted stock awards		54,026		271,965
Unvested restricted stock units		114,375		170,000
Stock options		12,134,205		9,197,528
Employee stock purchase plan		74,248		46,560
		12,376,854		9,686,053

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Cash, Cash Equivalents and Marketable Securities (Tables)

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Schedule of Cash, Cash Equivalents and Marketable Securities

The following provides detail of the Company's cash, cash equivalents, and marketable securities.

(in thousands)	Amortized Cost		Gross unrealized gain		Gross unrealized loss			Fair Value
September 30, 2023
Cash equivalents:
Money Market Funds	$	9,963	$	—	$	—		$	9,963
Commercial Paper		4,981		—		(1	)		4,980
Total cash equivalents		14,944		—		(1	)		14,943
Marketable securities:
Agency securities		10,508		—		(50	)		10,458
Corporate debt securities		101,396		11		(275	)		101,132
U.S. government securities		103,310		—		(290	)		103,020
Total marketable securities		215,214		11		(615	)		214,610
Total financial assets	$	230,158	$	11	$	(616	)	$	229,553
December 31, 2022
Cash equivalents:
Money Market Funds	$	25,996	$	—	$	—		$	25,996
Marketable securities:
Corporate debt securities		163,208		7		(1,672	)		161,543
U.S. government securities		9,607		—		(27	)		9,580
Total marketable securities		172,815		7		(1,699	)		171,123
Total financial assets	$	198,811	$	7	$	(1,699	)	$	197,119

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis:

	Fair value measurement at reporting date using
(in thousands)	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
September 30, 2023
Assets
Cash equivalents:
Money Market Funds	$	9,963	$	—	$	—
Commercial Paper		—		4,980		—
Total cash equivalents		9,963		4,980		—
Marketable securities:
Agency securities		—		10,458		—
Corporate debt securities		—		101,132		—
U.S. government securities		—		103,020		—
Total marketable securities		—		214,610		—
Total financial assets	$	9,963	$	219,590	$	—
December 31, 2022
Assets
Cash equivalents:
Money Market Funds	$	25,996	$	—	$	—
Marketable securities:
Corporate debt securities		—		161,543		—
U.S. government securities		—		9,580		—
Total marketable securities		—		171,123		—
Total financial assets	$	25,996	$	171,123	$	—

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Accrued Expenses and Other Current Liabilities (Tables)

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

(in thousands)	September 30, 2023		December 31, 2022
Compensation and related benefits	$	6,982	$	5,682
Research and development		3,447		6,887
Other		819		524
	$	11,248	$	13,093

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Commitments (Tables)

9 Months Ended

Sep. 30, 2023

Operating Lease, until December 31,2023

Schedule of Future Minimum Annual Lease Payments Under Lease

Future minimum annual lease payments under the Lease at September 30, 2023 are as follows:

(in thousands)
2023 (remaining)	$	482
Total undiscounted lease payments		482
Less imputed interest		(7	)
Current lease liability	$	475

Chestnut Run Lease

Schedule of Future Minimum Annual Lease Payments Under Lease

The estimated rent payments related to the Chestnut Run Lease are as follows:

(in thousands)
2023 (remaining)	$	—
2024		1,092
2025		2,746
2026		2,979
2027		3,054
2028		3,130
Thereafter		29,635

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Stock-Based Compensation Expense Recorded in Statements of Operations

The Company recorded stock-based compensation expense in the following expense categories in its accompanying statements of operations:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Research and development	$	3,319	$	3,214	$	9,544	$	8,886
General and administrative		3,396		3,228		10,160		10,413
	$	6,715	$	6,442	$	19,704	$	19,299

Summary of Stock Option Activity

The following table summarizes stock option activity for the periods indicated:

	Number of shares			Weighted average exercise price per share		Weighted average remaining contractual term (years)
Outstanding at January 1, 2023		9,390,930		$	12.08		8.31
Granted		3,091,898		$	6.82
Exercised		(17,685	)	$	1.77
Forfeited		(330,938	)	$	15.59
Outstanding at September 30, 2023		12,134,205		$	10.66		8.01
Exercisable at September 30, 2023		5,583,116		$	11.55		7.14

Summary of Information about Stock Options Outstanding

The following table summarizes information about stock options outstanding at September 30, 2023 under the Plan:

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price
$0.31 - $4.88		3,039,468		6.98	$	2.80		2,303,649	$	2.38
$4.89 - $7.50		4,053,164		9.25		6.58		242,049		6.02
$7.51 - $13.04		3,204,778		7.54		11.86		1,968,540		12.22
$13.05 - $88.98		1,836,795		7.81		30.55		1,068,878		31.36
		12,134,205						5,583,116

Schedule of Fair Value of Each Option Estimated on Date of Grant Using Weighted Average Assumptions

The fair value of each option was estimated on the date of grant using the weighted average assumptions in the table below:

	Nine months ended September 30,
	2023			2022
Expected volatility		83.53	%		84.91	%
Risk-free interest rate		3.81	%		2.52	%
Expected life (in years)		6.02			6.02
Expected dividend yield		—			—

Summary of Activity related to RSA Stock-Based Payment Awards

The following table summarizes activity related to RSA stock-based payment awards:

	Number of shares			Weighted-average grant date fair value
Unvested balance at January 1, 2023		201,716		$	2.81
Vested		(147,690	)	$	2.64
Unvested balance at September 30, 2023		54,026		$	3.26

Summary of Activity related to RSU Stock-Based Payment Awards

The following table summarizes activity related to RSU stock-based payment awards:

	Number of shares			Weighted-average grant date fair value
Unvested balance at January 1, 2023		165,000		$	6.08
Vested		(50,625	)	$	5.86
Unvested balance at September 30, 2023		114,375		$	6.18

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Risks and Liquidity - Additional Information (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Risks And Liquidity [Abstract]
Accumulated deficit	$ (423,315)	$ (334,558)

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Summary of Significant Accounting Policies - Schedule of Reconciliation of Cash and Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Accounting Policies [Abstract]
Cash and cash equivalents	$ 15,896	$ 30,605
Restricted cash	4,044	4,044
Total cash, cash equivalents, and restricted cash shown in statement of cash flows	$ 19,940	$ 34,649

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Summary of Significant Accounting Policies - Schedule of Potentially Dilutive Securities Excluded from Computation of Diluted Weighted-average Shares of Common Stock Outstanding (Details) - shares	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	12,376,854	9,686,053
Restricted Stock Awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	54,026	271,965
Unvested Restricted Stock Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	114,375	170,000
Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	12,134,205	9,197,528
Employee Stock Purchase Plan
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	74,248	46,560

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Summary of Significant Accounting Policies - Additional Information (Details)	9 Months Ended
	Sep. 30, 2023
Summary of Significant Accounting Policies [Line Items]
Change in accounting principle, ASU, adopted	true
Change in accounting principle, ASU, adoption date	Jan. 01, 2023
Change in acounting principle, ASU, early adoption	true
Change in acounting principle	ASU 2020-06

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Cash, Cash Equivalents and Marketable Securities - Schedule of Cash, Cash Equivalents and Marketable Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Marketable Securities [Line Items]
Marketable securities, Amortized cost	$ 230,158	$ 198,811
Marketable securities, Gross unrealized gain	11	7
Marketable securities, Gross unrealized loss	(616)	(1,699)
Marketable securities, Fair value	229,553	197,119
Money Market Funds
Marketable Securities [Line Items]
Cash Equivalents, Amortized Cost	9,963	25,996
Cash equivalents, Fair Value	9,963	25,996
Commercial Paper
Marketable Securities [Line Items]
Cash Equivalents, Amortized Cost	4,981
Cash equivalents, Gross unrealized loss	(1)
Cash equivalents, Fair Value	4,980
Cash Equivalents
Marketable Securities [Line Items]
Cash Equivalents, Amortized Cost	14,944
Cash equivalents, Gross unrealized loss	(1)
Cash equivalents, Fair Value	14,943
Agency Securities
Marketable Securities [Line Items]
Marketable securities, Amortized cost	10,508
Marketable securities, Gross unrealized loss	(50)
Marketable securities, Fair value	10,458
Corporate Debt Securities
Marketable Securities [Line Items]
Marketable securities, Amortized cost	101,396	163,208
Marketable securities, Gross unrealized gain	11	7
Marketable securities, Gross unrealized loss	(275)	(1,672)
Marketable securities, Fair value	101,132	161,543
U.S. Government Securities
Marketable Securities [Line Items]
Marketable securities, Amortized cost	103,310	9,607
Marketable securities, Gross unrealized gain	0
Marketable securities, Gross unrealized loss	(290)	(27)
Marketable securities, Fair value	103,020	9,580
Marketable Securities
Marketable Securities [Line Items]
Marketable securities, Amortized cost	215,214	172,815
Marketable securities, Gross unrealized gain	11	7
Marketable securities, Gross unrealized loss	(615)	(1,699)
Marketable securities, Fair value	$ 214,610	$ 171,123

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Cash, Cash Equivalents and Marketable Securities - Additional Information (Details) $ in Millions	Sep. 30, 2023 USD ($) Security
Investments, Debt and Equity Securities [Abstract]
Number of marketable securities | Security	49
Securities fair market value unrealized loss position | $	$ 193.4

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Fair Value of Financial Instruments - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	$ 229,553	$ 197,119
Agency Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	10,458
Corporate Debt Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	101,132	161,543
U.S. Government Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	103,020	9,580
Recurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	9,963
Fair value measurement, assets	9,963	25,996
Recurring Basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Money Market Funds
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	9,963	25,996
Recurring Basis | Significant other observable inputs (Level 2)
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	4,980
Fair value measurement, assets	219,590	171,123
Fair value measurement, assets	214,610	171,123
Recurring Basis | Significant other observable inputs (Level 2) | Agency Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	10,458
Recurring Basis | Significant other observable inputs (Level 2) | Corporate Debt Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	101,132	161,543
Recurring Basis | Significant other observable inputs (Level 2) | U.S. Government Securities
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	103,020	$ 9,580
Recurring Basis | Significant other observable inputs (Level 2) | Commercial Paper
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair value measurement, assets	$ 4,980

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Accrued Expenses and Other Current Liabilities - Summary of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Compensation and related benefits	$ 6,982	$ 5,682
Research and development	3,447	6,887
Other	819	524
Accrued expenses and other current liabilities	$ 11,248	$ 13,093

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Common Stock - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	9 Months Ended
	Jun. 30, 2023	Sep. 30, 2023
Class Of Stock [Line Items]
Gross proceeds from issuance of common stock and prefunded warrants	$ 113.0
Offering costs	2.6
Offering costs previously paid and deferred	0.3
Net proceeds from issuance	$ 110.4
Pre-Funded Warrants
Class Of Stock [Line Items]
Warrants exercise price per share		$ 0.0001
Warrants exercised		0
Pre-Funded Warrants | Voting Common Stock
Class Of Stock [Line Items]
Shares issued price per share	$ 5.7499
Warrants to purchase common stock	12,895,256
Common Stock
Class Of Stock [Line Items]
Common stock, voting rights		The holders of the voting common stock are entitled to one vote for each share of voting common stock held at all meetings of stockholders
Number of shares sold	6,761,200
Shares issued price per share	$ 5.75	$ 5.75
Common Stock | Minimum
Class Of Stock [Line Items]
Beneficial ownership percentage		9.99%
Common Stock | Maximum
Class Of Stock [Line Items]
Beneficial ownership percentage		19.99%
Common Stock | Voting Common Stock
Class Of Stock [Line Items]
Number of shares sold	5,312,978
Shares issued during period	5,312,978	2,264,456
Common Stock | Non-voting Common Stock
Class Of Stock [Line Items]
Number of shares sold	1,448,222
Shares issued during period	1,448,222

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Commitments - Additional Information (Details) $ in Millions	1 Months Ended	3 Months Ended		9 Months Ended
	Aug. 31, 2022 ft² Extension	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)
Other Commitments [Line Items]
Prepaid rent		$ 12.2		$ 12.2
Rent expense		0.5	$ 0.5	1.6	$ 1.6
Reimbursements for development of lab space				$ 5.5
Reimbursements for development of lab space period				3 years
Reimbursements for development of lab space expiration year				2023
Additional grant for development of lab space				$ 1.0
Grant for development of lab space				$ 3.4
Defined contribution plan, maximum annual contributions per employee, percent				100.00%
Defined contribution plan, employer matching contribution, percent of employee's gross pay				3.00%
Defined contribution plan, employer discretionary contribution amount		0.1	$ 0.1	$ 0.5	$ 0.4
Chestnut Run Lease
Other Commitments [Line Items]
Lease renewal period	5 years
Area of lease premises | ft²	81,000
Initial term of lease	162 months
Number of lease extensions | Extension	3
Chestnut Run Lease | Letter of Credit | Silicon Valley Bank
Other Commitments [Line Items]
Security deposit		4.0		4.0
Chestnut Run Lease | Letter of Credit | Pro Forma
Other Commitments [Line Items]
Security deposit		$ 0.5		$ 0.5

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Commitments - Schedule of Future Minimum Annual Lease Payments Under Lease (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Lease Liability [Line Items]
Current lease liability	$ 475	$ 1,832
Operating Lease Until December 30 2023
Lease Liability [Line Items]
2023 (remaining)	482
Total undiscounted lease payments	482
Less imputed interest	(7)
Chestnut Run Lease
Lease Liability [Line Items]
2024	1,092
2025	2,746
2026	2,979
2027	3,054
2028	3,130
Thereafter	$ 29,635

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Stock-Based Compensation - Additional Information (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2023 USD ($) shares	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) Plan $ / shares shares	Sep. 30, 2022 USD ($) $ / shares	Jan. 01, 2023 shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of equity incentive plans | Plan			2
Aggregate intrinsic value of outstanding options	$ 2,600,000		$ 2,600,000
Aggregate intrinsic value of exercisable options	2,400,000		2,400,000
Stock-based compensation expense	6,715,000	$ 6,442,000	$ 19,704,000	$ 19,299,000
Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Weighted-average grant date fair value of options granted | $ / shares			$ 4.97	$ 5.72
Aggregate intrinsic value of options exercised			$ 80,000
Stock-based compensation expense	6,500,000	6,100,000	18,900,000	$ 18,300,000
Total unrecognized compensation expense related to unvested stock option awards	44,100,000		$ 44,100,000
Total unrecognized compensation expense, weighted-average period			2 years 2 months 8 days
Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting period			4 years
Stock-based compensation expense	100,000	200,000	$ 400,000	600,000
Total unrecognized compensation expense, weighted-average period			5 months 26 days
Share-based payment arrangement, nonvested award, unrecognized expense	200,000		$ 200,000
Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting period			4 years
Stock-based compensation expense	100,000	100,000	$ 200,000	200,000
Total unrecognized compensation expense, weighted-average period			2 years 4 months 9 days
Share-based payment arrangement, nonvested award, unrecognized expense	$ 600,000		$ 600,000
2020 Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares available for future grants | shares	4,773,019		4,773,019
Terms of award			The number of shares of the Company’s common stock that may be issued pursuant to rights granted under the Plan shall automatically increase on January 1st of each year and continuing for ten years beginning on January 1, 2021, in an amount equal to five percent of the total number of shares of the Company’s common stock outstanding on December 31st of the preceding calendar year, subject to the discretion of the board of directors or compensation committee to determine a lesser number of shares shall be added for such year.
Award term			10 years
Percentage of shares outstanding used to calculate annual increase in number of shares that can be issued			5.00%
2020 Equity Incentive Plan | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting period			4 years
2020 Equity Incentive Plan | Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting period			1 year
2020 Employee Stock Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares available for future grants | shares	1,698,350		1,698,350
Terms of award			The number of shares of the Company’s common stock that may be issued pursuant to rights granted under the ESPP shall automatically increase on January 1st of each year and continuing for ten years beginning in 2021, in an amount equal to one percent of the total number of shares of all classes of the Company’s common stock outstanding on December 31st of the preceding calendar year, subject to the discretion of the board of directors or compensation committee to determine a lesser number of shares shall be added for such year.
Award term			10 years
Percentage of shares outstanding used to calculate annual increase in number of shares that can be issued			1.00%
Stock-based compensation expense	$ 100,000	$ 100,000	$ 200,000	$ 300,000
Common stock additional capital shares reserved for future issuance | shares					478,990
Eligible employees purchase common stock percentage of lower of fair market value			85.00%
Participants accrue rights to purchase maximum common stock amount			$ 25,000
2020 Employee Stock Purchase Plan | Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Eligible employees contribution percentage			15.00%
Vesting After One Year | Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of stock options vested			25.00%
Vesting After One Year | Restricted Stock Units
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of stock options vested			25.00%
Vesting After One Year | 2020 Equity Incentive Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Percentage of stock options vested			25.00%

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Stock-Based Compensation - Schedule of Stock-Based Compensation Expense Recorded in Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 6,715	$ 6,442	$ 19,704	$ 19,299
Research and Development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	3,319	3,214	9,544	8,886
General and Administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock-based compensation expense	$ 3,396	$ 3,228	$ 10,160	$ 10,413

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Stock-Based Compensation - Summary of Stock Option Activity (Details) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]
Number of shares, Outstanding at beginning of period	9,390,930
Number of shares, Granted	3,091,898
Number of shares, Exercised	(17,685)
Number of shares, Forfeited	(330,938)
Number of shares, Outstanding at end of period	12,134,205	9,390,930
Number of shares, Exercisable at September 30, 2023	5,583,116
Weighted average exercise price per share, Outstanding at beginning of period	$ 12.08
Weighted average exercise price per share, Granted	6.82
Weighted average exercise price per share, Exercised	1.77
Weighted average exercise price per share, Forfeited	15.59
Weighted average exercise price per share, Outstanding at end of period	10.66	$ 12.08
Weighted average exercise price per share, Exercisable at September 30,2023	$ 11.55
Weighted average remaining contractual term (years), Outstanding	8 years 3 days	8 years 3 months 21 days
Weighted average remaining contractual term (years), Exercisable	7 years 1 month 20 days

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Stock-Based Compensation - Summary of Information about Stock Options Outstanding (Details)	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Options Outstanding, Number | shares	12,134,205
Options Exercisable, Number Exercisable | shares	5,583,116
$0.31 - $4.88
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Range of Exercise Prices, Minimum	$ 0.31
Range of Exercise Prices, Maximum	$ 4.88
Options Outstanding, Number | shares	3,039,468
Options Outstanding, Weighted Average Remaining Contractual Life (in years)	6 years 11 months 23 days
Options Outstanding, Weighted Average Exercise Price	$ 2.8
Options Exercisable, Number Exercisable | shares	2,303,649
Options Exercisable, Weighted Average Exercise Price	$ 2.38
$4.89 - $7.50
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Range of Exercise Prices, Minimum	4.89
Range of Exercise Prices, Maximum	$ 7.5
Options Outstanding, Number | shares	4,053,164
Options Outstanding, Weighted Average Remaining Contractual Life (in years)	9 years 3 months
Options Outstanding, Weighted Average Exercise Price	$ 6.58
Options Exercisable, Number Exercisable | shares	242,049
Options Exercisable, Weighted Average Exercise Price	$ 6.02
$7.51 - $13.04
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Range of Exercise Prices, Minimum	7.51
Range of Exercise Prices, Maximum	$ 13.04
Options Outstanding, Number | shares	3,204,778
Options Outstanding, Weighted Average Remaining Contractual Life (in years)	7 years 6 months 14 days
Options Outstanding, Weighted Average Exercise Price	$ 11.86
Options Exercisable, Number Exercisable | shares	1,968,540
Options Exercisable, Weighted Average Exercise Price	$ 12.22
$13.05 - $88.98
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Range of Exercise Prices, Minimum	13.05
Range of Exercise Prices, Maximum	$ 88.98
Options Outstanding, Number | shares	1,836,795
Options Outstanding, Weighted Average Remaining Contractual Life (in years)	7 years 9 months 21 days
Options Outstanding, Weighted Average Exercise Price	$ 30.55
Options Exercisable, Number Exercisable | shares	1,068,878
Options Exercisable, Weighted Average Exercise Price	$ 31.36

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Stock-Based Compensation - Schedule of Fair Value of Each Option Estimated on Date of Grant Using Weighted Average Assumptions (Details) - Stock Options	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected volatility	83.53%	84.91%
Risk-free interest rate	3.81%	2.52%
Expected life (in years)	6 years 7 days	6 years 7 days

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Stock-Based Compensation - Summary of Activity related to RSA Stock-Based Payment Awards (Details) - Restricted Stock Awards	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares, Unvested balance at beginning of period | shares	201,716
Number of shares, Vested | shares	(147,690)
Number of shares, Unvested balance at end of period | shares	54,026
Weighted-average grant date fair value, Unvested balance at beginning of period | $ / shares	$ 2.81
Weighted-average grant date fair value, Vested | $ / shares	2.64
Weighted-average grant date fair value, Unvested balance at end of period | $ / shares	$ 3.26

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Stock-Based Compensation - Summary of Activity related to RSU Stock-Based Payment Awards (Details) - Restricted Stock Units	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares, Unvested balance at beginning of period | shares	165,000
Number of shares, Vested | shares	(50,625)
Number of shares, Unvested balance at end of period | shares	114,375
Weighted-average grant date fair value, Unvested balance at beginning of period | $ / shares	$ 6.08
Weighted-average grant date fair value, Vested | $ / shares	5.86
Weighted-average grant date fair value, Unvested balance at end of period | $ / shares	$ 6.18