October 22, 2020 – 

Wilmington, Delaware Company Enters Its Next Growth Phase

Last summer, Prelude Therapeutics was at a turning point. Founded in 2016, the Wilmington-based biopharmaceutical company is developing multiple experimental cancer therapies, three of which are in the clinical stage. Clinical development, however, requires significant funding. What’s more, the company is outgrowing its office and lab space — now housed in two buildings. 

To fulfill the requirements of the Delaware Strategic Fund, Prelude must hire more people by 2022. Certainly, Prelude needs to increase its staff to support its growing research and development activities.

Like many young life science companies, Prelude has yet to make a profit and relies on investors. In August, the company raised $50 million in a Series C round led by existing investors including OrbiMed Advisors and new investor Fidelity Management & Research Co.

Repeatedly tapping private investors and other sources, however, takes time and energy and can be distracting from focusing on research and development. So, it’s easy to see why an initial public offering is appealing. 

“If you want to continue to grow the company — and remain independent — an IPO offers two opportunities,” explains Kris Vaddi, founder and CEO of Prelude Therapeutics. “Public markets tend to give you higher valuation than private investors and can support the funding needs of a company with a growing pipeline; it could be 10-plus years before we can become profitable.” 

An IPO also offers liquidity to any angel or private investors who aren’t interested in long-term commitments, he adds.

Prelude initially filed with the SEC to raise up to $100 million in an initial public offering, then increased the amount to $150 million.

On Friday, Sept. 25, at 11:30 a.m., trading began. (Morgan Stanley, Goldman Sachs and Bank of America Securities are the joint underwriters, and the symbol is PRLD on NASDAQ.)

By the end of the day, Prelude had raised $158.2 million, selling 8.3 million shares at   $19 per share. “All in all,” Vaddi says, “it was a successful outcome.”

Creating the Foundation

Credit Vaddi’s reputation and his team’s research for the positive results. 

A native of India, Vaddi has doctorate degrees from two universities, including the University of Florida. He moved to Delaware as a post-doctorate fellow at the DuPont Co. and later worked for DuPont Pharmaceuticals. 

In 2001, Vaddi and some colleagues left DuPont to join Incyte, then a Palo Alto, California, genomics company. Needing fresh talent and a new direction, Incyte moved to Wilmington, where it’s now based. 

Vaddi and his peers helped reinvent the company with Jakafi, the first federally approved medication for two bone marrow disorders. Since the U.S. Food and Drug Administration approved the drug, it’s brought in more than $1 billion in sales for Incyte.

With $5 million in seed funding, Vaddi started Prelude Therapeutics at the University of Delaware STAR Campus. The company later moved to the Delaware Innovation Space, formerly the Delaware Experimental Station. 

As Prelude grew, it rented separate administrative offices in addition to the lab space. But the company is still significantly expanding. Delaware has approved a total of $834,090 in grants for Prelude contingent upon hiring goals.

Enter the IPO, which can help fund new offices, clinical trials and new product development.

Painting the Big Picture

According to the Philadelphia Business Journal, Prelude is the fifth Philadelphia-area life sciences company to go public in 2020. The others include Bio, Harmony Biosciences, Ayala Pharmaceuticals and Annovis Bio.

Experts recommended Prelude as a long-term investment, which is favored by institutional investors and mutual funds, Vaddi says. These groups see Prelude’s appeal to big pharma, which needs smaller companies to pioneer innovative therapies.

Prelude is currently in clinical trials using orally administered small molecule inhibitors as cancer therapy for solid tumors, including brain tumors. A third trial will focus on cancers of the blood, bone marrow or lymph nodes. 

If the therapies are successful, large pharmaceutical companies may wish to purchase the drug or Prelude. That, however, is not part of Vaddi’s immediate vision. 

To start, he’d like to find larger offices and labs in Delaware, which is a hub for scientists with relevant training. “There is plenty of talent right here,” he maintains. 

Delaware officials are “very customer-oriented,” he says. “They always asked us what we needed, and they followed through — every step of the way.” 

Speaking of steps, the IPO was a significant one on the way up to the next level, he says. 

To be sure, Prelude is no longer an early-stage company, although “that is where my heart is,” says the entrepreneur. Even so, he doesn’t want to sell the therapies or even his company to a larger firm. Prelude may form strategic partnerships with other companies to market the drugs on a global level.

“My goal is to build a company that will outlast my lifetime and be an enduring company that will deliver really important medicines to patients,” he says.