LENZ Therapeutics and Graphite Bio Announce Merger Agreement

LENZ Therapeutics and Graphite Bio have entered into a definitive merger agreement, combining the companies in an all-stock transaction. The primary focus of the merged entity will be on addressing presbyopia.

The anticipated trading symbol for the combined company on Nasdaq is "LENZ."

In conjunction with the merger, Graphite Bio has engaged in a subscription agreement for a PIPE financing totaling $53.5 million. This financing is anticipated to conclude simultaneously with the finalization of the merger and involves a syndicate of healthcare investors, led by LENZ's current investors and featuring participation from new investors.

The merger is contingent upon stockholder approval from both companies, the effectiveness of a registration statement to be submitted to the U.S. Securities and Exchange Commission for registering the securities associated with the merger, and the fulfillment of standard closing conditions.

With the anticipated cash from both companies upon closing and the concurrent PIPE financing proceeds, the combined entity is projected to possess approximately $225 million in cash or cash equivalents. Graphite Bio's contribution to the combined entity is expected to be $115 million, with an envisaged dividend payment of around $60 million to Graphite Bio shareholders at the transaction's close.

Following the completion, key healthcare investors in the combined company will include Versant Ventures, RA Capital Management, Alpha Wave Global, Point72, Samsara BioCapital, Sectoral Asset Management, RTW Investments, and others. The net proceeds from the merger and concurrent financing are expected to enable the combined company to continue building infrastructure and successfully commercialize LENZ's lead product candidate, contingent upon the successful completion of ongoing Phase 3 trials, New Drug Application (NDA) submission, and subsequent FDA approval.

“I am pleased to announce our merger with Graphite Bio, allowing us to create a publicly traded company focused on the advancement of LENZ’s lead programs, LNZ100 and LNZ101 for the treatment of presbyopia. This pivotal change comes at an important time for the company as we gear up for the readout of the Phase 3 CLARITY trials in the second quarter of 2024,” said Eef Schimmelpennink, President and CEO of LENZ Therapeutics.

“We believe that a once-daily pharmacological eye drop that can effectively and safely improve near vision throughout the full workday, without the need for reading glasses, will be a highly attractive commercial product with an estimated U.S. market opportunity in excess of $3 billion. We have assembled an executive team with extensive clinical, commercial and operational experience to commercialize such a product and become the category leader,” he added.

“Graphite Bio ran a thorough and strategic process and we believe that this transaction represents the company’s commitment to delivering value to the Graphite stockholders,” said Kim Drapkin, CEO of Graphite Bio. “LENZ Therapeutics is strongly positioned with Phase 3 lead program, addressing a very large target market with near-term, high potential, value-inflecting milestones and a well-credentialed management team to lead the combined company.”