The primary focus of the combined entity's lead programmes will be on addressing presbyopia, the age-related decline in near vision affecting individuals over the age of 45
LENZ Therapeutics, a biopharmaceutical company in the late stages of development, specialising in advancing and bringing innovative vision-improving therapies to market, has signed a definitive agreement to merge with Graphite Bio in an all-stock transaction.
The primary focus of the combined entity’s lead programmes will be on addressing presbyopia, the age-related decline in near vision affecting individuals over the age of 45. The merged company is anticipated to be listed on Nasdaq under the ticker symbol “LENZ.”
As part of the merger process, Graphite Bio has engaged in a subscription agreement for a PIPE (Private Investment in Public Equity) financing, slated to conclude simultaneously with the merger, amounting to $53.5m. This financing involves a syndicate of healthcare investors, primarily led by LENZ’s existing backers, with participation from new investors.
With the combined resources from both companies at the merger’s conclusion and the funds from the concurrent PIPE financing, the consolidated company is projected to possess around $225m in cash or cash equivalents.
Graphite Bio is set to contribute $115m to the unified entity and intends to distribute a dividend of approximately $60m to its shareholders upon transaction closure.
Upon completion, key healthcare investors in the amalgamated company will include Versant Ventures, RA Capital Management, Alpha Wave Global, Point72, Samsara BioCapital, Sectoral Asset Management, RTW Investments, among others.
The anticipated net proceeds resulting from the merger and concurrent financing are expected to empower the combined company to further develop its infrastructure and successfully bring LENZ’s primary product candidate to market, contingent upon the successful conclusion of ongoing Phase 3 trials, New Drug Application (NDA) submission, and subsequent approval by the FDA.
LENZ Therapeutics president and CEO Eef Schimmelpennink said: “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.
“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 US market opportunity in excess of $3 billion.
“We have assembled an executive team with extensive clinical, commercial and operational experience to commercialise such a product and become the category leader.”
The Board of Directors of both companies has unanimously approved the transaction, with the anticipated closing scheduled for the first quarter of 2024. The completion of the deal is contingent upon customary conditions, including approvals from the stockholders of each company.
Upon completion of the merger, Schimmelpennink will assume leadership of the combined company.