- Merger to create NASDAQ-listed, late
clinical-stage biopharmaceutical company focused on advancing LENZ
Therapeutics’ lead assets for the treatment of presbyopia
- Combined company expected to have
approximately $225 million of cash or cash equivalents at close,
including $53.5 million from a concurrent PIPE financing
- Companies to host joint webcast today,
November 15, 2023 at 8:00 a.m. ET
LENZ Therapeutics, a late-stage biopharmaceutical company
focused on developing and commercializing innovative therapies to
improve vision, and Graphite Bio, Inc. (NASDAQ: GRPH) today
announced that they have entered into a definitive merger agreement
to combine the companies in an all-stock transaction. The lead
programs of the combined company will address presbyopia, the
inevitable loss of near vision that impacts the daily lives of
nearly all people over the age of 45. The combined company is
expected to trade on Nasdaq under the ticker symbol “LENZ.”
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In connection with the merger, Graphite Bio has entered into a
subscription agreement for a PIPE financing that is expected to
close concurrently with the completion of the merger of $53.5
million, with a syndicate of healthcare investors led by LENZ’s
existing investors and including participation from new investors.
The merger is subject to stockholder approval of both companies,
the effectiveness of a registration statement to be filed with the
U.S. Securities and Exchange Commission to register the securities
to be issued in connection with the merger, and the satisfaction of
customary closing conditions.
With the cash expected from both companies at closing and the
proceeds of the concurrent PIPE financing, the combined company is
expected to have approximately $225 million of cash or cash
equivalents. Graphite Bio is expected to contribute $115 million to
the combined entity and expects to pay a dividend to Graphite Bio
shareholders of approximately $60 million at the close of the
transaction. Upon close, 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. It is expected that the net
proceeds from the merger and concurrent financing will allow the
combined company to continue to build infrastructure and
successfully commercialize LENZ’s lead product candidate, subject
to successful completion of the 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.”
“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.”
About LENZ Therapeutics’ Product Candidates
LENZ Therapeutics’ initial focus is the treatment of presbyopia.
In the United States, the estimated population who suffer from this
condition, known as presbyopes, is 128 million, almost four times
the number of individuals suffering from dry eye disease and three
times the number of individuals suffering from childhood myopia,
macular degeneration, diabetic retinopathy and glaucoma combined.
LENZ believes 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.
LENZ’s product candidates, LNZ100 and LNZ101, are
preservative-free, single-use, once-daily eye drops containing
aceclidine and aceclidine plus brimonidine, respectively. These
product candidates are differentiated based on rapid onset, degree
and duration of near vision improvement, as well as their ability
to be used across the full age range of presbyopes, from their
mid-40s well into their mid-70s, as well as the broadest refractive
range while avoiding blurry distance vision.
Aceclidine is a miotic, a small molecule that causes pupil
contraction, creating a pinhole effect that improves near vision.
Unlike other miotics, such as pilocarpine and carbachol,
aceclidine’s mechanism of action (MOA) is pupil-selective, meaning
it can reduce the pupil size below the desired 2 millimeters
without overstimulating the ciliary muscles that can cause a myopic
shift that can impair distance vision.
Aceclidine’s MOA was demonstrated in the Phase 2 INSIGHT trial
(NCT05294328), where both LZN100 and LNZ101 achieved their primary
endpoint of three-lines or greater near vision improvement without
losing one or more lines in distance vision, with a responder rate
of 71% (p<0.0001) and 56% (p<0.0001), respectively, compared
to 6% for vehicle. Responders were able to read small text up-close
without any visual aid, with both product candidates and
demonstrated rapid onset with 73% (p<0.0001) and 62%
(p<0.0001) having three-lines or greater improvement in near
visual acuity within 30 minutes for LNZ100 and LNZ101,
respectively, compared to 8% for vehicle, and sustained the
statistically significant three-lines or greater improvement in
near visual acuity over an extended duration of 10 hours
post-treatment, the last measured timepoint. Both LNZ100 and LNZ101
were well-tolerated, with no serious drug-related adverse events.
Additionally, their active ingredients have favorable tolerability
profiles that have been well-established empirically as both
aceclidine and brimonidine have been used as a treatment for
glaucoma.
LENZ is currently conducting three Phase 3 multi-center,
double-masked, randomized, active and vehicle-controlled,
U.S.-based efficacy and safety trials for LNZ100 and LNZ101. To
date, all sites are activated and the two six-week efficacy trials,
CLARITY-1 and CLARITY-2, are fully enrolled and over 95% enrolled,
respectively and the six-month safety trial, CLARITY-3, is fully
enrolled. The CLARITY trials are enrolling participants ranging
from 45 to 75 years old, the same age range used in the INSIGHT
trial, with a refractive range of -4.0 diopters (D) spherical
equivalent (SE) to +1.0D SE. Similar to the INSIGHT trial, the
primary efficacy endpoint in the CLARITY-1 and CLARITY-2 trials is
the percentage of subjects who achieve three-lines or greater
improvement in near vision, but at three hours post-treatment
rather than one hour post-treatment, comparing to brimonidine and
vehicle, respectively.
LENZ expects to report Phase 3 topline results from the CLARITY
trials in the second quarter of 2024 with a potential submission of
an NDA for at least one product candidate in mid-2024. LENZ’s
objective is to commercialize the approved product that will most
effectively meet the needs of the widest range of presbyopes and
best create loyalty and value based on an “all eyes, all day” brand
mission.
About the Proposed Merger
Pre-merger Graphite Bio stockholders are expected to own
approximately 35% of the combined company and pre-merger LENZ
Therapeutics stockholders are expected to own approximately 65% of
the combined company upon the closing of the merger, prior to the
additional PIPE financing transaction. The percentage of the
combined company that each company’s former stockholders are
expected to own may be adjusted based on Graphite Bio’s net cash at
closing.
The transaction has been unanimously approved by the Board of
Directors of both companies and is expected to close in the first
quarter of 2024, subject to customary closing conditions, including
the approvals by the stockholders of each company.
Management and Organization
Following the merger, the combined company will be led by Eef
Schimmelpennink, President and Chief Executive Officer of LENZ
Therapeutics, and other members of the LENZ management team.
Graphite Bio, Inc. will be renamed “LENZ Therapeutics, Inc.” and
the corporate headquarters will be located in San Diego, CA. The
merger agreement provides that the Board of Directors of the
combined company will be composed of seven members, including five
LENZ board members and two members selected by the Graphite Bio
board.
Conference Call Information
The companies will host a webcast call and presentation to
discuss the proposed transaction as well as LENZ’s pipeline assets
today, November 15, 2023, at 8:00 a.m. ET. The live webcast can be
accessed here and on the Graphite Bio website at
www.graphitebio.com in the Investors section or by calling
877-407-0898 or +1-201-689-8478. A replay of the webcast will be
archived and available following the event.
Advisors
Leerink Partners is acting as exclusive financial advisor to
Graphite Bio for the transaction and Goodwin Procter LLP is serving
as its legal counsel. BofA Securities is serving as lead financial
advisor to LENZ for the merger. Citi is also serving as financial
advisor to LENZ for the merger. BofA Securities is serving as lead
placement agent on the PIPE financing. Citi, Piper Sandler &
Co. and William Blair & Company, L.L.C. are serving as
co-placement agents for the PIPE financing. Latham & Watkins
LLP is serving as legal counsel to the placement agents. Wilson
Sonsini Goodrich & Rosati, P.C. is serving as legal counsel to
LENZ.
About LENZ Therapeutics
LENZ Therapeutics is a late-stage biopharmaceutical company
focused on developing and commercializing innovative therapies to
improve vision. Its product candidates, LNZ100 and LNZ101, are
preservative-free, single-use, once-daily, aceclidine-based eye
drops currently in Phase 3 clinical trials for the treatment of
presbyopia. Presbyopia impacts an estimated 1.8 billion people
globally and 128 million people in the United States. LENZ is
headquartered in San Diego, California, and is backed by venture
capital investors, including Versant Ventures, RA Capital
Management, Alpha Wave Global, Point72, Samsara BioCapital,
Sectoral Asset Management and RTW Investments. For more
information, visit: LENZ-Tx.com.
About Graphite Bio, Inc.
Graphite Bio, Inc. has historically been a clinical-stage,
next-generation gene editing company. In February 2023, Graphite
Bio announced its decision to discontinue the development of
nulabeglogene autogedtemcel ("nula-cel"), Graphite Bio’s lead
product candidate for sickle cell disease, and to initiate a
process to explore and review a range of strategic alternatives
focused on maximizing stockholder value from Graphite Bio’s product
development assets and cash resources. For more information, please
visit www.graphitebio.com.
Forward-Looking Statements
This communication contains “forward-looking statements” within
the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995, including but not limited
to, express or implied statements regarding the structure, timing
and completion of the proposed merger by and between Graphite Bio,
Inc. (“Graphite”) and LENZ Therapeutics, Inc. (“LENZ”) (the
“Merger”); the combined company’s listing on Nasdaq after the
closing of the proposed Merger (the “Closing”); expectations
regarding the ownership structure of the combined company; the
anticipated timing of the Closing; the expected executive officers
and directors of the combined company; expectations regarding the
structure, timing and completion of a concurrent private financing,
including investment amounts from investors, timing of closing,
expected proceeds and impact on ownership structure; each company’s
and the combined company’s expected cash position at the Closing
and cash runway of the combined company following the Merger and
private financing; the future operations of the combined company,
including commercialization activities, timing of launch, buildout
of commercial infrastructure; the nature, strategy and focus of the
combined company; the development and commercial potential and
potential benefits of any product candidates of the combined
company, including expectations around market exclusivity and IP
protection; the location of the combined company’s corporate
headquarters; anticipated clinical drug development activities and
related timelines, including the expected timing for announcement
of data and other clinical results and potential submission of a
New Drug Application for one or more product candidates; and other
statements that are not historical fact. All statements other than
statements of historical fact contained in this communication are
forward-looking statements. These forward-looking statements are
made as of the date they were first issued, and were based on the
then-current expectations, estimates, forecasts, and projections,
as well as the beliefs and assumptions of management. There can be
no assurance that future developments affecting Graphite, LENZ, the
Merger or the concurrent private financing will be those that have
been anticipated.
Forward-looking statements are subject to a number of risks and
uncertainties, many of which involve factors or circumstances that
are beyond Graphite’s control. Graphite’s actual results could
differ materially from those stated or implied in forward-looking
statements due to a number of factors, including but not limited to
(i) the risk that the conditions to the Closing are not satisfied,
including the failure to timely obtain stockholder approval for the
transaction, if at all; (ii) uncertainties as to the timing of the
consummation of the proposed Merger and the ability of each of
Graphite and LENZ to consummate the proposed Merger; (iii) risks
related to Graphite’s ability to manage its operating expenses and
its expenses associated with the proposed Merger pending the
Closing; (iv) risks related to the failure or delay in obtaining
required approvals from any governmental or quasi-governmental
entity necessary to consummate the proposed Merger; (v) the risk
that as a result of adjustments to the exchange ratio, Graphite
stockholders and LENZ stockholders could own more or less of the
combined company than is currently anticipated; (vi) risks related
to the market price of Graphite’s common stock relative to the
value suggested by the exchange ratio; (vii) unexpected costs,
charges or expenses resulting from the transaction; (viii)
potential adverse reactions or changes to business relationships
resulting from the announcement or completion of the proposed
Merger; (ix) the uncertainties associated with LENZ’s product
candidates, as well as risks associated with the clinical
development and regulatory approval of product candidates,
including potential delays in the completion of clinical trials;
(x) risks related to the inability of the combined company to
obtain sufficient additional capital to continue to advance these
product candidates; (xi) uncertainties in obtaining successful
clinical results for product candidates and unexpected costs that
may result therefrom; (xii) risks related to the failure to realize
any value from product candidates being developed and anticipated
to be developed in light of inherent risks and difficulties
involved in successfully bringing product candidates to market;
(xiii) risks associated with the possible failure to realize
certain anticipated benefits of the proposed Merger, including with
respect to future financial and operating results; (xiv) the risk
that the private financing is not consummated upon the Closing; and
(xv) the risk that Graphite stockholders receive more or less of
the cash dividend than is currently anticipated, among others.
Actual results and the timing of events could differ materially
from those anticipated in such forward-looking statements as a
result of these risks and uncertainties. These and other risks and
uncertainties are more fully described in periodic filings with the
U.S. Securities and Exchange Commission (the “SEC”), including the
factors described in the section titled “Risk Factors” in
Graphite’s Annual Report on Form 10-K for the year ended December
31, 2022, as amended, filed with the SEC, subsequent Quarterly
Reports on Form 10-Q filed with the SEC, and in other filings that
Graphite makes and will make with the SEC in connection with the
proposed Merger, including the Proxy Statement described below
under “Additional Information and Where to Find It.” You should not
place undue reliance on these forward-looking statements, which are
made only as of the date hereof or as of the dates indicated in the
forward-looking statements. Graphite expressly disclaims any
obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements contained herein to
reflect any change in its expectations with regard thereto or any
change in events, conditions or circumstances on which any such
statements are based. This communication does not purport to
summarize all of the conditions, risks and other attributes of an
investment in Graphite or LENZ.
No Offer or Solicitation
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities nor a solicitation
of any vote or approval with respect to the proposed transaction or
otherwise. No offering of securities shall be made except by means
of a prospectus meeting the requirements of Section 10 of the U S.
Securities Act of 1933, as amended, and otherwise in accordance
with applicable law.
Additional Information and Where to Find It
This communication relates to the proposed Merger involving
Graphite and LENZ and may be deemed to be solicitation material in
respect of the proposed Merger. In connection with the proposed
Merger, Graphite will file relevant materials with the SEC,
including a registration statement on Form S-4 (the “Form S-4”)
that will contain a proxy statement (the “Proxy Statement”) and
prospectus. This communication is not a substitute for the Form
S-4, the Proxy Statement or for any other document that Graphite
may file with the SEC and or send to Graphite’s shareholders in
connection with the proposed Merger. BEFORE MAKING ANY VOTING
DECISION, INVESTORS AND SECURITY HOLDERS OF GRAPHITE ARE URGED TO
READ THE FORM S-4, THE PROXY STATEMENT AND OTHER DOCUMENTS FILED
WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
GRAPHITE, THE PROPOSED MERGER AND RELATED MATTERS.
Investors and security holders will be able to obtain free
copies of the Form S-4, the Proxy Statement and other documents
filed by Graphite with the SEC through the website maintained by
the SEC at http://www.sec.gov. Copies of the documents filed by
Graphite with the SEC will also be available free of charge on
Graphite’s website at www.graphitebio.com, or by contacting
Graphite’s Investor Relations at investors@graphitebio.com.
Participants in the Solicitation
Graphite, LENZ, and their respective directors and certain of
their executive officers may be considered participants in the
solicitation of proxies from Graphite’s shareholders with respect
to the proposed Merger under the rules of the SEC. Information
about the directors and executive officers of Graphite is set forth
in its Annual Report on Form 10-K for the year ended December 31,
2022, which was filed with the SEC on March 20, 2023 and amended on
April 27, 2023, subsequent Quarterly Reports on Form 10-Q and other
documents that may be filed from time to time with the SEC.
Additional information regarding the persons who may be deemed
participants in the proxy solicitations and a description of their
direct and indirect interests, by security holdings or otherwise,
will also be included in the Form S-4, the Proxy Statement and
other relevant materials to be filed with the SEC when they become
available. You may obtain free copies of this document as described
above.
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version on businesswire.com: https://www.businesswire.com/news/home/20231115881807/en/
LENZ Therapeutics Contact Information Investors Julie
Seidel Stern Investor Relations, Inc. 212-698-8684
Julie.seidel@sternir.com
Graphite Bio, Inc. Contact Information Investors and
Media Chris Garrett Chief Strategy Officer ir@graphitebio.com
Graphite Bio (NASDAQ:GRPH)
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Graphite Bio (NASDAQ:GRPH)
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