Graphite Bio, Lenz Therapeutics to combine in all stock transaction

Lenz Therapeutics and Graphite Bio 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). 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 $53.5M, 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 $225M of cash or cash equivalents. Graphite Bio is expected to contribute $115M to the combined entity and expects to pay a dividend to Graphite Bio shareholders of approximately $60M 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, or NDA, submission and subsequent FDA approval.