LENZ Therapeutics Announces Completion of Merger with Graphite Bio and Provides Update on Recent Clinical and Corporate Progress
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Insights
The merger between LENZ Therapeutics and Graphite Bio, coupled with the reverse stock split and special cash dividend, represents a significant restructuring that may affect investor sentiment and stock liquidity. The reverse split could be perceived as a move to stabilize stock price by reducing the number of shares available, which often aims to attract more institutional investors. The special dividend provides immediate, tangible returns to shareholders, potentially increasing investor interest. Financially, the $210 million cash reserve post-merger indicates a robust balance sheet, enhancing LENZ's ability to invest in infrastructure and commercialization efforts without immediate need for further financing. The ownership percentages post-merger are also important as they reflect the new power dynamics within the company, with pre-merger LENZ stockholders retaining majority control, which might reassure investors about the continuity of the company's strategic vision.
LENZ Therapeutics' focus on presbyopia treatment addresses a significant market need, given the large potential patient population. The 'all eyes, all day' brand mission suggests a universal approach that could disrupt the current standard of care if their product candidates are successful. However, the commercial success will depend on the market's reception of the aceclidine-based therapy, its efficacy compared to existing treatments and the company's ability to execute an effective marketing strategy. The anticipation of Phase 3 trial results and a subsequent NDA submission are pivotal events that will likely influence investor expectations and the company's market valuation. If the results are positive and the FDA approval is granted, LENZ could capture a significant market share, but delays or negative outcomes could adversely affect the stock.
The therapeutic area of presbyopia that LENZ is targeting is currently under-served, with most treatments being device-based (e.g., glasses, contact lenses) rather than pharmacological. The development of LNZ100 and LNZ101 as once-daily, preservative-free eye drops could represent a significant advancement in the quality of life for patients. The aceclidine mechanism of action and the combination with brimonidine in LNZ101 are noteworthy because they suggest a differentiated approach that could offer benefits over current treatments. The safety profile and efficacy data from the Phase 2 INSIGHT trial are encouraging, but the larger and longer-term Phase 3 CLARITY trials will be more indicative of the drugs' potential. Investors will be closely watching the topline data release in April 2024 as a major milestone that could significantly impact the company's valuation and future prospects.
– LENZ Therapeutics to debut on Nasdaq under the ticker symbol “LENZ” as a publicly traded company advancing late clinical-stage assets for the treatment of presbyopia –
– Topline data from registration-enabling Phase 3 CLARITY trials for lead assets LNZ100 and LNZ101 expected in April 2024 –
– Strong balance sheet with approximately
“Following the close of this transaction, we believe we are well-positioned to bring the opportunity of a once-daily pharmacological eye drop intended to improve near vision throughout the full workday closer to the 128 million people in
Topline Data from Pivotal Phase 3 CLARITY Trials for LNZ100 and LNZ101 Expected in April 2024
LENZ’s product candidates, LNZ100 and LNZ101, are preservative-free, single-use, once-daily eye drops containing aceclidine and aceclidine plus brimonidine, respectively.
Previously, both LNZ100 and LNZ101 have demonstrated rapid onset and long duration of near vision improvement as well as an ability to be used across a wide age range of presbyopes with a broad refractive range while avoiding blurry distance vision. In the positive Phase 2 INSIGHT trial (NCT05294328), 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 at one hour post-treatment, with
Following the completion of the INSIGHT trial, LENZ initiated three pivotal Phase 3 CLARITY trials for LNZ100 and LNZ101. Similar to the INSIGHT trial, the primary efficacy endpoint in the CLARITY-1 and CLARITY-2 trials is the percentage of participants 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. The objective of the CLARITY-3 trial is to confirm the long-term safety profile of LNZ100 and LNZ101 over a six-month period. Participants in the CLARITY trials range in age 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.
The last visits of the last patients in each CLARITY trial have been completed as of the first quarter of 2024, and LENZ expects to report Phase 3 topline results from the CLARITY trials in April 2024.
Planned Approach to Commercialization of LNZ100 or LNZ101
Based on the data generated from the CLARITY trials, LENZ plans to submit a New Drug Application (NDA) to the
LENZ’s objective is to commercialize the product that the Company believes will most effectively meet the needs of the widest range of presbyopes tested and has the potential to provide the best value based on an “all eyes, all day” brand mission, and expects to share the selected product candidate for NDA submission as part of the topline results in April 2024.
LENZ intends to launch either LNZ100 or LNZ101 in
Upcoming Milestones
Based on its progress to date, LENZ anticipates the following near-term milestones in 2024:
- Announce topline results from the Phase 3 CLARITY trials and product candidate selection for NDA submission in April 2024
- Submit an NDA for the selected product candidate in mid-2024 to seek FDA marketing approval
Summary of the Merger Transaction, Reverse Stock Split, Special Cash Dividend and Private Placement
In connection with the closing of the merger, Graphite Bio effected a 1 for 7 reverse split of its common stock and issued a special cash dividend of
Concurrent with the closing of the merger, Graphite Bio completed a private placement of
Immediately following the merger and the private placement of
Leadership Team and Board of Directors Updates
The combined company will be led by Eef Schimmelpennink as President and Chief Executive Officer of LENZ. In addition to Mr. Schimmelpennink, the LENZ leadership team includes current members of management Marc Odrich, M.D., as Chief Medical Officer, and Shawn Olsson, as Chief Commercial Officer.
In addition, LENZ appointed Dan Chevallard as Chief Financial Officer, effective March 21, 2024. Dan most recently served as Chief Financial Officer at Viracta Therapeutics (Nasdaq: VIRX) and possesses more than 20 years of experience in financial, operational, and strategic planning in the biotechnology and life sciences industry.
The Board of Directors of LENZ will be composed of Eef Schimmelpennink, Fred Guerard, Jim McCollum, Zach Scheiner, Shelley Thunen, who join from LENZ’s Board of Directors, Kim Drapkin, who continues from Graphite Bio’s Board of Directors, and Jeff George, who joined as the Chair of the Board of Directors at the closing of the merger.
Advisors
Leerink Partners acted as exclusive financial advisor to Graphite Bio for the transaction and Goodwin Procter LLP served as its legal counsel. BofA Securities served as lead financial advisor to LENZ for the merger. Citi also served as financial advisor to LENZ for the merger. BofA Securities served as lead placement agent on the PIPE financing. Citi, Piper Sandler & Co., and William Blair & Company, L.L.C. served as co-placement agents for the PIPE financing. Latham & Watkins LLP served as legal counsel to the placement agents. Wilson Sonsini Goodrich & Rosati, P.C. served as legal counsel to LENZ.
About Presbyopia
Presbyopia is the inevitable loss of near vision associated with aging and impacts the daily lives of nearly all people over 45. In
About LENZ Therapeutics
LENZ is a late clinical-stage biopharmaceutical company focused on developing the first aceclidine-based eye drop to improve vision in patients diagnosed with presbyopia. LENZ’s product candidates, LNZ100 and LNZ101, are preservative-free, single-use, once-daily eye drops containing aceclidine and aceclidine plus brimonidine, respectively. LNZ100 and LNZ101 are under clinical evaluation in the registration-enabling Phase 3 CLARITY trials as potential therapies for the treatment of presbyopia, a condition impacting an estimated 1.8 billion people globally and 128 million people in
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of federal securities laws. You can identify forward-looking statements by words such as “may,” “will,” “could,” “can,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “poised,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, but not all forward-looking statements will contain these words. Forward-looking statements in this press release include, but are not limited to, statements regarding the timing, progress and results of LENZ’s clinical trials for LENZ’s current products, including statements regarding the timing of completion of trials, and the reporting of data from LENZ’s current trials; LENZ’s plans relating to the clinical development of LENZ’s product candidates; the size of the market opportunity for LENZ’s product candidates; LENZ’s plans relating to commercializing LENZ’s product candidates, if approved; the beneficial characteristics of LENZ’s product candidates; the timing of regulatory filings and approvals for LENZ’s product candidates; LENZ’s ability to obtain and maintain regulatory approval for LENZ’s product candidates; the expected potential benefits of strategic collaborations with third parties and LENZ’s ability to attract collaborators with development, regulatory and commercialization expertise; and the period over which LENZ estimates LENZ’s existing cash and cash equivalents will be sufficient to fund LENZ’s future operating expenses and capital expenditure requirements. These statements are based on numerous assumptions concerning the development of LENZ’s products and target markets and involve substantial risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievement to be materially different from the information expressed or implied by these forward-looking statements, including those risk factors described in the section titled “Risk Factors” in Graphite Bio’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 27, 2024, as well as the final 424B3 proxy statement/prospectus filed with the SEC on February 13, 2024. LENZ cannot assure you that the forward-looking statements in this press release or the assumptions upon which they are based will prove to be accurate. The forward-looking statements in this press release are as of the date of this press release. Except as otherwise required by applicable law, LENZ and Graphite Bio disclaim any duty to update any forward-looking statements. You should, therefore, not rely on these forward-looking statements as representing LENZ’s views as of any date subsequent to the date of this press release.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240321281097/en/
Shawn Olsson
LENZ Therapeutics
IR@LENZ-Tx.com
Janhavi Mohite
Stern Investor Relations, Inc.
janhavi.mohite@sternir.com
Source: LENZ Therapeutics, Inc.
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