Dive Brief:
-
Graphite Bio has agreed to a reverse merger with Lenz Therapeutics, ending a yearslong odyssey of ups and downs for the once-promising gene editing company.
-
Under the terms of the agreement, Graphite shareholders will end up with about 35% of the new company, which will be renamed Lenz Therapeutics and trade on the Nasdaq stock exchange under the ticker symbol “LENZ.” The combined organization will be run by Lenz’s management team and be headquartered in San Diego. Two of the seven board members will be selected by the Graphite board.
-
Lenz said Wednesday that the new company expects to have about $225 million in cash, helped by Graphite’s agreement to undertake a private investment in public equity, or “PIPE,” financing to raise $53.5 million. Graphite plans to pay a dividend of about $60 million to its existing shareholders when the transaction closes.
Dive Insight:
Graphite went public in June 2021, raising $238 million on the promise of genetic therapies for conditions including sickle cell disease. The company’s shares, which traded at a bit above $2 early Wednesday, soared above $28 in July 2021.
But results in the clinic didn’t pan out for Graphite. In January 2023, the company paused a Phase 1/2 study of its treatment for sickle cell disease after a patient suffered a serious side effect. In February, the company discontinued development of the therapy, announced plans to lay off half of its staff and began looking for “strategic alternatives.”
Enter Lenz Therapeutics. The reverse merger offers Lenz a public listing slot at a time when the market for initial offerings is still sluggish. And Graphite’s cash will help Lenz focus on the development of its lead product, now in Phase 3 testing.
Graphite shareholders will find themselves owning part of a company going in a very different direction. Lenz is focused on therapies for the eye, with a lead product designed to treat the vision deterioration that affects almost everyone over the age of 45. Lenz says its once-daily eye drops have the potential to enter a market topping $3 billion.
Graphite was originally incorporated in June 2017 under the name Longbow Therapeutics, but stopped developing its initial technology at the end of 2018. The company later became Integral Medicines and then changed its name one more time to Graphite in August 2020 after identifying what it believed was promising gene editing technology.
This story was originally published on BioPharma Dive. To receive daily news and insights, subscribe to our free daily BioPharma Dive newsletter.