Graphite Bio To Merge With LENZ Therapeutics; Stock Down In Pre-market

(RTTNews) - Graphite Bio, Inc. (GRPH), a clinical-stage gene editing company, on Wednesday announced that it has entered into a definitive merger agreement with LENZ Therapeutics in an all-stock transaction.

Accordingly, Graphite Bio has entered into a subscription agreement for a PIPE financing that is expected to close along with the completion of the merger of $53.5 million, led by a syndicate of LENZ's healthcare investors that includes participation from new investors.

The combined company is expected to trade on Nasdaq under the ticker "LENZ" and will have around $225 million of cash or cash equivalents.

Graphite Bio is expected to contribute $115 million to the combined entity and pay a dividend of around $60 million to its shareholders at transaction close.

Both the companies are hoping that the combined company will continue to build infrastructure and successfully commercialize LENZ's lead product candidate, based on the completion of the ongoing Phase 3 trials, New Drug Application submission and subsequent FDA approval.

In pre-market activity, Graphite Bio shares are trading at $1.87, down 19.7% on the Nasdaq.