LENZ Therapeutics, Inc.(US:LENZ)2023-05-11 20:11Financial Performance - The net loss for Q1 2023 was $23.934 million, compared to a net loss of $25.835 million in Q1 2022, reflecting a 7.3% improvement[10]. - The company reported a net loss of $23.9 million for the three months ended March 31, 2023, compared to a net loss of $25.8 million for the same period in 2022, representing a 7.4% improvement[15]. - The net loss attributable to common stockholders for Q1 2023 was $23.934 million, compared to a net loss of $25.835 million in Q1 2022, resulting in a basic and diluted net loss per share of $(0.43) for Q1 2023[69]. - The company incurred approximately $3.4 million in employee termination benefits due to a restructuring plan that eliminated about 50% of its workforce, with $2.5 million recognized as operating expenses in Q1 2023[66]. - The company incurred restructuring costs of $2.583 million in Q1 2023, which were not present in Q1 2022[10]. Cash and Liquidity - As of March 31, 2023, cash and cash equivalents increased to $69.811 million from $47.730 million as of December 31, 2022, representing a 46.3% increase[8]. - Cash, cash equivalents, and restricted cash at the end of the period totaled $71.5 million, a decrease from $186.8 million at the end of the previous year[15]. - The company expects its existing cash and marketable securities of $264.1 million will be sufficient to fund operations for at least the next 12 months[17]. - The company anticipates that its cash resources will be sufficient to fund operations for at least the next 12 months[74]. - The existing cash and investments are expected to fund operations into Q4 2024, pending revenue generation from product commercialization[91]. Assets and Liabilities - Total current assets decreased slightly to $270.307 million from $275.365 million, a decline of 1.9%[8]. - Total liabilities increased to $33.772 million as of March 31, 2023, from $25.611 million at the end of 2022, an increase of 31.5%[9]. - The accumulated deficit rose to $266.337 million as of March 31, 2023, compared to $242.403 million at the end of 2022, indicating a 9.8% increase[9]. - The total stockholders' equity decreased to $276.224 million as of March 31, 2023, down from $296.291 million at the end of 2022, a decline of 6.8%[9]. - The company recorded a restructuring liability of $2.115 million as of March 31, 2023, after recognizing $2.545 million in termination benefits charges during the period[67]. Research and Development - Research and development expenses for Q1 2023 were $16.244 million, down from $18.246 million in Q1 2022, a reduction of 11%[10]. - The company continues to focus on research activities related to its early-stage non-genotoxic conditioning program despite the discontinuation of nula-cel[16]. - The company recognized $1.1 million and $1.5 million in research and development expenses related to the LCGM Master Manufacturing and Service Agreement for the three months ended March 31, 2023 and 2022, respectively[38]. - The company is obligated to pay Stanford up to $12.8 million upon achieving certain development, regulatory, and commercial milestones for each Licensed Product[77]. - Research and development expenses for Q1 2023 were $16.2 million, a decrease of $2.0 million from $18.2 million in Q1 2022, primarily due to reduced clinical trial activities[88]. Strategic Decisions - The company announced a voluntary pause in the development of its lead product candidate, nula-cel, and plans to explore strategic alternatives, resulting in a 50% workforce reduction[16]. - The company has paused its Phase 1/2 CEDAR study of nula-cel for sickle cell disease and has decided to discontinue its development, leading to a corporate restructuring[73]. - The company entered into an exclusive license agreement with Stanford University, involving an upfront fee of $50,000 and the issuance of approximately 0.6 million shares of common stock[36]. - The Company agreed to pay IDT an upfront payment of $3.0 million and up to $5.3 million in regulatory milestone payments under the IDT License Agreement[40]. - The company has a retention program for key employees, with cash retention bonuses totaling $4.0 million, of which $0.3 million was recognized in Q1 2023[68]. Stock and Equity - The weighted-average shares used in computing net loss per share increased to 55,864,475 in Q1 2023 from 54,005,299 in Q1 2022, a growth of 3.4%[10]. - As of March 31, 2023, the company reserved a total of 17,395,191 shares for future issuance, an increase from 13,893,161 shares as of December 31, 2022[54]. - The company granted 2,933,350 options under the 2021 Plan during the three months ended March 31, 2023, with an average exercise price of $2.18 per share[61]. - The total stock-based compensation expense for the three months ended March 31, 2023, was $3.263 million, slightly down from $3.342 million in the same period of 2022[64]. - The company repurchased 26,942 shares that were previously early exercised during the three months ended March 31, 2023[62]. Market Conditions - The ongoing COVID-19 pandemic and global economic conditions may impact the company's ability to raise additional funds[91]. - The company has not issued any shares or received proceeds from offerings under the 2022 Shelf registration statement as of May 11, 2023[17]. - The company has not recognized any research and development expense in connection with the IDT License Agreement for the three months ended March 31, 2023 and 2022[40].