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LT

LENZ Therapeutics, Inc. (GRPH)·Q4 2022 Earnings Summary

Executive Summary

  • Q4 2022 was dominated by safety-driven strategic shifts: after a January 2023 voluntary pause of the Phase 1/2 CEDAR study due to a serious adverse event (pancytopenia) likely related to treatment, the company disclosed in February 2023 the discontinuation of nula‑cel and a process to explore strategic alternatives, alongside a restructuring to preserve capital .
  • Financially, Q4 2022 net loss was $24.6M and EPS was $(0.44); R&D was $18.5M and G&A $8.3M, with interest income of $2.2M; cash, cash equivalents and marketable securities were $283.6M at 12/31/22 .
  • Year-over-year, operating expenses rose versus Q4 2021 (R&D $18.5M vs $11.2M; G&A $8.3M vs $7.7M), widening net loss (Q4 2022 $(24.6)M vs Q4 2021 $(18.9)M) and EPS ($(0.44) vs $(0.35)) .
  • Prior quarters indicated strong execution and runway: first patient dosed in CEDAR, ASH abstracts accepted, and a WuXi Advanced Therapies manufacturing partnership; cash runway previously guided “into Q4 2024,” but Q4 strategic review effectively resets that outlook .
  • No earnings call transcript or S&P Global consensus estimates were available in our sources; estimates comparison is therefore unavailable. Wall Street consensus via S&P Global was unavailable for GRPH in this period.

What Went Well and What Went Wrong

What Went Well

  • Liquidity remained robust at year-end: cash, cash equivalents and marketable securities totaled $283.6M, providing flexibility during the strategic review .
  • Management moved decisively to address safety concerns and preserve capital, initiating strategic alternatives and restructuring; “We are working expeditiously to complete this strategic review” — CEO Josh Lehrer .
  • Prior quarter operational progress: first patient dosed in CEDAR and partnership with WuXi Advanced Therapies to scale manufacturing capabilities .

What Went Wrong

  • Safety event: the January 2023 voluntary pause of CEDAR due to prolonged low blood counts in the first patient, assessed as likely related to study treatment, preceded the February 2023 discontinuation of nula‑cel .
  • Rising operating expenses: Q4 2022 total operating expenses increased to $26.8M from $18.9M in Q4 2021, widening net loss to $(24.6)M and EPS to $(0.44) .
  • Program timeline/guidance disruption: prior communications targeted initial proof‑of‑concept readouts for mid‑2023; these were effectively withdrawn following the pause and discontinuation .

Financial Results

Metric (Units)Q2 2022Q3 2022Q4 2022
R&D Expense ($USD Millions)$17.8 $18.3 $18.5
G&A Expense ($USD Millions)$9.0 $7.9 $8.3
Total Operating Expenses ($USD Millions)$26.8 $26.2 $26.8
Interest Income ($USD Millions)$0.84 $1.47 $2.15
Net Loss ($USD Millions)$(25.9) $(24.7) $(24.6)
EPS (Basic & Diluted, $USD)$(0.48) $(0.45) $(0.44)
Cash, Cash Equivalents & Marketable Securities ($USD Millions, Period-End)$328.3 (6/30/22) $305.1 (9/30/22) $283.6 (12/31/22)

YoY comparison (Q4 2022 vs Q4 2021):

Metric (Units)Q4 2021Q4 2022
R&D Expense ($USD Millions)$11.2 $18.5
G&A Expense ($USD Millions)$7.7 $8.3
Total Operating Expenses ($USD Millions)$18.9 $26.8
Interest Income ($USD Millions)$0.01 $2.15
Net Loss ($USD Millions)$(18.9) $(24.6)
EPS (Basic & Diluted, $USD)$(0.35) $(0.44)

Notes:

  • The press releases present operating expenses and net loss without a revenue line, indicating no reported product revenue in the periods shown .

Segment breakdown: Not applicable; no segments disclosed .

KPIs:

KPIQ2 2022Q3 2022Q4 2022
CEDAR Trial StatusFirst patient dosed; initial PoC mid‑2023 anticipated First patient dosed; enrollment ongoing; PoC mid‑2023 Voluntary pause in Jan 2023; program discontinued Feb 2023
Manufacturing—WuXi Advanced Therapies partnership to support nula‑cel manufacturing —
Scientific PresenceASGCT beta‑thalassemia preclinical data presented Two ASH abstracts accepted (scRNAseq method; beta‑thalassemia platform) —

Guidance Changes

MetricPeriodPrevious GuidanceCurrent Guidance (Q4 context)Change
Cash RunwayThrough Q4 2024“Cash runway into Q4 2024” (reiterated prior quarters) Not reiterated; company initiated strategic review and restructuring to preserve capital Under review/withdrawn
nula‑cel PoC TimingMid‑2023Initial proof‑of‑concept data anticipated mid‑2023 Voluntary pause (Jan 2023) and discontinuation (Feb 2023) Withdrawn
CEDAR EnrollmentOngoingEnrollment ongoing across US sites Paused; program discontinued Halted
Pipeline FocusConditioning—Continue early-stage non‑genotoxic conditioning research; advance toward potential candidates New focus articulated

Earnings Call Themes & Trends

Note: No earnings call transcript was available in our sources for Q4 2022; themes below reflect press releases.

TopicPrevious Mentions (Q2)Previous Mentions (Q3)Current Period (Q4)Trend
Clinical Execution (CEDAR)First patient dosed; PoC mid‑2023 anticipated First patient dosed; enrollment ongoing; PoC mid‑2023 Voluntary pause after SAE; discontinued program Deteriorating/Halted
Safety——SAE of prolonged pancytopenia in first patient; likely treatment-related Emerged negatively
Manufacturing—WuXi partnership to support manufacturing and scaling —Stable/Not central post‑pause
Scientific CommunicationsASGCT preclinical beta‑thalassemia data Two ASH abstracts accepted (scRNAseq; platform application) —Deprioritized post‑pause
Strategy/CapitalCash runway into Q4 2024 Cash runway into Q4 2024 Strategic alternatives; restructuring to preserve capital Shift to strategic review
Platform/PipelineGene replacement in beta‑thalassemia (GPH102) preclinical Platform highlighted (UltraHDR); beta‑thalassemia application Focus on non‑genotoxic conditioning research Refocused

Management Commentary

  • “As announced last month, Graphite Bio has initiated a process to evaluate strategic alternatives that may result in changes to our business strategy… We are working expeditiously to complete this strategic review” — CEO Josh Lehrer .
  • “We are pleased to have recently dosed our first patient with nula‑cel, marking the first time an investigational therapy designed to correct a genetic mutation has been administered to a patient” — CEO Josh Lehrer (Q3 release) .
  • “We have made significant progress in advancing CRISPR‑based gene editing beyond cutting and disruption toward precision repair… we dosed the first sickle cell disease patient in our Phase 1/2 CEDAR trial… initial proof‑of‑concept data for nula‑cel in mid‑2023” — CEO Josh Lehrer (Q2 release) .

Q&A Highlights

  • No public earnings call transcript was available in our sources for Q4 2022; therefore, Q&A highlights and any call-based guidance clarifications are unavailable.

Estimates Context

  • Wall Street consensus estimates via S&P Global were unavailable for GRPH in this period due to missing CIQ mapping; as a result, comparisons vs consensus EPS and revenue cannot be provided.
  • Given pre‑revenue status and the subsequent program discontinuation, near‑term estimate frameworks likely required material revision post‑Q4 safety disclosure and strategic update .

Key Takeaways for Investors

  • Capital position remained strong at year-end ($283.6M cash/marketable securities), providing optionality during strategic alternatives .
  • Safety signal (prolonged pancytopenia) led to a decisive halt and discontinuation of nula‑cel, resetting the clinical narrative and timelines .
  • Operating expenses stepped up YoY in Q4 (Total opex $26.8M vs $18.9M), widening net loss and EPS; interest income partially offset the loss .
  • Prior strategic positives (WuXi manufacturing partnership, ASH/ASGCT scientific visibility) became secondary after the safety event and program termination .
  • Guidance previously pointing to mid‑2023 PoC and runway into Q4 2024 is effectively withdrawn/under review as the company pivots to non‑genotoxic conditioning and explores strategic options .
  • With no call transcript and no S&P consensus available, investors should focus on liquidity, burn trajectory (R&D/G&A trends), and milestones from the conditioning program as future catalysts .
  • Near-term trading could be driven by strategic review outcomes; medium‑term thesis hinges on whether the conditioning program can produce credible preclinical/early clinical candidates and the structure/terms of any strategic transaction .