Form 4: RA Capital Affiliates Disclose Grant of Stock Options to Director Zachary Scheiner at LENZ Therapeutics

RA Capital Management and its affiliates have disclosed the grant of 13,500 stock options to director Zachary Scheiner, exercisable at $30 per share, under LENZ Therapeutics' Outside Director Compensation Policy.

Summary

• RA Capital Management, L.P., along with its affiliated funds (RA Capital Healthcare Fund, L.P. and RA Capital Nexus Fund II, L.P.) and managing members (Peter Kolchinsky and Rajeev Shah), have filed a Form 4.
• The filing reports the grant of 13,500 stock options to Dr. Zachary Scheiner, an Outside Director of LENZ Therapeutics, Inc. and a Principal of RA Capital Management, L.P.
• The options have an exercise price of $30 per share and were granted on June 11, 2025.
• One hundred percent (100%) of the shares subject to the option will vest on June 11, 2026, provided Dr. Scheiner continues to serve as an Outside Director.
• The options expire on June 10, 2035.
• Dr. Scheiner holds these options for the benefit of the RA Capital funds and a separately managed account, and is obligated to turn over any net proceeds to RA Capital Management, L.P. to offset advisory fees.
• The reporting persons disclaim beneficial ownership of the option and underlying common stock, except to the extent of their pecuniary interest.

Sentiment

Score: 5

Explanation: Neutral. This is a routine disclosure of an insider transaction (grant of stock options) as part of director compensation, which is an expected corporate activity and does not inherently indicate positive or negative sentiment about the company's immediate prospects.

Positives

• The grant of stock options to an outside director aligns with standard corporate governance practices for director compensation.
• The vesting schedule encourages long-term commitment from the director, aligning their interests with the company's performance.

Risks

• Potential for perceived conflict of interest given Dr. Scheiner's dual role as a director of LENZ Therapeutics and a Principal of RA Capital Management, L.P., which is a significant shareholder and investment manager for funds benefiting from the option.
• The complex structure of beneficial ownership, with reporting persons disclaiming ownership except for pecuniary interest, may require careful interpretation by investors.

Future Outlook

Not applicable, as this document reports a past transaction and does not provide forward-looking statements about the company's performance or strategy.

Management Comments

• "RA Capital Management, L.P. (the 'Adviser') is the investment manager for RA Capital Healthcare Fund, L.P. (the 'Fund'), RA Capital Nexus Fund II, L.P. (the 'Nexus Fund II'), and a separately managed account (the 'Account')."
• "The Adviser, the Adviser GP, the Fund, the Nexus Fund II, Dr. Kolchinsky, and Mr. Shah disclaim beneficial ownership of any of the reported securities, except to the extent of its or his pecuniary interest therein."
• "Under Dr. Scheiner's arrangement with the Adviser, Dr. Scheiner holds the option for the benefit of the Fund, the Nexus Fund II and the Account. Dr. Scheiner is obligated to turn over to the Adviser any net cash or stock received upon exercise of the option, which will offset advisory fees owed by the Fund, the Nexus Fund II and the Account to the Adviser."
• "The Reporting Persons therefore disclaim beneficial ownership of the option and underlying common stock."
• "Dr. Zachary Scheiner, a Principal of RA Capital Management, L.P., serves on the Issuer's board of directors."

Industry Context

This is a standard compensation practice for directors, particularly in the biotechnology or pharmaceutical industry where early-stage companies often use equity-based compensation to attract and retain talent, including directors from significant institutional investors like RA Capital.

Comparison to Industry Standards

• The grant of stock options as part of director compensation is a common practice across industries, including biotechnology and pharmaceuticals, to align director interests with shareholder value.
• The specific exercise price and number of options granted would typically be benchmarked against peer companies of similar market capitalization and stage of development. Without current stock price or peer data, a detailed comparison is not possible.

Corporate Governance

Related Party Transactions

• The transaction involves Dr. Zachary Scheiner, an Outside Director of LENZ Therapeutics, Inc., who is also a Principal of RA Capital Management, L.P.
• RA Capital Management, L.P. is the investment manager for RA Capital Healthcare Fund, L.P. and RA Capital Nexus Fund II, L.P., both of which are 10% owners of LENZ Therapeutics, Inc. and have directors (Peter Kolchinsky and Rajeev Shah) on the board.
• Dr. Scheiner holds the options for the benefit of these RA Capital funds and a separately managed account, with proceeds offsetting advisory fees owed to RA Capital Management, L.P. This structure indicates a related party transaction where the compensation to a director is ultimately for the benefit of entities affiliated with significant shareholders and board members.

Stakeholder Impact

• Shareholders: The grant of options represents potential dilution upon exercise, but also aligns the interests of a key director (and indirectly, a major institutional investor) with long-term shareholder value.

Next Steps

• Vesting of the stock options on June 11, 2026, subject to Dr. Scheiner's continued service as an Outside Director.
• Potential exercise of the options by Dr. Scheiner (for the benefit of RA Capital funds) between June 11, 2026, and June 10, 2035.

Key Dates

Keywords

LENZ Therapeutics, LENZ, RA Capital Management, Stock Option, Form 4, Insider Transaction, Director Compensation, Beneficial Ownership, SEC Filing, Biotechnology, Pharmaceuticals