Lexeo Therapeutics, Inc. Common Stock M&A announcement

Earlier today, we issued a press release announcing the signing of an agreement to acquire Mantle Therapeutics and three new research collaborations focused on CNS-targeted gene therapy strategies in Friedreich's ataxia or FA. A copy of the press release and slides to today's call can be found on our website at lexeotx.com. Joining us on today's call are Nolan Townsend, Chief Executive Officer, Narinder Bhalla, Chief Medical Officer, and Louis Tamayo, Chief Financial Officer. Before I begin, I would like to remind you that this call will contain forward-looking statements regarding Lexeo's future expectations, plans, and prospects, which constitute forward-looking statements for the purpose of the Safe Harbor provision under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in our filings with the SEC. With that, I would like to turn the call over to our CEO, Nolan.

Thanks, Ashley, and thank you all for joining us this morning. Today, we are excited to announce that we have entered into an agreement to acquire Mantle Therapeutics alongside several new research collaborations, significantly expanding our presence in FA. Over the past several years, we have established a strong foundation in FA cardiomyopathy through the development of LX2006. Our initial area of focus was cardiomyopathy because it remains a leading cause of mortality in FA. We believe that addressing that burden represented the greatest opportunity to improve outcomes for patients. Today, we are building on that foundation by adding complementary therapeutic modalities and CNS-targeted gene therapy strategies, advancing our objective of building a best-in-class platform that comprehensively addresses both the cardiac and neurologic manifestations of FA.

As the field has evolved, it has become increasingly clear that patients and families value a comprehensive approach that addresses both the cardiac and neurologic aspects of disease burden. As we walk through today's announcement, you will see how this strategy will meaningfully expand our FA platform without changing our near-term priorities. LX2006 remains the backbone of our FA disease area strategy, and we believe it has the potential to become the best-in-class therapeutic for treating FA cardiomyopathy. SUNRISE-FA2 remains our highest operational and capital allocation priority. These new assets and collaborations are designed to complement that foundation and maximize our overall benefit in the neurologic pathology of FA. In addition to gene therapy, we will soon have small molecule, protein replacement, and RNA-based strategies providing multiple differentiated approaches to increase or replace frataxin in the brain and address the neurologic burden of FA.

This broader toolkit will allow us to pursue multiple biologic theses for successfully treating the components of FA mediated by the central nervous system while leveraging the infrastructure and expertise we have already built around LX2006 to extend our leadership in FA and create additional long-term value. Importantly, achieving a compelling return on investment for this acquisition does not depend on advancing every program. Upon closing, we intend to evaluate the acquired programs against predefined scientific, clinical, strategic, and financial criteria and prioritize investment in the opportunities demonstrating the strongest potential for clinical patient impact, regulatory success, and shareholder value creation. Our cash runway guidance into 2028, which remains unchanged, includes plans to advance one acquired program into clinical development. We expect to provide a program prioritization update in early 2027 and submit an IND for our next FA development candidate in 2027.

FA is a progressive multi-system disease with substantial unmet need. Cardiac complications remain the leading cause of mortality and is the reason LX2006 continues to be such an important potential therapy for patients and providers. At the same time, neurologic manifestations affect patients throughout the course of the disease and contribute significantly to long-term disability and reduced quality of life. We are already observing a statistically significant improvement in the neurologic component of FA with LX2006, and we believe this benefit could be further expanded with therapeutics specifically designed to target the brain, a key organ to address in order to maximize patient benefit and achieve a best-in-class treatment for patients with FA. Let me spend a moment on the transaction itself.

Lexeo will acquire Mantle Therapeutics for $8.3 million in upfront consideration, gaining access to a differentiated FA portfolio that includes a clinical stage asset with early functional and biologic signals. The agreement also includes up to $13 million in success-based clinical and regulatory milestone payments, bringing the total potential consideration to $21.3 million. This transaction is complemented by three new research collaborations with Weill Cornell Medicine, Vivet Therapeutics, and Apertura Gene Therapy. These collaborations are designed to evaluate cerebellum-targeted sequential dosing of frataxin gene therapy, alternative CNS delivery, and strategies that may support repeat dosing of LX2006. With that, I will turn it over to Narinder Bhalla to walk through the Mantle programs and research collaborations in greater detail.

Thank you, Nolan, and good morning, everyone. As you can see on slide 7, the Mantle portfolio includes four programs, which I will highlight in more detail on the next two slides. Starting with LX3010, this is a clinical-stage oral combination therapy designed to increase frataxin expression while addressing mitochondrial function and oxidative stress through complementary mechanisms including HDAC inhibition and NRF2. What we find particularly interesting is that the early data include both a functional signal and direct evidence of increased frataxin protein. Early clinical data include an approximately 6-point improvement in mFARS scores at 16 weeks and a mean 9-fold increase in frataxin protein levels from baseline in muscle biopsies across 11 Friedreich's ataxia patients. We plan to further evaluate the durability and reproducibility of these findings, but we believe the data generated to date support continued evaluation of the program.

LX3030 is a preclinical-stage oral tissue-penetrant small molecule designed to increase production of endogenous frataxin in the central nervous system. It is a third-generation benzamide HDAC inhibitor that builds on published clinical work demonstrating that oral benzamide HDACs can increase frataxin in patients with Friedreich's ataxia through epigenetic modulation and acetylation of chromatin. Preclinical studies have demonstrated robust increases in frataxin, supporting continued evaluation of LX3030 as a differentiated oral therapy. As we think about the unmet need in Friedreich's ataxia, neurological manifestations remain a major challenge. An oral therapy designed to reach the CNS and meaningfully increase frataxin could represent an important opportunity, particularly if it improves upon earlier approaches in this class. While still preclinical, we believe LX3030 has the potential to be a highly differentiated asset within the FA landscape.

What excites us about LX3050 is the opportunity to test a fundamentally different biological thesis of directly replacing deficient frataxin. LX3050 is a preclinical-stage recombinant human frataxin fused to a proprietary anti-TFR1 Fab. It is intended to directly replace deficient frataxin and uses a TFR1-targeting brain shuttle designed to cross the blood-brain barrier and increase delivery of frataxin to the brain. In vitro studies have demonstrated dose-responsive improvements in measures of mitochondrial function, providing early support for the program's proposed mechanism. We believe that diversification of mechanism is important in a disease as complex as FA, and this program uses a potentially differentiated protein replacement strategy designed to reach disease-relevant tissues, including the CNS. Finally, LX3070 is a discovery-stage ASO/Fab conjugate program designed to stabilize frataxin messenger RNA and thereby increase translation of endogenous frataxin protein.

The program combines an RNA-targeted mechanism with a proprietary anti-TFR1 Fab intended to support delivery to disease-relevant tissues. In vitro studies have demonstrated dose-responsive increases in frataxin. What we found particularly attractive here is the combination of a novel mechanism and a delivery strategy intended to reach the central nervous system. Together, the four programs will give us distinct approaches to either increase endogenous frataxin production or directly replacing the deficient protein. As these programs progress, Lexeo will have the opportunity to identify a differentiated lead neurologic program with the potential to deliver meaningful clinical benefit. We have also established three new collaborations to evaluate cerebellar targeted sequential dosing of frataxin gene therapy. Each collaboration is designed to complement systemically administered LX2006. Starting with Weill Cornell Medicine, we are particularly excited as this collaboration builds on encouraging large animal data that were previously presented at ASGCT earlier this year.

In those studies, animals received systemic intravenous LX2006, followed by a second intracisternal administration into the CSF and directly to the cerebellum 8 weeks later. Despite pre-existing immunity to the vector, potentially therapeutic levels of vector genomes were detected in the cerebellum through both approaches. We believe these findings provide early support for the feasibility of sequential dosing strategies and reinforce the opportunity to explore broader neurological applications of LX2006 in the future. With Apertura, we are excited to gain access to novel blood-brain barrier crossing capsids. One of the key challenges in neurological disease is achieving effective CNS delivery while maintaining a practical patient experience. This partnership gives us access to technology that may enable an intravenous route of administration to target the CNS, enabling a less invasive approach following initial systemic administration of LX2006.

With Vivet, we are evaluating technology that may help address one of the fundamental challenges associated with repeat administration. If successful, novel immune modulation strategies could play an important role in enabling future sequential dosing approaches and expanding long-term flexibility for gene therapy. Importantly, these collaborations provide opportunities to explore broader neurological applications, alternative delivery approaches, and future sequential dosing strategies, all while maintaining our focus on successful execution of SUNRISE-FA2. I will now turn it back over to Nolan.