LENZ Therapeutics, Inc. Q2 FY2024 earnings call

• Transformational first half of 2024: Public market debut, Phase 3 CLARITY trial results supporting LNZ100 as a potential best-in-class treatment for presbyopia, $30 million PIPE financing, and submission of NDA to the FDA.
• Clinical highlights: LNZ100 showed rapid onset, strong near vision improvement, high responder rates, and was well-tolerated in Phase 3 CLARITY trials.
• Commercial preparedness: Unbranded Eye Am campaign launched to educate eye care professionals, commercial leadership team fully staffed, and U.S. commercial capabilities being built out.
• Financials: Total operating expenses in Q2 2024 were in line with plan, R&D expenses decreased due to conclusion of Phase 3 study, and SG&A expenses increased due to commercial team additions.

In the second quarter of 2024, total operating expenses were approximately $14.4 million, down from $15 million in the same period of 2023. Research and development (R&D) expenses decreased to $6.9 million in Q2 2024 compared to $12.6 million in the same period of 2023. Selling, general, and administrative (SG&A) expenses increased to $7.4 million in Q2 2024 compared to $2.3 million in the same period of 2023. The company ended the second quarter with approximately $226.2 million in cash, cash equivalents, and marketable securities, which is expected to fund the cash runway to post-launch positive operating cash flow.

• Anticipates potential FDA approval in mid-2025 and U.S. launch as early as the second half of 2025.
• SG&A spend is expected to ramp modestly over the balance of 2024, with more significant investment in 2025 for commercialization.

Actual results may differ materially from forward-looking statements due to various factors and risks, including those discussed in the company's SEC filings. Investors are encouraged to consult the risk factors in the company's SEC filings for additional detail.

Q: Can you give an idea of when SG&A spend will pick up as you begin pre-launch investment? And how are you thinking about the market opportunity and identifying patients for pharmacotherapy?

A: Dan Chevallard said SG&A is expected to ramp modestly over the balance of 2024, with more significant investment in 2025. Shawn Olsson discussed identifying early adopters as those in contacts, with refractive surgery, or who've been to a Medispa, each group over 10 million.

Q: What percent of optometrists can prescribe LENZ100 and perform retinal exams?

A: Shawn Olsson said nearly all optometrists can prescribe LENZ100 and perform retinal exams as it's standard practice.

Q: Was there a pre-NDA meeting with the FDA, and any feedback? Also, what are you looking for in early physician adopters?

A: Eef Schimmelpennink said there was a pre-submission meeting with the FDA, and feedback was aligned. Shawn Olsson mentioned targeting ECPs with high propensity to write beauty scripts, focusing on 15,000 ECPs representing over 85% of beauty scripts.

Q: Update on CMC and unbranded campaign?

A: Eef Schimmelpennink said CMC is set with commercial-scale production and stable data. Shawn Olsson discussed the unbranded campaign training on ideal presbyopia solution aspects, with strong physician excitement.

Q: Any new findings from physician feedback and thoughts on product use in office?

A: Eef Schimmelpennink said medical community is discussing potential outside near vision uses. Shawn Olsson said ECPs have mixed preferences for in-office vs. home use, but product has immediate response.

Q: Refills per year and compliance?

A: Shawn Olsson said patients plan to use 4-7 days per week, with average refill rate assumed at 5 times per year, aligning with conservative market estimates