LENZ Therapeutics (NASDAQ:LENZ) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.
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Summary
LENZ Therapeutics reported over 50% growth in product revenue and total prescriptions in Q3, continuing into early Q4, driven by consumer-focused initiatives and expanded national TV campaigns.
The company is reorganizing to focus more on consumer marketing, reducing the sales and medical team size. This is expected to decrease operating expenses by more than 50%, targeting $70-75 million in 2027.
Telehealth contributed significantly to the growth, accounting for over 50% of incremental scripts in Q3. The company plans to continue leveraging this channel alongside traditional retail and ePharmacy outlets.
LENZ reported Q3 product revenues of $2.6 million and a net loss of $31 million, with a strong financial position of $197.3 million in cash, cash equivalents, and marketable securities.
CEO Eef Schimmelpennink announced his decision to step down by December 2026, with Dan Chevallard, the CFO, to be appointed as Interim CEO as the company transitions its leadership.
Full Transcript
OPERATOR
Following prepared remarks from management with accompanying slides, we will conduct a question and answer session and instructions will follow at that time. As a reminder, this call is being recorded at this time. I would like to turn the call over to Dan Chevallard, Chief Financial Officer. Please go ahead.
Dan Chevallard (Chief Financial Officer)
Thank you. Good morning and thank you for joining us today. My name is Dan Chevallard, Chief Financial Officer of LENZ Therapeutics. We are joined today by Eef Schimmelpennink, our President and Chief Executive Officer, Shawn Olsson, our Chief Commercial Officer, and Dr. Mark Odrich, our Chief Medical Officer. Before we begin, I would like to remind you that this call will contain forward-looking statements regarding LENZ’s future expectations, plans, prospects, corporate strategy, regulatory and commercial plans and expectations, cash runway projections and performance. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors and risks, including those discussed in our filings with the SEC and which can also be found on our website.
In addition, any forward-looking statements represent only our views as of the date of this webcast and should not be relied upon as representing our views as of any subsequent date. We specifically disclaim any obligations to update such statements. The company encourages you to consult the risk factors contained in our SEC filings for additional detail. With that, I will now turn the call over to Eef.
Eef Schimmelpennink (President and CEO)
Thank you, Dan. Good morning everyone. Today’s results mark an important step forward for LENZ and VIZ. In the third quarter we saw more than 50% growth in both product revenue and total prescriptions, with strong momentum continuing into the fourth quarter. On October 1st, we marked the one-year anniversary of this launch. Over the past year we’ve built important foundations, gained valuable insights into what drives reductions, and importantly drove encouraging momentum from our consumer-focused initiatives.
This last quarter we continued to see that consumer demand generation is a key driver of growth. Expanding our Ditch Reading Glasses campaign to national TV enables us to reach a broader group of consumers with a clear message: an alternative to reading glasses. Our newly established telehealth channel also gives interested consumers a convenient path to evaluation by an independent licensed eye care professional and, when appropriate, a prescription with home delivery.
Together these initiatives have helped establish a more seamless path from awareness to evaluation, treatment, and continued use. And, as I mentioned, the results were more than 50% growth in product revenue and total prescriptions in the third quarter, with strong momentum carrying into the early weeks of Q4. We have built a strong foundation with eye care professionals. VIZ awareness now exceeds 90% with more than 15,000 prescribing ECPs. At the same time, our launch experience has shown that physician awareness alone is not sufficient to drive adoption at the pace we want. The strongest growth response has come when consumer demand generation is paired with convenient access. All of this is giving us greater clarity on the commercial model best positioned to support durable growth in this category.
Based on what we have learned, we announced a strategic reorganization designed to align LENZ with this consumer-led commercial model. Going forward, consumer marketing will be the emphasis of our U.S. commercial strategy, with a much smaller and more focused sales and medical team maintaining important KOL, ECP, and trade relationships. This is an evolution of our launch strategy, not a change in our commitment to LENZ. The reorganization concentrates our people and capital on the activities that are demonstrating the clearest connection to patient acquisition and sales growth.
It also creates a more efficient structure for the business we are building. As part of this transition, we expect our organization to move to approximately 40 employees and we expect overall operating expense to decrease by more than 50%. We are targeting 2027 operating expenses of approximately 70 to 75 million dollars, with more than 70% of our projected spend allocated to our consumer-driven sales and marketing strategy. We strongly believe this focused model gives VIZ the opportunity to reach more patients, expanding this emerging category and building a durable business.
With that, I will hand it over to Shawn, who will provide more detail on our commercial execution.
Shawn Olsson (Chief Commercial Officer)
Thank you, Eef. As mentioned, we are one year into launch and have made measurable progress in three key areas: eye care professionals, consumers, and access. With ECPs, we have driven awareness of VIZ to above 90%, achieved more than 15,000 prescribing ECPs, and over 75% of them have prescribed more than once. With consumers, we’ve launched our national campaign and have continued to optimize ad placement to support VIZ’s continued growth. On access, VIZ is operating well and growing in all channels. VIZ is now available through retail pharmacies, the ePharmacy, and since July, telehealth, giving patients several ways to access VIZ.
This broader campaign and the additional telehealth channel have been the key drivers of the 50% quarter-over-quarter TRX growth in Q3 and, impressively, we have done that with Q3 working media spend broadly in line with Q2. Looking at the performance of VIZ, the presbyopia eye drop category is still in its infancy. We’re focused on growing this market, and it’s clear that VIZ is the leader in this developing category. Since approval and launch through Q3 we have distributed more than 4 million vials, including samples and commercial products, and sold approximately 110,000 packs. This makes VIZ the number one selling presbyopia eye drop in the U.S. since its approval.
Furthermore, based on the 2026 TRX data from Symphony, VIZ has 94% market share in the U.S. Building a new category takes time and therefore disciplined allocation of commercial resources. The more than 50% growth in Q3 showed us what the consumer campaign can do, and that is where we will concentrate our efforts. Consumer marketing will take the lead in our commercial strategy and receive a larger share of our commercial investment, including continued national television and digital advertising on the channels that deliver the strongest return.
As we look towards our year-two commercial focus for ECPs, our foundational awareness of VIZ is built and we’re moving from one-on-one detailing to broad ECP engagement through marketing, supported by a small team focused on key opinion leaders, speakers, and national and state-level support. This keeps VIZ top of mind in the eye care community while allowing us to drive more resources towards consumer demand, which will be our primary focus. We believe this is the right commercial model for durable growth.
With that, I’ll turn the call back over to Eef.
Eef Schimmelpennink (President and CEO)
Thank you, Shawn. Before handing the call over to Dan to discuss our financial results and outlook, I also want to address the leadership transition we announced. After nearly six years leading LENZ and more than 25 years in biotech, I have decided to transition from my role as President and CEO, effective December 1, 2026, to be able to devote more time to our passions. This is a deeply personal decision and I come to it when I feel confident in the direction of the company.
We have built an important foundation for VIZ and we have greater clarity on the commercial model ahead, and we’re aligning the organization around the opportunity in front of us. Dan and I will work closely together through December 1st to implement the reorganization, ensure continuity, and position him for success as Interim Chief Executive Officer. I have full confidence in Dan’s ability to lead LENZ through its next phase. He knows the business inside out and has been closely involved in building the foundation for our commercial growth. Together with Shawn, Mark, and the full leadership team, he is well prepared to lead LENZ to its next phase and I look forward to continuing to support him, the team, and the Board as a strategic advisor.
I’m very grateful to the LENZ team, past and present employees, and our Board of Directors for their support throughout this journey. I’m proud of what we have accomplished together, encouraged by the momentum we’re seeing, and confident in LENZ’s future. With that, I’d like to hand the call over to Dan.
Dan Chevallard (Chief Financial Officer)
Thank you, Eef. I’d like to start by saying thank you for all of your contributions to LENZ, and I look forward to your continued guidance as we work through your transition. Your leadership has left a lasting mark on LENZ, on me and the team we have built together. I’m humbled by the confidence placed in me by Eef and the Board of Directors to step into this role. I’m encouraged by our momentum. Our priorities are clear and we’re focused on executing in this next phase at LENZ.
As both Eef and Shawn have discussed, early results from the July launch of telehealth and our nationwide TV advertising campaign have been encouraging, as evidenced by a sequential increase of over 50% in product revenue in Q3 over Q2, with meaningful script growth observed across distribution channels. Impressively, our telehealth channel contributed more than 50% of the incremental scripts this quarter. Reflecting on Q3, we recorded total product revenues of 2.6 million, driven by over 38,000 paid scripts, representing a 50% and 51% sequential increase over Q2, respectively, and maintaining our consistently strong gross-to-net ratio of approximately 93%. In addition, we recorded 800,000 in license revenue related to the recognition of a portion of the upfront payment received from our commercialization agreement with Aerotex Pharmaceuticals signed in late Q2.
I will provide a further update on our global commercialization efforts for VIS in a moment. Turning now to operating expenses, our cost of sales on third quarter product revenue totaled 0.5 million, and we continue to anticipate VIS to trend to an approximately 90% product gross margin over time. Total SG&A decreased to 35.8 million in Q3, or approximately 31.5 million adjusted to exclude non-cash stock-based compensation and an additional 0.3 million in one-time non-cash charge. This was a 10% quarter-over-quarter decline from Q2, which was in line with our expectations.
Total research and development expenses remained zero in the third quarter, consistent with recent periods. Our Q3 net loss per share, both basic and diluted, was $0.99 per share in the quarter on a net loss of 31 million, and we ended the third quarter with approximately 197.3 million in cash, cash equivalents and marketable securities. As Eef discussed, today we announced a strategic consumer marketing-focused reorganization that is intended to concentrate our resources on the initiatives we believe have the greatest potential to drive durable patient growth, significantly lower our cost structure, and increase capital efficiency. We anticipate completing substantially all activities related to the reorganization in the fourth quarter, with an estimated $5 million in one-time net restructuring charges.
As we look ahead, we expect our annual operating expenses will reduce by over 50% and are targeting 2027 operating expenses in the range of 70 to 75 million, with over 70% of our forward spend allocated to our consumer-driven marketing strategy highlighted today. As I have in prior quarters, I wanted to take a moment to provide an update on our global licensing and commercialization efforts. We continue to see VIS as a global product, and with a worldwide population of over 1.8 billion adults with presbyopia, we believe the opportunity to expand our commercial footprint is an important and promising one. In Q3, we continued to advance our regulatory efforts with our commercial partners and now have 11 regulatory submissions under review and anticipate multiple additional submissions and potential ex-U.S. regulatory approvals in the months and quarters ahead. We remain focused on further expanding our global network in additional strategic geographies and, as I mentioned, we’ll maintain that effort as a strategic priority as we advance from here. With that, I’ll turn the call back over to Eef.
Eef Schimmelpennink (President and CEO)
Thanks, Dan. To close, I want to thank the entire LENZ team for the commitment and dedication you’ve shown in bringing this from development through approval onto the U.S. market. We’re very encouraged by the momentum we’re seeing. We have a clearer and more focused commercial strategy, and we’re taking decisive steps to build a more efficient and durable business. I believe in the opportunity ahead for this and in LENZ Therapeutics’ ability to execute against it.
With that, we would like to open up the call for questions.
OPERATOR
To ask a question, simply press star one on your telephone keypad. Again, that is star one to ask a question. Our first question comes from the line of Stacey with TD Cowen. Please go ahead.
Stacey (Analyst at TD Cowen)
Thanks so much for taking our questions. Good to see you, Eef, and Dan, nice to see you step in. So just two, first on telehealth, where do you see the contribution going for VIS prescriptions? With strategic changes, there can sometimes be some growing pains. Do you expect to see continued prescription growth in the next few months, and what gives you confidence in VIS’s trajectory looking further out over the next few years? And then second, to look at the prescription trajectory, maybe through Symphony, you talk about how closely aligned the prescriptions have been correlating to your DTC strategy.
Thanks so much.
Shawn Olsson (Chief Commercial Officer)
Hi Stacey, this is Shawn. Thanks for the question. So looking at the telehealth channel, what we’re seeing is, of the growth, telehealth is contributing the most to the recent growth in Q3. And so as we look forward, we continue to see that this will be a meaningful channel for us. What we are also very proud of is with our television campaigns and our advertising campaigns, we’re seeing growth on all channels. So all channels remain meaningful to us, and all channels we saw growing in this quarter.
What gives us continued confidence is, as we look at the early KPIs, visitors to the websites, data going into this month, we continue to see that growth, and that gives us confidence in VIS’s continued growth going forward. In terms of the Symphony data, we still believe the Symphony data is more accurate than the IQVIA data, and that’s why we referenced the Symphony data in this call. It continues to be a consistent amount off. It’s hard for us to speculate if that will change going forward, but what we’ve seen so far is it continues to have about a 70% accuracy.
Stacey (Analyst at TD Cowen)
Thank you so much.
Shawn Olsson (Chief Commercial Officer)
Thank you, Stacey.
OPERATOR
Our next question comes from the line of Mark Goodman with Leerink Partners. Please go ahead.
Alyssa (Analyst at Leerink Partners)
Hi, good morning everyone. This is Alyssa on for Mark. Now that the telehealth channel has been active for several months now, could you share what proportion of patients have required a live appointment versus completing the asynchronous ECP review? And secondly, could you provide any color on the characteristics or profiles of these early adopters? Thank you.
Shawn Olsson (Chief Commercial Officer)
Hi Alyssa, this is Shawn. Thanks for your question. So when we look at the telehealth channel, the way the telehealth channel is structured is, first of all, to get into the telehealth channel, it starts by going through a screener. The screener filters out any high-risk patients to make sure that only patients that are appropriate continue on to that doctor evaluation. And that doctor evaluation, it can be, as you said, both asynchronous or synchronous—asynchronous being done at two separate times, synchronous being a call or a video face to face.
The vast majority are done asynchronous. What we are happy to see is not only is telehealth working from providing new scripts, but it is also screening out appropriately patients. We do see people screened out both in the screener phase as well as after the screener phase when it moves on to the doctor evaluation. I think you had a second question. What was the second question?
Alyssa (Analyst at Leerink Partners)
Oh, just any detail on the demographics or patient characteristics from this early wave of adopters?
Shawn Olsson (Chief Commercial Officer)
Yeah, great question. So what’s nice about our e-pharmacy channel, our telehealth channel, we can see that demographic data of the patients. What we see is the telehealth patient is very similar to the other patients that are using the product. In the telehealth channel, the split is roughly 50/50 male/female. It does skew slightly more towards the younger end of presbyopia, right in that 45 to 55 range. But ultimately it is a very similar patient to what we’re seeing in the other channels.
OPERATOR
Thank you very much. Your next question comes from the line of Yagil Nachimowitz with Citi. Please go ahead.
Caroline (Analyst at Citi)
Hi, this is Caroline on for Yagil. Thanks for taking our question. Can you tell us more about the sales cycle through telehealth? Specifically, do you have data that tracks when a consumer moves from seeing a digital or TV ad to engaging with the telehealth platform and ultimately filling a prescription? And how does that compare with the traditional in-office pathway? Thanks.
Shawn Olsson (Chief Commercial Officer)
Hi Caroline, this is Shawn. Again, thanks for the question. So what’s great about the telehealth channel is we see a lot more data. What I can tell you is, when we first ran our pilot TV campaign in select markets when we first launched, we didn’t have the telehealth channel open yet. And typically, when we ran in those select markets, it was a four- to six-week cycle until we saw the lift from running the TV campaigns until that patient went into the eye care office.
Now that we have telehealth open, we can see when TV is on and when TV is off—any direct impact and correlation to scripts moving through the telehealth channel. So with the telehealth channel now open, that correlation from advertising and time to visit is within a couple of days, compared to multiple weeks prior to the telehealth channel. So that’s what we’re seeing. And that gives us, again, positivity in our advertising. It also allows us to very easily monitor where advertising is working and where it’s not, to correlate advertising back to that patient.
Caroline (Analyst at Citi)
Great. Thank you. And then if I may, are your ex-U.S. partners taking notes from the U.S. launch in terms of deploying a salesforce or not, and leveraging DTC campaigns? Thanks.
Dan Chevallard (Chief Financial Officer)
Yeah, good question. This is Dan. I think we’re definitely making sure that we’re in constant communication with our commercial partnerships around the world, and to the extent that they can leverage our learnings for their commercial strategy, that’s always going to be a positive. Important though also to remember that the U.S. market and ex-U.S. markets are not the same. So we always characterize our learnings in the U.S. as U.S.-centric, and hopefully the goal will be for them to leverage those for their specific.
OPERATOR
Thanks. Your next question comes from the line of Lachlan Hanbury Brown with William Blair. Please go ahead.
Lachlan Hanbury Brown (Analyst at William Blair)
Hey guys, thanks for the question. I was wondering maybe you could talk more about the growth you’re seeing outside the telehealth channel. I mean, is that sort of concentrated among certain prescribers? I know you don’t have as much data there, but what kind of trends are you seeing there? And then secondly, can you just talk to your confidence level that you don’t need as much of a field team anymore? I mean, I get that it looks like the telehealth and the advertising are really driving things, but what gives you confidence that taking the reps out of the field is not going to impact the growth trajectory moving forward?
Shawn Olsson (Chief Commercial Officer)
Hi Lachlan, this is Shawn. Great question. I think I heard the first question correctly, but I just want to make sure. I think it was about the prescriber base in telehealth—was that the first question?
Lachlan Hanbury Brown (Analyst at William Blair)
It’s about outside of telehealth. You know, we’ve talked about the nice uptick you’re seeing in telehealth, but wondering, you know, if that’s accounting for about 50% of growth, obviously you’re seeing growth outside of telehealth as well. So wondering if you can talk about what you’re seeing there in terms of the breadth and depth of prescribers and where that growth is coming from.
Shawn Olsson (Chief Commercial Officer)
Thanks, Lachlan. So, yeah, we’re very pleased that we now have over 15,000 prescribing ECPs. What we’ve seen since we’ve turned on our national TV campaign: one, we’re seeing consistency in the prescribers with 75% now prescribing multiple times. But what we’re also seeing in growth outside of telehealth is the broad excitement for an eyedrop for presbyopia. These new prescribers, a lot of them are not targets. So what we’re seeing is we’re driving consumers into eye care professionals around the country that haven’t necessarily been called upon.
So we’re seeing broad adoption and prescribing from the eye care community outside of telehealth, which is very good. And then what was your second question? So, real quick—yeah, yeah—on the impact of Salesforce. So what gives us confidence in this: what we have seen is we have 90% awareness in that eye care community. So they are fully aware; that repeat prescribing behavior—what we’re seeing is when a patient comes in and asks about this, this is prescribed, and therefore the real success is getting more patients to come in and ask about VIZ. What we are seeing is a lot in the doctor’s day to proactively bring up VIZ.
And our best focus in allocation of our dollars is to drive the patient in and ask about it. We’ve also seen this in markets where we have an empty territory or non‑target doctors; they are writing VIZ as much as those targeted doctors. So that gives us confidence in the focus on the consumer campaign.
OPERATOR
Your next question comes from the line of Jason Gerberry with Bank of America. Please go ahead.
Melanie (Analyst at Bank of America)
Hi, this is Melanie on for Jason. Thanks for taking your question. Just one on the leadership transition. How are you guys thinking about the process for the permanent CEO search, both in terms of timing and potential profile you’re looking for, especially given the shift in commercial strategy? Thanks.
Eef Schimmelpennink (President and CEO)
Thanks for the question today. So, if you think about the transition, we want to make sure—and I’m making sure—that it’s a very smooth one. Like I said, it was a personal decision on my end to transition out. I’ll be leading the change that we just announced, making sure the organization is set up well for then Dan to step in as the interim CEO. As I’ve mentioned, Dan has a wealth of knowledge around the business. He’s been with me and us for a long time now and integral to everything that we do within LENZ Therapeutics. So he’s extremely well positioned to lead the company.
In parallel, the board has started a search, and obviously Dan is one of the key candidates in that as well. We’re not making any commitments around timelines. Again, both me and the board have full confidence in him to lead the organization into its next growth phase. So we don’t expect any impact on our strategy and the execution of it with this transition.
OPERATOR
Our next question comes from the line of Matthew Cofield with HC Wainwright. Please go ahead.
Matthew Cofield (Analyst at HC Wainwright)
Hi, guys. I appreciate you taking our call, and apologies if this had been addressed previously. But in terms of marketing, in addition to the telehealth fulfillment channel, what possible factors would support ultimately turning on the DTC campaign in a greater capacity following the strategic commercial reorg? Thanks for any added color there.
Shawn Olsson (Chief Commercial Officer)
Thanks. That’s a great question. So again, this is Shawn. What we continue to monitor on the DTC side is, as we’re pulsing different channels—so as we turn on TV, what’s the response that we’re seeing across not only telehealth but all channels? We do the same thing across Instagram, across Facebook, across TikTok, as well as different ads. So what we continue to look at and measure is what’s that consumer acquisition cost of our different ads, and as we drive that consumer acquisition cost down, or find ones that we feel are a valuable ROI, that’s our signal to turn up that spend or change how much we’re allocating dollars to the different channels.
Matthew Cofield (Analyst at HC Wainwright)
Okay, that’s helpful. I appreciate it, thank you.
OPERATOR
And our final question comes from the line of Byron Amin with Piper Sandler. Please go ahead.
Michael (Analyst at Piper Sandler)
Thank you. This is Michael on for Byron. Thank you for taking the questions. I was just wondering if you could give a little bit more color on the resale rate and, given the recent cost restructuring, could you share how you’re thinking about timeline to profitability? Thanks.
Shawn Olsson (Chief Commercial Officer)
Thanks, Michael. So this is Shawn. I’ll cover the refill rate. We have multiple channels, but the channel where we can see the best data is the e‑pharmacy channel and the telehealth channel. Those channels represent the majority of our volume. Now, the telehealth channel is still new—it’s only about three months old—so we’re early in there. The e‑pharmacy channel, we have data for over a year now, and what we can see in our e‑pharmacy channel is that about 60% of the patients purchase more than one month supply.
So we’re encouraged by that number. For that same group, what we’re seeing is over the course of a year that group is buying more than five packs per year. So that’s a little bit more color on the refill rate and the total products being consumed by our predominant channel.
Dan Chevallard (Chief Financial Officer)
Michael, this is Dan. I’ll take your second question as it relates to forward guidance—excuse me. So, ending Q3, 197.3 million in cash. I think what we highlighted today was, as you think about our forward spend, approximately 50% reduction in our forward OpEx. So what we guided is a 70 to 75 million annual spend in 2027, and going forward I think you should expect to see the full impact of that change in spend trajectory in Q1. We’re not providing cash runway guidance or revenue guidance at this time, as we haven’t previously.
So I think we give you those inputs for today based upon the disclosures we made here.
Michael (Analyst at Piper Sandler)
Got it. Helpful, thank you.
OPERATOR
This concludes our question and answer session as I am now showing no further questions. Thank you for your participation, and we will now conclude today’s conference call. You may now disconnect.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.