Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to LENZ Therapeutics First Quarter 2024 Financial Results and Business Update. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. I would now like to turn the conference over to Dan Chevallard. Please go ahead, sir.

Thank you. Good afternoon, everyone. And thank you for joining us today to discuss LENZ’s first quarter 2024 financial results and business updates. My name is Dan Chevallard, Chief Financial Officer of LENZ Therapeutics. We are joined today by Eef Schimmelpennink, our President and Chief Executive Officer, who will provide our business update; as well as Dr. Marc Odrich, Chief Medical Officer; and Shawn Olsson, Chief Commercial Officer, both of whom will join us for Q&A. 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, cash runway projections and performance, which constitute forward-looking statements. 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. 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. With that, I will now turn the call over to Eef.

Thank you, Dan, and thank you, everyone, for joining us today. Let me start by saying that the first quarter of 2024 and the weeks following have been transformative for LENZ. In March, we completed our merger with Graphite Bio and a concurrent $53.5 million pipe financing. And as a result, we became a public company trading on NASDAQ under the ticker LENZ. These transactions led us to be well capitalized with around $213 million of cash and cash equivalents at the end of the quarter on our balance sheet. Importantly, we anticipate this cash balance to be sufficient to fund our operations to post-launch positive operating cash flow. I want to acknowledge the hard work that went into this and thank the teams at both LENZ and Graphite, as well as advisors on both sides that got us to this strong position. Only a few weeks after our public debut, we announced our positive CLARITY Phase 3 data and selected LNZ100, a single agent aceclidine product, as our commercial candidate to treat presbyopia. As a reminder, presbyopia is the inevitable loss of near vision that impacts the daily lives of nearly all people over the age of 45. As the crystalline lens in our eyes hardens with age, the eye is less able to accommodate and focus the incoming light for near vision on the retina, resulting in blurry near vision. Although the progression of presbyopia is gradual, presbyopes often experience an abrupt change in their daily life as the symptoms become more pronounced starting in their mid-40s, when reading glasses or other corrective aids are suddenly necessary to read text or conduct close-up work. To address the daily challenges faced by presbyopes, we are developing a once-daily pharmacological eyedrop that has been shown to be capable of improving…

Thank you, Eef. As Eef mentioned, we are pleased with the successful close of the merger transaction and concurrent pipe, having ended Q1 with approximately $213.3 million in cash, cash equivalents and marketable securities, inclusive of the over $117 million acquired in the recent merger and the $53.5 million in proceeds from the concurrent private placement. Importantly, we announced today that this is anticipated to fund the company’s cash runway through to post-launch positive cash flow from operations. We believe this puts us in a strong position to focus on execution. Our operating results and resulting cash burn for the first quarter were substantially in line with our plan. As is common around transactions such as what we just completed, there have been, and will be into the second quarter, certain non-recurring or one-time transaction costs. Those aside, our total operating expenses, inclusive of both research and development and sales general and administrative expenses, for Q1 2024 were approximately $16.1 million, compared to $12.6 million for the same period in 2023. Overall, this increase was substantially a result of additional operating costs incurred in our preparations for being a publicly traded company and early commercial planning. More specifically, our research and development expenses for Q1 2024 were $10.5 million, which was materially consistent with research and development expenses of $10.3 million for the same period in 2023. Substantially, all research and development expenses incurred for these comparative periods related to the clinical development and manufacturing were required to support our Phase 2 INSIGHT and Phase 3 CLARITY clinical trials. Selling, general and administrative expenses for Q1 2024 increased to $5.6 million, compared to $2.3 million for the same period in 2023. This increase was primarily driven by costs associated with preparations to be a publicly traded company, in addition to…

Thanks, Dan. Operator, we’re now happy to take questions.

Thank you. [Operator Instructions] Your first question comes from the line of Joseph Catanzaro with Piper Sandler. Your line is open.

Hey, everybody. I appreciate you taking my questions. Maybe two quick ones from me. First, on the NDA submission, can you maybe just help us better understand some of the gating factors there to getting that filing done? Is it mostly paperwork or are there sort of other things going on in the background and is there any risk to maybe timeline flipping there as you wait for some of those things to get done? And then second, maybe as we look towards the KOL event, are there any sort of additional analyses that you’re performing within the CLARITY data sets and sort of maybe some new things we might expect to see at that June event and what could be important there? Thanks.

Thanks, Joe. Great questions. Let me take them. So first one, as we work towards the NDA submission in the middle of the year, so like I said, we believe that with the CLARITY trials, we’ve completed now a full clinical program and we have the final pieces of the clinical data in our hands. Over the years, we’ve been very well aligned and will continue to be very well aligned with the FDA. So we have high confidence in the fact that we have a complete data set, and therefore, the team is now really fully focused on compiling the NDA. So to paraphrase what you were saying, it is paperwork from here on out. Doesn’t mean that it’s not a lot of work, and therefore, the team is really focused on that. We have the right people in place. So we’re very confident that we will meet that submission timeline that we’ve guided to in the middle of 2024. So your second question as to the KOL event. Again, as we’ve mentioned on the call, we now have the full data sets of all three studies and teams on both sides are analyzing them for additional insight. What we’re looking for and what we’re starting to see is really interesting and exciting data around efficacy. How does this product work for the different groups that are in the study? Does it work for mild, moderate, severe presbyopes? Any difference in response on age? How do LASIK patients respond? So those are some of the things that we’re excited to share at the upcoming KOL event. And secondly, it’s a great opportunity for people outside of LENZ to actually share their view on the data, how they see this work in the market. And as I’ve mentioned, we’ll also have lead investigators from the CLARITY trial that have true first-hand experience with our product and potentially also with other products that will share their views on how it performed in their patients.

Okay. Great. That’s all super helpful. Appreciate you taking my questions. Thanks.

Thanks, Joe.

Next question comes from the line of Yigal Nochomovitz with Citigroup. Your line is open.

Hi, Eef, and team. Thank you so much. If you mentioned some of the pooled data that you’re looking at with the full dataset, is any of that potentially something that could make its way into the label language or is that more going to stay on the marketing claim front?

No. Great question, Yigal. Thanks for joining the call. So looking at the label, the label we actually expect to be fairly broad to begin with. So if you look at the beauty label, it basically states for the treatment of presbyopia.

Yeah.

So it’s hard to expand that label. Now in the label itself, you’ll actually have data cutouts and that’s where the marketing team will continue and will be able to point at that. So we feel this is very important data to ultimately commercialize our product, but also for our healthcare professionals to look at and continue to gain confidence in how the product performs. So again, very excited to see some early data cuts of that data, and as we continue to validate that, we’ll start sharing that at our KOL event in June.

Thanks. And then with regard to the filing of the NDA, I believe you were also on track for completing some of the stability studies for the product. Given that you’re not taking LNZ101 forward, but rather 101, is that any faster to finish that stability or were both of those basically on the same timetable?

Yeah. No. Both were and are on the same timetable. As hard as I sometimes try to move times faster, that’s impossible, obviously. So we’re truly bound by the stability clock and that is going into our filing timing.

And then just the last one on the distance vision, you had some interesting data suggesting a potential benefit on distance. How much of that is going to be emphasized in your marketing pitch or that’s not going to really be the focus?

I think, again, that that’s going to be a great additional benefit. So while it’s likely not going to be a label claim, that’s not what we’re striving for. It is data that we will aim to have included in the label, and therefore, the marketing team can highlight that. We do feel it’s a very substantial benefit. One of the additional data cuts that we’re looking at is, is there a certain population that noticed this more than others or feel the benefit more, and one of the things that, again, anecdotally, we hear is that especially people that previously had LASIK and know what 20-20 distance vision looks like, over time, they have lost a little bit back to 20-25 or 20-30, appear to feel that benefit. So while it’s not a label claim, we feel it’s definitely a benefit that is additive to the near-vision effect. That’s obviously the main driver of the label.

Okay. Great. Thank you very much.

Thank you, Yigal.

Next question comes from the line of Tim Lugo with William Blair. Your line is open.

Thank you for the question and congratulations on all the progress in the quarter. I know it’s a very pivotal quarter for the company. My question is, can you talk about the transient nature of the adverse events that were observed in CLARITY? I know I’ve heard some questions around the headache rate, but also when I do look at, and maybe can you talk how it’s, anything you’re hearing from the market, because when I’ve seen some other successful eye care products like dry eye and then also maybe the other presbyopia products, the adverse event rates seem to compare well for CLARITY. So can you just maybe speak to that a bit?

Absolutely. Thanks, Tim, for that question. So I think first and foremost, and I’ll get to the other adverse events, the big thing that we’re very pleased with to see in our AE data is that across 30,000 patient treatment days, there were zero serious adverse events. So I think that first and foremost speaks to what we believe the safety of the product and the profile of the product, and it’s obviously different than some of the other products that we’ve seen out there and that’s really truly because of the difference of the mechanism of action of aceclidine and how it does not stimulate the ciliary body. So if you then look at the non-serious treatment-related days, headaches, and some of the other ones that we’ve noticed, again, importantly, they’re 100% or close to 100% are classified as mild. So in general, we see, and the feedback that we get from patients is that this is a very highly tolerable product, very comfortable with very minor AE issues. To your point, if you compare that to some of the other very successful products, our AE profile is the same, or you could argue, better than those products. You’re asked whether they were transient. So everything that we’re seeing suggests that they are. So we obviously have done our Phase 2 trials. I have a lot of data there and we’re going through the data on our Phase 3 trials now. So if you look at the, what’s called installation site irritation, that’s basically, if you put an eye drop in your eye, some people feel a mild, very brief sting. Think of that as a blink or two and that’s gone. So that’s definitely transient. The other ones as well, they all go away very, very quickly. Same goes for the headaches. So if you’re one of the few people that actually notice a headache, and again, placebo-corrected, that was about 7.6% in our efficacy trials. So if you’re one of those few people that feel that, they classify it as very mild and something that goes away very quickly. So that may range patient to patient from 10 minutes, 20 minutes to 30 minutes, or maybe slightly more, but it is transient. So it goes away quickly. The data that we’re trying to gather now is to see, is it tachyphylactic? So over time, as you continue to use the product, does this not even occur anymore after, for example, a week? So this is interesting data to look at. The interesting thing is that we only have very few patients, which is good, that had a headache. So it makes it interesting to look at data and see if we can find any trends. If we do, we will make sure to bring those again to the KOL events in June.

Okay. Great. Thank you for the all the detail. And maybe can you just speak to the issues with retinal detachment for some of the other products? And I know it’s -- that’s not something that came about in CLARITY. So, hopefully, can you just talk about potential label implications?

Absolutely. So let me answer the label and I’ll hand it over to Marc to explain how our product is different and why we feel we see the, again, very good lack of retinal attachments with aceclidine. But from a label claim perspective, currently, we expect that the FDA will treat this as a class label effect. I think important is that the data that we have, we can obviously share with healthcare providers. We’ll definitely have that discussion with the FDA. But again, currently, we believe that we might have the same general label or class label effect as the other meiotics. But again, the product is a very different meiotic. And Marc, feel free to jump in and add to that.

Thank you, Dave. Thank you for the question. The unique feature of aceclidine is that it spares the ciliary muscle for the most part. And that means it doesn’t cause constriction during a critical part, on a critical part of the eye and that constriction can cause a small amount of traction at something called the vitreous base. So while this is very, if you will, inside the eye and inside baseball, if I can use that analogy, this is something that this particular drug does not do. And therefore, this has a very low likelihood of causing the same kinds of problems that you would see with the drugs that were more popular than this drug, such as pilocarpine and carbachol, which in fact, stimulate this ciliary muscle so that there is traction on this area. So it’s a fundamental difference in our mechanism of action. We are a very specific meiotic, which is pupil selective and avoids the ciliary muscle as a mechanism of action.

Fantastic.

Thanks, Marc.

Thank you for that.

Thanks, Tim.

And last question comes from the line of Marc Goodman with Leerink Partners. Your line is open.

Hi. This is Basma on for Marc. We would like to ask a question about the survey results performing CLARITY trials where you mentioned that 75% of the respondents mentioned that they will continue using LNZ100. Do you know why 25%? What was the factor that drove 25% to discontinue the drug? And along the same lines, do you think that this 25% is kind of an indicator of the discontinuation rates that you expect in the real world or to expect from the use of the drug? And do you actually have any data from market research or analysis from this ongoing long-term safety data, a trial, I’m sorry, that can give you insight on the discontinuation rates? Thank you.

Thank you. Thank you for your question. Very insightful. So let me kick that off and then hand it over to Shawn for some additional detail. So first, just to make sure that or to clarify. So the question was asked after the study was completed. So patients had their last day of use of the product. We then asked them if this were commercially available, would you want to continue to use the product? So this is not a discontinuation rate in the study by any means. In fact, the vast majority of the patients or the participants completed both the efficacy and the long-term safety studies. And again, that plays to the product being very comfortable, but also very effective. So the 25% that you reference are people that say, yeah, I noticed the effect, but I might not use it going forward. If it’s in the real world, we feel can have a couple of different reasons. Maybe those are people that actually are happy with their current near vision solution. So if these people are on bifocals and they feel that that’s the right solution for them and they don’t want to change that, that’s maybe one reason. Another reason is maybe they feel that this is a cost that they cannot afford. Those are some of the things that you can think about. But again, these are not reasons of discontinuation of the product per se, but really if this product were to be commercially available, would you use it?

Yeah. And when I think commercially about this, I find this very encouraging to see there’s results and we also see it in line with generally our market research. In our corporate presentation, we highlight the interest in this drop. And generally, depending on the age, the amount of people that would seriously consider an eyedrop like this rose all the way up to about 68%. So seeing 75% continues after the study is exactly in line with what we expect from our market research. And again, very encouraging data. It’s great to see such high numbers and it also confirms that 81% of those people would expect to use these four days to seven days a week. That’s from the PROs. That is almost exactly aligned with our market research, which came between 79% to 80% of those people being four days to seven days a week. So what I find really encouraging is we actually see that our actual outcomes from our Phase 3 trial mimic what we’re finding in our market research as well, which highlights the huge opportunity in this market. And I think as we go towards commercialization, if you think of the sampling strategy, that will really play into that refill rate, which I think is a better thing to focus on is that refill rate. Because we’re going to have a strong sampling plan up front that’s going to allow people to try this product, make sure this is for them, which we expect the vast majority to do, and then move on into that fulfillment and repeat buying of a product. So we see that strategy is very important in actually improving this refill rate.

Thanks, Shawn. And maybe just a last point to add to that. If you were to pluck these percentages in against the 128 million population of presbyopes in the U.S., you end up with a market that’s about 20 -- 15 times to 20 times higher than the $3 billion that we already forecast. So the $3 billion that we talk about as the market potential really takes a very conservative approach on which part of the 128 million population is ultimately we feel going to use it, how often are they going to use that. It also, I think, indicates the very significant upsides over the $3 billion market that you could see.

Thank you. That’s very helpful. Thank you.

Thank you.

There are no further questions at this time. Mr. Eef Schimmelpennink, I turn the call back over to you.

Thank you, Dimi. Thanks, everyone. Thank you for taking the time to join us today. We look forward to keep you updated and we’ll see you hopefully at the June event. Thanks, everyone.

This concludes today’s conference call. You may now disconnect.