LENZ Therapeutics, Inc. (LENZ) Earnings

Management highlights

### Launch Performance and Early Traction - VIZ launch is in the early stages of building an entirely new pharmaceutical treatment category for presbyopia, with adoption growing but slower than management's initial target. Management has identified specific adoption barriers and is actively executing targeted changes. - Early fundamental signals are positive: over 10,000 unique prescribing eye care professionals (ECPs) as of Q1, higher than any recent ophthalmology launch at this stage. VIZ generates ~70% more scripts per prescriber than comparable competing products at the same launch stage, with 60% of prescribing ECPs writing multiple VIZ prescriptions, indicating strong early physician confidence and habit formation. - Patient persistence is encouraging: over two-thirds of e-pharmacy volume now comes from three-month prescriptions, up from Q4, and two-thirds of patients who try VIZ via sample convert to ongoing purchase. Aided ECP awareness is in the high 90s, and unaided awareness is over 80% among targeted ECPs. ### Identified Adoption Barriers and Corrective Actions - **Physician-side barrier**: High brand awareness and product understanding have not yet translated to consistent proactive discussion of VIZ during routine patient exams, as ECPs have not yet integrated the novel treatment into standard exam workflows. Management's response: Refine physician messaging to simplify integration, with a focused push on contact lens patients (a large, high-value segment where VIZ helps keep aging patients in contact lenses, supporting both patient outcomes and practice revenue). Share peer ECP success stories to demonstrate real-world practical use and drive habit formation. - **Patient-side barrier**: The multi-step journey from awareness to prescription to purchase creates avoidable drop-off. Management's response: Shift DTC messaging to a clear problem-solution framing centered on "tired of reading glasses" to better resonate with presbyopia patients. Add QR-coded onboarding tools and videos to set clear expectations for product use, improve initial trial experience, and support conversion from trial to ongoing use. Roll out in-practice physician sales of VIZ where legally permitted (25 U.S. states) to reduce access friction and pharmacy abandonment. ### Operational and Commercial Updates - Expand the field sales organization to 15,000 targeted ECPs, with full deployment expected by the end of Q2 2026, increasing reach and engagement frequency. - Transition to a new FDA-approved large-scale manufacturing process with tighter formulation specifications and an improved vial format, expected to improve product ease of use and patient comfort. - Testing linear TV advertising in select U.S. markets, alongside ongoing optimization of digital media creative and mix based on real-time performance data. Early digital results are strong, with 10x higher website traffic and above-benchmark ad recall on key platforms like YouTube and Pinterest. - International expansion momentum: Submissions completed in Europe and the UK, strong inbound partnering interest from Europe and Latin America, and existing partnerships already in place across China, Southeast Asia, Canada, and the Middle East.

Guidance

- Management maintains that building a new prescription category for presbyopia will take time as prescribing habits and patient behavior evolve, but expects the corrective adoption initiatives launched in Q1 to drive meaningful, measurable, and sustained new prescription growth over the coming quarters of 2026. - The company will begin publicly sharing detailed refill dynamics and retention data in the second half of 2026, after early patient cohorts have sufficient time to demonstrate consistent refill behavior, particularly for three-month prescription fills. - Q1 2026 operating expense, SG&A, and cash burn are expected to be higher than the go-forward quarterly run rate for the remainder of 2026. - R&D spending is expected to remain substantially zero for the foreseeable future, as all capital allocation is focused on the U.S. VIZ launch. - Long-term target for direct product gross margin remains 90%, and net cash per monthly VIZ pack remains $60, unchanged from prior guidance and in line with long-term expectations.

Segment performance

Lens Therapeutics operates with one core commercial product segment, VIZ, its presbyopia treatment eye drop, in addition to ex-U.S. partnership and licensing activities. In Q1 2026, VIZ generated net product revenue of $1.7 million, with total net revenue (including licensing) of $1.9 million. VIZ contributed 89.5% of total Q1 2026 revenue, while $250,000 in license revenue from the Monatis Middle East distribution agreement contributed the remaining 10.5%. The company reported 25,000 paid and filled prescriptions for VIZ in Q1, a 19% increase from Q4 2025, bringing total filled prescriptions since launch to approximately 46,000. Cost of sales totaled $1.1 million in Q1, almost entirely consisting of one-time non-recurring charges: an inventory temperature excursion loss (expected to be recovered via insurance in Q2) and a one-time charge for packaging upgrades tied to the new FDA-approved manufacturing transition. Direct product cost of sales for Q1 VIZ sales was immaterial, with long-term targeted direct product gross margin of approximately 90%. SG&A expenses totaled $45 million ($40.7 million net of non-cash stock-based compensation), a 13% quarter-over-quarter increase driven by planned direct-to-consumer launch investment. 80% of SG&A was allocated to sales and marketing, consistent with company targets. R&D expenses were $0 in Q1 2026. Net loss for the quarter was $41.5 million, or $1.32 per basic/diluted share. The company ended Q1 with $258.4 million in cash, cash equivalents, and marketable securities, with Q1 net cash burn of $34 million, consistent with Q4 and in line with budget.

Risks & headwinds

- The slower-than-expected pace of new patient adoption and routine ECP prescribing in Q1 creates uncertainty around the timeline for meaningful revenue and volume growth, and management will need to demonstrate that its corrective initiatives deliver improved results in upcoming quarters. - New competing presbyopia eye drop products have launched, and are expected to deploy sampling and counter-detailing in the market, which could create competitive pricing and adoption pressure. - Regulatory, operational, and market access variability for in-practice physician sales means this access improvement initiative is only available in 25 U.S. states, limiting its near-term impact on adoption. - Even with the strong early safety profile observed to date, adverse retinal events or other safety signals could emerge as patient exposure to VIZ grows, which would negatively impact adoption and regulatory standing. - DTC marketing efforts, including the new linear TV pilot, are still early and may not deliver the expected improvement in patient conversion and funnel entry, limiting growth upside.

Analyst Q&A

• Q: In addition to current prescription trajectory, what early encouraging signs exist for DTC/linear TV, which practice types are multi-prescribing, will refill data be shared in future calls, how is the company responding to new competitor sampling, and what is the current real-world safety profile of VIZ?

  A: Early DTC indicators are strong: ad engagement is high, website traffic is up 10x, and ad recall outperforms benchmarks on major digital platforms, though overall consumer awareness is still early, and full campaign maturation will take several quarters. The company will start sharing detailed refill dynamics in the second half of 2026, to allow sufficient time for three-month prescription patient behavior to mature. Competitors are sampling, but sampling remains a core part of Lens Therapeutics' strategy, which drives conversion and retention, and management believes VIZ's differentiated efficacy profile will outperform competing products in head-to-head use. Six months after launch, with ~46,000 boxes shipped, real-world safety events align with clinical trial expectations. Retina-related adverse events are far lower than the general population background rate, with only two non-causal retinal tears (both in patients with pre-existing risk factors) and zero retinal detachments, compared to 34 retinal events reported for a competing product at a similar exposure level. This is consistent with VIZ's unique pupil-selective mechanism of action that avoids ciliary body engagement, the pathway linked to higher retinal traction risk.

• Q: ECPs are currently not proactively discussing VIZ enough during exams. Beyond contact lens patients, what other patient groups are natural hooks to drive more frequent discussion, and is the prior 5 refills per year utilization assumption still valid?

  A: ECPs rely on established 20-minute exam workflows that do not yet include VIZ as a routine step. To fix this, the company simplified messaging and moved patient expectation-setting to QR-coded videos, reducing the time ECPs need to spend introducing the product, making it easier to add to routine exams. Beyond contact lens patients, natural high-potential groups include post-LASIK patients, patients seeking an active lifestyle, and patients who have not previously used correction for presbyopia. The 5 refills per year average utilization assumption remains valid, with no adjustment needed.

• Q: For the new in-practice ECP direct sales model, how does it impact company margins, what are the target markets, and how is ordering structured?

  A: In-practice sales are permitted in roughly half of U.S. states (25 total), with at-will ordering: ECPs purchase a case of product upfront, Lens ships directly to the practice, and the ECP then sells to patients. Net per-unit economics to Lens are roughly the same as e-pharmacy and retail channels, with no meaningful difference in overall margin, as the model avoids some wholesale distribution costs. Most participating ECPs are among the company's top 1,000 prescribers.

• Q: With R&D spending at zero in Q1, will this remain the case for the foreseeable future, as the company focuses capital on the VIZ launch?

  A: Yes, R&D spending is expected to stay substantially zero for the foreseeable future. The company completed all pivotal clinical work for VIZ in 2025 and shifted all capital allocation to support the U.S. commercial launch, so zero R&D spend in Q4 2025 and Q1 2026 reflects this intentional long-term strategic shift.