Okay, good morning, everyone. Thanks for joining our 45th Annual Healthcare Conference. I'm Stacy Ku, one of the biotech analysts here at TD Cowen. It's our pleasure to introduce Eef Schimmelpennink.
Hello,
I practiced it too, I apologize. CEO of LENZ Therapeutics, as well as Dan, Shawn, and the audience. Thanks so much.
Thanks, Stacy. Morning, everyone. Thanks for joining us here, and thanks for the invite. TD Cowen, always a pleasure to be here in Boston, albeit very cold. At LENZ Therapeutics, we've developed a presbyopia eye drop that is obviously targeting a $3 billion market. We're at a very late stage. Our PDUFA date's August 8, so within six months of potential FDA approval, which means that as a company, we're really gearing towards our commercial launch here in the US. If you think about our lead product, LENZ 100, it's an aceclidine-based eye drop that, as I've mentioned, is designed to relieve or treat presbyopia. I'll go relatively quickly through the slides today so we have some time for Q&A later on. Presbyopia is something that happens to all of us.
There's a lot of young people in the room here that probably don't know what I'm talking about, but you'll know of your parents that are holding their phones further away from their face. That's because all of us, and I'm one of them, as you age into, let's call it 45 and older, you actually start to develop presbyopia. You lose your ability to accommodate and see up close. The way to treat that with an eye drop is actually to create a pinhole pupil. If you get your pupil to below 2 mm, that near vision adaptive focus increases dramatically. It means that you can actually restore your near vision. That's what we've shown in our phase three trials that we read out about a year ago now.
You can think of this eye drop as a drop that you literally put in in the morning and set it, forget it. This is not a product that you need to use for months before you actually see some effects. It's day one naive patients that actually showed the numbers that you have on here. First time that we mentioned at 30 minutes, and at the end point is three lines or more of near vision improvement. We had 71% of patients hitting that, and that stayed there very nicely for most of the day. Last time point that we measured was at 10 hours. We saw 40% of patients hitting at least three lines or more. Now, two lines is actually what's clinically seen as meaningful by the Optometrists and Ophthalmology Society, and that's where you see that we have very high numbers.
This is a near universal eye drop, works for almost everyone. It obviously translates in a very significant commercial opportunity. Very conservatively, and I'll talk you through that, we look at it as at least a $3 billion market, and we have clearly the best in class product. We really look at this as a category of one that we're building in this market. Like I mentioned, very clear pathway to commercialization. Our NDA was submitted August 8 of last year, which led to an August 8 of this year PDUFA date. Very strong IP around the product. Seven granted patents that go at least 2039, 40 more on the review that will take that to 2044. A very healthy cash balance. We've not released our Q4 numbers yet, but Q3 last year, we ended with $217 million in cash.
We've continued to guide that that can actually take us to be cash flow positive. Like I mentioned, the problem of presbyopia is well known. It's that inevitable loss of near vision. This happens to all of us, which means that the market is enormous. 128 million people in the U.S. currently already have presbyopia. The solution for most of them is basically reading glasses, which are inconvenient. If you put them on, you can see up close, but you can't see in the distance. Almost everybody, if you survey, is looking for a better solution, a solution in the form of an eye drop. If you look across, if you look at the seriously consider a different solution, you're in the 60s. If you add the normally consider, you're up in the 90s. People are really looking for something different.
What are we talking about here with actually presbyopia? A little bit of high school biology here on the left side. You see that your eye in its native state is actually designed for distance vision. Your ciliary body, that's the muscle that ties into your lenses or LENZs. Your lens is thin. You only have a little bit of refraction, but it allows you to see in the distance and have that in a nice focal point on your retina. In a healthy eye, a young eye, as you move to up close, or you want to see it, look at something up close, the ciliary body starts to contract. The lens actually gets a little bit thicker. It means you have more refraction and you can look at something up close. Now, what happens in an older eye is that that lens becomes very hot.
It basically does not allow for any accommodation anymore. Even though your ciliary muscle is still contracting, there is no accommodation and there is no accommodation that allows you to see up close, which means that you have a blurry image on your retina. Like I mentioned, the solution for that is to create a pinhole pupil, as you can see on the left here. What that does is it blocks the light rays and the outer light rays that need more refraction. It leaves you with a nice focused image on your retina. The FDA endpoint to remember here is that you need to show three lines or more of near vision improvement. It is known that some of these agents called Miotics actually have an off-target effect that they also stimulate the ciliary body.
Even though there's no accommodation left in your lens, it does move the lens forward in your eye, which distorts your distance vision. The second part of the FDA endpoint is that you need to show that you do not lose more than one line of distance vision. Spoiler alert, we actually improved distance vision, but we'll get to that data in a second. What's so magical about being below two millimeters? This is all peer-reviewed research from the late 1990s, early 2000s. What you see in both graphics here is that if you follow the X-axis from right to left, if you go from a six millimeter pupil to a two millimeter pupil, you see a little bit of near vision improvement on that Y-axis, but it's not until you're below two millimeters that you're really on that steep end of the curve.
Below two millimeters is where you really drive near vision improvement. That is where you want to be. Thinking about these miotics and two in particular, aceclidine, that is the active ingredient that our founders about 10 years ago picked. They have pilocarpine that some of you may be familiar with. That is the product that, or the active ingredient in Vuity, that AbbVie launched a couple of years ago. What you see very clearly here is that aceclidine is the only pupil-selective miotic. If you look at that independence ratio, it is one to 20, one to 30, compared to a one to two or so for pilocarpine, which means that with aceclidine, you can very specifically target the iris sphincter and create that pinhole pupil without causing that side effect by stimulating the ciliary muscle, something that with pilocarpine is not possible.
That's what you see in vivo as well. Again, peer-reviewed research. With both 2% pilocarpine and aceclidine, you can get to a pinhole pupil. If you do that with pilocarpine, you drive a 1.3, the opposite of myopia. That's moving somebody from 20/20 distance vision to 20/63 or worse. You are no longer legally allowed to drive a car. You do not have that effect with aceclidine. Aceclidine is clearly the perfect product for a presbyopia eye drop. That's why we used it and developed this, a 1.75% aceclidine preservative-free eye drop. It comes in these little blow-fill seal containers with truly best in class potential. That is something that we can say based on our phase three trials. This is our phase three study design. We had three different trials. Clarity one and two were seven weeks, a six-week safety and efficacy trials.
Clarity three was a six-month long-term safety study. Looking at the efficacy data first, the light gray bars here, RDF the endpoint, three lines or more of near vision improvement. That is where you see that 71% at 30 minutes that I referred to earlier, 73%, and then very slowly tapering off to 40% still at the end of a full workday. The dark blue line is the two lines or more of near vision improvement. That is clinically meaningful. That gets most people to 20/32 or better. This is where you see that we are up in the 90s very early on. From a sampling perspective, if you think about how we are going to commercialize this, this is a product that lends itself extremely well for sampling.
We can pretty much guarantee if you're a presbyope, you put a drop in your eye, within half an hour, you'll be able to see your phone again and actually read it. P-values here, 0.0001 for all time points, so a very well-controlled study. The three lines or more was actually just the beginning. We had people hitting four lines, more than half of the people hitting five lines or more of near vision improvement. As you can see in the bottom there, almost 90% hit at least 20/20 or 20/32. Truly a product that works for most and gets you into great near vision. Talking about that distance vision, like I said, actually the same mechanism with that small pinhole pupil, but then without that ciliary body stimulation means that we actually improve distance vision as well.
This is a graph that shows that 40, 41% of participants achieved at least one line of distance vision improvement. There is definitely not a negative, in fact, actually a positive improvement on distance vision. We measured this in both normal light and low light. Lastly, obviously, a product like this needs to be very well tolerated analysis. If you look at that middle part of the graph first, those are the ocular AEs. Key to see here is that every single one of them was scored both by patient and doctor as mild. So 100% mild, very low percentages, and very transient. The installation site irritation is a very brief, quick sting that some people have if you put a drop of water in the eye.
Visual impairment is what some people notice is that because you obviously reduce the pupil size, you might experience a little bit of mild dimness. That's nothing like walking into a dark room. It's more like an indoor room if you come from the outside. And a little bit of hyperemia, but again, very, very mild. On the headache side, clearly a product that is very mild again. This is actually transient to begin with, but also Vuity. If you use the product for a couple of days in a row, that headache, mild headache no longer occurs. Importantly, we had less than 4% of discontinuation rate, again showing that across all studies, this is a very mild product. Lastly here, we have over 30,000 patient treatment days on product now without any serious treatment-related AEs. Again, a very safe and comfortable product.
That translates into when we asked the patients in the study what they thought about the product, obviously the majority said that they truly noticed an improvement in the near vision. We had three quarters of the people saying that, yes, I want to continue to use this product after the study. When we asked them how often, pretty much every day, four to seven days a week, that's how much people liked it. There is a lot of anecdotal evidence now or doctors talking about the product out there that clearly show that they were impressed and their patients as well. What does this mean from a market opportunity? Like I said, there are 128 million presbyopes in the U.S. alone, which makes it by far the largest ophthalmology market. It is larger than everything else combined, four times the dry eye market.
If you look at the patient feedback with 75% of the people saying that I want to continue to use it, 81% saying I want to use it four to seven days a week, if you multiply those, you'd get to a $60 billion market, which is clearly a little bit unrealistic out there. We actually look at it in a different way and say, of the 128 million people, we projected ultimately about 8 million people will be on the product. That's really haircut it down. It's a self-pay product and people want to use it. Rather than saying four to seven days a week, we assume about five refills a year. Three days a week, so about half the week. That gets you to the $3 billion market. Like I said, we're really gearing towards commercialization now. Very clear commercial strategy.
Three main pillars here. First one, doctors to recommend us. This is where you can imagine that our sales force plays a key role. We're targeting 15,000 ECPs. That's the same number of ECPs that Vuity was targeting, same number of ECPs that Tarsus is targeting, with a sales force of close to about 100 people. Consumers to request us by name. We're really building that strong emotional connection. This is the DTC campaign, the marketing campaign that will kick off after we've launched the product to doctors first. We are making sure that getting the products is seamless. Heavy sampling and then both retail and e-pharmacy to fill the scripts. Team is in place. It has been in place for quite a while. I'm not going to go through them, but we have the VP of Sales from Elegant that actually launched Vuity.
We've got the VP of Marketing that back in the day launched Red Bull and then went over to STAAR Surgical. So very strong team. Last couple of slides here. Obviously, it's important to note that optometry and ophthalmology is engaged and interested in a product like this. And this is a survey that shows that they are. If you think about how many patients they actually see on a monthly basis, there's 215 presbyopes that just walk into their practice every month. When we showed them a profile and asked what they thought about it, about 80% says, "Yeah, we see it as a safe, well tolerable, and we view it as attractive to use in our presbyopia patients." And then the likelihood to sample and likelihood to prescribe again already in the high 80s. And this is before we actually have rolled the product out.
A lot of enthusiasm. We have over 50 KOLs already on board, eager to start to prescribe the product. Second to last slide here is we've actually press released this morning that we're hosting our commercial day, April 15th. This is where we will go into the commercial strategy in a lot more detail. Invites for that will go out. Like I said, the product is very well protected, very strong IP portfolio both in the U.S. and in Europe. That was a little bit of a fly-by on the slides, but happy to go into Q&A from here.
We'll leave a little bit of time at the very end for the audience to ask some questions. From our end, we wanted to kind of drill down into some of the fly-by overview that you provided. First, you talked about the two lines, three lines of kind of clinical efficacy being clinically meaningful. You've also studied patients that are a little bit broader than, let's say, the Vuity mild patient clinical trial. As we think about maybe those more moderate presbyopia patients that you alluded to, can you talk about the improvements that you've seen in those patients kind of beyond maybe the mild population and who you're trying to target for LENZ 100?
Absolutely. Yeah, so that's an important difference between us and, frankly, every other study out there. Our population that we studied was by far the broadest. We had 45 to 75-year-olds in there. People have had LASIK, that were wearing contact lenses, pseudophakes, that had cataract surgery, and obviously 20/50 or worse presbyope. Very broad inclusion criteria. It's effectively a six times larger population than Vuity, which was mostly targeted to emmetropes, which means people that have good distance vision to begin with. In that, obviously, we had people that were, let's call it 20/50 to 20/80, 20/100. Those are your more mild to moderate. Then 20 over 100, which means that you cannot even see something that's this big up close, which are your severe presbyopes. It works for everyone. That's the interesting thing with this product.
Like I showed you earlier, we had people gaining six lines, seven lines. Now, to be able to gain six or seven lines, you need to obviously start off pretty bad. It worked for them. It got them back to 20/32, 20/20. It worked for people that were more moderate as well. If we think about who we're going to target first, it's less about, it's actually not about early presbyopes or mild ones, but we do not want to go after 128 million people, even though the study shows that it works there. We're looking at different segments. It's people that are wearing contact lenses. Most people leave contact lenses because they actually become presbyopic. There's no good bifocal contact lens. They have to move into lenses or into glasses. People have had LASIK. People have gone to many spots.
Each of those groups is over 10 million to begin with. Large chunks of the population that we'll go after first. We do not have to say, "Okay, only use this for your mild to moderate presbyopes.
Yeah. You did go to a lot of detail as it relates to kind of the dimness you see, the distance vision. As we think about patient satisfaction and kind of LNZ 100 as a once-daily eye drop, can you just talk a little bit more about those findings? Just drill down a little bit because you do see kind of normal vision even in low light, which obviously is important if you're kind of at the end of the day driving home from work. Can you walk in, just discuss that in a little bit more detail?
Yeah. What you need to do at the A requirement is test actually both near, but especially also distance vision in normal light and low light exactly for that reason. We have tested that as we should. Again, no negative impact there, in fact, a positive impact. Distance vision is definitely improving. We know actually off-label, some of these miotics are used against night or to treat night glares. That is that same mechanism. Clearly a product that works there. Of all those patients and all the feedback, there is not a single comment in there around night driving. Nobody is saying that it is impacting my night driving or anything like that. That is just the anecdotal feedback that we have solicited from the hundreds of patients that were on the product.
I think that, again, goes back to if you do look at the AEs, every single one of them was scored in a mild manner, which then translated into that very high satisfaction and the vast majority of patients saying, "I want to continue to use this product.
Okay. You talked about tachyphylaxis as it relates to kind of some of the insulation impact. As we think about side effects, do you want to talk about over the 28 days what you're seeing for patients that are kind of constantly treating with LNZ 100, kind of level of patient satisfaction there as well?
Yeah, absolutely. We measured, obviously, as you've mentioned, out to 28 days in efficacy, again, FDA requirement, because you want to show that the product is not tachyphylactic. It doesn't, if you will, wear off over time. What we see is that that's clearly not the case. If anything, it starts to go up or trend up a little bit. That's what you know anecdotally from products like these. These are repurposed glaucoma products. They've been used for years on end with the same efficacy. This is not a product that, if you will, wears off over time, but actually continues to be very, very effective.
Okay. Wonderful. Let's drill down into the commercial kind of strategy. You talked about the 1,500 ECPs that you're going to target, 100 reps. Do you just want to talk about the kind of optometrists that there are out there? There's private practice. There's those that are at retail stores. Just discuss in a little bit more detail who you think is going to be the first to prescribe LENZ 100.
Yeah. What we see is actually very, very broad interest. The team was out in Atlanta over the last couple of days at a big convention. Over and over, we get the same thing. Doctors realized that there is a big market for a presbyopia eye drop. They've completely turned off on pilocarpine and realized that we're the product that actually works. There is a lot of interest. If you think about how we envision the product to be prescribed, probably about 80% in the optometry setting, about 20% ophthalmology. That is also how we're targeting our sales force, how we're targeting our commercial strategy. Those are the doctors that are very, very eager to be one part of this and then to start prescribing the moment that the product is available.
Okay. At least for the optometrists, what kind of work have you done around the need for a retinal exam? Is it a common practice kind of in that setting?
Yeah. Just to give a little bit of background there. The label of Vuity has a recommendation, not a requirement, a recommendation for a retinal exam, which in general is a good thing. It happens actually during your annual exam anyway. The vast majority of optometrists and ophthalmologists do an eye exam anyway. Standard practice is not an additional hurdle or anything. It's a good thing for them because it's something that drives, obviously, patients into their practice, checks their eye health. Again, it just will likely be part of the initial eye exam before you can get the product prescribed.
Okay. As we think about LNZ 100 and maybe the product profile, what is the level of awareness of the mechanism of action? We take for granted that when we talk to our consultants, they're all highly familiar. They know that it's pupil selective. They don't think that you have kind of a high risk for retinal detachments. Obviously, that may not be the case for all. Just maybe talk about the work you've done, what you're doing to raise awareness, what kind of education efforts you have.
Yeah. No, great question. We've started to talk about aceclidine being pupil selective probably about two and a half years or so ago. We've touched a lot of doctors already. The fact that when you do your surveys, you hear back that people know aceclidine and know LENZ is not surprising. It's great. Not too surprising. We continue to build that awareness. We have close to 10 MSLs actually already in the market, started late last year, educating doctors on aceclidine, the importance of getting below 2 millimeters, that it's indeed pupil selective, how it's different from pilocarpine. That's really the work that they're doing. We continue to do that. Latest stats that I saw, as recent as last week, is that in, what's it now, two months of this year, they've had over 1,000 individual meetings already.
If you think about the 15,000 doctors out there, we're touching almost everyone before launch. Obviously, once the sales force comes on, that will even be more. Great to hear that the word's out and people are eager to see us launch.
Okay. Awesome. We talked about retinal detachment, but obviously have jumped around the discussion around Vuity. Curious, can you just talk about the positive attributes of Vuity that give you conviction in a large presbyopia market? Just talk about the key reasons maybe for the failure of Vuity. Is it efficacy? Is it safety? Just kind of talk about all those different aspects of the launch.
Absolutely. If you look at Vuity and just look at IQVIA as the base, you see that Vuity actually had a great launch. The first three months when they were only promoting to doctors, they very rapidly got up to about 3,000 new scripts a week. They turned on their version of DTC. That went up to about 6,000 new scripts per week. That is a blockbuster launch if they had a decent refill rate. What happened is that almost every patient, and I was one of them, went out and bought a bottle. These are all paid scripts.
You paid $80, $85 or so for a bottle of Vuity, used it, and realized that either one does not work, or if you are in one of four patients that does notice a little bit of an effect, it does not work real well. Vuity, if you look at the clinical data, they lost significance at hour three. They only work in about one of four patients. If you are an emmetrope, if you have good distance vision. Very narrow patient population, just not very good efficacy. Those are the reasons why Vuity failed. It did not work. If you want to enforce that, notice a little bit of effect, it did not work long enough. All the other pieces were distance, third, fourth, fifth. It was really efficacy that failed. What it does for us is that it shows that the market is there.
People are eager for something else. Then reading glasses, they're willing to pay for it. Doctors are willing to prescribe. If you promise an eye drop that works for the full day, it, guess what, has to work for the full day. That's why they failed.
Got it. RKA will tell us that it's not maybe the perceived risk of retinal detachment that probably put the final nail in the coffin.
No.
Okay. Understood. In the last few moments, we obviously want to drill down in that $3 billion market opportunity that you talk about. Maybe talk about the cash pay aspect, affordability, what kind of areas you're going to target when it comes to presbyopes. Before you answer, one thing that we think is a little underappreciated, this is a cash pay market. You are no longer kind of need to deal with the timing to get reimbursement and access. Just help us understand potential ramp, who you're targeting, and affordability kind of work you've done so far.
Yeah. No, absolutely. Yeah, to your point, this is a self-pay product, which means that the first script that will get written hits the bottom line. We do not have a market access issue. We actually do not even have a market access team because we do not need to talk to the PBMs. We do not need to talk to insurance. We do not need to get coverage. We do not need to do Medicaid, Medicare. All that fun stuff is not something that we have to think and worry about. Very easy access from the, again, very first script hitting the bottom line. From a cost perspective or cost to the patients, we have not guided. If you think about Vuity, like I said, they ultimately sold for about $79 or $80 for a month in that case, a bottle. Again, we are not guiding.
Clearly, the fact that there are 150,000 people that in those first six, seven, eight months went out and paid that for Vuity means that it's a price point that works. Now, 128 million people, and that's why we do look at, obviously, it's a self-pay product. You need to have a certain income to, in our mind, be able to buy this product. That's where that part of that walk down from 128 million to 8 million people comes in. It's a price point that works well. We've done a lot of CANTA studies ourselves around it that suggest that indeed that's a price point that works.
Okay. In the last few moments, maybe talk about the competitive landscape for presbyopia a little bit. Can you discuss the different mechanisms of action that are out there? Curious if you agree with us, our KOLs tell us that they probably won't touch another pilocarpine-based agent. Kind of curious what work you've done there as well.
Yeah. No, we're hearing the same thing. If you think about the landscape and recall that one slide with the three miotics in there, the key two that we talk about or get asked about is obviously our product, Aceclidine. Clearly, we're the only ones with Aceclidine, so unique to that. There were about four, maybe five companies that did pilocarpines. Vuity, obviously, first at a 1.25%. Then there were lower dose pilocarpines that were following thinking. I think it was the right thinking three or four years ago, maybe five, six years ago, that if Vuity is successful, I can ride that wave with a lower dose pilocarpine. Unfortunately, Vuity wasn't successful for all the reasons that we've obviously spoken about, which probably means that any other pilocarpine product, there's only one left at the moment.
It's going to be difficult for them to be successful, which sounds like that's the feedback that you're getting as well. There is a third miotic, Carvacol. It's a, as you saw, also a non-selective miotic, which means that it's probably not the right one, or it is not the right one for presbyopia. Similar, if you look at the clinical data for that product, it's just another Vuity. The company actually went bankrupt. I think they're trying to revive it now. That's why we think this is going to be a category of one where one product actually works.
Okay. Wonderful. With that, open it up for maybe one or two questions. I know we're a little over. Okay. Looking forward to April 15th.
Thank you.
Thank you.
Thanks everyone.