Product Development - LENZ's lead product candidate LNZ100 demonstrated a robust product profile with 71% and 91% of participants achieving three- and two-lines or greater improvement in near vision at 30 minutes in the Phase 3 CLARITY study[98]. - The FDA assigned a PDUFA target action date of August 8, 2025, for LNZ100, with a potential commercial launch as early as Q4 2025 if approved[104]. - LNZ100 has patent protection until 2039 in the U.S., supported by a strong intellectual property portfolio[98]. - LNZ100 achieved statistically significant improvements in distance vision, with 41% of participants showing at least one-line improvement[100]. - The CORXEL License Agreement allows for potential milestone payments of up to $95.0 million and tiered royalties on net sales of LNZ100 in Greater China[102]. Financial Performance - LENZ incurred an accumulated deficit of $132.4 million as of September 30, 2024, primarily due to research and development costs and administrative expenses[100]. - The company incurred net losses of $10.2 million and $18.9 million for Q3 2024 and 2023, respectively[118]. - Cash used in operating activities for the nine months ended September 30, 2024 was $50.3 million, compared to $39.4 million for the same period in 2023[123]. - Cash provided by financing activities for the nine months ended September 30, 2024 was $198.9 million, compared to $82.6 million for the same period in 2023[125]. - Other income, net for Q3 2024 was $2.7 million, compared to $1.0 million for Q3 2023, driven by an increase in interest income of $1.7 million[112]. - Other income, net for the nine months ended September 30, 2024 was $6.3 million, compared to $1.2 million for the same period in 2023, primarily due to an increase in interest income of $4.6 million[116]. Expenses - Research and development costs decreased in 2024 compared to 2023 due to the completion of Phase 3 CLARITY trials, while selling, general, and administrative expenses are expected to increase as the company builds its commercial infrastructure[103]. - Research and development expenses decreased by $10.6 million, or 62%, to $6.5 million for Q3 2024 compared to $17.0 million for Q3 2023[111]. - Selling, general and administrative expenses increased by $3.6 million, or 127%, to $6.5 million for Q3 2024 compared to $2.9 million for Q3 2023[112]. - For the nine months ended September 30, 2024, research and development expenses decreased by $16.0 million, or 40%, to $23.9 million compared to $40.0 million for the same period in 2023[114]. - Selling, general and administrative expenses for the nine months ended September 30, 2024 increased by $12.0 million, or 160%, to $19.5 million compared to $7.5 million for the same period in 2023[115]. Cash Position - As of September 30, 2024, LENZ had $217.2 million in cash, cash equivalents, restricted cash, and marketable securities, which is expected to support operations until positive cash flow post-commercial launch[100]. - As of September 30, 2024, the company had $217.2 million in cash, cash equivalents, restricted cash, and marketable securities[118]. Financing Activities - The company completed a PIPE financing in July 2024, raising $30.0 million through the sale of 1,578,947 shares of common stock at $19.00 per share[104]. - The company anticipates incurring significant expenses related to regulatory approval and commercialization efforts for LNZ100, which may require additional financing if revenue generation is delayed[100]. Company Classification and Future Outlook - The company is classified as an emerging growth company under the JOBS Act and may remain so until December 31, 2026[135]. - The company has total annual gross revenue of less than $100 million for the fiscal year ended December 31, 2023[135]. - The market value of the company's stock held by non-affiliates was less than $700 million as of June 30, 2024[135]. - The company does not anticipate paying dividends in the future, having historically paid none except for a special dividend prior to the Merger[134]. - The company intends to rely on exemptions from certain public company disclosure requirements while remaining an emerging growth company[135]. Accounting and Valuation - The company uses the Black-Scholes option pricing model to estimate the fair value of equity awards, which is influenced by various assumptions[132]. - The company has not experienced material changes to its financial statements due to revisions in estimates historically[130]. - The Series A Warrants became exercisable into shares of common stock upon completion of the Merger and are no longer remeasured at each reporting date[131]. - The expected term for options granted to employees is calculated using the simplified method due to insufficient historical exercise data[134]. - The company will continue to apply its current process for estimating expected volatility until sufficient historical information becomes available[134].
LENZ Therapeutics, Inc.(LENZ) - 2024 Q3 - Quarterly Report