Good morning, ladies and gentlemen, and welcome to the Lens Therapeutics third quarter 2026 financial results conference call. At this time, all participants are in a listen-only mode. Following prepared remarks for 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 Chevalard, Chief Financial Officer. Please go ahead.
Thank you, Tina. Good morning, and thank you for joining us today. My name is Dan Chevalard, Chief Financial Officer of Lens Therapeutics. We are joined today by Afe Skimpenick, our President and Chief Executive Officer, Sean Olson, our Chief Commercial Officer, and Dr. Mark Baudridge, 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 day 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 the statements. The company encourages you to consult the risk factors contained in our SST filings for additional detail. With that, I'll now turn the call over to Abe.
Thank you, Dan. Good morning, everyone. Today's results mark an important step forward for Lens 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 the Viz launch. Over the past year, we built important foundations, gained valuable insights into what drives adoptions, and, importantly, drove encouraging momentum from our consumer-focused initiatives. This last quarter, we continue to see that consumer demand generation is a key driver of growth. Expanding our title reading glasses campaign to national TV enable us to reach a broader group of consumers with a clear message or an alternative to reading glasses. Our newly established telehealth channel also gives interested consumers a convenient path The evaluation by an independent, licensed ICAP professional and, with 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've built a strong foundation with eye care professionals. This 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 on 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 lands 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 a launch strategy, not a change in our commitment to events. The reorganization concentrates our people and capital on the activities that are demonstrating the clearest connection to patient acquisition and sales code. It also creates a more efficient structure for the business we are building. As far as 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, with more than 70% of our projected spend allocated to our consumer-driven sales and marketing strategy. We strongly believe this focused model gives us the opportunity to reach more patients, expanding this emerging category, and building a durable business. With that, I will hand it over to Sean, who will provide more detail on our commercial execution. Thank you, Afe.
As mentioned, we are one year into launch and have immeasurable 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 e-pharmacy, 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 eyedrop 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 eyedrop in the U.S. since its approval. Furthermore, based on the 2026 TRX data from Symfony, Viz has 94% market share in the U.S. Building a new category takes time and therefore a 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 business 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, national and state-level support. This keeps Viz top of mind in the I-Carey community while allowing us to direct 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 Abe. Thank you, Sean.
Before handing the call over to Dan to discuss the financial results and outlook, I also want to address the leadership transition we announced. After nearly six years leading lens and more than 25 years in biotech, I have decided to transition from my role as president and CEO, effective December 1st, 2026, to be able to devote more time to other passions. This is a deeply personal decision, and I come to the point when I feel confident in the direction of the company. We have built an important foundation for this, 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 Lens to his next phase. He knows the business inside out and has been closely involved in building the foundation for our commercial growth. Together with Sean, Mark, and the full leadership team, he is well prepared to lead Lens to his 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 Lens team, our 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 Lens' future. With that, I'd like to hand the call over to Dan.
Thank you, Ave. I'd like to start by saying thank you for all of your contributions to Lens, And I look forward to your continued guidance as we work through your transition. Your leadership has left a lasting mark on Lens, on me, and the team we have built together. I am humbled by the confidence placed in me by APE and the Board of Directors to step into this role. I am encouraged by our momentum, our priorities are clear, and we are focused on executing in this next phase at Lens. As both Ape and Sean 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 preserved 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 licensed 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 VIZ 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 this 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 remain zero in the third quarter, consistent with recent periods. Our Q3 net loss per share, both basic included, 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 we've discussed today, we announced a strategic consumer-marketing-focused reorganization that is announced 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% in our 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 VIZ 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 continue 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-US regulatory approvals in the months and quarters ahead. We remain focused on further expanding our global network and 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 Abe.
Thanks, Dan. Too close. I want to thank the entire Lens team for the commitment and dedication you've shown in bringing VIVs 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's ability to execute against it. With that, we would like to open up the call for questions.
To ask a question, simply press star 1 on your telephone keypad. Again, that is star 1 to ask a question. Our first question comes from the line of Stacey Q with TD Cohen. Please go ahead.
Thanks so much for taking our questions. Eve, good to see you go, and Dan, nice to see you step in. So, just two. First on telehealth, where do you see the contribution going for VIZ 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 business trajectory looking further out over the next few years? And then second, to look at the prescription trajectory, maybe through Symphony, can you talk about how closely aligned the prescriptions have been correlating to your DTE strategy? Thanks so much.
Thanks for the So looking at the telehealth channel, so 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. You know, what gives us continued confidence is as we look at the early KPIs, visitors to the websites, right, data going into this month, right, we continue to see that growth, and that gives us confidence and visits continued growth going forward. In terms of the Symfony data, we still believe the Symfony data is more accurate than the IQ data, and that's why we referenced the Symfony 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.
Our next question comes from the line of Mark Goodman with LearRank Partners. Please go ahead.
Alyssa
Analyst — LearLink 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.
Hi, Alyssa. This is Sean. Thanks for your question.
So, when we look at the telehealth channel, so 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, you know, done at two separate times, synchronous being a call or a video face-to-face. You know, the vast majority are done asynchronous. What we are happy to see is not only a fellow 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.
Alyssa
Analyst — LearLink Partners
What was the second question? Oh, just any detail on the demographics or patient characteristics from this early wave of adopters.
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.
Alyssa
Analyst — LearLink Partners
Thank you very much.
Your next question comes from the line of Yagel Nachimovic with Citi. Please go ahead.
Hi, this is Caroline Ansuigal. 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.
Hi, Kieran. This is Sean 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 that, 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. Here, now that we have the telehealth open, we can see when TV is on and when TV is off and a 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.
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 sales force or not and leveraging DTC campaigns? Thanks.
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, you know, the goal will be for them to leverage those for their specific clients.
Your next question comes from the line of Lakelyn Hanbury-Brown with William Blair. Please go ahead.
Hey, guys. Thanks for the question. I was wondering maybe if 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 field or the reps out of the field is not going to impact the growth trajectory moving forward?
Hi, Lachlan. This is Sean. Great questions. 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?
It was about outside of telehealth here. We've talked about the nice uptick you're seeing in telehealth, but wondering if that's accounting for about 50% of growth. Obviously, you're seeing growth outside of telehealth as well. So, I'm 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.
Got it. Thanks, Lachlan. So, yeah, so, you know, we're very pleased that we now have over 15,000 prescribing ECTs. 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. What we're also seeing in growth outside of telehealth is the broad excitement for an eye drop 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 necessarily haven't 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, Lachlan? The impact of Salesforce. So real quick. Yeah. So on the impact of Salesforce, so what gives us confidence in this? So 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 Viz, Viz is prescribed. And therefore, the real success is getting more patients to come in and ask about Viz. You know, 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, you know, we have an empty territory or non-target doctors. You know, they are writing Viz as much as those targeted doctors. So that gives us confidence in the focus on the consumer campaign.
Your next question comes from the line of Jason Gerberry with Bank of America. Please go ahead.
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, like, the permanent CEO search, both in terms of timing and potential profile you're looking for, especially given the Kind of the shift in commercial strategy.
Thanks for the question, Mr. Dave.
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 was just announced, making sure the organization is set up well for them to step in as the interim CEO. So, 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 Lens. So, he's extremely well-positioned to lead the company. Okay. 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 Dan to lead the organization into its next role in place. So we don't expect any impact on our strategy and the execution of it with this transition.
Our next question comes from the line of Matthew Culfield with H.C. Wainwright. Please go ahead.
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.
Thanks. That's a great question.
So, again, this is Sean. So, 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, you know, 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.
Okay, that's helpful. I appreciate it. Thank you.
And our final question comes from the line of Byron Amin with Piper Sandler. Please go ahead.
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 refill rate. And given the recent cost restructuring, could you share how you're thinking about timelines profitability?
Thanks. Thanks, Michael. So this is Sean, so I'll cover that, the refill rate.
So, you know, what we are seeing is that 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 The patients purchased more than one month's 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 rates and the total products being consumed by our predominant channel.
Hi, 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 optics. So, what we guided is a 70 to 75 million annual spends in 2027 and going forward. I think you should expect to see the 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.
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.
