LENZ Therapeutics - a high risk high reward small cap biotech stock

Hello Simply Wallstreet I have some DD on a small cap company I want to share. Firstly I want you all to be aware of the risks associated with small caps. Mainly low volume and low liquidity leading to larger spreads on the bid/ask. Along with if the float is small then it is possibly easier for bigger players to manipulate price action. Okay great now that we got that out of the way allow me to introduce LENZ Therapeutics.

⸻

LENZ Therapeutics: A Biotech company with a singular product that was recently approved by the FDA, has plans to go live with distribution in October of 2025. What is their singular product you ask? It is called VIZZ and FDA Approved Aceclidine 1.44% eye drop to treat Presbyopia.

Right now you might be thinking “What did I just read? I was just like you when I first read that. Here is what I learned.

Presbyopia – More commonly known as farsightedness, affects 128 million adults in the US. For those of you like me with an IQ below your waist size. Farsightedness means you cannot read up close, a very intuitive way the medical community decided to define that, Thanks Docs!

⸻

What does this mean?

Well, VIZZ can treat farsightedness with an eye drop that lasts up to 10 hours. This will remove the need for reader glasses for example, it will be beneficial for people that need an ability to focus their eyesight more on things up close: computer screens, phone screens, reading, and many more activities requiring the ability to focus on things close to you.

⸻

My thesis is based around the potential growth this company could achieve by successfully integrating the product into the market. They currently have one competitor Vuity. Their competitor’s efficacy and side effects however are worse all around. This product uses a more effective active ingredient. People also like to take the easy way out often times, and an eye drop that will make it so they don’t have to remember bringing their glasses everywhere is the perfect level of convenience for people.

⸻

Possible Growth:

• Pricing is believed to be $80 a month

• Target population of the US is 128 million people

• A 4% adoption rate would mean an estimated gross revenue of 5 billion dollars for a single year

• The stock price at that level of revenue could be anywhere from $400 to $600

⸻

Company Financial Health: Good

• Short Term Liabilities covered at $213 million in assets / $10 million in liabilities

• Long Term Liabilities covered at $213 million in assets / $600k in liabilities

• This puts them at low risk of needing to liquidate shareholder currently

⸻

So we have a lot of potential here but let’s not forget the risks because we have a lot of them to consider

⸻

Major Risks to Consider:

• They currently only have one product so success or failure weighs heavily on its shoulders

• They have a competitor (albeit inferior) in the market

• It is currently a small cap company and at risk of what I mentioned in the opening of the post due to that

• The drug was blind tested for 3 years, there could be longer term side effects that would negatively hurt public opinion

• Financial health could be pressured if they fail to scale in an economical way

• Short Interest is 30% – it is irrelevant to my thesis on this product but something you should all be aware of

⸻

I personally think the risk is worth the reward here. Would love to discuss what you all think and if we have any biotech investment experts I definitely want your take on the matter.

this is not financial advice