Lantern Pharma Inc (LTRN) 2022 Q3 法說會逐字稿

We'll open up the call for questions and answers after management's presentation. A webcast replay of today's conference call will be available on our website at lanternpharma.com shortly after the call. We issued a press release after market close today, summarizing our financial results and the progress across the company for the third quarter of 2022. A copy of this release is available through our website at lanternpharma.com, but you will also find a link to the slides that management will be referencing on today's call. I would like to remind everyone that remarks about future expectations, performance, estimates and prospects constitute forward-looking statements for purposes of safe harbor provisions under the Private Securities Litigation Reform Act of 1995.

Lantern Pharma cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those anticipated. A number of factors could cause actual results to differ materially from those indicated by forward-looking statements, including the impact of the COVID-19 pandemic, results of clinical trials and the impact of competition. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements can be found in our annual report on Form 10-K for the year ended December 31, 2021, which is on file with the SEC and available on our website.

Forward-looking statements made on this conference call are as of today, Monday, November 7, 2022, and Lantern Pharma does not intend to update any of these forward-looking statements to reflect events and circumstances that occur after today, unless required by law. A webcast replay of the conference call and webinar will be available on Lantern's website. On today's webcast, we have Lantern's CEO, Panna Sharma; and CFO, David Margrave. Panna will start things off in a moment with an overview of Lantern's operational highlights and business activity, after which David will discuss our financial results. This will be followed by some concluding comments from Panna, and then we'll open up the call for Q&A. I'd now like to turn the call over to Panna Sharma, President and CEO of Lantern Pharma, please go ahead.

Thank you, Nicole. Good afternoon, everyone, and welcome to our third quarter 2022 earnings call. Thank you for joining us this afternoon to hear about our third quarter results and other corporate progress at Lantern. Lantern Pharma is at the leading edge of leveraging artificial intelligence, machine learning algorithms, biomarker, clinical, genomic and drug response data to transform the cost, compress the time lines and derisk oncology drug discovery as well as oncology drug development. We're actively using this transformative approach, which leverages AI through our own RADR AI platform.

We use this to uncover significant opportunities in cancer opportunities that are either underserved, unmet or often overlooked. We've advanced [in rescued] compounds, bringing them to Phase II clinical trials and also have developed entirely new drug candidates for first in human trials next year. We're doing this at a fraction of the cost and time line of traditional drug development.

Our unique AI platform is powered today by more than 25 billion data points and over 200 algorithms. These are the foundation of what helps us to understand, predict and model questions that are fundamental to oncology drug development. We're advancing 2 drug candidates that are in Phase II clinical stage and expect to launch 2 additional drug candidates early next year. Those first human trials will be with LP-184 and LP-284. Both molecules can be synthetically lethal in certain cancers, LP-184 is specifically in solid tumors, while LP-284 is directed in a range of blood cancers, specifically non-Hodgkin's lymphomas.

We've also been focused on advancing our rescued drug candidates LP-100 and LP-300 towards precise and meaningful treatment indications in unique patient populations. We also have several therapeutic programs that we expect to introduce in the coming quarters with both our existing molecules and with new molecules and new combinations that we have been validating and developing through our AI-guided process.

The compression of costs and time line is essential and key issue and one that we are truly at the lead position of with our process. It's what's allowed us to grow our portfolio from 3 programs 15 months ago to 11 programs today. We expect many of these programs to create high-value opportunities for our investors and potentially life-transforming therapies for cancer patients.

Core to our business is our IP, not only in our drug products and also on the insights on how to best manufacture, utilize and direct them, but also IP related to our AI platform and the methods and automation that drive the precision and power of RADR. We continue to expand the functionality of RADR and will provide investors and analysts additional details during a tech and platform day, which we expect to have in early Q1 of 2023. In addition, we recently published a paper in Frontiers and Drug Discovery, which highlighted our work with the National Cancer Institute in uncovering an entirely new DNA damage mechanism for LP-184 and also the development of a new indication in a ultra-rare brain cancer, ATRT.

Lantern Pharma has entered into a major period of transformation as we evolve and mature many of our initial AI-driven insights and advance additional drug candidates into human clinical trials. We're continuing to make significant and meaningful progress in turning the observations and insights generated by our AI platform and then validated in the labs. The labs [with] actually top-tier academic and research partners eventually into advancements for cancer patients and hopefully, to breakthrough clinical programs.

Our 11 programs span multiple indications and have been developed at a level of cash burn and resourcing that is largely unheard of, but has been enabled by our AI and data-driven approach. We expect many of these programs will be partnered with larger biopharma companies and as they further develop in the clinic. We've developed these programs, again, not only to fraction of the cost, but also a very compressed time line. And we believe that traditionally, it can take upwards of $10 million to up to $100 million to achieve a meaningful clinical program. We've done that per program with a range of $2 million to $3 million.

Today, we have several notable advancements to share with you, including updates about the advancement of our HARMONIC clinical trial for LP-300 in never smokers with non-small cell lung cancer, updates on the IND statuses of 184 and 284 and the clinical trial indications for those drugs. We also will talk about some of the improvements on our RADR AI platform. Most notably, this past quarter was marked with the launch of the HARMONIC clinical trial, a Phase II clinical trial for never aimed at never smokers that have non-small cell lung cancer. We expect this trial to enroll 90 patients.

And we're looking at the effect of LP-300 in combination with standard of care chemotherapy, which is pemetrexed and carboplatin, on overall response and also progression-free survival -- sorry, overall survival and progression-free survival. We've activated the first 2 clinical sites, Northwest Oncology and Gabrail Cancer Center in Ohio and are expected to dose first patients and add several additional trial sites in the U.S. in this quarter.

A novel and exciting aspect of the HARMONIC trial is also important for our future development, is that we'll be collecting and analyzing liquid biopsies from these patients at 4 time points during the trial. These biopsies, liquid biopsies will then be analyzed for both genomic and transcriptomic data, and we believe it could represent the largest, most comprehensive longitudinal biomarker studies done on never smokers, which is about 18% to 20% of new non-small cell lung cancer cases. Importantly, this data for the liquid biopsy will be used to generate insights for a potential pivotal Phase III and also be used in the tier to help partner the drug candidate out.

We're also continuing to engage in global biopharma partner discussions for regions of the world where there's a higher prevalence of non-small cell lung cancer in never smokers, including parts of Asia, South America and Europe.

It's important to note that in a previous Phase III multicenter clinical trial, a subset of never-smoker patients with non-small cell lung cancer receiving LP-300 with chemotherapy showed increased overall and 2-year survival of 91% and 125%, respectively, compared to patients who just received chemotherapy alone.

Never smoker patients with non-small cell lung cancer represent a potential market size of 1.5-2.5 billion, with nearly 200,000 patients diagnosed with this cancer, and about 20,000 to 30,000 of those are here in the U.S. alone, again, never smokers of non-small cell lung cancer. In Q3, we also announced the issuance of an exciting new patent relating to LP-300 that extends the commercial protection of LP-300 until late 2032 and is directed towards increasing the survival time of patients receiving LP-300 that are marked by the overexpression of thioredoxin or glutaredoxin. This patent increases the potential for future partnering and generates further growth in our patent state.

Moving on to our next drug program. We're currently developing LP-184 for 2 major classes of cancers, solid tumors, including genetically defined pancreatic and bladder cancers and central nervous system cancers, including GBM, or glioblastoma, and brain mets and also ATRT. Across all programs, LP-184 has the potential to be valued, we think, of this molecule, but somewhere in the range of $5 billion to $8 billion. LP-184 has potential both as a potent monotherapy agent, but also to be used in combination with other therapies.

In the last year, we filed over 10 patents on this molecule and across multiple indications and have increased the size of the CNS indications that are in development significantly from one last year to nearly 5 today. The completion of the LP-184 IND-enabling studies and the submission of the IND application to the FDA are anticipated for Q1 of 2023. LP-184 is under development for 2 major classes of cancer, solid tumors, including genetically defined pancreatic and bladder cancers and several central nervous system cancers. Based on the difference in the clinical needs and standard of care for these cancer classes, we may have 2 separate Phase I clinical trials for LP-184, and we expect these to launch in the first half of 2023.

In the U.S., the stand-alone market potential of these programs just in the CNS cancers alone, we expect it to be over $5 billion and then another $1 billion to $3 billion range for solid tumors. In addition to LP-184 as adult cancer program, LP-184 is also being developed for several rare pediatric cancers, including the ultra-rare cancer ATRT, a very aggressive and malignant CNS cancer with no existing standard of care therapy.

Lantern is in discussions with ATRT key opinion leaders about a pediatric trial design for a potential Phase I clinical trial. And also, this is the same indication for which we have a rare pediatric voucher. Lantern presented new preclinical data at the AACR special conference for pancreatic cancer in collaboration with our partners at Fox Chase Cancer Center. This presentation highlighted an important aspect of 184 and that it has potent antitumor effects in mouse models that have DNA damage response alterations or mutations in ATR and BRCA 1.

Additionally, LP-184 was demonstrated to act very synergistically with other standard of care agents use in pancreatic cancer, but also with spironolactone, which we've talked about before and also with radiation therapy. These combined results exemplify the potential for 184 as a therapeutic agent in some very aggressive cancers, both as monotherapy or in combination. You can view the poster on our website. LP-284, this is a totally new molecule. (inaudible) was first announced a little -- by a little over a year ago, introduced at ASH in 2021. We'll be at ASH again here this year. And we expect to finish the IND-enabling studies in Q1 of 2023 and file with the FDA. We expect the trial to launch again in the first half of 2023.

We're developing LP-284 for non-Hodgkin's B-cell lymphomas where again, we've seen nanomolar potency. And there's also a very important clinical need. And the NHL indications that we're particularly excited about are mantle cell and double-hit lymphoma. And globally, mantle-cell and double hit lymphomas impacted nearly 45,000 patients a year, with virtually all patients relapsing 2 to 5 years after treatment. And typically, they stop responding to existing standard of care agents.

So there's a significant clinical need for late-stage therapeutic options for these patients and represent, we think, another $1 billion opportunity. At Society of Hematology & Oncology, SOHO's Annual Meeting, Lantern scientist presented a new research on 284 for non-Hodgkin's lymphoma, and we presented also that LP-284 had strong antitumor effects in cell lines that are resistant to standard of care agents, ibrutinib and bortezomib.

So, LP-284 antitumor effect in those resistant cell lines supports this potential for relapsed patients or patients that develop resistance. That poster also can be viewed on our website. All the work that we do in validating our ideas about the molecules validating combinations and use is all done in collaboration with world-class leaders at top cancer centers, including Johns Hopkins, Fox Chase Cancer Center, UT Health in San Antonio, the Danish Cancer Society and others.

Continuing to focus on providing insight and transparency about our research, we continue to host webinars. We'll be hosting a KOL webinar in synthetic lethality. It's a key mechanism of action for our 184 and 284 molecules and also for 100. The webinar will feature an internationally recognized expert in synthetic lethality, Dr. Zoltan Szallasi, who is the -- he has a joint appointments, both in Danish Cancer Research and also as an Assistant Professor of Pediatrics at Boston Children's Hospital, Harvard Medical School affiliate.

We'll be announcing additional details about this webinar. It's a category we're particularly excited about. We think it had -- creates a lot of additional excitement around that class of molecule for 184 and 284. We're also happy to report that we surpassed our year-end goal of 25 billion data points. And we're several months ahead of schedule. This growth in data coincides with significant upgrades to our RADR's computational infrastructure, automation and library of machine learning algorithms. We think that this will continue to accelerate and more importantly, continue to be used in our programs and in programs at our collaborators.

The current collaboration with Actuate Therapeutics is advancing for their drug candidate elraglusib (formerly 9-ING-41). The RADR-generated insights have accelerated development initiatives for elraglusib, including identification of candidate biomarkers for patient selection and development of models to predict clinical response. Highlights of the ongoing successes collaboration are also planned to be shared in an upcoming webinar with Actuate's team. I'll now turn the call over to our CFO, David, who will provide an overview of the quarter's financial results. David?

Thank you, Panna, and good afternoon, everyone. I will now share some of the financial highlights from the third quarter. Our R&D expenses for the quarter ended September 30, 22 were approximately $0.7 million compared to approximately $2.96 million for the third quarter of 2021. A substantial portion of this decrease in expenses relates to a $935,000 payment we received in July '22 from one of our service providers in connection with the resolution of a difference of views regarding the service provider agreement. This payment we received contributed to an approximately $1.6 million reduction in product candidate manufacturing-related expenses during the 3 months ended September 30, 2022.

In addition, we made a $1 million upfront payment to Allarity Therapeutics during the 3 months ended September 30, 2021, which was nonrecurring. So that expense did not occur again in the quarter ended September 30, 2022. General and administrative expenses were approximately $1.4 million for the third quarter of 2022, up slightly from $1.2 million in the prior year period. We recorded a net loss of approximately $2.3 million for the quarter ended September 30, 2022, or $0.21 a share. This compares to a net loss of approximately $4.1 million for the quarter ended September 30, 2021 or $0.36 per share.

As of September 30, 2022, we had approximately 10.86 million shares of common stock outstanding and outstanding warrants to purchase approximately 178,000 shares and outstanding options to purchase [1,953] shares. These warrants and options, combined with our outstanding shares of common stock, give us a total fully diluted shares outstanding of approximately 12.04 million shares as of September 30, 2022.

Our cash position, which includes cash equivalents and marketable securities as of September 30, 2022, was approximately $57.8 million. This balance is expected to carry us into 2025. Importantly, we believe our solid financial position will fuel continued growth and evolution of our RADR AI platform, accelerate the development of our portfolio of targeted oncology drug candidates and allow us to introduce additional targeted products and collaboration opportunities in a capital-efficient manner. Lantern currently has 17 employees who are primarily focused on leading and advancing our research and drug development efforts. We see this number expanding slightly in coming quarters as we add additional experienced and talented individuals to help advance our mission. I'll now turn the call back over to Panna for some final comments. Panna?

Thank you, David. As David mentioned, we're well positioned and are executing on our mission to leverage AI and data in a highly cost-efficient manner to generate clinically needed programs in cancer therapy. We continue to have a strong fiscal discipline with our cash utilization, most of which has been on external research, manufacturing and trials. Our focus remains on leveraging our intellectual knowledge capabilities around scientific strategy in the AI platform and then working with world-class partners and CROs to execute on those needs. This enables us to scale the work as needed and rapidly adjust as our data or the markets dictate.

We believe this nimble model can be a hallmark of future drug development that's both efficient and de-risked. Later this quarter and this year, Lantern will be presenting new preclinical data at several scientific conferences, including the Society of Neuro-Oncology's Annual Meeting in Tampa that's coming up in the 16th through the 20th. The San Antonio Breast Cancer Symposium in early December, we're presenting some exciting new data and the American Society of Hematology, ASH, in New Orleans in mid-December, where we'll be talking more about 284.

We'll also be attending the BioFuture Conference this week in New York and the Disruptive Growth Conference in New York also in early December. Ultimately, we believe many of our programs, as they further develop can be partnered out for several hundred million or potentially even billions of dollars. In addition to providing multiple shots on goal, our maturing development pipeline with 2 Phase II assets, the upcoming launch of multiple Phase I trials and additional assets under development should provide a steady flow of catalysts news and data moving forward to attract an increasing level of interest from both investment communities and biopharma companies.

With extraordinary potential ahead of us, we continue to believe our current market cap and price does not accurately reflect the true value of our development programs and our AI technology platform for oncology drug development. We're actively pursuing and continue to pursue activities to increase our visibility of Lantern Pharma with the right sets of investors and also to engage with larger global biopharma companies to explore partnering one or several of our programs. I believe we've crossed an important inflection point in our business with our platform and now having repeatedly proven its capabilities of delivering important insights to expand our pipeline and aid in the development of others pipeline, we've ushered in a new era for our company.

We are now leveraging AI-driven insights to get to cancer patients in a more effective and efficient manner. I want to thank everyone for their time today and interest in entering on this call. And I'll now open up the call to questions.

Thank you, Panna. If you would like to ask a question, you can do so in 1 of 2 ways. You can either type your question in using the Q&A tool or you can click on the raise hand tool to speak directly to management, and I will allow you to speak. We have a few questions coming in here. One from John Vandermosten. Do we need an entirely new IND for each indication for LP-184?

David?

No, we're not expecting that. We think we can develop this under the same IND.

We'll have different protocols potentially for the trials, but the IND would be one.

And I see here, Michael King is raising his hand. Michael, go ahead and ask your questions.

Guys. Can you hear me? -- Congrats on the progress. Several questions. I'll try to keep it brief. Just in general, could you talk a bit about 184, since it's got so many potential indications, how do you foresee making specific go, no-go decisions for the various indications in the CNS, including pediatric and how are you going to prioritize the different indications?

That's a great question. The first, we will probably have a multitumor trial in 184. And from that Phase I or Phase Ia data, will probably enrich for Phase Ib or 2 based in the tumors that are most responsive. We're also, during that trial and gather information about large-scale information about the DNA damage response profile and also PTGR1 levels as well. And so we'll enrich from that initial Phase Ia to a more targeted 1b or 2 trial. And so I expect we'll -- we're going to probably enroll lots of solid tumors in that. That solid tumor will give us some good dosing information as well and allow us to get the safety data that we want. And from that, we'll probably launch then to Phase I in CNS cancers.

And again, very similar to the Phase I for solid tumors. We probably will enroll the majority of recurrent CNS cancers and then enrich in GBM and some of the more -- malignant gliomas that we've seen are more responsive. So we're going to allow patient data and real clinical data to guide the downstream selection, but we have some good ideas already where we think the most responsive tumors will be. And we'll pursue those first. I'll be the most responsive. Is there a clinical need that's clear and can we get through trials in a rapid way. But yes, there's a lot of -- that's why we take 184 is such an exciting molecule.

And you remind me, Panna, you're not going to prescreen patients for their PTGR expression, right, but you'll do some kind of a post-hoc analysis? Or how is that actually going to work?

That's the current thought that we'll -- we [won't] select based on PTGR1 levels initially. But we're still in discussions with KOLs and looking at feedback, but we may preselect based on DNA damage response mutation profile though. So if someone has a -- whether it be homologous repair deficient or nucleotide excision repair deficient, that might be the criteria across all solid tumors.

And in later-stage trials, we very well could use the PTGR1 as a selection eligibility criteria as well.

Got it. And then just one more quick question. Just as far as strategic imperatives are concerned. You said in the formal remarks and in the press release that you're going to start introducing perhaps some more novel compounds or new compounds into the pipeline and novel combinations. I just wonder how much -- can you keep filling up the front of the funnel, so to speak? Because are you going to get limited on bandwidth, you could potentially have 5 different trials on 184 alone, then you've got 284, 300, 100. So it's filling up the front end of the funnel at this point in time, really the priority or would you rather see some flow through into the clinical advancement of the pipeline compounds (inaudible).

Yes. The clinical advancement is clearly our priority. So -- but there are a lot of new ideas and advancements that are being made will very likely announce with partners. So you're right on, there's only so many trials that we can handle alone. But we do have some interesting things that we like to develop, but probably we'll develop with a partner faster. But our current priority is the clinical advancement that we talked about that first. But I don't want investors [or others] to forget this is also a platform.

The amount of new content that's coming out is at the rate that's only getting more precise and larger. And so that was our hope as we grew the platform, and I think that's beginning to be an opportunity for us to partner. And so that's why we raised it. The clinical advancement of the existing compounds is the #1 priority.

Thank you, Michael. We have another question coming in here. What are the first observations on screening success for the HARMONIC trial?

We're in the process of screening probably in half a dozen to dozen patients. So we won't know until we've started the dosing process, but yes, we've got probably 6 to 12 patients that are being --

-- That are in the likely stage.

Yes. No observations yet.

Okay. Anybody else has any last minute questions, feel free to raise your hand or type it in using the Q&A tool. I see John Vandermosten is raising his hand. John, you should be able to ask your question.

Hello, guys, can you hear me? I thought it was really interesting that you had noted about taking the liquid biopsies over the course of the trial. And I wonder if there was any precedent for that? And if so, any observations and then might that also be useful for conducting some kind of adaptive trial design in the future?

Yes. Like I said in the comments, the liquid biopsy probably been one of the largest longitudinal studies on the same patients in never smokers. So what happens now in these never smoking population is that they're typically -- if they have an actionable mutation, they're given a range of TKIs, some stop responding in a few months, some take 2-3 years. If they're EGFR, they might mutate to [T970M], which you can be on that drug also for a year or 2.

So my expectation is that the cancer genome will be pretty different across these never smokers. There'll probably be some subtle variations based on the drug history, treatment history that they've had. And so I think that we may expect different levels of response to the LP-300 plus chemo doublet based on the clinical treatment history. And so that will allow us to really pinpoint who's going to be the most responsive. And if there's a signature that comes out of it, we can use that signature regardless of never smoking status, and we may then have a pivotal Phase III with based on signature.

[A little] advance understanding of never smoking cancer biology in general, but I think it will be very helpful into creating a more focused and even [narrow] trial, and it will also help us with pharma partners. -- as pharma partners [in room], of course, asked the same question, why do we have a range of variability in response. Can you tell us what you're seeing? It may or may not correlate with their prior clinical treatment, but I think we'll find a lot of really good, insightful data in the liquid biopsies that we collect.

And I think a very exciting aspect of this is the de-identified data will then be included and incorporated in RADR, which will make that even more powerful.

And just to add on to that. Look, we will be doing liquid biopsy enrollment in multiple time points wherever possible in all of our trials. So it will be pretty standard. So we'll do them the GBM trial. We'll be doing on the solid tumor trial for 184. We'll be doing on the 284 trial because it just -- there's a wealth of data, the cost for liquid biopsy has gotten much more reasonable. And if patients are amenable to it, in which in many cases, they are, it gives us a lot of very clear ideas on how to advance the molecule.

Thank you, John. That is all the questions I see that we have for today. So thank you, everyone, for joining, and have a great rest of your day.

Nicole, thank you. David. Thanks.

Thanks a lot. Appreciate it. (inaudible).