Lantern Pharma Inc (LTRN) 2021 Q1 法說會逐字稿

Good afternoon, and welcome to Lantern Pharma's First Quarter 2021 Conference Call. As a reminder, this call is being recorded.

(Operator Instructions)

I would now like to introduce your host for today's conference, Marek Ciszewski with Investor Relations at Lantern Pharma. Marek, please go ahead, sir.

Thank you, Jim. And welcome, everyone, to the Lantern Pharma's First Quarter 2021 Conference Call. On the call today are Panna Sharma, Lanterns' President and CEO; David Margrave, Lanterns' CFO; and Dr. Kerry Barnhart, Lantern's Vice President of Clinical Development.

Our press release was issued today with our first quarter financial results that we will be discussing on our call today. Following the safe harbor statement, Panna will provide an overview of business highlights, after which David will overview our quarterly financial results, and Dr. Barnhart will provide an update on our LP-300 program. Panna will then offer concluding comments, after which we will open this call to questions.

Please also note that we have provided a link under Investor Relations website to additional slides that we may reference in today's call.

I would also like to remind everyone that remarks about future expectations, plans 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 our actual results to differ materially from those indicated by forward-looking statements, such as the impact of the COVID-19 pandemic, results of our 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 the Risk Factors section in our annual report on Form 10-K, which is dated March 10, 2021, on file with the SEC.

Forward-looking statements made on this conference call speak only as of today, Monday, May 3, 2021, and Lantern Pharma does not intend to update any of these forward-looking statements to reflect events or circumstances that occur after today.

A webcast replay of the conference call will be available on the Lantern Pharma's website. And with that, I'd like to turn the call over to President and CEO, Panna Sharma, for his opening comments.

Panna, please go ahead.

Marek, thank you, and good afternoon to everyone on the call today. Thank you for joining us for our first quarter 2021 conference call. We've had a number of very important progress points over the past quarter and over the past month. Very notably, as many of you probably read this morning, we announced a collaboration with Actuate Therapeutics where we will be leveraging our AI engine RADR to help them advance their drug candidate.

As you know, Lantern Pharma is an oncology biopharma company that leverages the power of our internally developed AI and machine learning platform called RADR to develop oncology therapeutics. We believe that we are transforming the development of oncology drugs by changing the pace, the cost, the risk of drug development, and opening up new doors to rescue and repurpose drugs by using our data-driven, machine-learning-enabled approach.

We are one of the few pure-play AI-based biopharma companies with multiple clinical stage programs as well as a rapidly growing proprietary platform for accelerating our understanding, modeling and prediction of patient in tumor response to cancer therapies.

We achieved multiple key milestones in this first quarter. I'm going to highlight a few of those that are critical. Most notably, our RADR AI platform surpassed 4 billion data points in the last campaign by the end of March and over 4.6 billion as of the end of April. We also submitted an updated clinical development plan to the FDA for LP-300. This is for a Phase II trial in nonsmokers, non-small cell lung cancer, and Dr. Barnhart will provide an update on our LP-300 program later in today's call.

During the quarter, we also expanded potential indications for LP-184 to include atypical territory rhabdoid tumors, an ultra-rare pediatric brain tumor, and also for LP-184 in drug-resistant non-small cell lung cancer. The indication in lung cancer was published in Oncotarget this past quarter, while the ATRT work is being pursued in collaboration with Johns Hopkins.

We also initiated preclinical development of LP-284, an entirely new molecule and certain hematologic cancers that have shown exceptional sensitivity to this new molecule in indications that are very different from our 184 molecule.

We also strengthened our intellectual property portfolio with the filing of over 10 patent applications, ranging from novel molecules to methods of use in manufacturing, to identifying patients, to actually those that cover fundamental technology aspects of our RADR platform.

Our research team published 2 peer-reviewed studies in Oncotarget and BMC Bioinformatics that further validate our data-driven machine-learning-enabled approach to drug development and also provide details and transparency on how RADR is being used and implemented in our development of LP-184.

We think the drug development process for 184 is actually a central hallmark in a data-driven approach. Our scientists also presented a poster at the virtual AACR this year. That poster was initially conducted in collaboration with Georgetown, examining the efficacy and potency of LP-184 in prostate cancers, including, and very importantly, those that have DNA damage repair mutations, and we believe that the combination of PTGR1 overexpression, along with DNA damage repair confers a potential path of synthetic lethality.

Very significantly, we also completed a $69 million follow-on offering in January 20 that dramatically strengthened our balance sheet, it provides us multiyear runway to execute our plan to harness the power of RADR, to innovate precision oncology therapeutics that can bring hope and potentially increase personalization to cancer patients globally.

For those of you that have listened to my prior talks and to earnings calls, know that I believe passionately about not only changing the pace at which drugs for oncology are brought to market, but also the cost, and we believe the only way to do this is to use AI and machine learning, which has absolutely smashed the product development cycle and cost curve of every other industry.

The growth in RADR is over 4.6 billion data points now represents a 16-fold increase since Last May. And a nearly fourfold growth since the beginning of the year.

Let me put this differently and very simply, we are adding roughly 1 billion data points of curated, biologically relevant information to guide drug development in cancer each month during the first quarter. This is a monthly pace that drives the volume of data acquired during the entirety of our 2020 campaigns.

Our campaigns are becoming larger. They're becoming more voluminous. And we're on track now to smash our previous goal of reaching 3 billion to 4 billion data points by the end of this year, which we already reached and are expecting to achieve over 10 billion during the next campaign.

We also expect productivity and functionality to keep increasing as our teams collaborate more effectively. And soon, more in person as we end the near of the pandemic in many locations.

Most importantly, the insights and knowledge that we are now able to acquire from RADR is opening up tremendous opportunities to not only develop our own pipeline of innovative oncology drug candidates, but also to collaborate with other biopharma companies to help accelerate the development of their cancer drug candidates.

This kind of opportunity will yield potential equity and milestone arrangements for Lantern and for our investors. Exemplifying this aspect of our business model, is the collaboration with Actuate Therapeutics that we announced earlier today. The collaboration focuses on leveraging the RADR AI platform, our machine learning methodologies and our large-scale oncology data sets to accelerate key aspects of Actuate's 9-ING-41 drug candidate, a best-in-class GSK-3 beta inhibitor in active development in multiple Phase II clinical trials, including for pancreatic cancer.

The collaboration is expected to start immediately. In fact, it has already started and will potentially generate novel intellectual property that will be jointly owned by the companies. Under the terms of the collaboration, Lantern Pharma will receive upfront equity in Actuate Therapeutics, subject to meeting certain conditions of the collaboration as well as development milestones in the form of additional equity if results from the collaboration are utilized in future development efforts.

We think this is a great way to leverage this growing asset. Our mission remains the same, to unleash the power of RADR and our AI platform to transform the pace, risk and cost of oncology drug discovery and development, ultimately impacting the lives of cancer patients worldwide by bringing therapies to market faster and with reduced cost.

RADR has the potential to significantly accelerate our understanding of which compounds should be developed for which indications and this may ultimately improve and personalize patient outcomes with reduced risk, decreased capital and the increased ability to personalize therapy.

During previous calls, I've spoken about how we are all experiencing and living in the beginning of a golden age of AI in medicine, an era where the availability of relevant data, computing power, cloud resources, along with on-demand sequencing, a global talent pool and the acceleration of AI and large-scale data analytics and algorithms, along with investor and economic demands, have aligned to make highly responsive machine-driven approaches to solving complex problems in medicine and healthcare a reality.

This is especially true in drug development. And especially in drug development that is earmarked by biomarkers and genomics. We are harnessing the trends and capabilities of this golden age to accelerate our expanding pipeline of oncology drug candidates and now also those of our partners.

Since our 2020 June IPO, we have grown the number of programs in active development to (inaudible) from 3. Very, very critical both from a risk-reward standpoint, but also from a shots on goal standpoint.

We are giving more opportunities to investors to generate upside even in the limited amount of time since we've been public. Plus, we are now also initiating development of an antibody drug conjugate program. In just 10 months, we have more than doubled these shots on goals, increased the range of cancers that we can have an impact on. And significantly increased the number of opportunities for potentially accretive licensing and/or partnering transactions.

We're particularly excited by the fact that we're opening into areas where there's massive clinical need for improved therapies. Especially in certain rare and ultrarare cancers. This may enable us to bring certain assets such as LP-184 and ATRT or other ultrarare cancers directly to patients and to the market ourselves.

This is an important point to note. Let's discuss quickly our pipeline. We remain firmly on track to begin in early -- third quarter of 2021, the Phase II trial of LP-300, a small molecule drug candidate targeting a growing but unaddressed type of non-small cell lung cancer among never -- among nonsmokers.

LP-300 is now likely the most clinically advanced drug candidate anywhere for this high medical -- high unmet medical need for this patient population. Dr. Kerry Barnhart will provide a detailed updated review of the clinical trial protocol later in our call.

LP-300 represents a potentially first-in-class combination therapy for non-small cell lung cancer patients who are nonsmokers, a histologically defined adenocarcinoma that accounts for approximately 20% of new non-small cell lung cancer cases globally and actually even more in certain geographies. We believe that each year, about $2.5 billion is spent globally on therapies and drug treatments for this patient population.

Moving on to our more rapidly evolving LP-184 program that's now in active development across 4 disclosed tumor types. Recall that among the central features of our business model is to collaborate on the development of our drug candidates in specific indications with leading researchers in that area so that we can leverage their respective knowledge and experience in a given therapeutic area and their experience with therapies for that patient population.

LP-184 is currently in active collaboration with Johns Hopkins in various CNS tumors, including glioblastoma and ATRT. With Georgetown University, we're working in studies of LP-184 in prostate cancer and with Fox Chase Cancer Center in active studies with LP-184 in pancreatic cancer. We continue to explore additional opportunities for collaboration and development, and we expect to announce additional collaborations with leading institutions in the coming months.

The scope of work being done at each of our collaborations is to prepare the drug, LP-184 or other candidates for clinical development and targeted clinical trials where we have a clear indication that -- a clear indication of the patient need and the mechanism of action and a driving genomic or biomarker-based signature. We believe that we can gain relevant insight, expertise and experience from these KOLs, and we remain firmly on track to leverage this model to potentially begin Phase I clinical trials in each of these collaborations and their respective indications in 2022.

We will continue to provide regular updates on each of these programs as appropriate. In fact, we have data that we expect in this quarter and next quarter for all of these programs.

Among the goals of the ongoing collaborations to help guide the development and validation of a signature of disease that can potentially serve as a companion diagnostic and thereby more clearly define the commercial potential of each of our innovative cancer drug candidates. It's important also to note that, in fact, there was a recent publication done by University of Toronto researchers that indicated that clinical trials in cancer that used a biomarker or used a biomarker-based signature were 5x more likely to receive regulatory approvals. In certain cancers like breast cancer, the increase was more notable, such as 12x and other cancers like pancreatic and prostate, and it was a little bit lower like 6x to 7x and 4x in colorectal.

These collaborations will allow us to get there, I believe, in a very cost-effective and very efficient manner. For example, our collaboration with Georgetown is currently focused on validating the role of PTGR1 and the genetic mutations that drive the DNA damage repair pathways that make LP-184 highly potent in certain prostate cancers.

Ultimately, the goal of the collaboration is to create a more biologically relevant and robust gene signature in preparation for clinical trials with the objective of allowing future prostate cancer patients to experience the benefit of a personalized treatment approach.

We believe that Lantern's AI-driven approach could save millions of dollars in drug development costs while significantly accelerating the path to personalization and commercialization of therapy. We also have a similar research and collaboration agreement with Fox Chase Cancer Center for the further development of 184 -- LP-184 in pancreatic cancer. This collaboration advances the targeted use of LP-184 in genetically defined subtypes of pancreatic cancer and also the development of robust gene signature.

We believe this could open up the pathway to a more personalized therapy option that has the potential to improve survival. This program is being led by Dr. Igor Astsaturov at the Molecular Therapeutics program at Fox Chase.

We also announced a new collaboration research agreement with Johns Hopkins for the development of LP-184 in atypical territory rhabdoid tumors, or ATRT, an ultrarare and fast-growing cancerous tumor of the brain that presents primarily in children. ATRT notably also is marked by SMARCB1 deletion, either entirely or in part. So SMARCB1-mutated cancers represent another category for LP-184.

Hopkins, as many of you know, is a leading research center for brain cancers, and one of the largest brain tumor treatment research centers in the world with a focus on treating patients affected by all types of brain tumors. ATRT currently has no effective therapies and the urgency of directing this drug towards helping children battle this particularly aggressive cancer was self-evident, as was the opportunity to collaborate with John Hopkins Pediatric Oncologist, Dr. Eric Raabe, who has devoted his career to studying these pediatric brain cancers. Pediatric brain cancer is the second leading cause of pediatric cancer death with the incidence rate growing, unfortunately, approximately 2.7% to 2.9% per year.

We believe that the rarity of the incidence of ATRT in the U.S. and it's -- actually globally, and its prevalence in children supports the potential for LP-184 to qualify in the future for a possible grant by the U.S. FDA for a rare pediatric disease designation. If we're successful in receiving the rare pediatric disease designation, and if it receives ultimate approval, we could qualify for getting a priority review voucher. That review voucher would represent a significant value-enhancing milestone for Lantern Pharma.

These research programs, such as the ones I've highlighted with Hopkins, Georgetown and Fox Chase, are at the forefront of translational cancer medicine. They will use patient-derived cancer cells that are studied using physiologically relevant in vitro and in vivo models. This innovative approach allows the researchers to more precisely understand the biology of the tumor, guided, of course, by early stage work that's done in a cycle with our RADR AI platform. This allows us to more accurately establish the precise signature in a cyclical manner. This data-driven insight also gives us insight into additional mechanisms that can be leveraged in creating combination programs and in creating potentially new targets or new molecules.

Our mission is to transform and accelerate the cancer drug development process. If we can compress the time to clinical trials and derisk our drugs such as LP-184, we can save years of research and tens of millions of dollars in developing treatments for GBM, ATRT, pancreatic and other potential rare or ultrarare -- cancers, such as the ones we're currently evaluating.

Also in talks about what our team has been -- also published was also published manuscripts describing the efficacy of our drug in a variety of different models, such as the one we published in Oncotarget just over 2 weeks ago, where there's a clear clinical need for LP-184 for non-small cell lung cancer patients that are ineligible for targeted therapy or have developed resistance to other forms of therapy. For us, this is a very interesting target because of our complementary approach with LP-300, where we're targeting nonsmokers that have a very different molecular profile.

Similarly, LP-184 goes again for a very unique subset of non-small cell lung cancer patients that aren't responding to targeted therapy or are no longer eligible. So meaning existing targeted therapies, such as EGFR or ALK inhibitors will only work in genetically defined patient sets. And there's about 30% -- to close to 40% that don't have those targetable alterations, such as EGFR, ALK, (inaudible) or have developed resistance to the current standard-of-care therapies. That leaves those patients without additional therapeutic options and actually not a very good prognosis. We believe that LP-184 could potentially be effective in that patient class.

We're now working preclinically to show how LP-184 inhibits tumor growth. We've shown that now in mouse xenograft model of KRAS and KEAP1 mutant lung cancers. And co-occurring, KRAS and KEAF1 mutations occur in about 17% of lung adenocarcinoma cases and are a very aggressive form of lung cancer that is believed to be usually undruggable. We've developed a genomic signature that is believed to -- predict response in tumors that will be responsive to 184 and guiding further development of the drug.

Using this data-driven approach, we've shown that not only we can find unique biomarkers that link drug response and mechanism, but we can also rapidly uncover clinically meaningful patient subgroups that can benefit from our portfolio of therapies.

In the past 10 months of being public, our team has accomplished a significant amount in terms of advancing our portfolio, uncovering new indications and very importantly, advancing our RADR AI platform. We believe that together this will provide the potential for multiple shareholder value enhancing milestones over the near 2021 and 2022, and we have sufficient capital to achieve those milestones.

Now I'll hand over the call to David Margrave, our CFO for a review of our first quarter financial results. David?

Thank you, Panna, and good afternoon, everybody. I'm now going to share some of the financial highlights from our first quarter of 2021. For the quarter ended March 31, 2021, we had a net loss of approximately $2.45 million or $0.24 per share compared to a net loss of approximately $477,000 or $0.24 per share for the quarter ended March 31, 2020. Research and development expenses were approximately $1.3 million in the first quarter of 2021 compared to $137,000 for the first quarter 2020.

The increase was primarily attributable to increases in research studies, expansion of our research team and noncash research and development related stock option compensation expense. We expect we will continue to increase our R&D spend as we further advance our portfolio and recently initiated ADC program and move towards commencement of additional clinical trials and research studies.

General and administrative expenses were approximately $1.2 million for the first quarter of 2021 compared to approximately $340,000 for the first quarter of 2020. The increase was primarily attributable to an increase in expenses associated with operating as a public company, along with increases in noncash general and administrative related stock option compensation expense.

Our team has also continued to grow. We currently have 16 employees, 12 full-time and 4-part time who are primarily focused on leading and advancing our drug development, biology and data science efforts.

We expect to operate in a hybrid work environment, working both in the office and remotely for the near future. We look forward to moving towards a post-COVID environment and improving our productivity even more.

As of March 31, 2021, we had 11,181,447 shares of common stock outstanding. This amount includes 4,928, 571 shares that were issued in our January 2021 follow-on offering. At March 31, 2021, we also had warrants to purchase 305,294 shares and options to purchase 823,826 shares. These outstanding shares of common stock together with warrants and options combined give us a total fully diluted shares outstanding of 12,310,567 shares.

Our cash position at March 31, 2021, was $81.4 million. As a result of our 2020 development and operational progress, as Panna discussed, we were able to significantly strengthen our balance sheet in the first quarter with the closing of a $69 million follow-on public offering in January.

This additional cash extends our anticipated cash runway through mid-2025. 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 product opportunities in a capital-efficient manner. Thank you, and I'll now hand the call back to Panna. Panna?

David, thank you very much. I would now like to invite Dr. Kerry Barnhart, our colleague, and our Vice President of Clinical Development to provide everyone an update on our LP-300 program. As many of you know, or for those of you that are new, LP-300 is a small molecule, a disulfide bond disrupting agent, which we believe can play an important role in the treatment of non-small cell lung cancer and never-smokers.

Kerry, welcome to the call, and please go ahead.

Thank you, Panna, and good afternoon, everyone. On last Tuesday, April 27, Lantern Pharma submitted to the FDA its plans for the further clinical development of LP-300 in never-smoker patients with lung adenocarcinoma. Building upon earlier clinical results from an international Phase III trial, conducted by BioNumerik and its partners that showed a clinically and statistically significant survival benefit from adding LP-300 to standard chemotherapy in this unique patient population, Lantern claims to conduct a new trial where never-smoker patients who have relapsed disease after being treated with either tyrosine kinase or immune checkpoint inhibitors, but having not been previously treated with standard chemotherapy, will now be treated with either standard-of-care chemotherapy or standard-of-care chemotherapy plus LP-300.

This trial, which we believe can best further confirm the additive survival benefit of LP-300 will enroll approximately 40 patients in each of the 2 treatment arms. In addition to providing the FDA with a full description of our clinical development plans, we also submitted supportive preclinical data from a bridging study that we conducted during the first quarter of this year that showed the tolerability of LP-300 added to standard-of-care chemotherapy.

Lantern also requested a meeting with the FDA to discuss these plans, and the FDA has granted that meeting request. That meeting has been scheduled now for the third week of June. And finally, I'll just comment that new LP-300 drug manufacturing is ongoing currently, and we anticipate having final drug product available for use in this clinical trial in the second half of this year.

And I'll be happy, during the Q&A session, to answer anybody's questions about our clinical development plans for this molecule. And with that, Panna, I'm turning it back to you.

Kerry, thank you. Before we open the call to questions, a few closing comments. Moving forward, we will continue to strategically grow RADR to become among the world's largest AI platforms for oncology drug discovery and development. We are confident that not only are we entering a new era of drug discovery, what I call the golden age of medicine. But the growth of radar and the growth of the algorithms will continue to present additional opportunities for R&D collaboration, such as the agreement we announced this morning with Actuate Therapeutics.

We're -- we are excited to soon begin in our LP-300 trial in non-small cell lung cancer among never-smokers, a very unique and needed patient population. We also anticipate updates on our various collaborations and development plans with LP-184 and LP-284. Likewise, our antibody drug conjugate program continues to advance and we're working on refining the conjugation and chemistry with that molecule, and we plan on written -- getting into clinical trials in 2022.

Our data-driven genomically targeted and biomarker-driven approach allows us to pursue a transformational drug development strategy that identifies, rescues or develop potential drug candidates at what we believe is a fraction of the time and cost associated with traditional cancer drug development.

Our dual approach to both develop de novo biomarker-guided drug candidates, such as LP-184 and 284, and also rescue historical drug candidates, such as LP-300, by leveraging the data sets in our RADR AI platform along with the continuous advances in genomics and computational biology, we believe this is emblematic of a new era in drug discovery and development and one that Lantern is a leader in.

In this context, we are focused on building a portfolio of quality, potentially high-value oncology drug candidates, each of which can be potentially partnered for pivotal registration-directed trials or potentially out-licensed and we believe this provides a clear and defined path for potential high-value creation for our shareholders or perhaps even brought to market directly in certain rare and ultrarare indications.

We are focused on establishing Lantern as the leading AI-driven oncology drug discovery and development brand and franchise. We're building a company that can deliver enduring and significant value for our shareholders. There are potentially, every decade, thousands or many thousands of discarded or otherwise deprioritized therapeutic candidates across the industry and in academia. We aim to bring at least 1 of these into our pipeline every 12 to 18 months.

We are laser-focused on the quality of rescue and the quality of new drug candidates, and our aim is to build a franchise with significant long-term value. It's also worth mentioning that the Board and management collectively own well over 25% of Lantern Pharma.

We believe the golden age of AI and drug discovery and development is here, and that Lantern is a leading -- one of the leaders in this paradigm shift, and this paradigm shift will bring a change in the pace, risk and cost of oncology drug discovery and development.

We believe that we're proving that significant efficiency in the time and cost of oncology drug discovery and development are possible, such as time to new indication, time to generating a signature, time to uncovering combinations, and most importantly, bringing those insights into an actual numbered product in your pipeline.

As our history has shown, we've more than doubled our number of candidates that we're pursuing in programs through their rapid identification and validation, where we're understanding the molecular drivers of cancer and perhaps the molecular drivers of response to specific compounds in a much more targeted way and one that we believe can be more effective for oncology drug patient -- oncology patients.

Crucially, as our RADR AI platform grows over the coming year to perhaps exceed 10 billion data points, we anticipate the discovery of additional high-value targets and indications of monotherapies, combination therapies or as part of our antibody drug conjugate platform. We look forward to sharing our ongoing progress with you and future updates and we would like to answer any questions that investors or analysts have on this call.

So with that, I'd like to open up the call to questions.

(Operator Instructions)

Our first question today, ladies and gentlemen, is going to come from John Vandermosten at Zacks SCR.

All right. Good afternoon. Why don't I start off with a question on the data points and what's behind the exponential growth of them? It seems like if you look at the chart, it just keeps on accelerating. How was that done?

Very good question. Partly, when we went public, as you know, the team was much smaller. So we've added some great team. We've given them good resources. But we've also invested the time on the infrastructure side, largely driven by our chief -- principal architect to focus on automation. So any task that we try to do, we try to automate it. And so we can get a lot done.

More importantly, we're able now to scour data sources internally and externally with a lot more precision and we prioritize the pipeline. And as we've gotten more experience with sucking in data and understanding what problems we have and what the quality of data issues are, where there's duplicate data. Again, we put all that insight back into the automation procedures. And so as we suck in more data, we understand where the exceptions are and what the exceptions are not. And that's allowed us to suck in more and more data faster.

So that's kind of been the process. And as I mentioned, we're planning our next campaign, and we believe our next campaign should get us very close to $10 billion. Whether it takes 3 months or 6 months or we're not sure but we're in the process of trying to obviously beat our last campaign where we sucked in a little over 3 billion data points.

So yes, it's -- a lot of it is automation, a lot of it is learning what goes right, what goes wrong, understanding how to handle and manage the exceptions and then building that into pipelines that are more self-aware.

Okay. And next question is on LP-284. I wanted to make sure I understand that molecule. It's the mirror image of 284. Is that right?

It's a mirror image or the stereoisomer, as it is called the 184.

Okay. Okay. So they're not -- I mean, I guess, the orientation of 184 and 284 is distinct?

Correct, yes.

Sometimes I know that they are mixed together, them and enantiomers are mixed. So I guess they're distinct. And I guess has there been a lot of preclinical work done that you're using in your in your AI work to look at the effectiveness and side effects of both of these enantiomers?

There has been some -- not a significant. Since 284 is a new molecule, there really is no historical work that we can rely on. We're doing the work. But we can learn from kind of other precedents. We can learn from similar (inaudible) situation, but it's a new molecule. So there's really not much work done at all on this kind of molecule since it's new, we've patented it.

So this is, like we said, it has some surprising distinct properties and hematologic -- or blood cancers, where 184 does not. So we're actually quite excited by it because our initial -- honestly, our initial thought, and this is kind of rewinding, but it's a little more belabored. When we first made 184 as a molecule, it was created semi synthetically, which led us to this mixed negative and positive enantiomer mix, because it was semisynthetic because it occurs naturally that way.

When we found the results of that semisynthetic molecule, there was an underlying thesis or belief that the muted effects that we saw in many of the cancers was because that there was different binding between the positive and negative enantiomer. And this actually had been observed in other anticancer drugs. And so many drugs are separated based on enantiomer like bendamustine, I believe that's one of the case studies.

And so there was a thought from our chemist that perhaps we need to purify and really get to the negative enantiomer or the positive enantiomer and that's actually the one that has the stronger potency as predicted by the AI engines. And we thought, okay, that makes sense. And this is one of actually the very first things when we were a private company that we looked at and started working on. And there were a lot of debates about whether this molecule was, in fact, different and unique or whether we're not seeing the potency that we should have seen. And so the enantiomer thesis made some sense, and we chased that down. We made -- then we invested significantly in creating a fully synthetic route of 184, not starting from (inaudible) fungal cultures. So starting purely from pure synthetic chemistry.

And we found that, in fact, 184 was super potent, as we know, nanomolar potency in many of the solid tumors, actually better than what was expected. And of course, what we saw as the muted effect was because of the positive enantiomer, not having the same kind of binding strength in property and actually kind of muting the effects of the negative enantiomer.

So we parked the positive enantiomer for a while. And we said, okay, we have to really characterize its negative enantiomer. And so as you've seen, we had more money and capability after we went public, we characterized 184 to death, which genomic sequences with subtypes of cancer. We did CRISPR editing to figure out if PTGR1 was the driver. We really characterized the molecule.

And there was a thought from some of our team members that perhaps we should benchmark 284 versus 184 in some more studies. And as part of those studies, we found that, in fact, 284 was very potent in certain hematologic cancers. Now it's still very early, and we saw to take this to the right, more relevant physiological models and small animals, et cetera, on the PDX. But what we're finding is that, in fact, the blood cancers in which 184 really doesn't have much of an effect because PTGR1 is not present as a driver and many of the other genes that are required for 184 to have its potency. That -- those are not hallmarks of many of these cancers. And so we believe 284 does work in a very different way.

And so what was seen as potentially a weakness in the solid tumors has turned out to actually be a strength in certain hematologic cancers. And so as we grew the team, we had the bandwidth and the time to really pursue that indication. And in fact, now we have some ideas as to why we have more data, and we filed IP. And so it's really very, very interesting. But it's still early. We hope that we'll get more data as we pursue 284 in blood cancers.

Our next question today will come from the line of Kyle Bauser at Colliers Securities.

This is Kayla Hostetler on for Kyle. Yes, we just wanted to ask about cash position -- yes, we were just wondering about cash position and potential asset acquisitions. And I think you mentioned that cash to be sufficient through 2025, but does that consider potential outside investments to supplement the current pipeline? And how should we think about your appetite for acquiring additional assets to develop?

That's a wonderful question. I'll let David talk a little bit about our cash position, cash usage, and then we'll talk about where we are in the BD pipeline.

Thanks, Panna. So we had $81.4 million at March 31. And we see our expenses growing as we move through this year. We had a net loss of $2.45 million for Q1. We expect that will grow from current levels during the remainder of 2021. We see R&D growing at a higher rate than G&A.

As we look to '23, where we'll have multiple trials in progress, our expenses will grow even further than that. Our operating plan has the potential for bringing in new candidates as part of our plans. So that's built into our estimates with respect to our runway. We always want to -- we are on the lookout for those sorts of opportunities. And I'll turn it back to Panna to drill down a little bit more on that.

Thanks. We have a fairly disciplined way to look at assets. In fact, one of our programs that we have internally that isn't quite really RADR, but somewhat eventually, I think it will feed into RADR. It's also a data-driven approach to look at oncology drug assets. We have an internal database called T4, it's called transforming trash to treasure that looks at every single oncology trial over the last 12 to 15-plus years by drug class, by failure by category, by drug type, by -- and then characterizes those drugs and the trials and the reasons of failure and the molecular weight and the indications and also new combinations or new ideas in those drug classes.

So we've looked at thousands and thousands of oncology drugs and prioritize the ones that we think are of interest. And we go after some of those proactively. And we get many, many, many opportunistically, literally every few weeks. But we have a disciplined process, and we'll deploy capital in a disciplined way. But I don't think it will be anything that will take a meaningful or significant portion out of our cash position. But yes, we have a good appetite. We're very good, but very well-informed appetite for new drug assets.

And our next question from our phone audience today will come from Keith -- excuse me, from Daniel Carlson at TW Research Group.

Question for you on the LP-300 trial -- question on the LP-300 trial. I wonder if you can provide some more details on that trial. And also, it seems like it might be right for a partnership, but I'm wondering if you're looking to further monetize that or accelerate that trial somehow?

Sure. I'll let Kerry talk about some of the details on the trial or the process to the extent that we can. And then I will answer questions about kind of further monetizing that asset and some of the ideas around that. Kerry?

Sure. So as I described, this is going to be a Phase II randomized 2-arm trial in which we will be looking at never-smoker lung adenocarcinoma patients who have failed the initial therapies designed to target their tumors, whether they're tyrosine kinase inhibitor therapy or immune checkpoint inhibitor therapy. Those therapies actually do a fairly good job in many patients of showing initial responses, but unfortunately, virtually all of those patients will eventually relapse and those therapies will not work for them. And the standard of care to treat those patients is now commonly a platinum-based chemotherapy doublet, which is similar to what historically, LP-300 showed statistically significant survival benefits for us.

So we will be treating these patients after they fail their initial therapies with either standard-of-care chemotherapy or standard-of-care chemotherapy with the addition of LP-300. And we are in the process right now of talking to sites. We have a small handful of sites that have indicated initial interest in participating in the trial. We're interviewing CROs to bring on board, a trial management and operations team. And I think we'll be releasing more details in the coming months about all of that. But Panna, I'll turn it back to you if you wanted to comment on partnership.

Yes. So one of the things we want to do is get through and scale up the trial because that will open up opportunities to potentially partner the asset. As I mentioned, 20% -- or approximately 20% of the non-small cell lung cancer cases seem to be occurring in never-smokers. And these never-smokers tend to be predominantly female, 66%, at least in the U.S. and U.K.

In fact, up to 70% and some parts of Asia, it's closer to 80%. And there's not a lot of good options. But many of the big pharma companies, AstraZeneca, Merck, Roche, have wonderful IO programs that have blossomed over the last few years and those IO drugs work really well in smokers that have high tumor mutation burden.

Interestingly enough, nonsmokers or never-smokers actually have a very low tumor mutation burden. A very quiet, very subtle mutation, very different profile. So they don't respond well to IO therapy or even IO plus chemo.

And so we believe that there's a great way to monetize this by partnering with some of the larger players who have good storage franchises in non-small cell lung cancer. And so we'll be -- we plan on having some of those discussions as the Phase II trial launches and goes underway.

The way we're currently planning for it, as Kerry mentioned, in the multi-arm trial is we have seen historically that there becomes kind of a separation of the survival curves in the LP-300 treated arm versus the standard of care arm at around 10 to 12 months, you start seeing this kind of separation begin.

So as we have further discussions, we're thinking about kind of a peak in or review at around that time based on how many people we've got enrolled. So I think in terms of monetizing, can we monetize it in or after that event, at around 12 months after the peak period -- after the launch maybe. It really depends on enrollment. But I definitely think that the heels of the end of the first 12 to 18 months of enrollment, I think there will be a lot of big pharma that have franchises in lung cancer that actually have tried to go after nonsmokers in the past, that would have a lot of interest in this asset. Hopefully answers your question.

Our next question comes from [Keith Gil at Connor Cherry & Company].

Congratulations on all your...

Jim, operator, I think...

[Keith], are you still there? I believe we may have lost you, sir. (Operator Instructions).

[Mr. Gil], can you hear us?

Can you hear me okay?

Yes, please go ahead.

I'm sorry. Okay. So again, congratulations on the Actuate Therapy agreement. Now is this a model for future deals? Could there be possibly cash milestone or royalty payments? And how many or how often can Lantern do these type of deals?

Thank you, [Keith]. As you know, we're not a service company or a services company. We're we're going to continue focusing on developing innovative or high-value oncology therapies. We will do it with partners where we believe we can get an interest in the therapy or in the company. And with Actuate, it happens to be a very like-minded group, where they think that AI and biomarker-driven approaches can accelerate their process and help them get to an exit. And more importantly, help them to find the right responder group, which is very valuable.

So I think those kind of efforts we plan on taking selectively knowing that we're going to be taking potentially equity or deferred cash or equity plus milestones based on success. So I think the cash will come down the line. I don't think we're going to try to build a franchise, we're just doing this just purely for cash as services. I think the bigger upside is in doing this in drugs where we have a higher likelihood of succeeding and getting in through the pipeline and then taking a percentage of that company or taking a percentage of that drug asset. And I think we'll see many of those types of deals, hopefully, over the coming quarters.

And next, we'll take a follow-up gentleman from Daniel Carlson at TW Research Group.

Sorry, guys, I had the same question, so no need.

(Operator Instructions)

We'll hear from [Steve Postec at Builders, Inc.]

Firstly, Panna, I'd like to congratulate you and your team on the tremendous progress you've made over this last year. It's really satisfying for me to be an investor in your company. I -- sure. I thought you said -- I heard you say that the trial on LP-300 was going to start on the second half of this year. And there was going to be approximately 40 patients involved in that. Will they all be women? And will there be an age limit on them?

Wonderful question, [Steve], I'll let actually Kerry clarify. I think there will be 2 arms. Kerry, do you want to go ahead and clarify that?

Sure, absolutely. So there are -- there will be 2 arms with 40 patients in each arm. And they will not be exclusively women. They will be exclusively never-smokers. We may, in fact, have a higher percentage of women just because there are a greater percentage of never-smokers that are women that get lung adenocarcinoma. But we will be stratifying in each individual clinical sites for both age and gender, so that in each individual clinical site, there won't be an overbalance of age or gender. And there is not, at this point in time, a specific age limit. There will be typical inclusion criteria for life expectancy and performance status, but we do not have an upper limit of age. There is a lower limit, 18 or older, but there is not an upper limit of age.

But the upper limit of age, mostly, Steve, as you probably know, will be covered by many of the comorbidities or other conditions. So -- but yes. Does that answer your question?

And gentlemen, his line has been returned to the audience.

We have no further questions coming from our audience today. I'd like to turn the floor over to Mr. Sharma for any closing or additional remarks.

Thank you, Jim, and thank you for all of you for your great questions. We hope that in the future that we'll be able to meet with many of you in person, share some of our progress of our team. We expect to be even more productive in the coming quarters and continue to have the discipline both on our investments and on our balance sheet, but focus on developing and innovating the drug development process in oncology.

We believe our AI platform is unparalleled in terms of the size and scale and will continue to grow through the year even more and more rapidly. And as our drug programs continue to progress through clinical trials and in clinical development, we believe any one of these opportunities can represent exit and value points that are several times our existing market cap. So with that, I'd like to thank you for your questions, and we look forward to talking with many of you face-to-face in the future.

Ladies and gentlemen, this does conclude today's program. Thank you for your participation, and you may disconnect at any time.