Lantern Pharma Inc. (NASDAQ:LTRN) Q3 2023 Earnings Call Transcript

Lantern Pharma Inc. (NASDAQ:LTRN) Q3 2023 Earnings Call Transcript November 9, 2023

Operator: Good afternoon, and welcome to our Third Quarter 2023 Earnings Call. As a reminder, this call is being recorded and all attendees are in a listen-only mode. We will open the call for questions and answers after our 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 progress across the company for the third quarter ended September 30, 2023. A copy of this release is available through our website at lanternpharma.com where you will also find a link to the slides management will be referencing on today’s call. We 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 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, 2022, which is on file with the SEC and available on our website. Forward-looking statements made on this conference call are as of today, November 8, 2023, and Lantern Pharma does not intend to update any of these forward-looking statements to reflect events from circumstances that occur after today, unless required by law.

The webcast replay of the conference call and webinar will be available on Lantern’s website. On today’s webcast, we have Lantern Pharma’s CEO, Panna Sharma; and CFO, David Margrave, Panna will start things off with an overview of Lantern’s strategy and business model and highlight recent achievements in our operations, after which David will discuss our financial results. This will be followed by some concluding comments from Panna, and then we’ll open the call for Q&A. I’d now like to turn the call over to Panna Sharma, President and CEO of Lantern Pharma. Panna, please go ahead.

Panna Sharma: Thank you. Hello, everyone, and thank you for joining us this afternoon to hear about our third quarter results and corporate progress. We made significant strides over this past quarter and executing our mission of transforming the oncology drug discovery and development process, especially now that we have all of our clinical stage drug candidates in human clinical trials that are active, two that are in Phase 1 now and one that is in Phase II. We also continue to make significant progress in the launch of our CNS and brain cancer focused subsidiary, Starlight Therapeutics and in developing the next major leg of our discovery and development efforts, which will be focused on drug conjugates, including antibody drug conjugates.

Our team and many clinicians are particularly excited about the interesting first-in-human drug candidates, LP-184 and LP-284. Both of these candidates share a mechanism called synthetic lethality. During Q2, I was able to share the news that we launched LP-184 into a Phase I clinical trial for recurrent advanced solid tumors, especially those that are refractory to current standard of care therapies. This area is an area of especially critical need. During Q3, we launched the sister drug candidate, LP-284, into a clinical trial for recurrent non-Hodgkin’s lymphomas and also sarcomas. We also dosed the initial patient for LP-184 this quarter. Additionally, we continue to enhance and develop our AI platform, RADR. Our AI platform is revolutionizing the way we model, predict and understand drug cancer interactions, enabling us to advance our newly developed drug programs from initial insights, the first in human clinical trials and an average of less than 2.5 years, and it cost of under $2 million per program.

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Q&A Session

So milestone unheard of in the realm of oncology drug discovery. Computational and AI-driven approaches are increasing their presence and usage at both large and emerging pharma companies for all facets of drug discovery and development. Our leadership in the innovative use of AI machine learning to transform costs and time lines in the development of precision oncology therapies should yield significant returns for investors and patients as our industry matures and adopts an AI-centric approach to drug development. The Golden age of AI medicine is just beginning, and it is being powered by large-scale, highly available computing, massive data storage and additionally, it is being said by health care and patient data and cancer data, which is more widely available and at increasing levels of quality.

Companies that can harness these capabilities in the biotech and tech bio industry and make them core to their business will be long-term leaders that create massive value for patients, for investors and for our industry. We believe Lantern Pharma is among the leaders in this transformation of the pace, risk and cost of the development of cancer medicines. This transformation has a promise not only to make oncology medicines faster, cheaper and with increased precision for patients and also for orphan and ultra-orphan groups, but also to help change the direction of R&D productivity and output in the pharma industry. In the past two years, we have successfully developed and launched 11 additional programs, a testament to the agility, efficiency and groundbreaking nature of our approach.

As compared to many other companies that are leveraging AI, our productivity and efficiency on a per dollar basis is unparalleled. On average, these programs are advancing from initial AI insights to first human clinical trials at an unheard cost and time line. In fact, in a recent study published in drug discovery today, it was reported that nearly half of the largest pharma companies had negative R&D productivity for the past 20 years. These startling figures serve as a stark reminder that the traditional model of big pharma R&D is just not sustainable, not effective and is not the right approach to improve drug pricing or drug availability. With escalating economic and political pressures over drug pricing and the nature of drugs, it’s clear that our industry needs to rethink its approach fundamentally, and we believe large pharma companies will increase the adoption of AI and computational approaches to elevate above this issue.

These specific instances of value creation at Lantern, specifically in CNS and neuro-oncology has allowed us to develop an entirely new company, Starlight Therapeutics and we’ll be providing more data later this year, early next year. We believe that company will be setting a new standard in cancer drug development in a category that hasn’t seen a new drug candidate as monotherapy in almost 17 years. As we continue to accelerate the pace at which we’re developing and validating insights, insights that can lead to meaningful drug assets, we are then positioning these drug assets after clinical trials to partner them out with larger biopharma companies. At the same time, as David will cover shortly, we have a strong ongoing cash position, approximately $45 million in cash and cash equivalents that is being carefully utilized to make meaningful progress on both our platform and our drug candidates into human clinical trials.

We believe our approach is the future of developing cancer therapies where data can be used to accelerate programs, derisk the identification and progress of life-changing medicines and provide insights into which patients are most suitable for a trial. Now turning to some of the specific highlights during the third quarter. We received FDA clearance of our IND application for LP-284, a first-in-human clinical trial for refractory non-Hodgkin’s lymphomas and sarcomas. We also dosed the first patient in our LP-184 trial, which is for multiple advanced solid tumors. And we also expanded the number of sites in the U.S. for our LP-300 non-small cell lung cancer trial for never smokers. We’ve also started the process of expansion into East Asian countries where the demographic for this patient population is twice that of the U.S., about 30% to 35% of non-small cell lung cancer patients are never smokers.

We also developed an initial proof of concept and preclinical evidence for our novel cryptophycin-based antibody drug conjugate. And we plan to share broader data from the initial exciting efficacy and scientific benchmarks achieved with that drug candidate in January 2024. We continue to advance RADR, our AI platform across several dimensions, automation, data sets, an increasing number of modules specifically designed for oncology drug development. And very importantly, we had continued ongoing fiscal discipline as clearly evidenced by our burn rate and our balance of approximately $45 million in cash, cash equivalents and marketable securities at the end of the third quarter. We believe this provides us with sufficient cash runway well into Q3 of 2025 or beyond, as Dave will talk about in our call in a few minutes.

So at this point, with the highlights behind us. I’ll come back and talk in more details, but I’ll turn the call over now to our CFO, David Margrave, who will provide an overview of the second quarter financial results. David?

David Margrave: Thank you, Panna, and good afternoon, everyone. I will now share some financial highlights from our third quarter ended September 30, 2023. Our general and administrative expenses were approximately $1.3 million for the third quarter of 2023, down slightly from approximately $1.4 million in the prior year period. R&D expenses were approximately $2.2 million for the third quarter of 2023, up from approximately $0.7 million or in the third quarter of 2022. A substantial portion of the R&D increase in 2023 relative to 2022 is related to a $935,000 payment received from a service provider in July 2022 to resolve the difference of views in the service provider agreement, which reduced our research and development expenses during the third quarter of 2022.