Lantern Pharma Inc. Q1 FY2021 Earnings Call

Thank you, Jim, and thank you for joining us for Lantern Pharma’s first quarter 2021 conference call. On the call today are Panna Sharma, Lantern's President and CEO; David Margrave, Lantern’s CFO and Dr. Kerry Barnhart, Lantern's Vice President of Clinical Development. A press release was issued today with our first quarter financial results that we will be discussing in 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 programs. Panna will then offer concluding comments, after which we will open this call to questions. Please also note that we have provided a link on the 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 that cause our actual results to differ materially from those indicated by forward-looking statements, such as the impact of the COVID-19 pandemic, the 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's Monday, May 3, 2021, and Lantern Pharma does not intend to update any of those forward-looking statements to reflect events or circumstances that occur after today. A webcast replay of the conference call will be available under 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 made significant progress over the past quarter and over the last month. 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 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 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 and tumor response to cancer therapies. We achieved multiple key milestones in this first quarter. I want 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 submitted an updated clinical development plan to the FDA for LP-300. This is for our Phase 2 trial in non-smokers with 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 teratoid rhabdoid tumors and ultra-rare pediatric brain tumor, and we also pursued 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 initiated pre-clinical development of LP-284, an entirely new molecule in certain hematologic cancers that have shown exceptional sensitivity to this new molecule and indications that are different from our 184 molecule. We strengthened our intellectual property portfolio with the filing of over 10 patent applications ranging from de novo molecules to methods of use of manufacturing, to identifying patients, and those that cover fundamental technology aspects of our RADR platform. Our research team published two peer-reviewed studies in Oncotarget and BMC Bioinformatics that further validate our data-driven, machine learning-enabled approach to drug development. We think the drug development process for one of these was 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 had DNA damage repair indications, and we believe that the combination of PTGR1 overexpression along with DNA damage repair confers the potential path of synthetic neutrality. Very significantly, we also completed a $69 million follow-on offering in January 2020 that dramatically strengthened our balance sheet, providing us with a multi-year 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 earnings calls know that I am passionate about changing the pace at which drugs for oncology are brought to market, as well as the cost, and we believe the only way to do this is to use AI machine learning, which has significantly disrupted the product development cycle and cost curve in every other industry. The growth of RADR to over 4.6 billion data points now represents a 16-fold increase since last May and nearly a four-fold 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 monthly pace drives the volume of data required during the entirety of our 2020 campaigns. Our campaigns are becoming larger and more voluminous, and we are on track now to exceed our previous goal of reaching 3 billion to 4 billion data points by the end of this year, which we've already reached, and we expect 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 move past the pandemic in many locations. Most importantly, the insights and knowledge we can now acquire from RADR are opening up tremendous opportunities not only to 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 foreign 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 methodology, and a large scale oncology data set to accelerate key aspects of Actuate's 9-ING-41 drug candidate, a best-in-class GSK-3β inhibitor in active development and multiple Phase 2 clinical trials, including those targeting 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 both 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 additional equity in the form of developing milestones 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 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 at a reduced cost. RADR has the potential to significantly accelerate our understanding of which compounds should be developed for which indication, ultimately improving and personalizing patient outcomes with reduced risk, decreased capital, and increased ability to personalize therapy. During previous calls, I've spoken about how we are experiencing the beginning of a golden age of AI in medicine, an era where the availability of relevant data, computing power, cloud resources, on-demand sequencing, a global talent pool, and the acceleration of AI and large scale data analytics 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 particularly in drug development that is characterized 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 June 2020 IPO, we’ve grown the number of programs in active development from 3; this is very critical, both from a risk-reward standpoint, and also from a shots-on-goal standpoint. We are providing 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 impact, and significantly increased the number of opportunities for potentially accretive licensing and partnering transactions. We are 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 ultra-rare cancers. This may enable us to bring certain assets such as LP-184 and ATRT or other ultra-rare cancers directly to patients into the markets ourselves. This is an important point to note. Let's discuss quickly our pipeline. We remain firmly on track to begin in the third quarter of 2021, the Phase 2 trial of LP-300, a small molecule drug candidate targeting a growing but unaddressed type of non-small cell lung cancer among non-smokers. LP-300 is now likely the most clinically advanced drug candidate for this high-unmet medical need for this patient population. Dr. Kerry Barnhart will provide a detailed 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 non-smokers, a histologically defined adenocarcinoma that accounts for approximately 20% of new non-small cell lung cancer cases globally and even more in certain geographies. We believe that each year about $2.5 billion is spent globally on therapies and drug treatment for this patient population. Moving on to the more rapidly evolving LP-184 program, which is now in active development across four disclosed tumor types. Recall that among the central features of our business model is collaboration in the development of our drug candidates and specific indications with leading researchers in that area, so we can leverage their respective knowledge and experience in a given therapeutic area and their experience with therapy for that patient population. LP-184 is currently under active collaboration with Johns Hopkins in various CNS tumors, including glioblastoma and ATRT. With Georgetown University, we are working on studies of LP-181 in prostate cancer and with a prostate cancer center conducting an active study of LP-184 in pancreatic cancer. We continue to explore additional opportunities for collaboration and development and 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 LP-184 or other candidates for clinical development and targeted clinical trials where we have a clear indication of patient need and the mechanism of action supported by a driving genomic or biomarker-based signature. We believe we can gain relevant insight, expertise, and experience from these key opinion leaders and we remain firmly on track to leverage this model to potentially begin Phase 1 clinical trials in each of these collaborations and their respective indications in 2022. We will continue to provide regular updates in each of these programs as appropriate. In fact, we have data we expect in this quarter and next quarter for all of these programs. Among the goals of the ongoing collaborations is to help guide the development and validation of a signature of disease that can potentially serve as a companion diagnostic and thereby clearly define the commercial potential of each of our innovative cancer drug candidates. It’s also important to note that there was a recent publication done by the University of Toronto Researchers that indicated that clinical trials in cancer that employed biomarkers or used a biomarker-based signature were five times more likely to receive regulatory approvals. In certain cancers like breast cancer the increase was more notable, such as 12 times, while for other cancers like pancreatic and prostate, it was lower, around six to seven times, and four times in colorectal. These collaborations will allow us to achieve that in a very cost-effective and efficient manner. For example, our collaboration with Georgetown focuses on validating the role of PTGR1 and genetic mutations that drive the DNA damage repair pathways that make LP-184 highly potent across 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 benefits of a personalized treatment. We believe Lantern’s AI-driven approach could save millions of dollars in drug development costs while significantly accelerating the path to personalization and commercialization of therapies. We also have a similar research collaboration agreement with Fox Chase Cancer Center for the further development of LP-184 in pancreatic cancer. This collaboration advances the targeted uses of LP-184 in genetically defined subtypes of pancreatic cancer while also developing a 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 teratoid rhabdoid tumors (ATRT) and ultra-rare fast-growing cancers of the brain that primarily affect children. ATRT notably is marked by SMARCB1 deletion, either entirely or in part. The SMARCB1 mutated cancers represent another category for LP-184. As many of you know, Hopkins is a leading research center for brain cancer and one of the largest brain tumor treatment research centers in the world, focusing on treating patients affected by all types of brain tumors. ATRT currently has no effective therapy, and the urgency of directing this drug towards helping children battle this particularly aggressive cancer is evident, as is the opportunity to collaborate with Johns 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 to approximately 2.7% to 2.9% per year. We believe the rarity of the incidents of ATRT in the U.S. and 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 rare pediatric disease designation. If we succeed in receiving the rare pediatric disease designation, and if it ultimately receives approval, we could qualify for a priority review voucher. That review voucher would represent significant value-enhancing milestone for Lantern Pharma. These research programs, such as the one highlighted with Hopkins, Georgetown, and Fox Chase, are at the forefront of translational cancer medicine. They will use patient-derived cancer cells that will be studied using physiologically relevant in vitro and in vivo models. This innovative approach allows researchers to understand the biology of the tumor more precisely, guided of course by early-stage work done cyclically with our RADR AI platform. This data-driven insight also gives insight into additional mechanisms that can be leveraged in creating combination programs and in discovering potentially new targets from 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 developing treatments for GBM, ATRT, pancreatic, and other potential rare or ultra-rare cancers such as those we are currently evaluating. Furthermore, it discusses what our team has also published, who has 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 two weeks ago, where there's a clear clinical need for LP-184 for non-small cell lung cancer patients who are ineligible for targeted therapies 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 targeting non-smokers with a very different molecular profile. Similarly, LP-184 targets a unique subset of non-small cell lung cancer patients that aren't responding to targeted therapies or are no longer eligible. We’ve shown that LP-184 potentially can be effective in that patient class. We are now working pre-clinically to show how LP-184 inhibits tumor growth; we’ve demonstrated this in mouse xenograft models of KRAS and KEAP1 mutant lung cancers, as well as the co-occurring KRAS and KEAP1 mutations that occur in about 17% of lung adenocarcinoma cases. We’ve developed a genetic signature that predicts response in tumors expected to respond to LP-184 and guide further development of the drug. Using this data-driven approach, we’ve shown that we can uncover unique biomarkers linking drug response to mechanisms, while also rapidly identifying clinically meaningful patient subgroups that can benefit from our portfolio of therapies. In the past 10 months of being public, our team has accomplished significant advancements in our portfolio, identifying new indications and, importantly, advancing our RADR AI platform. We believe together this has the potential for multiple shareholder value-enhancing milestones over the next years 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 of 2020. The increase was primarily attributable to increases in research studies, expansion of our research team and non-cash research and development-related stock option compensation expense. We expect our R&D spend to continue to increase as we further advance our portfolio and our recently initiated antibody-drug conjugate program and move towards the 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 non-cash general and administrative-related stock option compensation expense. Our team also continues to grow. We currently have 16 employees, 12 full-time and four part-time, focused on leading and advancing our drug development biology and data science efforts. We expect to operate in a hybrid work environment, working back in the office and remotely for the near term. 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 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. Thanks to our 2020 development and operational progress as Panna discussed, we significantly strengthened 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.

David, thank you very much. I would now like to invite Dr. Kerry Barnhart, our Vice President of Clinical Development, to provide everyone with an update on our LP-300 program. As many of you know, 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 in never smokers. Kerry, welcome to the call, 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 3 Trial conducted by our BioNumerik partner that showed a clinically and statistically significant survival benefit from adding LP-300 to standard chemotherapy in this unique patient population. Lantern’s plans 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 survival benefit of LP-300, will enroll approximately 40 patients in each of the two treatment arms. In addition to providing the FDA with a full description of our clinical development plan, we also submitted supportive preclinical data from a bridging study that we conducted during the first quarter that showed the tolerability of LP-300 when 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, scheduled for the third week of June. Lastly, I’d like to mention that the new LP-300 drug manufacturing is ongoing and we anticipate having the final drug product available for use in the clinical trial in the second half of this year. I’ll be happy to answer any questions about our clinical development plans for LP-300 during the Q&A session. 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 that the growth of RADR and the algorithm will continue to present additional opportunities for R&D collaborations such as the agreement we announced this morning with Actuate Therapeutics. While we are excited to soon begin our LP-300 trial in non-small cell lung cancer among never smokers—a very unique and needed patient population—we also anticipate updates in 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, with a plan to get it to clinical trials in 2022. Our data-driven, genomically targeted, and biomarker business approach allows us to pursue a transformational drug development strategy that identifies, rescues, or develops 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 developing de novo biomarker-guided drug candidates such as LP-184 and LP-284 and rescuing historical drug candidates like LP-300 by leveraging the data sets in our RADR AI platforms, along with continued advances in genomics and computational biology, exemplifies a new era in drug discovery and development that Lantern is leading. In this context, we are focused on building a portfolio of quality, potentially high-value oncology drug candidates, each of which can potentially be partnered for pivotal registration directed trials or even out-licensed. We believe this provides a clear and defined path for potential high-value creation for our shareholders, perhaps even bringing certain candidates to market directly concerning their ultra-rare indications. We aim to establish Lantern as the leading AI-driven oncology drug discovery and development brand and franchise. We are building a company that can deliver enduring and significant value for our shareholders. Many thousands of discarded or deprioritized therapeutic candidates exist across the industry and academia every decade. We aim to bring at least one of these into our pipeline every 12 to 18 months. We are laser-focused on the quality of the drugs we rescue and develop, and our goal 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 drug discovery and development is here, and that Lantern is one of the leaders in this paradigm shift. This shift will change the pace, breadth, and cost of oncology drug discovery and development. We are proving that significant efficiencies in the time and cost of oncology drug discovery and development are possible, as evidenced by metrics such as time to new indications, time to generate a signature, time to uncover combinations, and most importantly, bringing those insights into a growing number of products in our pipeline. As our history has shown, we have more than doubled our number of candidates that we are pursuing through rapid identification and validation to understand the molecular drivers of cancer and the mechanisms of response to specific compounds in a much more targeted way, one that we believe can be more effective for oncology patients. Crucially, as our RADR AI platform grows over the coming year, potentially exceeding 10 billion data points, we anticipate discovering additional high-value targets and indications regarding monotherapy, combination therapy, and our antibody-drug conjugate platform. We look forward to sharing our ongoing progress with you in future updates. Now, we would like to answer any questions investors and analysts have on this call. With that, I’d like to open up the call to questions.

Gentlemen, thank you. Our first question today is going to come from John Vandermosten at Zacks SCR. Please go ahead.

Hi, good afternoon. I wanted to 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 is that – how is that done?

Great question. You know partially when we went public, the team was much smaller, so we’ve added some great team members. We’ve provided them with good resources, but we've also invested in the infrastructure side, largely driven by our Principal Architect to focus on automation. In every task, we try to automate wherever possible. More importantly, we're now able to scour data sources internally and externally with much more precision, prioritizing the pipeline as we've gained more experience in data handling and problem-solving. We analyze the quality of data issues and where we can acquire the data. All these insights go back into the automation processes so that as we integrate more data, we understand where exceptions occur. That's allowed us to integrate more and more data faster. So that's essentially been our process. We're planning our next campaign, and we believe it will get us very close to 10 billion, whether it takes three months or six months, we're not sure, but we expect to outperform our previous goal of adding 3 billion to 4 billion data points by the end of the year.

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 the mirror image or the stereoisomer, as we call it, of 184.

Okay, so they are distinct?

Correct.

Has there been a lot of pre-clinical work done that you're using in your AI work to look at the effectiveness and side effects of both of these enantiomers?

There has been some non-significant work. Since 284 is referred to as a new molecule, there really is no historical work that we can rely on. However, we can learn from precedents in similar cases. We're actually quite excited by it because it has some surprising, distinct properties in hematologic cancers where 184 does not operate effectively. Our early thought was that our initial development of 184 allowed us to realize the importance of its enantiomers, leading us to focus on further characterization. As a result, we have invested significantly in creating a fully synthetic route to 284, and we're optimistic regarding its potential. That’s why we are encouraged by this development.

Thank you. Our next question today will come from Kyle Bauser at Colliers Securities. Please go ahead.

Hi! This is Kayla Hostetler on for Kyle. Thanks for taking the question.

No problem, thank you Kayla.

We were just wondering about cash potential and potential acquisitions. I think you mentioned that cash should be positioned through 2025, but does that consider kind of your offsetting 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 about our cash position, cash usage, and we’ll discuss where we are in business development.

Thanks Panna. We had $81.4 million at March 31 and you 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 general and administrative. As we look to ‘23 with multiple trials in progress, our expenses will grow further than that. Our operating plan accommodates bringing in new candidates as part of our plans which is built into our runway estimates. We are always on the lookout for those sorts of opportunities.

Thanks. We have a disciplined approach to asset acquisition. We have an internal database called T4, which allows us to systematically evaluate oncology drug candidates that have been previously discarded. We prioritize those that we believe are of interest and proactively seek them out while remaining opportunistic. This way, we can ensure any expenditure aligns well with our operations.

And our next question from our phone audience today will come from Daniel Carlson at TW Research Group. Please go ahead, your line is open, sir.

Thanks Panna. Question on the LP-300 trial. Can you provide more details on that trial and if it seems right for a partnership at some point?

Sure. I’ll let Kerry talk about some of the details on the trial and the process to the extent we can, and then I'll address questions about potential monetization.

Certainly. This will be a Phase 2 randomized two-arm trial in never smoker lung adenocarcinoma patients who have failed the initial targeted therapies. Those therapies do a good job for many patients initially but eventually, all will relapse as those drugs will not work for them. The standard of care for these patients is a platinum-based chemotherapy doublet. We will treat these patients either with standard of care chemotherapy or standard of care chemotherapy plus LP-300. We’re talking to sites and are in the process of collaborating with a trial management team. We’ll release more details about the trial in the coming months.

One of the strategies is to scale the trial, which will open opportunities for potential partners. Approximately 20% of non-small cell lung cancer cases occur in never smokers, predominantly females in the U.S. and U.K. with even higher rates in Asia. This presents an opportunity since few effective options exist for this demographic. We plan to engage discussions with larger pharmaceutical companies that have well-established franchises in non-small cell lung cancer as the Phase 2 trial progresses.

Certainly, thank you. Let’s hear from Keith Gill at Connor Cherry and Company.

Good afternoon, Panna. Congratulations on the Actuate Therapeutics agreement. Is it a model for future deals? Could there be cash milestones or royalty payments, and how often can Lantern engage in these types of agreements?

Great, thank you, Keith. As you know, we're not a service company. Our focus is on developing high-value oncology therapies while partnering with like-minded groups that appreciate AI and biomarker-driven approaches. We plan to pursue collaborations that offer equity, deferred cash, or milestones based on success. The cash potential will grow through these efforts as we seek to leverage our unique strengths in drug discovery.

Next, we will take a follow-up question from Daniel Carlson at TW Research Group.

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

Very good, thank you. We'll hear from Steve Popovich at Builders Inc.

Hello! Firstly, Panna, I’d like to congratulate you and your team on the tremendous progress you've made over the last year. It's satisfying being an investor in your company.

Thank you, Steve.

I thought I heard you say that the trial for LP-300 was going to start in the second half of this year and that there would be approximately 40 patients involved. Will they all be women and can we expect any age limits on that trial?

Absolutely! There will be two arms with 40 patients in each arm, and they will not all be exclusively women, although we might have a higher percentage of women due to the greater prevalence of never smokers among them who develop lung adenocarcinoma. We will maintain a balance in terms of age and gender at each clinical site. While we do have a lower limit of age of 18 or older, there is no specific upper limit.

Typically, any upper limits are usually covered by various comorbidities, as you might know. Does that answer your question?

Gentlemen, the line has been returned to the audience. We have no further questions coming from the 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 your great questions. We look forward to the possibility of meeting many of you in person in the future and sharing the progress of our team. We expect to be more productive in the coming quarters while maintaining discipline both in our investments and our balance sheet, all while focusing on innovating the drug development process in oncology. We believe our AI platform is unmatched in size and scale. We plan to continue our rapid growth and, as our drug programs progress in pre-clinical trials and clinical development, we believe any of these opportunities can represent exit points for value that are several times our existing market capitalization. So with that, I’d like to thank you for your questions and look forward to future discussions with many of you.

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