Lantern Pharma Inc.

Good afternoon, everyone. I'm Nicole Lieber with Investor Relations here at Lantern Pharma, and welcome to our fourth quarter and full year 2022 earnings call. I will be your host for today's call. As a reminder, this call is being reported and all attendees are in a listen-only mode. We will open up the call for questions and answers after management's presentation. A webcast replay of today's conference call will be available on our website at lanternpharma.com after the call. We issued a press release after market closed today, summarizing our financial results and progress across the company for the fourth quarter and full year of 2022. A copy of this release is available through our website at lanternpharma.com, where you will also find a link to the slides that management will be referencing on today's call. I would like to remind everyone that remarks about future expectations, performance estimates, and prospects constitute forward-looking statements for purposes of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Lantern Pharma cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those anticipated. A number of factors could cause actual results to differ materially from those indicated by forward-looking statements, including the impact of the COVID-19 pandemic, results of clinical trials, and the impact of competition. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements can be found in our annual report on Form 10-K for the year ended December 31, 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, Monday, March 20, 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 CEO, Panna Sharma, CFO David Margrave, and CSO Kishore Bhatia. Pana 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, which will be followed by Dr. Bhatia, who will provide a brief update on our development programs and upcoming webinars. This will be followed by some concluding comments from Pana, and then we'll open up the call for Q&A. I'd now like to turn the call over to Pana Sharma, President and CEO of Lantern Pharma. Pana, please go ahead.

Thank you, Nicole. Good afternoon, everyone. And welcome to our fourth quarter 2022 earnings call and company update. Thank you for joining us this afternoon to hear about our fourth quarter and year-end results and also our corporate progress at Lantern Pharma. Lantern Pharma is at the leading edge of leveraging artificial intelligence, machine learning algorithms, biomarker, clinical, genomic, and drug response data to transform the costs, compress the timelines, and de-risk oncology drug discovery and development. During 2022, our team was extremely focused on taking these insights and driving them to meaningful clinical programs that will be launched this year with our new first in human clinical with our first in human drug candidates LP 184 and LP 284. We've done this as a fraction of the time of traditional drug development approaches. This is really also the future of drug development, specifically in cancer, where there's so much data available. And that data can be used to accelerate programs, de-risk the identification of patients who will respond to the drug or diseases that will best benefit from the therapy, and progress those potentially life-changing medicines with reduced cost and reduced time. Our model both works for transforming early stage discovery and development, where we've been able to develop many new indications in a fraction of the time, literally less than two years for many indications, most of those in parallel. And it also helps with sharpening later stage clinical trials, where we believe by focusing on fewer and more select patients, those patients that are more likely to respond, we can significantly save time and money in later stage trials. Our platform is focused on being able to accomplish both. At the same time, our team has been advancing the clinical foundation and infrastructure for our phase two harmonic clinical trial for never smokers with non-small cell lung cancer. And this has been a very important endeavor. And we've strengthened our clinical operations team with some select and highly experienced colleagues that have joined us to help scale up the program. We now have over activated over five clinical trial sites across 12 different locations and centers in the US, including Ohio, Illinois, New York, Texas, and California. Across the five clinical trial sites, there's already one consented patient that is anticipated to be dosed later this month, and also 14 additional patients, potential patients, that are being prescreened and are being monitored for possible enrollment. Multiple additional trial sites across the U.S. are expected to be activated in the first half of 2023 and will bolster patient recruitment and enrollment. In the U.S., there are approximately 20,000 to 30,000 never smokers with non-small cell lung cancer diagnosed annually, representing an estimated annual market potential just in the U.S. of $1.5 to $2 billion. This opportunity has been developed by understanding why certain molecular profiles in non-small cell lung cancer, those largely associated with never smokers and those with very low tumor mutation burden and targeted mutations larger than the tyrosine kinase pathways are responsive to our drug LP300 when used in combination with the current chemotherapy standard of care. This effort without the use of large scale data and modeling would have really continued to stay on the shelf. We're also using this transformative data-driven approach for our proprietary radar AI platform. Our platform uncovers significant opportunities in cancer, opportunities that are either underserved, unmet, or often overlooked. We do this with tremendous accuracy. Our prediction success is 80 to 90%. And that's because not only of the data points, but also because we're relying on over 200 advanced machine learning algorithms. We've used this to both advance and rescue compounds, bringing them into phase two clinical trials, and also to develop entirely new drug candidates for first and human trials, many that will be launching in the coming months. And again, we're doing this at a fraction of the cost and timeline, and David will discuss some of our financials later today. Also, Kishore will talk about the progress on our exciting new molecules and how they are entering the clinic in the next few months and quarters. Our unique AI platform, as I mentioned, is served by over 25 billion data points and nearly 200 algorithms that can help us understand, predict, and model questions that are fundamental to oncology drug development. Our goals for our platform this year, we expect that it will reach over 50 billion data points, and we expect it to enhance functionality in three major areas. One, better predict and model combination regimens of small molecules with certain antibody classes, anti-cancer antibodies at least. The ability to understand and develop ADCs, antibody drug conjugates, at a fraction of the current cost. And third, develop highly specific targeted predictions of key safety features of a compound and predict blood-brain barrier permeability of those compounds. And we're already pretty far along the process of generating algorithms that we believe are not only best in class, but probably will be some of the best BBB algorithms out there. In talking about our new clinical trials, the first human trials will be with drug candidates LP184 and LP284. We believe that both molecules can be synthetically lethal in certain cancers, LP184 largely in solid tumors, while LP284 is directed at a range of blood cancers. The compression of costs and timeline that we are creating with our drug development process have allowed us to grow our portfolio from three programs about 30 months ago to 12 programs today. We expect that many of these programs to create high value opportunities for our investors and potentially life transforming therapies for cancer patients. Several of these programs we have brought together in a very exciting new wholly owned subsidiary called Starlight Therapeutics. The programs being developed by Starlight were born from the analysis of billions of oncology-focused data points and by using Lantern's AI platform, Radar. Star001's powerful anti-tumor mechanism, synthetic lethality, coupled with the collaborations that we've done with internationally recognized institutions, including Hopkins and the Grehe Children's Cancer Center at UT Health San Antonio, make it well-positioned to rapidly advance these CNS-focused therapies in a targeted and efficient clinical development pathway. Starlight intends to pursue human clinical trials for multiple CNS indications. Again, we've gone from one to now seven indications quite rapidly, starting in late 2023. It'll build upon the prior IND enabling studies and the upcoming phase 1A clinical testing that will be conducted by Lantern. The clinical development of STAR-001 in CNS cancers beyond the Phase Ia trial will be conducted exclusively by Starlight. Following the launch of Starlight, Lantern will continue to advance LP184 in clinical development for non-CNS indications. Indications such as pancreatic, where we've partnered with Fox Chase Cancer Center, bladder cancer, triple negative breast cancer, and other solid tumors that have DDR deficiencies. We'll also continue to provide AI, bioinformatic, and computational biology support to Starlight. The formation of Starlight as a wholly owned subsidiary allows Lantern to sharpen the focus on advancing Star001 through targeted clinical trials and dedicate increased time, resources, and personnel to progress what we think is one of the most promising drug candidates for CNS cancer patients in decades. We believe that by focusing our efforts by Starlight Therapeutics, we can accelerate and deepen our commitment to to the CNS cancer patient community while also creating the potential for meaningful additional upside for our investors. We'll always be looking for additional opportunities where the development needs and unique focus of certain programs or assets can be separated and developed in a focused manner. Our collaborative portfolio also continues to grow. In addition to our work with Actuate, we started a collaboration earlier this year with TTC Oncology. They're an emerging biotech focused on breast cancer. They have a best-in-class management team, and they have a really exciting drug called TTC-352 that's focused on certain unmet needs in ER-positive breast cancer patients. And as we develop our collaboration, We may have the ability to get an exclusive right to license the drug and any collaborative intellectual property to then develop it. This is a real case of where the platform is the currency. And you'll hear more about this program, this collaboration in the coming quarters as it develops. Lantern Pharma has entered now in a major period of transformation itself as we evolve and mature many of our initial AI-driven insights and advance them to drug candidates and to human clinical trials. We're continuing to make significant, meaningful progress in turning the observations and insights generated by our platform, validated in the labs, into advancements for cancer patients and potentially break through high-value clinical programs. Our programs, both at Lantern and Starlight, span multiple highly attractive indications and have been developed at a level of cash burn and resourcing that is almost unheard of in this space, but it has been driven by our growing AI platform. We expect many of these programs will partner with larger biopharma companies as they develop. In continuing our focus on providing insight, transparency, and also educating the market through webinars, we'll be hosting a KOL webinar on synthetic lethality, key mechanism of Lantern's drug candidates LP100, 184, and 284. That webinar will be tomorrow, Tuesday. The webinar will feature an internationally recognized expert in synthetic lethality, Zoltan Selassie. He's an MD, serves joint appointments, both as a principal investigator at the Danish Cancel Research Center, which is one of our collaborative sites, and as an assistant professor of pediatrics at Boston Children's Hospital, a Harvard Medical School affiliate. Additional details with the KOL webinar can be found on our website, and a link has also been provided in our earnings release and slides. We expect to follow up on this webinar with another additional webinar on synthetic lethality, specifically in terms of what the programs are for 184 and the implications for both mono and combination therapy. This will be led by our own Dr. Kishore Bhatia, our chief scientific officer, in late April. With that overview, I'll now turn the call over to our CFO, David Margrave, provide an overview of our fourth quarter and year-end results, and also walk you through some basic housekeeping items.

David. Thank you, Pana, and good afternoon, everyone. I will now share some financial highlights from our fourth quarter and the full year ended December 31, 2022. I'll start with a review of the fourth quarter. Our R&D expenses were $2.3 million for the fourth quarter of 2022, up slightly from $2.2 million in the fourth quarter of 2021. General and administrative expenses were $1.6 million for the fourth quarter of 2022, up slightly from $1.4 million in the prior year period. we recorded a net loss of $3.4 million for the fourth quarter of 2022 or 31 cents per share compared to a net loss of $3.5 million or 31 cents per share for the fourth quarter of 2021. For the full year of 2022, our R&D expenses were $8.6 million up from $7.6 million for 2021. This increase was primarily attributable to increases in research studies, increases in consulting expenses, and increases in R&D payroll expenses. Specifically, for the full year 2022, our spend on research studies increased by approximately $1.5 million, consulting expenses increased approximately $0.2 million, and R&D payroll expenses were up approximately $0.1 million. These increases were partially offset by decreases in product candidate manufacturing-related expenses of approximately $0.2 million, decreases in licensing fees of approximately $0.1 million, and a net decline in payments to Alarity Therapeutics of approximately $0.5 million. During the year ended December 31, 21, we made a one-time $1 million upfront payment to Alarity Therapeutics to take the rights to LP100 back into our control. which we are now looking at combining with PARP inhibitors in a combination program aimed at cancers with homologous repair deficiency or HRD cancers. During the year ended December 31, 2022, we released an escrow payment of approximately $459,000 to Elarity Therapeutics. Manufacturing-related expenses for the year ended December 31, 2022 were also reduced by $935,000 as a result of a payment we received in July 2022 from one of our service providers in connection with the resolution of a difference of views regarding the agreement with the service provider. our general and administrative expenses for 2022 were $5.8 million, up slightly from $5 million for 2021. The increase was primarily attributable to increases in payroll and compensation expenses of $0.5 million, increases in other professional fees of $0.4 million, increases in legal and patent-related expenses of $0.1 million, and increases in travel expenses of $0.1 million. Our R&D expenses continue to exceed our G&A expenses by a strong margin, reflecting our focus on advancing and expanding our product pipeline. The net loss for full year 2022 was $14.3 million, or $1.31 per share, compared to a net loss of $12.4 million, or $1.13 per share, for the full year 2021. As of December 31, 2022, we had approximately 10.86 million shares of common stock outstanding and outstanding warrants to purchase approximately 177,998 shares and outstanding options to purchase approximately 1,037,591 shares. These warrants and options combined with our outstanding shares of common stock give us a total fully diluted shares outstanding of 12,072,629 shares as of December 31, 2022. Our cash position, which includes cash equivalents and marketable securities at December 31, 2022, was $55.2 million. This balance is expected to carry us into 2025. Importantly, we believe our solid financial position will fuel continued growth and evolution of our radar AI platform, accelerate the development of our portfolio of targeted oncology drug candidates, and allow us to introduce additional targeted products and collaboration opportunities in a capital-efficient manner. Our team continues to be very productive under a hybrid operating model. This hybrid model also removes geographic restrictions to our hiring initiatives, which gives us the ability to recruit extremely high caliber team members that otherwise might not be available. We currently have 23 employees who are primarily focused on leading and advancing our research and drug development efforts. We see this number expanding slightly in coming quarters as we add additional experienced and talented individuals to help advance our mission. I'll now turn the call over to our Chief Scientific Officer, Kishore, for an update on some of our development programs. Kishore?