Lantern Pharma Inc.

Good afternoon, everyone. I'm Nicole Lieber with Investor Relations here at Lantern Pharma, and welcome to our second quarter 2023 earnings call. I will be your host for today's call. As a reminder, this call is being recorded and all attendees are in a listen-only mode. We will open up the call for all 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 closed today, summarizing our financial results and progress across the company for the second quarter ended June 30th, 2023. 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 results of clinical trials and the impact of competition. Additional information concerning factors that would 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, August 9, 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, 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 up 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.

to hear about our second quarter results and corporate progress. As we know, this is truly a golden age for AI medicine. And it really is just beginning. It's being powered by large scale, highly available computing power, massive data storage. Additionally, it's being fed by health care patient and cancer data, which is more widely available and at increasing levels of quality than ever before. Companies that harness these capabilities in the biotech and tech bio industry and make them core of their business will be long-term leaders that create massive value for patients, for investors, and for our industry. Lantern Pharma is among the leaders in this transformation of the pace, risk and cost of oncology drug discovery and development. This transformation has a promise to not only make medicines faster, cheaper, and with increased precision for patients, but also to help change the direction of R&D productivity and output in the pharma industry. I'll touch on this critical element later in our call. Our proprietary AI platform, Radar, continues to have a meaningful growth in its size, scope, and capabilities, and is at the center of this paradigm shift towards AI-driven drug development. Just three years ago, when we went public, we had only three drug programs addressing markets we had estimated to be about five to six billion in potential annual therapy sales. Today, we have over 14 drug programs, many with orphan drug designations and additional commercial protections. We're addressing markets today estimated to be approximately 14 plus billion in annual therapy sales. We also diligently are assessing several additional promising programs and molecular candidates for future development. Our growing pipeline of oncology drug candidates is a real-world demonstration of the rapid, AI-driven, machine-learning-enabled identification and validation of new cancer insights, insights where we can understand and accelerate the focus of specific molecules towards a more targeted and more effective oncology medicine. Importantly, Radar has empowered us to compress the timeline of early stage drug development so far by an impressive 70% while concurrently achieving about 80% reduction in the costs when benchmarked with traditional drug development in the pharma industry. We think we can continue to improve upon this. With our cutting edge AI platform, Radar, and also our adoption of leading technologies and innovative approach, we are illuminating the path for the next generation of oncology drug discovery. 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. On average, these programs are advancing from initial AI insights to first in human clinical trials in just two and a half years and an average cost of approximately 2 million per program. Some have actually even been below that. These are metrics that are previously unheard of in oncology drug discovery. In fact, in a recent study published in Drug Discovery Today and also in Nature, it was reported that nearly half of the 16 largest pharma companies had negative R&D productivity for the last 20 years. And they had spent collectively an average of $6.2 billion per drug approval. The number was slightly less in smaller pharma companies. But these startling figures serve as a stark reminder that the traditional model of big pharma R&D is not a sustainable or effective strategy, and it is not the right approach to improve drug pricing or drug availability. With this escalating economic and political pressures over drug prices, it's clear that our industry, especially cancer drug prices, it's clear that our industry needs to rethink its approach fundamentally. And we believe that big pharma will increase adoption of AI and computationally driven approaches to elevate above this current issue. As we have demonstrated, our radar platform has an impressive predictive accuracy of 88% in identifying which patients are most likely to respond to our drugs. to respond to drugs in clinical trials. We showcase this in a real-world study presented at ASCO with our collaboration partner, Actuate, for their phase two trial. This is not only a good technical feat, but really a game changer for patient stratification and selection by reducing the cost of trials and enrolling those patients who can ultimately benefit most from these targeted therapies. By combining our unique cutting edge AI with robust clinical genomic and drug response data, which we do in our platform, we believe that we have increased our ability to de-risk our programs and increase the odds of success by a significant factor. Multiple studies by academics, including work by Dr. Jason Parker, who I've quoted before at University of Toronto and industry analysts, have shown that the use of biomarker signatures can increase the success factor from 5 to 12x in oncology clinical development. This reduction in risk and cost comes also with the compression of the timeline, especially in later stage trials. So this underscores our technology's immense potential to produce insights that lead to the development of targeted cancer therapies. Currently, our AI-driven pipeline consists of 14 drug programs, including those under Radar Collaborations and our phase two clinical trial called Harmonic for lung cancer never smokers. Our team's unwavering commitment to harnessing the power of AI for drug discovery has also led to the formation of a partnership with Bielefeld University in Germany to develop the next generation of antibody drug conjugates. These are conjugates that are being designed and advanced with our Radar AI platform. This collaboration has the potential to pave the way for therapies with higher efficacy, a faster development timeline, and significantly reduced costs at early stage development. ADCs are a rapidly growing and excitement treating modality that is still in the early stages of commercial growth. Globally, ADC drug programs are one of the fastest growing drug development segments and are projected to grow from 4 billion as of last year to over 14 billion by 2027. There are many specific instances of value creation that we've talked about, but we've also developed an entirely new company, Starlight Therapeutics, whose sole focus will be on CNS and brain cancers. This demonstrates that Lantern continues to be at the forefront of a transformative and aggressive approach to oncology drug discovery and development. As we continue to accelerate the pace at which we're developing and validating insights, these insights can lead to meaningful drug assets. We are well positioned to then partner these drug assets out with larger companies. At this time, sorry, at the same time, As David will cover our CFO shortly, we have a strong cash position. It's been carefully utilized to make more meaningful progress in a disciplined manner. We believe our approach is the future of developing cancer therapies where data can be used to accelerate programs, de-risk the identification of issues and progress these potentially life-changing medicines. Now let's turn to some of the more specific highlights of our progress during the second quarter. During the second quarter, we received FDA clearance of our IND application for LP184, and we subsequently activated the initial clinical sites for the program. Now we're also identifying several potential patients for this phase one basket trial. This basket trial will serve multiple solid tumors and brain cancers, categories that have significant unmet clinical need. We also completed the IND enabling studies for LP284. LP184 and 284 are part of our franchise of synthetically lethal agents. We anticipate submitting the IND to the FDA by the end of August, and it'll set the stage for a first in human phase one trial for LP284 in advanced non-Hodgkin's lymphomas in the second half, actually in Q4 of 2023. Data demonstrating LP284 is in vitro and in vivo anti-tumor potency for mantle cell lymphoma, double-hit lymphomas, and other non-Hodgkin's lymphomas were published in Oncotarget in the quarter, further supporting the advancement of this potentially powerful therapeutic option for a range of blood cancers. We also dosed additional patients in the phase two harmonic clinical trial of LP300 in non-small cell lung cancer for never smokers and expanded patient recruitment and enrollment to several additional trial sites. As I mentioned a moment ago also, we entered into a collaboration with Bielefeld University in Germany during the second quarter. This is to develop breakthrough new antibody drug conjugates that we believe will set the stage for a new generation of novel ADCs that offer higher efficacy, faster development timelines, and significantly reduced cost to market. Our intellectual property was also strengthened and furthered in the quarter with the receipt of notice of allowance for a US patent covering the composition of matter, totally new drug, LP-284, extending commercial protection for this asset into early 2039. We also, during the quarter, filed five new patent applications for LP184 and 284 that cover the use of these drug candidates in combination regimens and also specific tumor subtypes where we think the potential is highest for these drugs. Very importantly, we continued fiscal discipline with our cash. We have a balance of 48 million in cash, cash equivalents, and marketable securities as the end of the second quarter, which provides us a strong cash runway into 2025. I'll now turn the call over to our CFO, David Margrave, who will provide an overview of the second quarter financial results, and then I'll come back with additional comments on our programs.

David. Thank you, Ponna, and good afternoon, everyone. I'll now share some financial highlights from our second quarter end of June 30, 2023. Our general and administrative expenses were approximately $1.6 million for the second quarter of 2023, up slightly from approximately $1.4 million in the prior year period. R&D expenses were approximately $3.6 million for the second quarter of 2023, up from approximately $3.0 million in the second quarter of 2022. Our increased R&D expenses were in line with expectations and primarily driven by increases in research studies and R&D related payroll and compensation expenses which were partially offset by a decrease in product candidate manufacturing expenses. We recorded a net loss of approximately $4.7 million for the second quarter of 2023, or 44 cents per share, compared to a net loss of approximately $4.5 million, or 41 cents per share, for the second quarter of 2020. Our loss from operations in the second quarter of 2023 was partially offset by interest income and other income net totaling approximately $444,000. Our interest income and other income net increased by an aggregate of approximately $541,000 for the second quarter of 2023 compared to the second quarter of 2022. This increase was attributable to an increase in interest of approximately $63,000, increases in dividend income of approximately $168,000, an increase in unrealized gains on investments of approximately $150,000, and an increase of approximately $109,000 in research and development tax incentives related to our Australia subsidiary. As of June 30, 2023, 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 1.1 million shares. These warrants and options combined with our outstanding shares of common stock give us a total fully diluted shares outstanding of approximately 12.1 million shares as of June 30, 2023. Our cash position, which includes cash equivalents and marketable securities was approximately 48.0 million as of June 30, 2023. And we expect this balance 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 has given us the ability to recruit extremely high caliber team members that otherwise might not have been available. We currently have 22 employees focused primarily on leading and advancing our research and drug development efforts. We see this number expanding slightly in coming quarters as we add additional experienced and talented individuals to help advance our mission. I'll now turn the call back to Pauna for an update on some of our development programs. Pauna.