Lantern Pharma Inc.

Good afternoon and welcome to our fourth quarter and year-end 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 fourth quarter and year ended December 31st, 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, 2023, which is on file with the SEC and available on our website. Forward-looking statements made on this conference call are, as of today, March 18th, 2024. 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, Ponna Sharma, and CFO, David Margrave. Pauna 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 Pauna, and then we'll open the call for Q&A. I'd now like to turn the call over to Pauna Sharma, President and CEO of Lantern Pharma. Pauna, please go ahead. Good afternoon, and welcome to our fourth quarter.

Hello, everyone, and thank you for joining us this afternoon to hear about our fourth quarter and fiscal year 2023 results and corporate progress. As many of you have heard me say in the past, 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. Lantern's leadership in the innovative use of AI and machine learning to transform costs and timelines in the development of precision oncology therapies should yield significant returns for investors and patients as their industry matures and adopts an AI-centric and data-first approach to drug development. 2023 was a transformational year for Lantern Pharma across many measures. We launched multiple clinical trials using our AI-guided drug candidates. We had multiple peer-reviewed publications and posters for our drug candidates and for our radar AI platform. Our AI platform advanced, reaching over 60 billion data points last year, and now is on the road to reaching over 100 billion this year. With significant and efficient expansion of our clinical infrastructure and operations team, this allows us to efficiently move our trials forward and maintain control over the data and operations of our clinical assets. We are also advancing a very exciting new company, Starlight Therapeutics, which is entirely focused on CNS cancers in an area where there has been no single approved therapy as monotherapy in nearly 18 years. We filed 11 patent applications last year across our drug candidates and our AI platform, and we continue to show very strong focused fiscal discipline. Our team... has accomplished a lot and is about 24 people today, small but focused and comprised of leaders at every level, high value contributors. They've made significant strides over the past quarter and throughout 2023 across all our programs and also with our AI platform, Radar. Radar, which has guided the rapid and efficient development of three AI-guided drugs into clinical trials at a pace and cost that has traditionally been unheard of in our industry. Our team has been focused on executing our mission of transforming the oncology drug discovery and development process, especially as we bring our clinical stage drug candidates into human clinical trials. Two that are now in phase one as part of our synthetic lethality franchise, and one that is in phase two. All of our clinical trials now have enrolled and dosed patients, and we expect to have data to share with you later this year as enrollment progresses. Our team and many clinicians are particularly excited about and interested in the programs for our first in human drug candidates, LP184 and LP284. Also, our unique drug, LP300, which we in-licensed and rescued, is aimed at never smokers who've been impacted by non-small cell lung cancer, but have failed other treatment options. Lung cancer among never smokers is a growing problem, not only in the U.S., but globally. And we've been successful in moving towards regulatory allowance for commencing our trial in Japan, Taiwan, and South Korea, where the incidence of non-small cell lung cancer among never smokers is nearly two and a half to three times that here in the US. We also continue to make significant progress on the launch of our clinical stage, CNS and brain cancer focused subsidiary, Starlight Therapeutics. This is a company that has been largely developed as a result of data, AI methods, computational approaches to optimize and maximize our insights about a molecule. About a year ago, we announced the formation of the subsidiary. We recruited a CMO last quarter in the fourth quarter, and now we're preparing to go into phase 1B2 clinical trials. We've also made major progress in developing the next major leg of our discovery efforts, which will be focused on drug conjugates, including antibody drug conjugates. Specifically, we've now engineered a cryptophysin-linked antibody drug conjugate, which we're developing in a highly efficient manner with our collaborative partners, academic partners in Germany. I'll talk a little bit more about that later in this call. Our progress across our preclinical assets and our clinical programs has been very focused, very efficient, and was in large part guided by our AI platform's latest functionality, capability, and modules, modules like our antibody drug conjugate module. We released some exciting data earlier this quarter, which we concluded as part of our collaboration with University of Belleville, But in particular, in that collaboration, we found that we had excellent control over the cysteine-engineered proteins, and that allowed us to have great control of the bioconjugation process. And we also saw very high potency in the picomolar range across six solid tumors, many of them with huge clinical need, in particular in medium-expressing HER2 cancers, which is a real unmet need in cancer care. Additionally, we continue to enhance and develop our AI platform for cancer drug development, RADAR. Our platform, we think, is revolutionizing the way we model, predict, and understand drug cancer interactions, enabling us to advance our newly developed drug programs from initial insights to first in human clinical trials in an average of less than two years and at a cost of under $2 million per program. It's a milestone unheard of in the realm of oncology drug discovery. Our leadership and the innovative use of AI and machine learning to transform costs and timelines has allowed us to bring three molecules to market with teams, cost, and efficiency that is only beginning to make a massive impact. We think year over year, we'll continue to make improvements and continue to refine and make our process more efficient, more precise, and potentially even more powerful. During 2023, we achieved our goal of reaching 60 billion data points, growing that cancer-focused data more in one year than we had in the prior three years. We expect these massive leaps, these increase in the pace to continue, and our team expects to reach over 100 billion this year. And this data growth and data ingestion will be automated. It'll free up our team to focus more on intelligent curation and analysis, and also on creating upstream engineered data sets from the raw data to solve more specific problems that can make use of generative AI and generative models. This golden age of AI medicine is just beginning, and it's being powered by large-scale, highly available computing power, massive data storage, and additionally, it is being fed by healthcare, patient, cancer data, all of this data, which is more widely available at an increasing levels of quality, higher than ever before. We believe that companies that harness these capabilities in biotech, and more appropriately, really the tech bio industry, will become 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 the 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. In the past three 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 $2 million per program, metrics unheard of in oncology drug discovery. In fact, in a recent study published by Drug Discovery Today, it was reported that nearly half of the 16 largest pharma companies had negative R&D productivity over the last 18 to 20 years, with big pharma collectively spending close to $3 billion per drug approval. These are startling figures, and they 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 escalating economic and political pressures over drug prices, it's clear that our industry needs to rethink its approach fundamentally, and we believe... Big Pharma will increase adoption of AI and computational approaches, data-first approaches, to elevate above this major hurdle sitting in front of us. Now, these specific instances of value creation, along with the development of an entirely new company, which will be at clinical stage, Starlight, whose sole focus will be on these intractable CNS and brain cancers, demonstrates that Lantern continues to be at the forefront of a transformative approach to oncology drug discovery. We're reaching speeds and efficiency that we believe are setting new standards in developing cancer medicines. As we continue to accelerate the pace at which we're developing and validating insights that can lead to meaningful drug assets that we can partner, license, sell in the future, we believe that we're very well positioned to partner these drug assets out to larger companies. At the same time, our CFO, David Margrave, will cover shortly. We have a very strong cash position, approximately $41.3 million in cash, cash equivalents, and marketable securities. And we're carefully utilizing that to make meaningful progress in a disciplined manner. We're going after indications that are needed. We're going after studies that help validate insights. And we're collecting data that will power our portfolio. We believe our approach is the future of developing cancer therapies, where data can be used to rapidly accelerate programs, de-risk the identification of cancer subtypes most likely to be responsive, use biomarker profiling to figure patient profiles and needs out earlier in the process, and progress these potentially life-changing medicines with economics that have not been seen in our industry. Now, let's turn to some of the specific highlights of our financial results during the fourth quarter and for the year-end 2023. I'll now turn the call over to our CFO, David Margrave, who will provide an overview of our fourth quarter financial results. David?

Thank you, Pana, and good afternoon, everyone. I'll now share some financial highlights from our fourth quarter and full year-ended December 31, 2023. I'll start with a review of the fourth quarter. Our general and administrative expenses were approximately 1.3 million for the fourth quarter of 2023, down somewhat from approximately 1.6 million in the prior year period. R&D expenses were approximately 3.6 million for the fourth quarter of 2023, up from approximately 2.3 million in the fourth quarter of 2022. We recorded a net loss of approximately 4.2 million for the fourth quarter of 2023 for 39 cents per share compared to a net loss of approximately 3.4 million or 31 cents per share for the fourth quarter of 2022. For the full year 2023, our R&D expenses were approximately 11.9 million up from approximately 8.6 million for 2022. This increase was primarily attributable to increases in research studies of approximately $2.98 million, increases in research and development payroll expenses of approximately $1.2 million, and increases in consulting expenses of approximately $160,000. These increases were partially offset by decreases in product candidate manufacturing-related expenses of approximately $631,000 and decreases of approximately $459,000 in payments to Elarity Therapeutics. During the year ended December 31, 2022, we released an escrow payment of approximately $459,000 to Elarity Therapeutics. and there was not a release of escrow payment amounts to Alerity during the year ended December 31-23. Manufacturing-related expenses for the year ended December 31-22 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 service provider agreement. Our general and administrative expenses for 2023 were approximately $6.0 million, up slightly from $5.9 million for 2022. The increase was primarily attributable to increases in payroll and compensation expense and other professional fees. Our R&D expenses continue to exceed our G&A expenses by a strong margin, reflecting our focus on advancing our product candidates and pipelines. For the full year 2023, net loss was approximately $15.96 million, or $1.47 per share, compared to $14.3 million, or $1.31 per share for 2022. Our loss from operations in the 2023 calendar year was partially offset by interest income and other income net, totaling approximately $1.9 million. Our cash position, which includes cash equivalents and marketable securities, was approximately $41.3 million as of December 31, 2023. We anticipate this balance will provide us with a cash runway into at least Q3 of 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 programs and collaboration opportunities in a capital-efficient manner. As of December 31, 2023, we had 10,721,192 shares of common stock outstanding, outstanding warrants to purchase 177,998 shares and outstanding options to purchase 1,091,196 shares. These warrants and options combined with our outstanding shares of common stock give us a total fully diluted shares outstanding of approximately 11.99 million shares as of year end 2023. In November of 23, we were able to reduce our outstanding share count through the purchase of 145,348 shares of Lantern Common Stock at a purchase price of $3.44 per share. Our team continues to be very productive under a hybrid operating model. We currently have 21 employees and three FTE consultants 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 over to Pauna for an update on some of our development programs. Pauna? Thank you, David.