Lantern Pharma Inc. (LTRN) is a clinical stage oncology company, “at the intersection of Artificial Intelligence, Genomics, and Machine Learning,” in the company’s own words with a “mission is to deliver precision oncology therapies to the right cancer patients with significantly reduced costs and timelines.” We will review where they stand on that premise, and how the investing community can benefit.
Lantern has a proprietary “integrated data analytics, experimental biology, biotechnology, and machine-learning-based platform” called the Response Algorithm for Drug Positioning & Rescue (“RADR”), which facilitates drug and cancer type-specific biomarker identification, to discover drug candidates for new indications. Candidates include “abandoned or shelved small-molecule drug candidates that have a proven history of tolerability, some of which have shown efficacy in oncology clinical trials.” The platform is based on key datasets of the company’s proprietary data generated from ex vivo 3D tumor models specific to drug-tumor interactions, data from commercial clinical trials and studies, and publicly available databases. Lantern uses RADR to predict patient responses to drugs being analyzed, as well as to define and develop strategies to combine under-development candidates with approved drugs in oncology indications. As of October 2020, the platform had already analyzed over one billion data points covering more than 140 drug-tumor interactions across more than 13,200 patient records from the company’s database and four other databases.
(image source: company website)
Lead candidate LP-100 (irofulven) (6-hydroxymethylacylfulvene) “is a monofunctional covalent DNA binder that inhibits DNA synthesis and replication, affects cell cycle and induces apoptosis.” The candidate was first developed by MGI Pharma and later collaborated with Eisai (OTCPK:ESALY). Lantern uncovered the genomic signature of potential responders, developed preclinical data, and out-licensed LP-100 to AllarityTherapeutics (formerly known as Oncology Venture) in 2016. Currently, it is in an active phase II clinical trial in metastatic hormone-resistant prostate cancer (“mHRPC”) patients. The company stands to receive up to $14 million or a specified percentage of future earnings from the sale or out-licensing of LP-100. The trial is expected to end in 1H-2021.
Second candidate LP-300 (Tavocept) (Disodium 2,2’-dithio-bis-ethane sulfonate) is a small molecule that modulates multiple cellular pathways simultaneously. It is indicated as a potential first-in-class combination agent for non-small cell lung cancer (“NSCLC”). Originally branded as Tavocept, the molecule has been studied at multiple centers in multiple randomized, controlled, NSCLC trials that included administration of cisplatin with either or both of paclitaxel and docetaxel. “Retrospective analyses of the results of a multi-country phase III lung cancer trial in subgroups of adenocarcinoma patients receiving LP-300, paclitaxel and cisplatin demonstrated substantial improvement in overall survival, particularly among female non-smokers, where a 13.6 month improvement in overall survival (p-value 0.0167, Hazard Ratio 0.367) in favor of LP-300 was observed, as compared to placebo in the subgroup of paclitaxel/cisplatin-treated patients.” The company is “repositioning LP-300 as a potential combination therapy for non-smoking (or never-smoking) female NSCLC patients with histologically defined adenocarcinoma” as there is no approved therapy for this subgroup of patients who appear responsive to LP-300.
The third candidate LP-184 is in the preclinical stage and is being developed for genomically defined cancers. The company recently entered into a collaboration and research agreement with Fox Chase Cancer Center for developing LP-184 in molecularly defined subtypes of pancreatic cancer, to potentially enable “more effective and personalized therapy.” According to the National Cancer Institute (“NCI”) pancreatic cancer will be the second leading cause of cancer death in the USA in 2020, given that overall five-year survival rate across all stages of pancreatic cancer is only 10%.
Lantern has also collaborated since 4Q-2019 with Georgetown University for LP-184 in prostate cancer. Proof of concept (“POC”) study demonstrated increased efficacy in killing prostate cancer cells that overexpress PTGR1, the gene characterising aggressive tumors. LP-184 seems to damage and block a pathway critical for cancer cell proliferation. The efficacy of the candidate will be validated in the next phase.
The RADR platform has been instrumental in identifying the company’s next indication too, accelerating the discovery of subtypes of glioblastoma multiforme (“GBM”), and central nervous system (“CNS”) diseases that could benefit from the LP-184 molecule.
Artificial Intelligence is driving drug discovery and development. It is estimated that the AI-driven drug discovery/ development market will be worth approximately $4 billion by 2024.
(Image source: company presentation of October 2020)
Lantern’s AI-driven approach has the potential to uncover new therapeutic opportunities as well as provide insights for combination therapies, while saving millions of dollars in development costs and accelerating the path to commercialization. The company is aiming for a market of nearly one million patients annually worth several billion USD in potential sales.
(Image source: company presentation linked earlier)
The below image from the company’s presentation shows the investment and investor interest in AI-driven drug development in as much as the competition.
Patents & Licenses
Lantern Pharma has over 108 issued and in-licensed patents and 7 patent applications across 14 patent families. LP-300 has potential protection until 2039. LP-100 has a US patent directed to use of the drug in combination with tumor biomarker signature (filed by Allarity Therapeutics) through 2036.
Lantern has an assignment agreement since January 2018, with BioNumerik Pharmaceuticals, Inc. pursuant to which the company acquired rights to domestic and international patents, trademarks and related technology and data relating to LP-300 (Tavocept) for human therapeutic treatment indications. Details of the arrangement can be referred from the latest 10-Q, page 7.
The company has a technology license agreement with AF Chemicals since January 2015, with relation to LP-100 and LP-184. Since May 2015, LP-100 is out-licensed to Allarity Therapeutics (formerly Oncology Venture). Details of the agreement can be referred from 10-Q, page 8.
The company’s wholly owned subsidiary, Lantern Pharma Limited was awarded a grant by the UK government in September 2018 for R&D in the prostate cancer biomarker analysis of LP-184. The grant will remain in force for five years.
As of 3Q-2020, the company had cash and cash equivalents of $20.8 million, including the proceeds from the IPO in June 2020. With just 6 employees, cash burn in fiscal 2019 was only $2.4 million, while in the TTM, it was $3.7 million. Debt is a miniscule $108,500. The company believes it has a cash runway of at least 12 months. Lantern Pharma has a market capitalization of $99.79 million on a stock price of $15.50. In the 52 weeks past, the stock has seen a low of $10.40 and a high of $24.84. Of the 6.22 million shares outstanding, majority holding is of PE/VC firms with 38.55%, the public with 34.27%, and private corporations with 16.79%. Insiders hold 7.78% shares and institutions 2.60%. One Wall Street analyst is bullish while one is very bullish, and the price target has increased nearly 12% over the past three months to $27.33.
Lantern Pharma has several milestones in 4Q-2020 and through 2021.
(milestones image from company presentation)
We will be keenly watching this stock over the next two quarters. Although the cash burn is about an eighth of the cash balance, the company expects payments to licensors, hence their estimated runway is 12 months. They have already repurposed and out-licensed one product. The next 12 months could see another out-license. The company is also performing ahead of stated targets. In July 2020, they had estimated to analyze one billion data points by 2021, but they have already achieved that in October 2020. They specified multiple milestones and are working in several directions with potential to discover quite a few candidates. Hence we are going to watch the company for two more quarters to get clarity on their roadmap.
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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.