Lantern Pharma Inc.

NASDAQ:LTRN

Earnings Call Analysis

Earnings Call Transcript 2024-Q2

[Operator]

Good afternoon, and welcome to our second quarter 2024 earnings call. As a reminder, this call is being recorded. [Operator Instructions] 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 second quarter ended June 30, 2024. A copy of this release is available through our website at lanternpharma.com, where you will also find a link to the slides management we'll 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, August 8, 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, Panna Sharma; and members of Management. Panna will start things off with introductions and an overview of Lantern's strategy and business model, and highlight recent achievements in our operations, followed by discussions of our financial results and a discussion of the Harmonic clinical trial results.

I'd now like to turn the call over to Panna Sharma, President & CEO of Lantern Pharma. Panna, please go ahead.

[Panna Sharma, executive]

Good afternoon, and thank you everyone for joining us to hear about our incredibly productive second quarter of 2024. Today on the call, I have our CFO, David Margrave; and also our Head VP of Clinical Development, Dr. Reggie Ewesuedo.

I'll begin the call by discussing generally the quarter and then hand it over to David to talk about the financials, and then Reggie and I will discuss the progress with our LP-300 clinical trial.

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; chemistry, biology, and even now manufacturing and patient selection. And at no time has this been more evident than today where every facet of pharma development from molecular design to disease modeling is being rethought as a result of the widespread availability of computational capabilities, high quality data, and improved automation.

Our company'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 our industry matures and adopts an AI-centric data-first approach to drug development. Today we have 3 active clinical trials with an additional ADC-based preclinical program and a very active approach in identifying and validating combination approaches with our drugs.

With our RADR AI platform, which is at the forefront of cancer drug development, we expect more activity and opportunities where we can continue to use our AI as currency for collaborations, partnerships, and co-development opportunities. We also plan to continue driving the ongoing innovation in our portfolio of drug candidates and drug programs.

This past quarter was a particularly busy one for Lantern and especially with our clinical operations team, as we had a notable initial readout in our Phase 2 Harmonic clinical trial where we saw preliminary, but interesting 86% clinical benefit rate in the lead-in patient cohort.

Our intellectual property also continues to grow globally and we were awarded a very important patent in Japan, directed at our LP-284 drug candidate, which is focused on the treatment of B-cell cancers.

So going back to our clinical trials, we have also dosed over 40 patients now in our LP-184 and LP-284 clinical trials. These are trials that are in Phase 1a and they have not yet seen any dose limiting toxicities or events, which we will discuss more in depth later in the call.

Our team has also achieved significant advancement towards a key milestone in the development of a molecular diagnostic for use with our drug candidate, LP-184. We expect to potentially use this diagnostic to improve patient selection and stratification, and the novel biomarker is PTGR1, one that we validated extensively both in the lab, but also in-silico, and it was identified through a number of in-silico AI-driven screens.

We also launched a very important strategic drug development collaboration using our AI platform, Oregon Therapeutics, to optimize the development of a first-in-class drug candidate XCE853, a potent inhibitor of cancer metabolism, which we believe can have impact across multiple cancers and has a unique mechanism of action involving proteotoxicity.

With Starlight Therapeutics, our wholly owned subsidiary focused on CNS and brain cancers, we advance towards initiating site selection and feasibility for a Phase 1b, Phase 2 trial in recurrent GBM with drug candidate, STAR-001. Our team also successfully launched Webinar Wednesdays, a webinar series focusing on the areas of artificial intelligence, oncology drug development, and leveraging our relationships with leading physicians, scientists, and our collaborators. We also closed the quarter with approximately $33.3 million in cash, cash equivalents, and marketable securities, which our CFO will talk about later in today's call.

Many of the initial observations made with the help of RADR are now being witnessed in the clinic as many of you know. RADR has guided the rapid and efficient development of 3 AI-guided drugs into clinical trials over the past several years at a pace and cost that has traditionally been unheard of in our industry.

Let me walk you through some of the highlights from our AI-powered pipeline, which is again currently in the clinic before I talk about other aspects of our business. Specifically with LP-184, our team and many clinicians are particularly excited about and interested in these programs for first in human synthetically lethal drug candidates that are acylfulvene, LP-184 and LP-284.

So far, 7 cohorts of patients comprised of dose levels 1 through 7 have been enrolled in escalating doses in the ongoing Phase 1a clinical trial for LP-184. This is a first-in-human Phase 1 trial across multiple solid tumor indications that are advanced and refractory to the existing standard of care. Very exciting for us as there have been no observed dose limiting toxicities to date. Now, we're at the point now in the trial where we expect to reach a dosage level in the coming cohorts where therapeutic concentrations of the drug should be attainable based on our pharmacokinetic and pharmacodynamic analysis. So mouthful, but all that means is we should start potentially seeing benefit in patients at these cohorts going forward.

The trial is actively enrolling patients across multiple U.S. centers. These patients are relapsed. They're refractory to all existing standard of care typically, and they have advanced solid tumors such as pancreatic cancer, glioblastoma, triple negative breast cancer, and also now increasingly with solid tumor types focused on DNA damage response deficiencies. The company believes that enrollment should be complete this year and on track for an initial readout of safety and molecular correlation data by the close of the year.

The dosage and safety data obtained in the Phase 1a trial for LP-184 are expected to be used to advance the central nervous system indications for the Phase 1b and Phase 2 trial to be sponsored by Lantern's wholly owned subsidiary Starlight, as well as other later phase trials in select tumors that have shown superior responsiveness to 184 and also meet our genomically-guided criteria.

AI and preclinical studies are also ongoing to further refine drug combination studies. Many of you saw the press release from yesterday and this press release supports, at least tend to support the improvement to durability and response with other FDA-approved drugs. Specifically, we published on PARP inhibitors earlier this quarter and yesterday in immune checkpoint inhibitors. These are 2 very exciting areas with the combination of our drug with some of the existing approved agents, many of which are multi-billion dollar drugs, actually we feel can benefit patients in certain solid tumors like triple negative breast cancer or others that have DNA repair deficiency.

Globally, the aggregate annual market potential for LP-184's target indications, we believe is in excess of $10 billion to $12 billion, consisting about $4 billion to $5 billion in CNS cancers and $7 billion to $8 billion for other solid tumors.

For LP-284, the third cohort of patients are being dosed and no dose limiting toxicities have been observed in this Phase 1a trial, and we expect to open additional sites throughout the quarter with the potential to advance to Phase 1b and Phase 2 by the close of this year or early 2025. LP-284 has shown nanomolar potency across multiple published in-vitro and in-vivo studies, including mantle cell double hit and other non-Hodgkin's lymphomas, and especially those with DNA damage response deficiency we published in cancers that had compromised functioning of ATM due to mutations or deletions.

Now nearly all MCL double hits high grade B-cell lymphoma patients relapsed from the current standard of care agents and there's this urgent and unmet need for novel improved therapeutics for these patients. We believe the annual market potential in this group is in excess of $3 billion. We've also begun a review of some notable mechanism of action that we've observed in LP-284, and we think we can actually leverage those in other diseases and conditions. Lantern expects to review those preclinical studies and findings later this quarter.

Our current enrollment efforts are focused on cancer patients with tumors that have what's called DNA damage repair deficiency. They've been observed to have higher sensitivity to 184 and even in some cases 284. So DDR genomic alterations are of interest for these trials, and we may consider other genomic alterations based on other emerging data.

We also continue to make significant progress in 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 big data because the billions of data points that we had in our system, we used AI methods to look at specific indications, validated those computationally, optimized our understanding and then took them into studies, wet-lab studies with animals and mice and PDX models, and now we're actually at a point where we can start taking these indications into the clinic.

Notably, we've also actually started site selection for the upcoming Phase 1b and Phase 2 trials, especially in recurrent IDH wild type high grade gliomas like GBM. This is very different than the most recent approval, which was an IDH mutant. So if you've not reviewed our Webinar Wednesday on Starlight with Dr. Marc Chamberlain, I would definitely urge you all to listen to the webinars where we provide a detail, the timing and focus of the trials that we anticipate launching with Starlight.

Now, the golden age of AI in medicine is just beginning as witnessed even today by discussion of today's merger among 2 big AI companies, Recursion in the U.S. and Exscientia in the U.K. And there's a need to really use large scale, highly available computing power, massive data storage and the tremendous high-def biology that's available today. And that is what we're at the forefront of. But we're also, at Lantern's way, we're harnessing those capabilities in a way we believe is much more efficient. We want to harness these capabilities in this emerging tech bio industry and be a long-term leader, not only where we create massive value for patients and also continue to drive innovation, but we're also thoughtful about the economics of cancer drug development.

It's one of the first reasons many of us joined this company is we wanted to not only make drugs faster, but we also wanted to make them smarter and cheaper. And Lantern is among the leaders in this transformation of the pace, the risk, and the cost of oncology drug discovery and development. This transformation has a promise not only to 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 cancer biopharma industry.

Now let's turn to our -- our focus to our financial updates and highlights with David. I'll now turn the call over to our CFO David Margrave who'll provide an overview of our quarter's financial results. David.

[David Margrave, executive]

Thank you Panna, and good afternoon, everyone. I'll now share some financial highlights from our second quarter into June 30, 2024.

We recorded a net loss of approximately $4.96 million for the second quarter of 2024 or $0.46 per share compared to a net loss of approximately $4.75 million or $0.44 per share for the second quarter of 2023. For the second quarter 2024, our R&D expenses were approximately $3.9 million, up from approximately $3.6 million for the second quarter of 2023. This increase was largely driven by an increase in clinical trial activity.

Our general and administrative expenses for the second quarter of 2024 were approximately $1.5 million, down slightly from approximately $1.6 million for the second quarter of 2023. The decrease was primarily attributable to decreases in payroll and compensation expense and decreases in insurance expenses. Our R&D expenses continue to exceed our G&A expenses by a strong margin, reflecting our focus on advancing our product candidates and pipeline.

Our loss from operations in the second quarter of 2024 was partially offset by interest income and other income net totaling approximately $449,000 as compared to interest income and other income net totaling approximately $444,000 for the second quarter of 2023. Our cash position, which includes cash equivalents and marketable securities, was approximately $33.3 million as of June 30, 2024. 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 RADR AI platform and continue the advancement of our portfolio of targeted oncology drug candidates. As of June 30, 2024, we had 10,758,805 shares of common stock outstanding, so about 10.75 million shares of common stock outstanding. We had outstanding warrants to purchase 81,496 shares of common stock and outstanding options to purchase 1,063,548 shares of common stock. These warrants and options combined with our outstanding shares of common stock give us a total fully diluted shares outstanding of approximately 11.9 million shares as of June 30, 2024.

Our team continues to be very productive under a hybrid operating model. We currently have approximately 22 employees and 4 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 over to Reggie for a review of initial Phase 2 patient results and future directions for our Harmonic trial. Reggie.

[Reggie Ewesuedo, executive]

Thank you, David. I'll start off by reviewing the study design for the Harmonic trial.

There are 2 stages in the Harmonic trial. The Stage 1 is the safety leading and then the randomization and expansion stage of the study. It is worth noting at this point though that investigators are completely satisfied and aligned with this strategy because it aligns very well with current dosing intervals for the standard of care regimen as well as the disease evaluation intervals. I will spend many of my time really going over the data. The safety lead-in is now completed with a total of 7 patients enrolled and the preliminary data is the subject of my presentation in most of the subsequent slides.

The study started with geographically dispersed sites in the United States with Dr. Treat at Fox Chase as the global lead investigator. The number of sites have now been extended to the Asia-Pacific region and includes renowned investigators like Dr. Goto at the National Cancer Center Hospital in Tokyo, as well as other experienced and reputable investigators both in Japan and Taiwan.

The obvious need for this expansion of sites should be pretty obvious. This is due to the fact that relatively high prevalence of the patient population in that part of the world. So let me now present the clinical data as it relates to safety when LP-300 is combined with the standard of care chemotherapy doublet.

To summarize, the safety profile is in keeping with what is expected for the standard of care regimen. Overall, the events observed were primarily Grade 1 or 2 adverse events. Now, most of these events seen in this presentation are attributable to a single patient who entered the study with multiple comorbidities. Of note, however, having completed this stage of the program, there were no dose limiting toxicities, severe adverse events, or more importantly, new unexpected toxicities reported, and no patient has discontinued any of the treatment due to toxicity. Now, this is key to a new regimen because it speaks to the tolerability of the triplet regimen.

I will now hand over the representation to Panna, the CEO, to review the key takeaways from the clinical data and I'll join him as part of that presentation.

[Panna Sharma, executive]

Thanks, Reggie. I want to review for everyone the key patient characteristics and our study's endpoints, and obviously these will be remain the same as we go now from the lead-in to the expansion phase. The patients are all never smokers that have histopathological evidence of Stage 3 or 4 primary lung adenocarcinoma. They have to have TKI molecular alterations such as EGFR, MET exon 14, ROS1, BRAF, ALK and TRK fusions, and they have to have relapsed after one or more lines of therapy with those TKIs. So obviously these are identified TKIs, which we believe are a small family of all the potential TKI mutations that can possibly occur. And that's an important note because our drug, we believe, has effects on the TKI receptors.

The study endpoints are progression-free survival and overall survival. And we'll give you a little discussion what we've seen as benchmarks for those toward the end. And the secondary endpoint, which we have some of -- some of which today are objective response rate, duration of response, and clinical benefit rate. And again, it's very surprising oftentimes that this, those who stop responding to those TKIs that are never smokers actually have very poor duration of response and after they go to chemo doublets, in fact, usually well under 5 and 6 months. So there's a very urgent need for targeting this population.

Reggie, you want to talk a little bit about some of the patient highlights so far?

[Reggie Ewesuedo, executive]

Yes, absolutely.

So maybe if we go on to the next slide. As required, one of what we do in clinical trials obviously is to look at the data from different angles. The first thing we did there was to look at the spider plot, which goes over the preliminary data, but with the intent to really understand the attributes of the regimen. What you see on this slide or presentation is the onset of the clinical benefit. This is rapid and it'll appear durable. Now this is key. So what we're expecting is, from the regimen, if a patient is treated, within the first 3 cycles, if they're going to derive clinical benefit, that should be sustainable and that's what we're beginning to observe.

So we'll go on to the next slide and we'll look at the data from another perspective, which is the waterfall plot. Now this gives us the magnitude of the clinical benefit. And as you can see on this presentation, is quite impressive. The response is just after 3 cycles, and this has been seen virtually for all the patients in this cohort. The emerging durability of a clinical benefit, however, is presented on the next slide, which is the swimmer's plot. So again, you begin to get a sense from this presentation that 86% disease control rate in this patient population with the 43% objective response rate, which includes one patient maintaining the 50% reduction in tumor size over 14 months. Clearly, we are encouraged by these preliminary results. We shared the results with investigators. They all with without exception, are very encouraged, which is what we are seeing here with this regimen.

So I'll now go on to the next slide, which talks about really the demographics of this patient and we want to pay particular attention to where we think we're seeing this benefit in the patients. We are closely monitoring the patients, but it is very clear from this that there are a couple of encouraging observations while assessing the demographics and specifics.

One, the patient population is relatively more heterogeneous. That will be the case with typical studies in this space, which tend to be restricted to one driver mutation populations. Two, the tyrosine kinase receptor genomic alterations at baseline is other than EGFR or EGFR alone. So there are 1 or 2 patients with co-mutation at baseline. We know those patients don't tend to do well with EGFR and targeted therapies. But you also notice that after 3 cycles, the tumor response is remarkably exaggerated at metabolic lesion size leading to complete disappearance or resolution to normalcy in size in the case of lymph nodes. Patients with low or intermediate tumor mutational body are deriving clinical benefit, which is very exciting to us because we believe this will pave the way for a more acceptable and adaptable biomarker selection strategy since this assessment is already part of routine clinical practice.

My next slide relates to the prior lines of cancer treatment and the response we're observing so far. Looking at this data, the median number of prior lines of therapy is 2 with a range of 1 to 4. Notwithstanding, the preliminary efficacy data suggests that regardless of the number of prior lines of treatment or type of prior tyrosine kinase inhibitor treatment, LP-300 when used in combination with standard of care regimen is likely to provide clinical benefit.

Now, it's important to point out that one of the patients in this cohort had already been exposed to carboplatin chemo doublet, but still derived remarkable and durable response. We strongly believe that based on the mechanism of action of LP-300, what we are seeing here is what we've always come to know about the drug, which is that the drug is known to re-sensitize tumor cells to the effect of chemotherapy through a mechanism where it reset the [indiscernible] cycle. So this is very encouraging set of data for us, and again, all investigators, including Dr. Treat that we've shared the data with, are very excited and we look at this as being very promising.

Next slide. So I will just review the top part of this slide and I will invite the CEO, Dr. Panna, to review the latter part of this slide. So to summarize, we have 7 patients that have been enrolled in the Stage 1 or the safety lead-in phase of the study. Six out of 7 patients have derived clinical benefit. Three of those are partial responders, which are really significant in magnitude of response, including very remarkable reduction in metastatic lesion sites with an average of tumor size reduction of about 51%. There are 3 noticeable stable diseases, which have resulted in an average about 13% tumor size reduction. But overall with the clinical benefit rate of 86% and an overall response rate of 43% from this initial cohort, we believe that this is very promising.

Notably, from a safety perspective, there are no DLTs, no serious adverse events in excess of what one would expect from the standard of care chemotherapy regimen. But more importantly, no new added toxicity to the doublet regimen, which tells us very clearly that after 3 cycles, this is a regimen that is very tolerable and most welcome in this space.

I'll hand over to the Panna to review the last part of this slide.

[Panna Sharma, executive]

Yes, thanks, Reggie. So obviously the key ongoing consideration is really the measuring for the durability of response going forward, and that's going to be very important for us. We are considering, we believe, to file for a breakthrough therapy designation if we continue to see the types of trends that we're seeing, which again, isn't just the clinical benefit rate, but also as Reggie pointed to that there's no increase in toxicity or adverse events, which is very important because oftentimes in this patient group, again, you're looking at some serious adverse events. And so far we've been fortunate not to have that, but more importantly, we're not seeing any that are above the normal standard of care, which is critical.

So we believe the types of clinical benefit, coupled with the safety profile that we've observed to date make us very excited to look at if these statistics continue to hold over the next few cycles to apply for breakthrough therapy designation. We've also observed, which is very important to note, this has been hypothesized early on and we're beginning to see some good data, is that tumor mutation burden or TMB levels that are measured as either low or intermediate, are responsive to this therapy triplet. And these are typically patients that are not responsive to immunotherapies or checkpoint inhibitors. Usually high TMB or high PD-L1 is associated with improved response to PDL and PD1. So all signs point to that we really need to accelerate the enrollment of this trial, and we've begun sharing the observations to date with the sites and with our Asian colleagues, and that we believe we'll be able to get to some significant enrollment over the next several months as the trial now goes into the expansion phase.

Let's go in the next slide, please.

[Reggie Ewesuedo, executive]

So let me conclude my part of the presentation and to put the Harmonic trial in context. I think there are several studies you see on this slide pertaining to the impacts or lack thereof of immunotherapy in the never-smoker population, which is the population targeted. Yes. The never-smokers with advanced lung adenocarcinoma clearly do not respond well to immunotherapy either when used alone or in combination with the standard of care carboplatin doublet. However, the preliminary profile and activity we are seeing in this study will seem to suggest that these subgroup of patients who tend to have low or intermediate tumor mutational body will potentially benefit from this Harmonic trial regimen. The study is currently enrolling in the randomization and expansion phase, and as Panna pointed out, more data in the near future will further define and/or validate the clinical activity that we've observed so far.

Could we go onto the next slide please? This just summarizes at a very high-level the key highlights about LP-300. There were previous study, this laid down the scientific rationale for the current design, where we saw very impressive improvement in clinical benefit in terms of survival when we looked at never-smokers versus smokers. So thus, the scientific basis for using LP-300 in combination with the current doublet standard of care. The mechanism of action are reflected on this slide. But one thing that is very fundamental in terms of the regimen, which we're beginning to observe, is that well over a 1,000 patients have been dosed with this drug either alone, even in healthy volunteers, or in combination with different chemotherapy regimen. So the safety profile is well-established, no surprise from this study that we have currently and it's welcomed by all the investigators as we have looked at the first cohort of patients from a safety and tolerability perspective.

I just thought I should share with you all the comparative data, the historical benchmark for what we are talking about. The next phase of this study obviously is combining LP-300 plus the pemetrexed carboplatin doublet versus carboplatin pemetrexed doublet. Now, this is the benchmark. When you look at overall response rate in these studies, you are going anywhere from about 26% to probably on the very high end, recently within my [indiscernible] study, about 36%. Right now, with the data that we have sharing with, this is the opinion of the investigators, we are clearly above what the historical data is, and I think we can attest to that. But more importantly, as the data matures, we are keen on understanding the median duration of response as well as the PFS, which obviously is the primary endpoint of this study, co-primary endpoint with survival. But all these studies either with IO agents or bispecifics, as you look at this particular set of the standard of care regimen, right now preliminary data obviously is looking better than what has been known in this space.

So I'll conclude by saying that the data that we have, the clinical data, from a safety perspective is spot on, is on the standard of care regimen that is expected and safety profile. And in terms of the preliminary and emerging, say, clinical efficacy profile, I think we're encouraged by what we're seeing. So thank you.

[Panna Sharma, executive]

Well, Reggie, thank you. And thank you to our clinical colleagues and of course patients for the first phase.

Moving back to the other aspects of our portfolio, I know people are very excited about Starlight. We've seen some really good movement this year in brain cancers, obviously initially in pediatric brain cancers with the results from day 1 pharmaceutical and now more recently with a result in IDH mutant gliomas. And so it's an exciting time and I think as we've stated before, we want to further monetize Starlight because Starlight is pointed at some very important and significant indications. We've now started site selection for the upcoming Phase 1b and 2 trials. We'll make several announcements in the coming months on the progress in those fronts and also on additional talent and leadership that we plan on leveraging at Starlight.

For those who have not listened in on the backdrop of Starlight or on the details of the trials, we have some webinars that we invite you to listen to. Additionally, a major part of our business obviously is to inform, educate, and share with the general public and investors and the oncology community the details of our programs and our efforts. So last Wednesday of every month, we'll focus on our trials, our publications, our collaborations, and on our AI developments. Our next webinar will be the end of this month, August 28, on Wednesday, where Reggie will dive deeper into some of the data and clinical readouts. And that'll be followed up with additional data from our AI platform in September, and some insights about our efforts in immuno-oncology with 184 in September. So all very, very relevant.

We've also had additional publications highlighting the clinical value of our RADR work. We had a great publication that showed the potential for LP-184 to be synergistic with PARP inhibitors in a wide range of solid tumors. This was published at AACR Journals, Cancer Research Communications, and again, this is in a wide range of solid tumors that are what's called HRD, Homologous Repair Deficient. And this is a very under-addressed large category that's generating billions in drug sales annually. The preclinical findings in the paper illustrate the potential of LP-184 to be a pan HRD Cancer Therapeutic, which could be the first drug of this type in this class. So it's a really great observation and will, we believe, help us establish a combination trial in this group of patients once we've established the MTD in the Phase 1a for LP-184.

Also, as we communicated yesterday, we have new data and scientific findings conducted in conjunction with Dr. Yong Du and Phoebus Lin at MD Anderson. And these were presented at the Immuno-Oncology Summit just yesterday by our colleague. And these findings showcase what Lantern believes to be the role of LP-184 to be combined with checkpoint inhibitors to provide greater response in triple negative breast cancer due to the synergy, but also we believe because of a mechanism where LP-184 can transform triple negative breast cancer tumors that are unresponsive or what's called cold, too responsive or hot to checkpoint inhibitors. And we believe that it reshapes the tumor microenvironment both through heightened T-cell aggregation and also by decreasing M2 macrophages. Both are really, really critical in heightening the potential for IO therapies to work. The poster can be found on our website under our poster section.

Now, 2024 has emerged to be a year of progress for us where we've accelerated ideas and AI-driven insights now to the clinic. And these insights are now not just good publications and great theory, but they're impacting patients and their journey to fight cancer and also influencing and develop the development decisions of other people in the cancer category. I think our collective efforts and dedication have fostered a transformational shift, not only for our company, but actually for groups of our industry. And that's setting us on a very exciting trajectory where we can not only improve the lives of cancer patients, but also do it in ways that is more effective and more scalable. We believe that our business model will drive affordable, more personalized treatment options in cancer.

Now, with that, I'd like to now open the call to any questions or clarifications. If you'd like to ask a question, you can do so in 2 ways. One, you can raise your hand under the participant category, I think there's a hand raised already. And/or you can also type it in and we can look at questions that way. So before we get into questions, I'd like to take a moment to personally thank our team for helping to prepare us for these calls and to gather all this takes a lot of work. So thank you for our team for taking time out of their normal day-to-day to help make this happen.

[Panna Sharma, executive]

So let's take some questions from our audience. I think our first question is from [ Keay at Chardan]. Keay, please go ahead. I think you're muted Keay. Okay. Let's go on. Let's take a question from John.

[Unknown Analyst]

Hello, am I coming through?

[Panna Sharma, executive]

Yes.

[Unknown Analyst]

I thought I'd start with a question on just what kind of threshold you're looking for that shows LP-300 merits a breakthrough candidate candidacy status?

[Panna Sharma, executive]

I think if we see the current trajectory in the next, let's say 12 to 20 patients, plus we get some durability data, I think that would give us comfort level, but we'd have to see the totality of the data. Seven patients is a good start, but it's preliminary. We'd love to see 21 patients. If we had 14 patients out of 21, that would get us pretty excited, 16 patients, I mean, but the overall clinical benefit rate of 86% is largely unheard of in this group. So we want to make sure that's durable. And so more patients drive the end number and then some durability of response, which I'm sure the FDA will want to look at for the -- for breakthrough.

[Unknown Analyst]

So about a 2/3 clinical benefit rate is what you'd be looking for?

[Panna Sharma, executive]

That's probably, yes, that's kind of good. We'd have to take a look at the totality of the data, but yes, I mean, metastatic lesion improvement, no safety issues, those all skew us towards some positive as well. Right?

[Unknown Analyst]

And then looking at the safety profile that you've seen from the first 7 Harmonic patients and comparing it to some of the other NSCLC populations that we're using EGFR, TKIs, and checkpoint inhibitors. How does that safety profile compare to some of those other molecules out there or biologics out there?

[Panna Sharma, executive]

Well, I'll let our safety expert, Reggie, take that question on.

[Reggie Ewesuedo, executive]

That's a very great question. I'll just tell you off the bat, what is unheard of in this space is for patients to go on to about 9 weeks or 9 to 10 weeks of treatment with any kind of dosing interruption or discontinuation of the regimen. I mean, that is very common with the TKIs in combination. You can look at the current, the MARIPOSA-2 trial, for example, which is the most recent with the bispecific combination with the TKI, by the way, for patients in the same population versus the same standard of care. It shouldn't surprise anybody in this field to know that certainly up to 80% of the patients discontinue treatment for one reason or the other because of toxicities and they had to interrupt treatment. And 1/3 or more of those patients literally discontinued treatment. So this, again, presenting this preliminary safety data with no new toxicity to these investigators was really exciting because for this length of time, none of the patients have required dose discontinuation for any of the -- certainly not LP-300.

[Unknown Analyst]

And just one more question on your collaborations. When you look at the Oregon Therapeutics and also Actuate and TTC, how will you determine if this is a success? I mean, what kind of milestones are you looking for internally to show that these are working and they're valuable?

[Panna Sharma, executive]

Yes, each one is a little bit different. I'll take that question. Unique, I mean, Actuate has filed an S1, and I think that the work our team did was definitely helpful for them in terms of understanding their patient population and developing some specific insights related to people who are refractory to PD1 therapy that would have potential to benefit from their drug, Elraglusib, yes.

[Reggie Ewesuedo, executive]

It's a little hard to say.

[Panna Sharma, executive]

Yes, hard to say. But so we think that's on track to be successful because we've helped the company. And if they do go public and are able to raise additional capital, we definitely think it's because of the focus around understanding the patient profile. With regards to TTC, that's they came a little after, so that one, we're still working. We do have some very good ideas. TTC is out raising capital or looking for grant money for the next phase. And -- but that one is not as well capitalized as Actuate has been. So they're slower. Oregon is the newest one, and I already am pretty excited about what we're doing for Oregon. And it's barely 2 months old, so it's very early, but we have some very clear milestones in terms of developing some collaborative IP together that we can monetize, specifically helping them define combinations and define indications that they haven't thought of. And I think we'll be able to accomplish that. Eventually the IP has to be monetized for it to be success for everyone, but you got to have good strong, valid ideas and do them inexpensively, which is part of the magic of AI.

[David Margrave, executive]

Yes, just adding very quickly to that, John, in simple terms, I think it's the question of are we able to allow them to see things and do things that they wouldn't be able to do otherwise? And this goes beyond our collaborations in terms of RADR and AI, and we're seeing just more and more evidence in these collaborations in other ways that's showing insights that wouldn't have arisen without that additional insight.

[Panna Sharma, executive]

Then we'll try Keay again, I don't know if he's back on the line, Keay?

[Unknown Analyst]

Can you hear me now?

[Panna Sharma, executive]

Yes, we can hear you, Keay.

[Unknown Analyst]

I appreciate all the detailed patient data. I guess the first question is, again, with a huge caveat, this is small numbers, but the patient with the red mutation had a nice response. I'm not sure if they were [indiscernible] or not, but was that a surprise to you based on your pre-clinic data?

[Reggie Ewesuedo, executive]

Maybe I take that one. Yes, it wasn't really a surprise because, again, if you, maybe one of the highlights for LP-300 and what we understand of the mechanism of action, one of the set of data we've been able to generate preclinically is understanding that the drug really binds to cysteine residues and of different tyrosine kinase receptors, including rat. So seeing this clinical data is very exciting to us, and that's why in the presentation I made sure to emphasize that is not just a driver mutation of interest as you've see in other clinical trials in this space, but rather the protocol is designed to really capture any driver mutations for those patients to come in as far as they're never-smokers. So this is very encouraging for us. It didn't come as a surprise.

[Unknown Analyst]

And then with respect to patient 107002 who had progressive disease, anything about their baseline that maybe might have predicted a less than favorable response there?

[Reggie Ewesuedo, executive]

This was the first patient enrolled in the trial. A lot of things going on with the protocol at that time, but this patient really accounted for most of the toxicities you've seen because of comorbidities. So the patient, one will say wasn't an ideal patient for a clinical trial.

[Panna Sharma, executive]

We have a question in the chat window that I'm going to go ahead and answer. I'll read it out for everyone. Can you please go deeper into checkpoint inhibitors and the market they currently garner, specifically Keytruda? And why LP-184 may be a great and synergistic partner?

Good question. Now, I am not a Keytruda rep or I'm not a Merck rep. But having done a lot of work for Merck in my prior career, I can tell you that the 57-patient trial that they had that got them on the map had remarkable results. The market today for checkpoint inhibitors, including Keytruda, is somewhere close to $42 billion to $48 billion. So it's a significant market. Now, we all know that Keytruda's, some of these early stage PD-L1s are coming off market and there are some new PD-L1s already out or PD-1s, Coherus has one of those already out I believe, that's a biosimilar. Pricing isn't great, but I've heard that the efficacy is very, very good and it's a clean biosimilar.

So the market, I think, will remain fairly robust. Analysts project that it'll grow about 15% to 17% because there's a whole new wave of new checkpoint inhibitors. So it's a good market. Now, we're not going after that whole market. We're going after as we believe that there's even a larger group of patients that don't respond to checkpoint inhibitors that could benefit from them. And there's a whole group of people whose lives have been wonderfully prolonged, but their cancer is not cured, so they stopped responding to checkpoint inhibitors and the tumor microenvironment reshapes itself. So that's where LP-184, we believe, can be a great and synergistic partner. The first one of course, we have some data on that we're excited about is in triple negative breast cancer. And triple negative breast cancer can be rapidly evolving in terms of its clonal evolution. So it's also part of the reason why it'd good to go after. And so we think that TNBC would be a great initial target to get early and early win and then potentially go after other places where checkpoint inhibitors can be improved, which will be many of those tumors where you have complex tumor microenvironments and you have rapid clonal evolution. And so that to me can be multiple, multiple billions of dollars of potential over time.

But the key is to pick one where we know that we could have a good effect and potential win. And TNBC looks like one where we've seen synergy, we've demonstrated clinical evidence, we see 2 of the most important hallmarks. One is we're bringing and recruiting the right T-cell environment. And we're also decreasing the number of M2 macrophages both which have been very, very correlated with reducing response to immunotherapies.

Thank you for that question, John.

Take another question in the chat window that just popped up. Michael? Yes, Michael's question I'll read is, are you open to small pharma partnership opportunities?

Well, Michael, being a small pharma ourselves, yes, absolutely. Yes, we're a small biopharma that acts like a big pharma, but we are a small pharma. I mean, we're always looking for partnership opportunities and welcome you to send myself or members that you know in the company an email and we'll get back to you quickly.

I have time for one more question. I don't know if there's any more questions. See, there's one more question. So I'll go ahead and take this one. The question is, given the market cap of the company, do you think Lantern is still relevant to be a major player in the industry?

That's a great -- that's a good fundamental question as an investor, I think. So thank you for being involved. I think there's room for big companies and small. and I always like to urge everyone that with the exception of a few handful of companies, every big company started small except LabCorp, which started because of Roche and US LABS, I mean even Regeneron and Biogen, now is that what we're going to be in the future? Who knows? But I do think that very likely that our approach and our drugs will be partnered, licensed, and sold. That's what we're doing. Or we'll spin out the assets. So I think that we are very relevant to the industry and I've seen a lot of companies try to copycat our approach. A lot of companies are very interested. So I think we will be very relevant and I think you will see ups and downs in this industry, just like every other industry. Like to remind people that even Amazon before it became the huge behemoth, not that we're going to become Amazon, saw 80% and 90% reductions in stock price about 4 or 5 times during -- on their way up. So stock prices and everything, I think it's a huge indicator of how much your cost of capital will be, but I think we're probably the cheapest company with a Phase 2 drug and 2 Phase 1 drugs that are first-in-class. So that does get me at times concerned, frustrated, but -- and we're not spending $60 million to $80 million a quarter like some other companies who are in the press today for their merger.

So it's you got to do things differently, but you also really have to think about how to do them differently. You can't say you're going to use AI and then spend like Eli Lilly or Roche. So I think we can do things differently with AI, pick the right very select focused bets and opportunities and try to develop those with a tremendous amount of operational efficiency. And so I think that'll pay a lot of dividends to our investors, but also will allow us to be very relevant in the industry.

[David Margrave, executive]

And just adding to that very quickly, we are beginning to see some great momentum on multiple fronts. We talked a lot today about Harmonic, but there are some very exciting things going on with our other candidates as well. And then RADR in addition to that. So we're building some great momentum that we think will be value driving in multiple ways.

[Panna Sharma, executive]

Thank you. So in closing, I want to express my thanks and gratitude to our team, our partners, our stakeholders, and those who are following the company for their support and interest. Together, I think we are really lighting the way toward a brighter future in oncology and solving real world problems for patients with proprietary AI solutions and insight. And we think we're going to radically alter the potential to change the cost structure and timelines in drug discovery. So thank you everyone for your time this afternoon.

With that, I'd like to adjourn the call today.

[David Margrave, executive]

Thanks a lot.

[Panna Sharma, executive]

Thank you.