LTRN: 2Q:21 Results

By John Vandermosten, CFA

NASDAQ:LTRN

READ THE FULL LTRN RESEARCH REPORT

Second Quarter 2021 Financial and Operational Results

On July 29, 2021, Lantern Pharma, Inc. LTRN announced second quarter 2021 financial and operational results, filed its form 10-Q with the SEC and hosted a conference call to review the quarter's accomplishments.

Highlights for year-to-date 2021 include:

➢ Launched ADC program with Califia Pharma - January 2021

➢ Raised $69 million in equity - January 2021

➢ Signed agreement with Piramal Pharma for fill and finish of LP-300 - January 2021

➢ Initiated development of LP-284 in hematologic cancers - 1Q:21

➢ Surpassed accumulation of 4.6 billion curated datapoints using RADR - April 2021

➢ Expanded LP-184 into ATRT indication - April 2021

➢ Started Actuate Therapeutics collaboration using RADR for GSK3β drug candidate 9-ING-41 - May 2021

➢ Initiated development of LP-184 in DNA damage repair deficient tumors – 2Q:21

➢ Filed 11 new patent applications - YTD 2021

➢ Reacquisition of rights for LP-100 from Allarity Therapeutics – July 2021

Lantern generated no revenues in the second quarter and expended $2.48 million on operations during the three month period producing a net loss of ($2.32) million, or ($0.21) per share.

For the second quarter ending June 30, 2021 and versus the second quarter ending June 30, 2020:

➢ Research & development expenses totaled $1.16 million, rising 642% from $157,000 on increase in product candidate manufacturing expenses of $320,000, research study expense of $280,000, and R&D employee associated expense of $279,000;

➢ General & administrative expenses rose 94% to $1.31 million from $676,000, primarily attributable to increases in corporate insurance expense of $296,000, business and corporate development expense of $158,000, and legal and patent fee expense of $114,000;

➢ Net loss was ($2.32) million, or ($0.21) per share, compared to ($833,000), or ($0.31) per share;

As of June 30, 2021, cash and marketable securities on the balance sheet were $79.6 million. Cash burn in the second quarter was ($1.7) million, up markedly from the ($490,000) consumed in the prior year period.

Reacquisition of LP-100 Rights from Allarity

Lantern reacquired global rights to its candidate LP-100 from Allarity Therapeutics, publicized in a press release on July 27, 2021. The candidate is in Phase II trials that enrolled 9 out of 27 targeted subjects. The purpose of the Phase II trial is to evaluate the anti-tumor effect of combination LP-100 and prednisolone in mCRPC¹ patients who progressed on androgen receptor targeted therapy and those pretreated with docetaxel. An interim analysis of the nine patients revealed a median overall survival (mOS) of 12.5 months, directionally improved compared to other, similar fourth-line treatment regimens for mCRPC1/'' that have ranged from 7.1 to 9.9 months. The nine patients included had been screened by Allarity's Drug Response Predictor (DRP).

The terms of the reacquisition of the candidate include a payment to Allarity of $1.0 million upfront, and an additional $1.0 million over 24 months based on manufacturing and trial enrollment milestones, and an additional $16 million based on IP license milestones and regulatory filings and approvals in the US and EU. If commercialized, Allarity will receive low to mid-single-digit royalties on net sales.

The reacquisition also included the developed clinical protocol for an intended study in bladder and prostate cancer with ERCC2/3 gene mutation. Lantern also received an exclusive license to use Allarity's companion diagnostic, DRP, in future development and commercialization of LP-100.

Reacquiring LP-100 expands Lantern's options for the development of the candidate in other indications. Based on the promising initial data from the ongoing Phase II study and with the knowledge of DNA damage repair and NER pathway drivers of efficacy, LP-100 may demonstrate potential beyond mCRPC.

LP-184 Positive Preclinical Data

On July 20, 2021, Lantern announced positive data from the ongoing pancreatic cancer collaboration with the Pancreatic Cancer Institute at Fox Chase Cancer Center. The preclinical data demonstrated that LP-184 produced significant tumor shrinkage in a murine pancreatic cancer xenograft model. The animal study evaluated the drug over eight weeks. Tumors in untreated mice grew over eleven-fold while tumors in treated mice shrank by over 90%. Mice were treated with once-weekly dosing at 3 mg/kg over the course of the study. No tumors were present in one out of the four treated mice, and in the remaining three mice the average remaining tumor was 7% of the original tumor. In contrast, the untreated tumors were 146-fold larger than the remaining treated tumors.

In addition, work was conducted on six pancreatic cancer cell lines and five patient-derived xenograft ex vivo tumor models. Significant reduction of cells and cell growth was observed across all cell lines and models with IC50 values in the 45-270 nM range. Data from this work are expected to be published and will also be incorporated into Lantern's RADR AI platform. Lantern expects to advance the collaboration with Fox Chase Cancer Center.

CRISPR silencing of PTGR1 resulted in no response by pancreatic cancer cells to the drug. The knockout data confirmed PTGR1 as a driver of cytotoxicity in LP-184, validating RADR's predictions. PTGR1-expressing pancreatic cancer cells had heightened response to LP-184 with IC50 values in sub-100nM range. PTGR1 expression could qualify patients for treatment, in the clinic and beyond, with LP-184.

Dr. Astsaturov, who leads these studies at the Fox Chase Cancer Center, further characterized the LP-184-sensitive tumors. Tumors that had nucleotide excision repair (NER) and homologous recombination (HR) pathway deficiencies had two-fold increased sensitivity to LP-184, representing additional biomarkers that could identify patient responders, and other cancers with similar properties. Potential other mutations and deficient genes could include BRCA1, BRCA2, ATM, ATR, ERCC2, ERCC3, ERCC4, ERCC5, ERCC6, FANCD2, RAD51 and PALB2.

Analysis of RADR's data indicates that 35-40% of pancreatic cancer transcriptomes have elevated PTGR1 expression and may be appropriate for treatment with LP-184. Lantern is in discussions with Dr. Astsaturov, and other key opinion leaders in pancreatic cancer, regarding the first in-human clinical studies of LP-184.

Collaboration with Actuate Therapeutics

On May 3, 2021, Lantern announced that it had entered into a research and development collaboration with Actuate Therapeutics. In the collaboration, Lantern will apply its RADR Artificial Intelligence (AI) platform to the development of 9-ING-41, a glycogen synthase kinase-3β (GSK-3β) inhibitor targeting cancer and fibrotic diseases. 9-ING-41 is participating in multiple Phase II clinical trials targeting myelofibrosis and pancreatic cancer. Application of RADR is expected to speed the development of Actuate's lead candidate by identifying important biomarkers relevant to matching the right patient with the right drug. Using a biomarker for patient stratification can dramatically improve the likelihood of regulatory approval.³  In the collaboration, Lantern will receive shares of Actuate stock based on meeting development milestones and may receive additional equity if results from the collaboration are utilized in future development efforts.

Actuate Therapeutics is a private biopharmaceutical company founded in 2015, with activities centered on agents that target GSK-3β, and based on intellectual capital developed in the laboratories of Dr. Alan Kozikowski at the University of Illinois-Chicago and the Center for Developmental Therapeutics at Northwestern University.

Publication of Preclinical Results in Oncotarget

Lantern announced on April 26, 2021 that it had published a manuscript entitled "The acylfulvene alkylating agent, LP-184, retains nanomolar potency in non-small cell lung cancer carrying otherwise therapy-refractory mutations." The article appeared in the journal Oncotarget, featuring preclinical evidence supporting the development of LP-184 in non-small cell lung cancers (NSCLCs) for patients ineligible for targeted therapy. The results demonstrated nanomolar potency in in vitro, drug-resistant lung cancer models of primary and metastatic NSCLC. The published results also demonstrated that LP-184 had higher in vitro potency than commonly prescribed platin and taxane-based chemotherapies. LP-184 maintained efficacy independent of KRAS or KEAP1 oncogenes and TP53 and STK11 tumor suppressor genes that commonly drive resistance. Furthermore, LP-184 showed tumor growth inhibition in a mouse xenograft model of KRAS and KEAP1 lung cancer, which occurs in about 17% of lung adenocarcinoma cases. Analysis of TCGA⁴ data for 517 lung adenocarcinoma patients showed that 35% had elevated PTGR1 and 40% of those had statistically significant co-occurrence of KEAP1 mutations.

Publication of LP-184 Article in BMC Bioinformatics⁵

BMC Bioinformatics published an article on machine learning to predict response in cell lines and xenografts in March 2021. The study employed Lantern's RADR platform to identify biomarkers sensitive to LP-184. NCI-60 cell lines were used to derive the gene signatures and characterize sensitivity to the agent.

The model began with 20,000 gene expression values, systematically narrowing the number down to a 16-gene signature that was able to predict LP-184 IC50 values with 86% accuracy. Machine learning has demonstrated an ability to identify responses at the preclinical stage, which allows for better positioning with regard to patient and indication as well as improving ultimate clinical success.

PTGR1 (Prostaglandin reductase 1) was found to be a necessary but insufficient requirement for LP-184 sensitivity and emerged as the top weighted gene in this study. The presence of PTGR1 is a determinant for the cytotoxicity of acylfulvenes and in this study represented almost half of the total variable importance in the identified markers. The identification of the importance of this gene will help clarify the mechanism of action of LP-184 and identify patients who may respond well to drugs such as Lantern's agent.

Phase II Clinical Trial For LP-300

Lantern expects to launch a Phase II trial for LP-300 in never-smoker non-small cell lung cancer (NSCLC) patients in the third quarter of 2021. Problems related to equipment and materials at the manufacturer led to a delay in delivering product to clinical sites for LP-300. However, the issues have been resolved and product is expected to be available later in the third quarter followed by patient enrollment in Q4. Since our last update, new sites have been selected for the upcoming trial and a meeting took place with the FDA.

The company is interacting with the FDA and other regulatory bodies to refine the design of the trial and is seeking approval from investigators and institutional review boards. Lantern expects to use a combination treatment that includes doublet chemotherapy. The trial is expected to be a two-year, multi-center study enrolling 80 patients equally split between two arms of standard of care chemotherapy and standard of care chemotherapy + LP-300. Subjects enrolled in the study will have been diagnosed with adenocarcinoma NSCLC with little to no history of smoking and no prior chemotherapy. Beyond assessing the response to treatment in the target population, the trial will also serve to assess the efficacy of LP-300 in combination with chemotherapy on non-smokers, compare efficacy of LP-300 in non-smoking males and non-smoking females, further investigate safety, toxicity and tolerability and investigate biomarkers. Endpoints are expected to be overall survival, progression-free survival, objective response rate, identification of gene signatures correlated with potential LP-300 efficacy from matched tumor tissue analysis and protection against chemotherapy-induced nephrotoxicity.

Summary

With the reacquisition of LP-100, Lantern expands its in-house portfolio further and expands the opportunity to identify potential in candidates beyond the primary indication. Lantern reports second quarter results with a healthy cash position and sufficient runway after its recent $69 million raise. With such a position, Lantern has support to take steps to advance its pipeline, such as completing clinical trials in both GBM and ATRT, and Phase I trials in its ADC program.

Management anticipates 2021 to be a year of transformational growth and progress with six programs in the pipeline and a large war chest of cash to fund preclinical and clinical work for years to come. Later this year we anticipate the start of the Phase II LP-300 study in NSCLC among non-smokers, IND-enabling studies of LP-184 in multiple solid tumors, continued advancement of the ADC program and continued investment in RADR's growing dataset. Management also expects to disclose additional PTGR1 over-expressing tumors as indications for LP-184. LP-284 has emerged as a contender in hematologic cancers based on an evaluation by RADR and in-vitro studies.

For added detail on Lantern's proprietary AI development platform, RADR, and for background on indications and Lantern's clinical candidates, please refer to further discussion in our initiation.

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1. Metastatic castration resistant prostate cancer (mCRPC)

2. Source: Lantern Pharma Second Quarter Earnings Call Presentation, July 2021.

3. Parker, J.L., Kuzulugil, S.S., Pereverzev, K., Mac, S., Lopes, G., Shah, Z., Weerasinghe, A., Rubinger, D., Falconi, A., Bener, A., Caglayan, B., Tangri, R. and Mitsakakis, N. (2021), Does biomarker use in oncology improve clinical trial failure risk? A large‐scale analysis. Cancer Med, 10: 1955-1963. https://doi.org/10.1002/cam4.3732

4. The Cancer Genome Atlas

5. Kathad, U. et al. A machine learning-based gene signature of response to the novel alkylating agent LP-184 distinguishes its potential tumor indications. BMC Bioinformatics volume 22, Article number: 102 (2021). March 2021.

6. Source: Lantern Pharma Second Quarter Earnings Call Presentation, July 2021.