LTRN: Pediatric Rare Cancer in Focus

By John Vandermosten, CFA

NASDAQ:LTRN

READ THE FULL LTRN RESEARCH REPORT

Lantern Pharma, Inc (NASDAQ:LTRN) reported third quarter 2024 financial results and achievements in a November 7^th, 2024 press release. Since our previous report, the company has been granted three additional rare pediatric disease designations for LP-184, and Fast Track designation for glioblastoma. It has also announced inaugural members for Starlight Therapeutics’ Scientific Advisory Board and participated in several conferences and presentations. 

On November 7^th, 2024, Lantern announced third quarter 2024 financial and operational results, filed its Form 10-Q with the SEC and hosted a video webcast to review accomplishments. In the financial sphere, Lantern generated no revenues in 3Q:24 and incurred operating expense of $5.2 million, producing a net loss of ($4.5) million or ($0.42) per share. 

For the quarter ending September 30^th, 2024 and versus the same comparable prior year period:

• Research & development expenses totaled $3.7 million, rising 68% from $2.2 million as spending on the LP-184 and, to a lesser extent, on the LP-300 program contributed to the increase. There were also spending jumps for LP-284, the RADR platform and other costs which were partially offset by lower spending on the LP-100 and ADC program. In terms of spending categories, Lantern experienced increases in research study material costs, higher salary and benefits and expanded consulting expenses;
• General & administrative expenses were $1.5 million, rising 11% from $1.3 million. Higher professional and patent fees combined with a rise in business development costs were partially offset by lower travel costs and salaries and benefits;
• Interest income was $191,000 versus $246,000 while other income rose to $483,000 from $116,000. Other income rose due to a fair value adjustment related to appreciation of securities ownership and foreign currency remeasurement gain. These were partially offset by a decrease in research and development tax incentives related to the Australian subsidiary;
• Net loss was ($4.5) million, or ($0.42) per share, compared to ($3.2) million, or ($0.29) per share.

As of September 30^th, cash and marketable securities on the balance sheet totaled $28.1 million, compared to year end 2023 cash balances of $41.3 million. Cash burn for 3Q:24 was ($5.6) million versus ($3.6) million in the prior year comparable quarter. Year to date, cash burn was ($13.9) million vs. ($11.0) million for the first nine months of 2023. To date, cash from financing of $67,000 has been solely generated from warrant exercises. Management anticipates sufficient cash to support operations until late 2025. 

FDA Actions

Lantern gained additional rare pediatric disease designations (RPDD) for LP-184 in malignant rhabdoid tumors, rhabdomyosarcoma and hepatoblastoma as detailed in a September 2024 press release. This builds on the RPDD that was announced back in January of 2022 for Atypical Teratoid Rhabdoid Tumors (ATRT). As we show in the following exhibit, these indications comprise very small numbers in the United States. Since these are rare diseases, predominantly occurring in a pediatric population, the sponsor is eligible for a priority review voucher. To refine the number of patients suffering from these cancers, we reviewed several sources^{[1],[2],[3],[4],[5]} and consulted with Lantern’s Chief Scientific Officer, Dr. Bhatia and Vice President of Clinical Development, Reggie Ewesuedo to refine our numbers. 

The very low total patient count is less than 100 cases per year in each of these rare pediatric cancers. This limited number of potential subjects requires these patients to be grouped together based on similar characteristics of their cancer. The FDA wants to see safety and clinical activity and realizes that it would be near impossible to run a randomized controlled trial for these groups, which allows for surrogate endpoints to be used and grouping of patients. 

The general pathway forward is to first run a study that identifies the optimal pediatric dosage of LP-184. If these studies show strong evidence of clinical activity, then a Phase II pivotal trial could be designed that would use a basket approach for all of these patients with these tumors. Biomarkers may also be used to identify these patients. Since the population is so small and it is a serious cancer in a pediatric population, the FDA is interested in response rates rather than a randomized control trial showing statistically significant efficacy. The primary goal in this population is to understand the safety and make the drug available to the pediatric patients. Following an assumed accelerated approval by the FDA, the sponsor would then be required to run a post-approval Phase IV confirmatory trial while the drug is marketed. 

To populate the trial, the sponsor would be best served to work with a large pediatric cancer group that could capture a broader swath of patients such as the Children’s Oncology Group and Pediatric Oncology Experimental Therapeutics Investigators’ Consortium (POETIC). Lantern is interacting with each of these two groups. 

Priority Review Vouchers (PRVs) can be awarded if the indications are approved. In recent years, these vouchers have sold in the secondary markets for around $100 million. The vouchers provide the bearer with a priority treatment for a drug application which can reduce the FDA review time by four months. They can be sold to other companies and are valid for any future drug application. 

SMARCB1

The common thread for all of these rhabdoid tumors[6] is the SMARCB1 gene. The SMARCB1 gene is a crucial tumor suppressor gene located on chromosome 22 that aids in the regulation of cell growth and development. It produces a protein that is part of the SWI/SNF chromatin remodeling complex, which helps control how DNA is packaged and accessed within cells, thereby influencing which genes are active or inactive. A normally functioning SMARCB1 gene helps prevent cells from growing and dividing too rapidly. Loss of SMARCB1 function, typically through genetic mutations, is strongly associated with the development of several rare cancers, most notably rhabdoid tumors in young children. These mutations can either be inherited (germline mutations) or occur spontaneously in specific cells (somatic mutations), and the complete loss of SMARCB1 function is particularly characteristic of malignant rhabdoid tumors. 

Publications 

In August 2024, Lantern research was published in PLOS ONE in an article entitled Expanding the repertoire of Antibody Drug Conjugate (ADC) targets with improved tumor selectivity and range of potent payloads through in-silico analysis. The study summarized the work done where the RADR platform was employed to identify ADC targets with improved tumor selectivity. The results identified a diverse range of both targets and payloads that can serve to facilitate multiple choices for precise ADC targeting.

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[1] Heck, J.E. et al. Epidemiology of Rhabdoid Tumors of Early Childhood. Pediatric Blood Cancer, January 2014.

[2] OrphaNet Rare Disease database, orpha.net.

[3] Medscape, Malignant Rhabdoid Tumor. James Geller, MD. September 27, 2021.

[4] American Cancer Society

[5] Kahla, J.A. et al. Incidence and 5-year survival of children and adolescents with hepatoblastoma in the United States. Pediatric Blood Cancer, October 2022.

[6] A rhabdoid tumor is a rare and aggressive type of cancer that primarily affects infants and young children, typically under the age of two. These tumors are characterized by their unique “rhabdoid” cells, which under a microscope resemble developing muscle cells. The most common types are atypical teratoid/rhabdoid tumors (AT/RT) found in the brain and spinal cord, and malignant rhabdoid tumors (MRT) that typically develop in the kidneys, though they can occur in other soft tissues throughout the body. Nearly all rhabdoid tumors are caused by the loss of function in a tumor suppressor gene called SMARCB1, which normally helps regulate cell growth and division. Due to their fast-growing nature and tendency to spread quickly, these tumors require intensive treatment, usually involving a combination of surgery, chemotherapy, and sometimes radiation therapy.

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