Despite uncertainties in the market created by the COVID-19 pandemic, a local biotech company is looking to go public.
Dallas-based Lantern Pharma, which leverages AI and machine learning to develop cancer drugs, filed an S-1 with the SEC on Thursday. It is seeking up to $28.8 million in its initial offering. According to Reuters, the offering amount listed is an estimate solely for calculating the SEC registration fee.
Lantern was launched in 2013 and has raised about $7 million in venture capital funding. It received its seed funding from Dallas-based health care focused accelerator and investor Health Wildcatters, and has since been backed by GPG Ventures, Bios Partners and Green Park & Golf Ventures. Lantern uses its AI platform RADR to identify potential oncological drug therapies that have previously failed but show future potential with additional tweaks.
“Our mission is to bring the right cancer drugs to the right patients by transforming the drug development process through the use of artificial intelligence and data-driven development approaches,” Lantern wrote in its filing.
Lantern is seeking to trade on the Nasdaq under the moniker LTRN and is being underwritten by ThinkEquity and Dougherty & Co. LLC, with the aim of delivering shares later this year.
According to the company’s S-1, its growth strategy includes advancing its algorithms, expanding its pipeline of drug candidates and pursuing future collaborations and partnerships. Lantern has a portfolio of more than 108 patents, including a licensing partnership with Oncology Ventures to potentially bring the prostate cancer treatment drug LP-100 to market.
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“We expect our financial condition and operating results to continue to fluctuate from quarter to quarter and year to year due to a variety of factors, many of which are beyond our control. We will need to eventually transition from a company with a research and development focus to a company capable of undertaking commercial activities,” Lantern wrote.
Though the company is looking for new funding, the coronavirus pandemic is expected to create some challenges for Lantern’s IPO. The Dallas Business Journal reports that the company posted a loss of more than $2 million last year and is pre-revenue. In the S-1, Lantern, as with many other S-1 filings, notes that it has a limited operating history and has not generated any revenues other than from research grants. It also adds that it expects to continue to incur losses in the future and may never reach or maintain profitability.
Other risk factors listed in Lantern’s filing include issues related to drug development in general. The company notes that some of its research may not produce a viable drug and that issues related to regulatory approval could halt or delay a drug’s introduction to the market.
“The significant declines in the Dow Industrial Average and other domestic and international stock indices at the end of February and during March and April 2020 were largely attributed to the adverse effects the pandemic has had on the world’s economies,” Lantern said in its filing. “We are still assessing our business plans and the impact COVID-19 may have on our ability to advance the development of our drug candidates or to raise financing to support the development of our drug candidates.”
Editor's note: The original version of this article stated that "Lantern posted $1.07 billion in gross revenue last fiscal year and has issued more than $1 billion in nonconvertible debt over the last three years." That statement was incorrect and has been removed.
