Lantern Pharma (NASDAQ: LTRN), a clinical-stage AI-driven precision oncology company, has entered into a definitive agreement for a registered direct offering expected to generate approximately $4.4 million in gross proceeds. The company will issue 2,135,923 shares of common stock, or pre-funded warrants in lieu thereof, at a price of $2.06 per share. Concurrently, Lantern announced a private placement of unregistered warrants and revealed plans to create an independent business entity composed of its AI platform, withZeta.ai, and related technologies and personnel.
The move comes as Lantern Pharma seeks to capitalize on its proprietary AI capabilities beyond internal drug development. withZeta.ai, described as a multi-agentic AI co-scientist platform, is already commercially available as a subscription-based research platform for the global biomedical and drug development community, representing a new revenue stream for the company. By spinning out this platform into a separate entity, Lantern aims to unlock value for shareholders and potentially attract partnerships or investment focused on the AI technology.
Lantern's clinical pipeline includes several candidates: LP-184 (acylfulvene), LP-284 (a TC-NER targeting compound for hematologic and solid tumors), and LP-300 (a cisplatin/ethacraplatin analog) being evaluated in the HARMONIC Phase 2 trial for never-smoker patients with relapsed advanced lung adenocarcinoma following TKI treatment. LP-184 is also being developed for pediatric CNS cancers through Starlight Therapeutics, Lantern's wholly owned CNS-focused subsidiary.
The company operates an AI Center of Excellence in Bengaluru, India, and is headquartered in Dallas, Texas. The registered direct offering is expected to provide additional capital to support ongoing clinical trials and the development of the AI platform spin-out. Investors can find the full press release here.
This announcement highlights a growing trend among biotech firms to monetize their AI platforms separately from drug development pipelines. For Lantern, the spin-out could lead to increased valuation transparency and new revenue opportunities, while the offering provides near-term funding. The success of this strategy will depend on the platform's adoption by the biomedical community and the progression of Lantern's clinical assets.
