Lantern Pharma Raises $4.4 Million in Registered Direct Offering, Plans to Spin Out AI Platform

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 offering involves the sale of 2,135,923 shares of common stock or pre-funded warrants in lieu thereof at $2.06 per share. In addition, the company announced a concurrent private placement of unregistered warrants and plans to create an independent business entity composed of its AI platform, withZeta.ai, and related technologies and personnel.

The news matters because it reflects Lantern Pharma's strategic pivot to not only advance its clinical pipeline but also to monetize its proprietary AI technology. By spinning out withZeta.ai into an independent entity, Lantern aims to unlock value from its AI platform, which is already commercially available as a subscription-based research platform for the global biomedical and drug development community. This move could provide a new revenue stream for the company, separate from its drug development efforts.

Lantern Pharma's clinical pipeline includes LP-184 (acylfulvene), LP-284 (a TC-NER targeting compound in hematologic and solid tumors), and LP-300 (cisplatin/ethacraplatin analog), which is being evaluated in the HARMONIC Phase 2 trial in 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's AI platform, withZeta.ai, is a multi-agentic AI co-scientist platform that leverages machine learning and Lantern's proprietary RADR platform to transform the development of cancer therapies. The decision to create an independent entity around this platform suggests that Lantern sees significant potential in offering its AI capabilities to the broader biomedical community, beyond its own drug development programs.

For investors, the offering and spinoff plans indicate a strategic focus on capitalizing on the growing demand for AI-driven drug discovery tools. Lantern Pharma operates an AI Center of Excellence in Bengaluru, India, and is headquartered in Dallas, Texas. The company's ability to generate revenue from its AI platform could diversify its financial base and reduce reliance on clinical trial outcomes.

For more details on the offering, the full press release is available at https://ibn.fm/6Dy4I. Updates on Lantern Pharma can be found in the company’s newsroom at https://ibn.fm/LTRN.