Lantern Pharma Inc. (LTRN) Q2 2021 Earnings Report, Transcript and Summary

Good afternoon and welcome to Lantern Pharma’s Second Quarter 2021 Conference Call. As a reminder, this call is being recorded and all participants are in listen-only mode. We will open the call for questions-and-answers after the presentation. I would now like to introduce your host for today's conference, Joslyn [indiscernible], Investor Relations at Lantern Pharma. Joslyn, please go ahead.

Thank you, Gretchen, and thank you for joining us for Lantern Pharma’s second quarter 2021 conference call. On the call today are Panna Sharma, Lantern's President and CEO; David Margrave, Lantern’s CFO; and Dr. Kishor Bhatia, Lantern's Chief Scientific Officer. A press release was issued today with our second quarter financial results that we will be discussing in our call today. Following the Safe Harbor statement, Panna will provide an overview of business highlights, after which David will overview our quarterly financial results and Dr. Bhatia will provide an updated on our R&D efforts. Panna will then offer concluding comments, after which we will open this call to questions. Please also note that we have provided a link on the Investor Relations website for additional slides that we may reference in today's call. I would also like to remind everyone that remarks about future expectations, plans, and prospects constitute forward-looking statements for purposes of Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Lantern Pharma cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those anticipated. A number of factors could cause our actual results to differ materially from those indicated by forward-looking statements, such as the impact of the COVID-19 pandemic, the results of our clinical trials, and the impact of competition. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements can be found in the risk factors section in our Annual Report on Form 10-K which is dated March 10th, 2021 on file with the SEC. Forward-looking statements made on this conference call speak only as of today's Thursday July, 29th, 2021, and Lantern Pharma does not intend to update any of those forward-looking statements to reflect events or circumstances that occur after today. A webcast replay of the conference call will be available on Lantern Pharma’s website. And with that, I’d like to turn the call over to Panna Sharma, President and CEO of Lantern Pharma. Panna, please go ahead.

Thank you, Joslyn and good afternoon to everyone on the call today. Thank you for joining us for our second quarter 2021 conference call. For those of you that are new to our story, Lantern Pharma is an oncology biopharma company that leverages the power of our internally developed artificial intelligence and machine learning platform called RADR to both rescue and develop oncology-focused therapies. We believe that we are transforming the development of oncology drugs by changing the pace, the cost, and the risk of drug development. We're one of the few pure play AI-based biopharma companies with multiple clinical stage programs as well as a rapidly growing proprietary platform for accelerating our understanding, modeling, and prediction of tumor response to cancer therapies, namely the drug candidates in our portfolio and those in classes that show synergy of their molecules, and also those of our partners. We reached several milestones in the second quarter. In April, we announced that our RADR AI platform exceeded 4.6 billion data points. And now we're enhancing our data lake with data from a wide range of blood cancers. We're really excited about the rate of growth that we're undergoing at this time period. Additionally, there's significant new functionality that we're building into our platform and this is because of the massive growth rate of over 4x since the beginning of the year, and now we're approaching 5x. As our growth rate has expanded, we now expect to achieve over 8 billion data points during the next campaign, which is scheduled to begin later this quarter. In terms of our portfolio, we've made a major announcement this past week, we announced a major milestone in our existing Phase 2 clinical program in metastatic castration resistant prostate cancer by reacquiring all global development and commercialization rights in an agreement with our former out-licensing partner. That program was previously licensed to Allarity Therapeutics, a public Danish biotech company and this transaction ensures that the appropriate resources and focus are applied to the future of the Irofulven or LP-100 program. We reached other very important progress points during the second quarter, such as our progress in pancreatic cancer, which Dr. Kishore Bhatia, our Chief Scientific Officer will expand on later today. And as you know pancreatic cancer is an orphan disease, has a survival rate of 7.9% and with nearly 490,000 cases globally and 62,000, just here in North America. It's a significant -- there's a significant need for improved therapies. We believe that nearly 35% of these pancreatic cancer cases are ideal candidates for LP-184 drug candidate, which is an area of high patient need. There's roughly over 1 billion in annual therapy sales, this represents in North America alone. Also, very importantly, for LP-184, we made new advances in validating the application of this drug candidate to bladder cancers and potentially, other cancers that have DNA damage repair mutations. We will be sharing data in these indications as we prepare for conferences, publications, and manuscripts in the very near future. We also made progress and initiating clinical trials site selection for LP-300 in an upcoming Phase 2 trial for non-small cell lung cancer in never smokers. This is an important program for never smokers were there are currently no approved therapies. During the quarter, we did experience delays in the program due to equipment and materials issues with our primary manufacturing partner. But we now expect the final -- have final drug product later this quarter. This product will then be ready for subsequent shipment to sites that are selected for our clinical trial. Selecting patients and sites that are aligned with the inclusion criteria for LP-300 will be a critical component of this Phase 2 clinical trial, meaning we need to select patients that are not only never smokers, but that are chemo-naive, have no prior history of chemo treatment, and have become non-responsive or have relapsed from prior TKI therapies. We will be working closely with leading sites to provide awareness and education of LP-300 and identifying potential patients that may benefit from this therapy. The current Phase 2 trial is focused on having two arms for a total of 80 patients; one arm of the current standard-of-care, which is a chemo doublet, and one arm with LP-300 plus the standard-of-care in a combination regimen. During the quarter, we also advanced our ADC program by further testing and refining our conjugation processes and testing various approaches to developing a highly targeted and potent new molecule for certain solid cancers. Based on the initial work that we're doing, we believe that the same approach can also be applied to certain hematologic cancers. This is again an early development, but we require additional validation, which we expect to accomplish during this quarter and Q4. We also do expect to finalize our conjugation process for this molecule and also its design this quarter and we'll plan on announcing details of the program and -- as well as its design and targets later this year. Also, during the second quarter, we announced a collaboration with Actuate Therapeutics, where we will be leveraging our AI engine. And our AI engine will help them advance key aspects of their drug candidate 9-ING-41. We discussed this briefly during the first quarter conference call, but as a quick reminder, the 9-ING-41 drug candidate is a best-in-class GSK-3β inhibitor, which is an active development and multiple Phase 2 clinical trials, including for pancreatic cancer. This type of collaboration can potentially yield meaningful equity-based milestones for Lantern and our shareholders. We're actively in discussions with select other biopharma companies for similar collaboration, where our platform can help derisk development decisions and advance meaningful therapeutic options for cancer patients. Base [ph] patent and intellectual property is a major component of developing significant moats around our business. Our drug candidates, how we apply our drug candidates, our AI platform, and our methods are all areas that we are focused on patenting. During the second quarter, we filed 11 patents; two of which are focused on the RADR platform and the remainder around our drug candidates and their application in specific cancers or in combination with other drugs and drug classes. We expect to continue our aggressive development and filing of intellectual property, especially, since our data-driven approach is actually accelerating the creation of unique insights and also generating precision correlations of response or potential response, and also other findings. We then take these findings and validate and refine them in the lab. This iterative, rapid approach is generating patents that we feel will be quite valuable in the future. We're particularly excited by the fact that we're entering into areas where there's a large clinical need for improved therapies, especially in certain rare and ultra-rare cancers. This may enable faster development and the potential for priority review vouchers with certain assets and indications such as LP-184 in Atypical Teratoid Rhabdoid tumors and ultra-rare brain cancer, or LP-284, in certain ultra -- again, ultra-rare blood cancers, where we're finding potential for meaningful response. It's an important point to note and more -- very important will help us develop transformative value, not just for our shareholders, but more importantly, for cancer patients that need improved and personalized cancer therapy options, especially in many cancers where there are very few or no therapy options. At Lantern we believe passionately about changing the pace at which oncology drugs are brought to market and reducing the cost of cancer therapy. We believe the best way to do this is to use AI and machine learning, which has already dramatically altered the product development cycle and cost curves of other industries and now we can now witness how it will transform, if not smash, the product development cycles in cancer drug development. I will now ask David Margrave, our CFO to provide an update on our financials, our transaction regarding LP-100 or Irofulven, and other financial details, David?

Thank you, Panna and good afternoon, everybody. I will share some of the financial highlights from second quarter of 2021 into June 30 and also discuss some of the details around the transaction to reacquire the global development and commercial rights to LP-100 that we announced earlier this week. We had a net loss of approximately $2.3 million, or $0.21 per share for the quarter ended June 30, 2021 compared to a net loss of approximately $833,000 or $0.31 per share for the quarter ended June 30, 2020. Research and development expenses were approximately $1.2 million in the second quarter of 2021 compared to $157,000 for the second quarter of 2020. The increase was primarily attributable to increases in research studies, including manufacturing expenses, expansion of our research team, and non-cash research and development related stock option compensation expense. We expect we will continue to increase our R&D spend as we advance and grow our pipeline. We've further advanced our portfolio and recently initiated the ADC program, which is now moving towards additional validation and research studied. Additionally, we have begun site selection for LP-300, our planned Phase 2 clinical trial in never smokers with non-small cell lung cancer. As the trial sites are selected and opened and enrollment advances, we expect R&D expenses to increase for the third and fourth quarters of 2021. General and administrative expenses were $1.3 million in the second quarter of 2021 compared to approximately $676,000 for the second quarter of 2020. The increase was primarily attributable to an increase in expenses associated with operating as a public company, along with increases in non-cash general and administrative related stock option compensation expense. Many of you are excited about the LP-100 program being required by Lantern so that we can move forward with the drug candidate and provide clarity to the market as to the future of this program. This program, as Panna of described earlier, is in a Phase 2 trial, where we will now assess future enrollment and other improvement opportunities To reacquire the global rights to the compound in the existing Phase 2 trial, an existing stock of drug supply along with an exclusive license to the DRP technology named LP-100 as a companion diagnostic in mCRPC. We invested an upfront amount of $1 million. An additional $1 million was placed in escrow to be paid over the next 24 months as milestones are met for drug development and advancing clinical trials. Additionally, we may pay up to an additional $16 million based on regulatory filings and eventual future market and approval for the drug in the U.S. and EU. Our team continues to be very productive, especially as we migrate to a hybrid work policy. We currently have 15 full-time employees, we're primarily focused on leading and advancing our drug development, biology and data science efforts. As of June 30, 2021, we had 11,184,039 shares of common stock outstanding. This includes 4,928,571 shares that were issued in our January 2021 follow on offerings. At June 30, 2021, we also had warrants outstanding to purchase 302,036 shares, and outstanding options to purchase 823,826 shares. These warrants and options, combined with outstanding shares of common stock, give us a total fully diluted shares outstanding of 12,309,901 shares as of June 30, 2021. Our cash position, inclusive of cash equivalents and marketable securities at June 30, 2021 was $79.6 million. This balance is expected to carry us into 2025. We believe our solid financial position will fuel continued growth and evolution of our RADR AI platform, accelerate the development of our portfolio of targeted oncology drug candidate, and allow us to introduce additional targeted product opportunities in a capital efficient manner. I'll now hand the call back to Panna. Panna?

David, thank you very much. Thank you for that overview. I would like now to invite Dr. Kishor Bhatia, our Chief Scientific Officer, and one of our esteemed colleagues to provide some detail on the growing data and excitement on our early stage drug development programs. Kishor, please go ahead.

Thank you Panna. In the next five minutes or so, I will take you through some more details of LP-184 and pancreatic cancers, as well as LP-184 in glioblastomas and ATRT, and in addition, I'll introduce our newest molecule, LP-284. As you all may know, for pancreatic cancers, the current standard-of-care regimen is what is often known as FOLFIRINOX, which consists of Fluorouracil, Irinotecan, Oxaliplatin. However, less than 25% of patients with pancreatic cancer survive the first year of diagnosis and less than 8% who survived beyond five years. So, obviously, there's a great need to improve therapy. The activity of our drug, LP-184 in pancreatic cancers is therefore very encouraging, not only for this, but for additional reasons I will elaborate upon. One particularly aggressive form of pancreatic cancers, sometimes called the unstable subtype, frequently harbors mutations in DNA damage response genes. And the proportion is quite significant, over 20% of pancreatic cancers show mutations in sub genes. Among them APM is mutated in up to 5% of sporadic pancreatic cancers. Using PDX models, we validated LP-184 efficacy in pancreatic cancers, with mutations in ATM, BRCA2, and other DNA damage response genes such as [indiscernible] and ERCC. Mutated ATM is particularly interesting because, in addition, it imparts homologous recombination deficiency character, but also even when it is heterozygous, it can cause metastatic aggressive cancers to undergo what is often known as epithelial mesenchymal transition, which negatively impacts prognosis. Although such aggressiveness goes along side with enhanced deficiency of DNA repair, the vulnerability it causes can be further explored -- exploited by LP-184 because our in-silico correlations using the NCI cell [ph] minor, strongly suggest that LP-184 molecule has enhanced efficacy in those tumors that have such EMT pathways. Of course, more recently, inhibitors of PARP have shown clinical efficacy in homologous recombination defective pancreatic cancers, but it's important to note that such treatment often results in resistance to PARP within the first year of treatment. Along with the PDX models, which are deficient in homologous recombination pathways, we have also conducted original experiments that included downregulation of ERCC4, a nucleotide excision repair gene using CRISPR-based knockout strategies. The result was increased sensitivity of such tumors that are NER deficient by a factor of twofold. What this strongly supports is the notion that LP-184 is synthetically lethal in not only homologous recombination deficient, but also in nucleotide excision repair deficient tumors. We are particularly excited by this observation of synthetic lethality, as it opens the applicability of LP-184 in other NER-deficient tumors. Important example would be bladder cancers, where over 30% of tumors have mutations that disrupt NER repair. It also opens other doors, the possibilities of using LP-184 in combination with molecules that disrupt DNA damage repair. As Panna highlighted earlier, we have filed IT [ph] in areas where we have seen the potential for combination approaches with our drug candidates. So, in terms of our future directions, we are focusing on developing combination approaches with PARP inhibitors and other DNA damaged repair protein inhibitors, including those that would inhibit the ERCC proteins. This combination approach will increase the vulnerability of pancreatic cancers to LP-184 and broaden the genomic subtypes of pancreatic cancers that will respond to LP-184. But in addition, it also provides an avenue to overcome or retard resistance to existing therapy. Now, since the key enzyme that drives the sensitivity of tumors to LP-184, which is PTGR1 is regulated by stress mechanisms. We are exploring the hypothesis that other modalities of treatments such as radiation will increase PTGR1 expression, and therefore, rendered tumors following radiation to enhanced tumoricidal activity of LP-184. Such a possibility will provide another dimension to LP-184 for treatment of local lesions in combination with radiation. This is particularly of interest, since over half of solid tumors are initially treated with radiation and the localized upregulation of PTGR1 provides a vulnerability window for the tumors that will hypothetically further protect against toxicities to non-tumor cells. I'm going to now shift the themes to research studies in CNS tumors. We have convincing data for efficiency and efficacy of LP-184, in glioblastomas and another rare CNS tumor called ATRT. We have obtained this efficacy data in in-vivo models using both subcutaneous and for glioblastoma subcutaneous as well as orthotopic models. Interestingly, both these indications were initially suggested by in-silico gene correlations, using the NCSL miner and our RADR platform. Low or absent expression of smarD1, which is an obligate genomic lesion of ATRT created with a significant correlation of negative 0.4 with efficacy of LP-184. We believe based upon other published data that loss of this chromatin modifying protein imparts a DNA repair deficiency phenotype to cells and thus makes tumors such as ATRT vulnerable to LP-184. In some ways, therefore, the selectivity is similar to what we are seeing in pancreatic cancers. Similarly, in glioblastoma, our RADR data predicts specific subsets of glioblastomas such as those with active EGFR pathways to be highly sensitive to LP-184. Another very exciting observation for us from our in-silico analysis is the prediction that expression of MGMT correlates with increased cytotoxicity of LP-184. The reason this is particularly relevant is because expression of MGMT imparts resistance to the standard-of-care temozolomide. Over 50% of glioblastoma, therefore, do not respond to temozolomide. We believe therefore, LP-184 has the potential to be an alternative, both as monotherapy and in combination with temozolomide for glioblastomas, Our future preclinical collaborations with Johns Hopkins are particularly directed to provide additional evidence for such applications in glioblastoma, -- particularly in those glioblastomas that have reversed their silence of expression of MGMT. We expect to have more news of this in the coming weeks. Early preclinical screening of LP-184 in a wide variety of tumors, conclusively highlighted selectivity of 184 in solid tumors, but also lack of activity of 184 in hematological cancers. Interestingly, the positive NN tumor of this compound is what we have now built for our newest drug candidate, which is named LP-184, which appears to be quite active in several hematologic cancers. Our working hypothesis is that the molecule 284 because of its scurrility is independent of PTGR1, but dependent upon other oxidoreductases. 284, which is a new molecule for hematological cancers, like 184, severely damages tumor DNA and the damage inflict shutdown of RNA synthesis. This shutdown persists longer, particularly in blood cancers with slow DNA repair efficiency. Many hematologic cancers, including those with translocations, which are quite common in hematologic malignancies, involving [indiscernible] have evidence of low expression of DNA repair genes. The prolonged shutdown of transcription starts such tumors have short lived proteins that they are addicted to and cannot live without. We have also obtained evidence that the efficacy of LP-284 can be broadened to hematologic cancers by combination with drugs that degrade repair proteins, such as ERCC3. We are now actively engaged in developing collaborations to further our development of LP-284 in lipoid malignancies, including those with key unmet needs, such as double-hit lymphoma, and relapsed and resistant mantle cell lymphoma, as well as CML, which has shown resistance to kinase inhibitors. We expect to announce additional details on these findings and the indications later this year. With that, Panna, I turn this call back to you,

Kishor, thank you. Before we open up the call the questions, a few closing comments on both our business model and our focus for the near future. As you can tell the data is helping us move forward rapidly. We'll continue advancing our pipeline of drug candidates. Using this genomically-targeted data driven methodology, we believe this is the future of not only drug development, but specifically, oncology drug development, where there's an avalanche of data available to help guide discovery, development, and patient stratification. We expect this to strategically grow RADR to become among the world's largest AI platforms for oncology drug discovery and development. Additionally, we will begin actively exploring additional collaborations and partnerships with larger biotech and pharma companies. We're confident that growth of RADR and the growth of the algorithms will continue to present additional opportunities for drug development, R&D collaboration, and partnering relationships. Our data driven, genomically targeted, and biomarker driven approach allows us to pursue a transformational drug development strategy that identifies, rescues, or develops potential drug candidates for what we believe is a fraction of the time and cost associated with traditional cancer drug development. Just last year, we've grown our programs from three at the time of our IPO to over eight today, maintaining what we believe is a very capital efficient and modest burn rate. Our dual approach to oncology drug discovery, both developing de novo biomarker guided drug candidates and rescuing historical drug candidates is we believe, an emblem of this new era in drug discovery, and one that we believe Lantern is a leader. There's potentially every decade, hundreds if not thousands of discarded or otherwise deprioritized therapeutic candidates across industry and academia, we aim to bring many of the -- least one of these drug candidates into our pipeline every 12 to 18 months. In the past 12 months, we've actually beaten this benchmark significantly. We're laser-focused on the quality of the drug candidates, but more importantly, on our ability to fully understand and characterize these that we go into clinical development in a very derisk manner. In this context, we're focused on building portfolio of high quality, high impact oncology drug candidates, which can be potentially partnered or brought to market rapidly in rare ultra-rare indications. We believe this provides a clear defined path for potential high value creation for our shareholders, but also very importantly, for improving the ability of personalized cancer treatments for patients. Our mission is to unleash the power of RADR in our AI platform to transform the pace, the risk, and the cost of oncology, drug discovery and development. We believe this is the only way to impact the lives of patients globally. RADR has the potential to significantly accelerate our understanding which compound should be developed and for which indications. We believe we're uniquely positioned to be able to continue this pursuit and to that end, we've grown the number of programs in our active development from three to eight and regain control over molecule LP-184, which is in a Phase 2 clinical trial. This is important as it provides more opportunities to generate near-term upside and is highly synergistic with our portfolio and improves the risk/reward occasion for investors. So, with that, I'd love to open up the call to any questions.

[Operator Instructions] Looks like our first question is from Kyle Bauser. Your line is open. Please go ahead.

Hey, thanks. Hi Panna, thanks for the updates today. Maybe a couple questions on the collaboration with Actuate. To the extent you can share what sort of development milestones are attached to this? And have other companies approached Lantern as a result of your agreement with Actuate?

Hi Kyle, it's a good -- very good question. I think that actually spurred a number of companies to reach out to us. We're in discussions and several of them. Some of them may know some molecules are great candidates for approach, others can be more challenging. We want to take on the projects that make the most sense. And also, we want to make sure that we get what we believe is fair consideration. So, there are a lot of really unique opportunities. But for us, we want to take a meaningful participation in the molecule upside. So, if there's milestones regarding development, that's important for our shareholders and for us to get upside and of course, if the molecule enters into certain targeted areas that were unknown or uncovered as a result of our platform, those are also milestones or trigger points for upside. These are the kinds of triggers that we did have with the Actuate deal, but detailed terms weren’t disclosed during the press release. But they -- we basically get some stock in the company and equity in the company for delivering insights about which indications and insights about companion diagnostic type signature or stratification approach. Those approaches then go into the commercial market or pursued then we get additional equity based on that.

Got it. That's helpful. And can you talk a little bit about how big agreements kind of play out. For example, this does Actuate kind of work with your team to answer questions or is there a dashboard that you can give them access to? It's probably not that simple. But just trying to understand how automated RADR is and what the goal is here? Thank you.

As I mentioned before Kyle, the goal is twofold, one to find additional indications where their drug, which is a GSK-3β inhibitor may be applied either monotherapy or in combination therapy. Finding those indications is partly involved in-silico and real world enrichment from looking at different classes of molecules. There's not a dashboard, we're routinely interaction with the Chief Scientific and Medical Officer. I don't think this approach is dashboard-like, I mean, we do share findings and data. We just finished a big data enrichment campaign, we just finalized curating and cleaning some of their existing data from clinical trials and it's interactive. I think there could be a day though, in probably in the next few quarters, where there's more of a dashboard-like delivery system for RADR. But again, remember, this is not a primary business model. Our business model, the way we're going to create value is by advancing our drugs to patients. This is a wonderful way to increase the value of our platform and give it more experience in terms of making it more robust, but it's not the primary driver of value.

No, that makes sense. Appreciate it. Thanks for all the updates Panna.

Our next question comes from John Vandermosten. Your line is open, please go ahead.

Hi Panna.

Hi John, how are you?

Doing pretty good, pretty good here. On the LP-100, you're bringing that back in house, that's great. How much of that data will you be able to use as you move forward with it? And are you able to pick up where you left off in the Phase 2 trial? Or do you have to start over or are you evaluating that?

We're evaluating that. That's a great question. As I mentioned, the first nine patients that were enrolled had a mean overall survival of 12.5 months. We think that's a major improvement over other fourth line or later metastatic castration resistant prostate cancer trials, which has typically had mean overall survival as low as five, six and up to nine or 10, depending on the patient population. But against kind of all the analysis that we've looked at this is a -- it's a major improvement. Obviously, it's a small number of patients and we believe we can increase it by going to the target enrollment of 27. But there are new insights, as we've talked about, regarding PTGR1, regarding DNA repair genes, and they might enable us to have a better enriched trial. We're in discussions with the investigators now on that. We are going to get all the data from the trial that was obviously part of the transaction. It was very compliant with GPDR, which is very stringent in Europe. And there are some page-level details we may not get. But we will load that data into our analysis in terms of how we go forward. And also take some of our other findings from 184 and other molecules and guide the development. So, yes, it's a big need for fourth line and later, which has all -- almost of our cases have less than one year and typically about nine months of survival. So, there's a great need for this, especially for people who are non-responsive to both chemo and androgen therapies. So we think this has a great place. Nine patients is a small number, but the response -- the overall survival is very, very meaningful mark and I think we can actually improve upon that potentially. So, it's a good indication, indication about $200 million in U.S. spend alone and probably close to $700 million globally. So, there's a significant commercial room for this drug.

And then in terms of R&D spend for LP-100, how much should we layer on for that?

We'll provide any additional financial details as we get all the data and have conversations with the investigators. I expect very modest amount in the third quarter, but more in the fourth quarter.

Okay. And in 2022, I assume as well, or is that--?

Yes. It'll -- 2020 will be the bulk of the work. So, we're in -- but yes, we're -- since we're already in the third quarter into August. As you know, August in Europe isn't the most busy time. So, we're -- we'll be analyzing the data, getting the sites -- getting the site IRBs transferred, working on some the regulatory backdrop, getting control the drug product and drug substance. So, kind of all ticking in time to basically take everything over. So, expect a modest spend in Q3, but much more in Q4 and Q1 of next year.

Okay, great. And then LP-184, that's a busy candidate for you guys. It's in a number of different areas, never a number of programs, ADCs, pancreatic, bladder, GBM, ATRT, maybe I missed one. How do you prioritize or rank those internally in terms of their importance?

Right now, the pancreatic is the furthest along. So, there's a clear need -- there's a significant market, as I mentioned, close to a $1 billion in spend. So, high need, high commercial value, furthest long in development, so that clearly has a priority. We're beginning on bladder because of the findings in bladder. We're working now with KOLs that are very interested. But pancreatic and GBM are our two priorities of 184 right now and bringing those to patients.

Great. Thanks for taking my questions Panna.

Our next question comes from Catherine Novak [ph]. Your line is open, please go ahead.

Hi, thanks for taking my question. I just wanted to ask -- I wanted to ask on the LP-300 Phase 2. You've mentioned earlier on the call that you plan to enroll never smokers, who are chemo naive and have failed prior TKI. Just want to clarify about the status of patients with prior checkpoint inhibitors? And are there other inclusion/exclusion criteria of note that might give us a better sense of the patient population?

That's a great question Catherine. Typically, the checkpoint is someone who's given a checkpoint inhibitor, a lot of checkpoint inhibitors are given with chemo. So that would make that -- make them not available for the trial. If they are going to have the very -- already that if their outcome is less than certain number of months that also would exclude them from the trial. And other comorbidities typically exclude people from the trial, but the patients the key ones are chemo naive. So, typically, these patients will be not eligible for immunotherapy. So, then they'll do hotspot or DNA sequencing and if they have one of the hallmarks mutations like EGFR -- one of these targeted TKIs. And eventually people get TKI fatigue, whether it be in round one around two or now in the third generation TK eyes eventually stopped responding. The great -- Tagrisso, of course, is the one major exception to that which has been phenomenal. That's for people that have X120 [ph], but for almost everywhere else to TKI fatigue begins to set in. And oftentimes there, there are other potential side effects. And so the clinicians at that point have a choice of whether to take them off of TKI and do a TK holiday, which is always challenging because then the cancer then is going to be coming back. So, they prefer to go to a chemo doublet. At that point, the clinicians will have a choice to do a chemo doublet or chemo doublet plus 300. And so that's -- those are the patients that are perfect for this trial.

As you know there's quite a few TKIs used in non-small cell lung cancer. So, we believe driving the awareness to clinical trials site selection about what role and place this plays as part of the patient selection allow us to enroll faster. But we're getting a lot of excitement from patient advocacy groups, patient groups that do harbor some of these targeted mutations, but eventually stop responding, or our never smokers and come down with the disease. So, there's a lot of interest. But if you've done chemo before or have checkpoint inhibitors, or have other comorbidities, it would be -- those would all be disqualifying factors.

Got it, make sense. And then I just kind of wanted to confirm the timing of the trial initiation. I think you mentioned that was planned for, I think 3Q or second half. And you'd also mentioned that you plan to meet with FDA in June. So, I wonder if you had any feedback -- if the agency had any feedback on the trial design and your approach to selecting patients?

We did -- it was a -- the meeting was a non-event, so there was no issues there. So that -- we're going to submit the final CMC and as I mentioned earlier in the call, we've had delays in manufacturing related to equipment and some of the analytical equipment and some supplies at the manufacturer level. So, independent of any other issues, but those have now been resolved. And we expect to have final drug product later this quarter. So, we're parallel tracking to try to save as much time as we can. But there's no issues the trial design. So, that's moving forward. And once we have the final CNC, that'll be submitted and we expect site selection and activity to happen this quarter and enrollments hopefully beginning in Q4.

Got it. Thanks very much.

Thank you.

And our next question comes from Ram Selvaraju. Your line is open, please go ahead.

Hi, this is [indiscernible] dialing in for Ram Selvaraju. Thanks for taking my question. So, with respect to LP-100, I know you release a median overall survival data. But I'm just curious, can you comment on other parameters, including duration of response and all that? And also, will the drug be evaluated in the remaining 18 patients that allowed initially expected to enroll?

We will be evaluating that with the investigators on -- there's no remaining 18 patients, so we haven't enrolled the other 18. So, it's something that they'd have to be identified. They'd have to be prioritized -- enabled for the trial. So, there's not a 18 patients remaining, they are just -- we have to go through the process. The trial was delayed due to COVID and then delayed due to the resources of the partner. And so now we're picking back up this active trial and moving forward with it. So, we'll release additional data on the duration of response and the overall details kind of at a later date once we've gone through everything with the investigators.

Understood. So, now that you regained the LP-100 rights, so what are your thoughts on initiating clinical trial activities in the U.S. with respect to timing? And are you planning to do small Phase 2b prior to launching a pivotal trial? And approximately how many U.S. patients must demonstrate drug efficacy to win FDA approval?

It is a great question, we do not have plans to do anything in the U.S. with the drug at this time. So, at this time, we have a lot of investigators who are interested in the drug. Since we've been in discussions with it for some other indications. We may pursue some of those that are with investigator-led initiatives. But right now, the priority would be to properly wrap up the existing trial and to evaluate how to best move forward in that indication. But that's already active and dollars have been spent in Europe. So, our goal is, of course, to maximize the amount of already spent investment in this drug. And so I think once we evaluate that, then we can consider perhaps U.S.-focused efforts. But right now, our focus is on these the existing efforts, as well as the investigators that have reached out for some really unique applications of the drug.

Great. One final from me, just like a clarification. So, others terms and conditions associated with using Allarity companion diagnostic tool? Or is it already embedded in the roughly $18 million total deal?

The total deal value is -- was $1 million upfront, $1 million over the next 24 months based on milestones, and then up to $16 million based on commercialization and marketing approvals.

With the substantial portion of that later amount based on actual marketing approval. So, it would be -- in the future at the time, the drug would receive marketing approval in the U.S. or Europe.

So, the -- but we do have the right to use their DRP companion diagnostic for this LP-100 drug in this application. And again, I think they've put some interesting work into it, but we also have additional insights about the molecule and the intended use. But we do have new opportunities already that we think are very interesting, namely in bladder cancer, which we've talked about. So, that will be one of the indications that we think are a high priority for this molecule.

All right, that's it from me. Congrats on your progress.

Thank you.

[Operator Instructions] Next question comes from Art [indiscernible]. Your line is open, please go ahead.

Panna, how are you?

Hey, good afternoon. How are you?

Congratulations to you and your team for the progress you've been making. I was asking similar questions through the LP-100, would there be consideration at all for a partnership somewhere along the way with that drug?

Absolutely, I think we have to be cognizant of the history of the drug and cognizant that it's in the middle of a trial that was delayed, that we're reviving now. So, I think those elements need to be taken off near-term before that there are real partnering opportunities and that's our goal. This is an asset that hasn't been paid significant -- hasn't been resourced adequately. So, I think we're going to -- we're about to change that and we will now focus on putting the right foot forward with the molecule, in the right trial, with the right data sets. And then partnering will happen naturally as a result, but you're absolutely, right. This is a great asset for partnering given the indications and late-stage metastatic castration resistant prostate cancer, it's a high need indication. And we believe the data is -- will be interesting. We will -- we do plan on releasing additional details on the data after we've had adequate time to discuss it with investigators.

Great. Okay, thank you and all the best going forward.

And it appears we have no further questions at this time.

All right, thank you for everyone's questions. I really thank everyone for their participation in today's call. And I look forward to giving you updates as we advance the molecules and as also as we develop new ideas for the platform and announce new details about our existing trials and/or new developments. Thank you.

This does conclude today's program. Thank you for your participation. You may disconnect at any time.