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 sell 2,135,923 shares of common stock, or pre-funded warrants in lieu thereof, at $2.06 per share. Concurrently, Lantern announced a private placement of unregistered warrants and revealed plans to spin off its AI platform, withZeta.ai, and related technologies and personnel into an independent business entity.
The move marks a significant strategic shift for Lantern, which has traditionally focused on developing its own pipeline of cancer therapies. By creating a separate entity for withZeta.ai, the company aims to unlock value from its AI capabilities and potentially generate a new revenue stream through the commercialization of its multi-agentic AI co-scientist platform. withZeta.ai is already commercially available as a subscription-based research platform for the global biomedical and drug development community, representing a departure from Lantern’s core drug development focus.
The registered direct offering is expected to close on or about March 21, 2025, subject to customary closing conditions. The net proceeds will be used for general corporate purposes, including working capital and potential investment in the new AI entity. The private placement involves the issuance of unregistered warrants to purchase shares of common stock, exercisable at a price of $2.06 per share, which could provide additional funding if exercised.
Lantern Pharma’s clinical pipeline includes LP-184 (acylfulvene), LP-284 (a TC-NER targeting compound for hematologic and solid tumors), and LP-300 (cisplatin/ethacraplatin analog), which is being evaluated in the HARMONIC Phase 2 trial for never-smoker patients with relapsed advanced lung adenocarcinoma. LP-184 is also being developed for pediatric CNS cancers through Starlight Therapeutics, Lantern’s wholly owned CNS-focused subsidiary.
The decision to spin off withZeta.ai underscores the growing trend among biotech firms to monetize their AI platforms separately from their drug development pipelines. For Lantern, this could provide a more direct path to revenue from its AI technology while allowing the company to focus on advancing its clinical programs. The new entity will operate independently, potentially attracting partners or investors interested in AI-driven drug discovery without exposure to the risks of clinical-stage assets.
Investors and industry observers will be watching to see how this restructuring impacts Lantern’s valuation and strategic direction. The company’s AI platform has been a key differentiator, and the spin-off could highlight its value. More details on the offering and the new entity are available in the full press release at https://ibn.fm/6Dy4I.
