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 includes the sale of 2,135,923 shares of common stock, or pre-funded warrants in lieu thereof, at $2.06 per share. Concurrently, the company announced a 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 move signals a strategic shift for Lantern Pharma as it seeks to unlock value from its proprietary AI capabilities. The creation of a separate entity for withZeta.ai, which is already commercially available as a subscription-based research platform, could allow the company to better capitalize on the growing demand for AI-driven drug discovery tools. The platform is now generating a new revenue stream for Lantern, and spinning it off may attract dedicated investment and partnerships.
The capital raised from the offering is expected to support Lantern’s clinical pipeline, which includes several promising candidates. LP-184, an acylfulvene compound, is being developed for adult solid tumors and, through Starlight Therapeutics, Lantern’s wholly owned CNS-focused subsidiary, for pediatric CNS cancers. LP-284 targets hematologic and solid tumors via a TC-NER mechanism, while LP-300, a cisplatin/ethacraplatin analog, is being evaluated in the HARMONIC Phase 2 trial for never-smoker patients with relapsed advanced lung adenocarcinoma following TKI treatment.
The decision to spin off the AI platform comes at a time when artificial intelligence is increasingly recognized as a transformative force in biotechnology. By establishing an independent entity, Lantern aims to provide clarity for investors and potentially attract strategic partners interested in leveraging withZeta.ai’s multi-agentic AI co-scientist capabilities. The platform is designed to accelerate the development of cancer therapies by analyzing vast datasets and predicting drug responses.
Lantern Pharma operates an AI Center of Excellence in Bengaluru, India, and is headquartered in Dallas, Texas. The company’s leadership has emphasized the importance of AI in precision oncology, and the spin-off aligns with a broader industry trend of separating technology platforms from drug development operations to maximize shareholder value.
Investors and industry observers will be watching closely to see how the independent AI entity performs and whether it can secure additional funding or partnerships. The registered direct offering, combined with the spin-off, positions Lantern to focus on its core drug development programs while allowing the AI platform to thrive independently. The company’s pipeline remains a key area of interest, particularly the progress of LP-184 in pediatric CNS cancers and the ongoing HARMONIC trial for LP-300.
For more information on Lantern Pharma and its latest developments, visit the company’s newsroom at https://ibn.fm/LTRN.
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