Matinas BioPharma Holdings, Inc. (MTNB) Q2 2017 Earnings Report, Transcript and Summary

Greetings, and welcome to Matinas BioPharma Quarterly Earnings and Business Update Conference Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation [Operator Instructions]. As a reminder, this conference is being recorded. I'd now turn the conference over to Ms. Jenene Thomas, Investor Relations for Matinas. Thank you, Ms. Thomas, you may now begin.

Thank you, Manny. Good morning, everyone. And thank you for joining us this morning for the Matinas BioPharma quarterly business update conference call. At this time, I would like to remind our listeners that remarks made during this call may state management's beliefs, hopes, intentions, expectations or projections of the future. These are forward-looking statements that involve risks and uncertainties. Forward-looking statements on this call are made pursuant to the Safe Harbor provisions of the federal securities laws. These forward-looking statements are based on Matinas BioPharma's current expectations and actual results could differ materially. As a result, you should not place undue reliance on any forward-looking statements. Some of the factors that could cause actual results to differ materially from those contemplated by such forward-looking statements are discussed in the periodic reports Matinas BioPharma filed with the Securities and Exchange Commission. These documents are available in the Investors section of the Company's Web site and on the Securities and Exchange Commission's Web site. We encourage you to review these documents carefully. Following the Company's prepared remarks, the call will be opened up for a question-and-answer session. Joining me on the call today are Roelof Rongen, the company’s Co-Founder and CEO; Jerome Jabour, Co-Founder and President; and Dr. Raphael Mannino, Chief Scientific Officer. It is now my pleasure to turn the call over to Jerry Jabbour.

Thank you, Jenene. And good morning to everyone joining us for Matinas’ second quarter 2017 results conference call. Toward the end of this morning's call, I will review our strong financial position and outlook for the balance of 2017 and 2018. However, our main purpose and focus this morning is to review and confirm our development program for our lead product MAT2203 toward an initial indication for the prophylaxis or prevention of invasive fungal infections in patients with Acute Lymphoblastic Leukemia or ALL. Throughout this call, I will refer to this indication as IFI prevention. The second quarter of 2017 was truly monumental for our Company, our MAT2203 product, and our overall delivery platform technology. This past June, we announced data from two separate clinical trials of MAT2203 in the treatment of mucosal infections into very different patient populations and at different dose and duration levels. Now that we have had the opportunity to review the full available data set from each of these studies and discuss them in detail with numerous key opinion leaders, as well as leading regulatory experts, we believe we have absolutely met our key objectives from these studies and are now positioned to engage with FDA with a goal of moving the MAT2203 development program into Phase 3 as quickly as possible. Over the past six weeks, we have spent a significant amount of time engaging with some of the world’s leading experts in mycoses. All of whom we have been working closely with since 2015 and who were unanimous in their conviction that the data generated to-date across all of our studies was compelling, validates to delivery mechanism of action of our drug delivery platform and warrants advancing MAT2203 into a pivotal registration study in IFI prevention as soon as possible; subject to the data to be generated in our already planned PK tolerability study in leukemia patients, the target patient population for our Phase 3 study. I will speak more about these experts and their role in our ongoing development program, as well as how we anticipate they might positively impact our expected FDA interaction a bit later on this call. Before we look more closely at the data drives from these two important studies, let’s take a step back and let me remind everybody about the uniqueness of our overall development program for MAT2203, which is based upon our unique ability to leverage our disruptive cochleate delivery drug platform to transform the way and existing medicine; already approved for the treatment of serious and life-threatening fungal infections, amphotericin B, is design and delivered. Against the backdrop of increasing fungal resistance to available therapies, as well as the rising number of patients subjected to immunosuppressive therapy, which increases the risks of developing these deadly infections. Our goal for MAT2203 has always been to give doctors and patients the opportunity to use amphotericin B, the most broad spectrum fungicidal agent in the battle against invasive fungal infections in a safe and convenient way. The development of any anti-fungal drug is a different animal unto it cell. but the development of an already existing compound in this area, in the unique direction we are seeking to take it, while certainly presenting opportunities also presents some interesting complexities as well. By complexities, I am referring to the reality that in Phase 2 clinical trials where in traditional drug development, you are continuing to learn about your drug, things like specific dosing and dose regimens. And the data derive from these trials are often now viewed in the proper context. This can lead to misunderstanding and confusion about the existence or robustness of quote-on-quote positive data. Similarly, there is a natural, though inappropriate, tendency to want to compare results within indications or across studies simply because the same models were used; even if the respective product candidates have very different development futures or target indications. This occurs, because convention, especially in the anti-fungal area, dictates utilizing study models and designs, which are not necessarily indicative of the ultimate development goals for a particular drug, more on that later. Unlike most, if not all of the Company’s exploring novel anti-fungal therapies today, we began our program with a drug that we know and understand from clinical practice from an efficacy perspective, is the go-to drug for the treatment of invasive fungal infections, because of its broad spectrum activity and fungicidal nature. In fact, it is the ideal drug for immunocompromised patients for that very reason. We are also aware, however, of the legacy limitations on the historical use of amphotericin B because of its severe toxicity profile and inconvenient method of administration. But because both clinicians and the FDA have a good understanding of the profile of amphotericin B from an efficacy perspective, our primary goal has always been to demonstrate that through our proprietary cochleate delivery platform technology, we can orally and safely administer amphotericin B, while achieving systemic delivery to infected tissues. Following more than 20 consistent and positive preclinical studies in a variety of invasive fungal infections and in a number of different species we, along with our key partner, the National Institute of Health, set out to design a development program, which would yield significant evidence of the safety and tolerability of MAT2203 along with efficacy representative of systemic absorption and distribution of drug to the side of infection. By necessity and for ethical reasons, early stage development work in humans for antifungal drugs must start with the treatment of less severe mucosal infections. It is well understood that an infection of the mucosal surface is essentially an over-growth of an otherwise commensal organism; by commensal, I mean a situation where the fungi benefits without adversely affecting the host. You see candida is present in all of our bodies; in that way, even with an infection of the mucosal surface, whether it is oral, esophageal or vaginal, the body does not necessarily see it as an infection and so it does not heavily recruit macrophage to cure or eradicate these types of infections. This is very different from invasive or deadly fungal infections, where macrophages are more activated in presence. Unlike drugs that flood tissues, like fluconazole for example, our MAT2203 seeks to employ a more focused and targeted delivery to the side of infection, which in-turn keeps serum levels of drug low thereby alleviating toxicity and increasing tissue absorption. In our ongoing trial with the NIH in immunocompromised patients with chronic mucocutaneous candidiasis, with the data from our first two patients, we successfully demonstrated the ability to safely and effectively treat patients who had suffered with these infections for decades. Most importantly, and at this point in time, two separate six month extensions to this protocol have been granted. Meaning, these patients have now been taking oral MAT2203 safely for more than eight months with exactly no signs of nephro or other toxicities normally associated with the use of amphotericin. Let's put that in context for a second. When you think about the period of time at which a normal or injected or liposomal amphothericin B starts to display signs of irreversible kidney damage or nephrotoxicity, it is typically between 10 to 14 days of use. In our NIH study, we have two patients now that have been on the drugs for 240-plus days with no toxicity. At the same time, given their underlying conditions and treatment history, they have each achieved dramatic improvements in clinical symptoms that were not previously achievable over decades with other therapies. This long term, safe and efficacious use of orally delivered MAT2203 is absolutely unprecedented for amphotericin B and exactly the type of wow data that has a key opinion leader so excited about the profile we are building for MAT2203 toward preventative use. Our ability to utilize a broad spectrum fungicidal agent like amphotericin B for long treatment periods while being well tolerated in safe sets MAT2203 up for uses perhaps the ideal drug for prophylaxis, where for example, the treatment periods will be approximately up to 90 days in patients with ALL. As you can see, we have moved to well more than double that treatment period with no evidence of toxicity. This key study remains ongoing as we continue to develop data on the safe long-term use of MAT2203, and we will continue to provide updates on this study as and when available and appropriate. Our goal with the recently completed VVC study was to further establish the safety and tolerability profile of MAT2203, while demonstrating efficacy through a mechanism involving systemic absorption. Given limited study options because of ethical constraints, we chose VVC as provided a model to demonstrate oral and safe systemic delivery while allowing for efficient and expedient recruitment of patients. In other words, it would increase patient exposure and put us on a faster path toward a pivotal registration trial. Our intention and this has been consistently stated since before that trial began, was never to pursue an indication for the treatment of VVC. Because placebo controlled trials are not conducted in this area for obvious reasons, i.e. no one signs up to potentially not be treated we were left to utilize the standard-of-care in VVC fluconazole as an active control. However, according to the key clinicians and opinion leaders in this space, comparison to fluconazole is really of limited or no relevance, given the ultimate development goals for MAT2203 in indications where fluconazole is contraindicated or inferior. Likewise, one cannot and should not compare the results of this study of MAT2203 in a VVC model to those of other drug candidates seeking an indication for the treatment of VVC. Similarly to fluconazole, those drug candidates today would either not be eligible or appropriate to pursue our initial indication for the prevention of invasive fungal infections in patients with ALL. For example, fluconazole for as effective as it may be in the treatment of acute VVC, has a very limited spectrum of activity, is not as all effective on mold infections and suffers some significant drug-to-drug interactions, especially in immunosuppressed patients. So as we began to receive additional data from this study, evaluate it in light of our overall development objectives for MAT2203 and discuss the same with the world’s leading mycological experts, we have become more confident than ever in the profile of MAT2203; our overall data package that we have assembled to-date and the readiness for this drug to enter a Phase 3 study in IFI prevention pending completion of the planned PK tolerability study in leukemia patients that will commence later this year and continue for most of 2018. Obviously, we continue to be extremely pleased with the safety and tolerability profile of MAT2203. We are also pleased with the evidence of efficacy demonstrated by a now thorough analysis of available data and discussions with our external team of clinical experts and advisers. In reviewing the disease severity scores from the recently completed VVC trial, we saw significant, meaning 80% reduction in severity attributes on day 12. On the more stringent criterion of clinical cure, in both the modified intent to treat and per-protocol populations, we saw rates of greater than 50%, and a positive dose response effect between the 200 milligram and 400 milligram treatment groups. We believe this dose response effect also was demonstrated in the scores for eradication rate on day five, which was the last day of treatment for MAT2203, and being higher in the 400 milligram treatment group than the 200 milligram treatment group. In our opinion, which is shared and informed by our expert advisers, efficacy results like these, especially in a model not optimize either for amphotericin or for the way our MAT2203 is delivered, are highly encouraging. And when combined with the safety and tolerability profile, we have built for this now orally bioavailable drug, we believe it positions us well to advance this much needed therapy into a pivotal trial in a patient population, which today has no alternative and which remains vulnerable to developing a deadly fungal infection as a result at the alarming rate of 15% to 20%. Following these two Phase 2 trials of MAT2203, our focus in the short-term is on two things. First, submitting a Type B meeting request to FDA for a meeting later this year to discuss our overall data packages to-date, to highlight the data to be generated from our ongoing PK tolerability study in leukemia patients as the last phase of our Phase 2 program and initiating discussions on our planned Phase 3 protocol. Second, ensuring that our PK tolerability study in leukemia patients gets-off to a good start and positions to us to begin receiving initial data from this important open-label study in the middle of 2018. Our QIDP and Fast Track status for MAT2203 provides us with great confidence that we will be granted a meeting with FDA this year. More frequent interactions with FDA, was one of the key mandates of the GAIN Act. Informing these two objectives is a world class team of opinion leaders and experts, which includes Dr. Dr. Oliver Cornely from the University of Cologne in Germany, probably the world’s leading expert on prevention of invasive fungal infections. Joining him is Dr. Demetrios Petropoulos from MD Anderson Cancer Center in Houston, Texas, considered by many to be the world’s leading expert in mycosis with over 500 peer-review publications in this area. These doctors are the key investigators in our PK tolerability study in leukemia patients at their request, and we’ll likely be for our Phase 3 program as well. Their experience with these types of patients that we desire to treat and their frustration with the current lack of available therapies is invaluable. We anticipate that one or both of them will also join us for our FDA interaction. Our preparation of the necessary briefing materials for this FDA meeting is being supported by well-known former FDA reviewers in the infectious disease area, and they will also be present and likely lead our FDA interaction. It is the collective confidence of these experts, along with numerous others, including Dr. David Perlin, Dr. Peter Pappas, Dr. Jack Strobel, and Dr. Edmond Tremont who following the review of our current data package and development plan and objectives, are helping drive our momentum and focus for the significant opportunity in IFI prevention and beyond. There's no question that there's a glaring unmet medical need, specifically in ALL patients where there's no current standard of care of treatment guidelines. And that MAT2203, in their opinion, is poised to be the solution doctors and patients so desperately need. And looking beyond our initial prevention indication, we have always envisioned pursuing the treatment of a variety of invasive fungal infections as a way to broaden the commercial opportunity for MAT2203 and position it as a potential blockbuster drug; importantly, and because of the timeline associated with our PK tolerability study of MAT2203 in leukemia patients, we will also take advantage of the significant interest shown by clinicians in the field of cryptococcal meningitis. Notably, Dr. Peter Williamson from the National Institute of Health and Dr. David [Boyer] from the University of Minnesota, who approached Matinas to undertake clinical studies in patients with cryptococcal meningitis during 2018. We are already in the planning phase with the Institutional Review Board at the University of Minnesota for this trial, and expect to announce details on that protocol in the coming months. While we do not view these studies at this point as core or a prerequisite in any way to support moving into Phase 3 and IFI prevention, we believe these studies in cryptococcal meningitis will give us the opportunity to continue to broaden utility platform for MAT2203 in the treatment of invasive fungal infections; while being supported by the interest of the leading clinicians in this area who today have little to no treatment options for their patients. As we move into treatment trials in invasive fungal infection, we always want to be guided by promising preclinical data. As you likely recall, earlier this year, we announced what is being characterized as extraordinary data from Dr. Peter Williamson’s preclinical crypto models, which demonstrated dramatic improvement in the treatment of crypto by MAT2203 and the ability to be systemically absorbed following oral administration and successfully crossed the blood/brain barrier. Accumulation in infected brain tissues was demonstrated using rhodamine labeled fluorescent imaging. While these remain only animal studies these promising preclinical data in one of the most stringent crypto preclinical models available, gives us confidence as we prepare to treat patients with this deadly invasive infection. So as you can hear, we believe we are very well positioned to deliver potentially significant data and milestone events for MAT2203 over the next 12 to 18 months as we drive towards the commencement of our first Phase 3 trial. Our goal is to set up this potentially game changing product to become the gold standard and drug of choice for physicians looking to prevent and treat invasive fungal infections. If successful, the addressable markets would position MAT2203 to be a blockbuster drug. We do not want to leave this call without also addressing the status of our MAT2501 development program. MAT2501 is our encochleated formulation of the broad spectrum aminoglycoside amikacin, and is being developed initially for the treatment of non-tuberculous mycobacterium, an area of significant unmet medical need. As potentially the first ever oral aminoglycoside, we believe MAT2501 has the potential to be a solution for a variety of chronic and acute bacterial infections, including gram negative bacterial infections. We announced positive Phase 1 data from a single ascending dose PK study in healthy volunteers earlier this year, which was highlighted by evidence of systemic absorption on top of an excellent safety profile. Next, we will commence our multiple ascending dose PK study of MAT2501 in healthy volunteers during the fourth quarter of this year. We determine to move into the second Phase 1 study as a way to build a broader foundation for MAT2501, which can then be developed for multiple indications without having to necessarily repeat early dose finding work. With the data from the multiple ascending dose study due in the second quarter of 2018, we believe we would be in a position to commence Phase 2 soon thereafter, driving this important product towards commercialization. From a commercial opportunity perspective, MAT2501 is being built and positioned toward a multibillion dollar marketplace, given its potential broad applicability, convenience of use and desirable side effect profile. It really is an exciting time for our Company, and these are just the first two products from what we believe could become a deep and robust product pipeline built upon our disruptive cochleate delivery platform technology. We continue to investigate the development of other compounds, both on our own and in collaboration with third-parties, utilizing this delivery system. And it is our hope and plan over the next 12 to 18 months to be in a position to announce development programs in other very promising areas of significant unmet medical need. Turning now to our financial results for the second quarter and our outlook, moving forward; we ended the quarter with cash and cash equivalents of approximately $11.3 million; for the three months ending June 30, 2017, a net loss attributable to common stockholders of approximately $3.9 million or a net loss per share basic and diluted of $0.04. Importantly, we believe and anticipate that current cash on hand at June 30, 2017, as well as cash potentially available through our controlled equity offering sales agreement, will be sufficient to meet our operating obligations for at least a year and have fully utilized would finance the Company’s operations through 2019. In summary, we believe that the patient data announced by the Company during the second quarter of 2017, from most every standpoint relative to our development objectives, safety, tolerability and efficacy, positions us to advance MAT2203 toward a pivotal Phase 3 trial for an indication for the prevention of IFI in patients with ALL. Our development path is clear and we will move swiftly and confidently toward an anticipated FDA meeting later this year as we aggressively continue to build a comprehensive overall data package for MAT2203, positioning it again to have the potential to be a blockbuster drug. Our calendar over the next six, 12 and 18 months has the potential to be full of value creating milestone events and we plan to sustain that momentum with our other key product MAT2501. We are extremely proud of the promise we have made so far during 2017, notably uplisting to a national securities exchange and delivering the first ever patient data utilizing our cochleate delivery technology platform. We genuinely look for to keeping our shareholders apprised as we continue to check boxes and hopefully build significant value in our Company. This will conclude our prepared remarks for this morning. And I would like to turn the call back over to the operator for our question-and-answer session.

Thank you. We will now be conducting a question-and-answer session [Operator Instructions]. Our first question is from Jason McCarthy of Maxim Group. Please go ahead.

Couple of questions, first, you’d mentioned going after mucosal infections versus just the pathway that you have to go through. But is the normal development pathway from mucosal infections to prophylaxis. And what I’m really asking is why is the PK tolerability bridge is so important. And how much data do you need to bridge do an indication in prophylaxis?

I’m going to ask Roelof to answer that question he has designed the entire development program very purposefully to get to this point today and really set us up to get to Phase 3. As you properly mentioned that bridge is really what’s going to take us from where we are today to get into leukemia patients, and it’s an important one. But Roelof will handle that.

When we develop a drug in the anti-fungal area, you’re working in a lot of difficult area, because our ethical dilemmas and it’s easy to see that if you have patients with invasive fungal infection at risk of dying that you in early stages are cautioned by everyone involved, clinicians, the institutional review boards to be very careful in how you treat these patients. So because of that ethical dilemma, the push has been to first go into mucosal disease, mucosal fungal infections, usually are not lethal. They are clearly inconvenient and cause patients lots of trouble and could cause long-term risk. But immediately, they are lower risk and therefore good starting point. And you will see that when you look at FDA summary basis of approval summaries that is a typical way to develop anti-fungal drugs. So the numerous examples how that is typically breaks to get started in the first patients and show efficacy. And operates to the invasive fungal infection prevention Phase 3 study is the PK tolerability study in patients with leukemia. And the reason we do this study is because we want to fully understand all the clinical issues of our drug works in the ultimate target population of ALL patients; understand how we can best dose, how high we can dose that’s where the tolerability aspect comes in; and in the end, if there are patients enrolled that show altogether very quickly, very consistent picture than that becomes very crisp early on and you might be able to take that to the FDA relatively quickly, if you have variability, if some patients show different behavior rather than the other, that’s very information because it tells you very important aspects of the drug. But then you have to accumulate a few more patients in order to work to the point where you can draw conclusions. So that's in essence how we see that bridge. We want to make sure that we test our product in our target patient population for Phase 3. We do not want have surprises at that point in time and we want to work carefully and deliberately to basically make that Phase 3 study a best way to get there with the lowest risk possible the most thought through protocol, the best dosing regimen, so that is a homerun right from the get go on, that's what we're aiming for. So that's where the tolerability study comes in. So we think that the study can take the balance of most of next year, but maybe earlier, if we can draw conclusions from high level of consistency.

And just building on that. How many patients for the leukemia study do you think you need? And I understand that later you can get some early data, maybe that's enough for the FDA to get used to the Phase 3 study. But I'm also looking at it as you had enough patients and you really do have a 10% to 20% IFI rate, theoretically, you could get some infection prevention data at the end of that study. Is that fair?

That is a possible way to look at that, and that's typically how we will look at that. Of course, it is an important aspect of the study. The question is what real comfort does that gives you, because there's always -- if you're lucky or unlucky in that respect, but there're other parameters to look at. And so we can look at parameters of what is happening in the system of the patients, can we count fungi and yeast in various body compartments, how is that effected, is that likely to reduce the risk of the patient, how does that relate to the dose that we give to patient at that point in time. So there are numerous other efficacy like components that we believe we will gain from that study that will truly inform us on how to best design that Phase 3 study, because there're many endpoints in the study. You want to show that you ultimately prevent these invasive fungal infections, but you also want to elucidate how which patients are best targeted, are there other patient types that maybe get special consideration to, et cetera. The leukemia is a complex condition and it’s a life threatening condition. So we try to understand the best modes of our product in that complex environment.

And I just want to switch gears, if I could, for a sec, over to the cryptococcal program. It was great data in the preclinical model. I know this is separate from 2203 and IFI and prophylaxis. What is the clinical plan for the crypococcal infections? I'm assuming that because you're getting blood/brain barrier crossing that these are brain infections as a result likely patients with age. Can you talk a little bit about that program and where you see that going over the next 12 months?

So I think it's very important to note that, as a company, we operate driven by the needs of the clinical community. And that's true with ALL, because the clinicians on the mycoses study group and many others have told us is that that's where really the large need is in the antifungal marketplace based on what the MAT2203 product is. But our product has numerous strengths, this is borne out by I think a wealth of preclinical data, cryptococcal meningitis being one of them. And when the opinion leaders in that area knock on your door, like Peter Williamson at the NIH produces fantastic results in what he considers a very stringent model of cryptococcal meningitis then delivers results that are very, almost overwhelming in terms of, as you can see, the delivery of the drug to the mice brain on a picture. Some pictures are worth a $1 million and this is one of them I think. If then other opinion leaders who have lots of patients in their clinics and [Dr. Boyer] in the University of Minnesota is here, the key opinion leader, he has patients in his clinics throughout the world’s, including East Africa, that are dying every day of this condition. It’s a high unmet need area. And when he knocks on your door and says, I really want to take your drug into this use and test it on my patients that are in high need and IV amphotericin is not an option in my field across the board. So we need alternatives. Nothing else works. Now you’re looking at an opportunity to help patients, help the clinicians to serve these patients and help the product in development to develop a unique edge of efficacy. And of course, we’re still developing that program, we’re developing the protocol, so with beginnings of that. But this is a great way of showing the differentiation of MAT2203 building under wealth of data in preclinical models in invasive fungal infections, and that’s really where the connection is, I think.

Thank you. The next question is from Robert LeBoyer of Aegis Capital. Please go ahead.

You gave a lot of good information about the 2203 program. One question that I have is, do you have any projection as to when the Phase 3 might start?

Robert, thanks for joining the call today. A good question and a little bit of a moving target, right and some of that is dependant certainly upon the interaction we’ll have with FDA later this year. But when we look at the necessity of generating that data in the PK tolerability study in leukemia patients, we really view that as critical to really ensuring that we have a better chance of success in the Phase 3. So we do want to wait and get a meaningful amount of data from that study, which will actually, to a large degree, help inform things like how we dose and how the protocol may be designed for Phase 3. But it’s a little bit of a sliding scale. And so, obviously, there is certain number of patients we are targeting for that PK and tolerability trial. We currently project that it could take up to a year. But as Roelof pointed out, depending on the consistency across patients early on in that study, there may be a meaningful amount of data or confidence we can generate from that, which will allow us to then go and have our interaction with FDA and go to Phase 3. So from a timeline standpoint, we want to be conservative and realistic that there are still boxes we need to check before we go into Phase 3, and that the PK tolerability trial, if it goes the full duration, would last about approximately a year. So that would put us in position for the beginning to 2019. But we want to stress that because of the unique open-label nature of that PK tolerability study, that timeline could be moved up. I think the most appropriate timing for us to really comment in detail on how we see all these pieces fit together is certainly after we’ve had an opportunity to have a positive interaction with FDA at the end of this year.

I agree with your plan to do the right amount to signs before you get to Phase 3, rather than learning from Phase 3, which you should have done before that. But, okay. So early 2019 would be an approximate guess at this point, is now what you’re saying?

I think that’s fair based upon our projected timeline for the PK tolerability study. But again, you have to keep in mind the targeted indication we’re going after. And when you’re thinking about, we are now going after a space on the map where there are alternative therapies, or there are drugs that can be used today in this patient population. So when you think about targeting preventative treatment in ALL patients, you’re talking about patients who today are not prophylaxis. They have no preventative treatment, because of the drug, the interaction with therapy that could be used, for example, in an AML population. And so when you look at our development pathway and our timeline, it’s not, what you would normally expect from a drug that’s looking for efficacy for the first time or for safety data for the first time. You have to look at it in the context of this is amphotericin B, which is well understood to have fungicidal activity. And us having demonstrated that it’s orally bioavailable and now safe that gives us a leg up. And then when you put in the backdrop of that, the glaring unmet medical need in ALL patients and the support really of the leading experts in the preventative treatment of invasive fungal infections, we think there is an opportunity to advance things even quicker. But we’re always going to look at things through a conservative lens. But they have to be informed by the unmet medical need and the unique attributes of the product we’re developing.

You’re breaking new ground, scientifically and clinically. So you have to do things right even if it takes a little longer. Okay. Well, thank you very much for that.

Thank you. The next question is from Michael Higgins of ROTH Capital Partners. Please go ahead.

Good morning and congratulations on the progress during Q2. Actually, update this morning couple of questions, if I may. Any updates on our CMC Phase 2a enrollments, when might we see more data from that and there is an option that that could become pivotal via the pathway?

With respect to the NIH study and enrollment is ongoing, we continue to screen patients at a pretty high rate, that’s a stringent protocol. And so ensuring that one patient sit within the parameters of the protocol is designed by the NIH. Remember these are patients with significant underlying health issues. And so a lot of times when we screen a patient, they simply don’t meet the criteria, in other words, they’re too sick to be enrolled in the trial. And the other aspect to that trial is that it’s a pretty invasive protocol. There as to do a lot of things for a long period of time. That being said, we know how important a third patient is in the scope of what a successful trial from a statistical standpoint would look like, meaning three out of 16 patients. It’s our expectation that we’ll be in a position to comment further on that this year. But enrollment continues. And one of the important takeaways from that study is just continuing to demonstrate the long-term safe use of that drug in the existing patients who continue to have really impressive efficacy results as well. And so that trial is ongoing. As far as [LAPD] we continue to investigate the potential to accelerate timelines based upon those more theoretical than actually implemented regulatory pathway that is something that we regularly discuss with our regulatory experts and clinical experts, and may become part of what we discuss with the FDA, as we head into this meeting in the fall. But again, focus is really important in those meetings. And our primary objective here is to clear the pathway to get 2203 into a Phase 3 trial for IFI prevention, [LPAD] could present a unique opportunity for treatment indications earlier, and it's certainly on our radar. But our focus is really clear in terms of IFI prevention at this point.

Okay, thanks. 2203's potential in the hemog indications, just want to clarify. Are you targeting ALL patients only as indication in IFI prevention or other hemog indications and transplant indications?

So an excellent question, and this is truly a question of us, what is the optimal study design for Phase 3. And as a company, we're very aware. We've looked at many companies doing non-inferiority studies, which are really the flavor of the year in the anti-infective space and the antifungal space. Those are very tricky studies. And so we have now a unique opportunity in ALL only patients where because of the abundant use of vincristine, which is a core treatment for their leukemia condition, the use of asels is not possible. There're black box warnings in both asle and vincristine labels. So you have a unique situation where ALL patients do not get prevention, antifungal therapy. And with that they incur the risk and the potential lethal consequences of fungal infections, because you basically take out their immune system and you start treating leukemia. So now we have a unique opportunity to actually conduct a placebo controlled trial, because there's no standard of care; placebo control trials are usually very crisp, usually require not the huge patient populations that you need in a non-inferiority study. And that's probably going to be the quickest and best way to bring home the benefit of prevention in that population. So that's one reason why we target that population as a core. The economics, if you think of why this company engaged in this, for ALL are compelling because the use from period-to-period in which your white cells, your immune system is down, it's approximately three months, 90 days as I said that before. And in AML, for instance, it's about 22 to 30 days this is the typical window. So there really is a lot more risk in terms of patient base there, which help to build the economic case. You can easily see that if a drug has proven to be successful in a core indication like ALL. Now, depending on the patient situation the doctors have the liberty to take what they learn from our product in ALL to other patients. So even though there will be off label and we would be not be in any positions to promote such use, it's very clear, but the physicians in this field are very sophisticated. It's the same physicians that treat AML and ALL patients and deal with the stem cell transplantation. So once they become comfortable with a tool like MAT2203 for preventing an ALL, you can probably expect some spillover in these other uses of AML, stem cell transplants, maybe solid organ transplant. And so we believe that ALL is a perfect way to start, because it’s the best way to demonstrate the utility of the drug and prevention in a concise, well defined patient population that also allows the physicians to then take that learning towards other patients that they serve.

Just to follow upon that. What would be your current thoughts on expanding in the hemog area is it a way for these Phase 2 results in ALL before moving forward? Or it gives you something while waiting for the trial to complete?

Well, in terms of waiting, so I think waiting for that PK tolerability data in leukemia patients is essential. And so I think before we map out what areas -- what other areas within hemog we may pursue preventative indications, I think that data is very telling about how we will behave in that immunosuppressed patients. It’s not [indiscernible] and remember the PK tolerability study in leukemia patients will include both ALL patients and AML patients as a way to ensure they have to enroll, and that’s really, really important. But as and when we get that data and as and when we see exactly what the protocol for IFI prevention in ALL patients will look like, we are already evaluating and have spoken about our desire and the ability we believe of MAT2203 to become an answer in other immunosuppressed patients, all of which are orphan drug populations when you think about stem-cell or solid organ transplant. Those also fit the criteria of the product model we’re trying to build of 12-years of exclusivity and protecting all of those things. But we think we need to be able to stay focused in the short-term about developing this tolerability data in this patient population, and at least getting the Phase 3 program in ALL prevention started -- in IFI prevention and ALL patient started and then we will quickly highlight other areas, which we may want to investigate clinically, so that you can round out your label as and when we’re on the path to getting an approval for IFI prophylaxis in ALL patients.

And just one last question. You discussed the safety of the two CMC patients of eight months. Can you give an update on the response rates in these other patients? Thanks.

Yes, that’s a very good question. So we are very encouraged by the first two patients that the NIH investigators reported on the ASM Microbe last June. These patients continued to respond very well. They have to travel to the NIH on a monthly basis for their examinations, and to get the next portion of drug that they take home. This continues to give them enormous quality of life improvement. So I think you heard Dr. Tremont talking about how one of the ladies in the study was able to eat pineapple again after two decade, the other lady able to eat her favorite southwestern spicy food. So that remains very important. And at the same time, we are able to see that safety picture, the tolerability picture for the kidney function, for liver function and all other aspects build up to a very meaningful timeframe that is now a multiple of our targeted 90 day. And so this is a spearhead group of patients that really is going to be very informative. And to continue to see the patient respond well, not see any resistance develop, which is expected from amphotericin, but it’s good to see that in our study. Those are very key components, and so we are very encourage and very happy with those two patients.

And just to add some color to that, Michael. When you think about these extension periods, these patients are continuing to take that highest tolerability so which they saw a response. And as we talked about with those first two patients, both really came into the study with the severity score of around seven and patient-one improved down to the three-four level, which was a 57% response and patient two went from seven to one, which was an 85% response. So as Dr. Tremont commented on during the NIH’s presentation of the data, essentially cure because there was scan or no growth during that time period. Interestingly, with the first patient, there was a period of time where she had to come off the drug and the candida level rose back up to a significant amount. That’s also pretty helpful in understanding that once you’re not taking our drug, especially in these immunocompromised patients, the candida returns and the disease return to a higher level. Once the patient went back on the drug, she returned down to the lower level again. And even we’re informed that we’re still waiting for the most recent data has even improved beyond 57%. For patient two, the most recent data we’ve seen is that we know she went from seven to one; we know that she has been essentially upgraded to a zero. So that is really, really good evidence that we’re continuing to have in patients who are susceptible to continuing to contract these infections that at minimum we’re in great maintenance mode of the improvements we’ve made already. And then on balance, we are also starting to see with long-term use continued improvement. And that’s the other aspect of why we want this to continue as we want to see how these per patient perform not only from a safety perspective but from an efficacy perspective. So on both fronts, safety and efficacy, we continue to be -- I mean, not only us but really Dr. Tremont, Dr. Freeman, the doctors who have treated these patients for such a long period of time, continue to be really excited about what they see. And that’s really the impendence for continue and grant extensions. You’re not going to continue to grant six month extension simply to get patient drug that’s not effective even if it's safe, you’re not going to continue to just give people these drugs. There is no placebo effect when somebody is a [indiscernible] spatient or genetically immunocompromised. So the drug is really working.

Thank you. There are no further questions at this time. And with that ladies and gentlemen, this does conclude today’s teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.