Matinas BioPharma Holdings, Inc. (MTNB) Q2 2022 Earnings Report, Transcript and Summary

Hello. And welcome to the Matinas BioPharma Second Quarter 2022 Results Conference Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to Peter Vozzo, Investor Relations Representative for Matinas BioPharma. You may begin.

Thank you, Kevin. Good morning, everyone, and thank you for joining the Matinas BioPharma second quarter 2022 results conference call. Earlier this morning we issued a press release with our financial results along with business updates. The release is available on the Matinas BioPharma website under the Investors section. Speaking on today’s call will be Jerry Jabbour, Chief Executive Officer; Dr Terry Matkovits, Chief Development Officer; Keith Kucinski, Chief Financial Officer; and Dr. Raphael Mannino, Chief Scientific Officer. Dr. Terry Ferguson, Chief Medical Officer; and Mr. Thomas Hoover, Chief Business Officer, available to answer questions during our Q&A session. At this time, I would like to remind our listeners that remarks made during this call may state management’s intentions, hopes, beliefs, expectations or projections of the future. These are forward-looking statements and involve risks and uncertainties. Forward-looking statements on this call are made pursuant to the Safe Harbor provisions of federal securities laws. These forward-looking statements are based on Matinas BioPharma’s current expectations and actual results may -- 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 files with the Securities and Exchange Commission. These documents are available in the Investors section of the company’s website and on the SEC’s website. An archive of this call will be posted to the company’s website also in the Investors section. Following the company’s prepared remarks, we will open the call for a question-and-answer session. I will now turn the call over to Jerry.

Thank you, Peter. Good morning, everyone, and thank you for taking the time to join us today. This morning, we will review our 2022 second quarter financial results and provide some highlights of our recent progress. As a company we are extremely pleased with both our progress and our execution during the second and third quarters of 2022. We acknowledge and appreciate that there are more and more eyes on our company and our technology platform, and that this attention is translated to an extremely loyal and dedicated shareholder base. During these somewhat challenging times for biotech stocks, we believe that our continued execution and focus have us well positioned for the second half of 2022 and far beyond. Matinas is a unique small cap company and that we have a later stage lead asset supported by impressive and compelling clinical data, while at the same time advancing a broadly applicable and potentially disruptive platform delivery technology supported by collaborations with some of the world’s most respected pharmaceutical companies. I want to begin today by addressing some of the questions around our exclusive research collaboration with BioNTech and our previously stated guidance that we hoped to have an option to license agreement in place within 90 days to 120 days of the original announcement. Although, these discussions have taken more time than perhaps it was initially anticipated, the passage of time has not dampened our collective desire to find a mutually acceptable agreement, nor has it impacted the spirit between our two great companies. The scientific aspects of our relationship have advanced nicely and we were thrilled to welcome BioNTech scientists to Matinas in June for an extended visit. A license agreement of this potential magnitude and importance takes time and can be complicated, but we remain very enthusiastic about our relationship and the prospects for a long-term partnership with BioNTech. We selected BioNTech for a reason, its leadership in the design and formatting of messenger RNA. And Matinas was also selected by BioNTech for a reason, our unique and proprietary delivery technology that could potentially solve some of the most significant challenges confronting conventional ways of packaging and delivering nucleic acids. One, oral bioavailability; two, non-immunogenic uptake and transfection permitting repeat dosing; and three, enhance stability, eliminating many of the significant costs associated with storing and transporting these critical therapies. Both parties continue to engage at the highest levels and with a positive outlook. We look forward to reaching an agreement that is representative of an appropriate value for our technologies capabilities and sets the proper precedent for this broadly applicable platform. Certainly, we will have more to announce on the continued progress of this relationship during 2022. I’d like to now turn to MAT2203, our late-stage clinical asset positioned for the treatment of deadly invasive fungal infections on a global basis, including cryptococcal meningitis, our lead indication. Several meetings with the FDA over the past few months have provided clarity around a flexible streamlined approval pathway for this potentially game changing drug, based on a single Phase III registration trial now scheduled to commence in the first quarter of 2023. Dr. Matkovits will provide more detail on the outcome of these crucial regulatory interactions, but from a high level, the FDA has given the guidance to establish a clear pathway to an approval for the treatment of cryptococcal meningitis, based upon a single Phase III pivotal trial, which incorporates both flexibility and appropriate risk mitigation to maximize the benefit of this drug for patients, as well as for our shareholders. We remain grateful to the National Institutes of Health for their ongoing and anticipated future financial support for this confirmatory Phase III trial. Based on recent transactions in the antifungal space, we believe there is significant value associated with a differentiated, safe and highly effective broad spectrum antifungal therapy. We believe that this recent regulatory clarity and positive support, both from FDA and the European Medicines Agency or EMA, along with our ongoing efforts to prepare for commercial supply through our arrangement with Thermo Fisher Scientific, very favorably positioned this asset for a partnership and we are pleased with the current level of interest being displayed by prospective third-party commercial partners. I’d like to turn the call over now to Dr. Matkovits to walk us through MET2203 progress in more detail.

Thanks, Jerry, and good morning, everyone. As you’re all aware MAT2203 is our oral LNC formulation of the broad spectrum fungicidal drug amphotericin B. Our ongoing EnACT trial is a Phase II evaluation of MAT2203 in HIV patients suffering from cryptococcal meningitis, a deadly fungal disease. With compelling data already demonstrated in the first three cohorts of this trial, we are currently enrolling patients in Cohort 4, which began in the first quarter of 2022. I’m pleased to report that this last cohort of the study is over 75% enrolled, with 42 out of 56 patients currently receiving treatment and that all patients currently in active treatment are doing quite well, which is a very positive sign at this point in the trial. While enrollments slowed a bit during May and June, due primarily to shortages of Flucytosine, we were able to take steps to secure enough Flucytosine to complete the study and have also recently opened an additional site in Uganda to facilitate enrollment. We have seen a recent uptick in enrollment because of these measures and remain confident that we will be in a position to announce topline data from Cohort 4 of EnACT late in the third quarter or early in the fourth quarter of this year. As you recall, Cohort 4 is studying an all oral regimen of MAT2203 during the 14-day induction period, followed by four additional weeks of oral consolidation therapy with MAT2203. Cohort 4 is comprised of 40 patients on MAT2203 administered with 5-FC and a control group of 16 patients receiving standard IV amphotericin B, also administered with 5-FC. We believe that this is an especially important cohort of patients, since the patients in the MAT2203 group do not receive any IV amphotericin. Achieving the primary endpoint in this cohort with an overall high rate of survival would be a very convincing demonstration of the impact that oral MAT2203 can have in treating these highly vulnerable patients. DSMB review of Cohort 4 data took place at the end of May at 50% enrollment. Following review of all of the available safety and efficacy data, the DSMB unanimously approved continuation of the study without any adjustments, a very positive indication that the all oral MAT2203 regimen is meeting expectations for both efficacy and safety. Turning now to the regulatory strategy for MAT2203. As Jerry mentioned, we have had several highly productive follow-up meetings with the FDA over the past few months, with very clear FDA guidance and support to help us finalize the design of the single pivotal Phase III registration trial for MAT2203, ultimately supporting submission of a new drug application or NDA, for a much simplified blanket indication for the treatment of cryptococcal meningitis. The open label trial which the company expects will be partially financially supported by the National Institutes of Health involves a three arm non-inferiority designed in HIV patients with cryptococcal meningitis. Arm one will be stepped down therapy with MAT2203 with treatment continuing for two weeks. ARM two will be stepped down therapy with MAT2203 with treatment out to six weeks. And Arm three will be a standard-of-care control arm of IV amphotericin induction transitioning to fluconazole. The non-inferiority margin for both the primary and key secondary endpoints will be 10% and total enrollment is expected to be approximately 270 patients, with an adaptive, de-risking design allowing for the potential for additional patients once enrollment has reached 75%. Key trial elements include, a primary endpoint of two-week all-cause mortality, with a pooled analysis across the two MAT2203 treatment arms compared with standard-of-care control to support a potential indication for the treatment of cryptococcal meningitis for up to two weeks. To evaluate opportunities for extending MAT2203 therapy, a key secondary analysis of 10-week relapse free survival of optimized treatment, two weeks or six weeks will be evaluated for non-inferiority against standard-of-care. Selection of the optimal treatment regimen will be based on predefined and protocolized clinical criteria and will then form the basis for a final NDA submission. We’re also extremely pleased to report that we recently received positive feedback from the EMA on both our request for Scientific Advice and Orphan Designation Application, which provides alignment with FDA and positions MAT2203 for global registration in key commercial markets, which is of great importance to potential partners. We also continue to aggressively pursue potential expansion -- expanded opportunities for MAT2203, focused on unlocking the full clinical potential of an oral and safe LNC enabled amphotericin B. We are excited to report today, that data generated in a neutropenic mouse model of pulmonary mucormycosis demonstrate that MAT2203 is as effective as liposomal amphotericin B in protecting against two clinical strains of mucormycosis, which are known to cause deadly invasive fungal infections associated with high morbidity and mortality. We expect these data to be presented and published this fall and full details of these studies should be available at ID Week. We believe that these data underscored the clinical potential of MAT2203 as a novel oral delivery of amphotericin B for the treatment of additional serious invasive fungal infections. Finally, we have recently initiated treatment of our first compassionate use patient for the treatment of an invasive fungal infection and are pleased to be able to support these highly vulnerable patients for whom there are limited treatment options available. I will now turn the call over to our CFO, Keith Kucinski, who will discuss our financial results.

Thanks, Terry, and good morning, everyone. This morning, the company reported a net loss attributable to common shareholders of approximately $5.9 million or $0.03 per basic and diluted share for the second quarter of 2022, compared to a net loss attributable to common shareholders of $5 million or a net loss of $0.02 per share basic and diluted for the same period in 2021. This increase was due primarily to an increase in research and development expenses, partially offset by $1.1 million of revenue resulting from the company’s research collaboration with BioNTech. Cash, cash equivalents and marketable securities at June 30, 2022, were approximately $38.5 million, compared to $49.6 million at December 31, 2021. Based on current projections, we continue to believe that cash on hand is sufficient to fund planned operations through 2023. I will now turn the call back over to Jerry.

Thank you, Keith. As we announced in our press release earlier this morning, Dr. Raphael Mannino, our Chief Scientific Officer has informed the company of his intent to retire from his position at the end of this year. Thankfully, he has agreed to transition to a consulting role and remain involved as a key strategic adviser to the company for at least the next year. Before I give Raphael a chance to express some thoughts, on behalf of our Board of Directors, shareholders and employees, I want to thank Raphael for his tremendous contributions to Matinas BioPharma and for his dedication to the LNC platform over the past 30 plus years. A true visionary, Raphael has set a great example for all of us, with his dedication, professionalism and integrity, and we look forward to ensuring that his legacy continues to permeate everything we do here at Matinas, as we remain committed to maximizing the breadth and value of this incredible LNC platform technology for the benefit of patients and our shareholders. Raphael, I give you the floor.

Thank you very much, Jerry. I’m extremely proud of all the work that has been done on the LNC platform over the years. Working on understanding and developing LNC technology has been challenging, educational and very rewarding adventure for me. First, I’m grateful to the talented and dedicated team at Matinas, for helping us to achieve remarkable clinical results with MAT2203. Establishing MAT2203 as a safe, convenient and highly efficacious drug formulation, demonstrating the ability to be administered orally, enter the systemic circulation, then cross the blood brain barrier and deliver amphotericin B to tissues in a targeted manner to save patients lives has been particularly gratifying for me. These past few years, we have also continued to gain greater insights into the mechanisms by which LNCs achieved the targeted delivery of their cargo therapeutics. These insights now provide the foundation for us to expand utilization of this differentiated delivery platform into new and exciting areas like nucleic acids, oligonucleotides, proteins and even vaccines. In collectively reaching these milestones, we have been able to achieve goals that I had set for myself, when I originally decided to focus my research career on the LNC platform. These achievements now have provided me with the opportunity to take a step back and slow down a bit. I could not be more excited about the scientific talent we have been able to attract to the company and the prospects for the LNC platform. We have taken great steps to ensure we have the right pieces in place and moving forward, and I have the utmost confidence in the team and the strategy for capitalizing on the opportunities ahead. I’m extremely happy that we’ll be able to have the chance to continue to work closely with the team, albeit in a different role come January, and I look forward to being a key resource for Jerry and the rest of the organization as they advance and progress this exciting technology. I’ll turn the call back over to Jerry for some concluding remarks. Thank you.

Thanks very much, Raphael. We wish you the best in your upcoming retirement and we’re thrilled that you will continue to act as a key strategic adviser and remain available to all of us for the foreseeable future, as we work tirelessly to continue to advance, validate and optimize the LNC platform across a wide range of therapies. Now to provide some concluding thoughts. Overall, we are pleased with our progress to-date in 2022 against our stated objectives, but we are far from satisfied. Over the next few months, there are several potential significant catalysts, which we believe will continue to drive our valuation and advance our LNC platform to new heights and visibility. We are excited about our upcoming Cohort 4 all oral MAT2203 data announcement in the treatment of cryptococcal meningitis. These data combined with regulatory clarity and a straightforward pathway to approval represent a significant opportunity for the company. In today’s market we are fortunate to have a late-stage clinical asset supported by impressive data with a large global commercial opportunity, which is the reason there is the opportunity to find the right commercial partner for this asset. We look forward to advancing our discussions with BioNTech and reaching a potentially transformational licensing arrangement in the field of messenger RNA, where BioNTech has proven to be a groundbreaking leader. Both parties share a sense of urgency and a desire to reach a mutually acceptable deal. Finally, we have many other irons in our fire, including programs with Gilead in remdesivir, Genentech and its molecules, our MAT2501 oral amikacin and other plans for our technology platform that are just now taking shape. This is an exciting time for our company and we believe for our stockholders, and we believe we are well-positioned for a strong close to 2022. We remain grateful to our supportive and patient shareholder base, who appreciates that good science does take time. We continue to think big here at Matinas and implement those steps necessary to build a strong and market leading company forged on a differentiated delivery technology at a time when delivery remains one of the industry’s biggest challenges. At this time, I will return the call to Kevin our Operator to facilitate a question-and-answer session.

Thank you. Our first question today is coming from Bert Hazlett from BTIG. Your line is now live.

Thank you. Congratulations on all the progress, lots going on and congratulations to Dr. Mannino on a great run. Just a quick follow-up on MAT2203 and then maybe just follow-up on other programs. Just with regard to MAT2203, is there any sense of the level of the support that you might be able to gain from the NIH for the Phase III program? I’d love to just get a sense of the magnitude of that?

Sure. So I -- as everyone knows, the NIH has long been a supporter of this program and it’s actually fully financial -- financially supporting the EnACT trial. Part of the way that this process works is Dr. Bill Weir has submitted a grant application to the National Institutes of Health. Those are scored across the Board by a panel of people within NIH. We understand that this particular study scored very highly relative to other programs that have been submitted, that initial indication was provided in the June timeframe, but that the final decision will come in September. Our expectation is that NIH will once again support this trial. At what level, whether it’s at a 50% level or 100% level, remains to be seen. At the end of the day, their financial support overall is limited to the patient costs in the study. Matinas has always been responsible for the CMC and for the supply of product. But that financial support from the NIH is meaningful and we expect it to be there again, and given the track record that the company has with NIH, the relationships that Dr. Mannino has been able to forge there, and quite frankly, the impressive results. Those are all good indicators, that this is a program that it makes sense for the NIH to push and get this drug over the finish line.

That are ongoing. Just a little more color on BioNTech and the status there. And if you could give us just a sense of maybe what the positions are between the two parties with regard yourselves and the company. With regard to their, at the scale of the agreement, just want to make sure we understand that as best as we can, as you contemplate additional moves going forward? And then just briefly, if there’s any update with regard to the Gilead or Genentech relationships that would be helpful as well?

Sure. So let’s start with BioNTech, and obviously, you always anticipate that everyone’s listening at all times. So the -- what I’m not going to do is negotiate over the phone with our partners. So, as far as sort of framing out the positions of the parties, I’ll put it in the context of what you typically see in these delivery platform deals. And at the end of the day, BioNTech came to us, because we have something nobody else has. And there is obviously a lot of competition in IP, confusion in the lipid nanoparticle space, number one. And number two, from a technical perspective, our technology facilitates delivery in a way that none of these other technologies could ever imagine. So that’s number one. What makes this relationship a little bit different is, the amount of competitive sensitivity that is going on now in the messenger RNA space and the potential to sort of lock out competition from an oral delivery of a messenger RNA in a way that does not generate an immune response, allows for repeat dosing and can completely change your cold chain, that desire to exclusively sort of wrap up our technology for an entire field. As I think, the biggest opportunity, it’s also I think, the biggest challenge for the parties to get their arms around typically in this area. Bert, as you know, what you see is you’ll see licensed arrangements, which are based upon targets or product candidates. We’re a little early for that, because most of what we’re doing on the research side with BioNTech is preclinical proof-of-concept. But that desire to maintain that competitive advantage is real and something that’s of key interest to BioNTech. The challenge for us is how you value that. And even at an early stage, you have to be careful or anticipate just how large this opportunity could be. And so you design a number of different scenarios that would take into account both product candidates and exclusivity, and you try to find some magic formula where the parties ultimately feel comfortable, that what they’re signing up for makes sense, both today and in the longer term. But that’s where the spirit of the discussions and the level of the discussions become really important. And so as a smaller company who’s approaching big pharma, what you want to have is you want to have visibility at the highest levels, you want to have an open dialogue and you want to be able to be supported by precedent. And I think that’s what’s happened over the last two years or three years, is you see the emerging importance of delivery, and deals between smaller companies and larger companies, and the value being attributed to a unique and differentiated delivery technology and we’ve named some of those deals in the past. So I don’t want to go through that. But we have time on our side. I mean, one of the advantages of having already -- have an ongoing relationship with BioNTech is that the science is not stopping. There’s no delay, while the parties figure out what the future looks like, in terms of advancing the platform and the delivery of messenger RNA and other nucleic acids. And we want the right deal, we want the right deal for our technology, we want the right deal, we obviously have a fiduciary obligation to our shareholders. We think the precedents there. We’re confident that a deal is going to get done and it’s really about putting ourselves in position where we can maximize the opportunity be able to participate in a downstream way and incent BioNTech to create as many product candidates as we can. So that you do have an opportunity to have a meaningful commercial participation as they advance the field of messenger RNA. So I don’t know that I can say more than that, but where -- we have a sense of urgency, so today. As we mentioned in our press release, the discussions are at an advanced stage, and hopefully, we get to a point in the near-term here when we have something meaningful that the market can digest and hopefully appreciate.

Awesome. Thank you for that color. And then just any brief update on Gilead and Genentech?

Yeah. So, the Gilead relationship, again, it’s one that’s important to us primarily from the validation of being able to package it and deliver an antiviral inside of cell, that has huge applicability, we think regardless of our relationship with Gilead. But we have Gilead attention. So the -- now that we have the full data package from UNC and NIH, we do already have something on the calendar to reengage with Gilead. And given sort of all over the attention around oral antivirals now, we think that there’s a discussion to be had there. So we’ll go into that armed with the confident that the data sort of support there, as generated in those two preclinical studies. And the Genentech work is ongoing. Even with six or seven people focused exclusively on formulation and delivery internally, we’re spreading ourselves across a lot of projects. And so we’re not, because we’re intently focused on BioNTech, it doesn’t mean we’re ignoring Genentech. We are doing formulation work with the proteins that they’ve provided and moving that forward as well. So we’ll see where that ends up. Hopefully, we’ll have some data and an ability to engage with them on a more meaningful level later this year. So -- and it doesn’t end there, but those are really the highlights and what we’ve sort of have discussed publicly. I know people are -- we’ve made a deal -- a big deal in the past about how many interactions we’ve had at events like BIO International and things like that. And that interest is real and those discussions take time to get people up to speed with our data packages and our technology and we’re being careful and thoughtful about who we want to move forward with, because you can’t be partners with everybody. So we like the group that we have here. We’re obviously focused in the short-term on creating real value with BioNTech, but it doesn’t mean that our relationships with Gilead or Genentech are any less important in the long run.

Thanks. Lots of focus, I am looking forward to additional progress all across the Board. Thanks, Jerry.

Thanks, Bert.

Thank you. We reached the end of our question-and-answer session. I’d like to turn the floor back over for any further closing comments.

Thanks, Kevin, and thanks, everyone, to joining -- for joining us today. We appreciate your continued interest in Matinas and the team here looks forward to providing you with updates on our future progress. Have a great day and enjoy the rest of your summer.

Thank you. That does conclude today’s teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.