Matinas BioPharma Holdings, Inc. (MTNB) Q1 2023 Earnings Report, Transcript and Summary

Greetings and welcome to the Matinas BioPharma First Quarter 2023 Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jody Cain. Thank you, Jody. You may begin.

This is Jody Cain with LHA. Thank you for participating in today’s call. Speaking on today’s call from Matinas BioPharma will be Jerry Jabbour, Chief Executive Officer; Dr. Terry Matkovits, Chief Development Officer, Dr. Terry Ferguson, Chief Medical Officer; and Keith Kucinski, Chief Financial Officer I would like to remind listeners that remarks made during this call may state management’s future intentions, hopes, beliefs, expectations or projections. These are forward-looking statements that involve risks and uncertainties. Forward-looking statements 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 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. Furthermore, the content of this conference call contains information that is accurate only as of the date of the live broadcast, May 10, 2023. Matinas BioPharma undertakes no obligation to revise or update any statements to reflect events or circumstances, except as required by law. And now I’d like to turn the call over to Jerry Jabbour. Jerry?

Jerry is your line on mute?

Thank you, Jody. Good afternoon, everyone and thank you for joining us. We have several recent developments to discuss today. First, we are encouraged by the feedback from the FDA that provides us with valuable guidance in developing a Phase 3 trial design with MAT2203, our oral amphotericin B product, which we believe could position this important and potentially life-saving drug for the broadest label possible for the treatment of numerous invasive fungal infections. It’s not often that the Director of the Division of Infectious Diseases elects to join a Type B meeting. And we believe this is a signal of the broad support we are receiving within FDA for the development of MAT2203. We also announced earlier today that our initial in vivo study of oral messenger RNA delivery did not demonstrate preclinical activity, which resulted in the conclusion of our collaboration agreement with BioNTech. Following a few brief remarks on these developments, I will turn the call over to Dr. Terry Matkovits to provide a more detailed update on MAT2203 and our plans to pursue marketing approval, followed by Dr. Terry Ferguson to discuss this recent development with BioNTech and our other nucleic acid programs. Finally, Keith Kucinski will review our financial results for the first quarter. You may have seen findings from a recent government study that was widely covered in the media discussing the rapid spread of deadly fungal infections in U.S. healthcare facilities. This disturbing news provides us with an even greater motivation to advance our MAT2203 program through late-stage development for broad treatment of these often deadly invasive fungal infections and toward commercialization. Our optimism for the life-saving potential for our drug has increased as we have continued to amass impressive compassionate use data through our expanded access program. One particularly compelling case was even highlighted during the recent European congress of Clinical Microbiology and Infectious Diseases or ECCMID, which was held last month. This growing body of clinical evidence played a meaningful role in our recent FDA meeting held in April. During our March investor call, we announced that preparations were underway for a Type B meeting seeking the FDA’s guidance and agreement on the design of a Phase 3 clinical trial to assess the efficacy, safety, and tolerability of MAT2203 in patients with life-threatening invasive fungal infections or ifs. Strategically, we believe that the treatment of these IFIs with our broad spectrum and orally administered antifungal agent, MAT2203, represents an important unmet medical need. It also aligns with the commercial interests of potential partners and sources of non-dilutive government funding to support the complete development and hopefully ultimate approval of MAT2203. We are diligently working to finalize and submit a protocol and accompanying statistical package for FDA review in the next few weeks. Once we have agreement with FDA on the design and endpoint to this Phase 3 study in aspergillosis, and other IFIs, hopefully in June, we’ll finalize our plan submission to BARDA and make a new submission to the Advanced Research Projects Agency for Health or ARPA-H. This is a research funding agency within the NIH, which has a $2.5 billion annual budget directed at supporting transformative biomedical and healthcare breakthroughs. On the partnership front, we remain in dialogue with multiple potential, global and regional partners and are prepared to accelerate those discussions with this important FDA feedback in hand. Turning now to BioNTech, we were disappointed to learn that our initial in vivo study of oral mRNA delivery, which was based upon encouraging early in vitro results did not demonstrate preclinical activity. We recognize that this was an ambitious goal for a first in vivo study of a new, unique messenger RNA formulation, especially where, to date, no delivery technology has been successful in achieving oral delivery of messenger RNA. We are pleased to report that in other studies conducted by Matinas similar messenger RNA formulations have shown activity when administered both intramuscularly and intraperitoneal. And we are encouraged by their ability to maintain both structural stability and undiminished biological activity for prolonged periods. We continue to believe that our technology has potential to provide differentiated delivery of nucleic acids, and this potential has been recognized by numerous parties outside of our relationship with BioNTech. To that end, we are in the process of generating additional data in this area, both through our collaboration with National Resilience, which has expanded to include studies with messenger RNA following April expiration of exclusivity with BioNTech and our own internal Matinas discovery programs in the siRNA space. Dr. Ferguson will have more on this shortly. With those comments, I would now like to turn the call over to Dr. Terry Matkovits. Terry?

Thanks, Jerry. And good afternoon everyone. As Jerry mentioned, we recently received official minutes from a very productive meeting with the FDA held in April. We believe that the written feedback reflects the clinical benefit the agency sees in developing a safe, targeted, orally administered form of amphotericin B for the treatment of patients with life-threatening IFIs. FDA also expressed its desire to continue to work collaboratively with us to advance development of MAT2203, while also acknowledging the impressive novelty of our LNC platform technology and its unique pharmacokinetic profile for the delivery of amphotericin B without the toxicity associated with IV administration. Importantly, the FDA provided us with the valuable guidance for pursuing MAT2203 registration in a broader IFI indication. The agency was encouraged by the impressive results from our EnACT Phase 2 trial in cryptococcal meningitis, which demonstrated that our LNC platform was able to deliver amphotericin B in a safe, well-tolerated oral form across the blood-brain barrier with unprecedented survival outcome for oral antifungal therapy. During our meeting, FDA advised us that a larger Phase 3 trial focused solely on cryptococcal meningitis would be challenging to establish the pharmacodynamic bridge necessary to support a pharmacodynamic bridge necessary to support a streamlined 505(b)(2) approval pathway in broader IFI indications since MAT2203 would be administered as combination treatment with flucytosine or fluconazole. While surprising, following robust discussion with FDA, we now believe that the revised Phase 3 aspergillus IFI study design, assessing the efficacy and safety of MAT2203 as early step down monotherapy in a comparative non-inferiority Phase 3 trial in aspergillus should establish the desired pharmacodynamic bridge to unlock the 505(b)(2) pathway to indications for the treatment of other invasive fungal infections. We expect this strategy to result in the broadest possible label for MAT2203, utilizing the most efficient clinical development pathway. Now let’s take a look at our Phase 3 strategy. We are designing this trial to include a comparative study targeting a single IFI, the deadly fungal infection aspergillosis and will include both first- and second-line treatment indications. The main aspergillosis cohort in this new trial design will include a non-inferiority comparison with standard of care IV azole or IV amphotericin B with a step down to oral azole or oral MAT2203 as monotherapy treatment beginning as early as two days after treatment with IV amphotericin B. The proposed trial will also include an additional cohort in a non-randomized experimental arm of patients with a broad range of probable or proven IFIs who are not able to step down to oral azole therapy. The IFIs in this cohort will likely include invasive mucormycosis and other rare mold infections, invasive candidiasis, candida cystitis and endemic mycoses, including coccidioidomycoses, histoplasmosis and blastomycosis. Our strategy of including a cohort with a broader group of IFIs will benefit from leveraging the pharmacodynamic bridge we expect to establish in the comparative aspergillosis portion of the Phase 3 trial. We plan to capitalize upon this bridge to justify label expansion to IFIs under the 505(b)(2) pathway and to continue to qualify for QIDP incentives under the FDA priority review and Fast Track designation, as well as orphan drug exclusivities that could allow for 12 years of exclusivity protection in the U.S. and possibly 10 years in the EU. We are in the process of finalizing this revised Phase 3 protocol for submission to FDA later this month, and FDA has agreed to review the protocol and provide comments on an off-cycle basis. This benefits us from a timing perspective and is another example of the FDA working collaboratively with us. We also expect this collaborative spirit to impact agreement on the acceptable non-inferiority margin for the main aspergillus cohort in this trial, which will directly impact the size of this cohort and the overall timing for study completion. During our meeting, FDA also recognized the clinically meaningful outcomes from compassionate use patients receiving MAT2203 as part of our expanded access program. While the case numbers are limited, the data demonstrates the ability of MAT2203 to safely target and effectively eradicate several invasive fungal infections even in the most clinically challenging cases. Since beginning this program in August of last year we have received inbound requests from physicians at the National Institutes of Health, University of Michigan, Nationwide Children’s Hospital and Johns Hopkins among others on behalf of patients who have experienced significant renal toxicity while receiving IV amphotericin B and/or have not responded to or are unable to tolerate azole or other classes of antifungal. To date, seven patients with various life-threatening fungal diseases including: candida, aspergillosis, mucormycosis, coccidioidomycosis, fusarium, rhodotorula and protothecal infections have been treated with MAT2203 as part of our program. These infections have presented across various tissues in the body, including bone, skin, lung, sinus, bladder and the brain or central nervous system. Treatment courses with MAT2203 administered as monotherapy have ranged from two weeks to six months or longer with no evidence of any renal toxicity. Off the seven patients five have successfully completed treatment with resolution of the infection with one patient, discontinuing treatment for reasons unrelated to MAT2203. Renal function for the patients return to normal after switching to MAT2203 with no further need for any electrolytes supplementation. Additionally, all were discharged from the hospital soon after switching to MAT2203 and received treatment on an outpatient basis. Of note, the pace of inbound request for our expanded access program has increased following a highly impactful case study presented at ECCMID last month as Jerry mentioned. We will continue to identify and support requests for access where the compassionate use of MAT2203 makes sense for the patient and presents opportunities to generate additional meaningful clinical data outside of the clinical trial setting. I’d now like to turn the call over to Dr. Terry Ferguson to discuss our nucleic acid programs. Terry?

Thanks Terry, and good afternoon everyone. We very recently received results of an initial in vivo study of an oral mRNA delivery formulation that was conducted in collaboration with BioNTech. The results did not demonstrate oral preclinical activity. By way of background this study was conducted in healthy mice and involved oral administration of a unique, proprietary, non-LNC formulation of BioNTech-supplied reporter firefly luciferase mRNA. This new proprietary, phosphatidylserine-containing nano-formulation is distinct from our conventional LNCs, and was developed by scientists at Matinas to handle the physical complexity and biological fragility of mRNA and other large oligonucleotides. We had been quite optimistic about moving into the oral study as this new delivery technology had successfully delivered mRNA in vitro in multiple cell lines. Because of the timelines required under the BioNTech collaboration we opted to bring it forward for oral in vivo evaluation. Unfortunately, we were not successful in this initial study and our collaboration agreement with BioNTech has been concluded. In parallel to our work with BioNTech, we conducted additional internal in vivo studies with similar non-LNC mRNA formulations, and these have shown significant activity with systemic administered both intramuscularly and intraperitoneally. Our new mRNA formulations have also demonstrated impressive structural stability and continued biological activity out to at least 17 weeks at 4-degree Celsius, which compares favorably to lipid nanoparticles or LNPs. Matinas has filed numerous provisional patent applications based on these novel, unique phosphatidylserine-based formulations. With the exclusivity constraints of the BioNTech agreement expiring last month, we were able to pursue interest from others working with mRNA. We have taken this opportunity to shift our work under our agreement with national resilience to focus more on mRNA, including in vitro delivery of reporter oligonucleotides with LNP reference comparators, delivery of even larger reporter oligonucleotides, and ultimately extending this work to include delivery of therapeutic oligonucleotides such as Cas9 mRNA, both in vitro and in vivo. Current plans involve a move into initial in vivo studies in the third quarter of this year. We envision that national resilience could be a true platform partner for our technologies by bringing to the table their considerable CMC expertise, their substantial manufacturing scale, and their unparalleled industry relationships in the nucleic acid space. We’re also continuing our internal discovery work with smaller oligos such as short interfering RNA or siRNA with specific inflammatory and oncology targets. We have chosen to focus these internal efforts on smaller oligos because of the greater ease, which with – with which they can be encapsulated into traditional LNCs. The previously documented success of traditional LNC of small oligos in prior in vitro and in vivo studies, and the overall success of the LNC platform in the oral delivery of small molecules. Following initial in vitro testing with cargoes that include new therapeutic agents we intend to move forward with multiple in vivo bio-distribution and animal efficacy studies in the second half of 2023. Data from these studies are expected to be highly useful in positioning Matinas for developing a broader potential pipeline of ASO and siRNA therapeutics. Now, I’d like to turn the call over to Keith Kucinski to review our first quarter financial performance. Keith?

Thank you, Terry. Today we reported revenue for the first quarter of 2023 of $1.1 million, which was generated from our research collaborations with BioNTech and Genentech. We had no revenue for the first quarter of 2022. Total cost and expenses for the first quarter of 2023 were $6 million compared with $7 million for the first quarter of 2022, the decrease was primarily attributable to lower manufacturing costs of clinical trial materials partially offset by higher headcount. Our net loss for the first quarter of 2023 was $5.5 million or $0.03 per share, this compares with the net loss for the first quarter of 2022 of $6 million, also $0.03 per share. Our cash, cash equivalents and marketable securities as of March 31, 2023 were $24.9 million. Based on current projections, we believe our cash is sufficient to fund planned operations into the second half of 2024. With that, I’ll turn the call back to Jerry.

Thanks Keith. In summary, MAT2203 has been established as a highly promising treatment for serious and often deadly fungal infections. Survival data from our Phase 2 EnACT study in cryptococcal meningitis combined with the growing evidence of clinical impact in the treatment of invasive fungal infections through compassionate use in our expanded access program have provided a solid basis upon which to engage FDA in a thoughtful and productive discussion on the Phase 3 program designed to have the broadest clinical impact, resulting in a significant commercial opportunity for potential partners. FDA’s feedback, guidance and willingness to engage collaboratively have placed us in a stronger position to advance development of this life-saving drug. We’re excited to finalize and submit our planned protocol to FDA for final review and obtain a big piece of the puzzle on unlocking partner value and government funding support. We remain on track with a later stage impactful clinical asset and one we continue to build a company around. While the recent in vivo study result with a novel oral messenger RNA delivery formulation, we conducted with BioNTech may represent a short-term setback. We are reminded that our goal of oral delivery of messenger RNA is ambitious and has to date not been accomplished by anyone else. Through our collaboration with BioNTech, we generated promising in vitro data followed by in vivo data demonstrating that our delivery technology could successfully deliver large nucleic acids like messenger RNA systemically. Even if the Holy Grail of oral delivery remains elusive at this point in time. We remain committed to expanding our understanding of the capabilities of our platform technologies and continue to believe they have the potential to provide differentiated delivery of nucleic acids through programs with National Resilience with messenger RNA and internal programs focused on LNC delivery of siRNA and small molecules. The second half of this year should yield multiple opportunities for additional data and expansion of our platform. We’re grateful for your continued support and will continue to diligently advance our promising technologies and resulting therapies for the benefits of patients globally. With that, we have finished our prepared remarks. And I will now turn the call back over to our operator, Paul, to facilitate a question-and-answer session. Paul?

Thank you. [Operator Instructions]

Thanks Paul. While we’re waiting for that first question, I’d like to mention that we have been invited to present at the JMP Healthcare Conference next Monday, May 15 in New York. The presentation will be webcast and will be available on the IR calendar page of the company website. Okay, Paul, can we have that first question, we’re ready.

Thank you. Our first question is from Gregg Alexander [ph] with Truist. Please proceed with your question.

Hey Jerry. Thanks for the presentation. I really appreciate it. Just had a question about the BioNTech collaboration. Over the past year you had mentioned that the deal was almost over the finish line or near the finish line. Can you just talk a little bit about what happened, and where we are right now with BioNTech?

Sure. I didn’t catch your name. What’s your name, and where you’re from?

Gregg. Gregg, I’m an individual investor, Alexander.

Okay. So Gregg, thanks for the question. I know that the BioNTech relationship has been on the minds of investors since we first announced it last April. And it’s a relationship we’re really excited about and scientifically being able to collaborate with a group like BioNTech, represented a great opportunity for us. And BioNTech came to the table with money on the table and ready to support us, and – but I think everyone recognizes that and certainly BioNTech did too, that we went into that relationship, having not yet demonstrated our ability to encapsulate and deliver messenger RNA. But the opportunity that the oral bioavailability could present for that particular nucleic acid was worth the work. And so the parties collaborated together over a year, certain aspects of that agreement, put BioNTech in position to want to potentially discuss a license agreement, which the parties did over the course of the last 12 months. As the year advanced and the work proceeded we developed a series of encouraging in vitro data where we showed the ability to encapsulate and get penetration essentially in a lab. And the decision was made at that time by BioNTech that they would like to wait for the in vivo data. And so we were full steam ahead towards an in vivo study, one-single study that BioNTech planned. We worked with their reporter, luciferase messenger RNA, encapsulated it, gave that product to them for the conduct of that study in April. And very recently, they shared the results of that study. Due to constraints on that agreement, I can’t go into a lot of the details around what was discussed with BioNTech, but they made it clear and we parted ways in a very cordial manner, but that they were going to focus on other projects. And so after we reviewed that data with their scientific teams, we also made them aware of our in vivo studies highlighting our ability to deliver systemically. It’s clear that they were focused on oral and based upon certainly what we’ve seen with BioNTech over the last few months. I think they’ve got a lot on their plate. For us, it was an opportunity worth taking. No question. We do it again all day long. But that’s also one of the reasons why at the first opportunity we could, we reached out and really turned the national resilience relationship towards messenger RNA, it’s the reason they came to us in the first place. The delivery of messenger RNA, whether systemically or oral represents an enormous opportunity. The current technology is used to deliver nucleic acids are effective but not perfect, and there’s a great need across the board for us to advance effective delivery. And so we’re going to continue to work on it. It may not be with BioNTech, but we’re excited about what we’re doing with National Resilience. We’re excited about what we’re doing in the siRNA space with targets in inflammation and oncology, and we wish BioNTech the best. We’re disappointed it didn’t work, but when no one’s been able to do it for 30 years, shame on us for believing we’d be able to do it the first time. But we had good reason for optimism. We’re going to drive forward. We’re not done in nucleic acids, and by the way we don’t want anybody to lose sight of the fact that when we sat down with FDA from MAT2203, we now have a lot of momentum, a plan for Phase 3 there and a clinical-stage asset that saves lives. So one of the unique things about Matinas is that it’s not a single shot on goal company. We have a technology that we believe can be broadly applicable. We took a shot with BioNTech, we do it again, but now we’re intent on also driving 2203 forward into a Phase 3 study because as we’ve shown and discussed over the past couple of months, this drug saves lives. So Gregg, congratulations to you for being the first individual investor to ever circumvent the lineup of analysts we have. But your question is a worthy one and a good one. So we welcome it. Hopefully, that gave you some color.

Thank you. Our next question is from Julian Harrison with BTIG. Please proceed with your question.

Hi. Congrats on the progress, and thank you for taking my questions. First on MAT2203, I was wondering if you could just remind us that the opportunity in post-transplant prophylaxis patients and what the development strategy might be there going forward? And then on the LNC technology, you noted that you plan to continue with in vivo distribution and efficacy studies in the back half of this year. I’m curious if this will include oral dosing or are you going to focus in other routes of administration there? And also when might we expect data from these additional studies? Thanks.

Sure. Julian, thanks very much, and welcome to the story. We’re thrilled to have you working with us with BTIG. So I want Dr. Matkovits to weigh in here, but prophylaxis has long been in our sights for those investors that have been around for a number of years. Prophylaxis is actually where this drug was targeted and heading based upon its unique profile. Any time you can take a broad spectrum drug that’s going to be effective against a lot of different bugs, works in immunocompromised patients and has the ability to be given orally given the increased incidence of immunocompromised patients developing fungal infections, prophylaxis is a natural place you would take a drug like MAT2203. When Dr. Matkovits joined, we smartly sort of pivoted that to let’s prove we can treat the fungal infections first, but we never lost sight of the opportunity that prophylaxis brings. And certainly, it is there and very much a large part of the value proposition. But Terry, why don’t you shed a little light on that?

Sure. Thanks, Jerry, and thanks for the question, Julian. So we believe that through the clinical program that we have generated data from in patients with invasive fungal infections, we’ve really highlighted the three critical attributes of our oral MAT2203 that we believe ideally positions this drug for the prophylaxis setting in patients post-transplant. And that includes the ability to administer orally the favorable long-term safety profile of our drug and the significant safety profile that allows the drug to be administered without any risk or any drug-drug interactions. So those three pivotal components of our drug, we believe, ideally and uniquely positions our drug to really replace oral azole therapy in the prophylaxis setting. And in fact, I can say from our recent experience at ECCMID during IDWeek last year, we have had significant inbound interest clinicians, who are treating patients, who are immunocompromised and has expressed interest in being part of our clinical program as we expand into the prophylaxis indication.

Great, thank you.

And then, Julian, let me touch on the second part of your question, nucleic acids. One of the best things that come out of the last year, specifically our work with BioNTech is we showed we have some pretty impressive scientists internally. And I say that because we started utilizing lipid nano-crystals, but when we recognized that there was going to have to be optimization there that was going to change the time lines of our relationship with BioNTech, in less than six months, the internal team here essentially came up with a novel phosphatidylserine based lipid-nanoparticle that didn’t have cytotoxicity in vivo, that was able to target cells, that was able to demonstrate activity and that continued in an in vivo environment. And so when you think about the historical legacy of lipid nanoparticles in the 20-plus years it took to get a therapy approved using lipid nanoparticles, the fact that the team here was able to do that in such a short period of time is frankly remarkable. And it gives us a couple of different opportunities. We do think that there is a size issue with the larger oligos, which represent a challenge for lipid nanocrystals, getting things to embed themselves in the buy layer. And so it gives us an opportunity to do two things. So with the National Resilience, we’re going to be focused more on systemic delivery, a huge need for IV, particularly in the vaccine area. So, we’re going to work with them utilizing this next-generation phosphatidylserine nanoparticle technology. But our internal work, smaller oligos are different. So siRNA for us still represents an important oral opportunity. We are targeting inflammation in oncology there, but it will be at least at present, our belief is that we can successfully encapsulate siRNA and deliver it with our LNCs. We’ve done that with other smaller oligos. But maybe Terry Ferguson, you want to shed some light on that. But our expectation, Julian, in the second half of this year is that we’ll have data with both.

Yes, Jerry, to build on what you were saying, I think, that it’s important to recognize that with the – as a result of the work that we’ve been doing with mRNA and our first opportunity with mRNA, we learned a lot. And it’s a different kind of cargo to be able to deliver. And we developed a specialized system for delivery of large oligos, it just didn’t work orally. Our LNC technology, the traditional LNC technology, the nanocrystals is available orally. Dr. Matkovits highlighted the success and progress of our MAT2203 program. But our ongoing work focusing on the smaller oligos, the siRNAs, the ASOs is taking advantage of exactly that technology and the strengths of what we’ve been able to prove and prior work that has shown delivery in vitro and in vivo of small oligos. So that work will probably be more focused in the oral direction.

Okay, great. Thanks very much.

There are no further questions at this time. I’d like to hand the floor back over to Jerry Jabbour for any closing comments.

Thanks, Paul. Thanks to everyone for joining us today and for your interest in Matinas. We are very excited about our company’s future, we are very excited about our ability to save lives with MAT2203 and we are very excited about the potential we have with a number of different delivery technologies going forward in nucleic acid. We look forward to reporting our progress during our Q2 investor call in August. And should we have developments before then, we certainly will be informing the market as soon as we can. Thanks, and have a great evening.

This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.