Welcome to the Matinas BioPharma Holdings, Inc. Second Quarter 2021 results conference call. At this time, all participants are in a 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, Hector. Good morning, everyone. And thank you for joining the Matinas BioPharma Second Quarter 2021 Results Conference Call. Early 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 DeBoer, Chief Executive Officer, and Keith Kucinski, Chief Financial Officer. We also have Dr. Terry Ferguson, Chief Medical Officer, Dr. Terry Matkovits, Chief Development Officer, and Dr. Raphael Mannino, Chief Scientific Officer, who will be 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 that 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 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 SEC. 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. We appreciate your time today as we discuss our financial results for the second quarter of 2021 and provide a significant business update. Throughout this year, we have made substantial advancements in our Lipid Nanocrystal, or LNC Platform delivery technology, both with our drug candidates and through promising partnerships with leading pharmaceutical companies. Our commitment to directing our internal resources solely on our LNC Platform has produced remarkable results and positions our company for potential breakthrough milestones in the near future. We recognize that achieving efficient and safe intracellular delivery of molecules remains one of the major challenges in drug development, particularly for innovative therapies. We believe our LNC Platform could establish a new standard for safe and effective intracellular drug delivery. A crucial part of our shift to focus primarily on our LNC Platform has been clarifying our technology and its extensive capabilities to investors and potential partners. We were thrilled to present a comprehensive look at our LNC Platform during our successful R&D Day in June, where we highlighted the distinctive qualities of our technology and how our serine-based lipid nanocrystals can effectively and safely deliver various therapeutic agents in a non-immunogenic way. The process for both assembling and delivering from our LNCs involves a unique membrane fusion mechanism, setting our technology apart from lipid nanoparticles and viral vectors. We also provided insights into our ongoing clinical programs and shared preclinical data that indicates our technology might offer critical solutions for small molecules as well as more complex entities like messenger RNA, DNA plasmids, antisense oligonucleotides, and vaccines. An archived version of this webcast is available on our website, and we encourage anyone interested in our LNC Platform to view this valuable content. The feedback following our R&D Day has been overwhelmingly positive, leading to multiple new inquiries and paving the way for exciting external collaborations, some of which are already being explored. Since then, we have seen several important developments related to our LNC Platform. We are delighted to report that Cohort 2 of the EnACT study involving MAT2203 for patients with HIV and cryptococcal meningitis is now fully enrolled. A DSMB meeting to review the safety and efficacy data from this cohort is anticipated in September, and we intend to announce these findings along with insights from Dr. David Bower, the principal investigator, post-evaluation. Although it is not customary to disclose data during an ongoing clinical study, the strategic design of the EnACT trial and the significant unmet medical need in this patient group create an opportunity to further validate our LNC Platform. We believe the outcomes can demonstrate our LNC technology's capability to enhance oral bioavailability and effectively deliver molecules across the blood-brain barrier. In Cohort 2, the duration of oral MAT2203 during the induction phase was extended to 12 days, followed by a 4-week consolidation treatment involving 40 active patients. We plan to discuss outcomes from both Cohorts 1 and 2 in September, and we believe the results could signify a major advancement in treating cryptococcal meningitis. Key points to consider include: First, survival is the FDA's primary endpoint for these patients; we know that the current survival rate stands at only 70% with the best standard of care, dropping to 30% in less optimal conditions. Any improvement over this benchmark would be significant, especially given the oral nature of our treatment. Second, we aim to establish early fungicidal activity, specifically wanting the clearance rate of yeast from cerebrospinal fluid to exceed 0.2, as established in literature to correlate with better survival rates. Third, we want to see minimal to no rebound cryptococcal infections during the entire MAT2203 treatment process, demonstrating effective therapy. Fourth, achieving sterility for all patients during either induction or consolidation phases would further validate MAT2203’s effectiveness. Finally, we seek an overall positive safety profile for MAT2203, with no signs of renal toxicity historically linked to IV amphotericin, no major safety signals, and no issues with tolerability. This combination of results would bolster the case for MAT2203 as a safe step-down therapy and provide significant validation for our LNC Platform. We believe these data from the EnACT trial's first half could facilitate a key regulatory discussion later in 2021 about MAT2203’s approval as a step-down therapy through accelerated regulatory pathways for essential anti-infective medicines addressing significant unmet needs in vulnerable populations. Approval for step-down therapy would enable physicians to prescribe MAT2203 following a brief course of IV amphotericin to complete the standard two-week induction regimen and continue with MAT2203 for an additional four weeks in maintenance. This indication alone would represent a significant commercial opportunity for MAT2203. Post-EnACT, we plan to seek FDA guidance regarding regulatory approval for an additional all-oral amphotericin regimen for this patient group. Overall, we feel MAT2203 could drastically increase amphotericin’s use due to its efficacy and enhanced safety profile, while also reducing hospital stays and associated costs. The second major development regarding our LNC Platform concerns MAT2501, our oral formulation of the broad-spectrum antibiotic amikacin. Together with the Cystic Fibrosis Foundation, we've progressed in crucial preclinical studies during Q2. Positive input received from the FDA in July regarding these studies, as well as our development strategy for MAT2501, allows us to move forward with a phase one single ascending dose pharmacokinetic study in healthy volunteers planned for Q4 2021. Our objective with MAT2501 is to create the first oral aminoglycoside, which has the potential to revolutionize how this important drug class is utilized. Leveraging our LNC Platform's ability to efficiently deliver molecules intracellularly, we believe MAT2501 can effectively deliver high levels of amikacin directly to the lung without the limitations of typical toxicity. One of the most eagerly awaited developments since our last quarterly update is our progress towards creating an oral formulation of Gilead's COVID-19 antiviral drug Remdesivir. We are pleased to announce that we have successfully completed planned in vitro studies of various LNC formulations of Remdesivir in collaboration with the National Institute of Allergy and Infectious Diseases at NIH. These formulations were tested for antiviral efficacy against the viral strain, using unformulated Remdesivir as a benchmark. The data reviewed with NIAID demonstrated that the tested LNC formulations exhibited significant antiviral activity compared to free Remdesivir, accompanied by a favorable toxicity profile. As a result of these encouraging findings, NIAID is preparing for an in vivo efficacy study of our most potent LNC Remdesivir formulation shortly. We anticipate additional data to be available in Q4 2021. These in vitro results not only validate our LNC Platform’s potential for formulating an oral version of Remdesivir, but they also provide proof of principle for the broader intracellular delivery of antiviral medications. As we confront the ongoing battle against COVID-19, the demand for effective and well-tolerated antiviral treatments for patients at high risk for severe outcomes at early stages remains critical. An oral formulation of Gilead’s Remdesivir could serve as an invaluable option in combating COVID-19 as it would allow earlier administration and possible prophylactic use, pending clinical validation. We are very pleased with our advancements in this project and eagerly anticipate NIH’s planned in vivo study soon. Lastly, concerning LYPDISO, our promising prescription omega-3 therapy, we continue to advance through a comprehensive global partnership process and look forward to sharing updates later in 2021. I will now turn the call over to our CFO, Keith Kucinski, to review our financial results.

Thanks, Jerry. And good morning, everyone. Turning now to our financial results. Cash, cash equivalents, and marketable securities at June 30th, 2021, were approximately $59.8 million compared to $58.7 million at December 31st, 2020. Research and development expenses were approximately $2.5 million in the second quarter of 2021 compared to approximately $3.4 million in the same quarter of 2020. The decrease was due primarily to the completion of the enhancement study of LYPDISO in January 2021. General and administrative expenses were approximately $2.3 million in the second quarter of 2021, essentially unchanged compared to the $2.4 million in the same period in 2020. The company reported a net loss attributable to common shareholders of approximately $5 million or $0.02 per basic and diluted share compared to a net loss attributable to common shareholders of $5.8 million or a net loss of $0.03 per share both basic and diluted for the same period in 2020. The decrease was due primarily to the aforementioned reduction in research and development expenses. Based on current projections, we believe that cash on hand is sufficient to fund operations into 2024. I will now turn the call back over to Jerry.

Thank you, Keith. In summary, the next few months promise to be a very exciting time for our company. With the EnACT data set to be released in September, MAT2501 entering a human clinical trial in the fourth quarter, and additional efficacy data expected with LNC Remdesivir, we believe we have significant near-term milestones for the company and our LNC Platform Technology. These catalysts, when combined with ongoing work with Genentech and others in expanding the use of this new paradigm-changing technology, should position Matinas for very big things in the coming quarters. I'd like to recognize and thank the tremendous team we have here for keeping its collective goals and objectives and continuing to execute, especially in completing enrollment of the all-important second cohort of patients in EnACT. With that, we have reached the conclusion of our prepared remarks, and I will turn the call over to the operator for a question-and-answer session.

Thank you. At this time, we will be conducting a question-and-answer session. One moment, please, while we poll for questions. Your first question comes from the line of Bert Hazlett with BTIG. Please proceed with your question.

Yes. Jerry, thank you for the comprehensive update. Congratulations on the progress with 2203. We look forward to that upcoming data. Regarding the other programs, specifically 2501 and remdesivir, my first question is about 2501. Do you expect its development course to be similar to 2203, with multiple arms and treatment regimens, or can it be more straightforward in terms of initial studies, specifically regarding efficacy? Additionally, when do you anticipate we might receive the initial human data from the remdesivir program? Thank you very much.

Thank you, Bert, for your questions. Regarding 2501, it shares some similarities with 2203 as it follows a 505(b)(2) process for infectious disease drugs, allowing for some streamlined regulatory and development paths. However, it diverges in its goal to treat nontuberculous mycobacteria (NTM). In Phase 2, we plan to set it up much like the EnACT trial, utilizing a pharmacokinetic approach leading into a Phase 2a study, followed by a Phase 2b efficacy study focused on patients with NTM. Depending on our progress over the next year, we anticipate starting this program by the end of next year. Further discussions with the FDA are necessary to outline the Phase 2 program. We've engaged extensively with key opinion leaders in this field, including experts both within and outside of the NIH. Given the significant unmet need and our development strategy through 505(b)(2) and other channels, we believe this program can be streamlined similar to 2203. Additionally, with 2501, we aim to stack indications since amikacin has a broad spectrum. Our primary focus is the treatment of NTM, but we also plan to target various acute bacterial infections, particularly gram-negative ones. The development plans for these indications should commence soon after we initiate the Phase 2 efficacy studies for NTM. The first oral aminoglycoside presents a substantial opportunity because, despite its efficacy, amikacin is currently underused due to its toxicity profile, which includes nephrotoxicity and ototoxicity. We believe our delivery program can mitigate many of these safety concerns. The division of infectious disease at the FDA is very engaged with us, and our ongoing work with 2203 has positively influenced their views on 2501, as highlighted during our recent meeting in July. The agency is becoming more comfortable with the pharmacokinetic profile of our LNC program, understanding how it operates and how it effectively delivers the drug inside cells while reducing blood levels. This should help us potentially accelerate 2501's development. On the remdesivir front, we recognize the significant interest from NIH and Gilead, especially as NIH prioritizes this work. There are many drugs in the pipeline, but thanks to our relationships with NIH, we have been positioned ahead of several others. Consequently, we are eager to begin in vivo studies quickly, as we have secured a place in the queue. We aim to have data from these studies available in the fourth quarter, and we will review these findings together with NIH and Gilead. Although not formally communicated, we sense a keen interest in advancing quickly into human clinical trials. While the timing is somewhat uncertain, given the urgency of the situation, we anticipate the possibility of beginning these trials in the first half of 2022.

Thanks very much. Look forward to the progress. Thank you.

Your next question comes from the line of Greg Fraser with Truist. Please proceed with your question.

Thanks, guys. Thanks for taking the questions and congrats on the progress in the quarter. On 2203, can you give us some insight into the accelerated approval pathway that you believe may be feasible and the additional clinical work that you might have to do to support a step-down indication?

Sure. Thanks, Greg. So there are more than one avenue available to us. We know that LPAD is available; that's the limited population pathway for anti-infective medicines for small patient populations. We also know that we're dealing with an orphan patient population here. There are some advantages and some disadvantages to each or all of those pathways. And so as we evaluate our desire to advance this towards approval as quickly as possible, we're also very cognizant of the label that we would want. And so there are some elements to consider as we move forward either under LPAD or Ofrin or some combination of both. What we do know is that the need here will be what we believe dictates the timeline. And so in our discussions with the FDA to date, there has been great receptivity to advancing this as quickly as possible. We think we were given great leeway, even in the design of EnACT to sort of move as quickly as we did into this largest study in a vulnerable patient population. But it remains to be seen, Greg, until we take the data from Cohort 2 and sit down with the FDA, likely in the fourth quarter of this year as to what exactly will be required. We know that these deadly invasive fungal infection studies are very hard to recruit. In fact, it took Basilea more than four years to recruit 40 patients into our mucor trial. We've recruited more than 56 patients into Cohort 2 alone in under a year. So we're moving this very, very quickly. We think the number of patients here is large enough where the FDA is going to have a good amount of data to evaluate both safety and efficacy. A lot of care was taken in the design of this study to give us an appropriate control of IV amphotericin, and actually an increase in the standard of care that would normally be available in Uganda. So it remains to be seen how we engage with the FDA. Our position is going to be for step-down therapy that we've shown enough that we believe will be supported by the principal investigator and other KOLs. But it will depend in large part upon the data from Cohort 2 and how that is evaluated certainly first by the DSMB and then when we sit down with the FDA at the end of the year.

Got it. That's very helpful. On the data you walked through the key elements that you want to see, which is very helpful. Which of those will the data Cohorts 1 and 2 address? I'm assuming it's maybe too early to have survival data. But if you can just expand on what we may see next month, that would be helpful. Thank you.

Yeah, I think you're going to see all of it. Survival is a key measure in both Cohort 1 and Cohort 2. It's a little bit easier to discern the efficacy in Cohort 2. In these patients, and that there should not be, or should be limited additional clinical work necessary to get that approval for step-down therapy. It's possible that the FDA may require some U.S. patients in order to grant that indication; that's certainly something we've considered. We've talked about with the NIH, who has access to many of these patients in the U.S. So that would be I think the unknown factor at this point, do they want to see some U.S. patients who have HIV who have cryptococcal meningitis? Other than that, we feel that the design and the data from Cohorts 1 and 2 and balanced against the vulnerability of these patients and the unmet need that EnACT should be enough for that early indication, but we'll see. Terry, certainly, comments on anything I just said with respect to possible outcomes of the FDA discussion on 2203, and then helping us or Felicia and Yasmeen's question on the trial design for Phase 1 of the single ascending dose study.

Thank you, Jerry, for the question. Regarding our interaction with the FDA, we expect them to consider all safety and efficacy data from the EnACT study that we will present. This data will support our 505(b)(2) strategy discussions with the FDA, allowing us to negotiate which elements of the already approved amphotericin products can be included in our submission from a bridging perspective. We are confident that we will receive strategic direction and explore various pathways to register our oral amphotericin initially as a step-down from IV therapy, and eventually submit a supplemental application for an all-oral induction and consolidation treatment. For your second question about the 2501 single ascending dose study, we will be testing five dose levels of our oral amikacin product against a placebo control, which is standard in an SAD study. IV amikacin will not be included in this trial, but we plan to use it as a comparator in Phase 2. The cohort design will involve safety evaluations at each incremental dose escalation, with oversight from the sponsor and the medical monitor at the CRO conducting the Phase 1 study. We will carefully monitor safety signals related to renal function and ototoxicity. In the previous SAD study with our MAT 2501 formulation, we saw no safety issues. Therefore, we will take a cautious approach in dose escalation and anticipate moving into our Phase 2 trials by the end of next year.

Thank you.

One moment please while we poll for more questions. Your next question comes from the line of Robert LeBoyer with Noble Capital. Please proceed with your question.

Good morning. I had some questions on the EnACT trial, which you've answered in your previous answers to the questions, and thanks for all the detail. The only thing that I didn't catch was the number of patients in the second Cohort. And after you report the data in September, what are your expectations for the milestones going forward in the program?

Robert, thanks for your questions. It's good to hear your voice again. On the EnACT trial on Cohort 2, the total cohorts are 56 patients. So there's 40 patients on active and 16 control. And that follows up on Cohort 1 where you had 10 patients on active and 4 on control. So it's a healthy number of patients that will give you a significant amount of valuable data. So we're excited about that. From there, and dependent on the discussion with the FDA and what design changes we make that may put us in an even more favorable position for the overall approval of MAT2203. The second half of MAT2203 is designed really for that all-oral amphotericin indication. So Cohort 3 is again set up as the cohort or as a lead into Cohort 4. That would get underway this year. Cohort 3 in terms of following the DSMB review of the data, they would again make a determination in terms of progression from Cohort 2 to Cohort 3. We would expect that that would get underway at some point in 2021. That will again be 14 patients. Given the success we have had in enrollment, even despite some shutdowns in Uganda with COVID earlier this year, we would expect that Cohort 3 to be finished pretty quickly. That would again be followed by a DSMB evaluation of those data. And then we would go into Cohort 4 in 2022, which would be an all-oral amphotericin arm. We may make some adjustments to that to put us in an even better position with the FDA, but that would be some things we discuss with the agency in the fourth quarter of this year. But EnACT we would expect to be completed during 2022 absent any significant changes or discussions with the FDA.

Great. Thank you very much and congratulations on all this progress.

Thanks, Robert.

Ladies and gentlemen, we have reached the end of the question-and-answer session, and I'd like to turn the call back to management for closing remarks.

Thank you, Hector. And thank you all for joining us today. We appreciate your continued interest in Matinas. The team here looks forward to providing you with updates on our future progress. Have a great day.

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