Welcome, everyone, to the Matinas BioPharma First Quarter 2024 Financial Results Conference Call. As a reminder, this conference is being recorded.

This is Jody Cain with LHA Investor Relations. Thank you for participating in today's call. Joining me from Matinas BioPharma are Jerry Jabbour, Chief Executive Officer; and Keith Kucinski, Chief Financial Officer. Dr. Terri Matkovits, Chief Development Officer; and Dr. Terry Ferguson, Chief Medical Officer, will be available during the question-and-answer session. I'd 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 and involve risks and uncertainties. Forward-looking statements 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 Securities and Exchange Commission. These documents are available in the Investors section of the company's website and on sec.gov. Furthermore, the content of this conference call contains information that is accurate only as of the date of the live broadcast, May 9, 2024. 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?

Thank you, Jody. Good afternoon, everyone, and thank you for joining us. Following a relatively quick turnaround from our full year 2023 call held in late March, today, we will be providing a brief but important update on our progress in key programs with our LNC platform technology, starting with MAT2203, our oral formulation of amphotericin B, which continues to demonstrate its potential to be a safe and effective long-term treatment option for a variety of invasive and often deadly fungal infections. Our discussions to secure one or more development and commercialization partners to advance MAT2203 into the Phase III ORALTO trial remain on track. We recognize that there is a lot of attention on this process and investor interest in seeing this goal come to fruition. This enthusiasm and interest in securing a partner and advancing into Phase III and toward commercialization is also shared by infectious disease physicians and KOLs who continue to provide very positive feedback and encouragement on how MAT2203 could become an essential part of the treatment regimen for patients facing these deadly infections, especially for those who currently have limited or no treatment options. These discussions involve complex negotiations on everything from territory to overall development strategy and indication stacking, to commercial manufacturing to regulatory and commercial positioning. Securing one or more development and commercialization partners for this life-changing asset, who share our sense of urgency to maximize MAT2203 value in multiple geographies continues to be our objective. We are focused on consummating a transaction that is in the best interest of our company, supports our strategic focus, brings value to our stockholders and positions MAT2203 to become an important solution for patients in need. Our confidence in the success of oral MAT2203 in the ORALTO trial as well as our positive outlook in other invasive fungal infections more broadly continues to build as we see mounting evidence of favorable outcomes in extremely ill patients from our compassionate expanded use access program. To date, we have enrolled 22 patients with additional patients under evaluation. This program highlights the ability of MAT2203 to safely target and effectively eradicate a variety of severe and potentially deadly invasive fungal infections, even in the most challenging clinical circumstances, including some infections deemed more difficult to treat than aspergillosis. We are pleased that supportive data with MAT2203 were recently published in a manuscript in antimicrobial agents in chemotherapy. The in vivo study data there demonstrated prolonged and enhanced survival, reduced fungal burden and improvement in lung infection with MAT2203 compared with placebo in treating the pulmonary mucormycosis fungal infections in immunosuppressed mice. Invasive mucormycosis infection is noteworthy for being very difficult to treat with a mortality rate that often exceeds 50%. And in the most severe circumstances have brain involvement, persistent neutropenia, and are hematogenously disseminated disease with mortality rates above 90%. Although these were preclinical data, MAT2203 has already been used to successfully treat multiple patients suffering from mucormycosis with impressive clinical resolution in the absence of nephrotoxicity. The body of evidence that MAT2203 is a life-changing therapy continues to grow, and we look forward to moving it into the ORALTO Phase III global clinical trial later this year. With MAT2203 partnering discussions ongoing, we have shifted our focus towards our other LNC platform programs. We have already generated foundational data through in vivo animal studies in oncology and inflammation, where we see significant unmet medical need and the opportunity for the unique LNC mechanism of action to play a meaningful role in combination with effective treatments suffering from inefficient or nonspecific delivery and/or significant safety and toxicity concerns. We have continued to generate highly encouraging results from in vivo studies with our LNC formulation of docetaxel, a well-known chemotherapeutic agent, administered intravenously that's routinely used in the management of various metastatic and unresectable tumors, but with well-recognized side effects and toxicities. Our studies have shown that oral LNCs can deliver docetaxel directly to tumor cells and with longer treatment duration than IV docetaxel while also reducing tumor volumes to an extent comparable to IV docetaxel, all with no indications of toxicity. The ability to improve the therapeutic index of docetaxel could improve patient outcomes with less toxicity and potentially broaden the scope of use of LNC docetaxel in treating tumors previously considered unresponsive to IV docetaxel treatment. Building off the LNC docetaxel data, we have also successfully formulated miriplatin, an insoluble platinum chemotherapeutic approved in Japan for hepatocellular carcinoma. In vitro testing demonstrated strong cellular uptake and tumor cell killing capabilities. Next steps are to assess this formulation in vivo with the results expected later this quarter. We continue to believe that the attributes of our LNC platform create unique opportunities to orally deliver antitumor agents with preferential uptake by certain tumor cells. More work is ongoing to enhance and optimize our oncology LNC with particular focus on optimizing dosing strategies, evaluating the impact of tumor cell surface phosphatidylserine, and the ultimate selection of preferential tumor targets. We expect to have more updates on our oncology programs in the second half of this year. Turning now to our small oligonucleotide program. We have successfully orally delivered biologically active small oligonucleotides in several inflammatory disease models. We are continuing to explore the delivery of cytokine inhibiting small oligonucleotides for inflammation with additional work in other animal models with other cytokine targets. We expect additional data from this work in the third quarter. Our highly promising data from ex vivo, in vitro, and in vivo studies showcasing our LNC platform for the uptake in targeted delivery of small oligonucleotides is being shared this week by our Chief Medical Officer, Dr. Terry Ferguson, in two separate presentations at the American Society of Gene and Cell Therapies 27th Annual Meeting as perhaps the only company successfully orally encapsulating and delivering small oligonucleotides with meaningful biological activity; our work here has been generating a lot of interest. In addition, our Chief Technology Officer, Dr. Hui Liu, will be presenting new in vitro and ex vivo data from our small oligonucleotide programs at the TIDES USA 2024 Conference next week in Boston. As we look to capitalize on our unique LNC drug delivery platform, which has been clinically validated by MAT2203 in infectious disease, we see a bright future in continuing to expand applications for the LNC platform into areas of significant unmet medical need. While early, these data in oncology and inflammation are part of our strategy to establish LNC as a preferred next-generation, orally available and targeted intracellular drug delivery technology. Before I turn the call over to Keith Kucinski, I'd like to mention that we completed a financing last month that strengthened our balance sheet and extended our cash runway into the second quarter of 2025, which better positions us to advance studies with our LNC platform programs while we work to secure MAT2203's future. We are grateful to our new investors for their support.

Thank you, Jerry, and good afternoon. In reviewing our financial performance, we reported no revenue for the first quarter of 2024 versus $1.1 million of revenue for the first quarter of 2023, which was generated from our research collaborations with BioNTech and Genentech. Total costs and expenses for the first quarter of 2024 were $5.9 million compared with $6.7 million for the first quarter of 2023. The decrease was primarily attributable to lower clinical development expenses, personnel costs, and administrative expenses. Our net loss for the first quarter of 2024 was $5.8 million or $0.03 per share. This compares with a net loss for the first quarter of 2023 of $5.5 million, which was also $0.03 per share. Cash, cash equivalents, and marketable securities as of March 31, 2024, were $8.1 million. As Jerry mentioned, subsequent to the close of the quarter, in April, we raised gross proceeds of $10 million through a registered direct financing. Based on our current projections, we believe our current cash resources are sufficient to fund planned operations into the second quarter of 2025.

Thanks, Keith. In summary, we are intently focused on our partnership discussions for MAT2203, advancing this important product into Phase III and closer to commercialization is a key objective for our company. Securing the right partner or partners to maximize value in multiple territories in a coordinated manner is paramount. We continue to believe supported by KOL feedback and patient clinical experience and data that MAT2203, if approved, could represent a new treatment paradigm addressing the significant challenges and unmet medical need in the treatment of invasive fungal infections with significant implications for patients who have limited or no current treatment options. The evolution of our strategy over the past six months to focus on expanding the LNC platform has yielded initial highly promising data in oncology and inflammation as we continue to learn about the capabilities of our unique and proprietary delivery technology. The potential for chemotherapeutics that are orally delivered and less toxic would be a big step forward for patients, and our demonstrated ability to deliver small oligonucleotides with biological activity and therapeutic effects orally could be transformative in the inflammation space where many companies are looking for oral, targeted, and extrahepatic delivery of nucleic acids. The data we've accumulated to date serves to reinforce our belief in the substantial potential of LNCs for the intracellular delivery of complex therapeutics in multiple therapeutic areas as we work toward the goal of creating a portfolio of internal and external drug candidates. We expect to be able to review and discuss additional data generated in these areas in the coming quarters. With that review, I'll now turn the call over to the operator for Q&A.

And our first question comes from the line of Scott Henry with Alliance Global Partners.

A couple of questions. First, with regards to the partnership update, should we be thinking about the month of May or perhaps is this a 2Q event or even a mid-2024 event? How should we be thinking about timing?

Scott, thanks for your question, and we appreciate your coverage. We've always guided that it's a Q2 story. So if it happens sooner, if you're talking about May, that would be great. But again, we're more focused on putting these pieces together in a fashion that allows us to maximize that opportunity. So without saying it's imminent, Q2 is still the goal, and we'll do everything we can to line it up within that framework. But if it does take a little bit longer to make sure everything is aligned, we're comfortable with that, too. Because at the end of the day, we want to move MAT2203 into ORALTO with either the best partner or partners to ensure that that trial is successfully conducted, that manufacturing is transferred to Thermo Fisher, and that we're setting ourselves up to commercialize this product on a global basis. So Q2 is the goal.

Perfect. It sounds like it's making good progress. Second question, with regards to the expanded access program, can you talk a little bit about how many patients within that, if there are any, have been invasive aspergillosis patients and how they have fared if you have any data available?

Sure, I'd be happy to. Yes. So we have 22 patients that are currently enrolled in our expanded access program with a handful that are in the queue of being evaluated. And we could say that roughly about one-third of the patients have invasive aspergillosis. And those that have completed a successful course of treatment from a timing perspective have had positive responses. So we're seeing that the efficacy that we saw in cryptococcosis is being borne out, as Jerry mentioned, in our mucor patients as well as our patients with invasive aspergillosis.

Okay. Great. And then with regards to the timing of the ORALTO trial, would you expect to have another meeting with the FDA? Or is that necessary? I don't know if you would take the expanded access program to date into a meeting? Or do you feel that everything is in position at this point in time?

Yes, Scott, that's a reasonable question. One of the advantages of working with the FDA for a year on the ORALTO trial was reaching an agreement earlier this year on the Phase III design. This means we don’t need to go back to the FDA for approval to start; we're ready to go. Our focus is now on finalizing a partnership with a contract research organization to initiate the Phase III trial, which we aim to begin in the fourth quarter of this year. When we say things are on track, we want to finalize this partnership deal as soon as possible, ideally by the second quarter. This timing would set us up for Phase III to commence in 2024, keeping everything aligned timeline-wise. There's always a sense of urgency, but considering the potential of MAT2203 in the U.S., we are looking at 12 years of exclusivity starting from the date of approval. While companies developing drugs must consider patent expiries, we also have the advantage of regulatory exclusivities. It's crucial to be positioned well for when we receive NDA approval to fully capitalize on that 12-year opportunity. Unlike many companies in our field, we sought and obtained FDA agreement before starting the Phase III trial, which is not common practice. Many companies take risks and then present data to the FDA, which often leads to rejection. The FDA has told some companies to return when their studies are complete and meet their criteria. We took a different approach, focusing on alignment with the FDA, who recognize the significant value in our oral MAT2203 product. This alignment was vital for attracting partners, and although it slightly delayed the process, it was an essential step in speeding up our discussions.

Okay. Great. Final question, just a quick one. Spending levels in Q1 should Q2 look similar to Q1 and then perhaps see a little bit of ramp in the second half as that trial gears up. Is that how we should think about it?

Yes. I mean we've been pretty thoughtful about our cash. Keith keeps a pretty tight control on spending here, and we've been thoughtful about our spend. It's going to be consistent. We have taken steps to slow some of our spending. And I would say the $10 million raise was not about all of a sudden opening the floodgates. It was about allowing us to be able to be selective with the platform studies we want to use and better position the company for, once we have secured the future of MAT2203. I would expect that, that would continue. I wouldn't necessarily think that spending will ramp up in the second half of the year because a key component of our discussions and negotiations with partners is that they are essentially taking responsibility for ORALTO costs and any additional preclinical studies that are necessary to file the NDA. So we'll see how that evolves, but I would expect pretty consistent spending from us on the R&D and the G&A side that centers around the platform, and our goal is to have somebody else pick up the cost for MAT2203.

And the next question comes from the line of Julian Harrison with BTIG.

This is Rei on behalf of Julian. Just a couple of questions from us on your LNC platform. How far away from an IND are you with regard to the ongoing preclinical efforts there? And what indications make the most sense if you were to file an IND?

Thank you for the question. Regarding our progress on the platform side, particularly in inflammation and oncology, we are currently analyzing various data sets to identify a product candidate. We anticipate that we are still a few months, possibly even a few quarters, away from selecting a product candidate. It’s essential that we establish an ideal target product profile that addresses unmet medical needs and offers significant value to potential partners. We aim to position ourselves with a product candidate that can address multiple challenges. Following this, IND-enabling studies typically take between 12 to 18 months. Our internal target is to file an IND at some point in 2025. It's crucial for us to differentiate ourselves, especially regarding the oral delivery of small oligonucleotides aimed at treating inflammatory conditions. We have already worked with cytokines such as IL-17 and TNF alpha, conducting studies on psoriasis and colitis, and believe that focusing on a GI target related to colitis is the most promising direction, though we require further information. Additionally, there may be other cytokines involved in different pathways than TNF alpha or IL-17 that could present better opportunities. In oncology, our focus is on not just safely delivering chemotherapeutics but also targeting specific tumor cells more effectively. We have begun with melanoma and are exploring triple-negative breast cancer along with other cancer targets, which are continuously evolving. Our goal is to demonstrate that our approach can enhance the efficacy of treatments like docetaxel in tumors where they have not been effective due to lack of targeting. Overall, while we estimate we are 12 to 18 months from an IND filing, our priority remains aligning everything to ensure that our product candidate provides value for investors, patients, and partners involved in later-stage clinical trials.

Thank you. And with that, this will conclude the question-and-answer session. And I'll turn the call back to Jerry Jabbour for closing comments.

Thanks, Joe. Thank you to everyone for joining us today and for your interest in Matinas. We remain very excited and optimistic about our company's future, and we look forward to reporting further progress during our second quarter conference call in August or before. Thank you again and have a great evening.

This concludes today's conference. You may now disconnect your lines at this time. Enjoy the rest of your day.