Earnings Call Transcript - MTNB Q4 2022

Operator, Operator

Greetings and welcome to the Matinas BioPharma 2022 Fourth Quarter and Full Year Conference Call. 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.

Jody Cain, Host

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; and Keith Kucinski, Chief Financial Officer. We also have Dr. Terri Matkovits, Chief Development Officer; and Dr. Terri Ferguson, Chief Medical Officer, available to answer questions during our Q&A 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 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, March 15, 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 Jabbour, CEO

Thank you, Jody. Good afternoon, everyone and thank you for joining us. During our 2023 strategic outlook call in late January, we detailed our strategy of focusing on the non-toxic extrahepatic delivery of nucleic acids and small molecules through our proprietary lipid nanocrystal platform technology, or LNC. This strategy capitalizes on the increasingly sophisticated approaches to targeting the body's genetic machinery to develop highly effective therapeutics as we believe genetically-targeted therapy is the future of medicine. We continue to believe that our LNC technology and our business strategy are putting us on a path to becoming a leader in the ever-evolving world of delivering genetic material. Currently available options for the intracellular delivery of therapeutics include liposomes, lipid nanoparticles, and viral vectors. While these technologies have been widely adopted, each has well-recognized limitations such as challenges with extrahepatic delivery, undesirable and dangerous toxicity and adverse immunogenicity, and unstable formulations that can necessitate challenging storage conditions. We believe our LNC delivery platform overcomes many of these limitations. Our confidence is significantly bolstered by the success of MAT2203. Results from the Phase II EnACT clinical trial of MAT2203 in a deadly brain fungal infection demonstrated that our LNC platform is able to deliver amphotericin B in a safe, well-tolerated oral form across the blood-brain barrier with dramatic survival outcomes. In contrast to the currently available formulations of this potent yet highly toxic antifungal which are only available with shorter-term intravenous administration. We are actively working to further validate and advance development of our LNC platform with several notable milestones expected during the second quarter. Among these are anticipated data readouts on key differentiating and value-creating aspects of the platform from our internal program with smaller oligonucleotides like siRNA and ASOs and for larger oligonucleotides like messenger RNA and DNA, exploring collaborations with BioNTech and National Resilience, two of the world's leading companies working in the rapidly emerging nucleic acid space. You may recall that we announced our exclusive research collaboration with BioNTech last April, involving a combination of our LNC platform technology and BioNTech messenger RNA formats. In addition to meaningful financial support, this collaboration has also provided an opportunity to evaluate the capabilities of our technology for large oligo delivery and even potentially the oral delivery of messenger RNA, widely considered to be the holy grail of RNA delivery. We are extremely pleased with the progress of our in vitro work over the past year and expect to gain additional insights from upcoming in vivo testing. The transition from in vitro demonstration of protein expression to achieving similar results in vivo is a complex one with many physiologic factors that can impact both the success of intracellular delivery in tissues and subsequent protein expression and biological activity in vivo. Importantly, we believe our internal in vivo biodistribution data arising from this collaboration will ultimately set the stage for us to quickly move into therapeutic applications of both smaller and larger oligonucleotides, and becomes a key decision point considered for the potential expansion of our BioNTech collaboration to a licensing agreement. One of the unique aspects of our delivery technology is its flexibility with routes of administration. In addition to pursuing the highly challenging oral delivery of messenger RNA, we are also evaluating the use of our technology to deliver messenger RNA intramuscularly as well as other routes for systemic administration. While the successful oral delivery of messenger RNA would represent a scientific first, our demonstrated ability to also deliver large oligos systemically with technology that is more stable, less toxic, and can deliver nucleic acids extrahepatically or beyond the liver, would also represent a significant advancement in the field of nucleic acid delivery and position our company to become a leader in this space. We view our technology's versatility and cargo-dependent characteristics as potential advantages, both from design and intellectual property perspectives. We believe we are building a solid foundation underlying our goal of creating a pipeline of internal and external product candidates in the nucleic acid space. The exclusivity constraints of our current agreement with BioNTech expire next month, allowing us to pursue interest from the many other firms working with messenger RNA. Things that we have learned during our in vitro and in vivo work over the past year, both internal and as part of our BioNTech collaboration position us to approach potential partners with a compelling data package. We remain in discussions with BioNTech and are interested in expanding our collaboration through a license agreement, but flexibility in this area should only benefit those discussions, while also allowing us the opportunity to broaden the application of our technology and engage with other leaders in this space who have expressed interest in differentiated delivery. Moving on to our Material Transfer and Evaluation Agreement with National Resilience. Since announcing this agreement in January, we and Resilience have been working closely on a comprehensive research program that includes design, formulation, optimization, and delivery of certain nucleic acids applying the LNC platform. We anticipate in vitro testing data during the second quarter, with our collaborative work then advancing to in vivo testing with data potentially available in the second half of 2023. We envision that National Resilience could be a true platform partner for our technologies, bringing CMC expertise, manufacturing scale, and unparalleled industry relationships in the nucleic acid space. In the coming months, we also anticipate results from our internal program for the delivery of smaller oligonucleotides such as antisense oligos, or ASOs, and short interfering RNA or siRNAs. We have chosen to focus our internal efforts on these smaller oligos because of the greater ease with which they can be encapsulated, their documented successful delivery in prior in vitro and in vivo studies with our technology, and the overall success of the LNC platform in oral delivery of smaller molecules. Following initial in vitro testing with cargoes, including newer therapeutic agents, we intend to move forward with multiple in vivo biodistribution and animal efficacy studies in the second half of 2023. These data are expected to be highly useful in identifying the company's next internal product candidate later this year and in positioning Matinas for developing a broader pipeline of ASO and siRNA therapies. I'd like to turn now to key next steps in the MAT2203 clinical development program. With all of our enthusiasm for potential applications for our technology in the nucleic acid space, we have not lost sight of the fact that we have a clinically validated asset in MAT2203, a drug that saves lives and has the potential to become the ideal antifungal agent for the treatment of serious and potentially deadly invasive fungal infections. Preparations are underway for a type B meeting with the FDA that is scheduled to take place in the second quarter. We will be seeking the agency's guidance and agreement on the design of a Phase III clinical trial to assess the efficacy, safety, and tolerability of oral MAT2203 in patients with life-threatening invasive fungal infections for which there are few treatment options. The meeting will include a discussion of our proposed pivotal study design and overall strategy for achieving MAT2203 marketing approval for a multitude of invasive fungal infection treatment indications. As previously announced, we made the prudent decision to gain important feedback from the FDA on our plans for a Phase III study in these invasive fungal infections prior to going into Phase III in cryptococcal meningitis. We believe a broader focus on invasive fungal infections positions Matinas to potentially receive nondilutive funds from BARDA and/or the NIH and makes this asset much more attractive to potential partners. Such funding could be sufficient to complete development of MAT2203 through market approval for the targeted IFI indications as well as to support supply chain and commercial readiness. We believe MAT2203 is a strong candidate for BARDA funding based upon its oral, well-tolerated, and broad-spectrum profile, its recent clinical success in the Phase II EnACT trial in cryptococcal meningitis, and the criteria set forth by BARDA for grants for promising antifungal treatments. We also believe pursuing IFIs provides the best means to maximize MAT2203's commercial potential, domestically with the potential for 12 years of exclusivity in the U.S., and will also favorably position this important drug for global expansion, where there is additional and significant need and commercial opportunity.

Keith Kucinski, CFO

Thank you, Jerry and good afternoon, everybody. Today, we reported revenue for 2022 of $3.2 million, which was generated from our research collaboration with BioNTech that we announced in April 2022. This compares with revenue for 2021 of $33,000 from our feasibility study agreement with Genentech. Total costs and expenses for 2022 were $27.8 million compared with $24.8 million for 2021. The increase was due mainly to higher research and development expenses related to the later stage of our MAT2203 clinical development program. Net loss attributable to common shareholders for 2022 was $21 million or $0.10 per share. This compares with a net loss attributable to common shareholders for 2021 of $23.7 million or $0.11 per share. As of December 31, 2022, cash, cash equivalents, and marketable securities were $28.8 million. Based on current projections, we believe our cash position is sufficient to fund planned operations into the second quarter of 2024. With that, I'll turn the call back to Jerry.

Jerry Jabbour, CEO

Thanks, Keith. We believe that the Matinas investment thesis has never been stronger and we could not be more excited about our prospects going forward. We are well positioned with a Phase III ready asset that has produced compelling and unprecedented survival data in the treatment of a deadly fungal infection. MAT2203 has established a solid foundation for our company and we are taking prudent steps to position that asset for long-term success. With our LNC platform, we have the potential to disrupt the delivery of nucleic acids by providing safe, extrahepatic intracellular delivery with enhanced stability with multiple potential routes of delivery, including oral. We are gaining confidence in our technology through internal programs with ASOs and siRNAs and through collaborations with industry leaders like BioNTech, Genentech, and National Resilience. All of this supports our goal of building robust internal programs and external pipelines with leading pharmaceutical companies. We see tremendous value for our company and our shareholders in establishing a leadership position for Matinas in intracellular delivery. We have many high-value milestones in the near term and throughout this year and we look forward to reporting on our progress and execution. With that, I will now turn the call over to the operator for our question-and-answer session.

Operator, Operator

Our first question is from Greg Fraser with Truist Securities.

Greg Fraser, Analyst

On 2203, will there be any new or incremental data from EnACT that's presented at the ECCMID meeting next month?

Jerry Jabbour, CEO

Sure. Terry Matkovits, do you want to handle that one?

Terry Matkovits, Chief Development Officer

Thanks for the question, Greg. We have completed enrollment and all patients have finished the treatment phase and follow-up, so we will be releasing the overall final data set. The data we are seeing supports and aligns with the interim data readout, showing very favorable results in terms of both efficacy and safety.

Greg Fraser, Analyst

Got it. I'm not sure if I missed this but did you already have the meeting with BARDA?

Jerry Jabbour, CEO

It's a good question. Greg, we have had an initial meeting with BARDA, and it was a positive discussion where we reviewed their criteria, our program, and how it aligns with their mission to identify promising antifungal therapies. They are just as interested as we are in the FDA's feedback on the Phase III program and invasive fungal infections. Their primary focus is on invasive fungal infections like aspergillosis, mucormycosis, and coccidioidomycosis, also known as Valley Fever. They are very eager to see what the FDA's feedback is regarding program size and length, as this will lead to us being invited to submit a white paper, which is essentially a formal proposal. We have bypassed a couple of steps with BARDA, but that key piece regarding the white paper will follow the FDA meeting in the second quarter.

Greg Fraser, Analyst

Got it. And how quickly after that meeting would you expect to have visibility on the study design and FDA's view?

Jerry Jabbour, CEO

Yes. This is now our fifth or sixth meeting with this division regarding this product, and we've established a strong rapport with the group. Typically, during our meetings with the FDA, we can gauge their leanings. They have been very collaborative with Matinas, and in fact, during a meeting last year, they suggested a modification to the design of the Phase III study for cryptococcal meningitis that was beneficial to us. We anticipate having a detailed discussion with them at this meeting. Usually, we wait around 30 days for the official minutes from these meetings, but we will have a clearer understanding before that. We prepare our own notes from these meetings, but we will wait for the official minutes before making any comments.

Greg Fraser, Analyst

Got it. Okay. And then I just had a question on the emergency use treatment. I'm curious how many patients have been treated with 2203? Is there a limit to the number that can be treated? And what are your plans to present or publish data related to those patients?

Jerry Jabbour, CEO

Yes. I’ll let Terri Matkovits take this. I think this has been one of the most exciting developments over the past six months due to the significant interest we've seen from patients in compassionate use. There seems to be some confusion regarding emergency use and compassionate use, so I want to clarify that this is not based on emergency use as seen during a global pandemic. This is compassionate use aligned with the drug's intended purpose. Additionally, our ability to offer amphotericin in an oral form suitable for extended use is very appealing to physicians. Terri, could you discuss the numbers we’re observing and some of the exciting developments we’ll be sharing at ECCMID regarding other invasive fungal infections beyond cryptococcosis?

Terry Matkovits, Chief Development Officer

We have supported the compassionate use of MAT2203 for the treatment of five patients, four of whom have responded very favorably in terms of safety and efficacy. These patients were experiencing significant renal toxicity due to their IV-administered amphotericin, and they had no other treatment options. While they were clinically responding to the IV amphotericin, the renal toxicity prompted them to seek our support. I'm pleased to report that two of these patients have completed treatment and shown successful responses. One patient, who will be discussed in an oral presentation at ECCMID, was at risk for amputation due to an osteomyelitis in her left foot caused by a Rhodotorula infection. She had significant renal failure and could not continue with IV amphotericin. After switching to our oral MAT2203, she showed continued clinical improvement, ultimately saving her foot. She resumed normal weight-bearing activities, and importantly, her renal dysfunction was completely reversed after transitioning to MAT2203. After three to four months of treatment, her infection is now clinically resolved. The second patient had a bladder candida infection and achieved complete clinical resolution of symptoms just two weeks after starting oral MAT2203. The other two patients are also showing improvement on MAT2203. One is a chemotherapy patient with severe aspergillosis and mucormycosis, who is making clinical progress after switching from IV amphotericin, and the fourth patient with a mucocutaneous infection is also responding well to treatment.

Operator, Operator

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

Jerry Jabbour, CEO

Thanks, Paul. Thank you once again for joining us today and for your interest in Matinas BioPharma. We're very excited about our company's future and look forward to reporting progress during our Q1 investor call, a short time from now in May. Thanks and have a great evening.

Operator, Operator

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