Matinas Biopharma Holdings, Inc.

Welcome everyone to the Martinez Biopharma First Quarter 2024 Financial Results Conference Call. Currently, all participants are in listen-only mode. Following management's prepared remarks, we will hold a Q&A session. To ask a question at that time, please press the star key followed by the number one on your touchtone phone. If anyone has difficulty hearing the conference, please press star zero for operator assistance. As a reminder, this conference is being recorded. I would now like to turn the conference over to Jody Cain. Please go ahead.

This is Jody Cain with LHA Investor Relations. Thank you for participating in today's call. Joining me from Martinez Biopharma are Jerry Jabbour, Chief Executive Officer, and Keith Cassenti, Chief Financial Officer. Dr. Terry Makovits, 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 Matinus 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. Matinus 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, Jodi. 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 3 Aralto 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 3 and toward commercialization is also shared by infectious disease physicians and KOL's 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's 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 ARATL 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 and 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 the most severe circumstances have brain involvement, persistent neutropenia, and a hematogenetically 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 Aralto Phase III Global Clinical Trial later this year. With MAT2203 partnering discussions ongoing, we have shifted our focus toward 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 durations 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 recently successfully formulated meroplatin, 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 LNT platform create unique opportunities to orally deliver anti-tumor agents with preferential uptake by certain tumor cells. More work is ongoing to enhance and optimize our oncology LNCs with particular focus on optimizing dosing strategies, evaluating impact of tumor cell surface phosphatidylserine, and 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 and 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 Therapy's 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 TIDE 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 LNCs as a preferred next generation orally available and targeted intracellular drug delivery technology. Before I turn the call over to Keith Kosinski, 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. Keith?

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 3 cents per share. This compares with the net loss for the first quarter of 2023 of $5.5 million, which was also 3 cents per share. Cash, cash equivalents, and marketable securities as of March 31st, 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. With that, I'll turn the call back to Jerry.

Thanks, Keith. In summary, we are intently focused on our partnership discussions for MAT2203. Advancing this important product into Phase 3 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 L&T 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. 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 serve to reinforce our belief in the substantial potential of LNC's 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. Joe? Thank you.

Ladies and gentlemen, if you would like to ask a question, please press star 1 on your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your headset before pressing the star keys. One moment, please, while we poll for questions. And our first question comes from the line of Scott Henry with Alliance Global Partners. Please proceed.

Thank you, and good afternoon. A couple 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?

Hey, 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 2203 into Aralto 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. 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.

We do. So, Terri Makovits, do you want to handle that question?

Sure, I'd be happy to. Yep. 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 a third of the patients have invasive aspergillosis. And those that have completed a successful course of treatment from a timing perspective have had positive response. So we're seeing that the efficacy that we saw in crypto is being borne out, as Jerry mentioned, in our mucor patients as well as our patients with invasive aspergillosis.

Okay, great. Thank you for that color. And then with regards to the timing of the Aralto 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's in position at this point in time?

Yeah, Scott, very fair question. And I think that's one of the benefits of having spent a year with FDA in designing the Aralto trial. So when we reached agreement with FDA earlier this year, that's agreement on the phase three design. So there's no requirement for us to go back to FDA to get permission to start. We're locked and loaded. And so now it's really aligning things around the CRO and identifying and securing that partner to start the phase three trial. And our goal again is for that to start in the fourth quarter of this year. So everything, when we say things remain on track, we would like to get this partnership deal closed as soon as possible with Q2 as that goal. That puts us then in position for phase three to start during 2024 and still keep everything aligned from a timeline perspective. You have a little bit, there's always a sense of urgency. But when you think about the opportunity with MAT2203, at least in the US, you're looking at 12 years of exclusivity, which starts from the date of approval. So a lot of times when companies are developing drugs, they have to take patent expiries into account. We of course do, but we also have the added benefit of these regulatory exclusivities. And so you want to put yourself in position so that when you do get that NDA approval, everything's lined up and you can maximize the benefit of that 12 year runway. So FDA and unlike most of the companies in this category, we went to FDA and got agreement before starting the phase three trial. A lot of companies in this area take risk and then try to sell FDA on data. And we've seen that be unsuccessful over the last two or three years where FDA has told companies come back to us, you know, when everything is done or complete or when you have what we want to see. We sort of flipped the script on that and spent more time getting alignment with FDA who see a great deal of value in an oral MAT 2203, an oral amphotericin product, so that we have the green light to go. And that was important for partners. The partners wanted that FDA alignment. So the train was slowed down a little bit to make sure we got FDA agreement. And that was a key composite of being able to accelerate 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?

Yeah, I mean, we've been pretty thoughtful about our cash. Keith keeps a pretty, you know, the purse strings pretty tight here, and we've been thoughtful about our spend. It's going to be consistent. We have taken steps to sort of slow some of our spend. 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, you know, 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 there essentially taking responsibility for RALTO 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 spend from us on an R&D and a G&A side that centers around the platform, and our goal is to have somebody else pick up the costs for 2203.

Okay, great. Thank you for taking the questions.

Thanks, Scott.

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

Hi, good afternoon. This is Rayon for Julian. Thanks for taking our questions. 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?

Great question and appreciate it. So I would characterize where we are on the platform side, if you're talking about inflammation and or oncology, we're triangulating data sets in order to be able to decide on a product candidate. And when you think about what's going to be next, I think we're certainly a few months, even a few quarters from a product candidate. You want to make sure that you're able to have an ideal TPP and that's going to not only meet unmet medical need, but that potential partners see a lot of value in, that you're putting yourselves in position to have a product candidate that's going to solve for a number of things. And then after that, IND enabling studies can take anywhere from 12 to 18 months. So our goal internally, as we continue to sort of triangulate these things in oncology and inflammation, is that an IND filing happens at some point in 2025. That would be our goal. It's more important for us. It's not as simple as just we want an IND on file. We want to be able to differentiate ourselves, whether you're talking about the oral delivery of small oligonucleotides. There we're targeting inflammatory conditions. With the cytokines we've shown already, IL-17, the TNF-alpha, you're looking at, we've done psoriasis, we've done colitis. We think a colitis sort of GI target makes the most sense. We need more information on that. There may be some other cytokines that are even on a different pathway than TNF-alpha or IL-17 that actually present a greater opportunity. And oncology, it's about showing not only that we can safely deliver chemotherapeutics, but that we could target certain tumor cells over others. And so part of what we've done is we started with melanoma. We've looked at triple negative breast cancer. We've looked at other cancer targets, and that continues to evolve. We want to be able to show that it's not just about taking docetaxel and making it safer. It's about potentially making docetaxel more efficacious or efficacious in a tumor that it hasn't been able to because it's not targeted. So I would say as we sit here today, we're probably talking 12 to 18 months from an IND filing, but it's more important for us to sort of align everything so that what we're creating in terms of a product candidate generates value either to investors, to patients, or to partners who would take those into later stage clinical trials.

Great. Thank you. Very helpful.

Thank you. And with that, this will conclude the question and answer session, and I'll turn the call back to Jerry DeBoer 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.