Q2 2023 Matinas BioPharma Holdings Inc Earnings Call

Participants

Jerome D. Jabbour; Co-Founder, CEO, President & Director; Matinas BioPharma Holdings, Inc.

Keith A. Kucinski; CFO; Matinas BioPharma Holdings, Inc.

Theresa Matkovits; Chief Development Officer; Matinas BioPharma Holdings, Inc.

Julian Reed Harrison; Director & Biotechnology Analyst; BTIG, LLC, Research Division

Jody Cain; SVP of LA; Lippert/Heilshorn & Associates, Inc.

Presentation

Operator

Welcome to the Matinas BioPharma Second Quarter 2023 Financial Results Conference Call. (Operator Instructions) As a reminder, this conference is being recorded.
I would now like to turn the conference over to Jody Cain. Please go ahead.

Jody Cain

This is Jody Cain with LHA. Thank you for participating in today's call. Joining me from Matinas Biopharma are Jerry Jabbour, Chief Executive Officer; Dr. Terri Matkovits, Chief Development Officer; and Keith Kucinski, Chief Financial Officer. We also have Dr. Terry Ferguson, Chief Medical Officer, available to answer questions during the 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 provision 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 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, August 9, 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?

Jerome D. Jabbour

Thank you, Jody. Good afternoon, everyone, and thank you for joining us. I'm pleased to report that we now have received important feedback from FDA and additional clarity on the development path forward to position MAT2203 for approval as quickly and efficiently as possible. As you know, MAT2203 is our oral formulation of amphotericin B.
I'll begin today's call with an overview of the feedback we've recently received from the FDA regarding a study for invasive fungal infections or IFI. I'll also provide a brief update on our LNC platform for the delivery of nucleic acids.
Following my initial remarks, Dr. Matkovits will provide more detail on the FDA's feedback and our plans with MAT2203 and will highlight an additional and highly compelling compassionate use case under our expanded compassionate use access program. Keith Kucinski will follow with a review of our financial results for the second quarter and year-to-date.
We are appreciative of the very recent feedback provided by FDA toward helping us to design a study for the regulatory advancement of MAT2203 in the treatment of IFIs. During the meeting held earlier this year, the FDA acknowledged the need for a therapy like MAT2203 and recently commented that the patients most likely to use our drug would be those patients with limited or no treatment options who require longer-term treatment for a variety of fungal infections, which are susceptible to therapy with amphotericin B.
Also, in their most recent feedback, FDA informed us that consideration of MAT2203 as a novel first-line therapy with an unrestricted label would require an extremely high bar to demonstrate noninferiority, which presents significant challenges for a smaller company like Matinas. Approval as a first-line therapy for just the treatment of aspergillosis, for example, would require an adequately powered study with an active rigorously defined comparator group and an all-cause mortality, non-inferiority margin of 10%, similar to that used in prior first-line approvals for new chemical entities.
The FDA instead highlighted and provided additional feedback on alternative trial designs, which could include the patient population likely to use MAT2203, specifically patients in need of long-term treatment for deadly IFI, such as azole-tolerant or azole-resistant patients. We believe that these alternative study designs could ultimately position MAT2203 for registration under the limited population pathway for antifungals or LPAD pathway. This pathway was originally established to provide a streamlined approach to clinical development of certain antibacterial and antifungal drugs to treat serious or life-threatening infections in limited populations of patients with unmet needs and could involve smaller, shorter or fewer clinical studies than would be required for more broadly used first-line therapy.
Enrollment would be focused on the highest need patients, which is where both we and FDA already believe our drug will be most appropriately used. Furthermore, the LPAD regulatory pathway and relevant study design aligns well with our compassionate use cases and recent clinical experience, which have shown the life-changing potential of MAT2203. We continue to believe that MAT2203 can play a meaningful role in treating the highest need patients and believe that an approval for MAT2203 pursuant to the LPAD pathway could present a cost-effective approach for pursuing approval.
The impressive compassionate use data that we continue to accumulate from our ongoing Expanded Access Program underscores the positive clinical impact of MAT2203 and provides powerful real-world examples of the life-changing potential of this drug. In just a moment, Dr. Matkovits will provide additional details and next steps.
But looking beyond MAT2203, we continue to be extremely encouraged by the in vitro data with our LNC oral formulations of various RNAi therapies. We are pushing forward into in vivo studies later this quarter to evaluate the biological activity of these formulations. And these could potentially represent the first successful oral delivery of functional small oligonucleotides that we are aware of, and we continue to believe that our technology has the potential to provide truly differentiated delivery in this rapidly evolving area of medicine.
With those comments, I'd like to turn the call over to Dr. Matkovits. Terri?

Theresa Matkovits

Thanks, Jerry, and good afternoon, everyone. As Jerry mentioned, the feedback and pathway outlined by the FDA for Matinas to gain approval of MAT2203 in first-line treatment indications for IFIs would be very challenging to implement for any company, much less a small company like Matinas. For example, a 10% non-inferiority margin for all-cause mortality would require approximately 700 patients assuming a 1:1 randomization against standard of care for a given indication in the treatment of a single invasive fungal infection. For Matinas, and we believe for most companies, this is simply not feasible from the perspective of the time required to enroll, treat and follow such a large number of patients and the overall cost of conducting such a study in an orphan disease population.
That said, and as Jerry mentioned previously, the FDA specifically called out that MAT2203 was likely to be used most in azole-resistant or azole-intolerant patients or in patients with limited treatment options. This, combined with the clinically meaningful outcome seen in the compassionate use patients receiving MAT2203 and our Expanded Access Program, has provided a clear indication of which direction to move forward with the development of MAT2203.
While the expanded access case numbers are still fairly small, both observed and measurable outcomes in multiple different fungal infections in multiple different target tissues highlight the ability of MAT2203 to safely target and effectively eradicate a variety of severe and potentially deadly invasive fungal infections in the most challenging clinical circumstances. I'll provide more detail on our compassionate use cases in a few minutes, but first, would like to discuss our potential next steps in the development of MAT2203.
A key message from the FDA's feedback is the opportunity to narrow our regulatory focus to a population of patients that could derive the most clinical benefit from a safe, targeted orally administered form of amphotericin B. These are patients with life-threatening IFIs with very limited treatment options, such as patients with renal toxicity or electrolyte abnormalities attributable to IV-administered amphotericin as well as azole-intolerant or azole-resistant patients requiring extended treatment of severe fungal infections.
Given this feedback and the continued positive clinical outcomes we are seeing in our Expanded Access Program, we believe the best course of action is to proceed with development of MAT2203 under the LPAD pathway. We believe the clinical database for such an approval could require significantly fewer patients overall to obtain oral step-down treatment indications in the treatment of a variety of IFIs in this more targeted patient population with limited treatment options.
I would like now to briefly describe some of the details around the LPAD process. This pathway was added to the Federal Food, Drug, and Cosmetic Act in late 2016 and was specifically intended to provide a streamlined regulatory process for antibacterial and antifungal drugs to treat serious and life-threatening infections in limited patient populations with unmet needs. Labeling for drugs under the LPAD pathway conveys that the approval is based on a benefit/risk assessment that more flexibly considers the severity, rarity or prevalence of the particular infection the drug is intended to treat and the lack of alternatives available for the patient population.
Determining whether a condition is serious is a matter of judgment by the FDA and but generally is based on whether the drug will have an impact on such factors as survival, day-to-day functioning or the likelihood that the condition if left untreated, will progress from a less severe condition to a more serious one. As noted previously, these criteria align strongly with the positive clinical outcomes we've seen from our Expanded Use Program. To date, 2 antibacterial drugs have received FDA approval under the LPAD pathway.
This pathway could allow us to consider a few different trial designs involving either an active comparator including best available therapy or potentially an appropriately defined prespecified external comparator recognizing the lack of active comparator alternatives for many of these patients. We are working now to evaluate the optimal path forward to best position MAT2203 to be approved under an accelerated LPAD registration pathway.
It is also worth noting that under the LPAD registration and approval pathways, MAT2203 would 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. MAT2203 could also potentially remain eligible for consideration for breakthrough designation as well.
We also plan to engage with the Biomedical Research and Development Authority, or BARDA, as quickly as possible to discuss next steps for funding MAT2203 through registration. Given that we plan on addressing the highest need patients, most of whom have limited or no alternative treatment options, we believe that our case for BARDA to assist with the funding of further development of MAT2203 is quite strong.
Now turning to our Expanded Access Program. Since instituting the program about a year ago, we have received inbound requests from physicians at the National Institute 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 azoles or other classes of antifungals.
To date, 8 patients have been enrolled in this program with an additional case pending. These patients suffered from various life-threatening fungal and other infectious diseases, including candida, aspergillosis, mucormycosis, coccidioidomycosis, Fusarium and Rhodotorula infections. These infections have also involved several different tissues in the body, including bone, skin, lung, sinus, bladder and the central nervous system, including the brain. All patients experienced significant treatment-limiting kidney toxicity with IV-amphotericin B treatment before turning to our Expanded Access Program for treatment with MAT2203.
The duration of treatment with MAT2203, all administered as monotherapy, range from 2 weeks to 6 months or longer with no evidence of any renal toxicity. Of the 8 patients, 4 have successfully completed treatment with resolution of their infection with 1 patient discontinuing treatment for reasons unrelated to MAT2203. Three patients continue to receive MAT2203 with ongoing clinical improvement of their infection and no safety or tolerability issues.
Kidney function for the patients who have received IV-amphotericin as an initial treatment experienced significant nephrotoxicity or intolerance and have all returned to normal after switching to MAT2203 with no further need for any electrolyte supplementation. Additionally, all patients were discharged from the hospital soon after switching to oral MAT2203 and continue to receive their treatment with MAT2203 on an outpatient basis. In each case, the reported impact on overall quality of life for patients was highly favorable.
Earlier this year, Dr. Marisa Miceli of the University of Michigan presented a compelling compassionate use case at the European Congress of Clinical Microbiology and Infectious Disease, or ECCMID.
Today, we are pleased to share the details of another successful case from Nationwide Children's Hospital in Ohio, which is recognized as one of the largest and most comprehensive pediatric hospitals and research institutes in the United States. In this instance, MAT2203 was used to treat a 15-year-old girl with underlying acute myeloid leukemia and diabetes who suffered from invasive fungal infections in sinus, lung and brain due to the multiple highly resistant mucor species as well as aspergillus species. The patient was initially treated with IV liposomal amphotericin B but developed treatment-limiting electrolyte abnormalities and renal toxicity that required hospitalization for intravenous hydration and electrolyte supplementation.
Upon enrolling in our Expanded Access Program, IV-amphotericin B was discontinued and the patient began treatment with oral MAT2203, and she was discharged from the hospital to continue the remainder of her treatment at home. Importantly, the patient began to show clinical improvement following only 3 weeks of therapy on MAT2203. Her renal function returned to normal, and repeated MRI for sinus and brain showed no evidence of active mucormycosis infection. Similarly, repeated chest CT scans showed a reduction in pulmonary nodules with no new lesions. There have been no signs of any recurrent invasive fungal infections since the patient stopped using MAT2203. The patient continued MAT2203 for a total of 17 weeks with no evidence of nephrotoxicity.
This case represents the first ever pediatric use of MAT2203 in an extremely compromised patient and highlights the clinical potential of MAT2203 in treating these deadly infections. In the words of the treating physician, Dr. Eunkyung Song, "Our decision to switch this patient to MAT2203 proved to be a turning point in our patient's journey. Rapidly her gastrointestinal intolerance and renal dysfunction resolved, enabling her to continue MAT2203 therapy for an additional 3 months. Throughout this period, the patient displayed excellent tolerance to MAT2203, and subsequent imaging revealed radiologic improvement of the invasive fungal infections. We are delighted with the remarkable outcome achieved with MAT2203, which addresses this patient's very challenging condition effectively."
We at Matinas appreciate the participation of Dr. Song and Nationwide Children Hospital in our program, along with all the patients and physicians who have participated in our clinical development program thus far.
Our Expanded Access Program is attracting additional and increasing interest as MAT2203 continues to demonstrate efficacy in these most challenging cases, and this program presents opportunities for us to generate additional meaningful clinical data outside of the clinical trial setting. We continue to evaluate requests for access where the compassionate use of MAT2203 may help patients without other treatment options.
Now I'd like to turn the call over to Keith Kucinski to review our financial performance. Keith?

Keith A. Kucinski

Thank you, Terri. Starting today with our second quarter results. We reported no revenue for the second quarter of 2023. This compares with revenue of $1.1 million for the second quarter of 2022, which was generated from our research collaboration with BioNTech.
Total costs and expenses for the second quarter of 2023 were $6.2 million compared with $7 million for the second quarter of 2022. The decrease was primarily attributable to lower manufacturing costs of clinical trial materials and lower clinical consulting fees, partially offset by higher head count-related expenses.
The company's net loss for the second quarter of 2023 was $6.1 million or $0.03 per share. This compares with a net loss for the second quarter of 2022 of $5.9 million, also $0.03 per share.
Turning now to our 6-month results. Revenue for this first 6 months of 2023 and 2022 was $1.1 million for each period. Total costs and expenses for the first half of 2023 were $12.8 million versus $14.7 million for the first half of 2022. The company's net loss for the first 6 months of 2023 was $11.6 million or $0.05 per share. This compares with a net loss for the first 6 months of 2022 of $11.9 million or $0.06 per share.
Our cash, cash equivalents and marketable securities as of June 30, 2023, were $22.5 million. Based on our current projections, we believe our cash is sufficient to fund planned operations into the third quarter of 2024. As previously mentioned, we are actively seeking to extend our cash runway by securing nondilutive funding from potential third-party development partners and government grant programs through agencies such as BARDA as well as from proceeds from potential public or private equity offerings.
With that, I'll turn the call back to Jerry.

Jerome D. Jabbour

Thanks, Keith. MAT2203 is changing patients' lives. Despite some of the regulatory challenges associated with the pathway to achieving a first-line unrestricted treatment indication for an invasive fungal infection, which arguably should not be applicable to an amphotericin B product, we continue to be encouraged by data and guided by the positive clinical experience of those patients demonstrating the highest unmet medical need. Our team is already working hard to outline the best path forward, which we believe could result in an LPAD approval for MAT2203.
Given our clinical success to date with MAT2203 and the continuing and growing patient need, we remain confident that there will be sources of nondilutive funding to continue to advance this life-changing therapy. Our mission with MAT2203 is clear: take advantage of the opportunity that the LNC platform has provided to formulate a safer amphotericin B, which can be used by patients in the longer-term treatment of invasive fungal infections and give patients the therapy they deserve.
Building on our success with MAT2203, we are very excited about our ongoing internal LNC-based RNAi program, distinguishable from the approach we were forced to take with messenger RNA due to its size and sensitivity. Our small oligonucleotide program is utilizing LNCs to deliver these molecules. With successful in vitro testing, demonstrating efficient delivery with measurable knockdown of inflammatory markers behind us, we now move aggressively forward into in vivo studies with enhanced confidence based on our clinical experience with MAT2203.
We have done a lot of work to understand preferential cellular uptake and see these LNC formulations behaving much like our small molecule LNCs with uptake by macrophages, neutrophils and other activated immune cells. As a result, we are naturally exploring inflammatory targets as an initial step. We are working with our partners to generate in vivo data evaluating biological activity with these LNC oral formulations, and we expect data later in 2023. We believe that a successful demonstration of in vivo efficacy in one or more of these studies would represent a first for the oral delivery of small oligonucleotides.
We're grateful for your continued support, and we look forward to continuing to keep you apprised of our progress.
With that review, I'll now turn the call over to the operator for questions and answers. Paul?

Question and Answer Session

Operator

(Operator Instructions)

Jerome D. Jabbour

While we're waiting for that first question, Paul, I'd just like to mention that next month, we'll be participating in the H.C. Wainwright Global Investment Conference. A webcast of our presentation will go live on the IR calendar page of the company's website on or around Monday, September 11. And we'll also be participating in the Dawson James Small Cap Growth Conference being held October 12 in Jupiter, Florida.
Okay. Paul, I think we're ready for that first question.

Operator

Our first question is from Julian Harrison with BTIG.

Julian Reed Harrison

Congrats on the progress here. On the first-line study for 2203, I'm wondering if you could provide any more details on what the active control group would likely look like? And is that different at all from the alternative study designs?
And then on the alternative study designs more specifically, can you talk more about these high-need subsets being considered, what the corresponding study designs would likely look like and what the corresponding market opportunities likely are?

Jerome D. Jabbour

Yes. So Julian, it's a great question, and thanks for being on the call today. I'll let Dr. Matkovits go into some detail, but I do want to be clear that we're still refining what those patient population targets look like, what a non-inferiority margin would look like in the statistics. But we certainly can talk a little bit about what we understand could be an active control in these patients. And obviously, there would be a distinction between those patients who could tolerate azole therapy, for which an active control could be appropriate and then those patients who are azole-resistant or azole-intolerant for which there wouldn't be an active control and you would be relying on some sort of external control.
So Terri, before we sort of go into alternate designs, do you want to just comment briefly on the controls?

Theresa Matkovits

Sure, Jerry, and thanks for your question, Julian. So from a control perspective, to build upon what Jerry mentioned, if we include a design that's really focused on the intolerant patient population, the control could be a best-of-care control arm, in which patients would be managed as they are today. If intolerant or unable to take azoles, many of these patients are leveraging longer courses of IV-amphotericin and in many cases, that longer course could require some dose adjustment of the IV-amphotericin dose that's administered, and it requires careful monitoring for renal function.
Another potential alternative, if we look at the intolerant patient as an external control arm consideration, would be looking at outside data outside of the clinical trial to really leverage what's available historically, which does -- can provide a higher regulatory hurdle if using external data. But those are the 2 options that we're weighing right now as a company vis-a-vis the control arm for the trial.

Jerome D. Jabbour

And then, Julian, importantly, when you think about the opportunity and the pursuit of a restricted label versus an unrestricted label, you're talking about more openness on behalf of FDA in the case of an active control portion of that study to change their perspective on the non-inferiority margin for that patient population. That's where they're going to take into account the patients with the highest need. And that's what underscores our belief that pursuing a study with this design with the ultimate intention of getting a restricted label for this patient population, it eases those restrictions on the non-inferiority margin. And that's really what's driving, for example, the 700 patients for a first-line unrestricted therapy. And so it's the combination of those 2 things along with some of the other benefits afforded by the LPAD pathway that we think can streamline development of MAT2203.

Operator

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

Jerome D. Jabbour

Thank you, Paul, and thank you to everyone for joining us today and for your interest in Matinas. We really are excited about our company's future. We're proud of the impact we're making in patients with MAT2203, and we're really excited about the potential that our LNC platform has and perhaps the first-ever oral delivery of small oligonucleotides.
So some exciting things coming up in the second half of this year. We're working as hard as we can to advance our programs. We're being smart with our funds. We are looking at alternative ways to extend our cash runway. Given the challenges in the capital markets today, we are evaluating every opportunity to maximize the value associated with this platform. It's making that dramatic impact in patients today, and we think it has an opportunity. Because of the way the platform behaves similarly with small oligos to small molecules, we believe that we could be on the cusp of trying to crack that code of the oral delivery of small oligonucleotides. More to come on that.
The science is hard. No one's been able to deliver nucleic acids orally. We understand the challenges, specifically around messenger RNA. We know what adjustments we had to make to our LNCs in order to deliver messenger RNA systemically. Those adjustments weren't necessary for small oligos. And so we believe they behave much more like lipid nano or traditional lipid nanocrystals, and we'll get to these in vivo experiments and we'll let the data speak for themselves.
But thank you again for joining us. Enjoy the rest of your summer, and we hope to see you at upcoming investor conferences in the fall. Have a great day.

Operator

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