Matinas BioPharma Holdings, Inc. (MTNB) on Q2 2021 Results - Earnings Call Transcript
Operator: 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.
Peter Vozzo: 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 Managements 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 -- safe -- 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.
Jerome Jabbour: Thank you, Peter. Good morning, everyone. And thank you for taking the time to join us today as we review our 2021 second-quarter financial results and provide an important business update. Throughout 2021, we have made meaningful progress in moving our Lipid Nanocrystal, or LNC Platform delivery technology forward with our own drug candidates, as well as with promising collaborations with some of the world's leading pharmaceutical companies. Our decision to focus our internal resources and expertise exclusively on our LNC Platform has yielded significant results and has our Company poised for what we believe could be several breakthrough milestones in the coming months. We understand that efficient and safe intracellular delivery of molecules continues to be one of the greatest challenges in drug development today, especially with innovative medicines. And we believe that our LNC Platform has a potential to becoming new paradigm, changing standard for safe and effective inter-cellular drug delivery. A key aspect of our transition to a primary focus on our LNC Platform was helping investors and potential partners to better understand our technology and the broad capabilities of this potentially disruptive platform. During the second quarter, we were very excited to have the opportunity to provide an in-depth look at our LNC Platform, at our successful R&D Day in June. During our presentation, we described the unique characteristics of our technology and how our serine-based, lipid nanocrystals fused with activated cells to effectively and safely deliver a variety of potential therapeutic cargoes in a non - amiogenic manner. Both the assembly of and the delivery from our LNC s involve membrane fusion with unique mechanism of action which clearly differentiates our technology from both lipid nanoparticles and viral vectors. In addition to providing details on our ongoing clinical programs, we were also able to share the preclinical data demonstrating how this novel technology can potentially provide critical solutions, for both small molecules and larger, more complex molecules, such as messenger RNA, DNA plasmids, antisense oligonucleotides, and vaccines. An archived copy of this webcast remains available on our website and we would encourage anyone interested in learning more about our LNC Platform to take advantage of the opportunity to review this important content. The response to our R&D day has been extremely positive, and has resulted in a number of new inquiries. Setting the stage for potential additional, exciting external collaborations, some of which are already under discussion. Since the R&D day in June, there have been several other key developments with our LNC Platform. First of all, we are thrilled that Cohort 2 of the EnACT study of MAT2203 in patients with HIV suffering from cryptococcal meningitis is now completely enrolled. The DSMB meeting to review the available safety and efficacy data from the second cohort is expected in September. And we plan to announce and discuss these data together with additional commentary from Dr. David Bower, principal investigator of EnACT following the DSMB evaluation. Although it is somewhat unusual to disclose and discuss data in the middle of an ongoing clinical study, the strategic design of the EnACT trial, along with the significant unmet medical need in this vulnerable patient population, provides a near-term opportunity to further validate the LNC Platform. We also believe that these data can highlight the unique ability of our LNC delivery technology to both facilitate oral bioavailability and deliver molecules effectively across the blood-brain barrier. In Cohort 2, the duration of oral MAT2203 in the induction phase was increased to 12 days, followed by consolidation treatment with MAT2203, for 4 additional weeks in 40 active patients. We plan to review and discuss the data from Cohorts 1 and 2 in September. And we believe the results from this step-down regimen could represent a significant breakthrough in the treatment of patients with cryptococcal meningitis. As we look forward to the results, a couple of key points are important to keep in mind. Number 1, survival is the FDA's endpoint of interest for these patients. We know that currently survival is only 70% in patients with the best standard of care. And unfortunately, as low as 30% in areas without the highest levels of care, any improvement over the historical best 70% survival rate would be a significant development given the oral nature of our therapy. Number two, we would like to see the data demonstrate early fungicidal activity, which is the rate of clearance of yeast from the cerebral spinal fluid. And we would like to see that this early fungicidal activity is greater than 0.2. In early fungicidal activity of greater than 0.2 is recognized as being associated with improved survival according to published literature. Number 3, we would like to see little or no evidence of rebound or breakthrough of cryptococcal meningitis infections during the entirety of the MAT2203 period, Treatment period. This would convincingly demonstrate that our therapy is working effectively. Number 4, we would like to see all patients achieve sterility during either the induction or consolidation phases while taking MAT2203. Sterility is defined as the absence of actively replicating fungi in the cerebral spinal fluid. This would again show that MAT2203 can be an effective step-down treatment in this patient population. And finally, 5, we would also expect to see an overall positive safety profile for MAT2203 in these patients, with no evidence of the renal toxicity historically seen with IV amphotericin, no other major safety signals, and no use limiting tolerability issues. This combination of results would provide great support for MAT2203 as a safe and effective step-down therapy in these patients and would represent a significant validation for our LNC Platform. We believe that these data from the first half of EnACT could also support a key regulatory interaction later in 2021, where we plan to discuss the potential for the approval of MAT2203 as step-down therapy under one or more accelerated regulatory pathways for important anti-infective medicines that address significant unmet medical needs in small or vulnerable patient populations. An indication for step-down therapy in patients with cryptococcal meningitis would mean that physicians would be free to prescribe MAT2203 for use following a short duration of IV Amphotericin in the beginning of the induction phase, in order to complete the two-week course of induction therapy and then continue with MAT2203 throughout the additional four-week consolidation or maintenance phase. This indication in and of itself would represent a significant commercial opportunity for MAT2203. And following completion of EnACT, we plan to approach FDA seeking advice regarding regulatory approval. for an additional all oral amphotericin treatment regimen in these patients. Overall, we believe that MAT2203, could significantly increase the use of amphotericin due to its efficacy, significantly improved safety profile, and by avoiding the patient need for extended hospitalization and associated costs. The second key development with our LNC Platform is the progress we have made with MAT2501, our LNC oral formulation of the broad spectrum aminoglycoside antibiotic drug amikacin. In collaboration with the Cystic Fibrosis Foundation during the second quarter of 2021, we advanced important preclinical studies. Positive feedback we received from the FDA in July on these ongoing preclinical studies, as well as our overall plan for development of MAT2501 position us to initiate a phase one single ascending dose pharmacokinetic study of MAT2501 in healthy volunteers. In the fourth quarter of 2021. Our goal with MAT2501 is to develop the first oral aminoglycoside, which could completely transform the use of this important class of drugs. Taking advantage of our LNC Platform's ability to effectively deliver molecules intercellularly, we believe that MAT2501's ability to orally deliver high levels of amikacin directly to the lung, without use limiting toxicity, clearly distinguishes it from all other available therapies and could provide an important solution for patients and physicians. Perhaps the most anticipated and exciting developments since our last quarterly update, involves our work and successfully formulating and developing a potential oral formulation of Gilead's noted COVID-19 antiviral drug Remdesivir. Today, we are extremely pleased to report that the Company and the National Institute of Allergy and Infectious Disease within NIH have successfully completed the planned in vitro studies of various LNC formulations of Remdesivir. LNC Remdesivir formulations were tested for anti-viral activity against the Washington SARS-CoV-2 strain in which are highly permissive for SARS-CoV-2 infections. Unformulated Remdesivir active was tested as a comparison. Following close review of these data with NIAID the LNC formulations tested in this model demonstrated meaningful antiviral activity as compared to free Remdesivir, while also showing a favorable toxicity profile. Given the impressive nature of these data NIAID is now preparing to initiate an in vivo efficacy study of the most potent LNC Remdesivir formulation as soon as possible. We expect additional data to be available in the fourth quarter of 2021. These in-vitro data represent a big step forward, in not only showing that our LNC Platform can be potentially effectively used to create an oral formulation of Remdesivir, but are also an important proof of principle for the intracellular delivery of antiviral medicines more broadly. As we face the ongoing reality of a continued fight against COVID-19, the need for effective, well-tolerated antiviral drugs that can be given to patients at high risk for severe disease at early stages of illness remains extremely high. An oral version of Gilead's remdesivir has the potential to be an important option for physicians around the world in the fight against COVID-19, since an oral remdesivir would permit administration earlier in the disease course, as well as potential for prophylactic use, should clinical studies support such an approach. We are very happy with our progress to date on this project and look forward to -- with great anticipation to the NIH's planned in vivo study in the near-term. Finally, regarding LYPDISO, our potential best-in-class prescription omega-3 therapy, we continue to work through a robust and global partnership process and look forward to providing an update later in 2021. I will now turn the call over to our CFO, Keith Kucinski, who will discuss our financial results.
Keith Kucinski: 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.
Jerome Jabbour: 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 INR, 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 questions and answer session.
Operator: 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.
Bert Hazlett: Yes. Jerry, thank you for the comprehensive update. Congratulations on the progress with 2203. We look forward to that data upcoming. Just with regard to the other programs 2501 and then remdesivir. First question is 2501. Do you expect that to have a development course analogous to 2203 multiple arms, multiple treatment regiments or can -- in the clinic, of course, or can that be a bit more straightforward in terms of initial studies? And I'm talking about, efficacy studies. And then with regard to remdesivir, when do you think we actually might get the initial human data from that program? Thanks very much.
Jerome Jabbour: Great, Bert. Thanks for the questions. So on 2501, in some ways, it is similar to 2203. This is a 505 (b)(2) like process, you are dealing with an infectious disease drugs. So there is the opportunity for certainly -- certain streamlined regulatory and development processes. But in some ways it's different because of the indication we're going after in terms of the treatment of NTM or nontuberculous mycobacteria -- mycobacterium, what you will see from us in Phase 2 is that was likely a setup very similar to what was utilized with the EnACT trial in terms of having a pharmacokinetic lead into Phase 2a study followed by a 2b study -- efficacy study, in patients with NTM. We would expect that program, depending on the how everything progresses over the next year, to potentially get started at the end of next year. A further discussion is required with FDA to formally sort of put together, what that Phase 2 program would look like. Obviously, we've spent a lot of time with KOLs in this area. Noted experts in NTM, both inside and outside NIH, including out in Colorado. So more there we do think though that this is because of the unmet need here. And because of the way we approach development through 505 (b)(2) and other regulatory channels it can be streamlined similar to 2203. And then you will also likely see us stack indications with 2501. So because amikacin is so broad-spectrum, obviously our initial target is the treatment of NTM. But we will also go after, different types of more acute bacterial infections, namely, gram-negative. And so the team is working to outline those development plans, which would start probably soon after we would get into the Phase 2 efficacy studies in NTM. But the first oral aminoglycoside represents a large opportunity for that reason. Amikacin is used sparingly today, even though it's very efficacious because of its toxicity profile, both nephrotoxicity and ototoxicity. And we think due to the nature of our delivery program, we can eliminate a lot of those safety concerns. So we have a very interested division of infectious disease at FDA, very engaged. The more we are in front of them with 2203, it helped them with 2501. That was noted during the interaction we just had in July. So you have an agency that's getting more comfortable with the pharmacokinetic profile of our LNC program, how it works, how it gets inside sales, how we are able to take drug out of the blood. All of that helps and we expect could help us accelerate the development of that drug. On the remdesivir side, we know that there's a lot of attention from NIH and Gilead on this. This is a high priority, especially at NIH. We also know that there's a lot of drugs in the queue there. And so we're fortunate enough because of our relationships at NIH to be moved to the front of that queue, which is why we're so excited to start the in vivo work, expeditiously, because there are a lot of drugs waiting for those slots, but NIH has slotted us ahead of a lot of the others. Once we get through the in vivo work, we expect those data in the fourth quarter. We'll evaluate those, we'll discuss those both within NIH and Gilead. And what's been communicated to us, although, not formerly, is there is an interest then to go immediately into those human clinical trials. Timing's a little bit of a guess at this point, I would expect though, given the sense of urgency here and the need that that's something we could see in the first half of 2022.
Bert Hazlett: Thanks very much. Look forward to the progress. Thank you.
Jerome Jabbour: Thanks, Bert.
Operator: Your next question comes from the line of Greg Fraser with Truist. Please proceed with your question.
Greg Fraser: 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?
Jerome Jabbour: Sure. Thanks, Greg. So there is -- 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 timeline. And so in our discussions with FDA to date, there has been great receptivity to advancing this as quickly as possible. We think we were giving great leeway, even in the design of enact to sort of move as quickly as we did into this large and vulnerable patient -- largest study in vulnerable patient population. But it remains to be seen, Greg, until we take the data from Cohort 2 and sit down with 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 in this study to give us an appropriate control of IV amphotericin. And actually an increase in the standard of care that would be -- normally be available in Uganda. So it remains to be seen how we engage with FDA. Our position is going to be for step-down therapy that we've shown enough, that 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 FDA at the end of the year.
Greg Fraser: 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.
Jerome Jabbour: 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. Unfortunately to many of these patients in the U.S. So that would be I think the unknown factor at this point, are 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 that 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 the single sending dose PK study.
Unidentified Company Representative: Sure. Thank you, Jerry. And thank you for the question. Regarding the FDA interaction, Jerry covered it well. Our expectation is that FDA will look at the totality of the safety and efficacy data that we will be presenting from the EnACT study. And that data will be inclusive of our 505B2. Strategy discussion with the FDA that will allow us to negotiate with the agency which elements of the already approved amphotericin product's can be included in our submission and relied upon from our 505 (b)(2) bridging perspective. So we feel confident that we'll get -- we'll receive strategic direction and the different pathways towards registering our oral amphotericin initially as a step-down to IV info and then ultimately in a supplemental application to the agency for an all-oral induction and consolidation treatment. Regarding your second question for the 2501 single-ascending dose study, this study will be an ascending dose study in which we will be testing 5 dose -- 5 dose levels of our oral amikacin product compared with a placebo control, which is typically what's done in an SAD study. We will not be including. IV amp -- IV amikacin in this trial. However, the expectation will be of course, in Phase 2 to have IV, amikacin as a comparator. The cohort design will have evaluation of safety at each incremental dose escalation step, that we will be a sponsor review and a review by the medical monitor at the CRO who will be conducting the study at the Phase 1 unit. So careful safety monitoring of both potential renal signals, as well as auto toxicity, which we have already conducted an SAD study with the prior formulation of our MAT 2501, in which we saw no evidence of any safety issues whatsoever with our prior formulation. So we will take a safe, cautious approach in escalating doses and anticipate that we will be able to quickly thereafter move into our Phase 2 trials at the end of next year.
Yasmeen Rahimi: Thank you.
Operator: 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.
Robert LeBoyer: 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?
Jerome Jabbour: Robert, thanks for your questions. It's good to hear your voice again. On the EnACT trial on Cohort 2, the total cohorts 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 a valuable data. So we're excited about that. From there, and dependent on the discussion with FDA and what design changes we make may make to the second half of EnACT, to perhaps 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 even better position with 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 FDA.
Robert LeBoyer: Great. Thank you very much and congratulations on all this progress.
Jerome Jabbour: Thanks, Robert.
Operator: 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.
Jerome Jabbour: Thank you, Hector. And thank you all for joining us today. We appreciate your continued interest in Matinas. And the team here looks forward to providing you with updates on our future progress. Have a great day.
Operator: This concludes today's conference. You may disconnect your lines at this time. Thank you all for your participation.
