Matinas BioPharma Holdings Inc (MTNB) 2021 Q2 法說會逐字稿

Welcome to the Matinas BioPharma Second Quarter 2021 Results Conference Call. (Operator Instructions)

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.

Thank you, Hector. Good morning, everyone, and thank you for joining the Matinas BioPharma Second Quarter 2021 Results Conference Call. Earlier 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 Investor section. Speaking on today's call will be Jerry Jabbour, Chief Executive Officer; and Keith Kucinski, Chief Financial Officer. We also have Dr. Terry Ferguson, Chief Medical Officer; Dr. Terri Matkovits, Chief Development Officer; and Dr. Rafael 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 management's 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 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 cannot 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.

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 the potential to become a new paradigm changing standard for safe and effective intracellular 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 phosphatidylserine-based lipid nanocrystals fused with activated cells to effectively and safely deliver a variety of potential therapeutic cargoes in a non-immunogenic manner. Both the assembly of and the delivery from our LNCs involve membrane fusion, with the 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 Boulware, Principal Investigator of an 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 one, 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 cerebrospinal fluid. And we would like to see that this early fungicidal activity is greater than 0.2. An early fungicidal activity of greater than 0.2 is recognized as being associated with improved survival according to published literature.

Number three, 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 four, 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 cerebrospinal fluid. This would again show that MAT2203 can be an effective step-down treatment in this patient population.

And finally, five, 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 1 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 2-week course of induction therapy and then continue with MAT2203 throughout the additional 4-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 I 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 intracellularly, 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 development since our last quarterly update involves our work in 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 antiviral activity against the Washington SARS-CoV2 strain in Caco-2 cells, which are highly permissive for SARS-CoV2 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.

Thanks, Jerry, and good morning, everyone. Turning now to our financial results. Cash, cash equivalents and marketable securities at June 30, 2021, were approximately $59.8 million compared to $58.7 million at December 31, 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 ENHANCE-IT 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.

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 eye on our 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 question-and-answer session.

(Operator Instructions)

Your first question comes from the line of Bert Hazlett with BTIG.

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 regimens or 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 initial human data from that program?

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're dealing with 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 mycobacterial -- mycobacterium. What you will see from us in phase II is, though, is likely a set up very similar to what was utilized with the EnACT trial in terms of having a pharmacokinetic lead into phase IIa study followed by a IIb study, efficacy study, in patients with NTM. We would expect that program depending on how everything progresses over the next year to potentially get started at the end of next year, further discussion is required with FDA to formally sort of put together what that Phase II 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 Chuck Daily 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 that 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 II 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 helps 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 cells, 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 with NIH and Gilead. And what's been communicated to us, although not formally is there is an interest then to go immediately into those human clinical trials. Timing is a little bit of a guess at this point. I would expect though, given the sense of urgency here and the need, that's something we could see in the first half of 2022.

Look forward to the progress. Thank you.

Your next question comes from the line of Greg Fraser with Truist.

Congrats on the progress in the quarter. On 2203, can you give us some insight into the accelerated approval pathways that you believe may be feasible and the additional clinical work that you might have to do to support a step-down indication?

Sure. Thanks, Greg. So if there is -- there are more than 1 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 sort of our desire to advance this towards approval as quickly as possible, we're also very cognizant of the sort of label that we would want. And so there are some elements to consider as we move forward either under LPAD or orphan or some sort of combination of both.

What we do know is that the need here will be what we believe dictates time line. And so in our discussions with the FDA to date, there has been great receptivity to sort of 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 4 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 in the 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 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.

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 from 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.

Yes. 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 efficacy in cohort 2 because of the greater spread between days of treatment with IV amphotericin and then oral amphotericin, which is the way the study was designed purposely. Cohort 1 was, by design, a lead in to establish safety in these patients in order to get the DSMB comfortable with the shorter course of IV treatment in Cohort 2. So survival will be there. We will and are measuring survival in the study in both the active and the control arms, and we'll be able to compare those. It's a small number of patients, but you will get survival data, at least for as long as these patients are through the course of therapy. And even after they come off the drugs, we will continue to follow these patients after the 6 weeks of treatment.

So you will see that. You certainly will see the measure of early fungicidal activity. We obviously are collecting safety data. So we are -- we've outlined exactly what we think these data will be able to show, and we'll talk through some of the nuances. And Dr. Boulware will be able to shed some light on how to think about these data in light of obviously his vast experience but also historical data relative to the treatment of patients with cryptococcal meningitis. So what we've tried to do today in outlining sort of those -- our expectations or hopes with respect to these data, those are the 5 key things we'll look to address and comment on after the DSMB has evaluated the data and we have an opportunity to review it in full.

Your next question comes from the line of Yasmeen Rahimi with Piper Sandler.

This is Felicia on for Yas. So we just have 2 for you this morning. So first can you just provide some color on the possible outcomes of the FDA discussions following the EnAct Cohort 2 readout? And second, can you provide some additional details on the trial design for the planned Phase I study with MAT2501 with regards to dosing size of the study and if there will be an IV in the case and comparator arm? And also has the FDA cleared the MAT portion of the study?

Great. So I'll handle sort of the first question and then Dr. Matkovits, I'll ask you to take the question on Phase 1 from MAT2501, the design and some of the details there. But Felicia, thank you for these questions. In terms of what our goal is for the FDA interaction off of the Cohort 2 data of EnAct, it's to go in and get that clarity on what will be required for an early registration for MAT2203 step-down therapy. Our position going in will be that cohort 1 and 2 demonstrate both the safety and efficacy as step-down therapy 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 sort of, I think, the unknown factor at this point are do they want to see some U.S. patients with -- 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.

Terri could certainly comment on anything I just said with respect to possible outcomes of the FDA discussion on 2203 and then help answer Felicia and Yasmin's question on the trial design for Phase I, the single ascending dose PK-study.

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 505(b)(2) strategy discussion with the FDA that will allow us to negotiate with the agency, which elements of the already approved amphotericin products can be included in our submission and relied upon from a 505(b)(2) bridging perspective. So we feel confident that we'll get -- we'll receive strategic direction on the different pathways towards registering our oral amphotericin initially as a step-down to IV ampho 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 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 amikacin in this trial. However, the expectation will be, of course, in Phase II to have IV amikacin as a comparator. The Cohort design will have evaluation of safety at each incremental dose escalation step that will be a sponsored review and a review by the medical monitor at the CRO who will be conducting the study at the Phase I unit. So careful safety monitoring of both potential renal signals as well as auto toxicity, which we have already conducted an SAD study with a prior formulation of our MAT2501 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 II trials at the end of next year.

(Operator Instructions)

Your next question comes from the line of Robert LeBoyer with Noble Capital.

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 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?

Robert, thanks for your questions. It's good to hear your voice again. On the EnACT trial in Cohort 2, the total cohort is 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 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 a cohort or as a lead-in to 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. So 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 discussed 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.

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.

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.

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