Greetings, and welcome to Matinas BioPharma Corporate Update Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to turn the conference over to Jenene Thomas with Investor Relations. Please go ahead, Ms. Thomas.

Good morning, everyone. Thank you for joining us this morning for the Matinas BioPharma corporate update conference call and webcast. Today’s webcast will be accompanied by a slide presentation that can be found under the investor section of the company’s website www.matinasbiopharma.com, under Events and Presentations. 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 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 filed with the Securities and Exchange Commission. These documents are available in the Investors section of the company’s website and on the Securities and Exchange Commission’s website. We encourage you to review these documents carefully. Following the company’s prepared remarks, the call will be opened up for a question-and-answer session. Joining me on the call today are Jerry Jabbour, Chief Executive Officer; Dr. Raphael Mannino, Chief Scientific Officer; and Dr. Matthew Wikler, the infectious disease clinician and member of Matinas’ Board of Directors. It is now my pleasure to turn the call over to Jerry Jabbour.

Thank you, Jenene. Good morning, everyone. Some days just feel different than others and today is a great day. Today marks a new chapter in the history of Matinas, a history that seen us transformed from a lipid-based to omega-3 drug development company to a clinical-stage drug development company in the anti-infective space built on the foundation of a proprietary and potentially disruptive drug delivery platform technology. 2017 saw successfully uplift this company to the New York Stock Exchange and revealed positive data in patients with our lead antifungal drug MAT2203. It also saw us move into a state-of-the-art formulation development and manufacturing facility here in New Jersey and make exciting advancements on our cochleate delivery technology platform. Now with significant momentum at our backs and equipped with the invaluable feedback, guidance and support from the FDA on MAT2203, we stand poised to drive the company forward into yet another stage of growth and value creation with more than an eye towards transforming ourselves yet again into a drug delivery platform company, focused on our own innovative products and supported with thoughtful and strategic collaborations in cutting-edge areas of science and medicine. Our mission for this update to call today is clear. We would like o provide clarity and convey confidence with respect to our path forward with MAT2203 following our FDA interaction in January. While highlighting some of the recent developments we have made on our cochleate platform delivery technology, which we believe position us to capitalize on its broad applicability and potentially collaborate with well-respected successful companies in a meaningful way. However, before we turn to these updates, I would first like to take the opportunity to convey our gratitude to my Co-Founder and friend, Roelof Rongen for all of his contributions to Matinas since we founded this…

Thank you, Jerry. I thought it will be interesting to provide you with some perspectives that I had about Matinas and why I decided to join the Board of Directors of this company. First of all, I was quite impressed with the drug delivery technology, which I feel has some clinically important advantages. First of all, the drug is delivered through this technology specifically to target areas required for effect. Therefore, the drugs was small margins between the effect and safety can get needed concentrations where the drug is needed for effect, while decreasing the concentrations in the plasma and other tissues, which could result in decreased toxicity or adverse events. Also, the ability to deliver drugs through an oral route, many drugs as you know, cannot currently be delivered orally and pre-integrated in inconvenience and added cost to the healthcare system. And clearly, this could be a true benefit to patients in many clinical situations. I was also impressed with MAT2203, which as you know, is encochleated amphotericin B. And once again, I think, this meets an unmet medical need. Amphotericin is the gold standard product for the treatment of fungal infections. However, it’s one of those products with a very narrow margin between efficacy and safety. And as discussed previously, it appears that MAT2203 allows for delivery of the amphotericin in effected doses to the relevant tissues with decreased plasma concentrations. And as a result of this, we believe this has potential to result in fewer toxicities. Also, MAT2203 can be the specific unmet medical need and prevent any invasive fungal infections in patients with Acute Lymphoblastic Leukemia. Due to the various drug, drug interactions between other anti-fungal agents, amphotericin B is really their only option. However, these patients frequently required amphotericin for up to 90 days and…

Thank you, Matt. Another extremely important element to our overall strategy and kind of a precursor to the work outlined by Dr. Wikler is the formulation optimization that we’re working to complete on MAT2203. We believe that by successfully improving MAT2203 in the ways that Dr. Raphael Mannino is going to describe in a few minutes, we’re positioning MAT2203 to meet its objectives in the clinic and to become then a commercially successful drug if and when approved by FDA. Beyond that, I have also asked Dr. Mannino to provide some additional detail around our platform technology and some of the initiatives that we’ve taken to demonstrate the sort of data that will position our technology to potentially be widely adapted and exciting in cutting-edge areas of medicine and science. So now I’ll turn it over to Raphael.

Thank you, Jerry, and thank you, Dr. Wikler. That was very, very – a very nice description and summary of the clinical development program that we have in mind for the development of MAT2203. And to reinforce what Jerry just said, consistent with what Dr. Wikler described, we have been in the process right now of taking our formulation, which has shown very good low levels of toxicity and efficacy and moving it now toward a formulation, which can be positioned to be in a direction of being a viable and very robust patient-friendly commercial product. So that when we finish the trials that Dr. Wikler just described, we have the product already online ready to go. In order to do that, we’re taking the current product that we have and we’re making it more concentrated, so there’ll be a lower volume for the patients take and we’re making at a much more tasty formulation with adding flavors in flavor enhancers and other types of controlling substances. So that the material at the patients will take will be a much more patient-friendly material that they will be actually interested in taking, which will then help us with compliance. It was one of the problems with the amphotericin and especially the IV formulations in previous studies has been patient compliance. So we’re moving our formulation to be a formulation, which not only is effective orally bioavailable and low toxicity, but also one that will be something that will be very, very patient-friendly in order to enhance compliance. We’ve already moved in that direction in terms of developing the processes for concentrating. We have batches that we have made, both in small-scale and large-scale. And over the next several months, we’re going to be able to demonstrate how these formulations are working.…

Thank you, Dr. Mannino. It’s clear that you have an infectious enthusiasm for cochleate delivery. And – but let me be clear about one thing, because it’s really nice to talk about coming attractions, and we think the science behind the applicability of the cochleate is very strong. And it’s that sort of not only enthusiasm, but the data we’ve been able to generate, which indicates that this has the potential to be a true platform technology and something that can grow into other areas of science. But let me be clear that our focus in the short-term is on the development of MAT2203. The value associated with pushing this program forward into the area of unmet medical need of prevention of invasive fungal infections is meaningful, it’s impactable. And the streamline development program that Dr. Wikler has outlined for us will put us in position to capitalize on that opportunity sooner rather than later. So while we have visions of transforming this company into a true platform company, we are very focused on unlocking the value in creating a gold standard and amphotericin product that is free from concerns of toxicity and can meet significant unmet medical need. And so I turn to Slide 15 now, because what we’ve tried to do for you is create a roadmap. A successful company is able to outline first investors and the market what are the boxes we intend to check in the short-term, which are going to unlock value. And so I want to highlight some of those milestones and catalysts on Slide 15. And what’s important and the takeaway here is that, we have a number of different things in the short-term that you’re going to be able to follow along with us and check the boxes. Following our formulation…

Thank you. At this time, we’ll be conducting a question-and-answer session. [Operator Instructions]. Thank you. Our first question comes from the line of Jason McCarthy with Maxim Group. Please proceed with your questions.

Hi, guys, thanks for taking the questions. But before my questions, Jerry, I just want to be the first to congratulate you on becoming the new CEO. I think, you’re the great guy or a perfect guy for this role as the company continues to build. I’m an anti-fungal guy, and I’m really looking forward to what you’re going to do going forward in leukemia and these other indications. A couple of questions. I think, something that gets lost not by you guys, but by investors is, how toxic amphotericin is? Maybe you can just discuss or review with us, how much could somebody take over their lifetime event for amphotericin versus what you can give with a cochleate and what you have given in patients going out to a year?

Great. Thank you, Jason. First, thank you for your generous comments. Obviously, I’m honored and humbled to be leading the company. But this is really all about the exceptional team we have here and the technology, which we believe can take the company to the next level. But you raised a great point on toxicity and there’s a reason why amphotericin is called ampho-terrible. And traditionally, you’ve seen whether delivered intravenously as AmBisome or injected as Fungizone, you typically tend to see toxicity around day 10 or day 14. And that causes physicians to make choices about whether or not they’re going to effectively treat a deadly invasive fungal infection or they’re going to subject the patient to irreversible kidney damage. And over the course of therapy, it’s traditionally been thought that any amount in total over three grams can never be given to a patient. And I want you to keep that three gram number in mind, because in our NIH trial and this is where we took three different doses into patients 200 milligrams a day, 400 milligrams a day and 800 milligrams a day. And the balance of that protocol was treatment for up to 54 days. And so when you think about just that protocol in and of itself, let’s take a new ladder those dosages over the course of that therapy time period. You’re getting past three grams a day and essentially by a month. And what we’ve been able to do in that study in, at least, two patients who have been taking it for more than a year, one 400 milligrams a day, one 800 milligrams a day, we’ve smashed that kind of impression of the toxicity of amphotericin in that study, where both the traditional levels associated with kidney toxicity, especially have never been outside the normal guidelines. And that’s also remained true for our third patient in that study who during her time in the study also showed no toxicity. And because of that safety profile and because of the meaningful lifestyle impacts, those patients have all elected to go into the long-term safety aspect of that study. So our ability to effectively give amphotericin for now more than a year, at least, in two patients and more than 90 days gives a lot of comfort, as we are developing a drug for a patient population whose neutropenic period is between 84 and 90 days. So the toxicity is probably the best aspect of the data we have from the NIH.

Okay. And as you’re starting to look at what types of leukemia you’re going to try to use this – use 2203 as prophylaxis, you’re going to start with ALL. Can you walk us through another types of Leukemia that are – could potentially benefit from this? I know most therapies are going to make patients neutropenic anyway. But in AML, you might use posaconazole, there is some other options out there. But do you see this or the potential for 2203 to expand to AML, cLL, other types of leukemia, because ampho really is just the better antifungal agent in my view versus what’s out there?

We certainly like the aspects of amphotericin, which would make it the primary choice for either an infectious disease specialists or hematologists looking to treat patients in this area. And you’re right that AML patients today do have a choice posaconazole as a preventative treatment. The reason we’re focused on ALL is for a couple of different reasons. The drug to drug interaction associated with posaconazole doesn’t make it available to those sorts of patients. We are also purposefully designing a drug in the development program to yield exclusivity associated with both QIDP. and orphan. And ALL qualifies for that, which would give us 12 years of exclusivity. That’s very important and we want to be able to get patients who unfortunately are dealing with Acute Lymphoblastic Leukemia, the opportunity did not develop a deadly fungal infection, which unfortunately results in mortality rates of over 50%. We do think there are opportunities for the use to potentially be expanded. But mostly, because of either growing resistance to posaconazole in that patient population or advancements, for example, in AML, which could yield drug to drug interaction with that drug similarly to kind of the regimens that are in place on the AlL side. But we’re intently focused on ALL. We think that that alone is a viable, commercial opportunity on top of meeting a significant unmet medical need. But down the road, do we think that once there is a positive experience in the ALL patients that it could be considered for broader use, that’s absolutely possible. But we’re definitely focused right now on developing it for the ALL population.

Right. And just a quick follow-up to that. While you could develop it for AML or some other indication, what’s your take on the use of antifungals in general, meaning, if 2203 is approved even for a relatively small population in ALL, my experience is that, i-Detox, if there’s an antifungal available, we’ll use it for anything. So there could be a significant amount of off-label use of 2203 if it does get approved even if it’s initially for ALL. Your thoughts?

Yes, you’re starting to sound like some doctors I know that the National Institutes of Health who are so excited about the potential broad application of amphotericin. But I want to be very cautious and careful about how we talk about potential uses of this drug. And whether or not it’s used off-label is obviously within the discretion of the physician. But for us, it’s important to establish that it’s safe and effective in the patient population that we’re targeting right now in ALL. What happens in the future or a physician’s level of comfort with the profile of this drug relative to other available antifungal that will take care of itself. So while I appreciate the fact that it would be potentially interesting to take the broadest spectrum antifungal drug, which is fungicidal and not fungistatic and user for a lot of different things, we’re really only concentrating on meeting that white space on the math.

Okay, great. Thanks for taking the questions. Congratulations again, my best to Roelof.

Great. Thanks, Jason.

Our next question is from the line of Robert LeBoyer with ROTH Capital. Please proceed with your question.

Let me also begin by congratulating you, Jerry. I think, the company’s in very good hands now and also I wish Roelof the best. My question has to do with first of all, the development timeframe for the drug going forward, my understanding from the comments is that, you’re going to be doing the protocol assessment for the rest of this year and then start in 2019? Am I correct on that?

Yes. I mean, obviously, protocol assessment is not what will take up the balance of our activities in 2018. But it’s those necessary ingredients, formulation optimization, dose optimization and interaction with the FDA hopefully, in the late third quarter, early fourth quarter in agreement on that protocol. And then the subsequent interaction with the leading leukemia centers in the U.S. and abroad that will take up that balance. But our – we anticipate commencing the first stage of this adaptive design trial in the late first quarter, early second quarter 2019, yes.

Okay, great. And one of the things that was mentioned was the collaborations and the potential for using this drug delivery system for other molecules. And that’s something that I’ve always thought had potential and seems to be getting more attention. Are there any potential collaborations for 2018, or all of these long-term things? Anything that we should be aware of or expect maybe the rest of the year?

Robert, thank you for your question there. And obviously, that’s a key strategic objective of ours. The timing of that is always very difficult to predict. But given the fact that the discussions we’ve had in these – with these companies and in these areas have progressed. We believe that it’s certainly possible and perhaps even likely that in 2018, we see one or more of these collaborations reveal themselves in some way shape or form. It’s too early to comment on exactly when or what the nature of these will be. But what is clear is that, in these areas that we’re focused on, whether it be vaccines, or oligonucleotides, or antivirals, there is a need those molecules. And we’re confident that in the work we’ve done to date, we’ve demonstrated an ability to do those sorts of things, but we’ll have to let those discussions play out before we can really comment them – comment on them in any meaningful way.

Okay. Yes, that’s consistent with my interpretation. It sounded like this has gone to a higher priority maybe more active discussions from great potential to something a little bit more tangible and a little bit closer on the horizon. So thank you for that. And just lastly, are any updates on 2501?

Yes, great question, because again, that would be an asset, where we would demonstrate the ability for the first time to orally deliver aminoglycoside. And so there’s still a high-level of interest and attractiveness to that market. And obviously, the comp to Insmed who’s – who has successfully demonstrated the ability to deliver amikacin through an inhaled process despite some of the challenges of inhaled delivery and some of the adverse events. The value that has been unlocked in that category is significant. So 2501 for us remains an interesting asset. But we have to look at where our focus needs to be in the short-term to drive the greatest value, given the resources we currently have in the company. And so as we made an assessment of where we are and where we want to go in 2203 and where we are and what’s likely to happen in terms of expansion of the platform into these other areas, 2015 is there. But until we are a better resourced company, we will do work necessary to move that forward, but we’re not going to undertake any major clinical work on that until we’re funded. Now I happen to think that could be a very important component of the financing, given the attractiveness of that market and the comps in that space, and our ability to differentiate significantly from those other products in those other companies. But for right now, intently focused on 2203 and strategic.

Okay, great. Thank you very much and congratulations once again.

Thank you.

Our next questions is from the line of Raghuram Selvaraju with H.C. Wainwright. Please proceed with your question.

HI, thanks for taking my questions. This is Julian on for Ram. Are you able to provide any guidance at this time on the cost of the pivotal Phase 2 trials of 2203?

Yes, I mean, because we have – really have those discussions yet with FDA to narrow in on things like patient population target, what are the statistics that will yield the number of patients we think will be required to demonstrate statistical superiority,. it’s hard to project it. We know essentially what the cost of patient is in this area and it’s anywhere from $75,000 to $10,000 per patient. But as far as like total cost that that’s kind of hard to kind of project at this point. But we’ll very quickly know that around the time that we meet with FDA and late in the third quarter. So we’re not far away from that. In the past, we predicted something in the nature of $25 million-plus. But to be certain about that, we need to decide on the final protocol.

Okay. And regarding 9001, has there been any recent updates? Is there any possibility of developing this drug candidate in-house?

Another great question. And – but given all the different things we want to focus on and do MAT9001 from an internal perspective is not a priority. But we keenly are aware of upcoming data from companies who have competitive products in the space who may change the entire value perception associated with that omega-3 cardiovascular space. And we like the fact that we’re sitting there with head-to-head data against the leading product in the space, which shows that we are significantly more efficacious than they are perhaps giving us a dose advantage over them. We’ll have to see how that reads out. We have had active partnering discussions on MAT9001. We expect those to continue and perhaps intensify when Amarin releases its outcomes data later this year. But for right now, it’s not an internal source of focus.

Okay, great. Thanks for taking my questions.

Thank you. Ladies and gentlemen, this concludes our question-and-answer session. This also conclude our conference for today. You may now disconnect your lines at this time, and we thank you for your participation.