Greetings and welcome to the Matinas BioPharma Quarterly Update Conference Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note, this conference is being recorded. I would now like to turn the conference over to your host, Jenene Thomas, Investor Relations. Ms. Thomas, you may begin.

Thank you, Sherry. Good morning, everyone and thank you for joining the Matinas BioPharma quarterly update conference call and webcast. 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 and 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. Terry Ferguson, Chief Medical Officer; Dr. Terry Matkovits, Chief Development Officer; Dr. Raphael Mannino, Chief Scientific Officer; and Keith Kucinski, Chief Financial Officer. It is now my pleasure to turn the call over to Jerry.

Thank you, Jenene, and good morning to all those dialed into our update call. At the beginning of this year, I made the statement that I thought Matinas could be one of the most exciting stories in biotech during 2019 based upon the fact that we believe we have two potential best-in-class assets. There is no question that our lead asset, MAT9001, a prescription-only omega-3 is going to be a tremendous driver of value for us. It's going to be used for treatment and we believe potentially for prevention in a large number of patients with cardiovascular and metabolic conditions. Quite simply, we are positioning MAT9001 to be a best-in-class drug in a multi-billion-dollar cardiovascular market. We are aggressively advancing this drug toward Phase 3 with an initial indication in the treatment of severe hypertriglyceridemia. We believe this is a product that is clearly differentiated from those omega-3 pharmaceutical products that are currently approved and we will highlight the reason supporting our belief during this morning's call. In addition to MAT9001, we are also actively pursuing what we believe has the potential to be a best-in-class drug delivery platform. If we think about some of the biggest challenges facing innovative medicine today, much of it centers on delivery. How do you package small molecules or nucleic acid polymers and deliver them inside a cell without generating an unintended immune response or undesirable toxicity. If we look back a little more than 6 months ago, it is truly incredible how much progress has been made, how our world here at Matinas has changed and why we think we’ve positioned 2019 to be a transformational year. Given the nature of this update call, we believe it is important to walk everyone through some key highlights that have brought us to where we’re…

Thanks, Jerry, and hello to everyone joining us on the call today. My name is Terry Ferguson. I’m a cardiologist and I joined Matinas as Chief Medical Officer at the end of February. I came to Matinas by way of Amgen where I’ve been for the last 2.5 years, where I led the cardiovascular and bone therapeutic area for U.S Medical Affairs. For me this has been the culmination of a really interesting journey. My initial training was in a traditional academic phenotype ultimately pivoting to full time clinical research. Undergraduate at Harvard Medical School of [indiscernible], postgraduate training at the University of Michigan and then Beth Israel in Boston for cardiology. From there I spent more than 20 years at the Texas Heart Institute in Houston, leading their cardiovascular clinical research and building a fairly significant academic career as an established cardiovascular clinical trialist. I moved to industry in 2008, first at the medicines company, then at AstraZeneca before coming to Amgen in 2016. And all along on both the academic side and the industry side, my main motivation has been all about advancing standards of care. As a clinical researcher, for me, it's not so much about the data per se, but much more about what new data might actually mean in practice and how we can use it to make a difference for patients. A big part of what drove my move to industry was a chance to do this on a larger scale, not just bringing new drugs to market, but also helping find ways to optimally use them in the real world. I have the opportunity and privilege to work on both the academic and industry worlds with a number of drugs that could be considered breakthrough cardiovascular therapies. Not all of them have made…

Thank you, Terry. We are extremely pleased to have attracted someone of your caliber who brings with him significant expertise and relationships from some of the world's leading pharmaceutical companies. I would now like to take some time to discuss our regulatory and clinical strategy for MAT9001. So how do we get there with 9001? The first step is reactivating our IND, essentially a paper exercise that will be completed within the next month. Then according to plans already agreed upon with the FDA as part of our original development program for MAT9001, we will conduct a 28-day tox study and a comparative PK study. We will submit those data to FDA and have an end of Phase 2 meeting to review those data as well as our plans for our Phase 3 program. Our plan is to get an SPA, a Special Protocol Assessment for each of our plan Phase 3 clinical trials. But the key here is not is to not just conduct the studies required for approval. Our strategy is to interlace studies required for approval with studies that will continue to differentiate MAT9001 from other prescription omega-3 products. In order to receive approval for severe hypertriglyceridemia, we need to conduct the comparative PK, a bridging tox study and one Phase 3 study in patients with triglyceride levels of 500 and above, very similar to the trials conducted with every currently approved omega-3 drug. That's good enough for approval in severe hypertriglyceridemia. But if you want to position this drug to impact the rapidly emerging omega-3 class, the same way that Lipitor impacted the statin class, we believe and understand that you need a differentiated profile. Therefore, we will conduct another head-to-head study against Vascepa, this time in patients treated over to separate 28-day period again in…

Thank you, Jerry. It is my pleasure to have joined the team and to participate in the call this morning. By way of background, I’m a biochemist and molecular biologist by training. I’ve been in industry in drug development leadership roles for over 25 years at global multinational pharma mid-size biotech and startups including Novartis, the Medicines Company, NPS Shire and ContraVir before joining Matinas. Throughout my career I’ve led the successful development of four globally commercialized products across a number of therapeutic areas. My decision to join the company preceded the news in the omega-3 world. The most compelling reason I joined the company was the LNC delivery platform technology. Having been a drug developer for all of my career, the delivery of drugs that are potent and effective that have delivery challenges whether it is [indiscernible] toxicity or low oral bioavailability has been a challenge across a number of classes of drugs. The value of the platform to deliver in a highly efficient and targeted way, drugs that’s in a variety of therapeutic classes, small molecules, peptides, vaccines, proteins, oligonucleotides, as well as other therapeutic interventions was really compelling for me. The LNC platform have such an established strong data set that has consistently demonstrated its utility and highly efficient oral delivery capability which was key for me joining the company to drive the development of these various clinical opportunities in numerous therapeutic areas of high unmet medical need. Following my due diligence of the LNC technology and evaluating the data the company has generated to date, joining Matinas was an easy decision. Also, shortly after I joined Matinas and the full REDUCE-IT data was announced, I saw the potential of MAT9001 to be a best-in-class cardiovascular therapy and what is projected to be a new multi-billion dollar omega-3 drug class. This made joining Matinas an even more exciting opportunity for me. I believe my experience in running large domestic and global drug development programs will be especially valuable in driving MAT9001 towards successful approval. I look forward to continue and working with the team to capitalize on the potentially significant opportunities within our reach. With that, I will turn the call back over to Jerry.

Thank you, Terry. We’ve assembled a very strong leadership team at Matinas, and we’re moving forward in 2019 from a position of real strength. We have a diversified position with multiple shots on goal for our potential best-in-class product candidates and potential best-in-class delivery platform technology, which could bring substantial value from ongoing and future collaborations. We believe our LNC delivery technology has the potential to enable the oral safe and intracellular delivery of medicines. We’ve early data with numerous molecules and have demonstrated that we can take drugs like amphotericin, which currently is IV only and highly toxic and make it orally available and well-tolerated for prolonged administration. Further, we have shown in preclinical studies that we can take nucleic acid polymers, deliver them to cells and express proteins, while limiting toxicity. A critical aspect of delivery in this space, we believe, is being able to penetrate the cell membrane or gain access to a cell without damaging or destroying the cell membrane in the process. That unfortunately is one of the results or downsides of the currently available technologies. Lipid nano-particles are being used by many companies in the gene therapy space. Unfortunately, regular lipid nano-particles enter the cell via cell membrane degradation and you can typically see a lot of cell death, an unfortunate side effects as a result. Among the benefits that our LNC technology provides is a non-aqueous interior, which translates into potentially longer shelf life stability even at room temperature. We believe that we can deliver biologically active molecules into cells fusogenically with limited toxicity and without unintended immune responses. When our particles interact with the cell membrane, cell membrane integrity is maintained. As exciting as it is, we want to be clear that this is early stage and something we want to learn…

Thank you. [Operator Instructions] Our first question is from Jerry Isaacson with ROTH Capital. Please proceed.

Thank you and good morning, everybody. So, Jerry, one of the things you talked about a lot was really nice to see the substantial public offering that you just finished. I wonder if you could just comment a little bit further on when you’re pitching this to the investors that you mentioned, what are you -- what’s your stated use of funds for the offering?

Right. Thanks, Jerry, and thanks for joining the call today. So, in what was a very quick, but very deep process in terms of meeting with these institutional investors, it was clear that there was a lot of interest in MAT9001. And that the goal in raising this amount of money was certainly to put our company in a position to drive that asset forward through meaningful clinical events. So, I would say that our primary focus with those funds is to drive MAT9001 forward, but that's also because we have the luxury of supportive partners who are providing non-dilutive dollars to drive MAT2203 forward for example. So, we’re in a little bit of an envious position where we have two assets that have attracted a lot of attention. Obviously, on a relative value basis, MAT9001 looks like a great investment relative to some of the other omega-3s in the space, and then we're equally grateful for the continued support of the NIH, who continues to advance development of MAT2203. So, the funds that we brought in, I'd say, were primarily earmarked for MAT9001 and general corporate purposes, and we will look towards those non-dilutive dollars to drive MAT2203 and the platform forward. And on the platform side, it's really because of the wherewithal and financial resources perspective, collaborators who are interested that we think will give us the opportunity to again potentially use non-dilutive dollars on the platform side.

Okay. Yes, thanks. I appreciate that. So another thing I wanted to dig into with you over Jerry, is that you talked -- you’ve been talking about this partnership with the global pharmaceutical company for the -- on the LNC platform side, but not too many details available so far. So, what can you tell us about this in terms of like what might be some triggering moments that would give us more detail, and should we expect to see any revenue on the books from this partnership?

Yes, it's a good question, Jerry. So, it's a really interesting process for us, because as we’ve come out with more and more data on the LNC platform, it obviously has attracted a lot of interest. There's clearly a challenge in the gene therapy space with delivery. What we learned during this process and we were already aware of it to a certain degree, but there's an enormous amount of competition and a huge amount of sensitivity on the part of these large pharmaceutical companies to keep exactly what they're doing secret or confidential. And so that's the primary reason for a lack of information is really just us having a willingness to accept our partners’ conditions to kind of move that forward. The model we've chosen to implement there is all about not deciding or setting a precedent for value too early. We are more than comfortable going into these earlier-stage, proof-of-concept in vitro and in vivo studies where we will look at things like immunogenicity or expression of proteins as a gateway for that partner to be able to make deeper investment and longer term -- have a longer-term relationship there. Our expectation is that we will begin to yield data from that collaboration probably toward the end of this year. There's still a lot going on within that large pharma partner in terms of coming up with the right nucleic acid polymer to put into it. So, there's a lot of thought being put into design. But our expectation is that once that proof-of-concept happens, whether it's with this or some of the other discussions that are ongoing, it's that initial data which we believe will put us in a better position to be able to outline a longer-term collaboration, whether it takes the form as an option to license agreement or a straight out license remains to be seen. But those programs typically take 4 to 6 months to generate that early data. And so, it's at that point kind of later this year where we plan to hopefully stack up a number of these, and so that from the end of 2019 and into 2020 we're going to have multiple opportunities to see data from these collaborations, which could put the company in a very good position to execute on longer-term collaborations.

Okay. So, thanks, Jerry. So, I just have one more question. The ADA, obviously, came out with some great guidance last week regarding the omega-3s that just could be potentially considered to be an important part of the standard of treatment for certain diabetes patients. I wonder if you guys could just talk about that a little bit and what it means for Matinas?

Sure. For this one, I mean, there's no better person in the room to answer that question than Dr. Ferguson. So I would offer Terry to make some remarks.

Yes. And I think that the -- the very quick record -- recognition by the ADA of the potential importance of omega-3s as part of the preventive therapy in patients with diabetes, there's a lot of things that are wrong within patients with diabetes. One of them is so-called diabetic dyslipidemia where they’ve lipid abnormalities. They also can have elevated triglycerides and the omega-3s wind up being perfectly positioned in that population to safely and effectively provide prevention. In the REDUCE-IT trial, at least 60% of those patients in REDUCE-IT were patients who had diabetes. So, I think that again there is growing recognition in the clinical community for the importance of the omega-3s in improving outcomes in otherwise at-risk patients. And I think that's just the tip of the iceberg for other things that may be coming in terms of the guidelines.

Okay, great. Thanks very much. That’s all the questions I have for you today. I appreciate it.

Great. Thank you.

Our next question is from Robert Hazlett with BTIG. Please proceed.

Thank you. Thank you for taking the questions and congratulations on all the progress. Jerry, I would love to ask with regard to MAT9001. What is it that -- what components of 9001 are driving the differentiated lipid profile? Is it the bioavailability of EPAs with the inclusion of DPA? Could you talk a little bit about again some of the more specifics of 9001 and some of the competitive data that you have to date versus Vascepa?

Sure. And I will [indiscernible] this with Dr. Ferguson. But I think you hit on the key elements, Bert. For us differentiation is all about efficacy and bioavailability and obviously the bioavailability starts with the free fatty acid were going to be much more easily absorbed. And as you saw in our head-to-head crossover study against Vascepa, that attribute of our product resulted in their being 5x more in terms of the level of EPA in the blood, which is unusual when you think about Vascepa being a pure EPA product and ours being a combination of a number of different omega-3s. The fact that we were able to get that increased amount of EPA into the blood demonstrates the importance of bioavailability, that's also going to play a role, we believe, in the type of diet that's required for these patients to absorb for example [indiscernible] kind of dose against what are the recommended kind of guidelines for these patients in terms of diet. And then on the efficacy side, certainly a product that’s higher in EPA is important. As important, we believe, is the elimination of DHA when we’re talking about that lack of an impact on LDL-cholesterol, but for us DPA does play an important role and we also need to recognize that we need to understand and learn more about DPA. But the fact that it does seem to be much more potent in the reduction of triglycerides than EPA is clearly having an impact on our ability to down regulate a lot of these lipid markers. And I think if you were to rank the omega-3s in terms of impact on reduction of triglycerides, for example, DPA would be leading the pack. Actually DHA would be second in terms of its impact on reduction of triglycerides and EPA would be third. The reality is that that DHA also has that impact on LDL-cholesterol so that adding DPA to this in a meaningful amount gives us that ability to hit triglycerides harder, it's one of the reasons why you saw such a robust difference in reduction of triglycerides in our head-to-head trial. At 33%, that's a very, very significant number in terms of percentage reductions in patients with triglyceride levels 200 to 499. And then when you layer on EPA's impact on things like Apo-C3 and PCSK9, it gives us a lot of encouraging data pointing towards differentiation and that we could be uniquely different. But Terry Ferguson maybe add a little bit to that.

And I think that as you look at this sort of getting to the key of the differentiation, is it better bioavailable EPA, is it the addition of DPA or is it some combination of both. If you just look at the lens of triglycerides, better bioavailability will give you more triglyceride lowering and DPA will give you better triglyceride lowering. I think that looking at the more sophisticated lipid markers as said, it's not just all about the bioavailability. The bioavailability is very important and that has to do with overcoming some of the variability, your potency, your ability to have how much you dose or pill counts [ph] and things like that, but also the feature that Jerry mentioned, the reduction in PCSK9, which is not what you see with EPA, maybe one of the unique characteristics relating to DPA. You’ve got a lot more to learn about this, but I think that there is a very interesting opportunity to explore both the better bioavailability and the addition of the unique amounts of DPA to what we have in MAT9001.

That's very helpful. And it dovetails right into my next question, which is as you -- as we consider that additional head-to-head study due out in the third quarter of next year, what incremental data do you hope to get from that study and can you just talk a little bit about trial design or patient inclusion that you -- that might help you better elucidate the profile of MAT9001 in that study?

I think that it is a couple of things are going to be going into that study. First, it's going to be larger. Next, it will be not just looking at a low-fat diet, which could have disadvantage to Vascepa in some respects since ethyl esters require food and optimally a high-fat meal for best absorption. So we will be looking at food effects and will have the opportunity to explore in more detail some of the lipid signals and some of the other signals that may give us more information around how MAT9001 is truly differentiated. So I think it will give us more data in relevant clinical circumstances and an opportunity to probe a little bit deeper into the things that we think are going to be differentiating us.

Terrific. And then just shifting to the LNC technology, congratulations on the progress so far with the initial research collaboration. When and what types of deliverables, Jerry, should we expect from this? And then what does an optimal agreement look like with the LNC technology? You’re touching on it, but I just want to maybe understand what could be coming here as you progress forward with the technology?

Sure. In terms of deliverables, I mean, we do have the ability to see any of the data that comes out of this evaluation and share it with third parties in a blinded manner. The timing of that is a little bit up in the air. I mean, I think we are expecting that we will be in position to have something by the end of the year. It's a little bit out of our control, because it doesn't necessarily kickoff until we receive the partners of nucleic acid polymer, which we believe is imminent. But it really should be a 4 to 6 months. Whether or not we are in position to press release that or whether or not that data will be available to be shared at scientific meetings remains kind of a discussion item between us and our partner. Our expectation is that should it perform the way we expect it to perform there will be no lack of desire to make those results known on either party, because it's going to be position us really well. And then in terms of optimal structure, I mean this is a perfect technology for licensing. Our expertise is in developing the formulations and figuring out the right combination of materials in order to create the stable formulations and facilitate this delivery in a non-toxic nondestructive manner. And so we very much want to maintain that as being our expertise. So whether it's an option to license, which gives the pharmaceutical partner the ability to control at which point they take over or trigger a full license payment. We've seen plenty of precedent in this space for what the terms of those agreements look like. It's hard to speculate on exact dollar counts, but I would expect that in the…

Terrific. That makes sense. Looking forward to upcoming events. Thank you.

Thanks, Bert.

Our next question is from Chad Messer with Needham & Company. Please proceed.

Great. Good morning and thanks for taking my questions. One of the findings from REDUCE-IT that I found sort of surprising and interesting was a lack of correlation of the benefit -- of the CD benefit with actual triglyceride levels. And this seems to point to some of the pleiotropic effects of omega-3s on things like blood pressure and blood viscosity. What data do you have on MAT9001 when some of these [indiscernible] endpoints? And what are your plans to look into these in the future?

I think that you bring up a really good point. One of the striking features of REDUCE-IT is that not all of the benefit in REDUCE-IT can be laid just at the feet of triglyceride. So there are other things that are going on, the so-called pleiotropic effects that you mentioned. And I think that our forthcoming study is a chance to explore a lot of those things. It's very clear that the three main omega-3s out there EPA, DHA and DPA, all do somewhat different things. And I think that, for instance, DHA is associated with elevations in LDL whereas the others are not. DPA, which is in our product is associated with reductions in PCSK9, which we haven't seen in the others. And I think that there is going to be an opportunity in the forthcoming studies to begin to explore in a number of different areas, just what exactly mechanistically may be going on. The omega-3s do a lot of things besides just lower triglycerides. And I think we're going to have an opportunity in our future studies to begin to tease out some of those details.

And Chad, just a follow-up on that, I mean, when we’re talking about our pure EPA product having demonstrated in REDUCE-IT, the significant impact on outcomes and the fact that it can't all be laid at the feet of triglycerides, some of this will depend on how STRENGTH reads out, which also has DHA in it. And so, STRENGTH comes out positive, it's not simply going to be an EPA effect. There must be a something about a high-dose, high-purity prolonged use of omega-3s, which is having an impact. But for example of STRENGTH were to come out not as robust as REDUCE-IT or not produce as near results. There must be something unique about EPA. And I think we would acknowledge that, but I think that's also where we feel very comfortable and very excited about the profile of MAT9001, and that's going to get back to the bioavailability. Our ability to get higher levels of EPA positions us pretty well regardless of how additional data strikes out. And I think even looking at the REDUCE-IT data, I think people are still trying to tease out whether or not you are seeing kind of these anti-inflammatory, these antithrombotic effect. So I think even more research is required there even on the Vascepa side. For example, you couldn’t even necessarily tie it to something like CRP. That's where our second mover advantage and our ability to continue to tease out the primary and secondary endpoints for our study becomes important, because as this landscape evolves, as more data comes out, both from REDUCE-IT and then eventually from the STRENGTH trial, we will add and look to add different data points in order for us to be able to tease out kind of differentiation. And we look forward to kind of being able to take advantage of our second mover status to design things in order to give or create more data to give answers to some of the questions that are coming out of these studies.

Great. Thanks. I appreciate the added thought.

Thanks, Chad.

Ladies and gentlemen, this concludes today’s teleconference. You may disconnect your lines at this time and thank you for your participation.