Welcome to the Matinas BioPharma Second Quarter 2020 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 from Matinas BioPharma. You may begin.

Thank you, Jessie. Good afternoon, everyone and thank you for joining the Matinas BioPharma second quarter 2020 results conference call. Just after the market close today, we issued a press release with our second quarter 2020 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 Jabbour, Chief Executive Officer. We also have Dr. Terri Matkovits, Chief Development 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 and involve risks, 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 the Matinas BioPharma's current expectations and actual results may differ materially. As a result you should not place undue reliance on any forward-looking statements. Some of the factors that could cause actual results to differ materially from those contemplated by such forward-looking statements are discussed in the periodic reports Matinas BioPharma files with the Securities and Exchange Commission. These documents are available in the Investors Section of the company's website and on the SEC's website. An archive of this call will be posted on the company's website also in the Investor Relations Section. Following the companies prepared remarks we'll open up the call for a question and answer session. I'll now turn the call over to Jerry.

Thank you, Peter. Good afternoon and thank you for taking the time to join us today as we provide a business update and discuss our 2020 second quarter results. We hope that you and your families have been well during these uncertain and challenging times. The second quarter of 2020 was unprecedented in all respects. Fortunately, as a company and as a team, we have been able to remain focused on execution, and on getting our clinical programs back on track as a key priority during the second quarter. I would first like to commend our employees for their extraordinary commitment to our mission, as we implemented a variety of processes, which successfully allowed us to advance both of our internal development programs while continuing to emphasize the safety of patients, our research and development partners, and our internal team. From a clinical perspective, we are pleased to announce that both the ENHANCE-IT study of MAT9001 and the EnACT study of MAT2203 have actively resumed enrollment after a temporary pause due to the pandemic in the second quarter. Beginning with MAT9001, we are rapidly approaching completion of our enrollment in our ENHANCE-IT trial, our head-to-head crossover comparative study of MAT9001 versus Vascepa. This clinical trial remains an important and compelling study for our next generation prescription Omega-3 therapy. With more than 90 out of 100 patients randomized and dose to-date in ENHANCE-IT, we expect to complete enrollment in August and remain on track to have top line data available early in the first quarter of 2021. We continue to believe that MAT9001 has best-in-class potential in the prescription Omega-3 class with clear differentiation in pharmacokinetics and impact on lipid markers such as triglycerides and PCSK9. We look forward to the ENHANCE-IT data to provide important information on the potential for…

[Operator Instructions] Our first question is coming from the line of Jason McCarthy from Maxim Group. Please proceed with your question.

This is Michael Okunewitch on for Jason. Thanks for taking the question, congrats on the progress. As you mentioned on the call, the COVID pandemic has brought a lot of attention to the infectious disease space, and particularly surrounding how under average are and given that drug development antifungals kind of lag behind other forms of infectious disease, I'd like to see if you could discuss in a bit more detail some of the challenges that have made antifungal development so difficult and the need for a safer alternative like MAT2203 or even gold standard drugs like amphotericin?

Michael, thanks very much for the question. So a lot of the challenges that we face in the development of antifungal drugs. I think first and foremost, there is just been a lack of focus on it. If you look at over the last 15 to 20 years, there has been a lack of investment in development of medicines in that space, because there were available therapies because they were cost effective, but the bugs have started to fight back. So you've had a lack of big pharma investment in that space. That's where the development of new therapies becomes so important, but then you start to talk about development hurdles, and the reality of developing an antifungal medicine means a demonstration as an initial matter in a non-life threatening infection, and that in and of itself takes time, it costs additional resources, and then you have the challenge of conducting studies in deadliest infections where patient recruitment can take a long time, and that becomes a challenge from a resource perspective, from an endpoint perspective, and certainly from an ethical perspective in the recruitment of patients. Oftentimes where FDA wants to look at these studies versus placebo, you can't really do that in those contexts. And so that's why we think our opportunity here at least as an initial matter is how do we take our technology, apply it to existing medicines, where we know that the drug is effective at killing the bug. So where the fungicidal therapies that could benefit from being made number one oral, but also a removal of toxicity when you talk about amphotericin B, doctors know this drug is ampho terrible. It actually can end kidney therapy after about 14 days of use, and so doctors are forced to make tough decisions between…

Yes, very much. So thank you for answering the question. And then I also have another one relating to today's news regarding the approval of a second generic Vascepa, but to see if you could comment on how the Vascepa generics could impact the space and more specifically, what does this mean for a second-generation Omega-3 like MAT9001. Would you anticipate the availability of generics have an impact on pricing or could it actually have a positive impact creating a greater access and familiarity in the market for when a potentially superior product enters the field?

Yes, thanks, Michael. It's a good question. And I think it remains to be seen exactly how this impacts, whether it be from a pricing perspective or an access perspective. What is reality is that no one should be surprised that a second generic was approved, because the initial win by the generics and the district court opened up the ability for FDA to approve these products, pending an appeal and you're likely not to see any of these generic products launch in the phase of an appeal, which is set to be argued on September 2, and then potentially have a decision for the Vascepa later this year. It remains a constantly evolving and challenging market, but what is clear is that if the profile of MAT9001 continues to demonstrate that it is a superior drug to placebo, it has an opportunity to not only be a successful drug, but a drug that most physicians will write even over a generic. Pricing will always come into play but the way we've thought about our drugs and the way we can price it gives us a lot of flexibility as that market evolves. What we're really looking to see and this is why the enhanced study is so important. How do we once again stack up to Vascepa because if we demonstrate and ENHANCE-IT once again, that were superior on triglycerides, on reduction of PCSK9, on reduction of non-HDL cholesterol, on VLDL cholesterol if we do not raise LDL cholesterol, and we are achieving as high or higher blood levels of EPA that bodes well for the profile of our drugs in the eyes of both payers and physicians, especially when you're talking about an initial indication of severe hypertriglyceridemia, where the potency and reducing triglycerides matters. The reality of generic competition here is it's likely to make the entire market competitive, which underscores our need to have a better drug. The profile of our drug and the data to date suggests that that's true and ENHANCE-IT gives us another opportunity to demonstrate that. We keep a close eye on what's going on with Amarin, we do note that they continue to increase both new RXs, and total RXs, the numbers are going in the right direction. At the end of the day, generic entry Vascepa will most effect Vascepa and our job will continue to demonstrate with the data that we have a better job to Vascepa and any copy thereof. So it remains to be seen, but ENHANCE-IT will tell us a lot about the future of MAT9001.

Next, I'd like to follow-up on something you mentioned there regarding the EnACT study. I'd like to see if you could just quantify a little bit how much of a change from baseline versus Vascepa you'd need to see to consider it, clinically meaningful and takes this to doctors and say we have, significantly better product?

Yes Michael, thanks for the question. As we previously communicated this study, the ENHANCE-IT study has been powered on a primary endpoint for reduction of triglycerides to show a 10% delta. And we believe that that is clinically meaningful versus Vascepa in this space. And so, we're looking for that 10% delta on triglycerides. In our first head-to-head study in a patient population with triglycerides 200 to 400, we saw a reduction with MAT9001 of approximately 33% and a reduction with Vascepa at approximately 11%. Amarin and others were quick to point out that that Vascepa underperformed relative towards performance in both [Anchor] and in REDUCE-IT, where its triglyceride reduction in a similar patient population was around 18% to 19%. The reality of the way ENHANCE-IT is set up from a design perspective is that both drugs are going to be given twice a day with food, which is the way Vascepa is currently indicated. Our expectation and I think it's a reasonable one would be that Vascepa should be expected to perform in line with where it has previously in these sorts of patients, which is around an 18% to 20% reduction in triglycerides. For MAT9001 in the profile of its drug, a change from a low fat diet to simply giving the drug twice a day with food is not likely to penalize MAT9001, while the entry criteria in ENHANCE-IT is slightly broader than it was in the first study, we would expect our triglyceride reduction to be in the neighborhood of where it was in the first study. And so, based upon the way we've looked at the numbers, we felt comfortable that 10% was correct, both based upon that data. And then what we think physicians, based upon the KOL feedback would view as a clinically meaningful difference in triglyceride reduction. So we've tried to set up a study to answer some of the questions that came out of the first study without putting MAT9001 at a disadvantage. Because the reality is a meal higher and fat is also going to improve the absorption of a free fatty acid, maybe not to the same degree as an ethyl-ester, but it's not likely to prejudice MAT9001.

[Operator Instructions] Our next question comes from the line of Gregg Gilbert from Truist. Please proceed with your question.

Sorry, I got in a little late so I'm hoping I don't repeat make you repeat yourself. But did you say when the End-of-Phase 2 meeting will actually occur?

We expected in this quarter so imminently. So that's on track for that. We've always said the third quarter of 2020.

And can you educate me on whether you would actually get an answer during the meeting or by when would you get an answer on A) 505(b)(2) pathway being appropriate and B) the actual protocol?

Yes, so typically, the way these things work, Gregg is in advance of the meeting, you submit a number of questions which you would like the FDA's input on and then within a certain period of time of requesting that meeting, you put together a briefing package for FDA. FDA then reviews those materials, and a few days - in some instances, it could be the day before the meeting you get FDA responses to those questions. And then the company provides some additional kind of clarity to FDA on the exact issues it would like to discuss during the meeting, the meeting occurs and then the FDA typically prepares minutes of those meetings, which follow, a period of time after the meeting. So it's not always a definite, but it's usually around 30 days. With respect to the issues that are going to be disgusted at a meeting like this obviously, you'd like to get some clarity on your regulatory pathway, but the reality is that the 505(b)(2) issue in and of itself as a review issue. So at the end of the day, the FDA does like to, keep its cards close to the chest and not necessarily give you a green light that you were going to be in position to satisfy the requirements for 505(b)(2). That being said, the topics that are going to be likely discussed during this meeting, which is the data from the comparative PK and the comparative tox will go a long way to giving, the company comforts that then can communicate to the market about the intended pathway. With respect to the Phase 3 protocol, there would be some back and forth with the FDA on that protocol. It's possible that you received, a green light to proceed following that meeting, but there may also be some additional information they require. And what you would be looking at then is, us planning for Phase 3 and then putting ourselves in position to just not have a clinical hold on the start of that study. So unclear exactly what will come out in the minutes, but nonetheless, it will give us invaluable information on being able to start Phase 3 and what our data looks like relative to the reference listed drug and does that give the FDA comfort from a safety and efficacy perspective, that you can refer to data generated by that in support of your application.

And then one more might be a little bit farfetched, but in a world where generic versus Vascepa could be launched later this year. If they are and there's no injunction, and it looks like it's clearly a genericized product, is there a scenario where you would actually change the design of your pivotals or would you try to - either way, you're trying to seek the maximum amount of differentiation in your pivotals as opposed to needing to do other types of studies later?

I think that's a very fair question, Gregg, and something that we've been talking about frankly, since we met last year, for the first time with our Scientific Advisory Board. You're always looking at the ability to discern whether staying true to the past, the pathways that have been blazed and how quickly you can get approval, versus how do you identify a potential patient population, which could distinguish you certainly from an indication and from a competitive standpoint for other available therapies. We're always kind of noodling on those, currently, there has - nothing has risen to the level of us being aggressive in pursuit of that. But that doesn't mean that those sorts of designs and thoughts about different patient populations, which may or may not rely on an impact on triglycerides, aren't kind of in the wings. So we'll wait to see how that goes. Certainly our discussions with FDA could impact our thinking on that. Other things that could impact our thinking on that, of course, are the outcome of the Vascepa trial and also a desire to see the data from strength at some point, which could inform our understanding of how populations may matter. So a lot of additional information required. We feel comfortable with the path that we've set forth. But we also have the potential to make some adjustments. Should the science and should the commercial opportunity dictate that makes sense.

[Operator Instructions] Thank you. We have reached the end of our question-and-answer session. So I'd like to pass the floor over to Mr. Jabbour for any additional closing comments.

Jessie, thanks very much. Thank you again to everyone who joined us today as we reviewed our second quarter of 2020 and gave you an outlook. Just a reminder that really within the next six months we have several opportunities for transformational data both with cohort progression and EnACT and data from ENHANCE-IT early in Q1, but also taking into account feedback from the Cystic Fibrosis Foundation in terms of being able to drive MAT2501 forward, plus opportunities with large pharma collaborators on our LNC platform. We look forward to keeping you updated on our progress. We wish all of you good health as we continue to chart these, you know unnavigated waters, and wish you the best for the rest of 2020. Thank you.

Ladies and gentlemen, this does conclude today's teleconference and webcast. We thank you for your participation and you may disconnect your lines at this time.