Greetings. Welcome to Matinas BioPharma Third Quarter 2020 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, Latonya. Good morning, everyone, and thank you for joining the Matinas BioPharma third quarter 2020 results conference call. Earlier this morning, we issued a press release with our third 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 would be Jerry Jabbour, Chief Executive Officer, who would discuss the company's corporate progress and key milestones; and Keith Kucinski, Chief Financial Officer, who will then review third quarter financial results. We also have Dr. Terry Matkovits, Chief Development Officer; and Dr. Terry Ferguson, Chief Medical Officer, available to answer questions during the Q&A. 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 federal securities laws. These forward-looking statements are based on 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 to the company's website also in the Investor Relations section. Following the company's prepared remarks, we will open up 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 provide a business update and discuss our 2020 third quarter results. Overall, we made great progress across our entire business during the third quarter, which was marked by several very important accomplishments. First, as everyone is aware, in July, we commenced Part 2 of the EnACT study with MAT2203 dosing in the first cohort of 10 patients. Taking all necessary steps and precautions to initiate dosing, following a temporary pause due to COVID-19, was a key objective for the company in the third quarter. More recently, we completed this portion of the study, and in October, the independent Data and Safety Monitoring Board, or DSMB, reviewed the first cohort data and unanimously recommended progression into the second patient cohort. This was a significant milestone for the company and provides great optimism as the EnACT study moves forward. Our enthusiasm is not only focused on the development of MAT2203 as the potential gold standard for the treatment of invasive fungal infections, but also extends to our overall LNC platform and the potential broad therapeutic applications that are available for medicines that can be orally administered with less systemic toxicity and with targeted intracellular delivery. I will go into more detail on EnACT and our LNC platform shortly. But we believe that the market has yet to fully appreciate the differentiating characteristics of our LNC platform and the significant challenges that it may be poised to solve. Challenges that lipid nanoparticles and viral vectors have unfortunately not been able to overcome despite widespread adoption. Second, we completed enrollment in the ENHANCE-IT study, a second head-to-head comparative study of MAT9001 versus Vascepa. We continue to be on track to report top line data from…

Thanks, Jerry, and good morning, everyone. Turning now to our financial results. For the third quarter of 2020, the company reported a net loss attributable to common shareholders of approximately $5.7 million or $0.03 per basic and diluted share compared to a net loss attributable to common shareholders of approximately $4.6 million or $0.03 per basic and diluted share for the same quarter of the previous year. Research and development expenses were approximately $3.3 million in the third quarter of 2020 compared to approximately $2.7 million in the same quarter last year. The increase was due primarily to higher clinical development expenses and employee compensation. General and administrative expenses were approximately $2.4 million in the third quarter of 2020 compared to the previous year's third quarter G&A expenses of approximately $1.9 million. The increase was due primarily to an increase in headcount. Turning to our balance sheet. We ended the third quarter of 2020 with approximately $62.8 million of cash, cash equivalents and marketable securities compared to approximately $27.8 million at the end -- I'm sorry, at year-end 2019, and this increase includes net proceeds of approximately $46.7 million from the company's public offering completed in January. Based on current projections, we continue to believe that cash on hand is sufficient to fund operations into the first half of 2023. I will now turn the call back over to Jerry.

Thanks, Keith. In summary, Matinas has made important advancements in several key areas. There has been meaningful progress in cohort progression for MAT2203 and EnACT, and this has also provided validation for our LNC platform delivery technology. In addition, by completing enrollment in ENHANCE-IT and gaining clarity and alignment with FDA on our planned regulatory and clinical plan, MAT9001 is now positioned to generate top line data in Q1 of 2021 and commence our Phase III study in severe hypertriglyceridemia soon thereafter. We are laser-focused on continued execution as our lead drugs -- our lead drug candidates advance in the clinic, and we are excited about the growing momentum behind our LNC platform as we look forward to even more promising applications of this exciting new technology. We believe that MAT2501 is poised to become our third clinical stage asset, and we remain extremely optimistic about continued support from the Cystic Fibrosis Foundation in the near term. Matinas has never been better positioned operationally, scientifically and financially, with near-term catalysts that potentially enhance the value we strive to provide to patients, caregivers and shareholders. In looking ahead to 2021 and beyond the top line data from ENHANCE-IT, we await the next DSMB evaluation regarding progression from cohort 2 to cohort 3 in EnACT in the middle of 2021, and we continue to generate promising data through our collaboration with Genentech. Finally, we are pleased that our strong cash position provides the existing capital to advance all of our product candidates towards significant data readouts and inflection points without needing to access the capital markets for additional funds for the foreseeable future. With that, we have reached the conclusion of our prepared remarks, and I will now turn the call over to the operator for a Q&A session.

[Operator Instructions] Our first question comes from Bert Hazlett with BTIG.

I have 2 general questions. One is on MAT9001. Jerry, thank you for the description, and looking forward to the head-to-head work upcoming in Q1. Regarding the Phase III study, could you elucidate a little bit more about the size of the trial? And then I think we understand the primary endpoint, but could you also talk about maybe key secondary endpoints for that Phase III trial in particular?

Thanks, Bert. So just, overall, what that trial is designed to do is to look very similar to the Phase III trials in severe hypertriglyceridemia that the other prescription omega-3s have done, just as a general matter. It may not look exactly like MARINE, for example, which was the Phase III that Amarin ran with Vascepa in severe hypertriglyceridemia. But in our discussions with the FDA and our belief that the closer these studies look, the easier it's going to be to compare data, although that's always a tough thing to do, study-to-study. It's going to be a better tool, we think, to be able to determine the overall sort of impact that MAT9001 has in this patient population. But Dr. Ferguson, why don't you kind of walk through the design of the Phase III study and the size?

Yes. So the Phase III study, Bert, is designed to mirror what has gone before in the severe hypertriglyceridemia space. The preliminary design is on the order of about 300 patients with 200 on active treatment randomized 2:1 active to placebo control. It's placebo-controlled. It will involve 12 weeks of therapy. The primary endpoint will be a percent reduction in triglycerides from baseline, and it's designed to address a population of patients with triglycerides greater than 500 -- the severe hypertriglyceridemia. I think that this mirrors what has gone before is a well-trodden pathway. The FDA is very familiar with this design. They were comfortable with the design for assessing the efficacy of the trial in terms of the active treatment. And I think that it puts us in a very good position. It will need to be run globally, but we are already well along the path to hammering out the details of exactly what is going to be going into this trial.

That's very helpful. And then I have a separate question on the LNC technology side. Fabulous progress with 2203 and the cohort progression and exciting developments with 2501 as well as with your partners, Genentech. Jerry, how do you think about the LNC platform, kind of near-term versus long term, as you think of the capital within the company, partnerships and value-adding partnerships versus internal development with this technology? You could make a case for either or both or -- but how are you thinking about it strategically kind of near-term and then longer term?

Yes. I think, Bert -- I mean, I think biotech is about building value and building relationships, number one and number two. Value you build by advancing your own clinical candidates to meaningful inflection points in generating data, which can make those products a compelling opportunity for physicians and patients. So we believe we're accomplishing that with -- certainly with MAT2203, and we look to aggressively push MAT2501 forward. That being said, even with those 2 assets, sort of strategic collaborations on a global basis or in areas where our development and commercial expertise wouldn't come into bear can be important validating sort of transactions. Those relationships take time. We have gotten a lot of inbound interest there. And so we will explore those, especially outside the U.S. But fundamentally, we believe the greatest value can be driven by pushing your own products forward. But because the LNC platform can be so broadly applied, it does make sense to continue to investigate collaborations like Genentech, especially in areas outside of what we're doing right now in infectious disease, and where we can rely on big pharma's expertise, certainly with maybe more innovative, cutting-edge or newer areas of medicine than we are exploring with our current small molecule products. But you don't want to actually go too fast. You want to be able to have the value catch up to the collaboration so that you can capture it. But ultimately, we just want to continue to drive and deliver that across the board. But I'll also tell you, I mean, I noticed that Novo Nordisk paid $1.8 billion for Emisphere recently, which represents a 2.5x multiple on Emisphere's value. And Endpoints called it the "holy grail of oral drug delivery." I think that the drug -- effective delivery of molecules, whether they be small molecules, oligonucleotides, proteins, peptides, continues to be a huge area of challenge. We're enthusiastic about exploring the opportunity that the LNC platform could provide in all of those areas. And a deal like Novo and Emisphere, I think, provides validation for this approach, and the reason to be excited as we continue to advance our own clinical candidates and expand our collaborations with companies like Genentech.

Thank you for the reminder of the proxy that -- the Novo deal, and I look forward to more progress on both business lines.

Thanks Bert.

Our next question comes from Yasmeen Rahimi with Piper Sandler.

I have 3 different questions for you. So the first one Jerry is, if you could kind of walk us through as you're in discussions with partnerships in regards to the utility of the LNC platform, what is the type of checklist that partners are wanting to be performed before committing to work together, so that might be the first question. And then the second one is on the Phase III design on [ 901 ] (sic) [ 9001 ]. Can you comment on what the total safety data set you need to show in regards to filing? And then I have a third question in regards to MAT901 (sic) [ MAT9001 ].

Okay. So we'll take the first question first. So in terms of an overall checklist, [ Yazz ], it really depends on the partner and on the therapeutic area in which you're looking to investigate. For example, for our first 3 announced collaborations, there was no checklist or history other than a review of data that we had generated over time at the LNC platform in areas like small molecules or DNA plasmids or vaccines, which attracted the interest. But that is why those collaborations sort of began with proof of concept. The reality of the LNC platform is that it's not cookie cutter to the extent that the same way we would formulate amphotericin, for example, is different than how we formulate amikacin. Fundamentally, they all fall within the umbrella of the LNC platform, but you're not necessarily going to be able to just quickly formulate from one sort of chemical molecule to another. A lot of things make a difference there. And that's even different with Genentech, for example. So -- but as we enter into collaborations with new pharma, who are interested in their molecules, the checklist is pretty simple. Please formulate our molecule. We'll give them a number of different formulations, which they will then test in a variety of preclinical models. They'll be assayed, and then there'll be some in vitro study before you get to some in vivo preclinical studies. If, for example, we're talking about something in the gene therapy space, there are going to be immediate tests on an in vitro basis on things like toxicity or protein expression, for example, that's going to be a little different than what you would do with a small molecule for infectious disease. But our belief is that upon these proof of concepts that we will then very quickly move into situations where we're talking about a license. Does that take into account an option to license structure? We're open to a variety of structures there. But what we're intently focused on now is delivering solid formulations that can then be evaluated. But I think Dr. Ferguson is going to add something.

Yes. Just to sort of take it to a very high level, what a partner is looking for is basically 2 things. They're looking for, "Can you make it? And can you take our compound? And can you deliver it?" And then, "can you measure it?" Because in the traditional drug development world, it is all about drug levels, but given the unique characteristics of our platform, you have to be able to measure the effect. And the simple question that a lot of these discussions revolve around is once we have established, we can provide them with confidence that, yes, we can make a particular product; and two, we can measure the effect of that product. If it's an antibiotic, if it's an antiviral, if it's gene therapy, how do you measure that beyond the drug levels. And those are the 2 boxes that really need to be checked.

Does that help on the first question, [ Yazz ]?

Yes, that was helpful.

Okay. So question number 2 is about the Phase III safety database and our recent interaction with FDA. And at the end of the day, we're still in discussions with the FDA on the size of that safety database. But what I will say is during our meeting, we talked exactly about the type of patients that would need to be included for an evaluation of safety. And one of the important things that came out of that FDA meeting was a great amount of flexibility. This additional patient safety data does not need to be in patients with severe hypertriglyceridemia, for example, or trigs above 500. That obviously provides some challenge for recruitment. It also would provide some challenge in terms of running into our -- really our pivotal 12-week trial in severe hypertriglyceridemia. We do know that we will need to generate additional data in patients with elevated triglycerides, but that's also an opportunity for MAT9001 to potentially show additional differentiation in maybe a different trig level patient population than in our Phase III pivotal program. So we continue to engage with the FDA on that. We expect to kind of have that answer at some point in the first quarter of 2021. But nothing will stop us from starting that pivotal Phase III study in severe hypertriglyceridemia. And then the addition of patients to satisfy the patient safety database based upon our current projections and our discussions with FDA, we'll do nothing to change that time line to NDA filing. So anything we do or anything we choose to do to satisfy those requirements, we'll be able to be done concurrently with our planned Phase III study.

And would you be -- can you comment on if you're thinking about adding a Vascepa arm to that study? And then also some comments around sort of manufacturing a supply chain, that could be also very helpful for us as that continues to be a major question among investors.

Sure. So in terms of adding an active Vascepa arm, it's probably premature to comment on that and there's a lot of different things that we would evaluate. But I would also say that we will now have -- after ENHANCE-IT reads out, we will now have done not 1 but 2 head-to-head studies versus Vascepa. So the utility necessarily of adding a Vascepa arm to a study that's designed to essentially only get you additional safety data so you can file an NDA, is probably a bridge too far. I think we will be comfortable that we will have assembled a very strong and unique head-to-head data set versus Vascepa from the 2 planned crossover studies. That's not to say that it has not been entertained. But I would say that we were -- we are going to be more focused on generating data with MAT9001 versus placebo. And then in terms of manufacturing and supply chain, things continue to go well for us. I mean, although we have a global supply chain, we have seen some impact from COVID-19. Some of that has to do with continued delivery of technical batches to kind of meet our CMC requirements to position ourselves to go into Phase III, but all of that is back on track. We continue to explore the opportunity to create redundancy from our current program. We're confident in the amount of supply that we can get certainly for our entire clinical program. And I think that you know well enough, and Amarin will talk well enough, there's certainly enough fish in to sea. What we're really sort of intently focused on -- and remember that we have our own proprietary formulation for MAT9001. And so it's really within our hands to then work with who are our key suppliers to kind of deliver that. And then we go to a proprietary capsule technology. So this is a capsule technology that no one else has and that we think is another barrier to entry. So we're comfortable on supply. This is not an inexpensive cost of goods product. I think that's one of the things that probably gives Amarin some comfort that in their relationships with suppliers of icosapent ethyl probably gives them some comfort that this won't be an ordinary generic launch. We're in an entirely different place. We have more than enough supply. We have plans to add to that over time. And so that's one area that we think we can continue actually to create our own barriers of entry between now and when we anticipate that MAT9001 could be approved.

[Operator Instructions] There are no further questions in queue at this time. I would like to turn the call back over to management for closing comments.

Thank you, Latonya, and thank you to everyone 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 and a good weekend.

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time, and have a great day, and thank you for your participation.