Hello, and welcome to the Matinas BioPharma's Q1 2021 Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Peter Vozzo, Investor Relations. Please go ahead.

Thank you, Kevin. Good morning, everyone, and thank you for joining the Matinas BioPharma first quarter 2021 results conference call. Earlier this morning, we issued a press release with our financial results along with business updates. This release is available on the Matinas BioPharma website under the Investors section.

Thank you, Peter. Good morning, everyone, and thank you for taking the time to join us today as we review our 2021 first quarter financial results, and provide a brief business update. At this point in the year, the reporting calendar becomes a bit compressed as we reviewed our 2020 financial results and provided an operational update a short while ago on March 29, and are now providing our first quarter report just 40 days later. Despite the short reporting interval, we continue to be very pleased with our overall progress, as we work towards several meaningful catalysts and milestones throughout 2021. In March, we outlined our plan and strategy to identify the right partner for our potential best-in-class prescription omega-3 drug LYPDISO, following the announcement of data from the enhanced head-to-head trial versus Amarin Corporation's Vascepa, where we once again showed superiority in the ability to achieve elevated levels of eicosapentaenoic acid or EPA in the blood, which has been demonstrated to correlate directly with the overall reduction of cardiovascular risk. The partnership process is ongoing with interested parties coming across the globe, including the U.S., EU and China.

Thanks, Jerry, and good morning, everyone. Turning now to our financial results. Cash, cash equivalents and marketable securities at March 31, 2021 were approximately $60.7 million compared to $58.7 million at December 31, 2020. The company reported a net loss attributable to common shareholders of approximately $5.2 million or $0.03 per basic and diluted share. These results are identical to those of the first quarter of last year. Research and development expenses were approximately $3.2 million in the first quarter of 2021 compared to approximately $4.1 million in the same quarter of 2020. The decrease was due primarily to the completion of the enhance -- ENHANCE-IT of LYPDISO in January 2021.

Thanks, Keith. In summary, 2021 represents a transformational year for Matinas as we focus our attention and resources on our LNC platform and anticipate important and meaningful data from the EnACT trial in the near-term. That combined with progress on MAT2501 and in our collaborations and focus on expanding the utilization of our potentially disruptive delivery technology, we believe we have positioned Matinas and our LNC platform for significant growth. The maturation of our LNC technology has enabled us to move it into the spotlight, and we look forward to continuing to share our progress with you during 2021 and beyond. We move forward from a strong financial position and committed to creating significant value for our shareholders. 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.

Our first question today is coming from Bert Hazlett from BTIG. Your line is now live.

Thank you. Congratulations on the continued progress. Jerry, just on 2203 initially, do you have any sense of how much data might be necessary for you to really enthusiastically pursue the kind of an LPAD more rapid advanced pathway? And then I have a strategic question after that.

Yes, Bert, thanks for the question. It's a good one. But it's one that comes with some uncertainty, right, because at the end of the day you're talking about a pathway that's relatively new within FDA. But at the same time, one that has received increased attention and emphasis from the agency in terms of incentivizing companies to drive these drugs forward. So in terms of magnitude of data, I don't know that that's really well understood. But what we do know is that the EnACT trial really represents a great opportunity in a very vulnerable patient population to highlight the attributes of 2203, both from a safety and efficacy perspective. And uniquely, it also gives the agency the opportunity to evaluate MAT2203, both from a step down therapy perspective and an induction. So in those discussions with FDA, what we will be focused on is really highlighting the potential for MAT2203 in both of those areas. And the first two cohorts of EnACT really highlight the ability to effectively be used as a step down therapy, and the next two cohorts really will focus on showing the ability of MAT2203 as induction. Although you certainly can draw some conclusions from the first two cohorts about the overall efficacy profile of MAT2230, we're not going to be in position then to have to force the agency to look at the whole and so we think that is going to give us an opportunity for them to really evaluate and perhaps accelerate what a maintenance or consolidation or a step down approval will look like followed quickly by an approval for induction therapy. So we think that's a little bit unique here. And given the fact that you're dealing with a deadly fungal infection and patients who are likely in the hospital as a result, step downs a natural place to begin and one that we think won't require a tremendous amount of patience to be able to get FDA comfortable that this is an important solution for patients.

Okay. Thank you. Just a quick follow-on on the 2203 comment. As we get through Cohort 2, assuming progression there, do you expect to provide a little more data in terms of the results for the first two cohorts? Or will we get that -- or will we just potentially get a progression to Cohort 3 and beyond?

Yes, that's a good question and an important one, because when we announced cohort progression the first time, that's really all we did was we relied sort of on the independence of the DSMB and because it was only 10 patients, we really just announced cohort progression. The plan for Cohort 2 is going to be different. So as of now we anticipate that we will be sharing data from both of the cohorts, should the DSMB recommend progression, and we feel good about that. And we would release that data, we would likely have a call around that data, we would involve the principal investigator. And so we will be able to go into much more detail in terms of what we're actually seeing in these patients. Cohort 2 is 4x the size of Cohort 1. So you're really starting to get a meaningful amount of data. And we think it's important that people have the opportunity to evaluate that in and of itself. So that would be our plan for the third quarter timeframe.

Thanks. Looking forward to that. And then with regard to just bigger picture strategy, if our programs like 2501, Jerry, ones that you think that you will continue on to fruition, just given some of the successes that you've mentioned in this space with various companies, or do you expect this to be largely a partnership strategy in the near-term? Like, maybe some of the development deals you have with Gilead and others? Just your thoughts on .

Yes, it's a very fair question. Yes, it's a fair question because I think with our platform technology, you're seeing that the breadth of possible applications here lead you down a lot of different pathways. We continue to believe that the infectious disease area provides a great opportunity to demonstrate and validate the LNC platform technology. So 2203 and 2501 are very important products for us. But we do believe that they could be important products for larger companies that already have commercialization organizations intact. And I think Pfizer's recent acquisition of Amplyx highlights that for these products that are differentiated and have an impact in infectious diseases, there is large demand. And so our goal is to advance 2203 and 2501 two points where they then become attractive to third parties. That doesn't mean we have to decide today, on May 10, whether we're going to go in alone or we're going to have opportunities to partner. We think there will be opportunities there. And that's going to do a couple of things for us. If there are the right opportunities with the right value proposition both inside and outside the U.S., we will partner. And sometimes you don't have to give away the whole thing, you can keep some rights for ourselves to co-promote or do other things. But if we are able to find partners and generate value through those sort of licensing arrangements, that does give us additional resources to then dive more fully into these more innovative areas, like gene therapy like messenger RNA, where we believe we can become very, very impactful. And so this is a multi-pronged strategy. Having these early clinical stage candidates give us the opportunity to generate meaningful data which could translate into partnerships. But it's kind of a good position to be in because realistically our work in gene therapy, messenger RNA things that we're doing with Genentech their earlier stage. So by advancing our infectious disease candidates, we are allowing then our work in gene therapy, for example, to mature a little bit. So the future -- exact future remains to be seen. But we do think there will be demand for both in oral amikacin and then an oral amphotericin by large pharma.

Great, thanks. Looking forward to the progress. Thank you.

Thank you. Our next question today is coming from Yasmeen Rahimi from Piper Sandler. Your line is now live.

Hi, team. Thank you so much for sharing with us all the updates. I actually had only one question and the question is related to the detail. I would love to hear your thoughts on sort of what type of key questions are coming up as you're having discussions with partners? And whether how mature those discussions are ongoing, and as you're noting in your press release, thinking about more partners, is there a strategy what makes more sense to hand it over to multiple people instead of one global partner that could actually develop this and commercialize it? So I would just love to hear a little bit more granular details on those discussions and when we should be expecting some insight. And thank you for taking my question.

Great. Yasmeen, thank you for the question, because we don't want let these sort of get lost in this. And it's been an interesting beginning to this process, because there has -- there have been expressions of interest across the globe. And it's not surprising, given the expansion of Vascepa certainly, and approval in EU and China, and the growing problem of cardiovascular disease, for example, in China that there's interest there. It's too early to tell whether this will be a situation whether for one global partner to take over development, or it'll be more regionalized. But the key questions are involving things like IP, like supply chain, and commercial differentiation, specifically, when you're talking about the U.S.. And we feel like we have good answers to each of those three questions, they take them in reverse order for commercialization in the U.S., this is a differentiated product. And so whether you're talking about a party that wants to push this into SHTG, or take on cardiovascular risk reduction, we've shown not once but twice how this drug is differentiated from Vascepa in any generic copy. And as more and more comes out from the REDUCE-IT trial about the importance of EPA levels, we saw recently, for example, Dr. Bhatt do another analysis where you start to see real levels of impact on cardiovascular risk when you achieve an EPA blood level of 104. While we saw in ENHANCE-IT the ability to get all the way to 143. And if you break down our ENHANCE-IT trial even further, there's a market difference between LYPDISO's ability to generate levels above 104 and Vascepa's ability to generate levels above 104. So from the commercial perspective, we think that they're across the globe. If you think about IP, it's a very different…

Thank you, Jerry.

Thank you. Our next question is coming from Greg Fraser from Truist Securities. Your line is now live.

Good morning. It's Greg Fraser for Gregg Gilbert. On MAT2501, should we think about the sequence of development as getting the proof-of-concept data in NTM first and then you consider other indications like gram-negative bacterial infections, or can you move forward with the gram-negative program before you have the efficacy data in NTM?

Hi, Greg, thanks. That's a very important question because it's not something that needs to be done one after the other, but there is a certain foundation that needs to be built. So part of the work that we're doing and that is being supported by the Cystic Fibrosis Foundation is establishing that short and long-term talks that would be supportive of going into programs targeting gram-negative bacterial infections. So you don't have to -- we're not going to necessarily go through the process of going into Phase 2 and Phase 3 on NTM and then coming back to gram-negative. But we do need to get through that foundation that shows that we continue to have a safe product, one that can have an effect, certainly on NTM. But it's really those 28-day and 90-day tox studies that will provide support for any number of programs that we want to undertake. And so as we get through those, as we get through a Phase 1 and healthy volunteers, then we will -- and we have an interaction with FDA around those data, then we will be able to better forecast how we may be able to do some of these things concurrently. And remember, there still is an opportunity that has been expressed by the Cystic Fibrosis Foundation to continue to be a key supporter of MAT2501 and NTM. So just because we would be doing things in parallel or concurrently doesn't necessarily mean that we will be doubling our need for internal resources. So building the foundation in 2021, and then it can go off in a number of different directions at the same time.

Got it. That's helpful. And then how should we think about R&D spend this year and next year, assuming that continues and 2501 advances into Phase 2 next year?

Yes, it remains relatively consistent, Greg, when you look at it a year-over-year basis, especially with EnACT since that trial is financially supported by the National Institutes of Health. Our cost obligations there really are from -- certainly from a supply perspective, and then from an oversight perspective and meeting our obligations as a sponsor. So they don't change meaningfully, where they could change is dependent on what we would discuss with the FDA, for example, on LPAD approval, are there adjustments that can be made, or will we need some patients in the U.S., for example, for 2203. The trade off there would be a much earlier approval. So that's something that I think we would trade every day. And on 2501, that will change, but again, it remains sort of contingent on what support we get from the Cystic Fibrosis Foundation. So year-over-year right now the way we forecast things, it looks pretty similar, but that could change depending on regulatory interactions and a trade offer in earlier commercial opportunity.

Got it. Thanks very much.

Thank you. We’ve reached the end of our question-and-answer session. I'd like to turn the floor back over to management for any further or closing comments.

Thanks, Kevin, and thanks to everyone for joining us today. We appreciate your continued interest in Matinas, and the entire team here looks forward to providing you with updates on our future progress. Have a great day.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.