Welcome to the Matinas BioPharma Second Quarter 2023 Financial Results Conference Call. Currently, all participants are in a listen-only mode. Following management’s prepared remarks, we will hold a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Jody Cain. Please go ahead.

This is Jody Cain with LHA. Thank you for participating in today’s call. Joining me from Matinas BioPharma are Jerry Jabbour, Chief Executive Officer; Dr. Terry Matkovits, Chief Development Officer, and Keith Kucinski, Chief Financial Officer. We also have Dr. Terry Ferguson, Chief Medical Officer available to answer questions during the Q&A session. I’d like to remind listeners that remarks made during this call may state management’s future intentions, hopes, beliefs, expectations or projections. These are forward-looking statements that involve risks and uncertainties. Forward-looking statements 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 files with the Securities and Exchange Commission. These documents are available in the Investors section of the company’s website and on the sec.gov. Furthermore, the content of this conference call contains information that is accurate only as of the date of the live broadcast, August 09, 2023. Matinas BioPharma undertakes no obligation to revise or update any statements to reflect events or circumstances, except as required by law. And now I’d like to turn the call over to Jerry Jabbour. Jerry?

Thank you, Jody. Good afternoon, everyone, and thank you for joining us. I'm pleased to report that we now have received important feedback from FDA, an additional clarity on the development path forward to position MAT2203 for approval as quickly and efficiently as possible. As you know, MAT2203 is our oral formulation of amphotericin B. I'll begin today's call with an overview of the feedback we've recently received from the FDA regarding a study for invasive fungal infections or IFIs. I'll also provide a brief update on our LNC platform for the delivery of nucleic acid. Following my initial remarks, Dr. Matkovits will provide more detail on the FDA's feedback and our plans with MAT2203 and will highlight an additional and highly compelling use case under our Expanded/Compassionate Use Access Program. Keith Kucinski will follow with a review of our financial results for the second quarter and year-to-date. We are appreciative of the very recent feedback provided by FDA toward helping us to design a study for the regulatory advancement of MAT2203 in the treatment of IFIs. During a meeting held earlier this year, the FDA acknowledged the need for a therapy like MAT2203 and recently commented that the patients most likely to use our drug would be those patients with limited or no treatment options, who require longer term treatment for a variety of fungal infections, which are susceptible to therapy with amphotericin B. Also, in their most recent feedback, FDA informed us that consideration of MAT2203 as a novel first-line therapy with an unrestricted label would require an extremely high bar to demonstrate non-inferiority, which presents significant challenges for a smaller company like Matinas. Approval is a first-line therapy for just the treatment of aspergillosis, for example, would require an adequately powered study with an active rigorously defined…

Thanks, Jerry, and good afternoon, everyone. As Jerry mentioned, the feedback and pathway outlined by the FDA for Matinas to gain approval of MAT2203 in first-line treatment indications for IFI would be very challenging to implement for any company, much less a small company like Matinas. For example, a 10% non-inferiority margin for all-cause mortality would require approximately 700 patients, assuming a one-to-one randomization against standard of care for a given indication in the treatment of a single invasive fungal infection. For Matinas and we believe for most companies, this is simply not feasible from the perspective of the time required to enroll, treat and follow such a large number of patients and the overall cost of conducting such a study in an orphan disease population. That said, and as Jerry mentioned previously, the FDA specifically called out that MAT2203 was likely to be used most in azole resistant or azole intolerant patients or in patients with limited treatment options. This, combined with the clinically meaningful outcome seen in the compassionate use patients receiving MAT2203 in our expanded access program, has provided a clear indication of which direction to move forward with the development of MAT2203. While the expanded access case numbers are still fairly small, both observed and measurable outcomes in multiple different fungal infections in multiple different target tissues highlights the ability of MAT2203 to safely target and effectively eradicate a variety of severe and potentially deadly invasive fungal infections in the most challenging clinical circumstances. I'll provide more detail on our compassionate use cases in a few minutes. But first, I would like to discuss our potential next steps in the development of MAT2203. A key message from the FDA's feedback is the opportunity to narrow our regulatory focus to a population of patients that could derive…

Thank you, Terry. Starting today with our second quarter results, we reported no revenue for the second quarter of 2023. This compares with revenue of $1.1 million for the second quarter of 2022, which was generated from our research collaboration with BioNTech. Total costs and expenses for the second quarter of 2023 were $6.2 million, compared with $7 million for the second quarter of 2022. The decrease was primarily attributable to lower manufacturing costs of clinical trial materials and lower clinical consulting fees, partially offset by higher headcount related expenses. The company's net loss for the second quarter of 2023 was $6.1 million, or $0.03 per share. This compares with a net loss for the second quarter of 2022 of $5.9 million, also $0.03 per share. Turning now to our 6 months results. Revenue for the first 6 months of 2023 and 2022 was $1.1 million for each period. Total costs and expenses for the first half of 2023 were $12.8 million versus $14.7 million for the first half of 2022. The company's net loss for the first 6 months of 2023 was $11.6 million or $0.05 per share. This compares with a net loss for the first 6 months of 2022 of $11.9 million or $0.06 per share. Our cash, cash equivalents and marketable securities as of June 30 and 2023 were $22.5 million. Based on our current projections, we believe our cash is sufficient to fund planned operations into the third quarter of 2024. As previously mentioned, we are actively seeking to extend our cash runway by securing nondilutive funding from potential third-party development partners and government grant programs through agencies such as BARDA as well as from proceeds from potential public or private equity offerings. With that, I'll turn the call back to Jerry.

Thanks, Keith. MAT2203, it's changing patients' lives. Despite some of the regulatory challenges associated with the pathway to achieving a first-line unrestricted treatment indication for an invasive fungal infection which arguably should not be applicable to an amphotericin B product, we continue to be encouraged by data and guided by the positive clinical experience of those patients, demonstrating the highest unmet medical need. Our team is already working hard to outline the best path forward, which we believe could result in an LPAD approval for MAT2203. In our clinical success to date with MAT2203 and the continuing and growing patient need, we remain confident that there will be sources of nondilutive funding to continue to advance this life-changing therapy. Our mission with MAT2203 is clear. Take advantage of the opportunity that the LNC platform has provided to formulate a safer amphotericin B, which can be used by patients in the longer-term treatment of invasive fungal infections and give patients the therapy they deserve. Building on our success with MAT2203, we are very excited about our ongoing internal LNC based RNAi program. Distinguishable from the approach we were forced to take with messenger RNA due to its size and sensitivity. Our small oligonucleotide program is utilizing LNC to deliver these molecules. With successful in vitro testing demonstrating efficient delivery with measurable knockdown of inflammatory markers behind us, we now move aggressively forward into in-vivo studies with enhanced confidence based on our clinical experience with MAT2203. We have done a lot of work to understand preferential cellular uptake and see these LNC formulations behaving much like our small molecule LCs with uptake by macrophages, neutrophils and other activated immune cells. As a result, we are naturally exploring inflammatory targets as an initial step. We are working with our partners to generate in-vivo data evaluating biological activity with these LNC oral formulations, and we expect data later in 2023. We believe that a successful demonstration of in vivo efficacy in one or more of these studies would represent a first for the oral delivery of small oligonucleotides. We're grateful for your continued support, and we look forward to continuing to keep you apprised of our progress. With that review, I'll now turn the call over to the operator for questions-and-answers. Paul?

Thank you. We'll now be conducting a question-and-answer session. [Operator Instructions]

While we're waiting for that first question, Paul. I'd just like to mention that next month, we'll be participating in the H.C. Wainwright Global Investment Conference. A webcast of our presentation will go live on the IR calendar page of the company's website on or around Monday, September 11. And we'll also be participating in the Dawson James Small Cap Growth Conference being held October 12 in Jupiter, Florida. Okay, Paul, I think we're ready for that first question.

Thank you. Our first question is from Julian Harrison with BTIG. Please proceed with your question.

Hi, thank you for taking my questions and congrats on the progress here. On the first-line study for 2203 I'm wondering if you could provide any more details on what the active control group would likely look like. And is that different at all from the alternative study designs? And then on the alternative study designs more specifically, can you talk more about these high need subsets being considered, what the corresponding study designs would likely look like and what the corresponding market opportunities likely are?

Yes. So Julian, it's a great question, and thanks for being on the call today. I'll let Dr. Matkovits go into some detail, but I do want to be clear that we're still refining what those patient population targets look like when a non-inferiority margin would look like in the statistics. But we certainly can talk a little bit about what we understand could be an active control in these patients. And obviously, there would be a distinction between those patients who could tolerate azole therapy for which an active control could be appropriate. And then those patients who are azole-resistant or azole-intolerant for which there wouldn't be an active control and you would be relying on some sort of external control. So Terry, before we sort of go into alternate designs, do you want to just comment briefly on the controls?

Sure, Jerry. And thanks for your question, Julian. So from a control perspective to build upon what Jerry mentioned, if we include a design that's really focused on the intolerant patient population, the control could be a best of care control arm, in which patients would be managed as they are today, if intolerant or unable to take azole, many of these patients are leveraging longer courses of IV amphotericin and in many cases, that longer course could require some dose adjustment of the IV amphotericin dose that's administered and it requires careful monitoring for renal function. Another potential alternative, if we look at the intolerant patient as an external control arm consideration, would be looking at outside data, outside of the clinical trial to really leverage what's available historically, which does -- can provide a higher regulatory hurdle of using external data, but those are the two options that we're weighing right now as a company vis-à-vis the control arm for the trial.

And then Julian, importantly, when you think about the opportunity and the pursuit of a restricted label versus an unrestricted label, you're talking about more openness on behalf of FDA, in the case of an active control portion of that study to change their perspective on the non-inferiority margin for that patient population. That's where they're going to take into account the patients with the highest need. And that's what underscores our belief, that pursuing a study with this design with the ultimate intention of getting a restricted lab for this patient population, it eases those restrictions on the non-inferiority margin. And that's really what's driving. For example, the 700 patients for a first-line unrestricted therapy. And so it's the combination of those two things along with some of the other benefits afforded by the LPAD Pathway that we think can streamline development of MAT2203.

Okay. Great. Thanks very much.

Thank you.

Thank you. There are no further questions at this time. I would like to hand the floor back over to Jerry Jabbour, for any closing comments.

Thank you, Paul, and thank you to everyone for joining us today and for your interest in Matinas. We really are excited about our company's future. We're proud of the impact we're making in patients with MAT2203. And we're really excited about the potential that our LNC platform has and perhaps the first-ever oral delivery of Small Oligonucleotides. So some exciting things coming up in the second half of this year, we're working as hard as we can to advance our programs. We're being smart with our funds. We are looking at alternative ways to extend our cash runway, given the challenges in the capital markets today. We are evaluating every opportunity to maximize the value associated with this platform. It's making that dramatic impact in patients today. And we think it as an opportunity because of the way the platform behaves. Similarly with Small Oligos to Small Molecules, we believe that we could be on the cusp of trying to crack that code of the oral delivery of Small Oligonucleotides, more to come on that. The science is hard. No one's been able to deliver nucleic acids orally. We understand the challenges, specifically around messenger RNA. We know what adjustments we had to make to our LNCs in order to deliver messenger RNA systemically. Those adjustments weren't necessary for small oligos. And so we believe they behave much more like lipid nano or traditional lipid nanocrystals. And we'll get to these in vivo experiments. And we'll let the data speak for themselves. But thank you again for joining us. Enjoy the rest of your summer. And we hope to see you at upcoming investor conferences, in the fall. Have a great day.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.