PART I [Item 1. Business](index=5&type=section&id=Item%201.%20Business) Matinas BioPharma develops LNC platform for drug delivery and seeks a partner for LYPDISO, an omega-3 formulation [Company Overview](index=5&type=section&id=Company%20Overview) Matinas BioPharma focuses on LNC platform for drug delivery and seeks a partner for LYPDISO for cardiovascular conditions - Matinas BioPharma is a biopharmaceutical company focused on improving intracellular delivery of critical therapeutics via its lipid nanocrystal (LNC) delivery platform and seeking a partner for LYPDISO™ (formerly MAT9001) for cardiovascular and metabolic conditions[15](index=15&type=chunk) - The LNC platform, exclusively licensed from Rutgers University, uses phospholipids and calcium to nano-encapsulate target molecules, enabling safe, efficient, and targeted intracellular delivery through various routes (oral, intramuscular, intravenous, inhalation)[16](index=16&type=chunk)[17](index=17&type=chunk) - MAT2203, an oral amphotericin B formulation, is the lead LNC-based drug candidate for invasive fungal infections, developed with NIH support and holding QIDP and Fast Track status for multiple indications, including cryptococcosis[19](index=19&type=chunk)[20](index=20&type=chunk) - MAT2501, an oral amikacin program, is being developed for non-tuberculous mycobacterial (NTM) infection, largely funded by the Cystic Fibrosis Foundation (CFF), with positive preclinical proof-of-concept data[21](index=21&type=chunk) - The company is pursuing strategic collaborations with biotech and pharmaceutical partners to expand the application of its LNC platform technology, including research evaluations with a top global pharmaceutical company, ViiV Healthcare, Genentech, and NIAID (for remdesivir)[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) - LYPDISO is a next-generation, highly purified omega-3 free fatty acid formulation designed for hypertriglyceridemia (HTG) and cardiovascular conditions, differentiated by its enhanced bioavailability and unique composition (high EPA plus DPA, low DHA)[25](index=25&type=chunk)[26](index=26&type=chunk) - The ENHANCE-IT study showed LYPDISO's potential for superior cardioprotection over Vascepa, with significantly higher plasma EPA concentrations, leading the company to seek a partner for its further development[28](index=28&type=chunk) [Strategy](index=7&type=section&id=Strategy) The company's strategy centers on advancing its LNC platform and finding a partner for LYPDISO - The company's strategy focuses on improving intracellular delivery of therapeutics via its LNC drug delivery platform for small molecules, nucleic acids, gene therapies, proteins/peptides, and vaccines[29](index=29&type=chunk) - A key strategic element is to find a partner for LYPDISO, a proprietary next-generation prescription omega-3 drug, believed to offer superior cardioprotective effects[29](index=29&type=chunk) - Advancing clinical-stage LNC assets, delivering efficacy data for MAT2203 in cryptococcal meningitis, progressing MAT2501 development with CFF support, and expanding LNC platform utilization through collaborations are core strategic goals[34](index=34&type=chunk)[402](index=402&type=chunk)[406](index=406&type=chunk) [Our Lipid Nanocrystal (LNC) Platform Delivery Technology](index=8&type=section&id=Our%20Lipid%20Nanocrystal%20%28LNC%29%20Platform%20Delivery%20Technology) The LNC platform enhances drug delivery by encapsulating molecules for targeted intracellular uptake - The LNC platform addresses challenges in drug delivery by providing stable, unique multilayered structures composed of phospholipids (like phosphatidylserine) and calcium, protecting encapsulated molecules from degradation[33](index=33&type=chunk)[37](index=37&type=chunk) - LNCs offer significant flexibility in administration routes (oral, intramuscular, intravenous, inhalation) and can encapsulate a broad range of molecules, including small molecules, nucleic acids (ASOs, mRNA, siRNA, DNA plasmids), and gene editing technologies (CRISPR/Cas9)[37](index=37&type=chunk) - Unlike other technologies, LNCs can enter cells through phagocytosis, membrane fusion, or clathrin-mediated endocytosis, facilitated by phosphatidylserine (PS) on their surface, which interacts with activated cells and PS receptors[38](index=38&type=chunk)[39](index=39&type=chunk)[42](index=42&type=chunk) - LNCs improve existing drugs by enabling cell-targeted delivery, reducing blood levels (and thus toxicity), and allowing oral delivery of drugs previously only available intravenously, with observed rapid local accumulation in infected tissues[44](index=44&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk) [Our LNC Clinical Stage Assets](index=12&type=section&id=Our%20LNC%20Clinical%20Stage%20Assets) The company's LNC platform has yielded clinical-stage candidates MAT2203 and MAT2501 for infectious diseases - The company has leveraged its LNC platform to develop two clinical-stage product candidates: MAT2203 (oral amphotericin B) and MAT2501 (oral amikacin)[50](index=50&type=chunk)[53](index=53&type=chunk) - MAT2203 is being developed for cryptococcal meningitis (CM), with preclinical studies showing its ability to cross the blood-brain barrier, treat infection, and reduce toxicity compared to IV amphotericin B[50](index=50&type=chunk) - The NIH-funded EnACT study for MAT2203 in CM patients in Uganda is exploring its use for induction and maintenance therapy, with potential for registrational approval and demonstrating LNC platform's CNS delivery capability[51](index=51&type=chunk) - MAT2203 has received QIDP and Orphan Drug designations for cryptococcosis, potentially granting 12 years of marketing exclusivity upon FDA approval[51](index=51&type=chunk)[56](index=56&type=chunk) - MAT2501, an oral amikacin, is being developed for non-tuberculous mycobacterial (NTM) infections, particularly in cystic fibrosis patients, with positive Phase 1 safety data and CFF funding for further preclinical and clinical studies[53](index=53&type=chunk) [MAT2203](index=13&type=section&id=MAT2203) MAT2203 is an oral amphotericin B formulation for invasive fungal infections, designed to reduce toxicity - MAT2203 is an oral LNC formulation of amphotericin B, a potent antifungal with little reported resistance, designed to overcome the severe nephrotoxicity and IV-only administration limitations of traditional amphotericin B[54](index=54&type=chunk)[57](index=57&type=chunk) - The LNC delivery of amphotericin B aims for targeted delivery to infected cells, higher drug levels at infection sites, and lower free circulating drug, potentially reducing overall toxicity and improving safety[54](index=54&type=chunk)[58](index=58&type=chunk) - Preclinical studies in CM mouse models demonstrated MAT2203's ability to cross the blood-brain barrier and treat the infection, positioning the LNC platform for CNS disorders[54](index=54&type=chunk) - Key benefits of MAT2203 include potential to treat resistant pathogens, enable all-oral therapy for CM (especially in resource-limited settings), and reduce hospital costs associated with IV administration[55](index=55&type=chunk) - MAT2203 has received QIDP, Fast Track, and Orphan Drug designations for cryptococcosis, potentially providing 12 years of marketing exclusivity upon FDA approval[56](index=56&type=chunk) - Phase 1 of the EnACT study in HIV-positive cryptococcosis survivors showed MAT2203 was well-tolerated orally without common IV amphotericin toxicities, with **96% of subjects preferring MAT2203** over IV amphotericin[61](index=61&type=chunk)[62](index=62&type=chunk) - Cohort 1 of EnACT demonstrated MAT2203's safety and tolerability, leading to unanimous DSMB approval to progress to Cohort 2, which will assess oral MAT2203 as a step-down treatment after 2 days of IV amphotericin[64](index=64&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) - The global antifungal market was approximately **$11.9 billion in 2018**, with invasive fungal infections accounting for over **$6 billion**, highlighting a significant unmet medical need due to rising drug resistance and limited innovative therapies[69](index=69&type=chunk)[71](index=71&type=chunk) [MAT2501](index=17&type=section&id=MAT2501) MAT2501 is an oral amikacin formulation for non-tuberculous mycobacterial infections, supported by CFF - MAT2501 is an oral LNC formulation of amikacin, a broad-spectrum antibiotic, designed to achieve oral bioavailability, limit toxicity (nephrotoxicity, ototoxicity), and enable targeted delivery to infection sites, particularly for non-tuberculous mycobacterial (NTM) lung disease[72](index=72&type=chunk) - NTM lung disease is a chronic, debilitating condition with increasing prevalence (**8% annually**), affecting **75,000-100,000 patients in the US in 2018**, and is difficult to treat due to antibiotic resistance and challenges in drug delivery[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) - MAT2501 has received Qualified Infectious Disease Product (QIDP) and Orphan Drug designations for NTM treatment from the US FDA[72](index=72&type=chunk) - Preclinical studies funded by the Cystic Fibrosis Foundation (CFF) demonstrated MAT2501's efficacy against NTM infections in CF mouse models, showing lower bacterial burden in lungs, spleen, and liver compared to parenteral amikacin or clarithromycin[77](index=77&type=chunk)[84](index=84&type=chunk)[88](index=88&type=chunk) - A CFF grant of **$3.75 million** was awarded in November 2020 to support MAT2501's continued development through a comprehensive preclinical toxicology program and a Phase 1 single ascending dose (SAD) study in healthy volunteers, expected to initiate in Q4 2021[77](index=77&type=chunk)[90](index=90&type=chunk) - Current NTM treatment guidelines recommend multi-drug therapies, including amikacin, but are limited by severe adverse effects (e.g., nephrotoxicity, ototoxicity) and patient nonadherence, highlighting the unmet need for safer, potent agents like MAT2501[85](index=85&type=chunk)[86](index=86&type=chunk) [LYPDISO](index=20&type=section&id=LYPDISO) LYPDISO is a next-generation omega-3 drug for hypertriglyceridemia, with potential for superior cardioprotection - LYPDISO is a proprietary, next-generation prescription omega-3 drug, a complex mixture of EPA and DPA in a delayed-release soft gelatin capsule, specifically designed to treat hypertriglyceridemia (HTG) and cardiovascular/metabolic conditions[91](index=91&type=chunk) - It is differentiated from other omega-3 products by its enhanced bioavailability (free fatty acid form) and unique composition (high EPA plus DPA, low DHA), with potential for potent impacts on triglycerides and other biomarkers[91](index=91&type=chunk) - The development plan for LYPDISO utilizes a 505(b)(2) regulatory pathway, which is expected to be shorter and less expensive, relying partly on FDA findings for previously approved drugs[92](index=92&type=chunk) - The ENHANCE-IT study, a head-to-head crossover trial against Vascepa, showed LYPDISO's potential as a best-in-class prescription omega-3 for cardiovascular risk reduction, with statistically significant improvements in TGs, total cholesterol, and VLDL cholesterol in the per-protocol population[93](index=93&type=chunk)[116](index=116&type=chunk) - In ENHANCE-IT, LYPDISO demonstrated significantly higher plasma EPA concentrations (**46% relative increase vs. Vascepa**) and significant reductions in hs-CRP, suggesting superior cardioprotective and anti-inflammatory effects[116](index=116&type=chunk)[117](index=117&type=chunk) - Given the high cost and time for cardiovascular outcomes trials, the company is seeking a partner for LYPDISO's continued development and has reallocated resources away from a Phase 3 program in severe hypertriglyceridemia (SHTG)[93](index=93&type=chunk)[116](index=116&type=chunk) - Hypertriglyceridemia is a growing health concern, affecting over **50 million adults in the US** with TGs ≥150 mg/dL, and is an independent risk factor for atherosclerotic cardiovascular disease and acute pancreatitis[94](index=94&type=chunk)[96](index=96&type=chunk) - The global prescription omega-3 market is approaching **$2 billion**, with key competitors including Lovaza, Vascepa, and Epadel. Recent guidelines advocate omega-3 use in high CV risk patients with elevated TGs despite statin therapy[98](index=98&type=chunk)[103](index=103&type=chunk) [Strategic Collaborations Using LNC Platform Delivery Technology](index=25&type=section&id=Strategic%20Collaborations%20Using%20LNC%20Platform%20Delivery%20Technology) The LNC platform is being explored through collaborations for various therapeutic applications, including antivirals - The LNC platform is being explored for reformulating molecules that require protection, efficient cellular uptake, or are currently IV-only, including oligonucleotides, vaccines, and anti-inflammatory agents[118](index=118&type=chunk) - Current collaborations include a research evaluation with a global pharmaceutical company for nucleic acid polymers (Jan 2019), a collaboration with ViiV Healthcare for antiviral drug candidates (May 2019), a feasibility collaboration with Genentech for proprietary compounds (Dec 2019), and a collaboration with NIAID to develop oral remdesivir formulations for COVID-19 (Dec 2020)[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) - These collaborations aim to create strategic verticals in innovative medicine, leveraging partners' expertise and resources, positioning the company as a licensor to generate upfront license, milestone, and royalty payments[123](index=123&type=chunk) [Exclusive License Agreement with Rutgers University](index=26&type=section&id=Exclusive%20License%20Agreement%20with%20Rutgers%20University) The company holds an exclusive license from Rutgers for its LNC platform, involving royalties and fees - The company holds an Amended and Restated Exclusive License Agreement with Rutgers University for the LNC platform delivery technology[125](index=125&type=chunk) - The agreement includes a license issue fee, an increased equity interest for Rutgers, tiered royalties (low to mid-single digits) on net sales, a one-time sales milestone fee of **$100,000**, and an annual license fee (initially **$10,000**, increasing to **$50,000**)[125](index=125&type=chunk) - The license term extends until the longer of **7.5 years** from first commercial sale or the expiration of the last-to-expire patent rights (currently until at least **2033**). Rutgers can terminate if commercial sales of a licensed product do not commence within nine years[126](index=126&type=chunk) [Intellectual Property](index=26&type=section&id=Intellectual%20Property) The company protects its products and LNC platform through patents, trade secrets, and regulatory exclusivity - The company protects its product candidates and technologies through patents, trade secrets, proprietary know-how, FDA exclusivity, and contractual restrictions[127](index=127&type=chunk) - LYPDISO's patent portfolio includes two issued U.S. patents and one foreign patent, covering methods related to triglyceride levels and omega-3 fatty acid compositions, providing protection through **2033**[128](index=128&type=chunk)[129](index=129&type=chunk) - The LNC platform and MAT2203 are protected by **30 issued U.S. and foreign patents** (licensed from Rutgers) and over **20 Matinas-owned pending patent applications**, extending protection through **2040**[130](index=130&type=chunk) - The LNC patent portfolio covers broad technology aspects, including amphotericin B LNCs, methods of delivering molecules, vaccine compositions, siRNA LNCs, and methods for treating mycobacterial and cryptococcus infections[130](index=130&type=chunk) - The company also relies on trade secrets and know-how for its LNC platform and LYPDISO manufacturing, protected by confidentiality and invention assignment agreements[132](index=132&type=chunk) [Competition](index=27&type=section&id=Competition) The company faces intense competition from established pharmaceutical firms and generic manufacturers - The biotechnology and pharmaceutical industries are highly competitive, with many competitors possessing greater resources and more advanced product candidates[134](index=134&type=chunk) - For LYPDISO, competitors include large pharmaceutical companies selling prescription omega-3s (e.g., GlaxoSmithKline's Lovaza, Amarin's Vascepa) and fibrates, as well as generic versions of these products[135](index=135&type=chunk) - Negative results from other omega-3 mixture studies (e.g., VITAL, ASCEND, meta-analyses) could negatively affect LYPDISO's utilization, despite its unique composition and higher dose regimen[139](index=139&type=chunk) - MAT2203 will compete with approved antifungal classes (polyenes, azoles, echinocandins) and their generic versions, as well as other product candidates in clinical development[143](index=143&type=chunk) - MAT2501 will primarily compete with other aminoglycosides for NTM lung infections, including Insmed's inhaled Arikayce® and IV amikacin (Amikin) from Bristol Myers Squibb and generic manufacturers[144](index=144&type=chunk) [Manufacturing](index=29&type=section&id=Manufacturing) The company relies on third-party manufacturers for LYPDISO and has in-house capabilities for LNC assets - The company relies on multiple third-party manufacturers for LYPDISO intermediates and final drug product, with plans to add more suppliers as development progresses[145](index=145&type=chunk) - In-house manufacturing capabilities exist for MAT2203, MAT2501, and LNC platform discovery programs, sufficient for current clinical supplies and early commercialization, but future expansion or third-party contract manufacturers may be needed for larger commercial quantities[146](index=146&type=chunk) - The company plans to secure long-term supply agreements for active pharmaceutical ingredients (amphotericin B for MAT2203 and amikacin for MAT2501) from third-party suppliers[147](index=147&type=chunk) [Sales and Marketing](index=29&type=section&id=Sales%20and%20Marketing) The company plans to commercialize products through partnerships or by building a specialized sales force - The company currently lacks a sales and marketing infrastructure[148](index=148&type=chunk) - Plans include retaining U.S. marketing/sales rights or co-promotion rights for products with marketing approval, especially for specialized sales forces[148](index=148&type=chunk) - For markets requiring a large sales force or outside the U.S., the company intends to commercialize through collaborative arrangements with leading pharmaceutical and biotechnology companies[148](index=148&type=chunk) [Review and Approval of Drugs in the United States](index=30&type=section&id=Review%20and%20Approval%20of%20Drugs%20in%20the%20United%20States) The FDA drug approval process is lengthy and complex, involving multiple clinical phases and regulatory pathways - The FDA regulates drugs under the FDCA, requiring substantial time and financial resources for regulatory approvals and compliance[150](index=150&type=chunk) - The approval process involves nonclinical studies (cGLP), submission of an IND, IRB approval, human clinical trials (GCP), NDA/BLA submission, FDA advisory committee review, manufacturing facility inspections (cGMP), user fees, and post-approval requirements (REMS, studies)[151](index=151&type=chunk)[152](index=152&type=chunk) - Clinical trials typically proceed in three phases: Phase 1 (safety, dosage tolerance in small healthy/patient groups), Phase 2 (safety, preliminary efficacy, optimal dosage in larger patient groups), and Phase 3 (pivotal studies for efficacy and safety in expanded patient populations)[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk) - FDA offers expedited review programs: Fast Track (for serious/life-threatening conditions with unmet medical needs), Breakthrough Therapy (for substantial improvement over existing therapies), and Priority Review (for significant safety/effectiveness improvement)[166](index=166&type=chunk)[167](index=167&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk) - The Accelerated Approval Pathway allows approval for serious/life-threatening conditions based on surrogate or intermediate clinical endpoints, contingent on post-approval confirmatory studies[172](index=172&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk) - Post-approval, drugs are subject to ongoing FDA regulation, including recordkeeping, reporting, advertising/promotion rules, and cGMP compliance, with potential sanctions for non-compliance[178](index=178&type=chunk)[179](index=179&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk) - Generic drugs can be approved via Abbreviated New Drug Applications (ANDAs) by demonstrating bioequivalence to a Reference Listed Drug (RLD), relying on the RLD's nonclinical and clinical data[184](index=184&type=chunk)[185](index=185&type=chunk) - The Hatch-Waxman Amendments provide non-patent data exclusivity periods (5 years for new chemical entities, 3 years for new clinical investigations) and a 30-month stay on ANDA approval if patent infringement litigation is initiated[188](index=188&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk) - Pediatric exclusivity can extend existing regulatory exclusivity by **six months** if pediatric study data responsive to an FDA request is submitted[194](index=194&type=chunk) - Orphan Drug Designation grants **7 years of market exclusivity** for drugs treating rare diseases (fewer than **200,000 US patients**) upon first FDA approval for that indication[195](index=195&type=chunk)[196](index=196&type=chunk) - The 21st Century Cures Act aims to modernize healthcare, spur innovation, and streamline therapy development, including provisions for novel trial designs and real-world evidence, and a 'Limited Population Pathway' for antimicrobials[197](index=197&type=chunk)[198](index=198&type=chunk)[200](index=200&type=chunk) [Other Health Care Regulations](index=38&type=section&id=Other%20Health%20Care%20Regulations) The company is subject to various healthcare regulations, including data protection, fraud, and pricing laws - The company is subject to various data protection laws, including federal and state health privacy laws (e.g., HIPAA, HITECH) in the U.S. and the GDPR in the European Union, governing the collection, use, disclosure, and protection of health-related personal information[201](index=201&type=chunk)[202](index=202&type=chunk) - Failure to comply with these data protection laws can result in government enforcement actions, civil/criminal penalties, private litigation, and adverse publicity[201](index=201&type=chunk)[202](index=202&type=chunk) - The company is also subject to fraud and abuse laws, such as the federal Anti-Kickback Statute and False Claims Act, which restrict certain marketing practices and prohibit knowingly presenting false claims for payment under federal healthcare programs[203](index=203&type=chunk)[205](index=205&type=chunk) - The Affordable Care Act (ACA) introduced significant healthcare reforms, including insurance requirements, subsidies, market reforms, and changes to Medicare reimbursement, with ongoing uncertainty regarding its implementation and potential impact[206](index=206&type=chunk)[207](index=207&type=chunk) - The Generating Antibiotic Incentives Now (GAIN) Act grants an additional **five years of marketing exclusivity** for Qualified Infectious Disease Products (QIDPs) to encourage development of new antibacterial and antifungal drugs[208](index=208&type=chunk)[209](index=209&type=chunk)[211](index=211&type=chunk) - Patent term restoration under the Hatch-Waxman Act allows for up to **five years of patent term extension** for time lost during product development and FDA regulatory review[212](index=212&type=chunk) - Marketing products outside the U.S. requires compliance with varying regulatory requirements of other countries, including clinical trial approvals (e.g., European Clinical Trials Directive) and marketing authorization applications (e.g., centralized or decentralized procedures in the EU)[213](index=213&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk)[218](index=218&type=chunk)[219](index=219&type=chunk) - Pharmaceutical coverage, pricing, and reimbursement are subject to significant uncertainty and government cost-containment programs, which could limit net revenue and profitability[221](index=221&type=chunk)[222](index=222&type=chunk)[223](index=223&type=chunk) [Human Capital Resources](index=42&type=section&id=Human%20Capital%20Resources) The company's success depends on attracting and retaining skilled personnel, with a focus on employee well-being - As of March 22, 2021, the company had **20 full-time employees**, with no collective bargaining agreements[226](index=226&type=chunk) - Success depends on attracting, developing, and retaining key personnel, whose skills, experience, and industry knowledge are crucial for operations and performance[228](index=228&type=chunk) - Employee health and safety are core values, with actions taken to protect the workforce during the COVID-19 pandemic[229](index=229&type=chunk) [Research and Development](index=43&type=section&id=Research%20and%20Development) R&D expenses increased in 2020, primarily supporting clinical and preclinical programs for product candidates Research and Development Expenses | Year Ended December 31, | Amount (millions) | | :---------------------- | :---------------- | | 2020 | $14.4 | | 2019 | $11.2 | - These expenses cover cash and non-cash costs related to clinical and preclinical programs (MAT2203, MAT2501) and the advancement of the drug delivery technology[231](index=231&type=chunk) [Corporate and Available Information](index=43&type=section&id=Corporate%20and%20Available%20Information) Matinas BioPharma, incorporated in Delaware, provides public reports on its website and through the SEC - Matinas BioPharma Holdings, Inc. was incorporated in Delaware in May 2013, with operating subsidiaries Matinas BioPharma, Inc. and Matinas BioPharma Nanotechnologies, Inc[232](index=232&type=chunk) - The company's principal executive offices are in Bedminster, New Jersey, and its website is www.matinasbiopharma.com[233](index=233&type=chunk) - Annual, Quarterly, and Current Reports (10-K, 10-Q, 8-K) are available free of charge on its website and through the SEC's website (www.sec.gov)[234](index=234&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) Investment in the company's stock is highly speculative, facing risks from COVID-19, funding needs, early-stage development, and competition - Investment in common stock is speculative and involves a high degree of risk, including potential loss of the entire investment[236](index=236&type=chunk) - Operations, business, and financial results have been and could continue to be adversely impacted by the COVID-19 pandemic[238](index=238&type=chunk) - The company has incurred significant losses since inception and may never achieve or maintain profitability, requiring substantial additional funding that may dilute stockholders or force relinquishment of rights[238](index=238&type=chunk)[240](index=240&type=chunk)[245](index=245&type=chunk)[249](index=249&type=chunk) - Product candidates (LYPDISO, MAT2203, MAT2501) are in early development stages, and there is no certainty of regulatory approval, successful commercialization, or ability to compete effectively[238](index=238&type=chunk)[259](index=259&type=chunk)[261](index=261&type=chunk)[296](index=296&type=chunk) - Reliance on third-party technology (Rutgers LNC platform) and manufacturers for product supply and clinical trials poses risks of loss of access, insufficient quantities, or non-compliance[238](index=238&type=chunk)[266](index=266&type=chunk)[268](index=268&type=chunk)[324](index=324&type=chunk) - Clinical drug development is lengthy, expensive, and uncertain; delays, negative results, or serious side effects could prevent commercialization[238](index=238&type=chunk)[273](index=273&type=chunk) - Challenges exist in protecting intellectual property rights, with risks of patent invalidation, infringement by others, or difficulty in maintaining trade secret protection[238](index=238&type=chunk)[342](index=342&type=chunk)[344](index=344&type=chunk)[346](index=346&type=chunk) - The company has no sales and marketing organization and may struggle to establish one or find suitable partners for commercialization[238](index=238&type=chunk)[289](index=289&type=chunk) - Regulatory changes, healthcare reform, and government pricing/reimbursement policies could negatively impact business and profitability[238](index=238&type=chunk)[309](index=309&type=chunk)[311](index=311&type=chunk)[312](index=312&type=chunk) - Risks also include product liability lawsuits, cybersecurity breaches, difficulties in managing organizational growth, and volatility in common stock price[238](index=238&type=chunk)[351](index=351&type=chunk)[356](index=356&type=chunk)[359](index=359&type=chunk)[370](index=370&type=chunk) [Summary of Risk Factors](index=44&type=section&id=Summary%20of%20Risk%20Factors) Key risks include COVID-19 impact, funding needs, early product development, and reliance on third parties - Key risks include adverse impact from COVID-19, significant operating losses and need for additional funding, early development stage of product candidates, and dependence on third-party technology and manufacturing[238](index=238&type=chunk) - Uncertainties in clinical trials, regulatory approvals, and commercialization efforts, along with intense competition, pose substantial threats to business success[238](index=238&type=chunk) - Other risks involve intellectual property protection, sales and marketing capabilities, regulatory compliance, and potential dilution from equity issuances[238](index=238&type=chunk) [Risks Related to Our Financial Position and Need for Additional Capital](index=46&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Additional%20Capital) The company faces significant operating losses and requires substantial additional funding, risking dilution or program delays - The company has incurred significant operating losses since inception, with a net loss of **$22.4 million in 2020** and **$17.4 million in 2019**, and an accumulated deficit of **$107.5 million** as of December 31, 2020[240](index=240&type=chunk) - Profitability is uncertain and depends on successful development, regulatory approval, and commercialization of product candidates, which are still in early stages[241](index=241&type=chunk) - Substantial additional funding will be required for ongoing and planned clinical/preclinical studies, regulatory approvals, manufacturing, commercialization, and intellectual property protection[245](index=245&type=chunk)[246](index=246&type=chunk)[247](index=247&type=chunk) - Failure to raise capital when needed could force delays, reductions, or elimination of product development programs or commercialization efforts[245](index=245&type=chunk) - Raising additional capital through equity sales may cause material dilution to stockholders, while debt financing could impose restrictive covenants[249](index=249&type=chunk) - Stockholders may face substantial dilution from the exercise of outstanding options and warrants, conversion of preferred shares, and future issuance of common stock for merger milestones[252](index=252&type=chunk) - The company's early operating history makes it difficult to evaluate future success or viability, with expected significant fluctuations in financial condition and operating results[253](index=253&type=chunk)[255](index=255&type=chunk) - U.S. federal income tax reform (Tax Cuts and Jobs Act of 2017) could materially affect tax obligations and effective tax rate, with ongoing uncertainty regarding its full impact[256](index=256&type=chunk)[257](index=257&type=chunk) [Risks Related to Product Development, Regulatory Approval, Manufacturing and Commercialization](index=50&type=section&id=Risks%20Related%20to%20Product%20Development%2C%20Regulatory%20Approval%2C%20Manufacturing%20and%20Commercialization) Product development faces uncertainties in trials, regulatory approval, manufacturing, and market acceptance - The company's development efforts are in early stages, and success depends on timely completion of preclinical/clinical trials, demonstrating safety/efficacy, obtaining regulatory approvals, establishing manufacturing, and effective commercialization[259](index=259&type=chunk)[260](index=260&type=chunk)[261](index=261&type=chunk) - Regulatory approval is not certain and delays can increase costs, delay market launch, and prevent commercialization[261](index=261&type=chunk)[263](index=263&type=chunk) - Preclinical and clinical studies are expensive, difficult, and prone to delays or failures due to negative results, patient enrollment issues, regulatory holds, or unforeseen side effects[273](index=273&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk)[276](index=276&type=chunk) - The company relies on licensed technology from Rutgers; loss of access or defects could impair business and delay product development[266](index=266&type=chunk) - Insufficient manufacturing capacity, reliance on third-party manufacturers, and non-compliance with cGMP standards could halt or delay commercialization[268](index=268&type=chunk)[269](index=269&type=chunk)[328](index=328&type=chunk)[329](index=329&type=chunk)[330](index=330&type=chunk)[332](index=332&type=chunk) - Successful commercialization depends on market acceptance by physicians, patients, and payors, which is influenced by efficacy, safety, convenience, pricing, and inclusion in treatment guidelines[270](index=270&type=chunk)[286](index=286&type=chunk)[287](index=287&type=chunk) - The company lacks a sales and marketing organization and may struggle to establish one or secure suitable collaboration arrangements, impacting commercialization success[289](index=289&type=chunk)[290](index=290&type=chunk)[291](index=291&type=chunk) - Reliance on the 505(b)(2) regulatory pathway for LYPDISO, MAT2203, and MAT2501 carries risks, including potential patent infringement lawsuits, 30-month stays, or requirements for additional data[293](index=293&type=chunk)[294](index=294&type=chunk)[295](index=295&type=chunk) - Intense competition from other biotechnology and pharmaceutical companies, including generic manufacturers, could reduce commercial opportunities and force price reductions[296](index=296&type=chunk) - Post-marketing, products are subject to ongoing regulatory review, restrictions (e.g., REMS), and potential withdrawal, with penalties for non-compliance or unanticipated problems[299](index=299&type=chunk)[300](index=300&type=chunk)[301](index=301&type=chunk)[302](index=302&type=chunk)[303](index=303&type=chunk)[305](index=305&type=chunk) - The company is evaluating next steps for LYPDISO development, seeking a partner, and has reallocated resources from a Phase 3 program, with no guarantee of a suitable partnership or realizing full value[306](index=306&type=chunk) - Future legislative or regulatory reforms, including government restrictions on pricing and reimbursement, could negatively impact business and results of operations[307](index=307&type=chunk)[309](index=309&type=chunk)[310](index=310&type=chunk)[311](index=311&type=chunk)[312](index=312&type=chunk)[313](index=313&type=chunk)[314](index=314&type=chunk)[315](index=315&type=chunk) - Penetrating foreign markets introduces additional regulatory burdens, economic instability, trade restrictions, and intellectual property protection challenges[316](index=316&type=chunk)[318](index=318&type=chunk)[319](index=319&type=chunk) - Marketing products in violation of healthcare fraud and abuse laws (e.g., Anti-Kickback Statute, False Claims Act) or government price reporting laws could lead to civil or criminal penalties[320](index=320&type=chunk)[321](index=321&type=chunk) - Heavy reliance on third parties (CROs, NIH, CFF) for clinical trials exposes the company to risks if these parties fail to perform or comply with regulations[323](index=323&type=chunk)[324](index=324&type=chunk)[325](index=325&type=chunk) - LYPDISO, if approved as prescription-only, will face competition from non-prescription omega-3 dietary supplements, potentially limiting sales and pricing[327](index=327&type=chunk) - Outbreaks of communicable diseases, like COVID-19, can materially and adversely affect business, financial condition, and results of operations by disrupting travel, supply chains, and facility operations[335](index=335&type=chunk) [Risks Relating to Our Intellectual Property Rights and Regulatory Exclusivity](index=67&type=section&id=Risks%20Relating%20to%20Our%20Intellectual%20Property%20Rights%20and%20Regulatory%20Exclusivity) Intellectual property protection is challenging, with risks of patent invalidation, infringement, and loss of licensed rights - The company depends on the LNC platform delivery technology licensed from Rutgers, and loss of these rights due to breaches, challenges to validity, or bankruptcy could prevent development and commercialization of lead product candidates[337](index=337&type=chunk)[339](index=339&type=chunk) - If development of the LNC platform is discontinued under certain conditions, the technology would be returned to former Aquarius stockholders, leading to loss of rights to lead product candidates[340](index=340&type=chunk) - Protecting intellectual property rights is difficult and costly; patent positions are uncertain, and issued patents may be challenged, invalidated, or circumvented[342](index=342&type=chunk)[343](index=343&type=chunk) - Reliance on trade secrets is risky as they are difficult to protect and can be independently discovered by competitors, or confidentiality agreements may be breached[344](index=344&type=chunk) - Product candidates may infringe on third-party intellectual property rights, leading to costly litigation, delays, or the need for expensive licenses or redesigns[346](index=346&type=chunk)[347](index=347&type=chunk)[348](index=348&type=chunk) - Generic competition for omega-3 products (like Vascepa) could negatively impact LYPDISO's sales and perceived value[350](index=350&type=chunk) - There is no assurance of obtaining or maintaining orphan drug, fast-track, or QIDP designations or exclusivity, and such designations do not guarantee faster development or FDA approval[279](index=279&type=chunk)[280](index=280&type=chunk)[282](index=282&type=chunk)[283](index=283&type=chunk) [General Company-Related Risks](index=69&type=section&id=General%20Company-Related%20Risks) General risks include managing growth, retaining personnel, product liability, cybersecurity, and stock price volatility - The company will need to significantly increase its organizational size to grow, which may lead to difficulties in managing growth and diverting management attention[351](index=351&type=chunk) - Failure to attract and retain highly qualified personnel, including key executives, would adversely impact business strategy and prospects[352](index=352&type=chunk)[355](index=355&type=chunk) - Product liability lawsuits, arising from clinical testing or commercialization, could result in substantial liabilities, limit commercialization, and harm reputation and financial condition[356](index=356&type=chunk)[357](index=357&type=chunk)[358](index=358&type=chunk) - Internal computer systems or those of contractors are vulnerable to security breaches, potentially disrupting product development programs, causing data loss, and incurring liability[359](index=359&type=chunk) - Future acquisitions or strategic alliances may not realize expected benefits if integration is unsuccessful or synergies are not achieved[360](index=360&type=chunk) - The company is obligated to pay significant royalties (up to **$35 million/year**) on MAT2203 and MAT2501 sales/licensing proceeds, and dividends on Series B Preferred Stock, which will dilute common stockholders[361](index=361&type=chunk)[362](index=362&type=chunk)[363](index=363&type=chunk) - The potential issuance of preferred stock by the board without stockholder approval could adversely affect common stockholders' voting power and equity interest[364](index=364&type=chunk) - A reverse stock split, if implemented, may not achieve intended benefits like increased market price or improved liquidity, and could lead to further dilution from future equity issuances[366](index=366&type=chunk)[367](index=367&type=chunk) - The company does not intend to pay dividends on common stock in the foreseeable future[368](index=368&type=chunk) - An active public trading market for common stock may not be sustained, and share price volatility could lead to significant market losses or class action litigation[369](index=369&type=chunk)[370](index=370&type=chunk) - Limited research coverage by analysts or adverse changes in recommendations could cause stock price and trading volume to decline[372](index=372&type=chunk) - Failure to maintain an effective system of internal control over financial reporting, as evidenced by a material weakness in 2020 (since remediated), could adversely affect financial reporting reliability and investor confidence[373](index=373&type=chunk)[374](index=374&type=chunk)[375](index=375&type=chunk)[376](index=376&type=chunk)[377](index=377&type=chunk) - Failure to build finance infrastructure and improve accounting systems could impair compliance with public company financial reporting requirements[379](index=379&type=chunk)[380](index=380&type=chunk) - Upon dissolution, common stockholders may not recoup all or any portion of their investment, as preferred stockholders have priority[381](index=381&type=chunk) - Anti-takeover provisions in corporate documents and Delaware law could make an acquisition more difficult, potentially limiting stockholder benefits[383](index=383&type=chunk)[384](index=384&type=chunk)[385](index=385&type=chunk) - Exclusive forum provisions in the certificate of incorporation may limit stockholders' ability to choose a favorable judicial forum for disputes[386](index=386&type=chunk) - The ability to use net operating loss carryforwards and other tax attributes may be limited by ownership changes under Section 382 of the Internal Revenue Code[387](index=387&type=chunk) [Item 1B. Unresolved Staff Comments](index=76&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company has no unresolved staff comments from the SEC - There are no unresolved staff comments[389](index=389&type=chunk) [Item 2. Properties](index=76&type=section&id=Item%202.%20Properties) The company's administrative offices are in Bedminster, NJ, and it leases laboratory space in Bridgewater, NJ - Administrative offices: Approximately **5,900 sq ft** in Bedminster, NJ, under a lease expiring May 2021. An amendment in September 2020 adds **3,034 sq ft** and extends the lease for **seven years** from Q2 2021[390](index=390&type=chunk) - Laboratory space: Approximately **14,000 sq ft** in Bridgewater, NJ, under a lease expiring in **2027**[390](index=390&type=chunk) [Item 3. Legal Proceedings](index=76&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently involved in any legal proceedings and is unaware of any pending claims - The company is not currently a party to any legal proceedings and is not aware of any pending or threatened claims or actions[391](index=391&type=chunk) - Future involvement in litigation relating to claims arising from ordinary course of business is possible[391](index=391&type=chunk) [Item 4. Mine Safety Disclosures](index=76&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[392](index=392&type=chunk) PART II [Item 5. Market For Registrant's Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities](index=73&type=section&id=Item%205.%20Market%20For%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20And%20Issuer%20Purchases%20Of%20Equity%20Securities) The company's common stock trades on NYSE American, with no cash dividends paid or anticipated, and no recent equity repurchases - Common stock is quoted on the NYSE American under the symbol "MTNB"[392](index=392&type=chunk) Common Stock High and Low Sales Price (Fiscal Years 2019-2020) | Quarter | Fiscal Year 2019 High | Fiscal Year 2019 Low | Fiscal Year 2020 High | Fiscal Year 2020 Low | | :-------------- | :-------------------- | :------------------- | :-------------------- | :------------------- | | First Quarter | $1.41 | $0.60 | $2.31 | $0.60 | | Second Quarter | $1.11 | $0.79 | $0.92 | $0.52 | | Third Quarter | $0.76 | $0.59 | $0.96 | $0.67 | | Fourth Quarter | $2.27 | $0.63 | $1.47 | $0.76 | - As of March 12, 2021, there were approximately **123 record holders** of common stock[394](index=394&type=chunk) - The company has never paid cash dividends on its common stock and does not anticipate doing so in the foreseeable future, intending to retain all available funds for business development[396](index=396&type=chunk) - No unregistered securities were sold recently, and no equity securities were repurchased by the issuer or affiliated purchasers during the period[397](index=397&type=chunk)[398](index=398&type=chunk) [Item 6. Selected Financial Data](index=77&type=section&id=Item%206.%20Selected%20Financial%20Data) As a Smaller Reporting Company, Matinas BioPharma is not required to provide selected financial data - As a Smaller Reporting Company, Matinas BioPharma is not required to provide selected financial data per §229.301 of Regulation S-K[399](index=399&type=chunk) - Management's Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the audited consolidated financial statements for understanding the company's financial position[399](index=399&type=chunk) [Item 7. Management's Discussion And Analysis Of Financial Condition And Results Of Operations](index=77&type=section&id=Item%207.%20Management's%20Discussion%20And%20Analysis%20Of%20Financial%20Condition%20And%20Results%20Of%20Operations) This section reviews the company's financial condition, highlighting significant losses, increasing R&D, and liquidity needs - The company's core strategy involves advancing its LNC platform technology and seeking a partner for LYPDISO, a next-generation prescription omega-3 drug[401](index=401&type=chunk) - The company has incurred net losses since inception, with **$22.4 million in 2020** and **$17.4 million in 2019**, and expects significant expenses and operating losses for the foreseeable future, requiring additional financing[403](index=403&type=chunk) - Revenue is primarily from contract research, totaling **$0.2 million in 2020** and **$0.1 million in 2019**, with no significant product revenue expected for many years[404](index=404&type=chunk) - Research and development expenses increased to **$14.4 million in 2020** from **$11.2 million in 2019**, driven by higher preclinical and clinical development, employee compensation, and manufacturing development[409](index=409&type=chunk)[421](index=421&type=chunk) - General and administrative expenses rose to **$10.0 million in 2020** from **$7.8 million in 2019**, mainly due to increased employee-related expenses and professional fees[410](index=410&type=chunk)[422](index=422&type=chunk) - The company generated **$1.1 million in 2020** and **$1.0 million in 2019** from the sale of New Jersey net operating losses (NOLs) and research tax credits[411](index=411&type=chunk)[423](index=423&type=chunk) - As of December 31, 2020, cash, cash equivalents, and marketable securities totaled **$58.7 million**, with an additional **$5.6 million** in net proceeds from common stock sales in January 2021, projected to fund operations into **2024**[425](index=425&type=chunk)[426](index=426&type=chunk)[436](index=436&type=chunk) - Future funding needs are substantial, expected to be met through equity offerings, debt financings, government funding, and collaborations, with risks of dilution or relinquishing technology rights[437](index=437&type=chunk)[438](index=438&type=chunk) [Overview](index=77&type=section&id=Overview) The overview highlights the company's LNC platform focus, LYPDISO partnership search, and ongoing net losses - Matinas BioPharma focuses on improving intracellular delivery of therapeutics via its LNC drug delivery platform and seeking a partner for LYPDISO, a proprietary next-generation prescription omega-3 drug[401](index=401&type=chunk) - Key strategic elements include advancing LNC clinical-stage assets (MAT2203, MAT2501), delivering efficacy data for MAT2203 in cryptococcal meningitis, progressing MAT2501 preclinical development with CFF support, and expanding LNC platform applications through collaborations[402](index=402&type=chunk)[406](index=406&type=chunk) - The company has incurred net losses of **$22.4 million in 2020** and **$17.4 million in 2019**, expecting continued losses and requiring additional financing[403](index=403&type=chunk) [Financial Operations Overview](index=78&type=section&id=Financial%20Operations%20Overview) This section details revenue sources, R&D expenses, G&A costs, and other income, showing increasing operational expenses Contract Research Revenue | Year Ended December 31, | Revenue (millions) | | :---------------------- | :----------------- | | 2020 | $0.2 | | 2019 | $0.1 | - Revenue is primarily from contract research grants (Cystic Fibrosis Foundation) and feasibility study agreements (Genentech), with no significant product revenue expected for many years[404](index=404&type=chunk) - Research and development expenses include costs for preclinical work, clinical trial materials, consultants, CROs (including NIH), and employee-related expenses[405](index=405&type=chunk)[407](index=407&type=chunk) Direct Research and Development Expenses (in thousands) | Category | 2020 | 2019 | | :------------------------------ | :---------- | :---------- | | Manufacturing process development | $1,421 | $1,081 | | Preclinical trials | $744 | $1,538 | | Clinical development | $5,149 | $2,565 | | Regulatory | $95 | $190 | | Internal staffing, overhead and other | $6,950 | $5,861 | | **Total R&D** | **$14,359** | **$11,235** | - R&D expenses are expected to increase as product candidates advance through clinical development and the LNC platform technology expands[409](index=409&type=chunk) - General and administrative expenses consist of salaries, facility costs, insurance, investor relations, and professional fees, anticipated to increase in 2021[410](index=410&type=chunk) Sale of Net Operating Losses (NOLs) (in millions) | Year Ended December 31, | Amount (millions) | | :---------------------- | :---------------- | | 2020 | $1.1 | | 2019 | $1.0 | - Other income, net, is primarily comprised of interest income (expense) and franchise taxes[412](index=412&type=chunk) [Application of Critical Accounting Policies and Accounting Estimates](index=80&type=section&id=Application%20of%20Critical%20Accounting%20Policies%20and%20Accounting%20Estimates) Critical accounting policies involve significant management judgment for areas like stock-based compensation and R&D costs - Critical accounting policies requiring significant management judgment and estimates include stock-based compensation, fair value measurements, research and development costs, goodwill and other intangible assets, and basic and diluted net loss per common share[414](index=414&type=chunk)[415](index=415&type=chunk) [Current Operating Trends](index=80&type=section&id=Current%20Operating%20Trends) Current R&D focuses on advancing MAT2203 and MAT2501, with increasing investment and inherent clinical trial uncertainties - Current R&D efforts focus on advancing MAT2203 towards efficacy data in CM, accelerating MAT2501 preclinical development with CFF assistance, and expanding the LNC platform through third-party collaborations[416](index=416&type=chunk) - Most R&D expenses in the near future will support preclinical and clinical development programs rather than technology development, with significant investment considered a competitive necessity[417](index=417&type=chunk) - The commencement and completion of clinical trials are subject to uncertainties like efficacy, safety issues, participant recruitment, funding, and regulatory delays, making accurate timing and cost estimates difficult[418](index=418&type=chunk) [Results of Operations](index=80&type=section&id=Results%20of%20Operations) Net loss increased in 2020 due to higher R&D and G&A expenses, despite a slight rise in contract research revenue Operating Expenses (in thousands) | Category | 2020 | 2019 | | :------------------------------ | :---------- | :---------- | | Revenues | $158 | $90 | | Research and development | $14,359 | $11,235 | | General and administrative | $10,006 | $7,776 | | **Total Operating Expenses** | **$24,365** | **$19,011** | | Loss from operations | $(24,207) | $(18,921) | | Sale of New Jersey net operating loss | $1,073 | $1,007 | | Other income, net | $686 | $541 | | **Net loss** | **$(22,447)** | **$(17,373)** | - Contract research revenue increased from **$89.8 thousand in 2019** to **$158.3 thousand in 2020**, primarily from CFF grants and a Genentech feasibility study[420](index=420&type=chunk) - R&D expenses increased by **$3.2 million in 2020** to **$14.4 million**, mainly due to higher preclinical/clinical development (**$1.8 million**) and employee compensation (**$1.3 million**)[421](index=421&type=chunk) - General and administrative expenses increased by **$2.2 million in 2020** to **$10.0 million**, driven by employee-related expenses (**$1.7 million**) and professional fees (**$0.4 million**)[422](index=422&type=chunk) - Income from the sale of New Jersey NOLs was **$1.1 million in 2020** and **$1.0 million in 2019**[423](index=423&type=chunk) [Liquidity and Capital Resources](index=81&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is supported by equity offerings, with cash projected to fund operations into 2024, but future needs remain substantial - Since inception, operations have been funded primarily through private placements and public offerings of equity securities, raising **$150.9 million gross** and **$138.4 million net**[424](index=424&type=chunk) Cash, Cash Equivalents and Marketable Securities (in millions) | As of December 31, | Amount (millions) | | :----------------- | :---------------- | | 2020 | $58.7 | | 2019 | $27.8 | - In January 2021, the company sold **3,023,147 shares of common stock** under an At-The-Market Sales Agreement, generating **$5.8 million gross** and **$5.6 million net proceeds**[426](index=426&type=chunk) - Public offerings of common stock generated net proceeds of **$46.7 million in January 2020** and **$30.1 million in March 2019**[428](index=428&type=chunk)[429](index=429&type=chunk) - A Series B Preferred Stock offering in June 2018 raised **$8 million gross** and **$7.1 million net**[430](index=430&type=chunk) Cash Flows (in thousands) | Category | 2020 | 2019 | | :-------------------------------- | :---------- | :---------- | | Cash used in operating activities | $(17,368) | $(14,092) | | Cash used in investing activities | $(40,667) | $(6,011) | | Cash provided by financing activities | $48,047 | $29,852 | | **Net (decrease)/increase in cash** | **$(9,988)** | **$9,749** | - Net cash used in operating activities increased by **$3.3 million in 2020** to **$17.4 million**, primarily due to increased net loss offset by higher non-cash stock-based compensation[432](index=432&type=chunk) - Net cash used in investing activities increased by **$34.7 million in 2020** to **$40.7 million**, mainly due to net purchases of marketable securities[433](index=433&type=chunk) - Net cash provided by financing activities increased by **$18.1 million in 2020** to **$48.0 million**, driven by higher net proceeds from common stock offerings and exercise of warrants/options[435](index=435&type=chunk) - Existing cash, cash equivalents, and marketable securities, plus recent proceeds, are expected to fund operating expenses and capital expenditures into **2024**[436](index=436&type=chunk) - Future cash needs will be financed through equity/debt offerings, government funding, and collaborations, with risks of dilution or relinquishing rights[437](index=437&type=chunk)[438](index=438&type=chunk) [Contractual Obligations and Commitments](index=84&type=section&id=Contractual%20Obligations%20and%20Commitments) This section refers to Note 10 for details on the company's contractual obligations and commitments - Refer to Note 10 – "Commitments" in the consolidated financial statements for a discussion of the Company's contractual obligations and commitments[440](index=440&type=chunk) [Off-Balance Sheet Arrangements](index=84&type=section&id=Off-Balance%20Sheet%20Arrangements) The company has no off-balance sheet arrangements as defined by SEC rules - The company did not have, and does not currently have, any off-balance sheet arrangements as defined under SEC rules[441](index=441&type=chunk) [Recent Accounting Pronouncements](index=84&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 3 for a discussion of recent accounting pronouncements - Refer to Note 3 - "Significant Accounting Policies" in the consolidated financial statements for a discussion of recent accounting pronouncements[442](index=442&type=chunk) [Item 7A. Quantitative And Qualitative Disclosures About Market Risk](index=84&type=section&id=Item%207A.%20Quantitative%20And%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk is limited to interest rate sensitivity on its cash and marketable securities, with no foreign currency exposure - Market risk exposure is limited to cash, cash equivalents, and marketable securities, totaling **$58.7 million** as of December 31, 2020[443](index=443&type=chunk) - Primary market risk is interest income sensitivity to changes in U.S. interest rates[443](index=443&type=chunk) - Due to the short-term nature of investments, a sudden change in market interest rates is not expected to have a material impact on financial condition or results of operations[443](index=443&type=chunk) - The company does not have any foreign currency or other derivative financial instruments[443](index=443&type=chunk) [Item 8. Financial Statements And Supplementary Data](index=84&type=section&id=Item%208.%20Financial%20Statements%20And%20Supplementary%20Data) Financial statements and the independent auditor's report are incorporated by reference from Part IV, Item 15 - Financial statements and the independent registered public accounting firm report are incorporated by reference from Part IV Item 15, "Exhibits, Financial Statement Schedules" of this Annual Report on Form 10-K[444](index=444&type=chunk) [Item 9. Changes In And Disagreements With Accountants On Accounting And Financial Disclosure](index=84&type=section&id=Item%209.%20Changes%20In%20And%20Disagreements%20With%20Accountants%20On%20Accounting%20And%20Financial%20Disclosure) This item is not applicable to the company - Not applicable[445](index=445&type=chunk) [Item 9A. Controls And Procedures](index=85&type=section&id=Item%209A.%20Controls%20And%20Procedures) Disclosure controls were effective as of December 31, 2020, with a previously identified material weakness remediated - As of December 31, 2020, disclosure controls and procedures were evaluated and concluded to be effective at the reasonable assurance level[446](index=446&type=chunk) - A material weakness in internal controls over financial reporting identified in the 2019 Annual Report was remediated as of December 31, 2020[448](index=448&type=chunk)[453](index=453&type=chunk) - Management concluded that internal control over financial reporting was effective as of December 31, 2020, with no identified material weaknesses[451](index=451&type=chunk) - Remediation involved enhancing operational procedures for purchasing, receiving, and recording expenditures, and formalizing/testing review procedures[454](index=454&type=chunk) - No other material changes in internal control over financial reporting occurred during the period[455](index=455&type=chunk) [Item 9B. Other Information](index=85&type=section&id=Item%209B.%20Other%20Information) The company has no other information to report under this item - None[456](index=456&type=chunk) PART III [Item 10. Directors, Executive Officers And Corporate Governance](index=83&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20And%20Corporate%20Governance) This section outlines the company's executive officers and board of directors, their experience, and committee structures Executive Officers and Directors | Name | Age | Position(s) | | :--------------- | :-- | :-------------------------------------------- | | Herbert Conrad | 88 | Chairman of the Board, Director | | Jerome D. Jabbour| 46 | Chief Executive Officer and President, Director | | James J. Ferguson| 67 | Chief Medical Officer | | Keith A. Kucinski| 51 | Chief Financial Officer | | Hui Liu | 53 | Chief Technology Officer | | Raphael J. Mannino| 73 | Chief Scientific Officer | | Theresa Matkovits| 53 | Chief Development Officer | | Patrick G. LePore| 65 | Vice Chairman of the Board, Director | | Eric Ende | 52 | Director | | Natasha Giordano | 59 | Director | | James S. Scibetta| 56 | Director | | Matthew Wikler | 71 | Director | - Key executive officers include Jerome D. Jabbour (CEO & President), James J. Ferguson (CMO), Keith A. Kucinski (CFO), Hui Liu (CTO), Raphael J. Mannino (CSO), and Theresa Matkovits (CDO), bringing extensive experience in biopharmaceuticals, R&D, and finance[459](index=459&type=chunk)[460](index=460&type=chunk)[461](index=461&type=chunk)[463](index=463&type=chunk)[464](index=464&type=chunk)[465](index=465&type=chunk) - The board of directors includes Herbert Conrad (Chairman), Patrick LePore (Vice Chairman), Eric Ende, Natasha Giordano, James S. Scibetta, and Matthew Wikler, all with significant industry and leadership experience[467](index=467&type=chunk)[468](index=468&type=chunk)[469](index=469&type=chunk)[470](index=470&type=chunk)[471](index=471&type=chunk)[472](index=472&type=chunk) - The board has four standing committees: Audit, Compensation, Nominating and Corporate Governance, and a Scientific Advisory Committee[475](index=475&type=chunk) - The Audit Committee oversees financial reporting and internal controls, with James Scibetta as chairman and all members (Herbert Conrad, Eric Ende, Natasha Giordano) being independent and financially literate[476](index=476&type=chunk) - The Compensation Committee advises on employee and director compensation, with Eric Ende as chairman

| --- | --- | |------------------------|-------| | | | | | | | | | | | | | | | | Corporate Presentation | | | | | | | | | | | | March 2021 | | | (NYSE AMER: MTNB) | 1 | Forward-Looking Statement This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including those relating to the Company's product development, clinical and regulatory timelines, market opportunity, cash flow and other statements that are predictive in nature, that ...

| --- | --- | --- | |--------------------------------------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Corporate Presentation December 2020 | | | Forward-Looking Statement MTNB This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including those relating to the Company's product development, clinical and regulatory timelines, market opportunity, cash flow and other statements that are predi ...

Matinas BioPharma Holdings, Inc. (NYSE:MTNB) Q3 2020 Results Conference Call November 6, 2020 8:30 AM ET Company Participants Peter Vozzo - IR Jerry Jabbour - CEO Keith Kucinski - CFO Dr. James Ferguson - Chief Medical Officer Conference Call Participants Bert Hazlett - BTIG Yasmeen Rahimi - Piper Sandler Operator Greetings. Welcome to Matinas BioPharma Third Quarter 2020 Results Conference Call. At this time, all participants are in listen-only mode. A question-and-answer session will follow the formal pre ...

[PART I - FINANCIAL INFORMATION](index=4&type=section&id=PART%20-%20I%20FINANCIAL%20INFORMATION) This part details Matinas BioPharma's unaudited financial statements, including balance sheets, operations, equity, and cash flow, highlighting a $101.2 million accumulated deficit and sufficient liquidity into 2023 [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS) This section provides Matinas BioPharma's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, equity, and cash flow, with accompanying notes [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents the company's financial position at specific dates, detailing assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheet Highlights (September 30, 2020 vs. December 31, 2019) | Metric | Sep 30, 2020 (Unaudited) | Dec 31, 2019 (Audited) | | :-------------------------------- | :----------------------- | :--------------------- | | Cash and cash equivalents | $7,051,225 | $22,170,438 | | Marketable securities | $55,719,661 | $5,604,634 | | Total current assets | $65,203,014 | $29,922,856 | | Total assets | $74,806,426 | $40,240,155 | | Total liabilities | $6,601,207 | $7,188,573 | | Total stockholders' equity | $68,205,219 | $33,051,582 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section outlines the company's revenues, expenses, and net loss over specific periods, including comprehensive loss Condensed Consolidated Statements of Operations Highlights (Nine Months Ended September 30) | Metric | 2020 (Unaudited) | 2019 (Unaudited) | Change (YoY) | | :-------------------------------- | :--------------- | :--------------- | :----------- | | Contract research revenue | $95,833 | $89,812 | +$6,021 | | Research and development expenses | $10,833,345 | $7,814,842 | +$3,018,503 | | General and administrative expenses | $6,980,155 | $5,460,023 | +$1,520,132 | | Total costs and expenses | $17,813,500 | $13,274,865 | +$4,538,635 | | Net loss | $(16,105,958) | $(11,799,820) | $(4,306,138) | | Net loss per common share | $(0.09) | $(0.09) | $0.00 | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) This section details changes in the company's equity accounts, including common stock, additional paid-in capital, and accumulated deficit [Condensed Consolidated Statements of Cash Flow](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) This section reports the cash inflows and outflows from operating, investing, and financing activities over specific periods Condensed Consolidated Statements of Cash Flow Highlights (Nine Months Ended September 30) | Metric | 2020 (Unaudited) | 2019 (Unaudited) | Change (YoY) | | :-------------------------------- | :--------------- | :--------------- | :----------- | | Net cash used in operating activities | $(13,060,126) | $(9,193,089) | $(3,867,037) | | Net cash used in investing activities | $(49,756,351) | $(405,604) | $(49,350,747)| | Net cash provided by financing activities | $47,497,264 | $29,841,637 | +$17,655,627 | | Net (decrease)/increase in cash, cash equivalents and restricted cash | $(15,319,213) | $20,242,944 | $(35,562,157)| | Cash, cash equivalents and restricted cash at end of period | $7,437,225 | $33,250,782 | $(25,813,557)| - The Company had an accumulated deficit of approximately **$101.2 million** through September 30, 2020, and expects to incur substantial and increasing losses for the foreseeable future as it continues product development[23](index=23&type=chunk)[25](index=25&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the unaudited condensed consolidated financial statements [Note 1 – Description of Business](index=9&type=section&id=Note%201%20%E2%80%93%20Description%20of%20Business) This note describes Matinas BioPharma Holdings Inc. as a clinical-stage biopharmaceutical company focused on novel product development - Matinas BioPharma Holdings Inc. is a clinical-stage biopharmaceutical company focused on identifying and developing novel pharmaceutical products[22](index=22&type=chunk) [Note 2 – Liquidity and Plan of Operations](index=9&type=section&id=Note%202%20%E2%80%93%20Liquidity%20and%20Plan%20of%20Operations) This note discusses the company's financial liquidity, historical losses, and plans for funding future operations - The Company has experienced net losses and negative cash flows from operations since inception, with an accumulated deficit of approximately **$101.2 million** as of September 30, 2020[23](index=23&type=chunk) - The Company's lead product candidate is MAT-9001, and it is also developing its lipid nano-crystal (LNC) platform delivery technology and associated product candidates[24](index=24&type=chunk) - As of September 30, 2020, the Company had **$7.1 million** in cash and cash equivalents and **$55.7 million** in marketable securities, which are believed to be sufficient to fund operations into the **first half of 2023**[27](index=27&type=chunk) [Note 3 – Summary of Significant Accounting Policies](index=9&type=section&id=Note%203%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles and policies used in preparing the condensed consolidated financial statements - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP and include the consolidated accounts of Holdings, BioPharma, and Nanotechnologies[28](index=28&type=chunk) - The COVID-19 pandemic did not significantly impact financial results for the three and nine months ended September 30, 2020, but future impacts on results or capital raising ability are uncertain[31](index=31&type=chunk) - The Company adopted ASU 2018-13 and ASU 2018-18 on January 1, 2020, neither of which had a material impact on the condensed consolidated financial statements[32](index=32&type=chunk)[33](index=33&type=chunk) [Note 4 – Cash, Cash Equivalents, Restricted Cash and Marketable Securities](index=10&type=section&id=Note%204%20%E2%80%93%20Cash%2C%20Cash%20Equivalents%2C%20Restricted%20Cash%20and%20Marketable%20Securities) This note provides details on the company's cash, cash equivalents, restricted cash, and marketable securities holdings and related gains/losses Cash, Cash Equivalents and Restricted Cash (in thousands) | Item | Sep 30, 2020 | Dec 31, 2019 | Sep 30, 2019 | Dec 31, 2018 | | :------------------------------------------------ | :----------- | :----------- | :----------- | :----------- | | Cash and cash equivalents | $7,051 | $22,170 | $32,665 | $12,447 | | Restricted cash included in current/long term assets | $386 | $586 | $586 | $561 | | Total cash, cash equivalents and restricted cash | $7,437 | $22,756 | $33,251 | $13,008 | - The Company recorded unrealized losses of approximately **$114.2 thousand** for the three months ended September 30, 2020, and unrealized gains of approximately **$367.1 thousand** for the nine months ended September 30, 2020, on marketable securities[37](index=37&type=chunk) Marketable Securities as of September 30, 2020 (in thousands) | Type | Amortized Cost | Unrealized Gain | Unrealized (Loss) | Fair Value | | :------------------------ | :------------- | :-------------- | :---------------- | :--------- | | U.S. Treasury Bonds | $25,575 | $220 | — | $25,795 | | U.S. Government Notes | $22,305 | $116 | $(1) | $22,420 | | Corporate Debt Securities | $6,201 | $19 | — | $6,220 | | State and Municipal Bonds | $1,275 | $10 | — | $1,285 | | **Total** | **$55,356** | **$365** | **$(1)** | **$55,720**| [Note 5 - Fair Value Measurements](index=13&type=section&id=Note%205%20-%20Fair%20Value%20Measurements) This note details the fair value hierarchy and measurements applied to the company's financial assets Fair Value Hierarchy of Assets as of September 30, 2020 (in thousands) | Asset Type | Total | Level 1 | Level 2 | Level 3 | | :------------------------ | :-------- | :-------- | :-------- | :------ | | U.S. Treasury Bonds | $25,795 | $25,795 | — | — | | U.S. Government Notes | $22,420 | — | $22,420 | — | | Corporate Debt Securities | $6,220 | — | $6,220 | — | | State and Municipal Bonds | $1,285 | — | $1,285 | — | | **Total** | **$55,720** | **$25,795** | **$29,925** | **—** | - Cash and cash equivalents, money market funds, and U.S. treasury bonds are classified as **Level 1**, while U.S. government notes, corporate debt securities, and state and municipal bonds are classified as **Level 2**[43](index=43&type=chunk) [Note 6 – Leasehold Improvements and Equipment](index=13&type=section&id=Note%206%20%E2%80%93%20Leasehold%20Improvements%20and%20Equipment) This note provides information on the company's leasehold improvements and equipment, including depreciation and amortization expenses Leasehold Improvements and Equipment, Net (in thousands) | Category | Sep 30, 2020 | Dec 31, 2019 | | :-------------------------------- | :----------- | :----------- | | Lab equipment | $1,443 | $1,437 | | Leasehold improvements | $878 | $878 | | Total | $2,321 | $2,315 | | Less: accumulated depreciation and amortization | $739 | $566 | | **Net** | **$1,582** | **$1,749** | Depreciation and Amortization Expense (in thousands) | Period | 2020 | 2019 | | :------------------------------------ | :----------- | :----------- | | Three months ended September 30 | $57.8 | $52.0 | | Nine months ended September 30 | $173.2 | $148.9 | [Note 7 – Accrued Expenses](index=15&type=section&id=Note%207%20%E2%80%93%20Accrued%20Expenses) This note details the composition of the company's accrued expenses, including payroll, general and administrative, and R&D Accrued Expenses (in thousands) | Category | Sep 30, 2020 | Dec 31, 2019 | | :---------------------------- | :----------- | :----------- | | Payroll and incentives | $805 | $978 | | General and administrative expenses | $250 | $428 | | Research and development expenses | $856 | $421 | | Deferred revenue | $104 | $100 | | Other | — | $13 | | **Total** | **$2,015** | **$1,940** | [Note 8 – Leases](index=15&type=section&id=Note%208%20%E2%80%93%20Leases) This note outlines the company's lease arrangements, including lease expenses and significant lease amendments Lease Expense (in thousands) | Lease Type | Period | 2020 | 2019 | | :--------- | :------------------------------------ | :---- | :---- | | Operating | Three months ended September 30 | $203.4 | $610.3 | | Operating | Nine months ended September 30 | $610.3 | $610.3 | | Finance | Interest expense (three months) | $1.4 | $2.8 | | Finance | Interest expense (nine months) | $5.4 | $9.3 | | Finance | Amortization expense (three months) | $8.6 | $25.0 |\ | Finance | Amortization expense (nine months) | $50.3 | $97.8 | - The Company amended its administrative office lease in Bedminster, New Jersey, to include an additional **3,034 square feet**, extending the lease term by **seven years** from January 15, 2021, with a total commitment of approximately **$1.8 million**[55](index=55&type=chunk) [Note 9 – Income Taxes](index=16&type=section&id=Note%209%20%E2%80%93%20Income%20Taxes) This note provides information on the company's income tax-related activities, specifically the sale of net operating losses Sale of Net Operating Losses (NOLs) (in millions) | Period | 2020 | 2019 | | :------------------------------------ | :---- | :---- | | Three months ended September 30 | $0 | $0 | | Nine months ended September 30 | $1.1 | $1.0 | [Note 10 – Stockholders' Equity](index=16&type=section&id=Note%2010%20%E2%80%93%20Stockholders%27%20Equity) This note details changes in stockholders' equity, including public offerings, ATM agreements, warrants, and diluted net loss per share - On July 2, 2020, the Company entered into an At-The-Market (ATM) Sales Agreement to offer and sell up to **$50 million** of common stock, but no shares were sold under this agreement as of September 30, 2020[57](index=57&type=chunk) - On January 14, 2020, the Company completed a public offering of **32.3 million** common shares at **$1.55 per share**, generating net proceeds of approximately **$46.7 million**[58](index=58&type=chunk) Warrants Outstanding (in thousands) | Metric | Dec 31, 2018 | Dec 31, 2019 | Sep 30, 2020 | | :------------------------------------ | :----------- | :----------- | :----------- | | Outstanding shares | 5,799 | 5,397 | 1,328 | | Weighted average exercise price | N/A | $0.62 | $0.55 | | Shares exercised (9 months ended Sep 30, 2020) | N/A | N/A | (2,576) | | Shares expired (9 months ended Sep 30, 2020) | N/A | N/A | (1,493) | - Diluted net loss per common share is the same as basic net loss per common share due to the anti-dilutive effect of potentially dilutive securities (stock options, preferred stock, warrants) during periods of net loss[66](index=66&type=chunk) [Note 11 – Accumulated Other Comprehensive (Loss)/Income](index=18&type=section&id=Note%2011%20%E2%80%93%20Accumulated%20Other%20Comprehensive%20%28Loss%29%2FIncome) This note presents the changes in accumulated other comprehensive income or loss, primarily from unrealized gains/losses on available-for-sale securities Changes in Accumulated Other Comprehensive (Loss)/Income (Nine Months Ended September 30, 2020, in thousands) | Component | Net Unrealized (Losses)/Gains on Available-for-Sale Securities | Accumulated Other Comprehensive (Loss)/Gain | | :---------------------------------------- | :------------------------------------------------------------- | :------------------------------------------ | | Balance, December 31, 2019 | $(1) | $(1) | | Unrealized gain on securities available-for-sale | $368 | $368 | | Reclassifications to net loss | $(3) | $(3) | | **Net current period other comprehensive income** | **$365** | **$365** | - There were no accumulated other comprehensive (losses)/gains during the nine months ended September 30, 2019[69](index=69&type=chunk) [Note 12 – Stock-based Compensation](index=20&type=section&id=Note%2012%20%E2%80%93%20Stock-based%20Compensation) This note details the company's stock-based compensation expense, including modifications to stock options and unrecognized compensation costs Stock-based Compensation Expense (in thousands) | Category | Three Months Ended Sep 30, 2020 | Three Months Ended Sep 30, 2019 | Nine Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2019 | | :------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Research and Development | $358 | $185 | $1,538 | $834 | | General and Administrative | $595 | $486 | $1,807 | $1,463 | | **Total** | **$953** | **$671** | **$3,345** | **$2,297** | - The Company modified certain vested stock options during the nine months ended September 30, 2020, extending their exercise terms by **two years**, resulting in an additional stock-based compensation expense of approximately **$432.8 thousand** recorded in R&D[72](index=72&type=chunk) - As of September 30, 2020, total unrecognized compensation costs for unvested awards were approximately **$9.0 million**, with a weighted-average recognition period of **2.9 years**[73](index=73&type=chunk) [Note 13 – Subsequent Event](index=21&type=section&id=Note%2013%20%E2%80%93%20Subsequent%20Event) This note reports on any significant events that occurred after the reporting period but before the financial statements were issued - There were no subsequent events to report[76](index=76&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section analyzes Matinas BioPharma's financial condition, results of operations, and liquidity, covering business overview, COVID-19 impact, and key financial changes - The Company is a clinical-stage biopharmaceutical company focused on developing MAT9001 for cardiovascular and metabolic conditions and applying its LNC platform delivery technology[82](index=82&type=chunk)[83](index=83&type=chunk) - The Company has incurred losses since inception, with a net loss of approximately **$16.1 million** for the nine months ended September 30, 2020, and expects significant future expenses, necessitating additional financing[83](index=83&type=chunk) - The COVID-19 pandemic temporarily halted clinical trial enrollment in March 2020, which resumed in June/July, and while it did not significantly impact financial results for the reported period, future impacts on trials and capital raising remain uncertain[85](index=85&type=chunk)[88](index=88&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=22&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This note advises readers that the report contains forward-looking statements subject to risks and uncertainties that may cause actual results to differ - This report contains forward-looking statements subject to risks and uncertainties, including those related to the COVID-19 pandemic, which may cause actual results to differ materially[78](index=78&type=chunk) - Key factors that could cause actual results to differ include the ability to raise capital, timing of clinical results, regulatory approvals, competition, reimbursement uncertainties, third-party performance, and intellectual property costs[81](index=81&type=chunk) [Overview](index=22&type=section&id=Overview) This section provides a general business overview, strategic focus, and highlights the company's historical net losses and future expectations - Matinas BioPharma is a clinical-stage biopharmaceutical company focused on developing MAT9001 for cardiovascular and metabolic conditions and applying its LNC platform delivery technology[82](index=82&type=chunk) - The company's strategy includes advancing MAT9001 for severe hypertriglyceridemia (SHTG), delivering efficacy data for MAT2203 in cryptococcal meningitis (CM) with NIH support, and expanding LNC platform applications through collaborations[87](index=87&type=chunk) - The Company has incurred net losses of approximately **$16.1 million** and **$11.8 million** for the nine months ended September 30, 2020 and 2019, respectively, and expects to incur significant expenses and operating losses in the coming years[83](index=83&type=chunk) [Impact of COVID-19](index=24&type=section&id=Impact%20of%20COVID-19) This section discusses the effects of the COVID-19 pandemic on clinical trial timelines and potential future financial or operational impacts - The COVID-19 pandemic led to a temporary halt in clinical trial enrollment in March 2020, with enrollment and dosing resuming in June and July[85](index=85&type=chunk) - The pandemic could adversely affect the ability to complete trials on expected timelines, impact third-party service providers, and cause delays in regulatory approvals or drug supply[85](index=85&type=chunk)[86](index=86&type=chunk) - Financial results for the three and nine months ended September 30, 2020, were not significantly impacted by COVID-19, but future impacts on results or capital raising are unpredictable[88](index=88&type=chunk) [Financial Operations Overview](index=25&type=section&id=Financial%20Operations%20Overview) This section provides an overview of the company's revenue generation, research and development expenses, and other income components Contract Research Revenue (Nine Months Ended September 30) | Year | Revenue | | :--- | :------ | | 2020 | $95.8K | | 2019 | $89.8K | - The Company does not expect to generate product revenue until **2023** at the earliest, if ever, depending on successful product candidate development and commercialization[89](index=89&type=chunk) Research and Development Expenses (in thousands) | Category | 3 Months Ended Sep 30, 2020 | 3 Months Ended Sep 30, 2019 | 9 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2019 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Manufacturing process development | $318 | $353 | $928 | $462 | | Preclinical trials | $119 | $487 | $598 | $1,063 | | Clinical development | $1,295 | $413 | $3,994 | $1,746 | | Regulatory | $39 | $37 | $73 | $170 | | Internal staffing, overhead and other | $1,565 | $1,381 | $5,240 | $4,374 | | **Total R&D** | **$3,336** | **$2,671** | **$10,833** | **$7,815** | - General and administrative expenses are expected to increase in 2020 due to public company status, employee compensation, investor relations, intellectual property protection, and insurance costs[94](index=94&type=chunk) Sale of Net Operating Losses (NOLs) (in millions) | Period | 2020 | 2019 | | :------------------------------------ | :---- | :---- | | Nine months ended September 30 | $1.1 | $1.0 | - Other income, net, primarily consists of interest income and dividends from cash and investments, offset by interest expense and franchise taxes[96](index=96&type=chunk) - Current R&D efforts focus on advancing MAT9001 for SHTG, expanding LNC platform technology through collaborations, and driving MAT2203 to efficacy data in CM[100](index=100&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, comparing revenues and expenses for the reported periods Comparison of Three Months Ended September 30 (in thousands) | Metric | 2020 | 2019 | Change (YoY) | | :------------------------ | :---- | :---- | :----------- | | Revenues | $96 | $0 | +$96 | | Research and development | $3,336| $2,671| +$665 | | General and administrative | $2,364| $1,890| +$474 | | Operating Expenses | $5,700| $4,561| +$1,139 | - The increase in R&D expenses for the three months ended September 30, 2020, was primarily due to higher employee compensation and clinical trial costs for MAT9001 and MAT2203[105](index=105&type=chunk) Comparison of Nine Months Ended September 30 (in thousands) | Metric | 2020 | 2019 | Change (YoY) | | :------------------------ | :----- | :----- | :----------- | | Revenues | $96 | $90 | +$6 | | Research and development | $10,834| $7,815 | +$3,019 | | General and administrative | $6,980 | $5,460 | +$1,520 | | Operating Expenses | $17,814| $13,275| +$4,539 | | Sale of net operating losses (NOLs) | $1,073 | $1,007 | +$66 | - The increase in general and administrative expenses for both periods was mainly due to higher compensation expense from increased employee headcount[106](index=106&type=chunk)[110](index=110&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20capital%20resources) This section details the company's cash position, funding sources, and future capital requirements for operations and development - Since inception, the Company has funded operations through private placements and public offerings, raising approximately **$150.9 million** in gross proceeds and **$138.4 million** net[112](index=112&type=chunk) - As of September 30, 2020, cash, cash equivalents, and marketable securities totaled **$62.8 million**, expected to fund operations into the **first half of 2023**[113](index=113&type=chunk)[122](index=122&type=chunk) Cash Flows (Nine Months Ended September 30, in thousands) | Activity | 2020 | 2019 | Change (YoY) | | :---------------------------------------- | :------ | :------ | :----------- | | Cash used in operating activities | $(13,060)| $(9,193) | $(3,867) | | Cash used in investing activities | $(49,756)| $(406) | $(49,350) | | Cash provided by financing activities | $47,497 | $29,842 | +$17,655 | | Net (decrease)/increase in cash, cash equivalents and restricted cash | $(15,319)| $20,243 | $(35,562) | - The increase in cash used in investing activities by **$49.4 million** was primarily due to the purchase and maturities of marketable securities in 2020[120](index=120&type=chunk) - The increase in cash provided by financing activities by **$17.7 million** was mainly due to **$46.6 million** net proceeds from the January 2020 public offering, compared to **$30.1 million** from the March 2019 offering, plus proceeds from warrant and option exercises[121](index=121&type=chunk) - Future funding requirements are expected to increase substantially for preclinical and clinical studies, regulatory approvals, manufacturing, intellectual property, and operational expansion[122](index=122&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section describes the company's limited market risk exposure, primarily from interest rate sensitivity on short-term, high-quality investments - The Company's market risk is limited to cash, cash equivalents, and marketable securities, all with maturities of **one year or less**[129](index=129&type=chunk) - Investment policy restricts investments to investment-grade credit ratings and U.S. government fixed income securities[129](index=129&type=chunk) - Primary market risk is interest income sensitivity; however, due to the short-term and high-quality nature of investments, a sudden change in interest rates is not expected to have a material impact[129](index=129&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20CONTROLS%20AND%20PROCEDURES) This section confirms the effectiveness of disclosure controls and the remediation of a previously identified material weakness in internal financial reporting controls - As of September 30, 2020, the Company's disclosure controls and procedures were evaluated and concluded to be **effective** at the reasonable assurance level[130](index=130&type=chunk) - A material weakness in internal controls over financial reporting, identified in the 2019 Form 10-K, was **remediated** as of June 30, 2020[132](index=132&type=chunk) - Remediation involved enhancing operational procedures for purchasing, receiving, and recording expenditures, and formalizing and testing review procedures[134](index=134&type=chunk) [PART II - OTHER INFORMATION](index=34&type=section&id=PART%20-%20II%20OTHER%20INFORMATION) This part contains additional information not covered in the financial statements, including legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20LEGAL%20PROCEEDSINGS) This section confirms that no legal proceedings were reported for the specified period - No legal proceedings were reported[137](index=137&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20RISK%20FACTORS) This section states no material changes to previously disclosed risk factors, advising investors to consider all risks from prior and current filings - No material changes to risk factors from the Annual Report on Form 10-K for the fiscal year ended December 31, 2019, were reported[138](index=138&type=chunk) - Investors are advised to carefully consider previously disclosed risk factors, as well as other information in this report and other SEC filings, as additional unknown or immaterial risks could still have a material adverse effect[138](index=138&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section reports no unregistered sales of equity securities or related use of proceeds during the period - No unregistered sales of equity securities or use of proceeds were reported[139](index=139&type=chunk) [Item 3. Defaults Under Senior Securities](index=34&type=section&id=Item%203.%20DEFAULTS%20UNDER%20SENIOR%20SECURITIES) This section confirms that no defaults under senior securities were reported for the period - No defaults under senior securities were reported[140](index=140&type=chunk) [Item 4. Mine Safety Disclosures](index=34&type=section&id=Item%204.%20MINE%20SAFETY%20DISCLOSURES) This section clarifies that mine safety disclosures are not applicable to the company's operations - Mine safety disclosures are not applicable[141](index=141&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20OTHER%20INFORMATION) This section indicates that no other material information was reported for the period - No other information was reported[142](index=142&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20EXHIBITS) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including certifications and XBRL documents - The exhibit index includes certifications from the CEO and CFO (pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), and 18 U.S.C. Section 1350) and various XBRL documents[149](index=149&type=chunk)

MAT9001 - Potential Best-in-Class Omega-3 Drug - MAT9001 aims to target the multi-billion dollar market for severe hypertriglyceridemia (SHTG) [8, 25] - Head-to-head data showed MAT9001's superiority in triglyceride lowering and EPA levels compared to Vascepa® [8] - Approximately 3.5 to 4 million adults in the United States have severe hypertriglyceridemia (SHTG, ≥500 mg/dL) [28] - The ENHANCE-IT study, a head-to-head comparison of MAT9001 vs Vascepa®, is fully enrolled as of August 2020, with top-line data expected in Q1 2021 [14] - MAT9001 demonstrated a median triglyceride reduction of -33% versus -32.5% for Vascepa® in a head-to-head study [36] MAT2203 - Oral Amphotericin B for Invasive Fungal Infections - The global invasive fungal infection market is valued at approximately $6 billion in 2018 [65] - Global Amphotericin B sales were approximately $800 million in 2018 [65] - EnACT study is a Phase 2 study in HIV patients with Cryptococcal Meningitis [9, 73] LNC Platform - Matinas' LNC Platform enables flexible, safe, targeted delivery of potent medicines [10, 79] - The company has feasibility evaluations with three Big Pharma companies across multiple compounds [10] - $50M+ equity financing in January 2020 extends cash runway to early 2023 [16]

Financial Data and Key Metrics Changes - The company reported a net loss attributable to common shareholders of approximately $5.8 million or $0.03 per basic and diluted share for Q2 2020, compared to a net loss of approximately $3.6 million or $0.03 per basic and diluted share for the same quarter in the previous year [49] - Research and Development expenses increased to approximately $3.4 million in Q2 2020 from approximately $2.8 million in the same quarter last year, primarily due to higher clinical development expenses related to MAT9001 and MAT2203 [50] - General and administrative expenses rose to approximately $2.4 million in Q2 2020 from approximately $1.8 million in the same quarter last year, mainly due to higher compensation expenses associated with planned increased headcount [51] - The company ended Q2 2020 with approximately $68 million in cash, cash equivalents, and marketable securities, compared to approximately $27.8 million at year-end 2019, reflecting net proceeds of approximately $46.7 million from a public offering completed in January [52] Business Line Data and Key Metrics Changes - The ENHANCE-IT study of MAT9001 is nearing completion of enrollment, with over 90 out of 100 patients randomized and dosed to date, expecting to complete enrollment in August and have top-line data available early in Q1 2021 [13][14] - The EnACT study of MAT2203 has resumed enrollment after a temporary pause due to the pandemic, with several patients already randomized and dosed in the first cohort [25] Market Data and Key Metrics Changes - The company noted that the approval of a second generic Vascepa could impact the market, but emphasized that if MAT9001 demonstrates superiority over placebo, it could still be successful despite generic competition [65][68] Company Strategy and Development Direction - The company aims to leverage its lipid nano-crystal (LNC) platform delivery technology to develop multiple therapies, emphasizing the potential of MAT2203 for treating invasive fungal infections and the importance of the EnACT study [17][20] - The company is also pursuing MAT2501, an oral formulation of amikacin, to address chronic bacterial infections, with an application for funding submitted to the Cystic Fibrosis Foundation [35][38] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for MAT9001 and MAT2203, highlighting the importance of upcoming data readouts and the company's strong financial position to support operations into the first half of 2023 [53][54] - The management acknowledged the challenges in antifungal drug development and the need for safer alternatives like MAT2203, emphasizing the company's commitment to addressing these challenges [58][61] Other Important Information - The company is maintaining progress across collaborations, particularly with Genentech, and is exploring the potential application of its LNC platform for COVID-19 therapies [42][48] Q&A Session Summary Question: Challenges in antifungal development - Management highlighted a lack of focus and investment in antifungal drug development, emphasizing the need for new therapies and the challenges of conducting studies in life-threatening infections [58][60] Question: Impact of generic Vascepa on MAT9001 - Management noted that while generic competition could affect pricing, demonstrating MAT9001's superiority could lead to its success in the market [65][68] Question: Clinical significance of ENHANCE-IT study - Management indicated that the ENHANCE-IT study is powered to show a clinically meaningful 10% delta in triglyceride reduction compared to Vascepa [72] Question: Timing of End-of-Phase 2 meeting - Management confirmed that the End-of-Phase 2 meeting with the FDA is expected to occur imminently within Q3 2020 [78] Question: Potential adjustments to pivotal study designs - Management acknowledged the possibility of adjusting study designs based on market conditions and FDA discussions, but emphasized confidence in the current path [86][89]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 For the transition period from to Commission File Number: 001-38022 MATINAS BIOPHARMA HOLDINGS, INC. (Exact name of registrant as specified in its charter) Delaware No. 46-3011414 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1545 Route 206 South, Suite 302 Bedminster, New Jersey 07921 (Address of principal executive offices) (Zip Code) FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTIO ...

| --- | --- | --- | |----------------------------------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Corporate Presentation June 2020 | | | Forward-Looking Statement MTNB This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including those relating to the Company's product development, clinical and regulatory timelines, market opportunity, cash flow and other statements that are predictive in ...

Matinas BioPharma Holdings, Inc. (NYSE:MTNB) Q1 2020 Earnings Conference Call May 11, 2020 4:30 PM ET Company Participants Peter Vozzo - Investor Relations Jerry Jabbour - Chief Executive Officer Terry Ferguson - Chief Medical Officer Terri Matkovits - Chief Development Officer Conference Call Participants Bert Hazlett - BTIG Ed Tenthoff - Piper Sandler Jason McCarthy - Maxim Group Greg Fraser - SunTrust Chad Messer - Needham & Company Operator Welcome to the Matinas BioPharma First Quarter 2020 Results Con ...