Matinas BioPharma(MTNB) - 2021 Q4 - Annual Report

Cautionary Note Regarding Forward-Looking Statements This section cautions that the Form 10-K contains forward-looking statements subject to risks and uncertainties that may cause actual results to differ materially Forward-Looking Statements Overview This overview emphasizes that forward-looking statements in the 10-K are subject to risks and uncertainties, cautioning investors against undue reliance - The report contains forward-looking statements subject to risks and uncertainties, which may cause actual results to differ materially from expectations[13][15] - Key factors that could cause actual results to differ include the ability to raise capital, timing of clinical trials and approvals, history of operating losses, dependence on early-stage product candidates and LNC platform, manufacturing capabilities, reliance on third parties, intellectual property protection, key personnel retention, and the impact of COVID-19[14] Item 1. Business Matinas BioPharma is a clinical-stage biopharmaceutical company focused on intracellular drug delivery using its proprietary Lipid Nanocrystal (LNC) platform, with a pipeline of anti-infective small molecules and plans to expand into nucleic acid delivery through collaborations Company Overview Matinas BioPharma is a clinical-stage biopharmaceutical company leveraging its LNC platform for anti-infective small molecules and expanding into nucleic acid delivery - Matinas BioPharma is a clinical-stage biopharmaceutical company utilizing its LNC delivery platform for nucleic acids and small molecules[17] - The LNC platform, exclusively licensed from Rutgers University, enables safe, efficient, and targeted intracellular delivery for various molecules (nucleic acids, proteins, small molecules) and has a neutral immunogenic profile, allowing repeated administration[18] - Current clinical pipeline includes MAT2203 (oral amphotericin B) and MAT2501 (oral amikacin), with plans to expand into nucleic acid delivery through internal efforts and external partnerships[17][29] Strategy The company's strategy focuses on leveraging its LNC platform to redefine intracellular delivery, advancing clinical assets, and expanding into nucleic acids through collaborations - Strategy focuses on redefining intracellular delivery using the LNC platform for small molecules and nucleic acids[31] - Feasibility collaboration with Genentech for oral formulations of proprietary compounds, extended through 2022[32] - Collaboration with NIAID to evaluate oral remdesivir formulations using LNC platform, with successful in vitro and in vivo studies[33] - Advancing MAT2203 towards NDA filing for cryptococcal meningitis via the EnACT study, demonstrating LNC's ability to cross the blood-brain barrier[32] - Progressing MAT2501 development for NTM infections with CFF financial support, including preclinical toxicology and a Phase 1 SAD study[33] Our Lipid Nanocrystal (LNC) Platform Delivery Technology The LNC platform offers a stable, non-immunogenic solution for oral and targeted intracellular delivery of various molecules, differentiating itself from traditional technologies by protecting payloads and enabling delivery to activated cells - LNCs are composed of phospholipids (like phosphatidylserine) and calcium, forming a stable, multilayered structure that protects encapsulated molecules from degradation[36][39] - LNCs offer flexible administration routes (oral, IV, intranasal) and can deliver a broad range of therapeutic agents, including small molecules, nucleic acids (ASOs, mRNA, siRNA, DNA plasmids up to 11kb), vaccines, peptides, and proteins[40][54] - LNCs enter cells via endocytosis and membrane fusion, utilizing phosphatidylserine (PS) on activated cell surfaces or PS receptors, enabling targeted delivery to phagocytes, infection sites, inflammation, and tumors without significant immune responses[18][41][42][46][51] Comparison of Drug Delivery Technologies | | Liposome | LNP | AAV Viral Vector | LNC | |---|---|---|---|---| | Structure | Aqueous interior surrounded by bilayer | Ionizable lipid complexing with mRNA; Non-aqueous interior | 26 nM Capsid housing <5 kb genome | Highly stable; Non-aqueous bilayer; Much longer shelf life | | Formulation Goal | Reduce Toxicity; Improve Bioavailability; Prolong half-life | Intracellular delivery (ASOs, siRNAs, mRNA); Mostly target liver | Control particle size; Minimize empty vectors | Encochleate water-soluble drugs; Further expand gene delivery; Significantly extend stability, shelf-life; Large and small molecules | | Potential Applications | Hydrophilic and Lipophilic drugs | mRNA, ASOs, siRNAs | Gene therapy | ASOs, mRNAs, siRNAs; Large nucleotides (up to 11 kB) | | Issues | Leakage of encapsulated drug; Fusion; Limited shelf life | Cationic lipid toxicity not suitable for chronic use; Anti-PEG allergic response; Very limited shelf stability; Cold-chain requirements | Very high production cost; Viral genome integration; Package size < 4k BP; Re-treatment problematic; Immunogenicity | Limited clinical experience to date | Our LNC Clinical Stage Assets Matinas BioPharma is developing two clinical-stage LNC-based product candidates: MAT2203 (oral amphotericin B) and MAT2501 (oral amikacin), with MAT2203 advancing towards NDA submission and MAT2501 in Phase 1 - MAT2203, an oral amphotericin B formulation, is the lead product candidate, with a pathway to NDA submission for cryptococcal meningitis following confirmatory data from the EnACT Trial's Cohort 5[55][56] - MAT2501, an oral amikacin formulation, is the second clinical-stage candidate, currently in a Phase 1 SAD pharmacokinetic study for non-tuberculous mycobacterial (NTM) infections, with significant financial support from the Cystic Fibrosis Foundation (CFF)[57] - MAT2203 has received Qualified Infectious Disease Product (QIDP) and Orphan Drug designations, potentially granting up to 12 years of market exclusivity[56] MAT2203 MAT2203 is an oral LNC formulation of amphotericin B, designed to reduce toxicity and enable oral delivery for invasive fungal infections, with clinical data showing safety and efficacy in cryptococcal meningitis - MAT2203 is an oral LNC formulation of amphotericin B, designed to overcome the severe nephrotoxicity and IV-only administration limitations of the traditional drug, offering targeted delivery to infected cells[59][61] - MAT2203 has received QIDP and Fast Track designations for various invasive fungal infections, including cryptococcosis, and Orphan Drug designation for cryptococcosis, potentially leading to 12 years of market exclusivity[60] - Clinical data from EnACT Cohort 2 demonstrated MAT2203's safety and efficacy in CM patients, with 98% survival at Day 30 (vs. 88% for IV amphotericin B) and 97% CSF culture conversion (vs. 76% for IV amphotericin B), without MAT2203-associated renal toxicity[71][73] - The FDA has requested additional confirmatory evidence for step-down therapy in CM, leading to an expansion of the EnACT trial to Cohort 5. A CMC meeting is scheduled for Q1 2022 to support a potential NDA submission in late 2023[74] MAT2203 - Product Profile MAT2203's product profile features oral amphotericin B, a broad-spectrum fungicidal agent, with its LNC formulation preventing drug leakage, reducing off-organ toxicities, and expanding the therapeutic window - MAT2203 is an oral LNC formulation of amphotericin B, a broad-spectrum fungicidal agent with minimal reported clinical resistance[61] - The LNC formulation prevents drug leakage, reducing off-organ toxicities (e.g., renal toxicity) and enabling a 10x higher tolerable oral dose in animal models compared to IV amphotericin B[64] - Preclinical studies in CM mouse models demonstrated MAT2203's ability to cross the blood-brain barrier, effectively treat infection, and eliminate IV amphotericin B's associated toxicity[63] Clinical Data MAT2203 has been safely administered to 247 subjects across five trials, demonstrating safety and efficacy in HIV-positive CM patients in the EnACT trial, with high survival and CSF sterilization rates - MAT2203 has been safely administered to 247 subjects in 5 clinical trials, with single doses up to 2.0g and repeated doses up to 2.0g/day for up to 60 months, showing no MAT2203-associated renal toxicity or electrolyte abnormalities[67][73] - In EnACT Part 2, Cohort 2, MAT2203 met its primary efficacy endpoint (Early Fungicidal Activity, EFA) with a mean EFA of 0.422 log10 CFU/mL/day. CSF sterilization rates exceeded 90%, and Day 30 survival was 98% (vs. 88% for IV amphotericin B)[71] - The EnACT trial is currently enrolling Cohort 4 (all-oral regimen) with results expected in Q3 2022, and a new Cohort 5 is planned to replicate Cohort 2's step-down design with more patients[24][25] Health Authority Interactions The FDA expressed no concerns with MAT2203 data but requested confirmatory evidence for step-down therapy, leading to a planned EnACT trial expansion and a Q1 2022 CMC meeting for NDA support - FDA expressed no concerns with MAT2203 efficacy, safety, or tolerability data, requesting additional confirmatory evidence for step-down therapy[74] - The company plans to expand the EnACT trial to include a new Cohort 5 in Uganda and will meet with the FDA in Q2 2022 to finalize its design and discuss a 30-day survival primary endpoint[74] - A key CMC meeting with FDA is scheduled for late Q1 2022 to support a potential NDA submission in late 2023, and the company is evaluating Breakthrough Designation and plans to engage with the EMA[74] Antifungal Market Opportunity The global antifungal market, valued at $11.9 billion in 2018 and projected to reach $13.9 billion by 2026, faces challenges from increasing drug resistance and high mortality rates for invasive fungal infections, creating a need for new therapies Global Antifungal Market Size | Year | Market Value (approx.) | |---|---| | 2018 | $11.9 billion | | 2026 (projected) | $13.9 billion | - The global invasive fungal infection market was valued at over $6 billion in 2018, with over 1.5 million annual cases globally (Candida, Aspergillus, Cryptococcus)[75] - High mortality rates (20-50%) and increasing drug resistance (e.g., fluconazole-resistant Candida, Candida auris) underscore the urgent need for new, safer antifungal agents[75][77] MAT2501 MAT2501 is an oral LNC formulation of amikacin, developed to treat multidrug-resistant bacterial infections like NTM lung disease, aiming for targeted lung delivery while reducing systemic toxicities - MAT2501 is an oral LNC formulation of amikacin, targeting multidrug-resistant bacterial infections, especially NTM lung disease in CF patients[78] - The LNC platform aims to deliver high levels of amikacin to the lung, avoiding the severe nephrotoxicity and ototoxicity of IV/inhaled amikacin[78] - MAT2501 has received Qualified Infectious Disease Product (QIDP) and Orphan Drug designations for NTM from the FDA[78] MAT2501 Previous and Ongoing Studies Preclinical studies, funded by the CFF, demonstrated MAT2501's efficacy against NTM strains in a CF mouse model, with ongoing toxicology and a Phase 1 SAD study expected to yield topline data in Q2 2022 - Preclinical studies, funded by the CFF, showed MAT2501 efficacy against amikacin-sensitive and resistant NTM strains in a CF mouse model[82] - The CFF has committed approximately $4.6 million to support MAT2501's early development through Phase 1, including preclinical toxicology and a SAD study[28][57][82] - Key acute and long-term toxicology studies are ongoing to support Phase 2 trials, alongside a SAD trial in healthy volunteers, with topline data anticipated in Q2 2022[57][83] NTM Treatment Guidelines and Limitations of Current Treatments NTM lung disease is a chronic condition with increasing prevalence, requiring toxic, lengthy combination therapies with poor adherence and cure rates, highlighting a significant unmet need for safer agents - NTM lung disease is a chronic, debilitating condition with increasing prevalence (over 8% annually), affecting 75,000-100,000 patients in the US alone in 2018[79] - Current NTM treatments involve highly toxic combination therapies for prolonged periods, with significant side effects (nephrotoxicity, ototoxicity from IV amikacin) leading to poor adherence and low cure rates (25-40% for macrolide resistance)[80][81][85] - MAT2501, as a safer and more targeted oral amikacin formulation, has the potential to address the significant unmet clinical need for improved NTM lung disease management[85] LYPDISO LYPDISO is a prescription-only omega-3 fatty acid composition for cardiovascular and metabolic conditions, demonstrating superior triglyceride-lowering and EPA blood levels compared to Vascepa, with the company seeking a development partner - LYPDISO is a prescription-only omega-3 fatty acid-based composition for cardiovascular and metabolic conditions[86] - It has demonstrated effective triglyceride-lowering and significantly higher EPA blood levels compared to Vascepa in two head-to-head studies[86] - The company is actively seeking a partner to continue the development of LYPDISO[86] Strategic Collaborations Using LNC Platform Delivery Technology Matinas BioPharma is pursuing strategic collaborations to broaden the LNC platform's application, reformulating molecules to improve delivery, reduce toxicity, and enable oral administration, with promising results from Genentech and NIAID partnerships - The LNC platform is being leveraged for strategic collaborations to reformulate molecules, improve delivery, reduce toxicity, and enable oral administration[88] - Feasibility collaboration with Genentech (extended through 2022) successfully formulated two proprietary compounds (small molecules and oligonucleotides) with intracellular delivery and no toxicity[89] - Collaboration with NIAID to develop oral remdesivir (LNC-RDV) showed successful in vitro and in vivo studies, reducing viral titers and improving clinical parameters in a SARS-CoV-2 mouse model, similar to subcutaneous remdesivir[90] - The company aims to license its LNC platform to strategic partners, generating upfront, license, milestone, and royalty payments[91] Exclusive License Agreement with Rutgers University Matinas BioPharma holds an exclusive worldwide license from Rutgers University for its LNC platform, involving tiered royalties, a sales milestone, an annual fee, and a recent issuance of 400,000 common shares for concessions - Matinas BioPharma holds an exclusive worldwide license from Rutgers University for the LNC platform delivery technology[18][92] - Royalty payments: Tiered basis between low single digits and mid-single digits of net sales[92] - Sales milestone fee: $100,000 when sales reach a specified threshold[92] - Annual license fee: $50,000[92] - Consideration: 400,000 shares of common stock issued to Rutgers in February 2022 for concessions in the license agreement[92] - The license term is the longer of 8.5 years from the first commercial sale or until the expiration of the last-to-expire licensed patent rights (expected until at least 2033). Rutgers can terminate if commercial sales don't commence within eight years[94][96] Intellectual Property Matinas BioPharma protects its product candidates and technologies through patents, trade secrets, FDA exclusivity, and contractual restrictions, including licensed patents for LNC/MAT2203 and owned patents for LNC applications and LYPDISO - The company protects its intellectual property through patents, trade secrets, proprietary know-how, FDA exclusivity, and confidentiality agreements[95][100] Exclusively Licensed and Matinas-Owned Intellectual Property Relating to Our Proprietary LNC Platform Delivery Technology and MAT2203 The company exclusively licenses 30 issued U.S. and foreign patents for its LNC platform and MAT2203 from Rutgers (until 2033) and owns over 30 pending applications for broad LNC applications (until 2040) - The company exclusively licenses 30 issued U.S. and foreign patents and 2 pending applications from Rutgers University for its LNC platform and MAT2203, with protection extending until at least 2033[96] - Matinas owns over 30 pending patent applications in the U.S. and internationally, covering broad LNC technology applications (e.g., amphotericin B LNCs, nucleic acid delivery, mycobacterial/cryptococcus treatments), with potential protection through 2040[96] Matinas-Owned Intellectual Property Relating to LYPDISO Matinas BioPharma owns two issued U.S. patents and one Australian patent for LYPDISO, covering methods related to omega-3 fatty acids for cardiovascular conditions, with protection through 2033, plus eight pending applications - The company holds two issued U.S. patents and one issued foreign patent (Australia) for LYPDISO, covering methods related to triglyceride levels, cholesterol, and apolipoprotein C-III using omega-3 fatty acids (EPA and DPA), with protection through 2033[98] - Eight additional patent applications cover LYPDISO's oil composition, other omega-3 fatty acid compositions, and formulations, with potential protection extending until at least 2033[98] Competition Matinas BioPharma operates in a highly competitive biotechnology and pharmaceutical industry, facing numerous competitors with greater resources and more advanced product candidates for both MAT2203 (antifungals) and MAT2501 (aminoglycosides for NTM) - The biotechnology and pharmaceutical industries are highly competitive, with many competitors possessing greater financial and human resources, and more advanced product candidates[102] - MAT2203 competes with approved antifungal classes (polyenes, azoles, echinocandins), including branded therapies like Cancidas, Eraxis, Mycamine, Diflucan, Noxafil, Vfend, Sporanox, Cresemba, Ambisome, Abelcet, and generic amphotericin B deoxycholate, as well as pipeline candidates[106] - MAT2501 competes with aminoglycosides for NTM lung infections, including Arikayce® (inhaled amikacin) and IV amikacin (Amikin), along with generic IV amikacin manufacturers[107] Manufacturing Matinas BioPharma conducts in-house manufacturing for clinical supplies of its LNC programs but is exploring third-party contract manufacturers for NDA support and commercial production, while relying on external suppliers for active pharmaceutical ingredients - The company has in-house manufacturing capabilities for clinical supplies of MAT2203, MAT2501, and LNC platform discovery programs[108] - Matinas is exploring third-party contract manufacturers for MAT2203 to support NDA filing and commercial production, and may expand internal capabilities[108] - The company relies on third-party suppliers for active pharmaceutical ingredients (amphotericin B and amikacin) and expects to enter into long-term supply arrangements[109] Sales and Marketing The company currently lacks a sales and marketing infrastructure, planning to retain U.S. rights for specialized sales forces and commercialize through collaborative arrangements for broader and international markets - The company currently lacks a sales and marketing infrastructure[110] - Plans include retaining U.S. marketing/sales rights or co-promotion rights for products accessible via a specialized sales force[110] - For large markets and international territories, the strategy is to commercialize through collaborative arrangements with pharmaceutical and biotechnology partners[110] Review and Approval of Drugs in the United States The FDA regulates U.S. drug approval, requiring extensive nonclinical and clinical studies, NDA submission, and post-approval requirements, with expedited pathways available for serious conditions with unmet needs - FDA regulates drug approval under the FDCA, requiring extensive nonclinical studies (cGLP) and human clinical trials (cGCP) in three phases (Phase 1, 2, 3) to establish safety and efficacy[111][113][119][120][121] - The approval process involves NDA submission, FDA review (including pre-approval inspections for cGMP compliance), potential advisory committee review, and payment of user fees[115][124][126][127] - Expedited programs (Fast Track, Breakthrough Therapy, Priority Review) and Accelerated Approval pathways exist for drugs addressing serious or life-threatening conditions with unmet medical needs, potentially shortening development or review times, but do not guarantee approval[128][129][130][132][134] Nonclinical Studies Nonclinical studies involve laboratory and animal testing under cGLP to assess drug purity, stability, safety, and activity, supporting IND applications and requiring long-term testing and cGMP manufacturing development - Nonclinical studies involve laboratory and animal testing under cGLP regulations to assess drug purity, stability, safety, and activity for initial human testing[113] - Results from nonclinical tests, manufacturing information, and clinical plans are submitted to the FDA as part of an IND application[113] - Additional requirements include long-term nonclinical testing (e.g., reproductive AEs, carcinogenicity) and developing cGMP-compliant manufacturing processes for commercial quantities[114] Human Clinical Trials in Support of a Regulatory Approval Human clinical trials involve administering investigational products to subjects under GCP, progressing through Phase 1 (safety), Phase 2 (preliminary efficacy), and Phase 3 (pivotal efficacy/safety) studies, all requiring FDA and IRB approval - Clinical trials involve administering investigational products to human subjects under GCP requirements, with informed consent[116] - Trials are typically conducted in three phases: Phase 1 (safety, dosage tolerance), Phase 2 (adverse effects, preliminary efficacy), and Phase 3 (pivotal studies for efficacy, safety, risk-benefit in expanded populations)[119][120][121] - Protocols and amendments must be submitted to the FDA as part of the IND, and IRBs must review and approve each clinical trial[116][117] Submission of an NDA to FDA NDA submission requires successful nonclinical and clinical trials, manufacturing details, and proposed labeling, undergoing FDA review, pre-approval inspections, and potential advisory committee input, subject to user fees - NDA submission requires successful completion of nonclinical and clinical trials, detailed chemistry, manufacturing, controls, and proposed labeling, along with application user fees[124] - FDA conducts a preliminary review (60 days) and an in-depth substantive review (typically 10 months, 6 months for priority review), which can be extended[125] - Pre-approval inspections of manufacturing facilities (cGMP compliance) and clinical sites (GCP compliance) are mandatory, and novel drugs are typically referred to an FDA advisory committee[126][127] Fast Track, Breakthrough Therapy and Priority Review Designations The FDA offers expedited review programs like Fast Track, Breakthrough Therapy, and Priority Review for serious conditions with unmet needs, aiming to accelerate development and review times for qualifying products - Fast Track designation is for serious/life-threatening conditions with unmet medical needs, allowing greater FDA interaction and rolling review[129] - Breakthrough Therapy designation is for drugs showing substantial improvement over existing therapies, providing intensive FDA guidance and potentially accelerated approval[130] - Priority Review designation is for drugs offering significant safety or effectiveness improvements, aiming for a six-month review target, and Priority Review Vouchers can accelerate review by up to four months for tropical disease products[132][133] Accelerated Approval Pathway The Accelerated Approval pathway allows early approval for serious conditions based on surrogate endpoints, requiring post-approval confirmatory studies and prior FDA review of promotional materials, with potential for market withdrawal if benefits are not verified - Accelerated approval is granted for serious/life-threatening conditions with meaningful therapeutic advantage, based on surrogate or intermediate clinical endpoints that predict clinical benefit[134][135] - This pathway is contingent on the sponsor's agreement to conduct post-approval confirmatory studies (Phase 4) to verify clinical benefit[136] - Failure to conduct required studies or confirm clinical benefit can lead to expedited market withdrawal, and all promotional materials are subject to prior FDA review[136] FDA's Decision on an NDA Following NDA evaluation, the FDA issues either an approval letter or a complete response letter, with approvals potentially including limitations, warnings, post-approval studies, or REMS, impacting market potential and profitability - FDA issues an approval letter for commercial marketing or a complete response letter for deficiencies[138] - Approval may include limitations on indications, warnings, post-approval studies (Phase 4), surveillance programs, or a Risk Evaluation and Mitigation Strategy (REMS)[139] - REMS can involve medication guides, communication plans, or elements to assure safe use (e.g., special training, restricted distribution, patient registries), materially affecting market and profitability[139] Post-Approval Requirements Approved drugs are subject to continuous FDA regulation covering manufacturing, labeling, distribution, advertising, and adverse event reporting, with strict prohibitions on off-label promotion and severe penalties for non-compliance - Approved drugs are subject to pervasive and continuing FDA regulation covering manufacturing, labeling, distribution, advertising, and adverse event reporting[141] - Manufacturers must register with FDA and state agencies, comply with cGMP requirements, and undergo periodic inspections[142] - Failure to comply can result in sanctions such as product withdrawal, fines, injunctions, refusal of approvals, and criminal penalties. Off-label promotion is strictly prohibited and can lead to significant liability[144][145] Abbreviated New Drug Applications (ANDA) for Generic Drugs The Hatch-Waxman Amendments enable generic drug approval via ANDAs, allowing reliance on RLD data if the generic is bioequivalent and identical, with approval withheld until non-patent exclusivity periods expire - ANDAs allow generic drug approval by relying on nonclinical and clinical data from a Reference Listed Drug (RLD)[147] - Generic drugs must be identical to the RLD in active ingredients, route, dosage form, strength, and bioequivalent[148] - ANDA approval is subject to the expiration of non-patent exclusivity periods for the RLD (five years for new chemical entities, three years for new clinical investigations)[150] Hatch-Waxman Patent Certification and the 30 Month Stay NDA sponsors list patents in the Orange Book, and ANDA applicants' Paragraph IV certifications can trigger patent infringement lawsuits, imposing an automatic 30-month stay on ANDA approval - NDA sponsors must list patents covering their product in the Orange Book[152] - ANDA applicants must certify against these listed patents, including a Paragraph IV certification if they claim non-infringement or invalidity[152][153] - A Paragraph IV certification can lead to a patent infringement lawsuit, imposing an automatic 30-month stay on ANDA approval[154] Pediatric Studies and Exclusivity The Pediatric Research Equity Act requires pediatric safety and effectiveness data in NDAs, with potential for deferrals or waivers, and pediatric exclusivity adding six months of marketing protection for accepted data - NDAs must include pediatric safety and effectiveness data, with sponsors submitting pediatric study plans[155] - The FDA can grant deferrals or waivers for pediatric data requirements[156] - Pediatric exclusivity adds six months of marketing protection to existing regulatory exclusivity if pediatric data, responding to an FDA request, is submitted and accepted[157] Orphan Designation and Exclusivity Orphan drug designation is for rare diseases, granting seven years of market exclusivity upon FDA approval for that indication, preventing competitor approval with limited exceptions, but does not expedite review - Orphan drug designation is for products treating rare diseases (fewer than 200,000 U.S. individuals)[159] - Designation does not expedite regulatory review but grants seven years of market exclusivity upon first FDA approval for the designated indication[159][160] - Exclusivity can be lost if the designation was defective, supply is insufficient, or a later drug is proven clinically superior[160] 21st Century Cures Act The 21st Century Cures Act modernizes healthcare, streamlines drug development, reauthorizes pediatric priority review vouchers, creates new voucher programs, and establishes a 'Limited Population Pathway' for antimicrobial products - The 21st Century Cures Act aims to modernize healthcare, spur innovation, and streamline drug development through increased federal funding for NIH and FDA[161] - It reauthorizes the rare pediatric disease priority review voucher program, creates a new voucher program for national security threat medical countermeasures, and streamlines combination product review[162] - Section 3042 establishes a 'Limited Population Pathway' for antimicrobial products treating serious infections with unmet needs, requiring special 'Limited Population' labeling[163] Other Health Care Regulations The company is subject to health privacy laws (HIPAA, GDPR), fraud and abuse laws (anti-kickback, false claims), and the Affordable Care Act, with non-compliance carrying significant penalties and impacting business operations - The company is subject to U.S. federal and state health privacy laws (e.g., HIPAA, state data breach laws) and EU regulations (GDPR) governing personal and health information, with non-compliance risking enforcement actions, litigation, and penalties[165][166] - Fraud and abuse laws, including the federal anti-kickback statute and false claims laws, restrict marketing practices and prohibit remuneration to induce healthcare purchases, with violations punishable by imprisonment, fines, and exclusion from federal programs[167][168] - The Affordable Care Act (ACA) imposes health insurance requirements, provides subsidies, and affects reimbursement, with ongoing uncertainty regarding its implementation, amendments, or repeal potentially impacting the business[170][171] Health Privacy Laws The company is subject to U.S. (HIPAA, HITECH) and EU (GDPR) health privacy laws, regulating the collection, use, and protection of health information, with non-compliance risking significant penalties and litigation - U.S. laws like HIPAA and HITECH govern the collection, use, disclosure, and protection of health-related personal information, requiring patient authorizations for PHI disclosure[165] - The EU's GDPR establishes a regulatory framework for personal data, including consent, notifications, security, and data breach reporting, with potential for regulatory sanctions and civil fines for non-compliance[166] Fraud and Abuse Laws Federal and state fraud and abuse laws, including the anti-kickback statute and false claims laws, restrict pharmaceutical marketing practices and prohibit inducements, with violations leading to severe civil and criminal penalties - The federal anti-kickback statute prohibits offering/receiving remuneration to induce purchases of healthcare items reimbursable by federal programs, with violations punishable by imprisonment, fines, and exclusion[167] - Federal false claims laws prohibit presenting false claims or making false statements for federal government payment, leading to prosecutions for inflated drug prices and off-label promotion[168] - Many states have similar anti-kickback and false claims laws, applying to state programs or regardless of payor[168] Affordable Care Act The ACA reformed healthcare financing, imposing insurance requirements, providing subsidies, and strengthening false claims laws, with ongoing uncertainty regarding its future potentially impacting the company's business and financial condition - The ACA imposes individual and employer health insurance requirements, provides subsidies, mandates insurance market reforms, and expands Medicaid[170] - Amendments to the Federal False Claims Act under the ACA facilitate 'qui tam' (whistleblower) lawsuits[170] - Continued uncertainty regarding the ACA's implementation, potential amendments, or repeal could materially adversely impact the company's business and financial results[171] Designation of and Exclusivity for Qualified Infectious Disease Products The GAIN Act grants an additional five years of marketing exclusivity for QIDPs (antibacterial/antifungal drugs for serious infections), along with priority review and Fast Track status, but with specific limitations - The GAIN Act grants an additional five years of marketing exclusivity for Qualified Infectious Disease Products (QIDPs)[172] - A QIDP is an antibacterial or antifungal drug for human use intended to treat serious or life-threatening infections caused by resistant or qualifying pathogens[173] - QIDP designation also provides priority review and Fast Track status, but the five-year exclusivity extension has specific limitations, such as not applying to certain supplements or product changes[173][174] Patent Term Restoration and Extension The Hatch-Waxman Act allows a limited patent term extension of up to five years to compensate for time lost during product development and FDA review, capped at 14 years from approval, with only one patent eligible per product - The Hatch-Waxman Act permits a patent term restoration of up to five years for time lost during product development and FDA regulatory review[176] - The restoration period is calculated as half the time between IND effective date and NDA submission, plus the time between NDA submission and approval, with a maximum of 14 years from product approval[176] - Only one patent applicable to an approved drug product is eligible for this extension[176] Review and Approval of Drug Products in the European Union Marketing products in the EU requires compliance with diverse regulatory requirements, including clinical trial approval and marketing authorization via centralized (EU-wide) or decentralized (mutual recognition) procedures, with specific evaluation timeframes - Marketing products in the EU requires compliance with diverse regulatory requirements, including clinical trial approval from national authorities and ethics committees[177][178] - Marketing authorization can be obtained through a centralized procedure (single EU-wide authorization, compulsory for certain products) or a decentralized procedure (mutual recognition among member states)[179][180][183] - The centralized procedure's maximum evaluation timeframe is 210 days, with accelerated evaluation possible within 150 days for products of major public health interest[181] Pharmaceutical Coverage, Pricing and Reimbursement Uncertainty surrounds coverage and reimbursement by third-party payors, with governments implementing cost-containment measures and EU countries having varied pricing and reimbursement policies, creating high barriers for new products - Coverage and reimbursement for approved products by third-party payors (Medicare, Medicaid, commercial insurers) are uncertain, with payors potentially limiting coverage to specific formularies[185] - Governments are implementing cost-containment programs, including price controls and generic substitution, which could limit net revenue[185] - In the EU, pricing and reimbursement vary by country, with some requiring price agreements or controlling profitability, leading to downward pressure on healthcare costs and high barriers for new products[187] Healthcare Law and Regulation The company's interactions with healthcare providers and payors are subject to federal and state fraud and abuse laws (anti-kickback, False Claims Act, HIPAA) and ACA transparency requirements, with non-compliance risking severe penalties - Arrangements with healthcare providers and payors are subject to federal and state fraud and abuse laws[189] - Federal healthcare anti-kickback statute prohibits remuneration to induce referrals or purchases under federal programs[193] - Federal False Claims Act imposes civil penalties for false or fraudulent claims to the government[193] - HIPAA and HITECH impose obligations for safeguarding individually identifiable health information[193] - ACA requires reporting of payments and transfers of value to physicians and teaching hospitals[193] - Violations can lead to civil penalties, criminal prosecution, and exclusion from federal healthcare programs[193] Human Capital Resources Matinas BioPharma had 31 full-time employees as of February 25, 2022, with no collective bargaining agreements, emphasizing attracting and retaining key personnel and prioritizing employee health and safety, especially during COVID-19 - As of February 25, 2022, the company had 31 full-time employees and no collective bargaining agreements[190] - Success depends on attracting, developing, and retaining key personnel, whose skills and experience are vital[190] - Employee health and safety is a core value, with actions taken to protect the workforce during the COVID-19 pandemic[191] Research and Development Research and development expenses were approximately $14.6 million in 2021 and $14.4 million in 2020, covering clinical and preclinical programs for MAT2203 and MAT2501, with some costs offset by CFF reimbursements Research and Development Expenses | Year | R&D Expenses (approx.) | |---|---| | 2021 | $14.6 million | | 2020 | $14.4 million | - R&D expenses include cash and non-cash costs for clinical and preclinical programs (MAT2203, MAT2501) and LNC platform development[194] - Reimbursements from the CFF grant for MAT2501 were approximately $2.2 million in 2021 and $0.1 million in 2020[194] Corporate and Available Information Matinas BioPharma Holdings, Inc., incorporated in Delaware in 2013, provides its SEC filings (10-K, 10-Q, 8-K) free of charge on its website and through the SEC's website - Matinas BioPharma Holdings, Inc. was incorporated in Delaware in May 2013, with two operating subsidiaries[195] - The company's principal executive offices are located at 1545 Route 206 South, Suite 302, Bedminster, New Jersey 07921[196] - SEC filings (10-K, 10-Q, 8-K) are available free of charge on the company's website (www.matinasbiopharma.com) and the SEC's website (www.sec.gov)[197](index=197&type=chunk) Item 1A. Risk Factors This section outlines key risks including significant operating losses, need for additional funding, uncertainties in regulatory approval and clinical trials, reliance on third parties, intellectual property protection challenges, competition, and impacts of healthcare law changes Summary of Risk Factors This summary highlights key risks such as operating losses, funding needs, early development stage uncertainties, regulatory approval challenges, reliance on third parties, IP protection difficulties, competition, and healthcare law impacts - Significant operating losses since inception and expectation of continued losses, with no assurance of profitability[200][201] - Need for substantial additional funding, which may cause dilution or require relinquishing rights[200][201] - Early stage of development makes future viability difficult to assess, with potential for unforeseen expenses and delays[200][201] - Uncertainty of regulatory approval for product candidates, lengthy and expensive clinical development process, and risks of negative or inconclusive trial results[200][201] - Dependence on licensed technologies, third parties for clinical trials and manufacturing, and challenges in commercialization[200][201] - Difficulties in protecting intellectual property rights and potential for infringement claims[200][201] - Intense competition from other biotechnology and pharmaceutical companies[200][201] - Impact of future legislation, healthcare reform, and communicable diseases (e.g., COVID-19) on business and financial results[200][201] Risks Related to Our Financial Position and Need for Additional Capital Matinas BioPharma has incurred significant operating losses and an accumulated deficit, requiring substantial additional funding to advance product candidates, with failure to raise capital risking delays or termination of development programs and potential stockholder dilution Net Loss and Accumulated Deficit | Metric | 2021 | 2020 | |---|---|---| | Net Loss | $23.3 million | $22.4 million | | Accumulated Deficit (as of Dec 31) | $131.6 million | N/A | - The company expects to incur significant expenses and operating losses for the foreseeable future, requiring substantial additional funding[202][208] - Raising additional capital through equity sales will dilute ownership, while debt financing may impose restrictive covenants. Failure to secure funding could delay or eliminate product development and commercialization efforts[212][213] - As of December 31, 2021, the company had approximately $49.9 million in cash, cash equivalents, and marketable securities, estimated to fund operations through 2023[209] Risks Related to Product Development, Regulatory Approval, Manufacturing and Commercialization Product development is lengthy and uncertain, with risks of delayed or denied regulatory approval, negative clinical trial results, reliance on third parties for manufacturing, and challenges in commercialization, all exacerbated by communicable diseases and economic conditions - Product development is a time-consuming, expensive, and uncertain process; success depends on completing preclinical/clinical studies, demonstrating safety/efficacy, obtaining regulatory approvals, establishing manufacturing, and commercializing products[219][221][232] - Clinical trials face risks of negative/inconclusive results, delays, serious side effects, and patient enrollment challenges, which could prevent or delay regulatory approval and commercialization[234][236][238] - The company relies heavily on third-party CROs and manufacturers for clinical trials and product supply, exposing it to risks of non-performance, non-compliance with cGMP/cGCP, and supply interruptions[229][286][289][290] - Commercial success is uncertain, depending on market acceptance, pricing, reimbursement, and the ability to establish effective sales and marketing capabilities, which the company currently lacks[249][252][254] - Outbreaks of communicable diseases (e.g., COVID-19) and adverse global economic conditions can materially and adversely affect business, financial condition, and results of operations[295][296] Risks Relating to Our Intellectual Property Rights and Regulatory Exclusivity The company's success depends on protecting its intellectual property, facing risks of license loss, patent challenges, trade secret breaches, and potential infringement claims, all of which could severely impair business operations - The company relies exclusively on its LNC platform delivery technology licensed from Rutgers; loss of these rights or defects in the technology would materially impair the business[297] - Protecting intellectual property is difficult and costly; patents may not be granted, or existing patents (owned or licensed) may be challenged, invalidated, or circumvented by third parties[301] - Reliance on trade secrets is risky due to difficulties in protection and potential for independent discovery or breaches of confidentiality[303] - Product candidates may infringe third-party intellectual property rights, leading to costly litigation, development delays, or the need for royalty/licensing agreements on unfavorable terms[306][307] General Company-Related Risks Matinas BioPharma faces challenges in expanding its organization and retaining key personnel, substantial product liability risks, and vulnerabilities in computer systems to failures or security breaches, all impacting operations and reputation - The company needs to increase its organizational size (currently 31 employees) to manage growth, which requires attracting and retaining highly qualified managerial, scientific, and medical personnel[310][311][313] - Loss of key employees, including the CEO, CDO, and CTO, would adversely impact business prospects[311] - The company faces substantial product liability risk from clinical testing and commercialization, potentially leading to significant liabilities, decreased demand, and reputational harm, which may not be fully covered by insurance[314][315][316] - Internal computer systems and those of CROs/contractors are vulnerable to failures or security breaches, risking data loss, program disruptions, and competitive harm, despite security measures[317] Risks related to our Securities Risks include significant royalty obligations to preferred stockholders, potential dilution from future equity issuances, no common stock dividends, volatile market price, anti-takeover provisions, limited judicial forum choice, and potential limitations on NOL carryforwards - Holders of Series A Preferred Stock are entitled to royalties of up to $35 million per year (4.5% of Net Sales, capped at $25M; 7.5% of Licensing Proceeds, capped at $10M) upon commercialization or licensing of MAT2203/MAT2501, expiring in 2033[320] - The board can issue new preferred stock without stockholder approval, potentially diluting common stock voting power and equity interest[321][328] - The company does not intend to pay dividends on common stock in the foreseeable future[322] - The common stock's market price has been and could remain volatile due to development progress, regulatory impacts, sales of large volumes of stock, and general market conditions[324] - Anti-takeover provisions in corporate documents and Delaware law could make acquisitions more difficult and limit stockholders' ability to replace management[330][331] - The company's ability to use net operating loss carryforwards and other tax attributes may be limited by ownership changes under Sections 382 and 383 of the Internal Revenue Code[334] Item 2. Properties Matinas BioPharma leases administrative office space in Bedminster, NJ, and laboratory space in Bridgewater, NJ, with leases expiring in August 2028 and July 2027, respectively - The company leases 8,900 square feet of administrative offices in Bedminster, NJ, with a lease expiring in August 2028[335] - The company leases 14,000 square feet of laboratory space in Bridgewater, NJ, with a lease expiring in July 2027[335] Item 3. Legal Proceedings Matinas BioPharma is not currently involved in any legal proceedings and is unaware of any pending or threatened claims, though future litigation may arise in the ordinary course of business - The company is not currently a party to any legal proceedings and is unaware of any pending or threatened claims[336] - The company may become involved in litigation in the future arising from its ordinary course of business[336] Item 4. Mine Safety Disclosures This item is not applicable to Matinas BioPharma Holdings, Inc. PART II This section covers market information for common equity, selected financial data, management's discussion and analysis of financial condition, market risk disclosures, financial statements, and controls and procedures Item 5. Market For Registrant's Common Equity, Related Stockholder Matters And Issuer Purchases Of Equity Securities Matinas BioPharma's common stock trades on NYSE American under 'MTNB,' with 107 record holders as of February 25, 2022, no cash dividends paid or anticipated, and recent unregistered securities sales for agreements - Common stock is quoted on the NYSE American under the symbol "MTNB"[337] - As of February 25, 2022, there were approximately 107 record holders, and the closing sale price was $0.60 per share[338] - The company has never paid cash dividends and does not anticipate doing so in the foreseeable future, prioritizing funds for business development[339] - February 8, 2022: 400,000 shares issued to Rutgers as partial consideration for the Second Amended and Restated Exclusive License Agreement[340] - September 3, 2021: 1,500,000 shares issued to Aquarius Biotechnologies Inc. holders as partial consideration for an amendment to the Aquarius Merger Agreement, in place of certain milestone payments[341] - No repurchases of equity securities were made during the reporting period[342] Item 6. Selected Financial Data This item is reserved and contains no information Item 7. Management's Discussion And Analysis Of Financial Condition And Results Of Operations This section analyzes Matinas BioPharma's financial condition and operating results, detailing significant losses, minimal revenue, R&D expenses, liquidity, and the critical need for additional financing to support its LNC platform and product development - The company focuses on redefining intracellular delivery using its LNC drug delivery platform for small molecules, nucleic acids, gene therapies, proteins/peptides, and vaccines[345] Net Loss and Accumulated Deficit | Metric | 2021 | 2020 | |---|---|---| | Net Loss | $23.3 million | $22.4 million | | Accumulated Deficit (as of Dec 31, 2021) | $131.6 million | N/A | - The company expects to incur significant expenses and operating losses for the foreseeable future, requiring additional financing to support continuing operations[346][373] - As of December 31, 2021, cash, cash equivalents, and marketable securities totaled $49.6 million, expected to fund operations through 2023[365][516] Overview Matinas BioPharma is a clinical-stage biopharmaceutical company focused on its LNC platform, advancing clinical assets and expanding into nucleic acids, while incurring significant losses and requiring additional financing - The company is a clinical-stage biopharmaceutical company focused on redefining intracellular delivery via its LNC drug delivery platform[345] - Advancing clinical stage assets (MAT2203, MAT2501) and expanding LNC platform into nucleic acids[348] - Advancing MAT2203 toward NDA filing for cryptococcal meningitis[348] - Progressing MAT2501 development for NTM infections with CFF support[348] - The company has incurred net losses since inception ($23.3M in 2021, $22.4M in 2020) and expects continued losses, necessitating additional financing[346] Financial Operations Overview The company's financial operations show minimal contract research revenue, anticipated increases in R&D expenses offset by CFF reimbursements, consistent G&A expenses, and income from selling New Jersey NOLs - Revenue is minimal, primarily from contract research (Genentech feasibility study and CFF grant), with significant product revenue not expected for many years[347] - R&D expenses are expected to increase as product candidates advance, with some MAT2501 program expenses reimbursed by the CFF[350] - General and administrative expenses are expected to remain relatively consistent[352] - Income from selling New Jersey net operating losses (NOLs) was approximately $1.3 million in 2021 and $1.1 million in 2020[353] Research and Development Expenses R&D expenses increased slightly to $14.6 million in 2021, driven by Aquarius Merger Agreement expenses, product development, and compensation, partially offset by decreased clinical trial expenses due to CFF reimbursements Direct Research and Development Expenses (in thousands) | Category | 2021 | 2020 | |---|---|---| | Manufacturing process development | $2,724 | $1,421 | | Preclinical trials | $401 | $744 | | Clinical development | $2,261 | $5,149 | | Regulatory | $339 | $95 | | Internal staffing, overhead and other | $8,858 | $6,950 | | Total R&D | $14,583 | $14,359 | - The $0.2 million increase in R&D expenses from 2020 to 2021 was driven by a $1.2 million expense for the Aquarius Merger Agreement, a $1.1 million increase in product development, and a $0.9 million increase in compensation[361] - This increase was partially offset by a $3.0 million decrease in clinical trial expenses, primarily due to $2.2 million in CFF reimbursements for MAT2501 and an $0.8 million decrease in other clinical trial expenses[361] General and Administrative Expenses General and administrative expenses increased slightly to $10.2 million in 2021 due to higher compensation and insurance costs, partially offset by lower professional fees, and are expected to remain consistent in 2022 General and Administrative Expenses | Year | Amount (approx.) | |---|---| | 2021 | $10.2 million | | 2020 | $10.0 million | - The increase was primarily due to higher compensation expense from stock option exercises and increased insurance expense[362] - This was offset by lower professional fees and consulting expenses[362] - General and administrative expenses are anticipated to remain relatively consistent in 2022[352] Sale of Net Operating Losses (NOLs) Income from the sale of unused New Jersey net operating losses (NOLs) and research tax credits under the New Jersey Technology Business Tax Certificate Program was approximately $1.3 million in 2021, an increase from $1.1 million in 2020 Income from Sale of NOLs | Year | Amount (approx.) | |---|---| | 2021 | $1.3 million | | 2020 | $1.1 million | - The company recognized income from selling unuse