Matinas BioPharma(MTNB) - 2022 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION Financial Statements The unaudited condensed consolidated financial statements for June 30, 2022, reflect a decrease in total assets to $52.4 million and an increased net loss of $11.9 million, primarily due to higher R&D expenses and increased cash used in operations Condensed Consolidated Balance Sheets As of June 30, 2022, total assets decreased to $52.4 million from $61.3 million at year-end 2021, primarily due to a reduction in cash and cash equivalents, while total stockholders' equity also declined Condensed Consolidated Balance Sheet Data (Unaudited) | Account | June 30, 2022 ($) | December 31, 2021 ($) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | 10,398,544 | 21,029,806 | | Total current assets | 41,924,228 | 50,993,321 | | Total assets | 52,415,641 | 61,326,074 | | Liabilities & Equity | | | | Total current liabilities | 5,382,315 | 4,348,743 | | Total liabilities | 9,567,104 | 8,833,016 | | Total stockholders' equity | 42,848,537 | 52,493,058 | Condensed Consolidated Statements of Operations and Comprehensive Loss For the six months ended June 30, 2022, the company reported an increased net loss of $11.9 million, up from $9.7 million in 2021, primarily driven by a significant rise in research and development expenses, partially offset by $1.06 million in new revenue Statement of Operations Highlights (Unaudited) | Metric | Three Months Ended June 30, 2022 ($) | Three Months Ended June 30, 2021 ($) | Six Months Ended June 30, 2022 ($) | Six Months Ended June 30, 2021 ($) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,062,500 | - | 1,062,500 | 33,333 | | Research and development expense | 4,126,529 | 2,480,764 | 9,104,634 | 5,722,196 | | General and administrative expense | 2,861,421 | 2,308,926 | 5,605,616 | 5,453,936 | | Loss from operations | (5,925,450) | (4,789,690) | (13,647,750) | (11,142,799) | | Net loss | (5,922,584) | (4,791,105) | (11,900,857) | (9,747,425) | | Net loss per share – basic and diluted | (0.03) | (0.02) | (0.05) | (0.05) | Condensed Consolidated Statements of Cash Flow For the six months ended June 30, 2022, net cash used in operating activities significantly increased to $9.9 million, while net cash provided by investing activities reversed to a $0.8 million outflow, and financing activities sharply decreased to $87,289 Cash Flow Summary (Unaudited) | Cash Flow Activity | Six Months Ended June 30, 2022 ($) | Six Months Ended June 30, 2021 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | (9,887,912) | (5,515,768) | | Net cash (used in) provided by investing activities | (830,639) | 16,470,652 | | Net cash provided by financing activities | 87,289 | 6,964,994 | | Net (decrease)/increase in cash | (10,631,262) | 17,919,878 | Notes to Unaudited Condensed Consolidated Financial Statements Key notes detail the company's liquidity, with $38.5 million in cash and equivalents expected to fund operations through 2023, alongside significant collaboration agreements and manufacturing commitments - The company is a clinical-stage biopharmaceutical firm that has incurred net losses since inception, with an accumulated deficit of approximately $143.5 million as of June 30, 2022[21][22] - As of June 30, 2022, the company had approximately $10.4 million in cash and cash equivalents and $28.1 million in marketable securities, which management believes is sufficient to fund planned operations through 2023[25] - In April 2022, the company entered into an exclusive research collaboration with BioNTech SE, receiving a $2.75 million exclusivity fee, with $1.1 million of revenue recognized from this agreement as of June 30, 2022[50][52][54] - The company entered into an agreement with Thermo Fisher Scientific in March 2022 for MAT2203 manufacturing, with estimated fees of approximately $7.7 million to be incurred over a two-year period[69] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's strategic focus on advancing its LNC platform and clinical assets, noting increased R&D expenses, $1.1 million in new collaboration revenue, and a liquidity position expected to fund operations through 2023 - The company's strategy is focused on advancing its LNC platform technology, progressing MAT2203 for cryptococcal meningitis and MAT2501 for NTM infections, and expanding collaborations like those with Genentech and BioNTech[76][79] - The company expects R&D expenses to continue increasing as product candidates advance to later-stage clinical trials, which are generally more costly[81] - As of June 30, 2022, the company had cash, cash equivalents, and marketable securities totaling approximately $38.5 million, which is expected to fund operations through 2023[99][104] Results of Operations For the first six months of 2022, revenue increased to $1.1 million due to the BioNTech collaboration, while R&D expenses significantly rose to $9.1 million driven by clinical trial and manufacturing costs Comparison of Operating Results (Six Months Ended June 30) | Metric | 2022 ($ in thousands) | 2021 ($ in thousands) | Change Driver | | :--- | :--- | :--- | :--- | | Revenues | 1,063 | 33 | New BioNTech research collaboration in 2022 | | R&D Expenses | 9,105 | 5,722 | Increased clinical trial and manufacturing costs for product candidates | | G&A Expenses | 5,605 | 5,454 | Higher compensation expense | | Sale of NOLs | 1,734 | 1,328 | Sale of NJ state tax credits | Liquidity and Capital Resources As of June 30, 2022, the company held $38.5 million in cash and equivalents, with $9.9 million net cash used in operations for H1 2022, expecting existing funds to last through 2023, with future needs met by external financing - Net cash used in operating activities increased to $9.9 million for the first half of 2022, compared to $5.5 million in the same period of 2021, due to higher R&D expenses and a larger net loss[100][101] - Net cash provided by financing activities dropped to $0.1 million in the first half of 2022 from $7.0 million in 2021, primarily due to no At-The-Market (ATM) sales in 2022[103] - The company anticipates expenses will increase substantially due to ongoing clinical studies for MAT2203 and MAT2501, development of new candidates, and manufacturing scale-up[104][106] Quantitative and Qualitative Disclosures About Market Risk This section is not applicable for the company as a smaller reporting company - The company has indicated that quantitative and qualitative disclosures about market risk are not applicable[109] Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2022, with no material changes to internal control over financial reporting identified during Q2 2022 - Based on an evaluation as of June 30, 2022, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective[110] - There were no changes in internal control over financial reporting during the second quarter of 2022 that have materially affected, or are reasonably likely to materially affect, internal controls[112] PART II - OTHER INFORMATION Legal Proceedings The company reported no legal proceedings during the period - None[113] Risk Factors No material changes were reported from the risk factors previously disclosed in the company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021 - No material changes were reported from the risk factors set forth in the Annual Report on Form 10-K for the fiscal year ended December 31, 2021[115] Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None[116] Other Information Dr. Raphael Mannino, Chief Scientific Officer, announced his retirement effective December 31, 2022, and will transition to a strategic advisor role under a one-year consulting agreement - Dr. Raphael Mannino, the Chief Scientific Officer, notified the company of his intent to retire effective December 31, 2022[119] - The company entered into a consulting agreement with Dr. Mannino for at least one year following his retirement, where he will act as a strategic advisor for a monthly rate of $15,000 and receive an extension on the vesting and exercisability of his outstanding stock options and warrants[119] Exhibits This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including certifications from the CEO and CFO, and Inline XBRL documents