Matinas BioPharma Holdings, Inc.
Q1 2018 Earnings Call Transcript

Published: 13 May 2018

[Operator:]

Greetings, and welcome to the Matinas BioPharma Quarterly Update Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Jenene Thomas, Investor Relations for Matinas BioPharma. Thank you. You may begin.

[Jenene Thomas:]

Good morning everyone and thank you for joining the Matinas BioPharma quarterly update conference call and webcast. At this time, I would like to remind our listeners that remarks made during this call may state management's intentions, hopes, beliefs, expectations or projections of the future. These are forward-looking statements that involve risks and uncertainties. Forward-looking statements on this call are made pursuant to the Safe Harbor provisions of the federal securities laws. These forward-looking statements are based on Matinas BioPharma's current expectations and actual results could differ materially. As a result, you should not place undue reliance on any forward-looking statements. Some of the factors that could cause actual results to differ materially from those contemplated by such forward-looking statements are discussed in the periodic reports Matinas BioPharma filed with the Securities and Exchange Commission. These documents are available in the Investors section of the company's website and on the Securities and Exchange Commission's website. We encourage you to review these documents carefully. Following the company's prepared remarks, the call will be opened up for a question-and-answer session. Joining me on the call today are Jerry Jabbour, Chief Executive Officer and Dr. Raphael Mannino, Chief Scientific Officer. It is now my pleasure to turn the call over to Jerry Jabbour.

[Jerry Jabbour:]

Thank you, Jenene and good morning to all those dialed into our update call. In the almost two months since I was appointed CEO, I am pleased to report that we have made meaningful progress in executing on the clear two part strategy we laid out for you during our March update call. One of my goals has been to connect more frequently with our valued shareholder base and although brief, this morning's update is an important one. During our last call, I let you know that we prioritized the development of our lead product candidate, MAT2203 by allocating resources toward optimizing both the formulation and the dose of this potentially breakthrough product, while we streamlined our overall development plan in order to reduce the risk, timeline and cost of garnering an approval for the prevention of invasive fungal infections in patients suffering from acute lymphoblastic leukemia. MAT2203 continues to demonstrate an excellent safety profile in our ongoing study at the NIH where despite already having met the statistical endpoint for success, we are safely and effectively now treating four patients, each of whom has enrolled in the long term safety phase of that study. These patients continue to experience absolutely no safety events or toxicity associated with MAT220. And now having successfully optimized the formulation and improved our dose volume from something along the lines of a cup of coffee to a tablespoon, we are now prepared to enter the dose optimization phase of our work. We remain extremely confident in the design and goal of our overall development program for MAT2203. The unmet medical need is clear and our unique ability to provide a comprehensive solution for patients and physicians in a very valuable market is evident. Alongside this critical work on MAT2203, which demonstrates the capability and potential of our platform delivery technology, we have also undertaken a strategic review of our unique and potentially disruptive technology and begun to identify those areas of medicine, which today are characterized by problems that our platform has been designed to solve. We have stated our clear intention and expectation that the ideal way to begin to expand the utilization of our platform technology outside of the anti-infective area is through strategic collaborations. In addition to being cost effective, these relationships bring important third-party validation of our platform technology and help us to continue to develop important data demonstrating our unique capabilities. Over the past 20 years, there have been enormous advancements in medicine and the field has gradually shifted from using small molecules to treat disease to identifying ways to capture the power of genetics to solve some of our most significant health challenges. We know that today genetic drugs such as small interfering RNAs, messenger RNA or DNA plasmids provide potential gene therapies to treat most diseases by silencing pathological genes, expressing therapeutic proteins or through gene editing applications, such as CRISPR. However in order for genetic drugs to be used clinically, sophisticated delivery systems are required and that is exactly where our proprietary lipid nano crystal or LNC technology comes in. We know today based on actual pre-clinical animal data that our platform has the potential to improve the stability of molecules inside and outside the body that we can effectively and efficiently deliver molecules intracellularly in a natural non-toxic way and that our molecules can be administered in a variety of ways including orally and peremptorily. We believe that our dosing flexibility combined with our natural cellular uptake and our stability profile can set us apart. A hallmark of all great companies is to think big, but execute small or in a focused manner. Our work to date with our delivery platform and our understanding of the limitations of current delivery systems indicate that we have the potential to be a solution in the gene therapy area. From messenger RNA to DNA plasmids to CRISPR, we are involved in evaluating research opportunities in every one of these areas. There is no question that we are thinking big. However, we also recognize and understand the importance of starting small and focused and creating tangible value. Our strategic focus to date in broadening the application of our platform has been focused on the oligonucleotide space and it is there that we plan to begin to execute in a focused manner. Our contemplated strategic collaborations will likely involve formulating our partners' molecule into our lipid nano crystal platform and conducting in vitro and in vivo studies. It is very important to establish that proof of concept with our partners' molecules before we have to entertain and value a license of our technology. So these are important first steps to take, which allow both partners to evaluate the viability of the platform, despite our already having data in this area we need and want to do it with third party molecules. In my experience, the first collaboration, the first deal is always the most challenging, but we continue to feel confident that we will be in position to have our first in the near future. This will represent an important first step as we position this platform to become a potential leader in the delivery of gene therapy. We are building the foundation of a company that we believe has the potential to create significant value in the short and long term for its shareholders, but most importantly, we envision ourselves becoming an invaluable part of the solution for patients and physicians in areas of innovative medicine. For us, that begins with MAT2203 where we have already demonstrated the viability of our platform technology in patients and we are advancing it rapidly towards what we believe could be a pivotal Phase 2 trial during 2019. We look forward to continuing to update you on our progress as we execute on our focused strategy. At this point, I would like to turn the call back over to the operator for our question-and-answer session.

[Operator:]

[Operator Instructions] Our first question is coming from Jason McCarthy of Maxim Group.

[Jason McCarthy:]

Couple of questions. First question on the platform in general. Cochleates have a - it's a very unique solid lipid crystal nanostructure that forms kind of like a spiral that traps whatever molecules inside. Can you discuss, and you mentioned it kind of in a broad sense, the applications for oligonucleotides or nucleic acids. Can you discuss a little bit about how this can be applied to gene therapy, gene editing, even RNAi where we've seen in the space, some difficulty with using viral delivery in terms of immunogenicity, gene editing hasn't been able to get beyond the ex vivo approach. Is there are an application for using cochleates in vivo. Do you avoid immunogenicity, maybe you can just provide a little bit more color in that area for cochleates.

[Jerry Jabbour:]

Sure. Jason, thanks for the question, really insightful and obviously you've touched on a lot of the challenges there that we've seen in some of those areas. And that's why I'm so happy that Dr. Mannino is sitting next to me because there's probably no one better to kind of distinguish what makes cochleates different from other lipid nano particles, what have been some of the challenges in drug delivery? So, I'd like Raphael to kind of handle that question and really drill down on some of the 30,000 foot view I gave you during my remarks.

[Raphael Mannino:]

Thanks, Jason. One of the first things that you just pointed out was the immunogenicity. Our lipid nano crystals have been shown, over the years, to be very, very non-immunogenic. They neither stimulate the immune response nor do they inhibit the immune response and that's fundamentally because the crucial matrix of the solid crystal is made of natural components, which is simply a phospholipid and calcium. And so there is nothing fundamental about the lipid nano crystal that we use that would induce the immune response. Secondly, as you pointed out, in contrast, to most other lipid particles, which have fluid by layers in them, which are susceptible to attack and our lipid nano crystal is a solid crystal. This is - with lipids, it's essentially the difference between butter in the refrigerator, which is solid and butter in the frying pan, which is liquid. And so this lipid nano crystal is very, very solid. It's also, as you said, multi-layered in contrast to most of the other structures, which have single layer. So the multi layers allow us to put material through the entire crystal, which is anhydrous. There's no water and that's another distinguishing factor of these lipid nano crystals, it's an anhydrous crystal, it's a solid crystal and it makes it very, very stable, both on the shelf and in the bottle. So, this is one of the classic characteristics of a lipid delivery particle. It has to be able to protect the material both from the outside world and from degradation in the body and in order to minimize any toxic effects, you need to minimize immunogenicity of the particle. And these two things are inherent in our lipid nano particle. And very key, especially for oligonucleotides aspect of lipid nano particles for the delivery of oligonucleotides is then the ability, not only to protect it from the outside world, but then get it to the target cell and once the particle interacts with the target cell to effectively deliver the oligonucleotide into the interior of the cell and again along with using natural material, our lipid nano crystal uses a natural fusion mechanism, both the calcium and the [indiscernible] are involved in natural fusion, membrane fusion mechanism, which is constantly going on within the body and so the ability to deliver the oligonucleotide across the cell membrane into the interior is a natural process and once again this has no toxicity and no membrane destruction. In contrast, most other nanoparticles use unnatural molecules, which are designed to compromise and disrupt cell membranes in order to get the oligonucleotides into the interior of the cell and this compromising and disrupting of cell membranes oftentimes results in both immune responses and toxicity. And so, as you know, we've worked for a long time delivering oligonucleotides in animal models and we are looking forward to now moving aggressively with partners into moving this technology further along with the delivery of oligonucleotides.

[Jason McCarthy:]

And Jerry, I just want to walk back to 2203, it's important in the anti-fungal community, I think, my experience can be overstated. Can you talk a little bit about the potential adoptive pathway that you could follow and is there potential to leverage the limited population antimicrobial drug, the LPAD approval pathway, it's been around for a really long time, so I'm thinking if you remove the toxicity, docs are going to want to use this and maybe there's an opportunity for Matinas to get accelerated approval?

[Jerry Jabbour:]

Good question, Jason and obviously following our FDA interaction in January of this year, we come back here to push development forward, feeling like we have a very supportive agency behind us and one of the things that was very clear at that meeting was that there was not only a willingness to work with us and the desire to learn more about how exactly our technology works, but there was an acknowledgement that we're different and that we're different in a way that provides for the safe delivery of such a broad spectrum, highly toxic drug like amphotericin that provides a unique opportunity we believe. And so that is, that confidence and that clarity provided by FDA is exactly why we believe this is a candidate for an adaptive design phase 2 trial, because underlying all of that support is the reality of the unmet medical need and when somebody like Oliver Cornely flies in for five minutes to speak to FDA about the importance of this drug to his patients, it becomes that much more tangible in the eyes of the agency. So coming out of that meeting and using kind of the framework and the foundation that was put in place by the team here over the last year and then taking the expertise of somebody like Matt Wikler who's gotten 20 drugs approved, that's why we're pointed toward the adaptive design and that's really designed, no pun intended, to do two things. It's really to take advantage of the unmet medical need and the safety profile that we've generated to date and put us in position, if we see the sort of things we want to see in stage one of that study, which would be a typical kind of PK analysis and tolerability analysis in leukemia patients, both ALL and AML, which will allow us to enroll that study faster that this adaptive design will mitigate the time and the resources to go from Phase 2 to Phase 3 and allow us to essentially just shift the program, drop the AML patients and continue with the efficacy portion with just the ALL patients in the design that we believe will provide for interim looks at the same time. So the exact protocol for that is still under development. As you can imagine, the dose optimization work that is currently going on right now will be very informative in terms of not only selecting the single dose we will take into what will be a placebo controlled trial, but also helping us better understand the statistics and the profile and what should be the inclusion criteria for patients in that study, but we believe that if we are successful in working with the FDA to implement that adaptive design, it could really cut off almost a year from that study. As far as early approval that will be - and the LPAD process, I mean, we've seen while that has been in existence for the past couple of years, we've seen kind of, I would say, mixed results with some of the companies that have tried to go down that pathway. I think we're different, because we're taking a known molecule and amphotericin, which has a demonstrated efficacy profile and we've continued to demonstrate that we can deliver it safely. There could be an opportunity there and that will become part of our discussions, but until we have the overall framework and package ready for that next step, the interaction is probably premature to say that that is clearly our focus, but certainly given the profile of our drug and the unmet medical need, that's an opportunity we plan to explore.

[Jason McCarthy:]

And just one more brief question for Dr. Mannino, maybe you can speak a little bit about the leukemia - the opportunity in leukemia from I guess an infection rate that these kids and young adults space, could be upwards of 20% or even higher. And the problem with [indiscernible] and why amphotericin can be a better option if it is safer.

[Jerry Jabbour:]

Jason, this is Jerry. I'll actually handle that question and I think you've kind of hit on the statistical target. I mean, you see numbers in terms of the incidence of those invasive fungal infections in leukemia patients really anywhere from 10% to 20% those tend to be very site specific and not necessarily uniform across the board, but the reality is that that number is growing and that's due to resistant infections, it's due to hospital borne infections and the different types of therapies that are being used in leukemia today, creating neutropenic periods that are longer and longer and putting more and more patients at risk. So the opportunity certainly is there in ALL patients, it's probably 7000, 8000 new cases a year and growing. And remember, the opportunity there in being able to prophylax those patients is the course of therapy, which is the entire neutropenic period, which would be about 90 days and today the opportunity really is there with ALL, because as you mentioned, the drug to drug interaction with ASLs, notably posaconazole, which is used on the AML side. It's about a $700 million drug globally. It can't be used in the ALL segment because of drug to drug interaction with the current standard of care in ALL, which is vincristine. Importantly though, we are seeing changes in how AML patients are being treated and with some of the new therapies coming forward in that area, including increasing resistance to posaconazole, which is being used in that area, it may make posaconazole less and less likely to be a desirable alternative for physicians in that segment too, but that will take care of itself. For us it is about ALL. It's targeting the opportunity there, being able to do so in a patient population which today has no alternative and in a course of therapy which could have a significant, obviously a significant commercial value and the real important thing here is look, if the incidence of the development of these fungal infections is 10%, 15%, 20%, those are all high numbers, but the stark reality is that of those patients who develop a fungal infection, the mortality rate is greater than 50%. So that's really the important unmet medical need that we believe we can meet with a drug in amphotericin that from an efficacy profile is the perfect solution here from a broad spectrum potential, it's just the toxicity profile which is the issue and the IV administration and we're coming at it from an oral and safe directions. So that's kind of the overall look on the leukemia space and what the trial would look like.

[Operator:]

Our next question is coming from Ram Selvaraju of H.C. Wainwright.

[Julian Harrison:]

This is Julian on for Ram. First off, I was just curious if you have any thoughts about this SCYNEXIS drug, SCY708 recently receiving fast track status for vulvovaginal candidiasis. Is this an indication you consider revisiting sometime soon.

[Jerry Jabbour:]

So obviously, we're aware of everything that's happening in the antifungal space, because people like to put us into that category, regardless of our foundation being the platform delivery technology, I think SCYNEXIS' drug going after VVC is perfect. That's not an area of focus of ours. It's not an indication that's conducive to our mechanism of action. We are all about treating invasive fungal infections, which are kind of - are inhibited by an inflammatory kind of condition in a tract cell to the immune system. So from a VVC perspective, remember, the VVC study for us was about safety and it was about demonstrating systemic absorption. It was never about focusing or going down the path for MAT2203 to be indicated for the treatment of vulvovaginal candidiasis, a non-life threatening mucosal infection. We're taking the biggest broadest spectrum drug and we're going to save lives. We're more than happy to see SCYNEXIS fill the important need in the treatment of VVC. But that's not an area of focus of ours.

[Julian Harrison:]

Regarding 9001, have you been getting any recent licensing interest since Amarin indicated that it's close to reporting top line data on Vascepa for dyslipidemia.

[Jerry Jabbour:]

Julian, thanks for that because it highlights what we believe is - continues to be an important asset of ours though in the background, just because of the opportunity associated with having a disruptive platform technology, but the reality is we believe we have a drug which head to head demonstrates its superiority to Vascepa, the reality is, yeah, we have ongoing discussions that's not a focus of the company. I actually have an outside group working on that and interest has picked up as we're getting closer to Amarin being in position to discuss their outcomes data. I believe that will be in the third quarter of this year and we would expect that as that gets closer and closer, there could be an opportunity for us to create value with the original asset upon which this company was founded, but we'll let that process play out and see where it goes. Our value creation event aren't predicated on that. That would be a nice add-on, but in the short term, our focus is on - really on this delivery technology and the ways we can get involved in a number of important therapeutic areas, but thanks for the question.

[Operator:]

Thank you. On behalf of Matinas BioPharma, I would like to thank everyone for participating today. You may disconnect your lines at this time and have a wonderful day.