Matinas BioPharma Holdings, Inc. — Q2 2022 Form 10-Q
Reporting period: Three and six months ended June 30, 2022. Matinas is a clinical-stage biopharmaceutical company developing its lipid nanocrystal (LNC) delivery platform and product candidates MAT2203 and MAT2501. It has no approved products and has not generated product-sales revenue.
Financial performance and liquidity
- Revenue: Q2 and first-half 2022 revenue was $1.06 million, versus none and $33,000, respectively, in the comparable 2021 periods. Revenue was contract research revenue under the BioNTech collaboration, not product sales.
- Expenses and losses: Q2 R&D expense was $4.13 million and G&A was $2.86 million; net loss was $5.92 million, versus $4.79 million in Q2 2021. For the first half, R&D was $9.10 million, G&A $5.61 million, and net loss $11.90 million, compared with $5.72 million, $5.45 million, and $9.75 million, respectively, in 2021. First-half loss per share was $0.05, unchanged from 2021.
- Other income: First-half results included $1.73 million from selling New Jersey NOLs and tax credits, versus $1.33 million in 2021. This partially offset operating losses.
- Cash flow: First-half cash used in operations was $9.89 million, versus $5.52 million in 2021. Cash, cash equivalents and restricted cash declined $10.63 million to $10.65 million; investing activities used $0.83 million and financing activities provided $0.09 million.
- Liquidity: At June 30, cash and cash equivalents were $10.40 million and marketable securities were $28.10 million; restricted cash was $0.25 million. Management said available cash and marketable securities were sufficient to fund planned operations through 2023, while also warning that additional financing will be needed for continuing operations.
- Debt and capital: The filing reports no conventional borrowings. Lease liabilities totaled approximately $4.42 million, primarily operating leases. Stockholders’ equity was $42.85 million; accumulated deficit was $143.54 million. Common shares outstanding were 216.86 million at June 30.
- Margins: Product margins are not meaningful because the company has no product sales; the filing does not provide a clear commercial margin measure.
Material changes and developments
- R&D expense increased 66% year over year in the first half, primarily from higher clinical, preclinical and manufacturing costs and compensation. G&A rose modestly, mainly from compensation.
- Under an April 2022 exclusive BioNTech research collaboration, Matinas received a $2.75 million exclusivity fee and BioNTech agreed to fund certain research expenses. The company recognized about $1.06 million in first-half revenue; approximately $2.06 million of the fee remained deferred at June 30. Discussions about a potential option-to-license agreement were ongoing.
- In March 2022, Matinas contracted with Thermo Fisher Scientific to scale up and provide commercial manufacturing capabilities for MAT2203. Estimated fees, including capital equipment, are about $7.7 million over two years through Q1 2024. The company prepaid $2.0 million; $1.96 million remained in prepaid expenses at June 30.
- Matinas issued 400,000 shares to Rutgers in February as partial consideration under an amended license agreement, recording $291,000 of R&D expense. It also exercised stock options for $99,000 of proceeds. No common-stock sales occurred in the first half of 2022.
Outlook, risks and other items
- Management expects substantial losses and increasing expenses for the foreseeable future, including higher cash use during the remainder of 2022. It plans to advance MAT2203 toward NDA filing through the ongoing EnACT study and progress MAT2501 preclinical work, including a healthy-volunteer single-ascending-dose pharmacokinetic study targeted for later in 2022.
- The company expects to fund operations through a mix of equity or debt financing, grants, collaborations and licensing. It had no committed external funding source other than limited CFF and NIH support; future financing may dilute shareholders or require unfavorable terms. Failure to obtain funding could delay, reduce or terminate development programs.
- Key risks include clinical efficacy and safety, trial timing and recruitment, regulatory outcomes, manufacturing scale-up and third-party dependence, intellectual-property protection, and the ability to raise capital. Management reported no material change to the risk factors in its 2021 Form 10-K. COVID-19 had no significant impact on reported first-half results, but future effects were uncertain.
- The filing reports no legal proceedings, defaults under senior securities or off-balance-sheet arrangements. Disclosure controls were deemed effective, with no material second-quarter change in internal control over financial reporting.
- After quarter-end, Chief Scientific Officer Raphael Mannino gave notice of retirement effective December 31, 2022, and agreed to serve as a strategic consultant for at least one year at $15,000 per month, subject to the agreement’s terms.
Important facts for investors to verify
- Progress, timing and results of the MAT2203 EnACT study and the MAT2501 development program.
- Whether the BioNTech collaboration advances to an option-to-license agreement, and the timing and amount of funded research activity.
- Actual spending under the Thermo Fisher manufacturing agreement and its effect on cash runway.
- Cash burn, marketable-security values and whether financing will be required earlier than management’s stated runway through 2023.
- Milestones and remaining payments under CFF support, and the continued availability of New Jersey NOL and tax-credit sale proceeds.