Matinas BioPharma Holdings, Inc. — Q3 2023 Form 10-Q
Period: Three and nine months ended September 30, 2023. Amounts are in millions of dollars unless otherwise noted. Matinas is a clinical-stage biopharmaceutical company developing its lipid nanocrystal (LNC) delivery platform and product candidates; it has no approved products and no product sales.
Financial performance
| Metric | Q3 2023 | Q3 2022 | Nine months 2023 | Nine months 2022 |
|---|---|---|---|---|
| Contract revenue | $0 | $1.063 | $1.096 | $2.125 |
| Research and development | $3.295 | $3.707 | $10.824 | $12.811 |
| General and administrative | $2.839 | $2.818 | $8.151 | $8.424 |
| Operating loss | $(6.134) | $(5.462) | $(17.879) | $(19.110) |
| Net loss | $(6.055) | $(5.462) | $(17.628) | $(17.363) |
| Net loss per share | $(0.03) | $(0.03) | $(0.08) | $(0.08) |
Contract revenue is collaboration and research revenue, not product revenue. Q3 revenue fell to zero as the prior-year period included BioNTech collaboration revenue. Nine-month revenue declined about 48%, reflecting lower collaboration revenue. R&D expense declined about 16% for the nine months, mainly due to lower manufacturing and clinical consulting costs; G&A decreased modestly. The company reported no gross margin measure in the filing.
For the nine months, operating cash use was $10.699, compared with $14.857 in 2022; investing activities provided $10.282, primarily from maturities of marketable securities. Financing activities used $0.006. Cash, cash equivalents and restricted cash decreased $0.423 to $6.657.
Financial position and liquidity
At September 30, 2023, cash and cash equivalents were $6.407 and marketable debt securities were $11.809, for $18.216 in combined cash and securities; restricted cash was $0.250. Total assets were $29.791, total liabilities $6.641 and stockholders’ equity $23.150. Accumulated deficit was $170.259. The filing reports no conventional borrowings; lease liabilities totaled $3.708, including $3.684 operating and $0.024 finance lease liabilities.
Cash and securities were down from $28.763 at December 31, 2022. Management estimates available cash and securities will fund planned operations into the third quarter of 2024, but not beyond. The filing states that substantial doubt exists about the company’s ability to continue as a going concern.
Material changes, outlook and risks
- Management expects 2023 R&D expense to be below 2022 levels, reflecting the pause in MAT2501 development and concentration of resources on MAT2203 and the LNC platform. It expects R&D costs to increase over time as development advances; G&A was expected to remain relatively consistent with 2022. No revenue or earnings guidance was provided.
- MAT2501 development was paused after the company determined in late 2022 it was not commercially reasonable to continue; the company will not receive the remaining Cystic Fibrosis Foundation award and has no further obligations under that agreement.
- The BioNTech collaboration term expired April 8, 2023; all related contract research revenue was recognized by March 31, 2023. Genentech feasibility-study obligations were completed in Q1 2023.
- Management is seeking non-dilutive funding from prospective partners and government sources, including BARDA and NIH, to advance MAT2203 toward Phase 3, and is seeking FDA input regarding a potential additional Phase 3 study. Additional financing may be required sooner than planned; equity issuance could dilute shareholders, and financing may not be available on acceptable terms or at all.
- The company is dependent on clinical, regulatory, manufacturing and financing outcomes, and has not obtained regulatory approval for any candidate. Trials may be delayed or discontinued due to funding, recruitment, safety, efficacy or regulatory issues.
- NYSE American minimum-bid-price compliance was not met; the company was required to regain compliance by March 21, 2024. Stockholders approved a possible 1-for-2 to 1-for-50 reverse split on November 1, 2023, at the board’s discretion. The filing cautions that a reverse split may not restore compliance or improve liquidity and could increase potential dilution from shares available for issuance.
- Other notable items: the company recognized no proceeds from New Jersey NOL and tax-credit sales in the first nine months of 2023, versus $1.734 million in 2022. Disclosure controls were assessed as effective; no material legal proceedings were reported.
Important facts for investors to verify
- Whether financing, spending controls and collaboration or grant funding can extend the stated runway beyond Q3 2024.
- MAT2203’s development plan, FDA feedback, Phase 3 timing and availability of non-dilutive funding.
- Whether the company regained NYSE American minimum-bid-price compliance and whether the approved reverse split was implemented.
- Future collaboration revenue, since current revenue is non-product revenue and prior BioNTech work has ended.
- Potential dilution from future equity financing, ATM sales or other authorized share issuances.