Matinas BioPharma Holdings, Inc. — Q2 2021 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2021. Matinas is a clinical-stage biopharmaceutical company developing LYPDISO and products using its lipid nanocrystal (LNC) delivery platform. It has no approved products and has not generated product-sale revenue.
Financial performance
| Metric | Q2 2021 | Q2 2020 | Six months 2021 | Six months 2020 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $33,000 | $0 |
| Research and development | $2.48 million | $3.41 million | $5.72 million | $7.50 million |
| General and administrative | $2.31 million | $2.36 million | $5.45 million | $4.62 million |
| Net loss | $4.79 million | $5.61 million | $9.75 million | $10.66 million |
| Net loss per common share | $0.02 | $0.03 | $0.05 | $0.06 |
| Cash used in operating activities | — | $5.52 million | $7.83 million |
At June 30, cash and cash equivalents were $30.4 million, marketable securities $29.5 million, and restricted cash $0.3 million. Unrestricted cash, cash equivalents and marketable securities totaled $59.8 million. Total assets were $70.0 million, liabilities $7.1 million and stockholders’ equity $62.9 million. No borrowings are reported; lease liabilities were approximately $3.5 million operating and $38,000 finance, including current portions.
Six-month cash and restricted cash increased $17.9 million to $30.7 million. Investing activities provided $16.5 million, primarily reflecting marketable-security sales exceeding purchases; financing activities provided $7.0 million, mainly from ATM stock sales and option exercises. The company reported an accumulated deficit of $118.1 million.
Material changes and notable items
- Six-month R&D expense fell 24% year over year, primarily because the LYPDISO clinical trial was completed in January 2021. Q2 G&A was approximately flat, while six-month G&A increased about 18%, primarily due to compensation and insurance costs.
- The $33,000 of six-month revenue was Genentech contract research revenue; no revenue was recognized in Q2. The company said product revenue is not expected before 2023 at the earliest, if ever.
- The company sold 3.0 million shares under its ATM program in January, raising $5.8 million gross and $5.6 million net. Series B preferred stock automatically converted in June into 8.436 million common shares; related common-stock dividends also increased the share count.
- New Jersey tax-credit and NOL sales generated $1.33 million in the first half, versus $1.07 million a year earlier. The Cystic Fibrosis Foundation award provided $971,000 of R&D expense credits in the first half for MAT2501 development.
- Effective August 1, 2021, an office lease amendment added premises and extended the lease for seven years, with approximately $1.8 million of commitments.
Outlook, risks and management commentary
- Management said existing cash and marketable securities should fund planned operations into 2024. It also expects continued substantial losses and rising expenses, including higher R&D spending in the second half of 2021.
- Near-term priorities include advancing MAT2203 toward efficacy data in the EnACT study for cryptococcal meningitis; progressing MAT2501 preclinical work and a planned single-ascending-dose study in healthy volunteers later in 2021; expanding LNC collaborations; and finding a partner to continue LYPDISO development.
- The company expects to need additional financing before product revenue can support profitability. Financing may dilute shareholders or impose debt-related obligations; funding may not be available on acceptable terms or at all.
- Key risks include clinical, regulatory, manufacturing and trial-enrollment uncertainty; reliance on third parties and the LNC platform; intellectual-property and commercialization challenges; and potential effects of COVID-19. Management said COVID-19 had not significantly affected first-half 2021 results but future effects were uncertain.
- The filing reported no legal proceedings, no material changes to previously disclosed risk factors, and no off-balance-sheet arrangements. Disclosure controls were deemed effective as of June 30, 2021.
Investor verification priorities
- Check clinical and regulatory progress, timing and results for MAT2203 and MAT2501, and whether the planned 2021 MAT2501 study occurred.
- Monitor cash burn, the stated runway into 2024, and any additional equity, debt, grant or collaboration financing.
- Verify progress in securing a LYPDISO development partner and the implications of the ENHANCE-IT results.
- Track share-count changes and potential dilution, including equity compensation and outstanding options and warrants.
- Review the August 2021 lease expansion and future contractual commitments, alongside the timing and conditions of CFF award funding.