Matinas BioPharma Holdings, Inc. — Q3 2022 Form 10-Q
Reporting period: Three and nine months ended September 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 reported no product sales.
Key financial results
| Metric | Q3 2022 | Q3 2021 | Nine months 2022 | Nine months 2021 |
|---|---|---|---|---|
| Revenue | $1.06 million | $0 | $2.13 million | $0.03 million |
| Research and development expense | $3.71 million | $4.62 million | $12.81 million | $10.34 million |
| General and administrative expense | $2.82 million | $2.26 million | $8.42 million | $7.71 million |
| Operating loss | $5.46 million | $6.88 million | $19.11 million | $18.02 million |
| Net loss | $5.46 million | $6.84 million | $17.36 million | $16.58 million |
| Basic and diluted loss per share | $0.03 | $0.03 | $0.08 | $0.08 |
- Nine-month operating cash use was $14.86 million, versus $11.27 million in 2021. Investing activities provided $4.92 million and financing activities provided $0.08 million. Cash, cash equivalents and restricted cash declined $9.85 million.
- At September 30, cash and cash equivalents were $11.18 million, marketable debt securities were $21.88 million, and restricted cash was $0.25 million. Management said cash and marketable securities on hand were expected to fund planned operations through 2023.
- Total assets were $47.55 million and stockholders’ equity was $38.62 million. Total liabilities were $8.93 million. The filing reports lease liabilities, including $4.22 million in operating lease obligations and approximately $8,000 in finance lease obligations; it reports no other borrowings.
- No gross margin is presented; the filing reports contract research revenue and operating expenses, not product sales.
Changes and notable items
- Revenue rose primarily from the BioNTech research collaboration. Of $2.75 million in BioNTech exclusivity fees received, $1.4 million remained deferred at quarter-end; the company also earns monthly research-service revenue. The filing reports $2.1 million of BioNTech-related revenue recognized through September 30.
- Q3 net loss narrowed year over year, while nine-month net loss increased. Nine-month R&D and G&A expenses rose, principally due to clinical and manufacturing activity and higher compensation. Q3 R&D expense fell partly because 2021 included a non-recurring Aquarius-related stock expense and manufacturing costs decreased.
- The company recognized $1.73 million from selling New Jersey NOLs and tax credits in the first nine months, compared with $1.33 million in 2021. It reported $0.79 million in nine-month unrealized losses on available-for-sale securities, recorded in other comprehensive loss.
- Common shares outstanding increased from 216.27 million at December 31, 2021 to 216.86 million at September 30, 2022. No ATM stock sales occurred in the 2022 nine-month period.
Outlook, risks and commitments
- Management expects continuing substantial losses and increasing R&D costs, and says additional financing will be needed. Existing cash and cash equivalents were expected to cover operating and capital needs through 2023; funding beyond that is not assured.
- MAT2203 development is focused on the EnACT study for cryptococcal meningitis; MAT2501 work includes preclinical studies and a healthy-volunteer pharmacokinetic study. Timing and costs remain uncertain and depend on trial results, recruitment, funding and regulatory decisions.
- A Thermo Fisher agreement for MAT2203 scale-up and manufacturing carries estimated fees, including capital equipment, of approximately $7.7 million through Q1 2024. The company had prepaid $2.0 million by September 30, with $1.96 million remaining in prepaid assets.
- Key risks include clinical and regulatory failure or delay, manufacturing and third-party dependencies, the need to raise capital on acceptable terms, potential shareholder dilution, intellectual-property protection and the possibility that the company never achieves product revenue or profitability. The company reported no material change to the risk factors in its 2021 Form 10-K.
- The company reported effective disclosure controls, no material Q3 changes in internal control over financial reporting, and no legal proceedings or off-balance-sheet arrangements.
Investor verification priorities
- Confirm cash burn and whether available cash and securities remain adequate relative to the stated runway through 2023 and anticipated development spending.
- Track MAT2203 and MAT2501 clinical and preclinical milestones, trial results, regulatory progress, and any changes to development timelines or costs.
- Review BioNTech collaboration revenue recognition, remaining deferred revenue, research funding, and whether an option-to-license agreement is reached.
- Monitor the Thermo Fisher commitment, CFF milestone funding, and the company’s ability to secure further financing without material dilution or unfavorable terms.
- Assess the value and maturity profile of marketable securities and the effect of further unrealized losses.