Matinas BioPharma Holdings, Inc. — 2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023; comparisons are with 2022. Unless noted otherwise, financial amounts below are in U.S. dollars. The company is a clinical-stage biopharmaceutical developer with no product-sales revenue.
Business context and development
Matinas is developing its lipid nanocrystal (LNC) drug-delivery platform. Its lead candidate, MAT2203, is an oral formulation of amphotericin B for invasive fungal infections. Other early-stage programs use the platform for inflammation and oncology; the filing reports animal-model results, not clinical efficacy, for those programs.
In February 2024, the company said it had reached agreement with the FDA on the design of ORALTO, a planned Phase 3 trial of MAT2203 as oral step-down treatment for invasive aspergillosis in patients with limited options. The planned study targets about 216 adults, with enrollment expected to begin in the second half of 2024 and take approximately 24 months. Starting the trial requires a development/commercial partnership or additional capital.
Financial performance and liquidity
| Metric | 2023 | 2022 | Change / context |
|---|---|---|---|
| Contract revenue | $1.096 million | $3.188 million | Down 65.6%; no product-sales revenue |
| Research and development | $14.489 million | $16.678 million | Down $2.189 million |
| General and administrative | $10.373 million | $11.100 million | Down $0.727 million |
| Operating loss | $23.766 million | $24.590 million | Improved by $0.824 million |
| Net loss | $22.942 million | $20.997 million | Loss increased by $1.945 million |
| Net loss per share | $0.11 | $0.10 | Basic and diluted |
| Cash used in operating activities | $15.278 million | $19.156 million | Use decreased by $3.878 million |
The net loss worsened despite lower operating expenses, largely alongside a decline in proceeds from New Jersey tax-credit/NOL sales: $0.484 million in 2023 versus $3.491 million in 2022. Contract revenue consisted of collaboration and research work, principally BioNTech and Genentech.
At December 31, 2023, cash and cash equivalents were $4.787 million and marketable debt securities were $8.969 million, or $13.756 million combined, excluding $0.250 million of restricted cash. Current assets were $15.543 million and current liabilities were $2.622 million. Total assets were $25.104 million, total liabilities $5.858 million, and stockholders’ equity $19.246 million. No conventional borrowings are identified in the supplied financial statements; lease liabilities were $3.556 million in total, including $3.533 million operating leases and $0.023 million finance leases.
Management says available cash and marketable securities are insufficient to fund planned operations beyond the next 12 months from the filing date, and the auditor highlights substantial doubt about the company’s ability to continue as a going concern. Elsewhere, management estimates the resources at year-end would fund operations into the third quarter of 2024. The filing also says cash use in operations may be slightly higher in 2024. These are estimates, not committed financing.
Gross margin is not meaningful for assessing product economics because the company has no product-sales revenue. The filing reports operating and net losses rather than a meaningful positive operating margin.
Material changes, outlook, and risks
- R&D spending fell as MAT2203 development activity was paused or slowed while the company sought FDA feedback and a partner; management expects 2024 R&D expense to be lower than 2023 until funding is secured. G&A also declined.
- Operating cash use declined year over year, but this reflected working-capital timing as well as operating factors. Investing cash provided $13.242 million, primarily from net sales and maturities of marketable securities; financing cash use was $0.007 million.
- EnACT Phase 2 results for cryptococcal meningitis included mean early fungicidal activity of 0.38 and 0.30 log10 CFU/mL/day in Cohorts 2 and 4, respectively. The company reported 90% survival through 18 weeks in each 40-patient MAT2203 cohort and lower kidney-related adverse events versus standard of care. The trial was open-label and these results do not establish success in the planned Phase 3 aspergillosis study.
- The compassionate-use program had 19 enrolled patients; 15 had follow-up, of whom 12 had complete clinical resolution or objective improvement. These uncontrolled patient observations are not a substitute for a controlled clinical trial.
- MAT2203 has FDA QIDP and Fast Track designations for specified indications and orphan designation for cryptococcosis. Designations do not assure approval; the company says potential U.S. exclusivity could total up to 12 years if applicable requirements are met.
- Major risks include financing availability and potential dilution, clinical-trial execution and results, regulatory approval, manufacturing capacity and third-party dependence, intellectual-property protection, competition, and lack of sales and marketing infrastructure. The company had 46.7 million options outstanding at a weighted-average exercise price of $0.83 per share at year-end.
- Potential contingent royalties to former Series A preferred holders include 4.5% of defined net sales, capped at $25 million per year, and 7.5% of defined licensing proceeds, capped at $10 million per year. The company also pays Rutgers an annual license fee and may owe sales-based royalties.
Most important facts for investors to verify
- Whether the company secures a partnership or raises sufficient capital to begin ORALTO, and whether its cash runway assumptions remain current.
- ORALTO’s actual start, enrollment pace, trial costs, endpoint assumptions, and any FDA-requested changes.
- MAT2203’s Phase 3 efficacy and safety relative to standard of care; distinguish controlled-trial evidence from EnACT and compassionate-use observations.
- Availability, cost, and regulatory readiness of clinical and commercial manufacturing, including any resumption of work with Thermo Fisher.
- Future share issuance and dilution, including option exercises, ATM usage, and any financing or partnership terms that affect existing stockholders.