Matinas BioPharma Holdings, Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022. Matinas is a clinical-stage biopharmaceutical company developing its lipid nanocrystal (LNC) delivery platform and product candidates, including MAT2203 and MAT2501. It had no approved products and no product-sales revenue.
Financial results and liquidity
| Metric | Q1 2022 | Q1 2021 |
|---|---|---|
| Revenue | $0 | $33,000 |
| Research and development expense | $4.98 million | $3.24 million |
| General and administrative expense | $2.74 million | $3.15 million |
| Operating loss | $7.72 million | $6.35 million |
| Net loss | $5.98 million | $4.96 million |
| Net loss per share, basic and diluted | $0.03 | $0.03 |
| Net cash used in operating activities | $4.76 million | $4.65 million |
Gross margin is not meaningful given the absence of product revenue. Net loss was partly offset by $1.73 million from selling New Jersey net operating losses and tax credits, versus $1.33 million a year earlier. The company reported $9,894 of other income, net, in Q1 2022.
At March 31, 2022, cash and cash equivalents were $19.33 million and marketable securities were $24.54 million, totaling approximately $43.87 million; restricted cash was $250,000. Management said cash and marketable securities on hand were sufficient to fund planned operations through 2023. Cash, cash equivalents and restricted cash declined $1.70 million during the quarter. The company has reported recurring losses and negative operating cash flows since inception.
Total liabilities were $8.10 million, primarily lease obligations; the filing reports no borrowings. Operating lease liabilities were $4.55 million in total present value, and finance lease liabilities were $17,000. Stockholders’ equity was $47.68 million.
Changes versus Q1 2021
- R&D expense rose approximately 54%, primarily reflecting increased clinical-trial activity and higher compensation expense.
- G&A expense declined approximately 13%, mainly because Q1 2021 included non-recurring compensation expense related to stock-option exercises.
- Revenue decreased from $33,000 of Genentech feasibility-study revenue to zero.
- Net loss increased about $1.02 million. Operating cash use was broadly similar year over year.
- Investing cash inflow fell to $2.96 million from $8.82 million, while financing cash inflow was $93,000 versus $6.78 million, including an ATM stock offering in Q1 2021 but none in Q1 2022.
Outlook, developments and risks
- Management expected operating losses and expenses to rise as development advances, and anticipated higher cash use during the remainder of 2022. It said additional financing would be needed over time; no committed external funding source was identified beyond limited CFF and NIH support.
- The stated development priorities included advancing MAT2203 through the EnACT study toward an NDA filing, advancing MAT2501 preclinical work, and completing a single-ascending-dose pharmacokinetic study in healthy volunteers later in 2022. The company also said it was seeking a partner for LYPDISO.
- A March 2022 agreement with Thermo Fisher Scientific for MAT2203 scale-up and manufacturing capabilities was estimated at approximately $7.7 million over two years, through Q1 2024.
- Subsequent event: On April 8, 2022, Matinas entered an exclusive research collaboration with BioNTech to evaluate mRNA formats using its LNC platform. The company is to receive a $2.75 million exclusivity fee, and BioNTech will fund certain research expenses. The parties had also begun discussions about a possible license agreement.
- Key risks include clinical and regulatory uncertainty, manufacturing and third-party dependencies, the need for additional capital and possible shareholder dilution, intellectual-property protection, and the possibility that candidates never obtain approval or generate revenue. The company said COVID-19 had not significantly affected Q1 results but future effects remained uncertain. It reported no material changes to the risk factors in its 2021 Form 10-K.
- Marketable securities recorded $484,000 of unrealized losses in Q1, contributing to a $629,000 accumulated unrealized loss at quarter-end. The company also issued 400,000 shares to Rutgers under a license amendment and recorded $291,000 of R&D expense for the shares.
Important facts for investors to verify
- Whether the cash runway assumption through 2023 remains valid as clinical, manufacturing and other spending increases, and what financing may be required.
- MAT2203 and MAT2501 clinical and preclinical progress, milestones and timelines, including the EnACT study and planned MAT2501 study.
- The timing, cash-payment profile and total obligations under the approximately $7.7 million manufacturing agreement.
- Receipt and accounting for the BioNTech exclusivity fee and research funding, and whether collaboration discussions result in a license agreement.
- Potential dilution from future equity financing and the value and terms of any third-party funding or partnerships.