Matinas BioPharma Holdings, Inc. — FY2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021; comparative figures are for FY2020. This is an annual report, not a standalone Q4 filing. Matinas is a clinical-stage biopharmaceutical company with no approved products or product-sales revenue.
Business context and development
The company’s business centers on its lipid nanocrystal (LNC) drug-delivery platform, licensed from Rutgers University. Its clinical-stage candidates are MAT2203, oral amphotericin B for invasive fungal infections, and MAT2501, oral amikacin being developed initially for nontuberculous mycobacterial lung disease. The company also pursues platform collaborations and is seeking a partner for its legacy omega-3 asset, LYPDISO.
- MAT2203: In EnACT Cohort 2, 40 patients treated with MAT2203 had mean early fungicidal activity of 0.422 log10 CFU/mL/day (95% CI: 0.294–0.550); the filing says the primary endpoint was met. Reported Day 30 survival was 98% for MAT2203-treated patients versus 88% for IV amphotericin B. The company reported no MAT2203-associated renal toxicity or electrolyte abnormalities in this cohort.
- After its December 2021 FDA meeting, the company said additional confirmatory evidence was needed for step-down therapy and planned a new EnACT Cohort 5. It expected to discuss the cohort design with FDA in 2022; Cohort 4 results were expected in Q3 2022. These were forward-looking expectations, not completed milestones.
- MAT2501: A Phase 1 single-ascending-dose study was enrolling, with topline results expected in 2022. The Cystic Fibrosis Foundation (CFF) had committed approximately $4.6 million toward development.
- Collaborations: Genentech extended its formulation feasibility work through 2022. NIAID-supported preclinical testing of an oral LNC formulation of remdesivir showed encouraging results in a mouse model; further studies were planned.
Financial performance and liquidity
| Metric | FY2021 | FY2020 | Change / context |
|---|---|---|---|
| Contract research revenue | $33,000 | $158,000 | No product-sales revenue |
| Research and development expense | $14.6 million | $14.4 million | Up approximately $0.2 million |
| General and administrative expense | $10.2 million | $10.0 million | Up approximately $0.2 million |
| Operating loss | $24.7 million | $24.2 million | Widened approximately $0.5 million |
| Net loss | $23.3 million | $22.4 million | Widened approximately $0.8 million |
| Net loss per common share | $0.11 | $0.12 | Basic and diluted |
| Cash used in operating activities | $15.2 million | $17.4 million | Use decreased approximately $2.1 million |
The company recognized $1.3 million from selling New Jersey net operating losses and research credits in 2021, versus $1.1 million in 2020. This and other income reduced the reported net loss relative to the operating loss. The filing reports no meaningful product margin because there were no product sales.
- At December 31, 2021, cash and cash equivalents were $21.0 million and marketable securities were $28.6 million; restricted cash was approximately $0.3 million. Management said available cash and marketable securities were expected to fund operations through 2023, an estimate dependent on assumptions and spending.
- Current assets were $51.0 million and current liabilities $4.3 million. Total liabilities were $8.8 million, including approximately $4.7 million of operating lease liabilities and $24,000 of finance lease liabilities. The filing does not report conventional borrowings.
- Cash from financing was $7.0 million, primarily including $5.6 million net proceeds from ATM share sales and $1.4 million from option exercises. Investing activities provided $16.8 million, largely reflecting marketable-security maturities and sales; this was not operating cash generation.
- Accumulated deficit was $131.6 million. The company reported 216.3 million common shares outstanding at year-end and 216.9 million as of March 4, 2022. It had 28.2 million options outstanding at a weighted-average exercise price of $1.21 and 988,000 warrants outstanding.
Material changes, outlook and risks
- Operating expenses increased modestly, while net loss widened. R&D included a $1.2 million noncash charge for shares issued under the Aquarius merger agreement. CFF funding reimbursed approximately $2.2 million of MAT2501 R&D costs in 2021, compared with $0.1 million in 2020.
- The Series B preferred stock converted into common stock in 2021, and the company issued 1.5 million additional common shares to Aquarius holders in September 2021. The ATM program contributed $5.6 million net proceeds in January 2021.
- Management expected higher operating cash use in 2022 as R&D advanced. The company has no established product-sales revenue and expects continuing losses; it may need further capital. Additional equity could dilute shareholders, while collaboration or licensing arrangements could require giving up rights.
- MAT2203’s development path remains subject to FDA agreement on confirmatory-trial design, clinical results, manufacturing readiness and eventual regulatory review. The company discussed a potential NDA pathway, but approval and timing are uncertain. QIDP, Fast Track and orphan designations do not assure approval or a faster review.
- Other material risks include clinical and enrollment uncertainty; reliance on Rutgers-licensed LNC technology, third-party trial and manufacturing providers, and grant support; limited commercial infrastructure; competition and reimbursement uncertainty; and possible COVID-19 or supply-chain disruption. LYPDISO’s future depends on finding a development partner.
- Potential future product-related payments include royalties to Series A preferred holders: 4.5% of net sales and 7.5% of licensing proceeds, subject to stated annual caps and other terms. CFF’s MAT2501 award also carries contingent commercialization royalties and other obligations.
- There were no disclosed pending legal proceedings. Management concluded disclosure controls and internal control over financial reporting were effective at year-end. The auditor issued an unqualified opinion and identified R&D accrual estimation as a critical audit matter, citing judgment in estimating CRO and contract manufacturer work performed.
Important facts for investors to verify
- Whether MAT2203 Cohort 4 and planned Cohort 5 results support FDA-agreed requirements for an NDA, and whether the anticipated development timetable remains achievable.
- MAT2501 Phase 1 results, completion of toxicology work, and the availability and conditions of further CFF support.
- Actual cash burn, marketable-security balances and financing needs against management’s runway estimate through 2023.
- Share-count changes, outstanding options and warrants, and the terms and potential dilution of future financing.
- Manufacturing scale-up and supply arrangements, Rutgers license obligations, preferred-holder royalties, and CFF commercialization obligations.
- Progress in securing a LYPDISO partner and any material changes in collaboration economics or pipeline priorities.