Matinas BioPharma Holdings Inc

Company Overview

We are a clinical-stage biopharmaceutical company focused on delivering groundbreaking therapies using our lipid nanocrystal (LNC) platform delivery technology (LNC Platform). We are seeking to develop an internal pipeline of products utilizing the LNC Platform to successfully encapsulate small molecules and small oligonucleotides and facilitate targeted and extrahepatic delivery to desired cells and tissues without toxicity. In addition, we believe the LNC Platform can also support building an external pipeline of products for leading pharmaceutical companies seeking to develop novel formulations that capitalize on the unique characteristics of the LNC Platform to facilitate, enhance and optimize the delivery of complex molecules, including small molecules, antisense oligonucleotides (ASOs) and silencing or short interfering RNAs (siRNAs).

Our current lead product candidate is MAT2203 (oral amphotericin B), a highly potent antifungal drug which, by virtue of LNC delivery, has been made oral, safe, and well-tolerated for prolonged administration in patients with life-threatening invasive fungal infections. Following the successful EnACT Phase 2 trial in the treatment of cryptococcal meningitis, MAT2203 is now positioned for a single, Phase 3 registration trial (the ORALTO trial) in support of a New Drug Application (NDA) for the treatment of invasive aspergillosis in patients with limited treatment options.

Additional internal discovery programs are currently directed at:

We are dedicated to maximizing the value associated with our unique LNC Platform. This proprietary platform technology, which partially relies upon an exclusive worldwide license from Rutgers University to certain intellectual property, nano-encapsulates chemical and biological payloads in a manner that facilitates safe, efficient, and targeted intracellular delivery for a wide variety of molecules. LNCs have been used to successfully deliver a variety of therapeutic compounds in vivo, including small molecules, peptides, proteins, and small oligonucleotides. Importantly, LNCs are well differentiated from other lipid nanoparticle delivery technologies.

Our LNCs are primarily comprised of phospholipids, like phosphatidylserine (PS), calcium (which is required to keep LNCs intact) and a designated therapeutic cargo, which is trapped inside or between the bilayers of the LNC, resulting in a highly stable, crystalline structure which protects the cargo and allows for oral administration surviving gastrointestinal conditions. Outside of cells, such as in gastrointestinal fluid and in blood, normal extracellular levels of calcium maintain this crystalline structure, whereas in tissues LNCs are avidly taken up by professional phagocytes, as well as infected, inflamed, and malignant cells. In the much lower calcium environment of the cytosol, LNCs lose their crystalline structure and release their cargo intracellularly.

LNCs have a novel targeting profile utilizing PS to facilitate both membrane fusion and PS-receptor mediated endocytosis. Depending on the therapeutic target being approached, the cargo may either have a direct impact inside that particular cell, or, alternatively blood cells such as neutrophils can act as a vehicle to indirectly deliver cargo to target tissues, as in the case of infection or inflammation. LNCs also have a neutral immunogenic profile enabling repeated administration, unlike lipid nanoparticle (LNP) delivery, which because of inherent cytotoxicity may also not be amenable to repeat administration. Uniquely, the highly stable structure of LNCs permits oral administration (not possible with LNPs) since the cargo is protected within the LNC structure from the harsh environment of the gastrointestinal tract.

Preclinical and clinical studies have consistently demonstrated that orally administered LNCs can successfully deliver therapeutic cargosin vivo, to sites of infection, to areas of inflammation, and to tumors. All these target tissues have cells with PS exposed on their surface (which creates opportunities for direct fusion with the cell membrane), as well as specific PS-recognizing receptors on tissue-resident professional phagocytes (which facilitates additional cellular uptake via endocytosis). The ability to target diseased tissues – and potentially avoid off-target effects - the capability to enter cells via both fusion and endocytic mechanisms, and the ability of LNCs to encapsulate – and deliver - a broad range of therapeutic agents provides a solid foundation from which to create a broad pipeline of internal product candidates and external partnerships. While the delivery of therapeutic nucleic acids has advanced considerably in recent years, to date there has been little progress in orally delivered oligonucleotide therapeutics beyond conjugated oligos specifically targeting the liver. Similarly, there are also significant potential opportunities for both small molecules (with potential for both enhanced safety and increased efficacy) and small oligonucleotides in the oncology area.

MAT2203

Our lead drug candidate based on the LNC Platform is MAT2203, an oral formulation of amphotericin B, a well-known and highly effective antifungal drug. Amphotericin B is currently only available in IV formulations which are associated with significant renal toxicity and have labeled restrictions on their use for up to 2 weeks in the United States and only 1 week in most parts of the world due to toxicities, the most prevalent of which is severe nephrotoxicity. Despite these limitations, amphotericin B is currently used and approved to treat a variety of invasive, and potentially deadly, fungal infections due to its potency. MAT2203, which is formulated using our LNC Platform, has the potential to preserve or even increase the efficacy of amphotericin B, while eliminating the risk of nephrotoxicity and providing more convenient and cost-effective oral administration. MAT2203’s product profile has allowed physicians and patients to use MAT2203 for longer periods of time and more broadly than amphotericin B has ever have been used previously and in an outpatient setting.

MAT2203 has been developed to date with the assistance and financial support of the National Institutes of Allergy and Infectious Disease (NIAID) of the National Institutes of Health (NIH). MAT2203 has been designated as a Qualified Infectious Disease Product (QIDP) with Fast Track Status for the treatment of invasive candidiasis, the treatment of aspergillosis, the prevention of IFIs in patients who are on immunosuppressive therapy, and, most recently with an Orphan Designation for the treatment of cryptococcosis. We plan to pursue additional orphan designations for the treatment of aspergillosis, the treatment of invasive candidiasis and the treatment of certain endemic mycoses. Upon approval, MAT2203 could be eligible for up to 12 years of regulatory or marketing exclusivity in the United States.

The initial indication for MAT2203 is early step-down therapy from IV amphotericin B for the treatment of invasive aspergillosis in patient with limited treatment options. Invasive aspergillosis is a serious and life-threatening invasive fungal infection that occurs primarily in severely immunocompromised patients with hematological malignancies and in transplant recipients. This initial step-down indication is a gateway indication, as we plan to expand the utilization of MAT2203 into the treatment of other invasive fungal infections (IFIs) and potentially even for prophylaxis against IFIs in immunocompromised patients, such as transplant patients.

The EnACT (Encochleated Oral Amphotericin for Cryptococcal Meningitis Trial) Phase 2 study was a Phase 2 prospective, randomized, open-label, sequential cohort study, financially supported by the NIH NINDS, evaluating the safety, tolerability, and efficacy of MAT2203 in 100 HIV-positive persons with cryptococcal meningitis. The EnACT trial included a total of four cohorts of patients, with the first two cohorts testing MAT2203 as early step-down therapy following initial treatment with IV amphotericin B during the 14-day induction period, and the second two cohorts testing MAT2203 as potentially all oral therapy. The induction period for all patients in each cohort (active or control) is 14 days, followed by an additional four weeks of treatment (active or control) during a consolidation/maintenance period. Cohorts 1 and 3 were safety lead-ins to Cohorts 2 and 4, respectively, which were the key efficacy cohorts for EnACT.

The primary endpoint in EnACT was Early Fungicidal Activity (EFA), a measurement of cerebrospinal fluid fungal clearance. EFA is a well-validated quantitative measure of the efficacy of antifungal agents and is a key surrogate marker for survival. EFAs of less than 0.20 log 10 Cryptococcus colony forming units (CFUs) per mL CSF per day are associated with significantly higher mortality and worse clinical outcomes 1. EFA measured above this threshold is clinically meaningful and represents robust fungal clearance. In the second cohort of EnACT, the mean EFA achieved with patients treated with MAT2203 was 0.38 log 10 CFU/mL/day, with 95% confidence intervals (0.30 to 0.46) significantly higher than the prespecified primary endpoint threshold of >0.20. All patients treated with MAT2203 who completed the induction phase achieved sterile CSF cultures during treatment (either during induction or early consolidation phases). There was no evidence of breakthrough or relapsed cryptococcal infections observed in any of the patients during treatment with MAT2203 through 10 weeks. In Cohort 2, overall survival was 90% after 18 weeks in 40 patients randomized to receive MAT2203.

Interim data from Cohort 4 of the Phase 2 EnACT study of MAT2203 (oral amphotericin B) for the treatment of cryptococcal meningitis (CM) were presented at IDWeek in October 2022. As part of IDWeek, the EnACT abstract was the recipient of the Outstanding Abstract and IDSA Awardee by the Infectious Diseases Society of America. In the EnACT trial, MAT2203 exceeded the primary endpoint threshold for early fungicidal activity (EFA) of 0.20 log 10 CFU/mL/day, with a mean EFA achieved of 0.30 log 10 CFU/mL/day with 95% confidence intervals from 0.22 – 0.38.

Cohort 4 also yielded key secondary endpoints, including overall survival and safety. For 40 patients receiving MAT2203 treatment, overall survival remained at 90% through 18 weeks, while the survival rate at Week 2 was 95% (the primary endpoint for the upcoming Phase 3 registration trial in cryptococcal meningitis). Importantly, the incidence of adverse events relating to kidney function and anemia were significantly lower for MAT2203 compared to the conventional IV amphotericin B standard of care treatment across the entirety of the EnACT trial, with no evidence of kidney toxicity even with up to 6 weeks of oral MAT2203 treatment.

In February 2024, we announced agreement with the United States Food and Drug Administration (FDA) on the design of a single Phase 3 registration trial of MAT2203 in patients with invasive aspergillosis who have limited treatment options, including consensus on all critical elements of the registrational path for MAT2203 (the ORALTO trial).

ORALTO is a Phase 3, randomized, multicenter, open-label, adjudicator-blinded study to evaluate the efficacy and safety of MAT2203 as an oral step-down treatment following treatment with AmBisome® (liposomal IV-amphotericin B) compared with the standard of care in patients with invasive aspergillosis who have limited treatment options. The primary efficacy endpoint is all-cause mortality at study day 42.

Key secondary objectives include:

1****Clin Infect Dis.***2020;71(5):e45-49

Enrollment is expected to include approximately 216 adults with recently diagnosed probable or proven invasive aspergillosis who are being treated with AmBisome due to their inability to receive an IV mold-active azole and with limited alternative treatment options. Following up to two days of initial treatment with AmBisome, eligible study participants will be entered into the study and randomized in a 2:1 ratio to receive either oral MAT2203 or continued AmBisome treatment followed by standard of care.

All study participants will receive up to 12 weeks of treatment starting from the first day of treatment with AmBisome. It is anticipated that all study participants will be hospitalized during the initial AmBisome treatment period. After step-down to oral MAT2203, study participants may be discharged from the hospital to continue treatment on an outpatient basis, as clinically appropriate.

An independent Data Review Committee, who will be blinded to treatment, will adjudicate primary and secondary endpoints, including clinical, radiological, and mycological responses. Once approximately 75% of participants are enrolled, an independent Data Safety Monitoring Board will review the overall pooled all-cause mortality rate in a blinded fashion to ensure that the sample size assumptions are reasonable and that the study is adequately powered. Should the pooled event differ substantially from expected levels, a sample size adjustment can be made to the trial.

ORALTO will be conducted at approximately 65 investigator sites in the U.S., Europe, South America, Middle East, and Asia Pacific. Enrollment is expected to commence in the second half of 2024 and is expected to require approximately 24 months.

We are actively engaged in an ongoing partnership process for MAT2203, seeking one or more development and/or commercialization partners. We will require either (i) the consummation of a partnership transaction, or (ii) raising additional capital, prior to commencing the ORALTO trial.

In addition to conducting the EnACT trial, a MAT2203 Compassionate/Expanded Use Access Program was established to provide MAT2203 on a compassionate use basis. Enrollment into the Program requires that patient applicants meet certain criteria for eligibility, including:

19 patients to date have been enrolled in the Program at multiple healthcare institutions, including the University of Michigan, Johns Hopkins, Nationwide Children’s Hospital, City of Hope, Vanderbilt University Medical Center, the National Institutes of Health, Children’s Hospital of Philadelphia, Memorial Sloan Kettering Cancer Center, and the University of California, San Diego School of Medicine. The majority of enrolled patients are post-transplant or are undergoing treatment for underlying malignancies. The infections being treated with MAT2203 include a variety of micro-organisms (includingAspergillus,Mucorales species,Candidiasis,Fusariumand suspectedCoccidioides) occurring at multiple sites of infection, including brain, bladder/colon, bone, lung, sinus, and skin. Most patients were receiving AmBisome® prior to enrollment but developed treatment-limiting nephrotoxicity and most also required treatment for either azole-resistant organisms or had clinically failed azole therapy and had no other treatment options.

Of the 19 patients enrolled in the Program, 15 have available follow-up and 4 recently initiated or will soon commence treatment with MAT2203.

Importantly, all patients who experienced renal toxicity following treatment with AmBisome saw their renal function return to baseline after transitioning to MAT2203 therapy and suffered no further renal side effects over the course of extended treatment with MAT2203.

LNC Platform Work

In addition to advancing MAT2203 into the ORALTO Phase 3 trial, we continue to expand the utilization of the LNC Platform with small molecules and small oligonucleotides outside of infectious disease, targeting inflammation and oncology.

Inflammation

We are investigating a variety of LNC formulations of two small oligonucleotides designed to target inflammatory cytokines IL-17A and TNFα and have conducted a series ofin vitro andin vivo studies evaluating the biological activity associated with oral delivery as well as the corresponding associated clinical benefit of IL-17A knockdown in an imiquimod (IMQ) induced murine psoriasis disease model.

These preliminary studies have documented biological activity in the form of cytokine knockdown and have also provided some evidence of associated tangible clinical benefit with improvements in skin lesion appearance (redness, scaling) in this qualitative psoriasis model. These data remain under evaluation and the analyses are focused on (a) clarifying the strength and time course of cytokine inhibition, and (b) evaluating cytokine mRNA levels and specific tissue responses in these models to better understand and interpret these data.

In December 2023, we announced results from a series ofin vivo studies demonstrating successful oral delivery of two LNC-formulated small single-strand oligonucleotides that specifically target key inflammatory cytokines TNFα and IL-17A in well-established and validated animal models that mimic acute inflammatory responses seen in human diseases.

Acute Colitis Study (“TNFα”)

A dextran sulfate sodium (“DSS”)-induced murine colitis model was used to evaluate an orally administered LNC-delivered small oligonucleotide that specifically targets TNFα mRNA synthesis. Colon tissue TNFα mRNA levels, as assessed by quantitative real-time PCR analysis, were lower following orally administered active LNCs, resulting in statistically significant reductions of serum TNFα levels by 37% compared with diseased, but untreated animals. Importantly, clinical disease activity scores at key time points in the studies were also significantly improved with an active LNC formulation.

Acute Psoriasis Study (“IL-17A”)

An imiquimod (“IMQ”)-induced murine psoriasis model was used to evaluate an orally administered, LNC-delivered small oligonucleotide designed to inhibit IL-17A mRNA synthesis, which contributes significantly to the progression of psoriatic skin lesions. Similar to the DSS colitis model, skin tissue levels of IL-17A mRNA in the IMQ psoriasis model were lower with orally administered active LNCs compared with IMQ alone. In this model, while IL-17A serum levels were not expected to change, improvement was demonstrated in clinical disease markers of skin redness and scaling, further validating the biological activity of these small oligonucleotides.

Oncology

In November of 2023 we announced positive results from anin vivo animal study of an oral LNC formulation of docetaxel, a well-known chemotherapeutic agent used in the management of multiple metastatic and unresectable tumors. Anti-tumor effects of daily oral LNC-docetaxel were comparable to IV-docetaxel with statistically significant reductions in tumor volume compared with untreated controls at Day 14 (high dose oral LNC -63%; low dose oral LNC -57%; IV docetaxel -68%), and similar reductions in tumor weight at Day 14. No systemic toxicities were noted. Body weight was stable over treatment duration and hematologic parameters were similar to untreated controls.

In March 2024 we announced positive results from an additional in vivo study of LNC-docetaxel in healthy mice. The goal of the study was to determine whether an oral LNC formulation of docetaxel could improve the overall safety profile of conventional IV-administered docetaxel. The study included 24 healthy BALB/c mice divided into three treatment groups: (1) control animals treated with oral saline, (2) IV-docetaxel (30 mg/kg, or 0.6 mg/dose) administered once a week for three weeks, and (3) oral LNC-docetaxel (37.5 mg/kg, or 0.75 mg/dose) administered once daily over three weeks. The primary endpoint of the study was change in body weight over the treatment period which how toxicity is primarily manifested in this model.

Key takeaways included the following:

Next steps include evaluating the efficacy of the current LNC-docetaxel formulation in other tumor models. Additionally, we plan to evaluate the potential anti-tumor activity of LNC formulations of small oligonucleotides.

Strategy

We are focused on redefining the intracellular delivery of nucleic acids and small molecules through our LNC Platform and its application to overcome current challenges in safely and effectively delivering small molecules, nucleic acids, gene therapies, proteins/peptides, and vaccines.

Key elements of our strategy include:

Our Lipid Nanocrystal (LNC) Platform

Safe, efficient, and targeted intracellular delivery of medicines remains one of the biggest challenges in the pharmaceutical and biotech industry today. An ever-growing understanding of the complex biology within cells has given rise to increasingly sophisticated therapeutic approaches targeting the genetic machinery driving metabolic activity within cells. However, challenges remain, especially for small molecules causing significant toxicity and for therapeutic oligonucleotides in areas including safely and efficiently delivering cargo to the interior of a cell, delivering to targets beyond the liver and in providing opportunities for longer-term oral delivery to increase convenience and resulting in a potentially significant pharmacoeconomic impact.

Strategically, we are seeking to leverage the unique features of the LNC Platform and the biology of phosphatidylserine to extend potential applications for the intracellular delivery of highly potent, but highly toxic small molecules as well as the oral, target delivery of small oligonucleotides.

LNCs – Background

“Cochleate lipid cylinders” were originally described in scientific literature as complex, cylindrical, multi-lamellar structures arising from the addition of Ca++ to sonicated liposomal preparations of phosphatidylserine (PS) in an aqueous solution, with the lamellae folded in a spiral, crystalline configuration that excludes water. When sufficient external calcium is present, these structures remain in a crystalline state, while the addition of etheylenediaminetetraacetic acid (EDTA) to these preparations (removing the calcium) results in the loss of the stable spiral crystalline structure (Figure 1).

Figure 1: Cochleate Formation

We have developed techniques to embed cargo molecules within cochleates as they are assembled. These new cargo-carrying structures (termed lipid nanocrystals, orLNCs) have been used to successfully deliver several different cargo molecules to cellsin vitroand to animals and humansin vivo. Because of their exceptional stability (an anhydrous crystalline structure) and unique composition (PS-containing bilayers), we believe that LNCs are a promising alternative for the intracellular delivery of a variety of small molecules – proteins, peptides – and small oligonucleotides such as ASOs and siRNA. In addition, since the normal physiologic levels of calcium in the gut can maintain their crystalline structure, LNC formulations can also potentially be delivered orally, as the encapsulated cargo is protected from degradation by harsh environmental conditions or enzymes (Figure 2).

Figure 2: LNCs Encapsulate and Protect their Cargo in a Water-free Environment

Importance of Phosphatidylserine

Phosphatidylserine (PS) is present in virtually all cells and is an integral part of the cell membrane. PS is normally localized to the inner part of the membrane bilayer by active cellular processes and not normally exposed externally (Figure 3). However, when cells are injured and/or apoptotic, PS moves from the inner layer to the outer layer and is the primary “eat me” signal driving efferocytotic clearance of apoptotic cells by professional phagocytes.

Studies with cargo carrying LNCs have documented both a lack of cargo accumulation in the tissues of normal, healthy animals, and significant cargo delivery to involved tissues in infected animals. Another important aspect of the underlying stability of LNCs is that they do not release their cargo within the blood (due to the presence of stabilizing levels of calcium), and delivery of cargo is confined to involved cells and tissues.

Mechanistically, the cellular entry of LNCs is driven by PS, which is an important participant in both efferocytotic clearance of apoptotic cells and in physiologic cellular fusion processes (Figure 3). As noted, apoptotic cells expressing PS on their surface are recognized and cleared by professional phagocytes, without eliciting the normal inflammatory responses that might otherwise be anticipated with cell death. Professional phagocytes themselves have several very specific PS receptors that facilitate this clearance. Parenthetically this mechanism is exploited by enveloped viruses to facilitate viral uptake by immune cells – “viral apoptotic mimicry” – noting that the “envelope” of enveloped viruses is basically comprised of PS. Thus, phagocytosis of LNCs by professional phagocytes (and some non-professional phagocytes) becomes one mechanism for intracellular delivery of LNCs.

Figure 3: Importance of Phosphatidylserine (PS) in apoptotic phagocytosis

As described above, in addition to its role as an “eat-me” signal for uptake of apoptotic cells by phagocytes, PS also plays a very important role in normal physiologic cellular fusion processes – as a “fuse-me” signal (such as with the formation of myotubules from myoblasts, the formation of osteoclasts from osteoblasts, and the fertilization of an of egg by sperm to form a zygote) or even as a “heal me” signal (as with axonal fusion after injury or repair of injured cell membranes). Consequently, the presence of PS on both the surface of LNCs and on the surface of targeted somatic cells (which themselves may express PS because of injury or inflammation) creates additional opportunities for intracellular delivery via direct cellular fusion (Figure 4).

Figure 4 – Importance of Phosphatidylserine (PS) in Cellular Fusion

LNC Drug Delivery

Because of their underlying stability, LNCs do not release cargo within the blood (due to the presence of stabilizing levels of calcium), and the delivery of cargo is confined to involved cells and tissues. Studies utilizing an LNC formulation of radio-labeled amphotericin showed no accumulation in normal healthy tissues, in contrast to multiple studies showing clinically meaningful tissue levels of amphotericin when amphotericin-carrying LNCs were administered in the setting of systemic fungal infections.

After oral administration, LNCs are transported across the cells lining the gastrointestinal tract (via transcytosis). Because of their size, LNCs do not enter the portal circulation and thereby avoid first pass hepatic metabolism. Instead, they are transported through the gut lymphatics to the thoracic duct and enter the circulatory system via the superior vena cava. Once they have entered the circulation, LNCs are transported by professional phagocytes (as well as via other non-cellular mechanisms) to sites of injury or infection, where they are avidly taken up by infected/injured cells that have PS on the outer layer of their cell membranes. Finally, when exposed to the very low calcium environment in the interior of a cell, the forces responsible for maintaining the otherwise stable LNC structure are no longer as strong, and the LNCs release their cargo.

Differentiation from LNPs

Conventional LNPs in blood bind ApoE to their surface and are taken up into cells by clathrin-mediated endocytosis via the ApoE-recognizing LDL receptor. From within early endosomes, LNPs then act to disrupt the endosomal membrane and gain entry to the cytosol. Endosomal escape of LNPs is a very inefficient process, with endosomal escape rates of generally < 5%. Administration of LNPs can also be associated with injection site reactions and other toxicities arising from the destruction of the endosomal membrane, which, ultimately, can limit their chronic use. Additionally, LNPs cannot be delivered orally. LNC delivery can overcome many of the limitations of LNPs with oral administration, extra-hepatic targeting, multiple potential cellular entry mechanisms, a breadth of payload capabilities, the ability to target both immune and somatic cells, reduced toxicity/improved safety, and opportunities for safe, chronic long-term administration. Each of these have been validated with the clinical success of MAT2203 in the treatment of deadly invasive fungal infections.

Therapeutic Targets

Infection

The therapeutic applications of our proprietary delivery technology have focused initially on the delivery of potent, highly effective anti-infective agents that have treatment-limiting potential toxicities, including irreversible toxic effects on kidney and hearing function. In MAT2203, we have developed a less toxic and orally bioavailable formulation of the potent (but otherwise highly toxic) fungicidal drug amphotericin B that can be safely used for longer periods of time than currently possible with conventional amphotericin in the treatment of deadly fungal infections. This, in turn, has created potential opportunities to use amphotericin B in ways that were not previously possible with conventional formulations, and create opportunities for amphotericin treatment in settings where conventional amphotericin has proven to be too toxic, and open the possibilities for much longer-term treatment which should result in overall improved outcomes for patients with a significant pharmacoeconomic impact.

Inflammation

With the observation that LNCs are avidly taken up by innate immune cells (monocytes, neutrophils, and dendritic cells) we believe that LNCs could become very useful in treating inflammatory diseases. We have gained access to a number of small oligonucleotides that are capable of very selectively knocking down individual cytokines – specifically IL-17A and TNFɑ. We have successfully advanced the program with these small oligos, first with successful, efficiently encapsulated LNC formulations, and next within vitro validation of the efficacy of the LNC formulations. More recently, we have progressed two of these LNC-formulated small oligos intoin vivo studies in animal disease models, with successful demonstration of both measurable biological activity and potential therapeutic efficacy in two different models. In a murine imiquimod-induced psoriasis model we observed reductions of tissue IL-17A mRNA, accompanied by improvement in skin redness and scaling. Similarly, in a murine DSS model of inflammatory bowel disease, daily oral administration of an oral LNC formulation of the TNFɑ targeted oligonucleotide resulted in reductions of colon TNFɑ mRNA, significant reductions in serum TNFɑ levels, and significant improvements in disease activity scores.

Cancer

Building on the success of MAT2203 in creating a safe, effective formulation of amphotericin that can be administered orally for much longer periods of time for the treatment of deadly fungal infections, and having seen how avidly tumor cells can take up LNCs in vitro, we have extended the application of LNC technology to oncology applications. Some tumors cell lines are also known to have relatively high levels of surface PS expression, which provides potential directionality for those tumors which may respond positively to treatment with LNC-mediated chemotherapies. Building upon our experience with MAT2203, there are two specific areas where we believe that LNCs could provide major advances:

We began initial formulation work with a number of chemotherapeutic agents, and ultimately chose to move forward with docetaxel. We have shownin vitro therapeutic efficacy that proved even better than conventional docetaxel, and moved rapidly toin vivostudies and into a syngeneic mouse melanoma model (with known high surface PS expression). In this model, our oral LNC formulation of docetaxel proved to be equally effective as conventional intravenous docetaxel. Moreover, despite daily oral administration of the LNC formulation, there was no adverse impact on body weight, and no indications of any hematologic toxicity. Through this work, we have demonstrated that an oral LNC formulation of docetaxel, administered daily, can deliver levels of drug to tumors provide a comparable therapeutic response to that of conventional IV docetaxel, without any indications of toxicity. Additionalin vivo work in healthy mice has shown that even higher doses of LNC docetaxel (50% greater) were equally free from toxicity, while similar increases in the IV docetaxel dose were accompanied by indications of toxicity, with a mean weight loss of approximately 20%.

Our LNC Clinical Stage Asset: MAT2203

Our lead product candidate, MAT2203, is an orally administered LNC formulation of a broad spectrum anti-fungal drug called amphotericin B. Traditionally, amphotericin B is an IV-administered drug used as a last resort for treatment of systemic fungal infections resistant to triazoles and echinocandins, including resistant candidiasis, cryptococcal meningoencephalitis, and aspergillosis. To date, there have been little to no reported clinically observed drug-resistance to amphotericin B, further bolstering the use of this compound as the most likely last resort treatment for fungal infections in the foreseeable future. However, the use of amphotericin B is relatively limited because it is currently only available as an IV-administered product and has documented history of severe toxicity (most notably nephrotoxicity). By utilizing our LNC Platform to nano-encapsulate amphotericin B, we have created an opportunity for the drug to be administered orally with targeted delivery to infected cells and tissues, which we believe may have fewer side effects than the currently available IV-formulations of amphotericin B, and potentially result in greater efficacy due to the ability to administer amphotericin B safely for longer periods of time.

Our LNC delivery of amphotericin B changes the bio-distribution, resulting in a higher level of amphotericin B at the site of infection and a lower level of free circulating drug. By reducing the amount of circulating drug, our LNC Platform may reduce overall toxicity. Importantly, drug concentrations will be high only in target tissues due to the migratory nature of drug-carrying phagocytes to inflammatory regions. Based upon data generated to date, we believe MAT2203 has the potential to offer improved safety and reduced toxicity, and, as a result, we believe MAT2203 will be able to offer a categorically different and improved formulation that delivers orally administered amphotericin B, directly to the target cell at the site of infection.

The data from animal toxicity and human studies for MAT2203 indicate a substantial advantage over other amphotericin B formulations in observed toxicities and side effects, which we believe is driven by two primary factors:

The profile of MAT2203, which facilitates the oral, targeted, and non-toxic delivery of amphotericin B has the potential to fundamentally change the treatment paradigm for IFIs, which are a rapidly growing global threat.

The Increasing Problem of Fungal Pathogens

Fungal pathogens and infections are an increasing global public health concern. IFIs are increasing globally due to advancements in the medical management of critically ill and immunocompromised patients. The emergence of drug-resistant IFIs has resulted in prolonged hospitalizations and the increased use of expensive and often highly toxic second-line antifungal agents.

Fungal pathogens cause a wide variety of infections but there are only four currently available classes of systemic antifungal treatments (polyene, azole, echinocandin, pyrimidine), and only two classes (azole, pyrimidine) are available in oral formulations. Use of these antifungal agents typically require a considerable degree of expertise to manage potential toxicities and complex drug-drug interactions in these vulnerable patients and effective polyene and echinocandins require prolonged hospitalization for intravenous administration. Therefore, there is a critical unmet need for more effective, well-tolerated, and safe oral antifungal agents to treat patients with serious, life-threatening, and often drug resistant IFIs.

The World Health Organization (WHO) recently recognized IFIs to be a global public health concern. In late 2022, the WHO released their Fungal Priority Pathogen List which designates Aspergillus fumigates, Candida auris, and Candida albicans to be in the Critical Priority group (i.e., highest perceived public health threat), Mucorales, Candida tropicalis, and Candida parapsilosis in the High Priority group, and Coccidioides species in the Medium Priority group. Aspergillus, Candida, Coccidioides, and Cryptococcus species are also qualified pathogens that pose a serious and life-threatening risk and are on the qualified designation list according to 317.2 – CFR – Code of Federal Regulations Title 21 – FDA.

We believe that MAT2203 has the potential to become a best-in-class therapy for the treatment of IA and for other IFIs more broadly by offering the following key potential benefits:

MAT2203 Development History and Plan

Preclinical Data

MAT2203 has demonstrated antifungal activity when administered orally in several animal models forCryptococcus,Candida, andAspergillusinfection [Zarif et al, 2000; Perlin, 2004; Lu et al, 2019]. The efficacy in these animal models has been shown to demonstrate comparable or superior antifungal activity compared to IV amphotericin B but with reduced toxicity.

Thein vivoefficacy of MAT2203 has been shown in multiple mouse models infected withCryptococcus neoformans;these studies were conducted by Dr. Peter Williamson at NIH [Lu et al, 2019]. Multiple studies demonstrated the potential for MAT2203 to be administered in combination with 5FC to provide an effective oral formulation for treatment of cryptococcal meningitis. Using a 3-day delayed model of murine cryptococcal meningoencephalitis and a large inoculum of a highly virulent strain of serotype AC. neoformans, MAT2203, administered in combination with 5FC, was found to have efficacy equivalent to administered amphotericin B deoxycholate with 5FC and superior to oral fluconazole without any observed toxicity. The transport of fluorescent MAT2203 particles to the brain as well as significant brain levels of amphotericin drug was demonstrated in treated mice, and immunological profiles were similar to those of mice treated with conventional amphotericin B. These studies suggest the potential for an efficacious oral formulation of a known fungicidal drug against intrathecal cryptococcal disease. MAT2203 therefore provides a promising therapeutic option for CM.

Additional preclinical studies of MAT2203 have been conducted to investigate the treatment of other IFIs. Oral MAT2203 was demonstrated to be effective in multiple nonclinical studies*. In vitro* studies have demonstrated that the MAT2203 LNC formulation did not have an impact on the antifungal activity of amphotericin B. Oral MAT2203 was demonstrated to be effective in several mouse models of systemic fungal infection with Candida, Aspergillus, and Mucor. In the Candida infection models in both immunocompromised and immunocompetent mice, the efficacy of oral MAT2203 was comparable to intraperitoneal (IP) amphotericin B in terms of survival and reduction of tissue burden in target organs of lung, liver, and kidneys of infected animals. In the Aspergillus mouse models of infection, the efficacy of oral MAT2203 was comparable to intraperitoneal amphotericin B in terms of survival, with dose-dependent reduction of fungal tissue burden. Oral MAT2203 also demonstratedin vivo efficacy in treatingR. delemar orM. circinelloides pulmonary infections in immunosuppressed mice and led to a reduction in fungal spores in lung and brain comparable to results achieved with the liposomal intravenous amphotericin B.

EnACT Phase 2 Trial

Based a comprehensive preclinical data package, the NIH financially supported a grant application from the University of Minnesota to conduct the EnACT Phase 2a/b trial in Uganda. This study was initiated in October 2019 and explored the use of MAT2203 for both induction and maintenance therapy in the treatment of cryptococcal meningitis, which is one of the most frequent and opportunistic infections in HIV patients. Given the high morbidity and mortality associated with CM in HIV patients, the clinical unmet need is very high with the global burden estimated at 1 million cases annually.

EnACT consisted of two parts. Part 1 of EnACT was conducted in HIV-positive patients with a history of cryptococcosis, evaluated ascending oral doses of MAT2203, and identified a safe maximum tolerated dose for Part 2 of the trial.

Part 2 of EnACT was a prospective, randomized, open-label sequential cohort clinical trial to investigate the safety, tolerability, and efficacy of oral MAT2203 in 100 HIV-positive persons with cryptococcal meningitis compared to SOC. The EnACT trial included a total of four cohorts of patients, with the first two cohorts testing MAT2203 as early step-down therapy following initial treatment with IV amphotericin B during the 14-day induction period, and the second two cohorts testing MAT2203 as potentially all oral therapy. The induction period for all patients in each cohort (active or control) is 14 days, followed by an additional four weeks of treatment (active or control) during a consolidation/maintenance period. Cohorts 1 and 3 were safety lead-ins to Cohorts 2 and 4, respectively, which were the key efficacy cohorts for EnACT.

Cohort 2 of EnACT was designed to assess the potential to treat CM infections with oral MAT2203 as a step-down treatment during the induction phase of treatment immediately following only two days of IV amphotericin treatment, with continued treatment with MAT2203 for up to six weeks during early maintenance treatment. The primary efficacy endpoint for Part 2 of EnACT was early fungicidal activity (EFA) defined as rate of clearance of Cryptococcus from the cerebrospinal fluid (CSF) (log 10 colony forming units [CFU]/mL/day) as measured by serial quantitative fungal cultures over the first two weeks of treatment.

In Cohort 2 of EnACT, we reported the following results:

Potent Early Fungicidal Activity (EFA), Cerebrospinal Fluid (CSF) Sterilization, with No Evidence of Breakthrough Infections During Treatment with MAT2203

Survival

2*Clin Infect Dis. 2020;71(5):e45-49

Safety

In Cohort 4 of EnACT, we reported the following results:

Efficacy and EFA

Survival

Safety

The EnACT trial results were published in the Journal of Clinical Infectious Diseases in August 2023 as an Editor’s Choice manuscript.

Expanded/Compassionate Use Access Program

Following completion of the EnACT Trial, we initiated our Expanded/Compassionate Use Access Program in 2022 to demonstrate that MAT2203 could have a significant impact in treating patients with invasive fungal infections with limited or no treatment options, which are very similar to the patients we believed we would be enrolling in a Phase 3 clinical trial.

19 patients to date have been enrolled in the Program at multiple healthcare institutions, including the University of Michigan, Johns Hopkins, Nationwide Children’s Hospital, City of Hope, Vanderbilt University Medical Center, the National Institutes of Health, Children’s Hospital of Philadelphia, Memorial Sloan Kettering Cancer Center, and the University of California, San Diego School of Medicine. The majority of enrolled patients are post-transplant or are undergoing treatment for underlying malignancies. The infections being treated with MAT2203 include a variety of micro-organisms (includingAspergillus,Mucorales species,Candidiasis,Fusariumand suspectedCoccidioides) occurring at multiple sites of infection, including brain, bladder/colon, bone, lung, sinus, and skin. Most patients were receiving AmBisome® prior to enrollment but developed treatment-limiting nephrotoxicity and most also required treatment for either azole-resistant organisms or had clinically failed azole therapy and had no other treatment options.

Of the 19 patients enrolled in the Program, 15 have available follow-up and 4 recently initiated or will soon commence treatment with MAT2203.

Importantly, all patients who experienced renal toxicity following treatment with AmBisome saw their renal function return to baseline after transitioning to MAT2203 therapy and suffered no further renal side effects over the course of extended treatment with MAT2203.

We plan to continue to evaluate opportunities to provide MAT2203 on a compassionate use basis for patients as we believe these are opportunities to showcase the safety and efficacy of MAT2203 outside clinical trial settings which represent important additional patient data for both FDA and prospective partners to review.

The ORALTO Phase 3 Trial

In February 2024, the Company announced that it has reached agreement with the FDA on the design of a the ORALTO trial, including consensus on all critical elements of the registrational path for MAT2203.

ORALTO is a Phase 3, randomized, multicenter, open-label, adjudicator-blinded study to evaluate the efficacy and safety of MAT2203 as an oral step-down treatment following treatment with AmBisome (liposomal IV-amphotericin B) compared with the standard of care in patients with invasive aspergillosis who have limited treatment options. The primary efficacy endpoint is all-cause mortality at study day 42. Key secondary objectives include:

Enrollment is expected to include approximately 216 adults with recently diagnosed probable or proven invasive aspergillosis who are being treated with AmBisome due to their inability to receive an IV mold-active azole and with limited alternative treatment options. Following up to two days of initial treatment with AmBisome, eligible study participants will be entered into the study and randomized in a 2:1 ratio to receive either oral MAT2203 or continued AmBisome treatment followed by standard of care.

All study participants will receive up to 12 weeks of treatment starting from the first day of treatment with AmBisome. It is anticipated that all study participants will be hospitalized during the initial AmBisome treatment period. After step-down to oral MAT2203, study participants may be discharged from the hospital to continue treatment on an outpatient basis, as clinically appropriate.

An independent Data Review Committee, who will be blinded to treatment, will adjudicate primary and secondary endpoints, including clinical, radiological, and mycological responses. Once approximately 75% of participants are enrolled, an independent Data Safety Monitoring Board will review the overall pooled all-cause mortality rate in a blinded fashion to ensure that the sample size assumptions are reasonable and that the study is adequately powered. Should the pooled event differ substantially from expected levels, a sample size adjustment can be made to the trial.

ORALTO will be conducted at approximately 65 investigator sites in the U.S., Europe, South America, Middle East, and Asia Pacific. Enrollment is expected to commence in the second half of 2024 and is expected to require approximately 24 months.

We are actively engaged in an ongoing partnership process for MAT2203, seeking one or more development and/or commercialization partners. We will require either (i) the consummation of a partnership transaction, or (ii) raising additional capital, prior to commencing the ORALTO trial.

Based on the data generated in Cohorts 2 and 4 of EnACT, data from our ongoing Expanded Access Program, and following our reaching agreement with the FDA on the design of the ORALTO Phase 3 trial design, we believe we have a well-defined pathway to NDA submission for MAT2203 for an initial indication for the treatment of invasive aspergillosis in patients with limited treatment options. Our overall development strategy is to expand the indications for MAT2203 to include the treatment of other IFIs and even prophylaxis once a pharmacodynamic bridge to IV amphotericin has been established through the planned ORALTO Trial.

Overall Clinical Data Package

Clinical studies conducted to evaluate MAT2203 include two completed Phase 1 studies in healthy volunteers (Study CAM-102 and Study MB-70011), and three Phase 2-like studies: one completed study in patients with moderate to severe vulvovaginal candidiasis (VVC), one Phase 2a study in patients with mucocutaneous candidiasis who are refractory or intolerant to standard non-IV therapies, and one Phase 2 study in patients with cryptococcal meningitis.

As of March 2024, MAT2203 has been administered to a total of 202 subjects in four clinical trials and through our Expanded/Compassionate Use Access Program as follows:

In these studies, single doses of MAT2203 up to 2.0 g and repeated doses of MAT2203 up to 2.0 g/day and as long as 48 months have been safe and well-tolerated.

About Invasive Aspergillosis in Patients with Limited Treatment Options

Invasive aspergillosis (IA) is a serious and life-threatening invasive fungal infection that occurs primarily in severely immunocompromised patients with hematological malignancies and in transplant recipients. IA has been increasing globally due to advancements in the medical management of these patients and has recently been recognized as a global public health concern. In 2022, the World Health Organization released their Fungal Priority Pathogen List that designatedAspergillus fumigatus, the most common cause of IA, to be in the Critical Priority group (i.e., the highest perceived public health threat).Aspergillusis also included in the FDA qualified designation list of pathogens that pose a serious and life-threatening risk.

The one-year mortality for patients with IA has been reported to be 41% in solid organ transplant recipients and up to 75% in stem cell transplant recipients. Although outcomes have improved since the development of mold-active azoles, the use of these agents is often complicated by treatment-limiting toxicities, drug-drug interactions, and the recent emergence of drug resistance.

The Infectious Diseases Society of America (IDSA) Treatment Guidelines recommend that patients with IA receive treatment with a mold-active azole for a minimum of 6 to 12 weeks, largely dependent on the degree and duration of immunosuppression, site of disease, and evidence of disease. Although the mold-active azoles are generally effective, their use requires a considerable degree of expertise to manage toxicities and drug-drug interactions which often limit duration of treatment.

IA caused byAspergillus species that are resistant to mold-active azoles has been increasing globally due to the chronic use of azoles and the widespread use of azole fungicides in agriculture. This emerging resistance is particularly concerning because IA due to azole-resistantAspergillus is a life-threatening disease with a high mortality rate.

Patients with hematological malignancies and transplant recipients often receive antifungal prophylaxis with a mold-active azole to prevent infection during high-risk periods. Recently, cases of breakthrough IA have been reported in patients receiving antifungal prophylaxis. The reason for these apparent failures of prophylaxis may be non-compliance, poor absorption, drug-drug interactions, or infection with a drug-resistantAspergillusspecies.

The IDSA Treatment Guidelines recommend an intravenously administered amphotericin B, such as AmBisome, as an alternative for patients with IA who are unable to receive treatment with a mold-active azole. However, IV amphotericin B can cause nephrotoxicity and electrolyte abnormalities which usually requires hospitalization for close monitoring and electrolyte supplementation. Other complications of IV amphotericin B include acute infusion reactions with dyspnea, hypoxia, chest and back pain, IV-site phlebitis, anemia, and hepatotoxicity. As such, treatment with IV amphotericin B for more than a few weeks is generally not safe or practical. There are no oral antifungals available that will enable these patients to complete the recommended 6 to 12 weeks of treatment. Accordingly, there is a critical unmet medical need for effective and well-tolerated oral antifungal agents to treat these patients with IA.

MAT2203 Regulatory Designations

The FDA has granted MAT2203 designations for Qualified Infectious Disease Product, or QIDP, and Fast Track for the treatment of invasive candidiasis and aspergillosis, for the prevention of IFIs in patients on immunosuppressive therapy, and the treatment of cryptococcosis. We recently also received Orphan Drug Designation for MAT2203 for the treatment of cryptococcosis and associated CM from the U.S. FDA and EMA. The FDA may designate a product candidate as an orphan drug if it is intended to treat a rare disease or condition, which is generally defined as having a patient population of fewer than 200,000 individuals in the United States, or a patient population greater than 200,000 in the United States where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the United States. The orphan drug designation provides eligibility for orphan drug exclusivity in the United States upon FDA approval if a product that has orphan drug designation subsequently receives the first FDA approval for a particular active ingredient for the disease for which it has such designation. For a product that obtains orphan drug designation based on a plausible hypothesis that it is clinically superior to the same drug that is already approved for the same indication, to obtain orphan drug exclusivity upon approval, clinical superiority of such product to this same drug that is already approved for the same orphan indication must be demonstrated. Orphan drug exclusivity means that the FDA may not approve any other applications, including a NDA, to market the same drug for the same indication for seven years, except in limited circumstances such as if the FDA finds that the holder of the orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease or condition for which the drug was designated. Similarly, the FDA can subsequently approve a drug with the same active moiety for the same condition during the exclusivity period if the FDA concludes that the later drug is clinically superior, meaning the later drug is safer, more effective or makes a major contribution to patient care. Orphan drug designation also entitles a party to financial incentives such as opportunities for grant funding towards clinical trial costs, a waiver from payment of user fees, an exemption from performing clinical studies in pediatric patients unless the FDA requires otherwise by regulation, and tax credits for the cost of the clinical research.

The QIDP designation, provided under the Generating Antibiotic Incentives Now Act, or the GAIN Act, offers certain incentives for the development of new antibacterial or antifungal drugs, including eligibility for Fast Track designation, priority review and, if approved by the FDA, eligibility for an additional five years of marketing exclusivity. Fast Track designation enables more frequent interactions with FDA to expedite drug development and review. Fast Track designation does not change the standards for approval, and we can provide no assurances that we can maintain Fast Track designation for MAT2203 or that such designation will result in faster regulatory review. The seven-year period of marketing exclusivity provided through orphan designation, if granted, combined with an additional five years of marketing exclusivity provided by the QIDP designation positions MAT2203 with a potential for a total of 12 years of marketing exclusivity in the United States to be granted at the time of FDA approval.

Antifungal Market Opportunity

The overall global antifungal market was valued at approximately $15.8 billion in 2023 and is expected to reach approximately $20.5 billion by 2030. In 2021, the global invasive fungal infection market was valued at more than $7.21 billion and is expected to reach US $ 10.36 billion in 2030. This includes therapies used as active treatment or prophylaxis (preventative) in the inpatient and outpatient setting, therapies used for the treatment of hospitalized patients and therapies used for the treatment of patients who are being discharged from the hospital. Importantly, private insurance costs per visit range from approximately $40k to $150K per patient (2019 Benedict) mostly due to extended length of stay. We estimate that, each year, there are over 1.5 million cases of IFIs caused by various species ofCandida, AspergillusandCryptococcus,the three most common invasive fungal pathogens, globally. The estimated incidence in the U.S. for these conditions is approximately 46,000 for invasive candidiasis, 15,000 for invasive aspergillosis, and 4,900 for CM. For example, aspergillosis-associated hospitalizations in the U.S. alone came at an estimated treatment cost of more than $1.3 billion, with indirect costs amounting to an additional $485 million. The rapid progression of disease and high mortality rates (20% - 50%) associated with documented IFIs often result in antifungal therapy being administered in suspected (unconfirmed) cases or as a preventative measure in patients at high risk. Also, the increasingly widespread use of immune suppressive drugs as cancer chemotherapy or for organ transplantation or treatment of autoimmune disease has resulted in an increasing population of patients at risk for IFIs. Furthermore, the limited number of systemic antifungal drug classes, consisting of azoles, echinocandins and polyenes, and their extensive use, has led to increased numbers of infections with drug-resistant strains. The Centers for Disease Control and Prevention (CDC) has listed fluconazole-resistantCandidaas a serious threat requiring prompt and sustained action and has also identified a rise in echinocandin resistance, especially among*Candida glabrata.*In 2022, the WHO issued a fungal priority pathogens list including cryptococcal neoformans, aspergillus fumigatus and c. auris and c. albicans as critical priority for antifungal development due to the high unmet need. We believe this underscores the urgent need for new agents with demonstrated activity against resistant strains and that can be administered with significantly less toxicity and the potential to discharge patients earlier to reduce hospital stays and associated costs.

LNC Platform Expansion

In addition to advancing MAT2203 into the ORALTO Phase 3 trial, we continue to expand the utilization of the LNC platform with small molecules and small oligonucleotides outside of infectious disease, targeting inflammation and oncology.

Inflammation

We are investigating a variety of LNC formulations of two small oligonucleotides designed to target inflammatory cytokines IL-17A and TNFα and have conducted a series ofin vitro andin vivo studies evaluating the biological activity associated with oral delivery as well as the corresponding associated clinical benefit of IL-17A knockdown in an imiquimod (IMQ) induced murine psoriasis disease model.

These preliminary studies have documented biological activity in the form of cytokine knockdown and have also provided some evidence of associated tangible clinical benefit with improvements in skin lesion appearance (redness, scaling) in this qualitative psoriasis model. These data remain under evaluation and the analyses are focused on (a) clarifying the strength and time course of cytokine inhibition, and (b) evaluating cytokine mRNA levels and specific tissue responses in these models to better understand and interpret these data.

In December 2023, we announced results from a series ofin vivo studies demonstrating successful oral delivery of two LNC-formulated small single-strand oligonucleotides that specifically target key inflammatory cytokines TNFα and IL-17A in well-established and validated animal models that mimic acute inflammatory responses seen in human diseases.

Acute Colitis Study (“TNFα”)

A dextran sulfate sodium (“DSS”)-induced murine colitis model was used to evaluate an orally administered LNC-delivered small oligonucleotide that specifically targets TNFα mRNA synthesis. Colon tissue TNFα mRNA levels, as assessed by quantitative real-time PCR analysis, were lower following orally administered active LNCs, resulting in statistically significant reductions of serum TNFα levels by 37% compared with diseased, but untreated animals. Importantly, clinical disease activity scores at key time points in the studies were also significantly improved with an active LNC formulation.

Acute Psoriasis Study (“IL-17A”)

An imiquimod (“IMQ”)-induced murine psoriasis model was used to evaluate an orally administered, LNC-delivered small oligonucleotide designed to inhibit IL-17A mRNA synthesis, which contributes significantly to the progression of psoriatic skin lesions. Similar to the DSS colitis model, skin tissue levels of IL-17A mRNA in the IMQ psoriasis model were lower with orally administered active LNCs compared with IMQ alone. In this model, while IL-17A serum levels were not expected to change, improvement was demonstrated in clinical disease markers of skin redness and scaling, further validating the biological activity of these small oligonucleotides.

Oncology

In November of 2023 we announced positive results from anin vivo animal study of an oral LNC formulation of docetaxel, a well-known chemotherapeutic agent used in the management of multiple metastatic and unresectable tumors. Currently, docetaxel is administered intravenously and can be associated with significant side effects and toxicities. The study demonstrated reductions in tumor size comparable to systemic intravenous docetaxel in a well-validated mouse melanoma model. No toxicity was observed with the LNC formulations over the 10 days of oral dosing. The course of treatment primarily targeted efficacy and requires further study and evaluation with longer periods of administration.

Anti-tumor effects of daily oral LNC-docetaxel were comparable to IV-docetaxel with statistically significant reductions in tumor volume compared with untreated controls at Day 14 (high dose oral LNC -63%; low dose oral LNC -57%; IV docetaxel -68%), and similar reductions in tumor weight at Day 14. No systemic toxicities were noted. Body weight was stable over treatment duration and hematologic parameters were similar to untreated controls.

In March 2024 we announced positive results from an additional in vivo study of LNC-docetaxel in healthy mice. The goal of the study was to determine whether an oral LNC formulation of docetaxel could improve the overall safety profile of conventional IV-administered docetaxel. The study included 24 healthy BALB/c mice divided into three treatment groups: (1) control animals treated with oral saline, (2) IV-docetaxel (30 mg/kg, or 0.6 mg/dose) administered once a week for three weeks, and (3) oral LNC-docetaxel (37.5 mg/kg, or 0.75 mg/dose) administered once daily over three weeks. The primary endpoint of the study was change in body weight over the treatment period which how toxicity is primarily manifested in this model.

Key takeaways included the following:

The daily administered oral LNC-docetaxel dose was 50% higher, and the total amount of drug administered was 3.5 times greater, than the LNC-docetaxel dose administered in a previous study that demonstrated anti-tumor activity comparable to IV-docetaxel in a syngeneic mouse melanoma model.

Next steps include evaluating the efficacy of the current LNC-docetaxel formulation in other tumor models. Additionally, we plan to evaluate the potential anti-tumor activity of LNC formulations of small oligonucleotides.

Strategic Collaborations Involving the LNC Platform

We continue to believe that our LNC Platform can be used to reformulate a wide variety of molecules and drugs which (i) require delivery technology to effectively protect molecules and drugs in the body and could benefit from efficient delivery and cellular uptake by target cells, and (ii) are currently only available in IV formulations or, (iii) otherwise experience significant toxicity-related AEs. We have tested a range of pharmaceutical compounds reformulated by using our LNC Platform in proof-of-concept animal studies, including oligonucleotides (mRNA, siRNA, DNA plasmids), vaccines, anti-inflammatory agents, NSAIDs and atovaquone. We intend to pursue opportunities to develop products, either alone or in partnership with other pharmaceutical or biotech companies, and this remains a key part of our strategy to maximize the value of this unique and disruptive LNC Platform.

In December 2019, we announced a feasibility collaboration with Genentech, a Roche company, to evaluate formulations of several Genentech compounds utilizing our LNC Platform. The original agreement provided for cooperation on up to three proprietary Genentech compounds for initialin vitro testing. Two of the programs have been completed. Each demonstrated the successful intracellular delivery of LNC-formulated small molecules and oligonucleotides, without accompanying toxicity. We have chosen to slow this collaboration to focus on our internal small oligonucleotide programs in inflammation and our small molecule programs in oncology.

In December 2020, we announced a collaboration with the NIAID to develop oral formulations of Gilead’s remdesivir, which is currently only available as an intravenous therapy in the fight against COVID-19. During 2021 and 2022, the NIAID, together with the Department of Epidemiology at the University of North Carolina at Chapel Hill, conducted twoin vivo tests of our LNC formulation of Gilead Science’s remdesivir (LNC-RDV) in a standard genetically modified mouse model of SARS-CoV-2 infection. In these animal models, orally administered LNC-RDV reduced viral titers and improved clinical parameters of body weight and congestion scores five days following infection, with effects similar to those seen with subcutaneous administered remdesivir. Following discussion and review of the data with Gilead, the Company was informed that Gilead would focus on its internally developed prodrugs of remdesivir given their advanced clinical placement.

In April 2022, we, along with BioNTech SE, a global pharmaceutical company focused on mRNA technologies, announced an exclusive research collaboration to evaluate the combination of BioNTech’s mRNA formats with our proprietary LNC Platform. Under the terms of the agreement with BioNTech, we received an exclusivity fee in the amount of $2.75 million, and BioNTech funded certain of our research expenses related to the collaboration. We collaborated closely on formulation, optimization, andin vitro testing and a singlein vivostudy was conducted in 2023. Thein vivo study of oral mRNA delivery did not demonstrate oral preclinical activity. This formulation successfully delivered mRNAin vitro in multiple cell lines prior to advancing to thein vivo study in healthy mice. Additional internalin vivo studies of similar non-lipid nanocrystal (“LNC”) mRNA formulations did show activity when administered systemically (intramuscularly and intraperitoneally). In addition, these formulations demonstrated a high degree of stability to at least 17 weeks at 4° Celsius which compares favorably to lipid nanoparticles (“LNPs”); The research collaboration between Matinas and BioNTech concluded in May of 2023 following thein vivo study results.

In January 2023, we entered into a Material Transfer and Evaluation Agreement with National Resilience, Inc. (Resilience) focused on exploring the potential for oral delivery of identified nucleic acids. We have informed Resilience that we have prioritized our internal work in small oligonucleotides but could revisit this collaboration in the future.

We continue to evaluate additional potential strategic collaborations with other interested biotechnology and pharmaceutical partners. These early stage, proof-of-concept evaluations could provide an efficient, less expensive pathway to create numerous strategic verticals in areas of innovative medicine while capitalizing on the development expertise and financial resources of well-established partners. Data from these evaluations could position us as a licensor of our LNC Platform to numerous strategic partners better positioned to absorb the risks and costs of drug development while allowing our company to become a royalty aggregator with the potential to generate upfront license, milestone, and royalty payments as we maximize the value of the overall LNC Platform.

Exclusive License Agreement with Rutgers University

Through our acquisition of Aquarius Biotechnologies Inc., we acquired a license from Rutgers for certain patents related to the LNC Platform. We subsequently changed the name of Aquarius Biotechnologies Inc. to Matinas BioPharma Nanotechnologies, Inc. and in February of 2022, the parties agreed to a Second Amended and Restated Exclusive License Agreement. The agreement provides for (1) royalties on a tiered basis between low single digits and the mid-single digits of net sales of products using such licensed technology, (2) a one-time sales milestone fee of $100,000 when and if sales of products using the licensed technology reach the specified sales threshold and (3) an annual license fee of $50,000 over the term of the license agreement. There was also a reduction in the consideration paid to Rutgers in the event of a sublicense to a third party of the exclusive patent rights granted pursuant to the Agreement. In consideration of the concessions made by Rutgers in the amended license agreement, the Company issued Rutgers 400,000 shares of common stock in February 2022. We also agreed to continue to assume the responsibility to pay required patent prosecution and maintenance fees covering the technology.

Unless otherwise terminated by either party, the term of the license, on a country-by-country basis, shall be the longer of 8-1/2 years from the date of first commercial sale of a product in a country using the licensed technology or until the expiration of the last-to-expire patent rights licensed under the agreement, whichever is longer. Rutgers has the right to terminate the license agreement if we have not commenced commercial sales of at least one product using the licensed technology within eight years of the effective date of the Second Amended and Restated License Agreement.

Intellectual Property

The proprietary nature of, and protection for, our product candidates and our discovery programs, processes and know-how are important to our business. We will seek to protect our products and associated technologies for their manufacturing and development through a combination of patents, trade secrets, proprietary know-how, FDA exclusivity and contractual restrictions on disclosure. Our policy is to pursue, maintain and defend patent rights and to protect the technology, inventions and improvements that are commercially important to the development of our business. Our success will significantly depend on our ability to obtain and maintain patent and other proprietary protection for commercially important technology and inventions and know-how related to our business, defend and enforce our patents, preserve the confidentiality of our trade secrets and operate without infringing the valid and enforceable patents and proprietary rights of third parties. We also rely heavily on know-how and continuing technological innovation to develop and maintain our proprietary position.

Exclusively Licensed and Matinas-Owned Intellectual Property Relating to Our Proprietary LNC Platform and MAT2203

The patents and patent applications that we exclusively license from Rutgers provide some patent protection for the proprietary chemistry technology used in certain of our processes to make our lipid nanocrystal and geodate cochleates and formulate the active pharmaceutical ingredients delivered inside this delivery technology, as in MAT2203, our lead product comprising the LNC Platform. Pursuant to our license agreement, we acquired rights to a portfolio that as of December 31, 2023 included 1 pending U.S. non-provisional patent application, 9 U.S. patents, and 49 granted foreign patents, which extends patent protection until at least 2033, excluding patent term adjustments or extensions. The in-licensed patents have been granted in countries including Europe, China, India, Brazil, Russia, Canada, Japan, Korea, Australia and Mexico.

The Matinas-owned patent portfolio covers our LNC Platform and users. This patent portfolio includes 5 pending U.S. provisional applications, 2 pending U.S. non-provisional applications, 2 pending PCT applications, 13 pending foreign applications, and 20 granted foreign patents. The foreign pending applications and granted patents are in countries including Europe, China, Brazil, Canada, Japan, Korea, Australia and Mexico

As of December 31, 2023, we owned one issued U.S. patent, 7 issued foreign patents in Australia, Canada, Europe, and Japan, and one pending foreign patent application in Korea, directed to compositions and methods for enhancing tissue penetration of an active agent in an LNC. The patents are expected to expire in 2036, and patents issuing from or claiming priority to the pending application are also expected to expire in 2036, excluding patent term adjustments or extensions.

As of December 31, 2023, we owned 9 foreign patents in Australia, Europe, and Japan, directed to LNC compositions and methods for treating mycobacteria infection. The patents are expected to expire in 2036, excluding patent term adjustments or extensions.

As of December 31, 2023, we owned one U.S. issued patent, one pending non-provisional U.S. patent application, 2 issued foreign patents in Japan and Australia, and 4 pending applications in China, Korea, Canada, and Europe, directed to LNC compositions and methods for treating cryptococcus infections. The patents are expected to expire in 2037, and patents issuing from or claiming priority to the pending application are also expected to expire in 2037, excluding patent term adjustments or extensions.

As of December 31, 2023, we owned one pending non-provisional U.S. patent application, and 4 pending applications in Australia, Brazil, Canada, China, Europe, Hong Kong, Japan, and Mexico, directed to LNC compositions and methods for treating cryptococcus infections. Patents issuing from or claiming priority to the pending applications are also expected to expire in 2040, excluding patent term adjustments or extensions.

As of December 31, 2023, we owned one PCT application directed to methods for controlling LNC particle size. Patents issuing from or claiming priority to the pending applications are also expected to expire in 2043, excluding patent term adjustments or extensions.

As of December 31, 2023, we owned one PCT application directed to LNC compositions and methods for treating mucormycosis. Patents issuing from or claiming priority to the pending applications are also expected to expire in 2043, excluding patent term adjustments or extensions.

As of December 31, 2023, we owned three U.S. provisional applications directed to LNC platform improvements for delivery of therapeutic agents, including small oligonucleotides. Patents issuing from or claiming priority to the pending applications are also expected to expire in 2044, excluding patent term adjustments or extensions.

As of December 31, 2023, we owned one U.S. provisional application directed to lipid particle formulations for nucleic acid delivery. Patents issuing from or claiming priority to the pending applications are also expected to expire in 2044, excluding patent term adjustments or extensions.

As of December 31, 2023, we owned one U.S. provisional application directed to LNC compositions and methods for treating cancer. Patents issuing from or claiming priority to the pending applications are also expected to expire in 2044, excluding patent term adjustments or extensions.

We cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications we may own or license in the future, nor can we be sure that any of our existing patents or any patents we may own or license in the future will be useful in protecting our technology. For this and more comprehensive risks related to our intellectual property, please see “Risk Factors—Risks Relating to Our Intellectual Property and Regulatory Exclusivity.”

In addition to patents, we rely on trade secrets and know-how to develop and maintain our competitive position. For example, significant aspects of our proprietary LNC Platform are based on unpatented trade secrets and know-how. Trade secrets and know-how can be difficult to protect. We seek to protect our proprietary technology and processes, in part, by confidentiality agreements and invention assignment agreements with our employees, consultants, scientific advisors, contractors and commercial partners. These agreements are designed to protect our proprietary information and, in the case of the invention assignment agreements, to grant us ownership of technologies that are developed through a relationship with a third party. We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems. While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached, and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our contractors use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.

We also plan to seek trademark protection in the United States and outside of the United States where available and when appropriate. We intend to use these registered marks in connection with our pharmaceutical research and development as well as our product candidates.

Competition

The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition, and a strong emphasis on proprietary products. We face competition from many different sources, including commercial pharmaceutical and biotechnology enterprises, academic institutions, government agencies and private and public research institutions. Many of these companies have far greater human and financial resources and may have product candidates in more advanced stages of development and many will reach the market before our product candidates. Competitors may also develop products that are more effective, safer or less expensive or that have better tolerability or convenience.

Although we believe that our proprietary LNC Platform, experience, and knowledge in our areas of focus provide us with competitive advantages, potential competitors could reduce our commercial opportunities. For many of our product candidates, we anticipate facing competition from other products that are available on a generic basis and offered at low prices. Many of these generic products have been marketed by third parties for many years and are well accepted by physicians, patients, and payers.

We believe that MAT2203 and any other development candidate we may pursue in the future using our proprietary LNC Platform, paralleled with our scientific and development expertise in the field of drug delivery, provide us with competitive advantages over our peers. However, we face potential competition from various sources, including larger and better-funded pharmaceutical, specialty pharmaceutical, and biotechnology companies, as well as from generic drug manufacturers, academic institutions, governmental agencies, and public and private research institutions.

MAT2203 will primarily compete with antifungal classes approved for the treatment of fungal and mold infections, which include polyenes, azoles and echinocandins. The approved branded therapies for these indications include Cancidas (caspofungin, marketed by Merck & Co.), Eraxis (anidulafungin, marketed by Pfizer, Inc.), Mycamine (micafungin, marketed by Astellas Pharma US, Inc.), Diflucan (fluconazole, marketed by Pfizer, Inc.), Noxafil (posaconazole, marketed by Merck & Co.), Vfend (voriconazole, marketed by Pfizer, Inc.), Sporanox (itraconazole, marketed by Jansen Pharmaceuticals, Inc.), Cresemba (isavuconazole, marketed by Astellas Pharma US, Inc.), Ambisome (liposomal amphotericin B, marketed by Astellas Pharma US, Inc.) Abelcet (lipid complex amphotericin B, marketed by Sigma Tau Pharmaceuticals Inc.), Rezzayo (rezafungin, marketed by Melinta Therapeutics), Brexafemme (Ibrexafungerp marketed by GlaxoSmithKline) and amphotericin B deoxycholate (marketed by X-Gen Pharmaceuticals, Inc.). There currently are and may be more generic versions of these products available at the time of MAT2203 market approval, which will create added competition. In addition to approved therapies, we expect that MAT2203 may compete with product candidates that we are aware of in clinical development by third parties, such olorofim (being developed by F2G, Ltd), fosmanogepix (being developed by Basilea), and AM2-19, a derivative of amphotericin B being developed by Elion Therapeutics.

Manufacturing

We currently lease and operate in-house manufacturing capabilities for our lead LNC Platform product candidate, MAT2203, and for our LNC Platform discovery programs in the small molecule and small oligonucleotide spaces. While sufficient to produce the clinical supplies of product necessary to conduct our ongoing clinical trials and potentially early commercialization of MAT2203, we are exploring relationships with well-respected third-party contract manufacturers for the formulation and manufacture of MAT2203 necessary to support the filing of an NDA and to support commercial manufacture for this product. We may also need to expand our internal manufacturing capabilities in the future. If we are not able to retain our current manufacturing facilities and if we do not develop additional in-house manufacturing capability for MAT2203 and our other product candidates sufficient to produce product for commercialization of these products, we will need to develop relationships with third-party manufacturers for the manufacture of our product candidates which could be time consuming and expensive.

In the first quarter of 2022, we selected and reached agreement with Thermo Fisher Scientific to support scale-up and manufacturing for MAT2203 in anticipation of a potential NDA submission. Thermo Fisher Scientific, with more than 65 locations around the world, provides integrated, end-to-end capabilities across all phases of development, including APIs, biologics, viral vectors, cGMP plasmids, formulation, clinical trials solutions, logistics services and commercial manufacturing and packaging. During 2022 we worked with Thermo Fisher to prepare for a technology transfer of certain of the processes we use in the formulation and manufacture of MAT2203. As part of our decision to prioritize the regulatory feedback from FDA on our plan for a Phase 3 trial and our desire to secure a pharmaceutical or governmental partner to advance the development of MAT2203 into Phase 3, we slowed down our transition to Thermo Fisher and our planned related expenses during 2023. We anticipate the resumption of activities with Thermo Fisher once additional financing from one or more of these sources has been secured.

There are several potential third-party suppliers for amphotericin B, the generic active pharmaceutical ingredient in our lead clinical stage product candidate – MAT2203. Although to date we have not entered into formal supply agreements to secure sufficient supply of amphotericin B to support our clinical programs for MAT2203, we believe we will be able to secure supply of amphotericin B to support our clinical programs for MAT2203 from one or more third-party suppliers. As we move through development for our product candidates, we expect to enter into long-term supply arrangements for key active pharmaceutical ingredients.

Sales and Marketing

We currently do not have any sales and marketing infrastructure. We plan to retain U.S. marketing and sales rights or co-promotion rights for our product candidates for which we receive marketing approvals, particularly in situations where it is possible to access the market through a focused, specialized sales force. For situations in which a large sales force is required to access the market, and with respect to markets outside the United States, we generally plan to commercialize our product candidates through collaborative arrangements with leading pharmaceutical and biotechnology companies.

Review and Approval of Drugs in the United States

In the United States, FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act, or FDCA, and implementing regulations. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources. Failure to comply with the applicable U.S. requirements at any time during the product development process, approval process or after approval may subject an applicant and/or sponsor to a variety of administrative or judicial sanctions, including refusal by FDA to approve pending applications, withdrawal of an approval, imposition of a clinical hold, issuance of warning letters and other types of letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement of profits, or civil or criminal investigations and penalties brought by FDA and the Department of Justice (DOJ) or other governmental entities.

Our product candidates must be approved by FDA through the NDA or biologics license application (BLA), in the case of biologic product candidates, process before they may be legally marketed in the United States. An applicant seeking approval to market and distribute a new drug product in the United States must typically undertake the following:

Nonclinical Studies

Nonclinical studies include laboratory evaluation of the purity and stability of the manufactured drug substance or active pharmaceutical ingredient and the formulated drug or drug product, as well asin vitro and animal studies to assess the safety and activity of the drug for initial testing in humans and to establish a rationale for therapeutic use. The conduct of nonclinical studies is subject to federal regulations and requirements, including cGLP regulations. The results of the nonclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and plans for clinical trials, among other things, are submitted to FDA as part of an IND.

Companies usually must complete some long-term nonclinical testing, such as animal tests of reproductive AEs and carcinogenicity, and must also develop additional information about the chemistry and physical characteristics of the drug and finalize a process for manufacturing the drug in commercial quantities in accordance with cGMP requirements. The manufacturing process must be capable of consistently producing quality batches of the drug candidate and, among other things, the manufacturer must develop methods for testing the identity, strength, quality and purity of the final drug product. Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the drug candidate does not undergo unacceptable deterioration over its shelf life.

Human Clinical Trials in Support of a Regulatory Approval

Clinical trials involve the administration of the investigational product to human subjects under the supervision of qualified investigators in accordance with GCP requirements, which include, among other things, the requirement that all research subjects provide their informed consent in writing before their participation in any clinical trial. Clinical trials are conducted under written study protocols detailing, among other things, the objectives of the study, the parameters to be used in monitoring safety and the effectiveness criteria to be evaluated. A protocol for each clinical trial and any subsequent protocol amendments must be submitted to FDA as part of the IND. An IND automatically becomes effective 30 days after receipt by FDA, unless before that time FDA raises concerns or questions related to a proposed clinical trial and places the trial on clinical hold. In such a case, the IND sponsor and FDA must resolve any outstanding concerns before the clinical trial can begin. Accordingly, submission of an IND may or may not result in FDA allowing clinical trials to commence.

In addition, an IRB representing each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution, and the IRB must conduct continuing review and reapprove the study at least annually. The IRB must review and approve, among other things, the study protocol and informed consent information to be provided to study subjects. An IRB must operate in compliance with FDA regulations. Information about certain clinical trials must be submitted within specific timeframes to the National Institutes of Health for public dissemination on their ClinicalTrials.gov website.

A sponsor who wishes to conduct a clinical trial outside the United States may, but need not, obtain FDA authorization to conduct the clinical trial under an IND. When a foreign clinical study is conducted under an IND, all FDA IND requirements must be met unless waived. If a foreign clinical trial is not conducted under an IND, the sponsor may submit data from the clinical trial to FDA in support of an NDA or IND so long as the clinical trial is conducted in accordance with GCP and if FDA is able to validate the data from the clinical trial through an on-site inspection if FDA deems it necessary.

Human clinical trials are typically conducted in three sequential phases, which may overlap or be combined:

Phase 1: The drug is initially introduced into a small number of healthy human subjects or patients with the target disease (e.g. cancer) or condition and tested for safety, dosage tolerance, absorption, metabolism, distribution, excretion and, if possible, to gain an early indication of its effectiveness and to determine optimal dosage.

Phase 2: The drug is administered to a larger number of trial participants, up to several hundred, who usually have the disease or condition that the experimental drug is intended to treat, to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage.

Phase 3: These clinical trials are commonly referred to as “pivotal” studies, which typically denotes a study which presents the data that FDA or another relevant regulatory agency will use to determine whether or not to approve a drug. In Phase 3 clinical trials, the drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product, and to provide adequate information for the labeling of the product.

Progress reports detailing the results of the clinical trials must be submitted at least annually to FDA and more frequently if serious AEs occur. Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, or at all. Furthermore, FDA or the sponsor may suspend or terminate a clinical trial at any time on various grounds, including a finding that the research subjects are being exposed to an unacceptable health risk. Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution, or an institution it represents, if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the drug has been associated with unexpected serious harm to patients. FDA will typically inspect one or more clinical sites to assure compliance with GCP and the integrity of the clinical data submitted.

Submission of an NDA to FDA

Regulatory approval for most new drug or biologic products is based on two adequate and well-controlled Phase 3 clinical trials that provide evidence of the safety and efficacy of the proposed new product. Assuming successful completion of required clinical testing and other requirements, the results of the nonclinical and clinical trials, together with detailed information relating to the product’s chemistry, manufacture, controls, and proposed labeling, among other things, are submitted to FDA as part of an NDA requesting approval to market the drug product for one or more indications. Under federal law, the submission of most NDAs is additionally subject to an application user fee and the sponsor of an approved NDA is also subject to annual prescription drug program fees and establishment user fees. These fees are typically increased annually.

FDA conducts a preliminary review of an NDA within 60 days of its receipt and informs the sponsor by the 74th day after FDA’s receipt of the submission whether the application is sufficiently complete to permit substantive review. FDA may request additional information rather than accept an NDA for filing. In this event, the application must be resubmitted with the additional information. The resubmitted application is also subject to review before FDA accepts it for filing. Once the submission is accepted for filing, FDA begins an in-depth substantive review. FDA has agreed to specified performance goals in the review process of NDAs. Most such applications are meant to be reviewed within ten months from the date of filing, and most applications for “priority review” products are meant to be reviewed within six months of filing. The review process may be extended by FDA for various reasons, and for various time periods, including for three additional months to consider new information or clarification provided by the applicant to address an outstanding deficiency identified by FDA following the original submission.

Before approving an NDA, FDA typically will inspect the facility or facilities where the product is or will be manufactured. These pre-approval inspections cover all facilities associated with an NDA submission, including drug component manufacturing (such as Active Pharmaceutical Ingredients), finished drug product manufacturing and control testing laboratories. FDA will not approve an application unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications. Additionally, before approving an NDA, FDA will typically inspect one or more clinical sites to assure compliance with GCP.

The FDA is required to refer an application for a novel drug to an advisory committee or explain why such referral was not made. Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts, that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions. FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

Fast Track, Breakthrough Therapy and Priority Review Designations

FDA is authorized to designate certain products for expedited review if they are intended to address an unmet medical need in the treatment of a serious or life-threatening disease or condition. These programs are fast track designation, breakthrough therapy designation and priority review designation.

Specifically, FDA may designate a product for Fast Track review if it is intended, whether alone or in combination with one or more other drugs, for the treatment of a serious or life-threatening disease or condition, and it demonstrates the potential to address unmet medical needs for such a disease or condition. For Fast Track products, sponsors may have greater interactions with FDA and FDA may initiate review of sections of a fast-track product’s NDA before the application is complete. This rolling review may be available if FDA determines, after preliminary evaluation of clinical data submitted by the sponsor, that a Fast Track product may be effective. The sponsor must also provide, and FDA must approve, a schedule for the submission of the remaining information and the sponsor must pay applicable user fees. However, FDA’s time goal for reviewing a Fast Track application does not begin until the last section of the NDA is submitted. In addition, the Fast Track designation may be withdrawn by FDA if FDA believes that the designation is no longer supported by data emerging in the clinical trial process.

Second, in 2012, Congress enacted the Food and Drug Administration Safety and Improvement Act, or FDASIA. This law established a new regulatory scheme allowing for expedited review of products designated as “breakthrough therapies.” A product may be designated as a breakthrough therapy if it is intended, either alone or in combination with one or more other drugs, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development. FDA may take certain actions with respect to breakthrough therapies, including holding meetings with the sponsor throughout the development process; providing timely advice to the product sponsor regarding development and approval; involving more senior staff in the review process; assigning a cross-disciplinary project lead for the review team; and taking other steps to design the clinical trials in an efficient manner.

Third, FDA may designate a product for priority review if it is a drug that treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness. FDA determines, on a case-by-case basis, whether the proposed drug represents a significant improvement when compared with other available therapies. Significant improvement may be illustrated by evidence of increased effectiveness in the treatment of a condition, elimination or substantial reduction of a treatment-limiting drug reaction, documented enhancement of patient compliance that may lead to improvement in serious outcomes, and evidence of safety and effectiveness in a new subpopulation. A priority designation is intended to direct overall attention and resources to the evaluation of such applications, and to shorten FDA’s goal for taking action on a marketing application from ten months to six months.

Under Section 524 of the FDCA, the FDA is authorized to award a priority review voucher to sponsors of certain tropical disease product applications that meet the criteria specified in the Act. A priority review voucher may be used by the sponsor who obtains it, or it may be transferred to another sponsor who may use it to obtain priority review for a different application. Priority review vouchers can result in the acceleration of review and approval of a product candidate by up to four months. In order to be eligible for a tropical disease priority review voucher, the application must be: for a listed tropical disease; submitted under Section 505(b)(1) of the FDCA or Section 351 of the Public Health Service Act; for a product that contains no active ingredient that has been approved in any other application under those statutory provisions; and must qualify for priority review. FDA has identified in guidance those product applications for the prevention or treatment of tropical diseases that may qualify for a priority review voucher.

Accelerated Approval Pathway

FDA may grant accelerated approval to a drug for a serious or life-threatening condition that provides meaningful therapeutic advantage to patients over existing treatments based upon a determination that the drug has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit. FDA may also grant accelerated approval for such a condition when the product has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality, or IMM, and that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments. Drugs granted accelerated approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval.

For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign, or other measure that is thought to predict clinical benefit but is not itself a measure of clinical benefit. Surrogate endpoints can often be measured more easily or more rapidly than clinical endpoints. An intermediate clinical endpoint is a measurement of a therapeutic effect that is considered reasonably likely to predict the clinical benefit of a drug, such as an effect on IMM. FDA has limited experience with accelerated approvals based on intermediate clinical endpoints but has indicated that such endpoints generally may support accelerated approval where the therapeutic effect measured by the endpoint is not itself a clinical benefit and basis for traditional approval, if there is a basis for concluding that the therapeutic effect is reasonably likely to predict the ultimate clinical benefit of a drug.

The accelerated approval pathway is most often used in settings in which the course of a disease is long, and an extended period of time is required to measure the intended clinical benefit of a drug, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly. The accelerated approval pathway is usually contingent on a sponsor’s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies to verify and describe the drug’s clinical benefit. As a result, a product candidate approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-approval clinical trials to confirm the effect on the clinical endpoint. Failure to conduct required post-approval studies, or confirm a clinical benefit during post-marketing studies, would allow FDA to withdraw the drug from the market on an expedited basis. All promotional materials for product candidates approved under accelerated regulations are subject to prior review by FDA.

FDA’s Decision on an NDA

Based on FDA’s evaluation of the NDA and accompanying information, including the results of the inspection of the manufacturing facilities, FDA may issue an approval letter or a complete response letter. An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications. A complete response letter generally outlines the deficiencies in the submission and may require substantial additional testing or information for FDA to reconsider the application. When those deficiencies have been addressed to FDA’s satisfaction in a resubmission of the NDA, FDA will issue an approval letter. The FDA has committed to reviewing such resubmissions in two or six months depending on the type of information included. Even with submission of this additional information, FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.

If FDA approves a product, it may limit the approved indications for use for the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-approval studies, including Phase 4 clinical trials, be conducted to further assess the drug’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions which can materially affect the potential market and profitability of the product. In addition, as a condition of approval, FDA may require an applicant to develop a REMS. REMS use risk minimization strategies beyond the professional labeling to ensure that the benefits of the product outweigh the potential risks. To determine whether a REMS is needed, FDA will consider the size of the population likely to use the product, seriousness of the disease, expected benefit of the product, expected duration of treatment, seriousness of known or potential AEs and whether the product is a new molecular entity. REMS can include medication guides, physician communication plans for healthcare professionals and elements to assure safe use, which may include, but are not limited to, special training or certification for prescribing or dispensing, dispensing only under certain circumstances, special monitoring and the use of patient registries. FDA may require a REMS before approval or post-approval if it becomes aware of a serious risk associated with use of the product. The requirement for a REMS can materially affect the potential market and profitability of a product.

FDA may prevent or limit further marketing of a product based on the results of post-market studies or surveillance programs. After approval, many types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval.

Post-Approval Requirements

Drugs manufactured or distributed pursuant to FDA approvals are subject to pervasive and continuing regulation by FDA, including, among other things, requirements relating to recordkeeping, periodic reporting, product sampling and distribution, advertising and promotion and reporting of adverse experiences with the product. After approval, most changes to the approved product, such as adding new indications or other labeling claims, are subject to prior FDA review and approval. There also are continuing, annual user fee requirements for any marketed products and the establishments at which such products are manufactured, as well as new application fees for supplemental applications with clinical data.

In addition, drug manufacturers and other entities involved in the manufacture and distribution of approved drugs are required to register their establishments with FDA and state agencies and are subject to periodic unannounced inspections by FDA and these state agencies for compliance with cGMP requirements. Changes to the manufacturing process are strictly regulated and often require prior FDA approval before being implemented. FDA regulations also require investigation and correction of any deviations from cGMP and impose reporting and documentation requirements upon the sponsor and any third-party manufacturers that the sponsor may decide to use. Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance.

Once an approval is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market. Later discovery of previously unknown problems with a product, including AEs of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in revisions to the approved labeling to add new safety information; imposition of post-market studies or clinical trials to assess new safety risks; or imposition of distribution or other restrictions under a REMS program. Other potential consequences include, among other things:

FDA strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market. Drugs may be promoted only for the approved indications and in accordance with the provisions of the approved label. FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.

In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act, or PDMA, which regulates the distribution of drugs and drug samples at the federal level and sets minimum standards for the registration and regulation of drug distributors by the states. Both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution.

Abbreviated New Drug Applications (ANDA) for Generic Drugs

In 1984, with passage of the Hatch-Waxman Amendments to the FDCA, Congress authorized FDA to approve generic drugs that are the same as drugs previously approved by the FDA under the NDA provisions of the statute. To obtain approval of a generic drug, an applicant must submit an abbreviated new drug application (ANDA), to the agency. In support of such applications, a generic manufacturer may rely on the nonclinical and clinical testing previously conducted for a drug product previously approved under an NDA, known as the reference listed drug (RLD).

Specifically, for an ANDA to be approved, the FDA must find that the generic version is identical to the RLD with respect to the active ingredients, the route of administration, the dosage form and the strength of the drug. At the same time, the FDA must also determine that the generic drug is “bioequivalent” to the innovator drug. Under the statute, a generic drug is bioequivalent to a RLD if the rate and extent of absorption of the drug do not show a significant difference from the rate and extent of absorption of the listed drug.

Upon approval of an ANDA, the FDA indicates whether the generic product is therapeutically equivalent to the RLD in its publication “Approved Drug Products with Therapeutic Equivalence Evaluations,” also referred to as the “Orange Book.” Physicians and pharmacists consider a therapeutically equivalent generic drug to be fully substitutable for the RLD. In addition, by operation of certain state laws and numerous health insurance programs, FDA’s designation of therapeutic equivalence often results in automatic substitution of the generic drug by the pharmacist without the knowledge or consent of either the prescribing physician or patient.

Under the Hatch-Waxman Amendments, the FDA may not approve an ANDA until any applicable period of non-patent exclusivity for the RLD has expired. The FDCA provides a period of five years of non-patent data exclusivity for a new drug containing a new chemical entity. In cases where such exclusivity has been granted, an ANDA may not be submitted to FDA until the expiration of five years unless the submission is accompanied by a Paragraph IV certification, in which case the applicant may submit its application four years following the original product approval. The FDCA also provides for a period of three years of exclusivity if the NDA includes reports of one or more new clinical investigations, other than bioavailability or bioequivalence studies, that were conducted by or for the applicant and are essential to the approval of the application. This three-year exclusivity period often protects changes to a previously approved drug product, such as a new dosage form, route of administration, combination or indication.

Hatch-Waxman Patent Certification and the 30 Month Stay

Upon approval of an NDA or a supplement thereto, NDA sponsors are required to list with the FDA each patent with claims that cover the applicant’s product or an approved method of using the product. Each of the patents listed by the NDA sponsor is published in the Orange Book. When an ANDA applicant submits its application to the FDA, the applicant is required to certify to FDA concerning any patents listed for the reference product in the Orange Book, except for patents covering methods of use for which the ANDA applicant is not seeking approval. Specifically, the applicant must certify with respect to each patent that:

A certification that the new product will not infringe the already approved product’s listed patents or that such patents are invalid or unenforceable is called a Paragraph IV certification. If the applicant does not challenge the listed patents or indicate that it is not seeking approval of a patented method of use, the ANDA application will not be approved until all the listed patents claiming the referenced product have expired.

If the ANDA applicant has provided a Paragraph IV certification to FDA, the applicant must also send notice of the Paragraph IV certification to the NDA and patent holders once the ANDA has been accepted for filing by the FDA. The NDA and patent holders may then initiate a patent infringement lawsuit in response to the notice of the Paragraph IV certification. The filing of a patent infringement lawsuit within 45 days after the receipt of a Paragraph IV certification automatically prevents the FDA from approving the ANDA until the earlier of 30 months after the receipt of the Paragraph IV notice, expiration of the patent, or a decision in the infringement case that is favorable to the ANDA applicant.

Pediatric Studies and Exclusivity

Under the Pediatric Research Equity Act of 2003, an NDA or supplement thereto must contain data that are adequate to assess the safety and effectiveness of the drug product for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective. With enactment of the Food and Drug Administration Safety and Innovation Act, or FDASIA, in 2012, sponsors must also submit pediatric study plans prior to the assessment data. Those plans must contain an outline of the proposed pediatric study or studies the applicant plans to conduct, including study objectives and design, any deferral or waiver requests, and other information required by regulation. The applicant, the FDA and the FDA’s internal review committee must then review the information submitted, consult with each other, and agree upon a final plan. The FDA or the applicant may request an amendment to the plan at any time.

The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements. Additional requirements and procedures relating to deferral requests and requests for extension of deferrals are contained in FDASIA.

Pediatric exclusivity is another type of non-patent marketing exclusivity in the United States and, if granted, provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity, including the non-patent exclusivity. This six-month exclusivity may be granted if an NDA sponsor submits pediatric data that fairly respond to a written request from the FDA for such data. The data do not need to show the product to be effective in the pediatric population studied; rather, if the clinical trial is deemed to fairly respond to the FDA’s request, the additional protection is granted. If reports of requested pediatric studies are submitted to and accepted by the FDA within the statutory time limits, whatever statutory or regulatory periods of exclusivity or patent protection cover the product are extended by six months. This is not a patent term extension, but it effectively extends the regulatory period during which the FDA cannot approve another application.

Orphan Designation and Exclusivity

Under the Orphan Drug Act, the FDA may designate a drug product as an “orphan drug” if it is intended to treat a rare disease or condition (generally meaning that it affects fewer than 200,000 individuals in the United States, or more in cases in which there is no reasonable expectation that the cost of developing and making a drug product available in the United States for treatment of the disease or condition will be recovered from sales of the product). A company must request orphan product designation before submitting a NDA. If the request is granted, the FDA will disclose the identity of the therapeutic agent and its potential use. Orphan product designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process.

If a product with orphan status receives the first the FDA approval for the disease or condition for which it has such designation, the product will be entitled to orphan product exclusivity. Orphan product exclusivity means that the FDA may not approve any other applications for the same product for the same indication for seven years, except in certain limited circumstances. Competitors may receive approval of different products for the indication for which the orphan product has exclusivity and may obtain approval for the same product but for a different indication. If a drug or drug product designated as an orphan product ultimately receives marketing approval for an indication broader than what was designated in its orphan product application, it may not be entitled to exclusivity.

21st Century Cures Act

On December 13, 2016, Congress passed the 21 st Century Cures Act, or the Cures Act. The Cures Act is designed to modernize and personalize healthcare, spur innovation and research, and streamline the discovery and development of new therapies through increased federal funding of particular programs. It authorizes increased funding for the FDA to spend on innovation projects. The new law also amends the Public Health Service Act to reauthorize and expand funding for the National Institutes of Health. The Act establishes the NIH Innovation Fund to pay for the cost of development and implementation of a strategic plan, early-stage investigators and research. It also charges NIH with leading and coordinating expanded pediatric research. In addition, the Cures Act includes provisions requiring the FDA to assess and publish guidance on the use of novel clinical trial designs, the use of real-world evidence in applications, the availability of summary level review for supplemental applications for certain indications, and the qualification of drug development tools. Because the Cures Act has only recently been enacted, its potential effect on our business remains unclear with the exception of a provision requiring that we post our policies on the availability of expanded access programs for individuals. Because these provisions allow the FDA to spend several years developing these policies, the effect on us could be delayed.

With amendments to the FDCA and the Public Health Service Act, or PHSA, Title III of the Cures Act seeks to accelerate the discovery, development, and delivery of new medicines and medical technologies. To that end, and among other provisions, the Cures Act reauthorizes the existing priority review voucher program for certain drugs intended to treat rare pediatric diseases until 2026; creates a new priority review voucher program for drug applications determined to be material national security threat medical countermeasure applications; and revises the FDCA to streamline review of combination product applications.

Section 3042 of the Cures Act authorizes a “Limited Population Pathway” to expedite approval of antimicrobial products intended to treat serious or life-threatening infections for which there are unmet medical needs. Drugs approved under this provision are required to adhere to special labeling requirements, including a prominent “Limited Population” statement. We will monitor the implementation of the Cures Act but cannot currently assess how this initiative may impact our business.

Other Health Care Regulations

Health Privacy Laws

We are subject to data protection laws and regulations (i.e., laws and regulations that address privacy and data security). In the U.S., numerous federal and state laws and regulations, including state data breach notification laws, state health information privacy laws, and federal and state consumer protection laws (e.g., Section 5 of the FTC Act), govern the collection, use, disclosure, and protection of health-related and other personal information. Failure to comply with data protection laws and regulations could result in government enforcement actions and create liability for us (which could include civil and/or criminal penalties), private litigation and/or adverse publicity that could negatively affect our operating results and business. In addition, we may obtain health information from third parties (e.g., principal investigators involved in our clinical trials) that are subject to privacy and security requirements under the Health Insurance Portability and Accountability Act of 1996, or HIPPA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH. HIPAA generally requires that covered entities (healthcare providers, health plans and healthcare clearinghouses) obtain written authorizations from patients prior to disclosing protected health information of the patient (unless an exception to the authorization requirement applies). If authorization is required and the patient fails to execute an authorization or the authorization fails to contain all required provisions, then we may not be allowed access to and use of the patient’s information and our research efforts could be impaired or delayed. Furthermore, use of protected health information that is provided to us pursuant to a valid patient authorization is subject to the limits set forth in the authorization (e.g., for use in research and in submissions to regulatory authorities for product approvals). Among other things, HITECH makes HIPAA’s privacy and security standards, as well as the various penalties or failure to comply, directly applicable to “business associates”—independent contractors or agents of covered entities performing certain functions involving the creation or use of protected health information on behalf of a covered entity or providing services to a covered entity. While we do not believe we are a “business associate” under HIPAA, regulatory agencies may disagree.

The General Data Protection Regulation, or GDPR, adopted in 2016, establishes a regulatory framework designed to protect the security of personal data collected about residents of the EU and the movement of such personal data across the national borders of the EU Member States, including, but not limited to, requirements to obtaining consent of the individuals to whom the personal data relates, the nature and scope of notifications provided to the individuals, the security and confidentiality of the personal data, data breach notification and using third party processors in connection with the processing of the personal data. Failure to comply with the EU Directive and the GDPR could subject us to regulatory sanctions, delays in clinical trials, criminal prosecution and/or civil fines or penalties. Additionally, GDPR creates a direct cause of action by individual data subjects.

Fraud and Abuse Laws

In addition to the FDA restrictions on marketing of pharmaceutical products, several other types of state and federal laws have been applied to restrict certain marketing practices in the pharmaceutical industry in recent years. These laws include anti-kickback statutes and false claims statutes. The federal healthcare program anti-kickback statute prohibits, among other things, knowingly and willfully offering, paying, soliciting or receiving remuneration to induce or in return for purchasing, leasing, ordering or arranging for the purchase, lease or order of any healthcare item or service reimbursable under Medicare, Medicaid or other federally financed healthcare programs. This statute has been interpreted to apply to arrangements between pharmaceutical manufacturers on the one hand and prescribers, purchasers and formulary managers on the other. Violations of the anti-kickback statute are punishable by imprisonment, criminal prosecution, civil monetary penalties and exclusion from participation in federal healthcare programs. Although there are a number of statutory exemptions and regulatory safe harbors protecting certain common activities from prosecution or other regulatory sanctions, the exemptions and safe harbors are drawn narrowly, and practices that involve remuneration intended to induce prescribing, purchases or recommendations may be subject to scrutiny if they do not qualify for an exemption or safe harbor.

Federal false claims laws prohibit any person from knowingly presenting, or causing to be presented, a false claim for payment to the federal government, or knowingly making, or causing to be made, a false statement to have a false claim paid. Recently, several pharmaceutical and other healthcare companies have been prosecuted under these laws for allegedly inflating drug prices they report to pricing services, which in turn were used by the government to set Medicare and Medicaid reimbursement rates, and for allegedly providing free product to customers with the expectation that the customers would bill federal programs for the product. In addition, certain marketing practices, including off-label promotion, may also violate false claims laws. The majority of states also have statutes or regulations similar to the federal anti-kickback statute and false claims laws, which apply to items and services reimbursed under Medicaid and other state programs, or, in several states, apply regardless of the payor.

Affordable Care Act

In late March 2010, the Federal government enacted the comprehensive health care reform package, the Affordable Care Act (ACA). Among other provisions, the ACA imposes individual and employer health insurance requirements, provides certain insurance subsidies (e.g., premiums and cost sharing), mandates extensive insurance market reforms, creates new health insurance access points (e.g., State and federal-based health insurance exchanges), expands the Medicaid program, promotes research on comparative clinical effectiveness of different technologies and procedures, and makes a number of changes to how products and services will be reimbursed by the Medicare program. Amendments to the Federal False Claims Act under the ACA have made it easier for private parties to bring “qui tam” (whistleblower) lawsuits against companies, under which the whistleblower may be entitled to receive a percentage of any money paid to the government.

Since its enactment, there have been judicial and Congressional challenges and amendments to certain aspects of the ACA. There is continued uncertainty about the implementation of the ACA, including the potential for further amendments to the ACA and legal challenges to or efforts to repeal the ACA. If the ACA is repealed or further modified, or if implementation of certain aspects of the ACA are delayed, such repeal, modification or delay may materially adversely impact our business, strategies, prospects, operating results or financial condition. We are unable to predict the full impact of any repeal, modification or delay in the implementation of the ACA on us at this time. Due to the substantial regulatory changes that will need to be implemented by CMS and others, and the numerous processes required to implement these reforms, we cannot predict which healthcare initiatives will be implemented at the federal or state level, the timing of any such reforms, or the effect such reforms or any other future legislation or regulation will have on our business.

Designation of and Exclusivity for Qualified Infectious Disease Products

In 2012, Congress passed legislation known as the Generating Antibiotic Incentives Now Act, or GAIN Act. This legislation is designed to encourage the development of antibacterial and antifungal drug products that treat pathogens that cause serious and life-threatening infections. To that end, the law grants an additional five years of marketing exclusivity upon the approval of an NDA for a drug product designated by FDA as a Qualified Infectious Disease Product, or QIDP. Thus, for a QIDP, the periods of five-year new chemical entity exclusivity, three-year new clinical investigation exclusivity and seven-year orphan drug exclusivity, would become 10 years, eight years, and 12 years, respectively.

A QIDP is defined in the GAIN Act to mean “an antibacterial or antifungal drug for human use intended to treat serious or life-threatening infections, including those caused by—(1) an antibacterial or antifungal resistant pathogen, including novel or emerging infectious pathogens;” or (2) certain “qualifying pathogens.” A “qualifying pathogen” is a pathogen that has the potential to pose a serious threat to public health (e.g., resistant gram-positive pathogens, multi-drug resistant gram-negative bacteria, multi-drug resistant tuberculosis andClostridium difficile) and that is included in a list established and maintained by FDA. A drug sponsor may request FDA to designate its product as a QIDP any time before the submission of an NDA. FDA must make a QIDP determination within 60 days of the designation request. A product designated as a QIDP will be granted priority review by FDA and can qualify for “fast track” status.

The additional five years of market exclusivity under the GAIN Act for drug products designated by FDA as QIDPs applies only to a drug that is first approved on or after July 9, 2012. Additionally, the five-year exclusivity extension does not apply to: a supplement to an application under Section 505(b) of the FDCA for any QIDP for which an extension is in effect or has expired; a subsequent application submitted with respect to a product approved by FDA for a change that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device or strength; or a product that does not meet the definition of a QIDP under Section 505(g) based upon its approved uses.

Patent Term Restoration and Extension

A patent claiming a new drug product may be eligible for a limited patent term extension under the Hatch-Waxman Act, which permits a patent restoration of up to five years for patent term lost during product development and FDA regulatory review. The restoration period granted is typically one-half the time between the effective date of an IND and the submission date of a NDA, plus the time between the submission date of a NDA and the ultimate approval date. Patent term restoration cannot be used to extend the remaining term of a patent past a total of 14 years from the product’s approval date. Only one patent applicable to an approved drug product is eligible for the extension, and the application for the extension must be submitted prior to the expiration of the patent in question. A patent that covers multiple drugs for which approval is sought can only be extended in connection with one of the approvals. The USPTO reviews and approves the application for any patent term extension or restoration in consultation with FDA.

Review and Approval of Drug Products in the European Union

To market any product outside of the United States, a company must also comply with numerous and varying regulatory requirements of other countries and jurisdictions regarding quality, safety and efficacy and governing, among other things, clinical trials, marketing authorization, commercial sales and distribution of drug products. Whether or not it obtains FDA approval for a product, the company would need to obtain the necessary approvals by the comparable non-U.S. regulatory authorities before it can commence clinical trials or marketing of the product in those countries or jurisdictions. The approval process ultimately varies between countries and jurisdictions and can involve additional product testing and additional administrative review periods. The time required to obtain approval in other countries and jurisdictions might differ from and be longer than that required to obtain FDA approval. Regulatory approval in one country or jurisdiction does not ensure regulatory approval in another, but a failure or delay in obtaining regulatory approval in one country or jurisdiction may negatively impact the regulatory process in others.

Pursuant to the European Clinical Trials Directive, a system for the approval of clinical trials in the European Union has been implemented through national legislation of the member states. Under this system, an applicant must obtain approval from the competent national authority of a European Union member state in which the clinical trial is to be conducted. Furthermore, the applicant may only start a clinical trial after a competent ethics committee has issued a favorable opinion. Clinical trial application must be accompanied by an investigational medicinal product dossier with supporting information prescribed by the European Clinical Trials Directive and corresponding national laws of the member states and further detailed in applicable guidance documents.

To obtain marketing approval of a drug under European Union regulatory systems, an applicant must submit a marketing authorization application, or MAA, either under a centralized or decentralized procedure.

The centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid for all European Union member states. The centralized procedure is compulsory for specific products, including for medicines produced by certain biotechnological processes, products designated as orphan medicinal products, advanced therapy products and products with a new active substance indicated for the treatment of certain diseases. For products with a new active substance indicated for the treatment of other diseases and products that are highly innovative or for which a centralized process is in the interest of patients, the centralized procedure may be optional.

Under the centralized procedure, the Committee for Medicinal Products for Human Use, or the CHMP, established at the European Medicines Agency, or EMA, is responsible for conducting the initial assessment of a drug. The CHMP is also responsible for several post-authorization and maintenance activities, such as the assessment of modifications or extensions to an existing marketing authorization. Under the centralized procedure in the European Union, the maximum timeframe for the evaluation of an MAA is 210 days, excluding clock stops, when additional information or written or oral explanation is to be provided by the applicant in response to questions of the CHMP. Accelerated evaluation might be granted by the CHMP in exceptional cases when a medicinal product is of major interest from the point of view of public health and in particular from the viewpoint of therapeutic innovation. In this circumstance, the EMA ensures that the opinion of the CHMP is given within 150 days.

The decentralized procedure is available to applicants who wish to market a product in various European Union member states where such product has not received marketing approval in any European Union member states before. The decentralized procedure provides for approval by one or more other, or concerned, member states of an assessment of an application performed by one-member state designated by the applicant, known as the reference member state. Under this procedure, an applicant applies based on identical dossiers and related materials, including a draft summary of product characteristics, and draft labeling and package leaflet, to the reference member state and concerned member states. The reference member state prepares a draft assessment report and drafts of the related materials within 210 days after receipt of a valid application. Within 90 days of receiving the reference member state’s assessment report and related materials, each concerned member state must decide whether to approve the assessment report and related materials.

If a member state cannot approve the assessment report and related materials on the grounds of potential serious risk to public health, the disputed points are subject to a dispute resolution mechanism and may eventually be referred to the European Commission, whose decision is binding on all member states.

Pharmaceutical Coverage, Pricing and Reimbursement

Significant uncertainty exists as to the coverage and reimbursement status of products approved by FDA and other government authorities. Sales of products will depend, in part, on the extent to which the costs of the products will be covered by third party payors, including government health programs in the United States such as Medicare and Medicaid, commercial health insurers and managed care organizations. The process for determining whether a payor will provide coverage for a product may be separate from the process for setting the price or reimbursement rate that the payor will pay for the product once coverage is approved. Third party payors may limit coverage to specific products on an approved list, or formulary, which might not include all of the approved products for a particular indication. Additionally, the containment of healthcare costs has become a priority of federal and state governments, and the prices of drugs have been a focus in this effort. The U.S. government, state legislatures and foreign governments have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement and requirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures, could further limit our net revenue and results.

In order to secure coverage and reimbursement for any product that might be approved for sale, a company may need to conduct expensive pharmacoeconomic studies in order to demonstrate the medical necessity and cost-effectiveness of the product, in addition to the costs required to obtain FDA or other comparable regulatory approvals. A payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved. Third party reimbursement may not be sufficient to maintain price levels high enough to realize an appropriate return on investment in product development.

In the European Union, pricing and reimbursement schemes vary widely from country to country. Some countries provide that drug products may be marketed only after a reimbursement price has been agreed. Some countries may require the completion of additional studies that compare the cost-effectiveness of a particular product candidate to currently available therapies. For example, the European Union provides options for its member states to restrict the range of drug products for which their national health insurance systems provide reimbursement and to control the prices of medicinal products for human use. European Union member states may approve a specific price for a drug product, or it may instead adopt a system of direct or indirect controls on the profitability of the company placing the drug product on the market. Other member states allow companies to fix their own prices for drug products but monitor and control company profits. The downward pressure on health care costs in general, particularly prescription drugs, has become intense. As a result, increasingly high barriers are being erected to the entry of new products. In addition, in some countries, cross-border imports from low-priced markets exert competitive pressure that may reduce pricing within a country. Any country that has price controls or reimbursement limitations for drug products may not allow favorable reimbursement and pricing arrangements.

Healthcare Law and Regulation

Healthcare providers, physicians and third-party payors play a primary role in the recommendation and prescription of drug products that are granted marketing approval. Arrangements with third party payors and customers are subject to broadly applicable fraud and abuse and other healthcare laws and regulations. Such restrictions under applicable federal and state healthcare laws and regulations, include the following:

Some state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government in addition to requiring drug manufacturers to report information related to payments to physicians and other health care providers or marketing expenditures. State and foreign laws also govern the privacy and security of health information in some circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.

Human Capital Resources

As of March 18, 2024, we had 32 full-time employees. There are no collective bargaining agreements covering any of our employees.

We believe that our success depends on our ability to attract, develop and retain key personnel. We believe that the skills, experience and industry knowledge of our key employees significantly benefit our operations and performance.

Employee health and safety in the workplace is one of our core values and we provide a safe and secure workplace for our employees.

Employee levels are managed to align with the pace of business and management believes it has sufficient human capital to operate its business successfully.

Research and Development

For the years ended December 31, 2023 and 2022, we incurred $14,489 and $16,678, respectively, on research and development activities. These expenses include cash and non-cash expenses relating to the development of our clinical and pre-clinical programs, including our anti-infective product candidates, MAT2203 and MAT2501 as well as support and enhancement of our LNC Platform. Our research and development expenses reflect the reimbursement of certain MAT2501 program expenses of $88 thousand and $811 thousand during the years ended December 31, 2023 and 2022, respectively, related to the CFF grant agreement.

Corporate and Available Information

We were incorporated in Delaware under the name Matinas BioPharma Holdings, Inc. in May 2013. We have two operating subsidiaries: Matinas BioPharma, Inc., a Delaware corporation originally formed on August 12, 2011 as Nereus BioPharma LLC, and Matinas BioPharma Nanotechnologies, Inc., a Delaware corporation originally formed on January 29, 2015 as Aquarius Biotechnologies, Inc.

Our principal executive offices are located at 1545 Route 206 South, Suite 302, Bedminster, New Jersey 07921, and our telephone number is (908) 484-8805. Our website address is www.matinasbiopharma.com. Our website and the information contained on, or that can be accessed through, our website will not be deemed to be incorporated by reference into this Annual Report on Form 10-K or any other report we file with or furnish to the SEC.

We make available on our website, free of charge, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission, or the SEC. Our SEC reports can be accessed through the Investors section of our internet website. Further, a copy of this Annual Report on Form 10-K is located at the SEC’s Public Reference Rooms at 100 F Street, N.E., Washington, D. C. 20549. Information on the operation of the Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains a website that contains reports, proxy and information statements and other information regarding our filings athttp://www.sec.gov.