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What changed in Matinas BioPharma Holdings, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Matinas BioPharma Holdings, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+432 added−400 removedSource: 10-K (2024-03-27) vs 10-K (2023-03-15)

Top changes in Matinas BioPharma Holdings, Inc.'s 2023 10-K

432 paragraphs added · 400 removed · 257 edited across 5 sections

Item 1. Business

Business — how the company describes what it does

135 edited+146 added−114 removed201 unchanged
Biggest changeSeveral participants with high baseline fungal burdens had noteworthy antifungal activity within the MAT2203 treatment arm, including one patient with quantitative cryptococcal culture as high as 915,000 CFU/mL at the time of screening with effective clearance during the induction period, a key demonstration of potent antifungal activity, even in the most challenging of cases. 4 ● Survival In Cohort 4, in 40 patients receiving MAT2203 treatment, interim 18 Week survival is currently 85%, while the survival rate at Week 2 was 95% (similar to SOC); note that Week 2 survival is the prespecified primary endpoint for the MAT2203 Phase 3 registration trial in cryptococcal meningitis.
Biggest changeIn Cohort 4 of EnACT, we reported the following results: Efficacy and EFA ● The CSF yeast clearance rate exceeded the prespecified primary endpoint threshold target of >0.20, with a mean EFA achieved of 0.30 log 10 CFU/mL/day with 95% confidence intervals from 0.22 – 0.38. ● Several participants with high baseline fungal burdens had noteworthy antifungal activity within the MAT2203 treatment arm, including one patient with quantitative cryptococcal culture as high as 915,000 CFU/mL at the time of screening with effective clearance during the induction period, a key demonstration of potent antifungal activity, even in the most challenging of cases.
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.
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.
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.
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.
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, 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.
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.
Specifically, for an ANDA to be approved, 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, FDA must also determine that the generic drug is “bioequivalent” to the innovator drug.
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.
Upon approval of an ANDA, 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.
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.
Under the Hatch-Waxman Amendments, 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.
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.
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 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.
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 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.
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.
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 FDA.
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.
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, FDA and FDA’s internal review committee must then review the information submitted, consult with each other, and agree upon a final plan.
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.
FDA or the applicant may request an amendment to the plan at any time. 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.
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.
If reports of requested pediatric studies are submitted to and accepted by 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 FDA cannot approve another application.
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, 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).
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, 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.
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.
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 FDA to spend on innovation projects.
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.
In addition, the Cures Act includes provisions requiring 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.
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 FDA to spend several years developing these policies, the effect on us could be delayed.
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.
Such restrictions under applicable federal and state healthcare laws and regulations, include the following: ● the federal healthcare anti-kickback statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid; ● the federal False Claims Act imposes civil penalties, and provides for civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; ● the HIPPA imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; ● HIPAA, as amended by the HITECH and its implementing regulations, also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; ● the federal false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services; ● the federal transparency requirements under the ACA requires manufacturers of drugs to report to the Department of Health and Human Services information related to payments and other transfers of value to physicians and teaching hospitals and physician ownership and investment interests and the reported information will be made publicly available on a searchable website; and ● analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers.
Such restrictions under applicable federal and state healthcare laws and regulations, include the following: ● the federal healthcare anti-kickback statute prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid; ● the federal False Claims Act imposes civil penalties, and provides for civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government; ● the HIPPA imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; ● HIPAA, as amended by the HITECH and its implementing regulations, also imposes obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; ● the federal false statements statute prohibits knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services; 38 ● the federal transparency requirements under the ACA requires manufacturers of drugs to report to the Department of Health and Human Services information related to payments and other transfers of value to physicians and teaching hospitals and physician ownership and investment interests and the reported information will be made publicly available on a searchable website; and ● analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third-party payors, including private insurers.
An applicant seeking approval to market and distribute a new drug product in the United States must typically undertake the following: ● completion of nonclinical laboratory tests, animal studies and formulation studies in compliance with FDA’s good laboratory practice (cGLP), regulations; ● submission to FDA of an investigational new drug applications (IND), which must take effect before human clinical trials may begin; ● approval by an independent institutional review board (IRB) representing each clinical site before each clinical trial may be initiated; ● performance of adequate and well-controlled human clinical trials in accordance with current good clinical practices (GCP), to establish the safety and efficacy of the proposed drug product for each indication; ● preparation and submission to FDA of an NDA or BLA; ● review of the product by an FDA advisory committee, where appropriate or if applicable; ● satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with current Good Manufacturing Practices (cGMP), requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; 22 ● payment of user fees and securing FDA approval of the NDA or BLA; and ● compliance with any post-approval requirements, including a risk evaluation and mitigation strategy (REMS), and post-approval studies required by FDA.
An applicant seeking approval to market and distribute a new drug product in the United States must typically undertake the following: ● completion of nonclinical laboratory tests, animal studies and formulation studies in compliance with FDA’s good laboratory practice (cGLP), regulations; ● submission to FDA of an investigational new drug applications (IND), which must take effect before human clinical trials may begin; 26 ● approval by an independent institutional review board (IRB) representing each clinical site before each clinical trial may be initiated; ● performance of adequate and well-controlled human clinical trials in accordance with current good clinical practices (GCP), to establish the safety and efficacy of the proposed drug product for each indication; ● preparation and submission to FDA of an NDA or BLA; ● review of the product by an FDA advisory committee, where appropriate or if applicable; ● satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with current Good Manufacturing Practices (cGMP), requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity; ● payment of user fees and securing FDA approval of the NDA or BLA; and ● compliance with any post-approval requirements, including a risk evaluation and mitigation strategy (REMS), and post-approval studies required by FDA.
The ability to step-down to an oral amphotericin B product during treatment of an invasive fungal infection will offer significant benefit to patients for whom there are only limited oral treatment options that carry significant issues of safety, tolerability, and high propensity of resistance, as seen with the azole class of antifungals. ● Shorter and less costly hospital stays and lower outpatient costs .
The ability to step-down to an oral amphotericin B product early during treatment of an invasive fungal infection will offer significant benefit to patients for whom there are only limited oral treatment options that carry significant issues of safety, tolerability, and high propensity of resistance, as seen with the azole class of antifungals. ● Shorter and less costly hospital stays and lower outpatient costs .
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. 33 In the European Union, pricing and reimbursement schemes vary widely from country to country.
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.
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. 26 FDA may prevent or limit further marketing of a product based on the results of post-market studies or surveillance programs.
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.
Specifically, the applicant must certify with respect to each patent that: ● the required patent information has not been filed; ● the listed patent has expired; ● the listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration; or ● the listed patent is invalid, unenforceable or will not be infringed by the new product.
Specifically, the applicant must certify with respect to each patent that: ● the required patent information has not been filed; ● the listed patent has expired; ● the listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration; or 32 ● the listed patent is invalid, unenforceable or will not be infringed by the new product.
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. 13 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.
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. 19 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.
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. 32 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.
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.
We intend to use these registered marks in connection with our pharmaceutical research and development as well as our product candidates. 20 Competition The biotechnology and pharmaceutical industries are characterized by rapidly advancing technologies, intense competition, and a strong emphasis on proprietary products.
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.
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 and from one or more third-party suppliers.
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 long term supply arrangements for key active pharmaceutical ingredients. Sales and Marketing We currently do not have any sales and marketing infrastructure.
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.
Importantly, private insurance costs per visit range from approximately $40k to $150K per patient (2018 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 of Candida, Aspergillus and Cryptococcus, the three most common invasive fungal pathogens, globally.
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 of Candida, Aspergillus and Cryptococcus, the three most common invasive fungal pathogens, globally.
The efficacy in these animal models have shown to demonstrate comparable or superior antifungal activity compared to IV amphotericin B but with reduced toxicity. 15 The in vivo efficacy of MAT2203 has been shown in multiple mouse models infected with Cryptococcus neoformans; these studies were conducted by Dr. Peter Williamson at NIH [ 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. The in vivo efficacy of MAT2203 has been shown in multiple mouse models infected with Cryptococcus neoformans; these studies were conducted by Dr. Peter Williamson at NIH [ Lu et al, 2019 ].
Multiple studies demonstrated the potential for MAT2203 administered in combination with 5FC to provide an effective oral formulation for treatment of cryptococcal meningitis.
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.
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. 29 21st Century Cures Act On December 13, 2016, Congress passed the 21 st Century Cures Act, or the Cures Act.
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. 33 21st Century Cures Act On December 13, 2016, Congress passed the 21 st Century Cures Act, or the Cures Act.
Figure 3: 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 4 ).
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 ).
The SEC maintains a website that contains reports, proxy and information statements and other information regarding our filings at http://www.sec.gov.
The SEC maintains a website that contains reports, proxy and information statements and other information regarding our filings at http://www.sec.gov. 39
We will 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.
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.
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 3 ).
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 ).
Clinical Data 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 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.
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.
We anticipate the resumption of activities with Thermo Fisher once additional financing from one or more of these sources have been secured. 21 There are several potential third-party suppliers for amphotericin B, the generic active pharmaceutical ingredient in our lead clinical stage product candidate – MAT2203.
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.
As part of our decision to prioritize the regulatory feedback from FDA on our plan for a Phase 3 trial in IFIs and our desire to secure a pharmaceutical or governmental partner to advance the development of MAT2203 into Phase 3, we have slowed down our transition to Thermo Fisher and our planned related expenses during 2023.
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.
Amphotericin B is currently only available in IV formulations which are associated with significant renal toxicity and labeled restrictions on its use for up to 2 weeks in the United States and only 1 week in most parts of the world due to its toxicities, the most prevalent of which is severe nephrotoxicity.
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.
Strategic Collaborations Using LNC Platform We believe 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.
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.
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 2 ). Figure 2: Cochleate Formation 7 We have developed techniques to embed cargo molecules within cochleates as they are assembled.
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 ). 8 Figure 1: Cochleate Formation We have developed techniques to embed cargo molecules within cochleates as they are assembled.
For instance, with MAT2203 we have developed a less toxic and orally deliverable formulation of the potent (but otherwise highly toxic) fungicidal drug amphotericin that can be safely used for longer periods of time than currently possible with conventional amphotericin in the treatment of deadly fungal infections.
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.
Our research and development expenses reflect the reimbursement of certain MAT2501 program expenses of $811 thousand and $2,179 thousand during the years ended December 31, 2022 and 2021, 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.
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.
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 delivery technology, has the potential to preserve the efficacy of amphotericin B while eliminating the risk of nephrotoxicity and providing more convenient and cost-effective oral administration.
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.
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, siRNA, ASOs – and, with modifications, large oligonucleotides such as DNA and RNA.
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.
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. 34 Human Capital Resources As of March 3, 2023, we had 34 full-time employees.
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.
Preclinical Data Oral MAT2203 has demonstrated antifungal activity when administered orally in several animal models for Cryptococcus , Candida , and Aspergillus infection [ Zarif et al, 2000 ; Perlin, 2004 ; Lu et al, 2019 ].
MAT2203 Development History and Plan Preclinical Data MAT2203 has demonstrated antifungal activity when administered orally in several animal models for Cryptococcus , Candida , and Aspergillus infection [ Zarif et al, 2000 ; Perlin, 2004 ; Lu et al, 2019 ].
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.) and amphotericin B deoxycholate (marketed by X-Gen Pharmaceuticals, Inc.).
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.).
These new cargo-carrying structures (termed lipid nanocrystals, or LNCs ) have been used to successfully deliver a number of different cargo molecules to cells in vitro and to animals and humans in vivo .
These new cargo-carrying structures (termed lipid nanocrystals, or LNCs ) have been used to successfully deliver several different cargo molecules to cells in vitro and to animals and humans in vivo .
Overcoming limitations of LNPs and viral vectors 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.
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.
This study was initiated in October 2019 and is exploring the use of MAT2203 for both induction and maintenance therapy in the treatment of CM, which is one of the most frequent and opportunistic infections in HIV patients.
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.
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. 16 In Part 2, enrollment in all four cohorts has been completed.
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.
Thus, phagocytosis of LNCs by professional phagocytes (and some non-professional phagocytes) becomes one mechanism for intracellular delivery of LNCs. 8 Figure 4: 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).
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).
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.
While we do not believe we are a “business associate” under HIPAA, regulatory agencies may disagree. 34 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.
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.
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.
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.
Even with submission of this additional information, FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. 30 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.
As of January 2023, MAT2203 has been administered to a total of 284 subjects in five clinical trials as follows: ● 52 healthy subjects (Studies CAM-102 [N=36] and MB-70011 [N=16]) ● 36 patients with HIV and 101 patients with CM (EnACT study MB-70007), ● 91 patients with VVC (MB-70005) ● 4 patients with mucocutaneous (esophageal and oropharyngeal) candidiasis (MB-70004) 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.
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: ● 52 healthy subjects (Studies CAM-102 [N=36] and MB-70011 [N=16]) ● 36 patients with HIV and 101 patients with CM (EnACT study MB-70007), ● 91 patients with VVC (MB-70005) ● 4 patients with mucocutaneous (esophageal and oropharyngeal) candidiasis (MB-70004) ● 19 patients in our Expanded/Compassionate Use Access Program in patients 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.
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 gene therapy and vaccine spaces.
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.
Item 1. Business Company Overview We are a clinical-stage biopharmaceutical company focused on delivering groundbreaking therapies using our lipid nanocrystal (LNC) platform delivery technology (LNC Platform) to maximize global clinical impact and patient access.
Item 1. Business Company Overview We are a clinical-stage biopharmaceutical company focused on delivering groundbreaking therapies using our lipid nanocrystal (LNC) platform delivery technology (LNC Platform).
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.
Additionally, we plan to evaluate the potential anti-tumor activity of LNC formulations of small oligonucleotides. 7 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.
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.
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.
The estimated incidence in the U.S. for these conditions is approximately 46,000 for invasive candidiasis, 15,000 for invasive aspergillosis, and 3,700 for CM. For example, aspergillosis-associated hospitalizations in the U.S. alone came at an estimated treatment cost of more than $1 billion.
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.
Additionally, GDPR creates a direct cause of action by individual data subjects. 30 Fraud and Abuse Laws In addition to 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.
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.
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. 31 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 and Clostridium difficile ) and that is included in a list established and maintained by FDA.
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 and Clostridium difficile ) and that is included in a list established and maintained by FDA.
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, which we believe may have fewer side effects than the currently available IV-formulations of amphotericin B.
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.
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.
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. 28 Before approving an NDA, FDA typically will inspect the facility or facilities where the product is or will be manufactured.
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.
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.
FDA has identified in guidance those product applications for the prevention or treatment of tropical diseases that may qualify for a priority review voucher. 25 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.
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.
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.
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. 25 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.
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.
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.
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.
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. 35 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.
MAT2203 Our lead anti-fungal product candidate, MAT2203, is an application of our LNC Platform to a broad spectrum and potent 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.
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.
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.
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.
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.
Endosomal escape of LNPs is a very inefficient process, with endosomal escape rates of generally 11 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.
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. 23 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.
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.
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.
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.
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.
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.
Both the PDMA and state laws limit the distribution of prescription pharmaceutical product samples and impose requirements to ensure accountability in distribution. 27 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 FDA under the NDA provisions of the statute.
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.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAny delay in the approval process will harm our business. ● Clinical drug development involves a lengthy and expensive process and uncertain as to outcome. ● Delays in any aspect of our clinical trials could result in increased costs to us and delay or limit our ability to obtain regulatory approval for our product candidates. ● We may not have or be able to obtain sufficient quantities of our products to meet our supply and clinical studies obligations and our business, financial condition and results of operation may be adversely affected. ● If we are unable to successfully commercialize our products our ability to generate revenue will be limited. ● If our preclinical and clinical studies do not produce positive results, if our clinical trials are delayed or if serious side effects are identified during such studies or trials, we may experience delays, incur additional costs and ultimately be unable to commercialize our product candidates. ● If we cannot enroll enough patients to complete our clinical trials, our business, financial condition and results of operations may be adversely affected. ● We may not be able to obtain or maintain orphan drug designation, Fast Track designation, qualified infection disease designation or breakthrough therapy designation for any of our product candidates, and even if granted, such designations may not actually lead to a faster development or regulatory review and would not assure FDA approval of any of our product candidates. ● If we are unsuccessful in identifying and developing additional product candidates, our potential for growth may be impaired. ● If we are unable to establish satisfactory sales and marketing capabilities, we may not successfully commercialize any of our product candidates, even if regulatory approval is obtained. ● If we are unable to file for approval of MAT2203 under Section 505(b)(2) of the FDCA or if we are required to generate additional data related to safety and efficacy in order to obtain approval under Section 505(b)(2), we may be unable to meet our anticipated development and commercialization timelines. ● We face competition from other biotechnology and pharmaceutical companies. ● Even if we obtain marketing approval for any product candidate, we will be subject to ongoing obligations and continued regulatory review and requirements, which may result in significant additional expense. ● Future legislation, and/or regulations and policies adopted by the FDA may increase the time and cost required for us to conduct and complete clinical trials. ● Changes in health care law and implementing regulations may have a material adverse effect on us. ● Our future growth depends, in part, on our ability to penetrate foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties. ● If we market our product candidates in a manner that violates healthcare fraud and abuse laws, or if we violate government price reporting laws, we may be subject to civil or criminal penalties. ● We expect that we will rely on third parties to conduct clinical trials for our product candidates. ● We are, and will be, completely dependent on third parties to manufacture our product candidates, who may not perform as expected. 36 ● Unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives could harm our business. ● Outbreaks of communicable diseases may materially and adversely affect our business, financial condition and results of operations. ● We depend on certain technologies that are licensed to us.
Biggest changeAdditionally, our product candidates could be subject to labeling and other restrictions and withdrawal from the market, and we may be subject to penalties if we fail to comply with regulatory requirements or if we experience unanticipated problems with our future products. ● Future legislation, and/or regulations and policies adopted by the FDA may increase the time and cost required for us to conduct and complete clinical trials. ● Changes in health care law and implementing regulations may have a material adverse effect on us. ● Our future growth depends, in part, on our ability to penetrate foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties. ● If we market our product candidates in a manner that violates healthcare fraud and abuse laws, or if we violate government price reporting laws, we may be subject to civil or criminal penalties. ● We have been and expect to be significantly dependent on our collaborative agreements for the development of MAT2203, which exposes us to the risk of reliance on the performance of third parties. ● We expect that we will rely on third parties to conduct clinical trials for our product candidates, which exposes us to the risk of reliance on the performance of third parties. ● We are, and will be, completely dependent on third parties to manufacture our product candidates, and our commercialization efforts could be halted, delayed or made less profitable if those third parties fail to obtain manufacturing approval from the FDA or comparable foreign regulatory authorities, fail to provide us with sufficient quantities of any product candidate or fail to do so at acceptable quality levels or prices. ● Unfavorable pricing regulations, third-party reimbursement practices or healthcare reform initiatives could harm our business. ● Outbreaks of communicable diseases may materially and adversely affect our business, financial condition and results of operations. ● Adverse global conditions, including economic uncertainty, may negatively impact our financial results. ● We depend on certain technologies that are licensed to us.
We do not control these technologies and any loss of our rights to them could prevent us from discovering, developing and commercializing our product candidates. We rely upon our LNC Platform and certain of the patents which are exclusively licensed to us by Rutgers. We do not exclusively own some of the patents that underly the LNC Platform.
We do not control these technologies and any loss of our rights to them could prevent us from discovering, developing and commercializing product candidates. We rely upon our LNC Platform and certain of the patents which are exclusively licensed to us by Rutgers. We do not exclusively own some of the patents that underly the LNC Platform.
Our future capital requirements, both short-term and long-term, will depend on many factors, including: ● the progress, timing, costs, and results of our ongoing and planned clinical trials of our product candidates; ● the scope, progress, timing, costs, and results of clinical trials of, and research and preclinical development efforts for, other product candidates, including MAT2203, any future product candidates based upon our LNC Platform, and any preclinical or clinical work done to further validate our LNC Platform, generally; ● our ability to enter into and the terms and timing of any collaborations, licensing or other arrangements that we may establish; ● the number and development requirements of other product candidates that we pursue; ● the costs, timing, and outcome of regulatory review of our product candidates by the FDA and comparable non-U.S. regulatory authorities; ● the costs and timing of future commercialization activities, including product manufacturing, marketing, sales, and distribution, for any of our product candidates for which we receive marketing approval; ● the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; ● our headcount growth and associated costs as we expand our research and development and establish a commercial infrastructure; ● the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; ● the extent to which we acquire or in-license other products and technologies; ● the costs of operating as a public company; and ● the effect of competing technological and market developments.
Our future capital requirements, both short-term and long-term, will depend on many factors, including: ● the progress, timing, costs, and results of our ongoing and planned clinical trials of our product candidates; ● the scope, progress, timing, costs, and results of clinical trials of, and research and preclinical development efforts for, other product candidates, including MAT2203, any future product candidates based upon our LNC Platform, and any preclinical or clinical work done to further validate our LNC Platform, generally; 43 ● our ability to enter into and the terms and timing of any collaborations, licensing or other arrangements that we may establish; ● the number and development requirements of other product candidates that we pursue; ● the costs, timing, and outcome of regulatory review of our product candidates by the FDA and comparable non-U.S. regulatory authorities; ● the costs and timing of future commercialization activities, including product manufacturing, marketing, sales, and distribution, for any of our product candidates for which we receive marketing approval; ● the revenue, if any, received from commercial sales of our product candidates for which we receive marketing approval; ● our headcount growth and associated costs as we expand our research and development and establish a commercial infrastructure; ● the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; ● the extent to which we acquire or in-license other products and technologies; ● the costs of operating as a public company; and ● the effect of competing technological and market developments.
The success of MAT2203 and any other product candidates we may develop will depend on many factors, including the following: ● successful completion of preclinical studies; ● successful enrollment in, and completion of, clinical trials: ● demonstrating safety and efficacy; ● receipt of marketing approvals from applicable regulatory authorities; ● establishing clinical and commercial manufacturing capabilities or making arrangements with third-party manufacturers; ● obtaining and maintaining patent and trade secret protection and non-patent exclusivity for our product candidates and technologies; ● launching commercial sales of the product candidates, if approved, whether alone or selectively in collaboration with others; ● acceptance of the product candidates, if approved, by patients, the medical community and third-party payers; ● effectively competing with other therapies; ● a continued acceptable safety profile of the products following approval; and ● enforcing and defending intellectual property rights and claims.
The success of MAT2203 and any other product candidates we may develop will depend on many factors, including the following: ● successful completion of preclinical studies; ● successful enrollment in, and completion of, clinical trials: ● demonstrating safety and efficacy; ● receipt of marketing approvals from applicable regulatory authorities; ● establishing clinical and commercial manufacturing capabilities or making arrangements with third-party manufacturers; ● obtaining and maintaining patent and trade secret protection and non-patent exclusivity for our product candidates and technologies; ● launching commercial sales of the product candidates, if approved, whether alone or selectively in collaboration with others; 45 ● acceptance of the product candidates, if approved, by patients, the medical community and third-party payers; ● effectively competing with other therapies; ● a continued acceptable safety profile of the products following approval; and ● enforcing and defending intellectual property rights and claims.
We anticipate that our expenses will increase substantially if and as we: ● conduct further clinical and preclinical studies of MAT2203, our lead LNC product candidate; ● support the conduct of further clinical studies of MAT2203, even if such studies are partially financed with non-dilutive funding from the NIH; ● seek to discover and develop additional product candidates; ● seek regulatory approvals for any product candidates that successfully complete clinical trials; ● require the manufacture of larger quantities of product candidates for clinical development and potentially commercialization; ● maintain, expand and protect our intellectual property portfolio; ● hire additional clinical, quality control and scientific personnel; and ● add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts and personnel and infrastructure necessary to help us comply with our obligations as a public company.
We anticipate that our expenses will increase substantially if and as we: ● conduct further clinical and preclinical studies of MAT2203, our lead LNC product candidate; ● support the conduct of further clinical studies of MAT2203, even if such studies are partially financed with non-dilutive funding from the NIH; ● seek to discover and develop additional product candidates; ● seek regulatory approvals for any product candidates that successfully complete clinical trials; ● require the manufacture of larger quantities of product candidates for clinical development and potentially commercialization; ● maintain, expand and protect our intellectual property portfolio; 42 ● hire additional clinical, quality control and scientific personnel; and ● add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts and personnel and infrastructure necessary to help us comply with our obligations as a public company.
We may experience numerous unforeseen events during, or as a result of, preclinical testing and the clinical trial process that could delay or prevent our ability to obtain regulatory approval or commercialize our product candidates, including: ● our preclinical tests or clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional preclinical testing or clinical trials or we may abandon projects that we expect to be promising; ● regulators or institutional review boards may not authorize us to commence a clinical trial or conduct a clinical trial at a prospective trial site; 43 ● conditions imposed on us by the FDA or any non-U.S. regulatory authority regarding the scope or design of our clinical trials may require us to resubmit our clinical trial protocols to institutional review boards for re-inspection due to changes in the regulatory environment; ● the number of patients required for our clinical trials may be larger than we anticipate, or participants may drop out of our clinical trials at a higher rate than we anticipate; ● our third-party contractors or clinical investigators may fail to comply with regulatory requirements or fail to meet their contractual obligations to us in a timely manner; ● we might have to suspend or terminate one or more of our clinical trials if we, the regulators or the institutional review boards determine that the participants are being exposed to unacceptable health risks; ● regulators or institutional review boards may require that we hold, suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements; ● the cost of our clinical trials may be greater than we anticipate; ● the supply or quality of our product candidates or other materials necessary to conduct our clinical trials may be insufficient or inadequate or we may not be able to reach agreements on acceptable terms with prospective clinical research organizations; and ● the effects of our product candidates may not be the desired effects or may include undesirable side effects or the product candidates may have other unexpected characteristics.
We may experience numerous unforeseen events during, or as a result of, preclinical testing and the clinical trial process that could delay or prevent our ability to obtain regulatory approval or commercialize our product candidates, including: ● our preclinical tests or clinical trials may produce negative or inconclusive results, and we may decide, or regulators may require us, to conduct additional preclinical testing or clinical trials or we may abandon projects that we expect to be promising; ● regulators or institutional review boards may not authorize us to commence a clinical trial or conduct a clinical trial at a prospective trial site; ● conditions imposed on us by the FDA or any non-U.S. regulatory authority regarding the scope or design of our clinical trials may require us to resubmit our clinical trial protocols to institutional review boards for re-inspection due to changes in the regulatory environment; ● the number of patients required for our clinical trials may be larger than we anticipate, or participants may drop out of our clinical trials at a higher rate than we anticipate; ● our third-party contractors or clinical investigators may fail to comply with regulatory requirements or fail to meet their contractual obligations to us in a timely manner; ● we might have to suspend or terminate one or more of our clinical trials if we, the regulators or the institutional review boards determine that the participants are being exposed to unacceptable health risks; ● regulators or institutional review boards may require that we hold, suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements; ● the cost of our clinical trials may be greater than we anticipate; 48 ● the supply or quality of our product candidates or other materials necessary to conduct our clinical trials may be insufficient or inadequate or we may not be able to reach agreements on acceptable terms with prospective clinical research organizations; and ● the effects of our product candidates may not be the desired effects or may include undesirable side effects or the product candidates may have other unexpected characteristics.
If we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts. ● Raising additional capital may cause dilution to stockholders, restrict operations or require us to relinquish rights to our technologies or product candidates. ● Our stockholders may be subject to substantial dilution by exercises of outstanding options and warrants. ● Our operating history to date may make it difficult to evaluate the success of our business and assess our future viability. ● We are early in our development efforts, which may not be successful. ● We cannot be certain that our product candidates will receive regulatory approval, without which we cannot market any of our product candidates.
If we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our product development programs or commercialization efforts. ● Raising additional capital may cause dilution to stockholders, restrict operations or require us to relinquish rights to our technologies or product candidates. ● Our stockholders may be subject to substantial dilution by exercises of outstanding options and warrants. ● Our operating history to date may make it difficult to evaluate the success of our business and assess our future viability. ● We are early in our development efforts, which may not be successful. ● We cannot be certain that our product candidates will receive regulatory approval, without which we will not be able to market any of our product candidates.
To succeed, among other things, we must be able to: ● identify potential drug product candidates; ● design and conduct appropriate laboratory, preclinical and other research; ● submit for and receive regulatory approval to perform clinical studies; ● design and conduct appropriate preclinical and clinical studies according to good laboratory and good clinical practices; ● select and recruit clinical investigators; ● select and recruit subjects for our studies; ● collect, analyze, and correctly interpret the data from our studies; ● submit for and receive regulatory approvals for marketing; and ● manufacture the drug product candidates according to cGMP.
To succeed, among other things, we must be able to: ● identify potential drug product candidates; ● design and conduct appropriate laboratory, preclinical and other research; ● submit for and receive regulatory approval to perform clinical studies; ● design and conduct appropriate preclinical and clinical studies according to good laboratory and good clinical practices; 47 ● select and recruit clinical investigators; ● select and recruit subjects for our studies; ● collect, analyze, and correctly interpret the data from our studies; ● submit for and receive regulatory approvals for marketing; and ● manufacture the drug product candidates according to cGMP.
The Cures Act, among other things, is intended to modernize the regulation of drugs and spur innovation. We cannot predict what if any effect the Cures Act or any existing or future guidance from FDA will have on development of our product candidates. 50 Changes in health care law and implementing regulations may have a material adverse effect on us.
The Cures Act, among other things, is intended to modernize the regulation of drugs and spur innovation. We cannot predict what if any effect the Cures Act or any existing or future guidance from FDA will have on development of our product candidates. Changes in health care law and implementing regulations may have a material adverse effect on us.
For example, an outbreak could significantly disrupt our business by limiting our ability to travel or ship materials within or outside China and forcing temporary closure of facilities that we rely upon. 55 Adverse global conditions, including economic uncertainty, may negatively impact our financial results. Global conditions, dislocations in the financial markets, or inflation could adversely impact our business.
For example, an outbreak could significantly disrupt our business by limiting our ability to travel or ship materials within or outside China and forcing temporary closure of facilities that we rely upon. Adverse global conditions, including economic uncertainty, may negatively impact our financial results. Global conditions, dislocations in the financial markets, or inflation could adversely impact our business.
Issues arising from scale-up, environmental controls, public health crises, such as pandemics and epidemics, equipment requirements, or other factors, may have an adverse impact on our ability to manufacture our product candidates. 42 If we are unable to successfully commercialize our products our ability to generate revenue and will be limited.
Issues arising from scale-up, environmental controls, public health crises, such as pandemics and epidemics, equipment requirements, or other factors, may have an adverse impact on our ability to manufacture our product candidates. If we are unable to successfully commercialize our products our ability to generate revenue will be limited.
Patient enrollment is a function of many factors, including: ● investigator identification and recruitment; ● regulatory approvals to initiate study sites; ● patient population size; 44 ● the nature of the protocol to be used in the trial; ● patient proximity to clinical sites; ● eligibility criteria for the study; ● competition from other companies’ clinical studies for the same patient population; and ● ability to obtain comparator drug/device.
Patient enrollment is a function of many factors, including: ● investigator identification and recruitment; ● regulatory approvals to initiate study sites; ● patient population size; ● the nature of the protocol to be used in the trial; ● patient proximity to clinical sites; ● eligibility criteria for the study; ● competition from other companies’ clinical studies for the same patient population; and ● ability to obtain comparator drug/device.
If reimbursement is not available or is available on a limited basis, we may not be able to successfully commercialize any product candidates that we develop. Our future growth depends, in part, on our ability to penetrate foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties.
If reimbursement is not available or is available on a limited basis, we may not be able to successfully commercialize any product candidates that we develop. 56 Our future growth depends, in part, on our ability to penetrate foreign markets, where we would be subject to additional regulatory burdens and other risks and uncertainties.
In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans. 39 Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.
In addition, we may seek additional capital due to favorable market conditions or strategic considerations, even if we believe we have sufficient funds for our current or future operating plans. Raising additional capital may cause dilution to our stockholders, restrict our operations or require us to relinquish rights to our technologies or product candidates.
Any such loss would likely increase our expenses and materially harm our business, financial condition, and results of operation. 53 We expect that we will rely on third parties to conduct clinical trials for our product candidates, which exposes us to the risk of reliance on the performance of third parties.
Any such loss would likely increase our expenses and materially harm our business, financial condition, and results of operation. We expect that we will rely on third parties to conduct clinical trials for our product candidates, which exposes us to the risk of reliance on the performance of third parties.
Further, we cannot provide assurance that competitors will not infringe the trademarks we use, or that we will have adequate resources to enforce these trademarks. 57 Our product candidates may infringe the intellectual property rights of others, which could increase our costs and delay or prevent our development and commercialization efforts.
Further, we cannot provide assurance that competitors will not infringe the trademarks we use, or that we will have adequate resources to enforce these trademarks. Our product candidates may infringe the intellectual property rights of others, which could increase our costs and delay or prevent our development and commercialization efforts.
Similar requirements exist in many of these areas in other countries. 49 In addition, our product labeling, advertising, and promotion would be subject to regulatory requirements and continuing regulatory review. FDA strictly regulates the promotional claims that may be made about prescription products.
Similar requirements exist in many of these areas in other countries. In addition, our product labeling, advertising, and promotion would be subject to regulatory requirements and continuing regulatory review. FDA strictly regulates the promotional claims that may be made about prescription products.
In such event, the value of our common stock could decline, and you could lose all or a substantial portion of the money that you pay for our common stock. 35 Summary of Risk Factors ● We have incurred significant losses since our inception.
In such event, the value of our common stock could decline, and you could lose all or a substantial portion of the money that you pay for our common stock. Summary of Risk Factors ● We have incurred significant losses since our inception.
An inactive market may also impair our ability to raise capital by selling shares of capital stock and may impair our ability to acquire other companies or technologies by using our common stock as consideration. Our share price has been and could remain volatile.
An inactive market may also impair our ability to raise capital by selling shares of capital stock and may impair our ability to acquire other companies or technologies by using our common stock as consideration. 65 Our share price has been and could remain volatile.
Because of the breadth of these laws and the narrowness of the safe harbors, it is possible that some of our business activities could be subject to challenge under one or more of these laws. The U.S.
Because of the breadth of these laws and the narrowness of the safe harbors, it is possible that some of our business activities could be subject to challenge under one or more of these laws. 57 The U.S.
Drugs designated as breakthrough therapies by the FDA may also be eligible for accelerated approval if the relevant criteria are met. Designation as a breakthrough therapy is within the discretion of the FDA.
Drugs designated as breakthrough therapies by the FDA may also be eligible for accelerated approval if the relevant criteria are met. 50 Designation as a breakthrough therapy is within the discretion of the FDA.
We expect our expenses to increase in connection with our ongoing activities, particularly as we conduct additional clinical studies of our product candidates, including the potential Phase 3 clinical trials of MAT2203 in CM and IFIs, and conduct additional preclinical and clinical trials to further validate and expand our LNC Platform, continue research and development, initiate clinical trials and, if development succeeds, seek regulatory approval of our product candidates.
We expect our expenses to increase in connection with our ongoing activities, particularly as we conduct additional clinical studies of our product candidates, including the potential Phase 3 clinical trials of MAT2203, and conduct additional preclinical and clinical trials to further validate and expand our LNC Platform, continue research and development, initiate clinical trials and, if development succeeds, seek regulatory approval of our product candidates.
We currently have no sales and marketing organization. If we are unable to establish satisfactory sales and marketing capabilities, we may not successfully commercialize any of our product candidates, even if regulatory approval is obtained. At present, we have no sales or marketing personnel.
If we are unable to establish satisfactory sales and marketing capabilities, we may not successfully commercialize any of our product candidates, even if regulatory approval is obtained. At present, we have no sales or marketing personnel.
If and when we obtain FDA or EMA approval of MAT2203 and/or MAT2501, which we do not expect to occur before 2026, if ever, and/or if we generate sales of such products, or we receive any proceeds from the licensing or other disposition of MAT2203 or MAT2501, we are required to pay to the holders of our Series A Preferred Stock, subject to certain vesting requirements, in aggregate, a royalty equal to (i) 4.5% of Net Sales (as defined in the Certificate of Designations), subject in all cases to a cap of $25 million per calendar year, and (ii) 7.5% of Licensing Proceeds (as defined in the Certificate of Designations), subject in all cases to a cap of $10 million per calendar year.
If and when we obtain FDA or EMA approval of MAT2203 and/or MAT2501, which we do not expect to occur before 2027, if ever, and/or if we generate sales of such products, or we receive any proceeds from the licensing or other disposition of MAT2203 or MAT2501, we are required to pay to certain former holders of our Series A Preferred Stock, in aggregate, a royalty equal to (i) 4.5% of Net Sales (as defined in the Certificate of Designations), subject in all cases to a cap of $25 million per calendar year, and (ii) 7.5% of Licensing Proceeds (as defined in the Certificate of Designations), subject in all cases to a cap of $10 million per calendar year.
While we require employees, academic collaborators, consultants, and other contractors to enter into confidentiality agreements, we may not be able to adequately protect our trade secrets or other proprietary or licensed information. Typically, research collaborators and scientific advisors have rights to publish data and information in which we may have rights.
However, trade secrets are difficult to protect. While we require employees, academic collaborators, consultants, and other contractors to enter into confidentiality agreements, we may not be able to adequately protect our trade secrets or other proprietary or licensed information. Typically, research collaborators and scientific advisors have rights to publish data and information in which we may have rights.
In either event, we could be required, before obtaining marketing approval for any of our product candidates, to conduct substantial new research and development activities beyond those we currently plan to engage to obtain approval of our product candidates.
In either event, we could be required, before obtaining marketing approval for any of our product candidates, to conduct substantial new research and development activities beyond those we currently plan to engage to obtain approval of our product candidates. Such additional new research and development activities would be costly and time consuming.
If we or a regulatory agency discovers previously unknown problems with a product, such as AEs of unanticipated severity or frequency, problems with the facility where the product is manufactured, or we or our manufacturers fail to comply with applicable regulatory requirements, we may be subject to the following administrative or judicial sanctions: ● restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or voluntary or mandatory product recalls; ● issuance of warning letters or untitled letters; ● clinical holds; ● injunctions or the imposition of civil or criminal penalties or monetary fines; ● suspension or withdrawal of regulatory approval; ● suspension of any ongoing clinical trials; ● refusal to approve pending applications or supplements to approved applications filed by us, or suspension or revocation of product license approvals; ● suspension or imposition of restrictions on operations, including costly new manufacturing requirements; or ● product seizure or detention or refusal to permit the import or export of product.
FDA has also requested that companies enter into consent decrees of permanent injunctions under which specified promotional conduct is changed or curtailed. 54 If we or a regulatory agency discovers previously unknown problems with a product, such as AEs of unanticipated severity or frequency, problems with the facility where the product is manufactured, or we or our manufacturers fail to comply with applicable regulatory requirements, we may be subject to the following administrative or judicial sanctions: ● restrictions on the marketing or manufacturing of the product, withdrawal of the product from the market, or voluntary or mandatory product recalls; ● issuance of warning letters or untitled letters; ● clinical holds; ● injunctions or the imposition of civil or criminal penalties or monetary fines; ● suspension or withdrawal of regulatory approval; ● suspension of any ongoing clinical trials; ● refusal to approve pending applications or supplements to approved applications filed by us, or suspension or revocation of product license approvals; ● suspension or imposition of restrictions on operations, including costly new manufacturing requirements; or ● product seizure or detention or refusal to permit the import or export of product.
Pursuant to the terms of the Certificate of Designations of Preferences, Rights and Limitations (the “Certificate of Designations”) for our Series A Preferred Stock, we are required to pay royalties of up to $35 million per year.
Risks related to our Securities Pursuant to the terms of our Series A Preferred Stock, we may be obligated to pay significant royalties. Pursuant to the terms of the Certificate of Designations of Preferences, Rights and Limitations (the “Certificate of Designations”) for our Series A Preferred Stock, we are required to pay royalties of up to $35 million per year.
The degree of market acceptance of MAT2203 or such other product candidate will depend on several factors, including: ● demonstration of clinical safety and efficacy of such product candidate; 46 ● relative convenience and ease of administration; ● the prevalence and severity of any adverse effects; ● the willingness of physicians to prescribe such product candidates and of the target patient population to try new therapies; ● pricing and cost-effectiveness; ● the inclusion or omission of such product candidate in applicable treatment guidelines; ● the effectiveness of our or any future collaborators’ sales and marketing strategies; ● limitations or warnings contained in FDA approved labeling; ● our ability to obtain and maintain sufficient third-party coverage or reimbursement from government health care programs, including Medicare and Medicaid, private health insurers and other third-party payors; and ● the willingness of patients to pay out-of-pocket in the absence of third-party coverage or reimbursement.
The degree of market acceptance of MAT2203 or such other product candidate will depend on several factors, including: ● demonstration of clinical safety and efficacy of such product candidate; ● relative convenience and ease of administration; ● the prevalence and severity of any adverse effects; ● the willingness of physicians to prescribe such product candidates and of the target patient population to try new therapies; ● pricing and cost-effectiveness; ● the inclusion or omission of such product candidate in applicable treatment guidelines; ● the effectiveness of our or any future collaborators’ sales and marketing strategies; ● limitations or warnings contained in FDA approved labeling; ● our ability to obtain and maintain sufficient third-party coverage or reimbursement from government health care programs, including Medicare and Medicaid, private health insurers and other third-party payors; and ● the willingness of patients to pay out-of-pocket in the absence of third-party coverage or reimbursement. 51 If MAT2203 or any other product candidates we may develop is approved but does not achieve an adequate level of acceptance by physicians, health care payors and patients, we may not generate sufficient revenue and we may not be able to achieve or sustain profitability.
If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. 44 Our stockholders may be subject to substantial dilution by exercises of outstanding options.
Regardless of the merits or eventual outcome, liability claims may result in: ● decreased demand for MAT2203 or any future products that we may develop; ● injury to our reputation; ● withdrawal of clinical trial participants; ● costs to defend the related litigation; ● a diversion of management’s time and our resources; ● substantial monetary awards to trial participants or patients; ● product recalls, withdrawals or labeling, marketing, or promotional restrictions; ● loss of revenue; ● the inability to commercialize our product candidates; and ● a decline in our stock price. 59 Our inability to obtain and retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products we develop.
Regardless of the merits or eventual outcome, liability claims may result in: ● decreased demand for MAT2203 or any future products that we may develop; 63 ● injury to our reputation; ● withdrawal of clinical trial participants; ● costs to defend the related litigation; ● a diversion of management’s time and our resources; ● substantial monetary awards to trial participants or patients; ● product recalls, withdrawals or labeling, marketing, or promotional restrictions; ● loss of revenue; ● the inability to commercialize our product candidates; and ● a decline in our stock price.
We cannot be certain that drafting and/or prosecution of the licensed patents and patent applications by the licensors have been or will be conducted in compliance with applicable laws and regulations or will result in valid and enforceable patents and other intellectual property rights.
We cannot be certain that drafting and/or prosecution of the licensed patents and patent applications by the licensors have been or will be conducted in compliance with applicable laws and regulations or will result in valid and enforceable patents and other intellectual property rights. 60 Our rights to use the technology we license are subject to the validity of the owner’s intellectual property rights.
In addition, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, or DGCL, which may, unless certain criteria are met, prohibit large stockholders, in particular those owning 15% or more of the voting rights on our common stock, from merging or combining with us for a prescribed period of time. 62 Stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees may be limited.
In addition, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, or DGCL, which may, unless certain criteria are met, prohibit large stockholders, in particular those owning 15% or more of the voting rights on our common stock, from merging or combining with us for a prescribed period of time.
Our board of directors has the authority to issue up to 10,000,000 additional shares of our preferred stock without further stockholder approval.
Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock. Our board of directors has the authority to issue up to 10,000,000 additional shares of our preferred stock without further stockholder approval.
In addition, the global macroeconomic environment has been and may continue to be negatively affected by, among other things, instability in global economic markets, increased U.S. trade tariffs and trade disputes with other countries, instability in the global credit markets, supply chain weaknesses, instability in the geopolitical environment as a result of the Russian invasion of the Ukraine, the withdrawal of the United Kingdom from the European Union, and other political tensions, and foreign governmental debt concerns.
In addition, the global macroeconomic environment has been and may continue to be negatively affected by, among other things, instability in global economic markets, increased U.S. trade tariffs and trade disputes with other countries, instability in the global credit markets, supply chain weaknesses, instability in the geopolitical environment and political tensions, and foreign governmental debt concerns.
The exercise of such outstanding options and the warrants will result in dilution of the value of our shares. Our operating history to date may make it difficult to evaluate the success of our business to date and to assess our future viability. We commenced active operations in 2013 and our product candidates are in early stages of clinical development.
Our operating history to date may make it difficult to evaluate the success of our business and to assess our future viability. We commenced active operations in 2013 and our product candidates are in early stages of clinical development.
There can be no assurance that we will have available assets to pay to the holders of common stock, or any amounts, upon such a liquidation, dissolution or winding-up of our Company. In this event, you could lose some or all of your investment.
There can be no assurance that we will have available assets to pay to the holders of common stock, or any amounts, upon such a liquidation, dissolution or winding-up of our Company.
The loss of access to these patents could materially impair our business and future viability, and could result in delays in developing, introducing, or maintaining our product candidates and formulations until equivalent technology, if available, is identified, licensed and integrated.
We rely heavily on the LNC Platform and certain of the patents that we have exclusively licensed from Rutgers. The loss of access to these patents could materially impair our business and future viability, and could result in delays in developing, introducing, or maintaining our product candidates and formulations until equivalent technology, if available, is identified, licensed and integrated.
If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. 61 Upon dissolution of our company, you may not recoup all or any portion of your investment.
If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.
Such additional new research and development activities would be costly and time consuming. 48 We may not be able to realize a shortened development timeline for any of our product candidates, and the FDA may not approve our NDA based on their review of the submitted data.
We may not be able to realize a shortened development timeline for any of our product candidates, and the FDA may not approve our NDA based on their review of the submitted data.
To the extent that any disruption or security breach results in a loss of or damage to our data or applications, or inappropriate disclosure or theft of confidential or proprietary information, we could incur liability, the further development of our product candidates could be delayed, our competitive position could be compromised, or our business reputation could be harmed.
To the extent that any disruption or security breach results in a loss of or damage to our data or applications, or inappropriate disclosure or theft of confidential or proprietary information, we could incur liability, the further development of our product candidates could be delayed, our competitive position could be compromised, or our business reputation could be harmed. 64 We may acquire businesses or products, or form strategic alliances, in the future, and we may not realize the benefits of such acquisitions.
We may encounter numerous difficulties in developing, manufacturing and marketing any new products resulting from a strategic alliance or acquisition that delay or prevent us from realizing their expected benefits or enhancing our business.
We may encounter numerous difficulties in developing, manufacturing and marketing any new products resulting from a strategic alliance or acquisition that delay or prevent us from realizing their expected benefits or enhancing our business. We cannot assure you that, following any such acquisition, we will achieve the expected synergies to justify the transaction.
Our failure or the failure of the NIH or our CROs to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process and could also subject us to enforcement action up to and including civil and criminal penalties.
Our failure or the failure of the NIH or our CROs to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approval process and could also subject us to enforcement action up to and including civil and criminal penalties. 58 As a result, many important aspects of our drug development programs would be outside of our direct control.
Many provisions of the ACA impact the biopharmaceutical industry, including that in order for a biopharmaceutical product to receive federal reimbursement under the Medicare Part B and Medicaid programs or to be sold directly to U.S. government agencies, the manufacturer must extend discounts to entities eligible to participate in the drug pricing program under the Public Health Services Act, or PHS.
Many provisions of the ACA impact the biopharmaceutical industry, including that in order for a biopharmaceutical product to receive federal reimbursement under the Medicare Part B and Medicaid programs or to be sold directly to U.S. government agencies, the manufacturer must extend discounts to entities eligible to participate in the drug pricing program under the Public Health Services Act, or PHS. 55 Additionally, the Inflation Reduction Act of 2022, which took effect in 2023, includes policies that are designed to have a direct impact on drug prices and reduce drug spending by the federal government.
If we elect to develop our own sales and marketing organization, we do not intend to begin to hire sales and marketing personnel until the time of NDA submission to the FDA at the earliest, and we do not intend to establish our own sales organization in the United States until shortly prior to FDA approval of MAT2203 or any of our other product candidates. 47 We may not be able to establish a direct sales force in a cost-effective manner or realize a positive return on this investment.
If we elect to develop our own sales and marketing organization, we do not intend to begin to hire sales and marketing personnel until the time of NDA submission to the FDA at the earliest, and we do not intend to establish our own sales organization in the United States until shortly prior to FDA approval of MAT2203 or any of our other product candidates.
We may acquire businesses or products, or form strategic alliances, in the future, and we may not realize the benefits of such acquisitions. We may acquire additional businesses or products, form strategic alliances, or create joint ventures with third parties that we believe will complement or augment our existing business.
We may acquire additional businesses or products, form strategic alliances, or create joint ventures with third parties that we believe will complement or augment our existing business.
Factors that may inhibit our efforts to commercialize MAT2203 or any of our other product candidates in the United States without strategic partners or licensees include: ● our inability to recruit and retain adequate numbers of effective sales and marketing personnel; ● the inability of sales personnel to obtain access to or persuade adequate numbers of physicians to prescribe our future products; ● the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and ● unforeseen costs and expenses associated with creating an independent sales and marketing organization.
Factors that may inhibit our efforts to commercialize MAT2203 or any of our other product candidates in the United States without strategic partners or licensees include: ● our inability to recruit and retain adequate numbers of effective sales and marketing personnel; ● the inability of sales personnel to obtain access to or persuade adequate numbers of physicians to prescribe our future products; ● the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and ● unforeseen costs and expenses associated with creating an independent sales and marketing organization. 52 If we are not successful in recruiting sales and marketing personnel or in building a sales and marketing infrastructure, or if we do not successfully enter into appropriate collaboration arrangements, we will have difficulty successfully commercializing MAT2203 or any other product candidates we may develop, which would adversely affect our business, operating results and financial condition.
If, for any reason, these third parties are unable or unwilling to perform, we may not be able to terminate our agreements with them, and we may not be able to locate alternative manufacturers or formulators or enter into favorable agreements with them and we cannot be certain that any such third parties will have the manufacturing capacity to meet future requirements.
Failure by our contract manufacturers to comply with or maintain any of these standards could adversely affect our ability to develop, obtain regulatory approval for or market any of our product candidates. 59 If, for any reason, these third parties are unable or unwilling to perform, we may not be able to terminate our agreements with them, and we may not be able to locate alternative manufacturers or formulators or enter into favorable agreements with them and we cannot be certain that any such third parties will have the manufacturing capacity to meet future requirements.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. As a result of our merger with Aquarius Biotechnologies, Inc., our ability to utilize our U.S. federal net operating loss, carryforwards and U.S. federal tax credits may be limited under Sections 382 of the Internal Revenue Code of 1986, as amended.
As a result of our merger with Aquarius Biotechnologies, Inc., our ability to utilize our U.S. federal net operating loss, carryforwards and U.S. federal tax credits may be limited under Sections 382 of the Internal Revenue Code of 1986, as amended. The limitations apply if an “ownership change,” as defined by Section 382 and Section 383, occurs.
If the FDA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of a product candidate or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market such product candidate , if approved. 54 Our contract manufacturers will be subject to ongoing periodic unannounced inspections by the FDA and corresponding state and foreign agencies for compliance with cGMPs and similar regulatory requirements.
If the FDA or a comparable foreign regulatory authority does not approve these facilities for the manufacture of a product candidate or if it withdraws any such approval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop, obtain regulatory approval for or market such product candidate , if approved.
As a result of this decision, we do not currently intend to enforce the federal forum selection provision in our certificate of incorporation, unless the decision is reversed on appeal. However, if the decision is reviewed on appeal and ultimately overturned by the Delaware Supreme Court, we would enforce the federal district court exclusive forum provision.
As a result of this decision, we do not currently intend to enforce the federal forum selection provision in our certificate of incorporation, unless the decision is reversed on appeal.
In addition, delays in approvals or rejections of marketing applications may be based upon many factors, including regulatory requests for additional analyses, reports, data and studies, regulatory questions regarding data and results, changes in regulatory policy during the period of product development and the emergence of new information regarding such product candidates. 41 Data obtained from preclinical studies and clinical trials are subject to different interpretations, which could delay, limit, or prevent regulatory review or approval of any of our product candidates.
In addition, delays in approvals or rejections of marketing applications may be based upon many factors, including regulatory requests for additional analyses, reports, data and studies, regulatory questions regarding data and results, changes in regulatory policy during the period of product development and the emergence of new information regarding such product candidates.
Our rights to use the technology we license are subject to the validity of the owner’s intellectual property rights. Enforcement of our licensed patents or defense or any claims asserting the invalidity of these patents is often subject to the control or cooperation of our licensors.
Enforcement of our licensed patents or defense or any claims asserting the invalidity of these patents is often subject to the control or cooperation of our licensors.
We cannot be certain that any patent application owned by a third party will not have priority over patent applications filed by us, or that we will not be involved in interference, opposition or invalidity proceedings before the United States or foreign patent offices.
We cannot be certain that any patent application owned by a third party will not have priority over patent applications filed by us, or that we will not be involved in interference, opposition or invalidity proceedings before the United States or foreign patent offices. 61 We also rely on trade secrets to protect technology, especially in cases where we believe patent protection is not appropriate or obtainable.
Accordingly, an adverse determination in a judicial or administrative proceeding, or the failure to obtain necessary licenses, could prevent us from developing and commercializing MAT2203 or a future product candidate, which could harm our business, financial condition, and operating results.
Accordingly, an adverse determination in a judicial or administrative proceeding, or the failure to obtain necessary licenses, could prevent us from developing and commercializing MAT2203 or a future product candidate, which could harm our business, financial condition, and operating results. 62 We anticipate that competitors may from time to time oppose our efforts to obtain patent protection for new technologies or to submit patented technologies for regulatory approval.
Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of such product candidate. Moreover, product approvals may be withdrawn for non-compliance with regulatory standards or if problems occur following the initial marketing of the product. Any of the foregoing scenarios could materially harm the commercial success of such product candidate.
Moreover, product approvals may be withdrawn for non-compliance with regulatory standards or if problems occur following the initial marketing of the product. Any of the foregoing scenarios could materially harm the commercial success of such product candidate. We currently have no sales and marketing organization.
Such changes could, among other things, require: ● additional clinical trials to be conducted prior to obtaining approval; ● changes to manufacturing methods; ● recalls, replacements, or discontinuance of one or more of our products; and ● additional recordkeeping. 51 Such changes would likely require substantial time and impose significant costs or could reduce the potential commercial value of our product candidates.
Such changes could, among other things, require: ● additional clinical trials to be conducted prior to obtaining approval; ● changes to manufacturing methods; ● recalls, replacements, or discontinuance of one or more of our products; and ● additional recordkeeping.
We have received orphan drug designation for MAT2203 in the United States and may seek additional orphan drug designation for other product candidates. Regulatory authorities in some jurisdictions, including the United States and Europe, may designate drugs for relatively small patient populations as orphan drugs.
Regulatory authorities in some jurisdictions, including the United States and Europe, may designate drugs for relatively small patient populations as orphan drugs.
The FDA may withdraw Fast Track designation if it believes that the designation is no longer supported by data from our clinical development program. 45 Any breakthrough therapy designation granted by the FDA for our product candidates may not lead to a faster development or regulatory review or approval process, and it does not increase the likelihood that our product candidates will receive marketing approval.
Any breakthrough therapy designation granted by the FDA for our product candidates may not lead to a faster development or regulatory review or approval process, and it does not increase the likelihood that our product candidates will receive marketing approval. We may seek a breakthrough therapy designation for some of our product candidates.
Data from clinical trials may receive greater scrutiny with respect to safety, which may make the FDA or other regulatory authorities more likely to terminate clinical trials before completion or require longer or additional clinical trials that may result in substantial additional expense and a delay or failure in obtaining approval or may result in approval for a more limited indication than originally sought.
Data from clinical trials may receive greater scrutiny with respect to safety, which may make the FDA or other regulatory authorities more likely to terminate clinical trials before completion or require longer or additional clinical trials that may result in substantial additional expense and a delay or failure in obtaining approval or may result in approval for a more limited indication than originally sought. 46 We depend in part on technology owned or licensed to us by third parties, the loss of which would terminate or delay the further development of our product candidates, injure our reputation, or force us to pay higher royalties.
We do not control these technologies and any loss of our rights to them could prevent us from discovering, developing and commercializing MAT2203. ● If we discontinue development of MAT2203, we could be required to return such technology to the former stockholders of Aquarius and/or Rutgers and we could lose the rights to our lead product candidate. ● It is difficult and costly to protect our intellectual property rights, and we cannot ensure the protection of these rights. ● If we fail to obtain or maintain patent or trade secret protection for our technologies, third parties could use our proprietary information. ● Our product candidates may infringe the intellectual property rights of others, which could increase our costs and delay or prevent our development and commercialization efforts. ● We will need to increase the size of our organization to grow our business, and we may experience difficulties in managing this growth. ● If we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy. ● If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates. ● Our internal computer systems, or those of our CROs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs. ● We may acquire businesses or products, or form strategic alliances, in the future, and we may not realize the benefits of such acquisitions. ● The rights of the holders of common stock may be impaired by the potential issuance of preferred stock. ● We do not intend to pay dividends on our common stock in the foreseeable future. ● An active public trading market for our common stock may not be sustained. ● Our share price has been and could remain volatile. ● If securities or industry analysts do not publish research or reports about our business, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline. ● Upon dissolution of our Company, you may not recoup all or any portion of your investment. ● Anti-takeover provisions of our certificate of incorporation, bylaws and Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult. ● Our certificate of incorporation allows for our board to create new series of preferred stock without further approval by our stockholders, which could adversely affect the rights of the holders of our common stock ● Stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees could be limited. ● Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. 37 Risks Related to Our Financial Position and Need for Additional Capital We have incurred significant losses since our inception.
In addition, the loss of the services of certain key employees would adversely impact our business prospects. ● If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our product candidates. 41 ● Our internal computer systems, or those of our CROs or other contractors or consultants, may fail or suffer security breaches, which could result in a material disruption of our product development programs. ● We may acquire businesses or products, or form strategic alliances, in the future, and we may not realize the benefits of such acquisitions. ● Pursuant to the terms of our Series A Preferred Stock, we may be obligated to pay significant royalties. ● The rights of the holders of common stock may be impaired by the potential issuance of preferred stock. ● We do not intend to pay dividends on our common stock in the foreseeable future. ● An active public trading market for our common stock may not be sustained. ● Our share price has been and could remain volatile. ● If securities or industry analysts do not publish research or reports about our business, or if they change their recommendations regarding our stock adversely, our stock price and trading volume could decline. ● We could be delisted from the NYSE American, which could seriously harm the liquidity of our stock and our ability to raise capital. ● Upon dissolution of our Company, you may not recoup all or any portion of your investment. ● Our certificate of incorporation allows for our board to create new series of preferred stock without further approval by our stockholders, which could adversely affect the rights of the holders of our common stock. ● Anti-takeover provisions of our certificate of incorporation, bylaws and Delaware law could make an acquisition of us, which may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders to replace or remove the current members of our board and management. ● Stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees could be limited. ● Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.
Such proceedings are generally highly technical, expensive and time consuming, and there can be no assurance that such a challenge would not result in the narrowing or complete revocation of any patent of ours that was so challenged. 58 General Company-Related Risks We will need to increase the size of our organization to grow our business, and we may experience difficulties in managing this growth.
Such proceedings are generally highly technical, expensive and time consuming, and there can be no assurance that such a challenge would not result in the narrowing or complete revocation of any patent of ours that was so challenged.
Even if we do receive Fast Track designation or priority review, we may not experience a faster development process, review or approval compared to conventional FDA procedures.
Even if we do receive Fast Track designation or priority review, we may not experience a faster development process, review or approval compared to conventional FDA procedures. The FDA may withdraw Fast Track designation if it believes that the designation is no longer supported by data from our clinical development program.
We expect our financial condition and operating results to continue to fluctuate significantly from quarter-to-quarter and year-to-year due to a variety of factors, many of which are beyond our control.
We expect our financial condition and operating results to continue to fluctuate significantly from quarter-to-quarter and year-to-year due to a variety of factors, many of which are beyond our control. Accordingly, you should not rely upon the results of any quarterly or annual periods as indications of future operating performance.
We expect to incur losses over the next several years and may never achieve or maintain profitability. We have incurred significant operating losses in every year since inception and expect to incur net operating losses for the foreseeable future. Our net loss was $20,997 thousand and $23,283 thousand for the years ended December 31, 2022 and 2021, respectively.
Risks Related to Our Financial Position and Need for Additional Capital We have incurred significant losses since our inception. We expect to incur losses over the next several years and may never achieve or maintain profitability. We have incurred significant operating losses in every year since inception and expect to incur net operating losses for the foreseeable future.
In addition, delays in receipt of or failure to receive regulatory clearances or approvals for any other products would harm our business, financial condition, and results of operations.
Such changes would likely require substantial time and impose significant costs or could reduce the potential commercial value of our product candidates. In addition, delays in receipt of or failure to receive regulatory clearances or approvals for any other products would harm our business, financial condition, and results of operations.
Foreign sales of our product candidates could also be adversely affected by the imposition of governmental controls, political and economic instability, trade restrictions and changes in tariffs, any of which may adversely affect our results of operations. 52 If we market our product candidates in a manner that violates healthcare fraud and abuse laws, or if we violate government price reporting laws, we may be subject to civil or criminal penalties.
Foreign sales of our product candidates could also be adversely affected by the imposition of governmental controls, political and economic instability, trade restrictions and changes in tariffs, any of which may adversely affect our results of operations.
Future growth would impose significant added responsibilities on members of management, including the need to identify, recruit, maintain, motivate, and integrate additional employees. In addition, our management may have to divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to managing these growth activities.
In addition, our management may have to divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to managing these growth activities.
Further, the FDA may place conditions on approvals including potential requirements or risk management plans and the requirement for a Risk Evaluation and Mitigation Strategy (REMS) to assure the safe use of the drug.
Further, the FDA may place conditions on approvals including potential requirements or risk management plans and the requirement for a REMS to assure the safe use of the drug. If the FDA concludes a REMS is needed, the sponsor of the NDA must submit a proposed REMS; the FDA will not approve the NDA without an approved REMS, if required.
Our certificate of incorporation allows for our board to create new series of preferred stock without further approval by our stockholders, which could adversely affect the rights of the holders of our common stock. Our board of directors has the authority to fix and determine the relative rights and preferences of preferred stock.
In this event, you could lose some or all of your investment. 66 Our certificate of incorporation allows for our board to create new series of preferred stock without further approval by our stockholders, which could adversely affect the rights of the holders of our common stock.
If such an attempt were successful, we might be barred from discovering, developing and commercializing product candidates based on the LNC Platform, including our lead anti-infective product candidates. 56 If we discontinue development of the LNC Platform, we could be required to return such technology to the former stockholders of Aquarius and/or Rutgers and we could lose the rights to our lead product candidates.
If such an attempt were successful, we might be barred from discovering, developing and commercializing product candidates based on the LNC Platform, including our lead anti-infective product candidates. It is difficult and costly to protect our intellectual property rights, and we cannot ensure the protection of these rights.
We have 34 employees as of March 3, 2023. As our development and commercialization plans and strategies develop, we will need to expand the size of our employee base for managerial, development, operational, sales, marketing, financial and other resources.
As our development and commercialization plans and strategies develop, we will need to expand the size of our employee base for managerial, development, operational, sales, marketing, financial and other resources. Future growth would impose significant added responsibilities on members of management, including the need to identify, recruit, maintain, motivate, and integrate additional employees.
In addition, we will have to compete with established and well-funded pharmaceutical and biotechnology companies to recruit, hire, train and retain sales and marketing personnel.
We may not be able to establish a direct sales force in a cost-effective manner or realize a positive return on this investment. In addition, we will have to compete with established and well-funded pharmaceutical and biotechnology companies to recruit, hire, train and retain sales and marketing personnel.
As a result, many important aspects of our drug development programs would be outside of our direct control. In addition, the NIH or the CROs may not perform all their obligations under their arrangements with us or in compliance with regulatory requirements.
In addition, the NIH or the CROs may not perform all their obligations under their arrangements with us or in compliance with regulatory requirements.
We believe our procedures for enrolling patients have been appropriate; however, delays in patient enrollment would increase costs and delay ultimate commercialization and sales, if any, of our products. Such delays could materially adversely affect our business, financial condition, and results of operations. We may not be able to maintain orphan drug designation or exclusivity for our anti-infective product candidates.
Such delays could materially adversely affect our business, financial condition, and results of operations. 49 We may not be able to maintain orphan drug designation or exclusivity for our anti-infective product candidates. We have received orphan drug designation for MAT2203 in the United States and may seek additional orphan drug designation for other product candidates.
We have obtained product liability insurance covering our clinical trials in the amount of greater than or equal to $5 million in the aggregate.
Our inability to obtain and retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products we develop. We have obtained product liability insurance covering our clinical trials in the amount of greater than or equal to $5 million in the aggregate.
The federal government has levied large civil and criminal fines against companies for alleged improper promotion and has enjoined several companies from engaging in off-label promotion. FDA has also requested that companies enter into consent decrees of permanent injunctions under which specified promotional conduct is changed or curtailed.
The federal government has levied large civil and criminal fines against companies for alleged improper promotion and has enjoined several companies from engaging in off-label promotion.
Accordingly, you should not rely upon the results of any quarterly or annual periods as indications of future operating performance. 40 Risks Related to Product Development, Regulatory Approval, Manufacturing and Commercialization We are early in our development efforts, which may not be successful.
Risks Related to Product Development, Regulatory Approval, Manufacturing and Commercialization We are early in our development efforts, which may not be successful.
In addition, we have no control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. Failure by our contract manufacturers to comply with or maintain any of these standards could adversely affect our ability to develop, obtain regulatory approval for or market any of our product candidates .
In addition, we have no control over the ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel.
As of December 31, 2022, we had outstanding options to purchase an aggregate of 34,739,470 shares of our common stock at a weighted average exercise price of $1.07 per share and warrants to purchase an aggregate of 238,000 shares of our common stock at a weighted average exercise price of $0.75 per share.
As of December 31, 2023, we had outstanding options to purchase an aggregate of 46,707,934 shares of our common stock at a weighted average exercise price of $0.83 per share. The exercise of such outstanding options will result in dilution of the value of our shares.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Facilities Our administrative offices consist of approximately 8,900 square feet of office space in Bedminster, NJ that we occupy under a lease that expires in June 2029. We also lease laboratory space approximating 14,000 square feet in Bridgewater, NJ, that expires in July 2027. 63
Biggest changeItem 2. Properties Facilities Our administrative offices consist of approximately 8,900 square feet of office space in Bedminster, NJ that we occupy under a lease that expires in June 2029. We also lease laboratory space approximating 14,000 square feet in Bridgewater, NJ, that expires in July 2027.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFurther, there was no general solicitation or general advertising related to this issuance of such shares. 64 Repurchases of Equity Securities by the Issuer and Affiliated Purchasers We did not purchase any of our registered securities during the period covered by this Annual Report. Item 6. [Reserved]
Biggest changeRepurchases of Equity Securities by the Issuer and Affiliated Purchasers We did not purchase any of our registered securities during the period covered by this Annual Report.
Any future determination to pay dividends will be at the discretion of our board of directors and will depend upon a number of factors, including our results of operations, financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors our board of directors deems relevant.
Any future determination to pay dividends will be at the discretion of our board of directors and will depend upon a number of factors, including our results of operations, financial condition, future prospects, contractual restrictions, restrictions imposed by applicable law and other factors our board of directors deems relevant. Recent Sales of Unregistered Securities None.
On March 3, 2023, the closing sale price of our common stock, as reported by the NYSE MKT, was $0.50 per share and we had approximately 104 record holders of our common stock.
On March 18, 2024, the closing sale price of our common stock, as reported by the NYSE MKT, was $0.27 per share and we had approximately 102 record holders of our common stock.
Removed
Recent Sales of Unregistered Securities On February 8, 2022, 400,000 shares of our common stock were issued to Rutgers, The State University of New Jersey (“Rutgers”), as partial consideration of the Second Amended and Restated Exclusive License Agreement, dated February 8, 2022, between us and Rutgers.
Removed
Such shares were issued to Rutgers pursuant to an exemption from the registration requirements of the Securities Act by virtue of Section 4(a)(2) of the Securities Act because we believe: (i) the securities were offered and sold only to an accredited investor; and (ii) Rutgers had knowledge and experience in financial and business matters which allowed it to evaluate the merits and risk of the receipt of these securities, and that it was knowledgeable about our operations and financial condition.
Removed
Further, there was no general solicitation or general advertising related to this issuance of such shares. On September 3, 2021, 1,500,000 shares of our common stock were issued to the holders of Aquarius Biotechnologies Inc.
Removed
(“Aquarius”) as partial consideration of the Amendment, dated September 3, 2021, to the Agreement and Plan of Merger by and among the Company, Saffron Merger Sub, Inc., Aquarius and J Carl Craft, as holder representative, dated January 19, 2015 (the “Aquarius Merger Agreement”).
Removed
Such shares were issued in place of certain milestone payments previously included under the Aquarius Merger Agreement upon the achievement of specified development milestones.
Removed
Such shares were issued to the holders of Aquarius, as defined in the Aquarius Merger Agreement, pursuant to an exemption from the registration requirements of the Securities Act by virtue of Section 4(a)(2) of the Securities Act because we believe: (i) the securities were offered and sold only to accredited investors; and (ii) the holders had knowledge and experience in financial and business matters which allowed each of them to evaluate the merits and risk of the receipt of these securities, and that each holder was knowledgeable about our operations and financial condition.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWe will seek to fund our operations through public or private equity offerings, debt financings, government, or other third-party funding, collaborations, and licensing arrangements. Adequate additional financing may not be available to us on acceptable terms, or at all.
Biggest changeWe do not believe that the cash, cash equivalents and marketable debt securities on hand are sufficient to fund planned operations beyond the next twelve months from the filing date of this Annual Report. We will seek to fund our operations through public or private equity offerings, debt financings, government or other third-party funding, collaborations, and licensing arrangements.
We anticipate that our expenses will increase substantially if and as we: ● conduct further preclinical and clinical studies of MAT2203, our lead product candidate, even is such studies are primarily financed with non-dilutive funding from NIH; ● seek to discover and develop additional product candidates; ● seek regulatory approvals for any product candidates that successfully complete clinical trials; 69 ● require the manufacture of larger quantities of product candidates for clinical development and potentially commercialization; ● maintain, expand, and protect our intellectual property portfolio; ● hire additional clinical, quality control and scientific personnel; and ● add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts and personnel and infrastructure necessary to help us comply with our obligations as a public company.
We anticipate that our expenses will increase substantially if and as we: ● conduct further clinical studies of MAT2203, our lead product candidate, even is such studies are primarily financed with non-dilutive funding from NIH; ● seek to discover and develop additional product candidates; ● seek regulatory approvals for any product candidates that successfully complete clinical trials; ● require the manufacture of larger quantities of product candidates for clinical development and potentially commercialization; ● maintain, expand, and protect our intellectual property portfolio; ● hire additional clinical, quality control and scientific personnel; and 74 ● add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts and personnel and infrastructure necessary to help us comply with our obligations as a public company.
The table below summarizes our direct research and development expenses for our product candidates and development platform for the years ended December 31, 2022 and 2021. Our direct research and development expenses consist principally of external costs, such as fees paid to contractors, consultants, analytical laboratories and CROs and/or the NIH, in connection with our development work.
The table below summarizes our direct research and development expenses for our product candidates and development platform for the years ended December 31, 2023 and 2022. Our direct research and development expenses consist principally of external costs, such as fees paid to contractors, consultants, analytical laboratories and CROs and/or the NIH, in connection with our development work.
Our ability to generate product revenue, which we do not expect to occur for many years, if ever, will depend heavily on the successful development and eventual commercialization of our early-stage product candidates. 65 Research and Development Expenses Research and development expenses consist of costs incurred for the development of product candidates MAT2203 and MAT2501, and advancement of our LNC Platform, which include: ● the cost of conducting pre-clinical work; ● the cost of acquiring, developing, and manufacturing pre-clinical and human clinical trial materials; ● costs for consultants and contractors associated with Chemistry and Manufacturing Controls (CMC), pre-clinical and clinical activities and regulatory operations; ● expenses incurred under agreements with contract research organizations, or CROs, including the NIH, that conduct our pre-clinical or clinical trials; ● employee-related expenses, including salaries and stock-based compensation expense for those employees involved in the research and development process; and ● the reimbursement of certain expenses related to the CFF award agreement.
Our ability to generate product revenue, which we do not expect to occur for many years, if ever, will depend heavily on the successful development and eventual commercialization of our early-stage product candidates. 70 Research and Development Expenses Research and development expenses consist of costs incurred for the development of product candidate MAT2203, and advancement of our LNC Platform, which include: ● the cost of acquiring, developing, and manufacturing pre-clinical and human clinical trial materials; ● costs for consultants and contractors associated with Chemistry and Manufacturing Controls (CMC), pre-clinical and clinical activities and regulatory operations; ● expenses incurred under agreements with contract research organizations, or CROs, including the NIH, that conduct our pre-clinical or clinical trials; ● employee-related expenses, including salaries and stock-based compensation expense for those employees involved in the research and development process; and ● the reimbursement of certain expenses related to the CFF award agreement.
As of December 31, 2022, we had cash, cash equivalents and marketable debt securities, excluding restricted cash, totaling $28,763. 2020 At-The-Market Sales Agreement On July 2, 2020, we entered into an At-The-Market Sales Agreement (the “Sales Agreement”) with BTIG, LLC (“BTIG”), pursuant to which we may offer and sell, from time to time, through BTIG, as sales agent and/or principal, shares of our common stock having an aggregate offering price of up to $50 million, subject to certain limitations on the amount of common stock that may be offered and sold by us set forth in the Sales Agreement.
As of December 31, 2023, we had cash, cash equivalents and marketable debt securities, excluding restricted cash, totaling $13,756. 2020 At-The-Market Sales Agreement On July 2, 2020, we entered into an At-The-Market Sales Agreement (the “Sales Agreement”) with BTIG, LLC (“BTIG”), pursuant to which we may offer and sell, from time to time, through BTIG, as sales agent and/or principal, shares of our common stock having an aggregate offering price of up to $50 million, subject to certain limitations on the amount of common stock that may be offered and sold by us set forth in the Sales Agreement.
BTIG will be paid a 3% commission on the gross proceeds from each sale. We may terminate the Sales Agreement at any time; BTIG may terminate the Sales Agreement in certain limited circumstances. During 2022, we did not sell any shares of our common stock under the ATM Sales Agreement.
BTIG will be paid a 3% commission on the gross proceeds from each sale. We may terminate the Sales Agreement at any time; BTIG may terminate the Sales Agreement in certain limited circumstances. We did not sell any shares of our common stock under the Sales Agreement during either 2023 or 2022.
The Company recognized $3,491 and $1,328 for the years ended December 31, 2022 and 2021, respectively, in connection with the sale of state net operating losses and state research and development credits to a third party under the New Jersey Technology Business Tax Certificate Program.
The Company recognized $484 and $3,491 for the years ended December 31, 2023 and 2022, respectively, in connection with the sale of state net operating losses and state research and development credits to a third party under the New Jersey Technology Business Tax Certificate Program.
We generated $3,188 and $33 for the years ended December 31, 2022 and 2021, respectively. The amount earned during 2022 consists of contract research revenue resulting from the research collaboration with BioNTech SE while the amount earned during 2021 resulted from the feasibility study agreement with Genentech Inc. Research and Development expenses.
We generated $1,096 and $3,188 for the years ended December 31, 2023 and 2022, respectively. The amount earned during 2023 consists of contract research revenue resulting from the research collaboration with BioNTech SE and the feasibility study agreement with Genentech Inc., while the amount earned during 2022 resulted exclusively from the research collaboration with BioNTech SE. Research and Development expenses.
For a description of our significant accounting policies, refer to “Note 3 – Summary of Significant Accounting Policies .” Of these policies, the following are considered critical to an understanding of our Consolidated Financial Statements as they require the application of the most difficult, subjective and complex judgments; (i) Stock-based compensation, (ii) Fair value measurements, (iii) Research and development costs, and (iv) Goodwill and other intangible assets.
For a description of our significant accounting policies, refer to “Note 3 – Summary of Significant Accounting Policies .” Of these policies, the following are considered critical to an understanding of our Consolidated Financial Statements as they require the application of the most difficult, subjective and complex judgments; (i) Research and development costs, and (ii) Goodwill and other intangible assets.
Our business, financial condition and results of operations may be materially adversely affected by any delays in, or termination of, our clinical trials or a determination by the FDA that the results of our trials are inadequate to justify regulatory approval, insofar as cash in-flows from the relevant drug or program would be delayed or would not occur. 67 Results of Operations Years Ended December 31, 2022 and 2021 The following table summarizes our operating expenses for the years ended December 31, 2022 and 2021: Years Ended December 31, 2022 2021 Revenues $ 3,188 $ 33 Expenses: Research and development $ 16,678 $ 14,583 General and administrative 11,100 10,185 Operating Expenses $ 27,778 $ 24,768 Sale of net operating losses (NOLs) $ 3,491 $ 1,328 Revenues.
Our business, financial condition and results of operations may be materially adversely affected by any delays in, or termination of, our clinical trials or a determination by the FDA that the results of our trials are inadequate to justify regulatory approval, insofar as cash in-flows from the relevant drug or program would be delayed or would not occur. 72 Results of Operations Years Ended December 31, 2023 and 2022 The following table summarizes our operating expenses for the years ended December 31, 2023 and 2022: Years Ended December 31, 2023 2022 Revenues $ 1,096 $ 3,188 Expenses: Research and development $ 14,489 $ 16,678 General and administrative 10,373 11,100 Operating Expenses $ 24,862 $ 27,778 Sale of net operating losses (NOLs) $ 484 $ 3,491 Revenues.
R&D expense for the years ended December 31, 2022 and 2021 was $16,678 and $14,583, respectively.
R&D expense for the years ended December 31, 2023 and 2022 was $14,489 and $16,678, respectively.
Current Operating Trends Our current R&D efforts are focused on advancing our lead LNC product candidate, MAT2203, through clinical development toward an initial indication for the treatment of CM and expanding application of our LNC Platform through both internal efforts and collaborations with third parties.
Current Operating Trends Our current R&D efforts are focused on advancing our lead LNC product candidate, MAT2203, through clinical development and expanding application of our LNC Platform through both internal efforts and collaborations with third parties.
We anticipate that our general and administrative expenses during 2023 will remain relatively consistent with expenses incurred during 2022. 66 Sale of Net Operating Losses (NOLs) & Tax Credits Income obtained from selling unused net operating losses (NOLs) and research and development tax credits under the New Jersey Technology Business Tax Certificate Program was $3,491 and $1,328 for the years ended December 31, 2022 and 2021, respectively.
We anticipate that our general and administrative expenses during 2024 will decrease slightly compared to expenses incurred during 2023. 71 Sale of Net Operating Losses (NOLs) & Tax Credits Income obtained from selling unused net operating losses (NOLs) and research and development tax credits under the New Jersey Technology Business Tax Certificate Program was $484 and $3,491 for the years ended December 31, 2023 and 2022, respectively.
The 2022 NOL sales included tax years 2021 and 2020, and the 2021 NOL sale included tax year 2019. Liquidity and capital resources Sources of Liquidity We have funded our operations since inception primarily through private placements of our preferred stock and our common stock and common stock warrants.
The income recorded in 2023 included sales related to tax year 2022, while income recorded in 2022 included sales related to tax years 2021 and 2020. Liquidity and capital resources Sources of Liquidity We have funded our operations since inception primarily through private placements of our preferred stock and our common stock and common stock warrants.
As of December 31, 2022, we have raised a total of $156,651 in gross proceeds and $143,941, net, from sales of our equity securities since inception in 2013.
As of December 31, 2023, we have raised a total of $156,851 in gross proceeds and $144,141, net proceeds, from sales of our equity securities since inception in 2013.
Off-Balance Sheet Arrangements We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules, such as relationships with unconsolidated entities or financial partnerships, which are often referred to as structured finance or special purpose entities, established for the purpose of facilitating financing transactions that are not required to be reflected on our balance sheets. 70 RECENT ACCOUNTING PRONOUNCEMENTS Refer to Note 3 - “ Summary of Significant Accounting Policies ,” in the accompanying notes to the consolidated financial statements for a discussion of recent accounting pronouncements.
Off-Balance Sheet Arrangements We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules, such as relationships with unconsolidated entities or financial partnerships, which are often referred to as structured finance or special purpose entities, established for the purpose of facilitating financing transactions that are not required to be reflected on our balance sheets.
We expect that there will be a similar amount of cash used in operations during 2023 as we continue to move our product candidates and LNC Platform forward in their development cycles.
We expect the amount of cash used in operations during 2024 to be slightly higher as we continue to move our product candidates and LNC Platform forward in their development cycles.
Years Ended December 31, 2022 2021 Direct research and development expenses: Manufacturing process development $ 2,523 $ 2,724 Preclinical trials 720 401 Clinical development 2,175 2,261 Regulatory 737 339 Internal staffing, overhead and other 10,523 8,858 Total research & development $ 16,678 $ 14,583 Research and development activities are central to our business model.
Years Ended December 31, 2023 2022 Direct research and development expenses: Manufacturing process development $ 1,182 $ 2,523 Preclinical trials 852 720 Clinical development 1,696 2,175 Regulatory 581 737 Internal staffing, overhead and other 10,178 10,523 Total research & development $ 14,489 $ 16,678 Research and development activities are central to our business model.
The 2022 NOL sales included tax years 2021 and 2020, and the 2021 NOL sale included tax year 2019. Other Income, net Other income, net is largely comprised of interest income (expense) and dividends.
The income recorded in 2023 included sales related to tax year 2022, while income recorded in 2022 included sales related to tax years 2021 and 2020. Other Income, net Other income, net is largely comprised of interest income (expense) and dividends.
At December 31, 2022, the ATM’s available capacity was $44,247. 68 Cash Flows The following table sets forth the primary sources and uses of cash for each of the period set forth below: Years Ended December 31 2022 2021 Cash used in operating activities $ (19,156 ) $ (15,223 ) Cash provided by investing activities 4,877 16,770 Cash provided by financing activities 79 6,965 Net (decrease)/increase in cash and cash equivalents and restricted cash $ (14,200 ) $ 8,512 Operating Activities Net cash used in operating activities for the year ended December 31, 2022 was $19,156, compared to $15,223 in the prior year.
At December 31, 2023, the Sales Agreement’s available capacity was $44,247. 73 Cash Flows The following table sets forth the primary sources and uses of cash for each of the periods set forth below: Years Ended December 31 2023 2022 Cash used in operating activities $ (15,278 ) $ (19,156 ) Cash provided by investing activities 13,242 4,877 Cash (used in) provided by financing activities (7 ) 79 Net decrease in cash and cash equivalents and restricted cash $ (2,043 ) $ (14,200 ) Operating Activities Net cash used in operating activities for the year ended December 31, 2023 was $15,278, compared to $19,156 in the prior year.
Financial Operations Overview Revenue During the year ended December 31, 2022, we generated $3,188 in contract research revenue resulting from the research collaboration with BioNTech SE. During the year ended December 31, 2021, we generated $33 in contract revenue from the feasibility study agreement with Genentech Inc.
During the year ended December 31, 2022, we generated $3,188 in contract revenue resulting from the research collaboration with BioNTech SE.
Investing Activities Net cash of $4,877 was provided by investing activities for the year ended December 31, 2022, while $16,770 of net cash was provided by investing activities for the year ended December 31, 2021.
Investing Activities Net cash provided by investing activities for the year ended December 31, 2023 was $13,242, compared to $4,877 of net cash provided by investing activities for the year ended December 31, 2022.
The increase of $3,933 for the period was primarily due to an increase of $6,324 of working capital adjustments due to the timing of receipts and payments in the ordinary course of business and the $1,200 Aquarius agreement charge in 2021 offset by $2,286 of a decrease in net loss in the current period, the $936 increase in stock based compensation expense, including other non-cash expenses, and the license agreement charge of $291 in 2022.
The decrease of $3,878 for the period was primarily due to a decrease of $6,456 of working capital adjustments due to the timing of receipts and payments in the ordinary course of business, partially offset by a $1,945 increase in net loss in the current period, $280 decrease in stock based compensation expense, and a decrease associated with the license agreement charge of $291 in 2022.
The decrease of cash provided by investing activities of $11,893 was primarily due to the $24,975 decrease in proceeds received from maturities of our marketable debt securities and the increase of $632 in purchases of equipment and leasehold improvements, partially offset by the decrease of $13,714 in purchases of marketable debt securities as compared to the prior year.
The increase of $8,365 provided by investing activities was primarily due to a $7,691 net decrease in the purchases and maturities of marketable debt securities and $674 decrease in purchases of equipment and leasehold improvements as compared to the prior year.
We have incurred losses for each period from inception. Our net loss was $20,997 and $23,283 for the fiscal years ended December 31, 2022 and 2021, respectively. We expect to incur significant expenses and operating losses over the next several years. Accordingly, we will need additional financing to support our continuing operations.
For the years ended December 31, 2023 and 2022, our net loss was $22,942 and $20,997, respectively. We have incurred losses for each period from our inception and expect to incur additional losses for the foreseeable future.
General and Administrative expenses. G&A expense for the years ended December 31, 2022 and 2021 was $11,100 and $10,185, respectively. The increase of $915 over prior year was primarily due to higher compensation expense related to stock-based compensation of $506 and increased headcount. Sale of net operating losses (NOLs) & tax credits.
G&A expense for the years ended December 31, 2023 and 2022 was $10,373 and $11,100, respectively. The decrease of $727 over the prior year was primarily due to a decrease in certain insurance premiums, and lower consulting fees and facility expenses related to certain projects that began in the prior year. Sale of net operating losses (NOLs) & tax credits.
The decrease of $6,886 in cash provided by financing activities is primarily due to the Company raising $5,580 of net proceeds from the 2021 ATM sales of our common stock for which the Company did not have similar equity raises during year ended December 31, 2022, and a decrease in the receipt of proceeds of $1,316 from the exercise of stock options.
Financing Activities Net cash (used in) and provided by financing activities was ($7) and $79 for the years ended December 31, 2023 and 2022, respectively. The decrease of $86 in cash provided by financing activities is primarily due to the decrease in the receipt of proceeds of $99 from the exercise of stock options in 2022.
We expect that our existing cash, cash equivalents and marketable debt securities will be sufficient to fund our operating expenses and capital expenditures requirements into the second quarter of 2024.
We do not believe that our existing cash, cash equivalents and marketable debt securities will be sufficient to fund our operating expenses and capital expenditures requirements beyond the next twelve months from the filing date of this Annual Report. As a result, substantial doubt exists about the Company’s ability to continue as a going concern.
However, we anticipate that our research and development expenses during 2023 will be relatively consistent with expenses incurred in 2022 as we pause the development of MAT2501 to focus our existing resources on MAT2203 and advancement of our LNC platform delivery technology into the field of nucleic acids.
However, we anticipate that our research and development expenses during 2024 will be lower compared with expenses incurred during 2023 until such time as we are able to secure additional funding to support initiation of our Phase 3 registration trial for MAT2203 and advancement of our LNC platform delivery technology.
We are also seeking the input and guidance of the FDA for an additional Phase 3 study of various IFIs. ● Building an external pipeline of collaborations focused on our LNC Platform with leading pharmaceutical companies like BioNTech, Genentech and National Resilience to provide delivery solutions for their complex nucleic acid drug products.
Oral, extrahepatic and non-toxic intracellular delivery of these molecules would represent a significant advancement. ● Building an external pipeline of collaborations focused on our LNC Platform with leading pharmaceutical companies to provide delivery solutions for their complex small molecules and small oligonucleotides, including ASOs and siRNAs.
Removed
Overview We are focused on redefining the intracellular delivery of nucleic acids and small molecules through our lipid nanocrystal (LNC) drug delivery platform and its application to overcome current challenges in safely and effectively delivering small molecules, nucleic acids, gene therapies, proteins/peptides, and vaccines.
Added
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 tissues without toxicity.
Removed
Key elements of our strategy include: ● Advancing our LNC Platform and expanding the utilization of this promising technology into areas of innovative medicine beyond small molecules, including nucleic acids (e.g., mRNA, DNA, ASOs) and proteins. ● Positioning MAT2203 for an NDA filing for various indications for the treatment of serious IFIs, including cryptococcal meningitis.
Added
Key elements of our strategy include: ● Advancing MAT2203 into the ORALTO trial for the treatment of invasive aspergillosis in patients with limited treatment options by securing a development and/or commercial partner.
Removed
We are seeking non-dilutive funds from prospective third-party pharmaceutical partners and various governmental sources of capital, such as the Biomedical Advanced Research and Development Authority (BARDA) and the NIH in order to continue the development of MAT2203 into Phase 3.
Added
This initial indication is designed to be a gateway indication to establish the pharmacodynamic bridge necessary to expand the use of MAT2203 into other indications to treat deadly invasive fungal infections (e.g., mucormycosis, candidiasis and the endemic mycoses) through limited additional clinical work under a 505(b)(2) pathway, thereby making MAT2203 a pipeline in a product. ● Expanding the utilization of our LNC Platform with other small molecules and small oligonucleotides into inflammation and oncology in order to develop an internal pipeline of differentiated drug candidates.
Removed
Our failure to raise capital as and when needed would impact our ability to continue as a going concern and would have a negative impact on our financial condition and our ability to pursue our business strategy. We will need to generate significant revenues to achieve profitability, and we may never do so.
Added
These financing alternatives may not be available to us on acceptable terms, or at all. As a result, substantial doubt exists about our ability to continue as a going concern. Financial Operations Overview Revenue During the year ended December 31, 2023, we generated $1,096 in contract research revenue resulting from the research collaboration with BioNTech SE and Genentech Inc.
Removed
The increase of $2,095 was due to an increase of $2,327 of compensation expense, primarily related to headcount increases, $1,441 increase in clinical trials expenses due to the continued advancement of MAT2203, partially offset by an increase in the reimbursement of certain MAT2501 program expenses of $811 and a decrease of $916 primarily related to the Aquarius Merger Agreement in 2021 in connection with the LNC Platform.
Added
The decrease of $2,189 was due to a decrease of $1,302 of clinical trial expenses and $541 decrease in professional & consulting fees, primarily related to the pause of our MAT2203 development program, and a $291 decrease due to the license agreement amendment expense recorded in 2022. General and Administrative expenses.
Removed
During 2021, BTIG sold 3,023,147 shares of the Company’s common stock generating gross proceeds of $5,753 and net proceeds of $5,580, after deducting BTIG’s commission on gross proceeds.
Added
RECENT ACCOUNTING PRONOUNCEMENTS Refer to Note 3 - “ Summary of Significant Accounting Policies ,” in the accompanying notes to the consolidated financial statements for a discussion of recent accounting pronouncements.
Removed
Financing Activities Net cash provided by financing activities was $79 and $6,965 for the years ended December 31, 2022 and 2021, respectively.
Removed
On March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation (“FDIC”) was appointed as receiver. We have deposit accounts at SVB. The standard deposit insurance amount is up to $250 thousand per depositor, per insured bank, for each account ownership category.
Removed
On March 12, 2023, the U.S. Treasury, Federal Reserve, and FDIC announced that SVB depositors will have access to all of their money starting March 13, 2023. The Company does not expect to be negatively impacted by these events.