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Item 1. Business

2023-03-15 compared with 2022-03-08 · 877 added, 797 removed, 799 unchanged (68% of the section changed)

are a clinical-stage biopharmaceutical company focused on redefining the intracellular delivery of nucleic acids and small molecules

through our lipid nanocrystal (LNC) delivery platform technology.

Our current pipeline consists of two potent anti-infective small molecules,

MAT2203 (oral amphotericin B) and MAT2501 (oral amikacin).

We are also expanding the application of our LNC platform through collaborations

with well-respected pharmaceutical companies whose molecules and compounds benefit from the unique capabilities of our delivery technology,

which can provide oral bioavailability and facilitate non-toxic and efficient intracellular delivery.

We are intent on further expansion

of our LNC platform, both internally and through external partnerships, into the field of nucleic acids where delivery into cells remains

a critical element of therapeutic effect.

BioPharma is dedicated to maximizing the value associated with our unique LNC platform delivery technology.

This proprietary platform

technology, licensed from Rutgers University on an exclusive worldwide basis, nano-encapsulates chemical and biological payloads in a

way that facilitates safe, efficient, and targeted intracellular delivery for a wide variety of molecules, including nucleic acids (mRNA,

DNA, siRNA, antisense oligonucleotides (ASOs)), proteins and small molecules.

Our LNCs are primarily comprised of phospholipids, like

phosphatidylserine (PS), and calcium (which is required to keep LNCs intact), and are well differentiated from other viral and lipid

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.

The Company is developing an internal portfolio

of products and strives to be the partner of choice for leading pharmaceutical companies seeking to develop novel formulations that capitalize

on the unique characteristics of the LNC Platform to facilitate, enhance and optimize the delivery of complex nucleic acids.

internal pipeline consists of MAT2203 (oral amphotericin B), a highly potent antifungal drug which we have successfully made oral, safe,

and well-tolerated for patients.

We also have internal discovery programs ongoing in the formulation and delivery of small oligonucleotides,

namely antisense oligonucleotides (ASOs) and silencing or short interfering RNAs (siRNAs).

We are also intent on expanding the application

of our LNC Platform through collaborations with well-respected pharmaceutical companies whose molecules and compounds benefit from the

unique capabilities of our delivery technology, which can provide oral bioavailability and facilitate non-toxic and efficient intracellular

delivery of nucleic acids, particularly in the fields of mRNA and DNA.

are dedicated to maximizing the value associated with our unique LNC Platform.

This proprietary platform technology, which partially

relies upon an exclusive worldwide license from Rutgers University to certain intellectual property, nano-encapsulates chemical and biological

payloads in a way that facilitates safe, efficient, and targeted intracellular delivery for a wide variety of molecules, including nucleic

acids (mRNA, DNA, siRNA, antisense oligonucleotides (ASOs)), proteins and small molecules.

Our LNCs are primarily comprised of phospholipids,

like phosphatidylserine (PS), and calcium (which is required to keep LNCs intact) and are well differentiated from other viral and lipid

nano-particle delivery technologies.

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have a neutral immunogenic profile enabling repeated administration, which is a significant drawback associated with both viral vector

(AAV) and lipid nanoparticle (LNP) delivery.

The structure of an LNC is highly stable, protecting the payload throughout formulation

and following administration into the human body.

This stability allows for the avoidance of extreme cold chain storage temperatures

required for maintaining the integrity of LNPs and facilitates the oral administration of LNCs, which is not possible with either AAV

or LNP delivery as they protect the vulnerable payload from the gastric environment and potential extracellular degradation.

also be administered via IV injection and intranasally.

Because of their unique composition, LNCs can be delivered into a cell

through both endocytosis and membrane fusion.

Once LNCs gain access to the inside of a cell, they naturally unwind due to the necessarily

low calcium concentrations inside a cell.

Thereafter, depending on the target, payloads either have their desired impact inside a cell,

or utilize the cell as a vehicle to target tissues, in the case of infection or inflammation.

(AAV) and lipid nanoparticle (LNP) delivery due to the potential for cytotoxicity.

The structure of an LNC is highly stable, protecting

the payload throughout formulation and following administration into the human body.

This stability eliminates the need for the extreme

cold chain storage temperatures required to maintain the integrity of LNPs, and facilitates the oral administration of LNCs, which is

not possible with either AAV or LNP delivery as LNCs protect the vulnerable payload from the gastric environment and potential extracellular

LNCs can also be administered via IV or IM injection and intranasally.

Because of their unique composition, we believe LNCs

can be delivered into a cell through both endocytosis and membrane fusion.

Once LNCs gain access to the inside of a cell, they naturally

unwind due to the necessarily low calcium concentrations inside a cell.

Thereafter, depending on the target, payloads either have their

desired impact inside a cell, or utilize the cell as a vehicle to target tissues, in the case of infection or inflammation.

and preclinical studies have demonstrated success in delivering LNCs to professional phagocytes, including macrophages, sites of infection

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range of therapeutic agents, including small molecules, vaccines, peptides, and proteins, as well as nucleic acid polymers (e.g., mRNA,

DNA , ASOs, and siRNA,) provide a broad array of potential targets and modalities from which to create a broad pipeline of internal product

DNA , ASOs, and siRNA,) provide an array of potential targets and modalities from which to create a broad pipeline of internal product

candidates and partnerships.

lead drug candidate based on the LNC platform delivery technology is MAT2203, an oral formulation of amphotericin B, a well-known and

highly effective antifungal drug.

Amphotericin B is currently only available in IV formulations which are associated with significant

renal toxicity and 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.

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.

MAT2203’s product profile could potentially allow physicians

and patients to use MAT2203 for longer periods of time and more broadly than amphotericin B could ever have been used previously.

initial planned indication for MAT2203 is as step-down therapy from IV amphotericin B during induction treatment in patients with cryptococcal

meningitis (CM), a deadly fungal infection located in the brain, and which primarily affects immunocompromised patients.

The induction

treatment period is typically 14 days and step-down therapy with MAT2203 would begin following an initial, short 1–2-day treatment

course with IV amphotericin followed by 12-13 days of MAT2203.

This initial step-down indication is a gateway indication, as we plan

to expand the utilization of MAT2203 into consolidation therapy in CM patients (weeks 3-6) and then into the treatment of other invasive

fungal infections and even for prophylaxis against invasive fungal infections in immunocompromised patients, such as transplant patients.

lead drug candidate based on the LNC Platform is MAT2203, an oral formulation of amphotericin B, a well-known and highly effective antifungal

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.

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.

MAT2203’s product profile could potentially allow physicians and patients to

use MAT2203 for longer periods of time and more broadly than amphotericin B could ever have been used previously.

initial planned indication for MAT2203 is as step-down therapy from IV amphotericin B for the treatment of cryptococcal meningitis (CM),

a deadly fungal infection located in the brain, and which primarily affects immunocompromised patients.

This initial step-down indication

is a gateway indication, as we plan to expand the utilization of MAT2203 into the treatment of other invasive fungal infections (IFIs)

and potentially even for prophylaxis against IFIs in immunocompromised patients, such as transplant patients.

has been developed to date with the assistance and financial support of the National Institutes of Allergy and Infectious Disease (NIAID)

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MAT2203 has been designated as a Qualified Infectious Disease Product (QIDP) with Fast Track

Status for the treatment of invasive candidiasis, the treatment of aspergillosis, the prevention of invasive fungal infections in patients

who are on immunosuppressive therapy, and, most recently, the treatment of cryptococcosis.

MAT2203 has also received an Orphan drug designation

Upon approval, MAT2203 could be eligible for up to 12 years of regulatory exclusivity in the United States.

Status for the treatment of invasive candidiasis, the treatment of aspergillosis, the prevention of IFIs in patients who are on immunosuppressive

therapy, and, most recently with an Orphan Designation for the treatment of cryptococcosis.

Upon approval, MAT2203 could be eligible

for up to 12 years of regulatory or marketing exclusivity in the United States.

partnership with the NIH, we have conducted numerous preclinical studies of MAT2203 in cryptococcal meningitis and demonstrated that

MAT2203 was able to (a) cross the blood-brain barrier, (b) effectively treat this infection and (c) eliminate the toxicity normally associated

with delivery of amphotericin B intravenously.

The NIH has funded a grant submission from the University of Minnesota for a clinical

study of MAT2203 in patients with cryptococcal meningitis in Uganda, where this disease is highly prevalent among the human immunodeficiency

virus (HIV)-positive community.

This study, the Encochleated Oral Amphotericin for Cryptococcal Meningitis Trial (EnACT), initiated

in 2019 and currently enrolling patients in Cohort 4 of the trial.

In this trial we are exploring the use of MAT2203 for both induction

(step-down and all oral) and consolidation therapy, and we believe that, if positive, this trial could form the foundation for the filing

of a New Drug Application for MAT2203.

The first three cohorts of EnACT have been completed, with the data from each of the cohorts reviewed

by an independent Data Safety Monitoring Board (DSMB) prior to progression from one cohort to the next.

EnACT is currently enrolling

patients in Cohort 4, which is designed to test an all-oral regimen of MAT2203 during the induction period.

Results from Cohort 4 are

expected in the third quarter of 2022.

upon the data from the first two cohorts of EnACT, we held a meeting with the FDA in December of 2021 to discuss potential registration

pathways for MAT2203.

Following feedback from FDA, we plan to expand the EnACT trial to include a new, Cohort 5, which will replicate

the design from Cohort 2, and include more patients where MAT2203 will be evaluated as step-down treatment to IV amphotericin.

We anticipate

meeting again with FDA in the first half of 2022 to finalize the protocol for Cohort 5 and agree on the requirements for NDA filing for

this initial indication.

to date from EnACT validates the use of MAT2203 in difficult-to-treat fungal infections, and we believe positions MAT2203 to become

a best-in-class antifungal drug for the treatment of additional invasive fungal infections.

Furthermore, the demonstration that MAT2203

effectively crosses the blood-brain barrier in humans positions our LNC platform delivery technology to potentially be used more

broadly with many other types of molecules, potentially including nucleic acids.

second clinical-stage program is the development of MAT2501, our oral amikacin development program, which also utilizes our LNC platform

MAT2501 is currently being studied in a Phase 1, single ascending dose (SAD) pharmacokinetic study in healthy volunteers,

with results expected late in the first half of 2022.

This program is funded in large part by the Cystic Fibrosis Foundation (CFF) and

together we are developing MAT2501 initially for the treatment of non-tuberculous mycobacterial (NTM) infection, a serious lung infection

which can be especially problematic in patients with cystic fibrosis (CF).

To date, we have received commitments totaling approximately

$4.6 million from the CFF based, in part, upon the positive preclinical proof-of-concept data generated by Colorado State University

testing MAT2501 efficacy against both amikacin-sensitive and resistant strains of infecting organisms in a CF mouse model for NTM infections.

plan to establish a broad internal and external pipeline of drug candidates utilizing our LNC platform.

Internally, we have increased

our efforts to demonstrate, validate and optimize the formulation and intracellular delivery of nucleic acids.

We also are in active

discussions with third parties concerning the formulation of proprietary nucleic acids utilizing our LNC platform and are concentrating

on those parties with demonstrated scientific expertise and competitive advantages in the nucleic acid space.

We have ongoing collaborations

with third parties which have successfully broadened the application of our LNC platform and remain ongoing.

MAT2203 was able to (a) cross the blood-brain barrier, (b) effectively treat this infection, and (c) eliminate the toxicity normally

associated with delivery of amphotericin B intravenously.

The NIH has funded a grant submission from the University of Minnesota for

a clinical study of MAT2203 in patients with cryptococcal meningitis in Uganda, where this disease is highly prevalent among the human

immunodeficiency virus (HIV)-positive community.

This study, the Encochleated Oral Amphotericin for Cryptococcal Meningitis Trial

(EnACT), initiated in 2019 and recently completed enrollment and reported positive data.

Cohort 2 of EnACT evaluated the safety and

efficacy of MAT2203 (administered with adjunctive flucytosine) as early step-down treatment, following two days of IV amphotericin B,

followed by consolidation treatment with MAT2203 in combination with 800 mg/day fluconazole for an additional 4 weeks.

Cohort 4 of EnACT

evaluated the safety and efficacy of an all-oral regimen of MAT2203 (administered with adjunctive flucytosine) for the initial 14-day

induction period, with MAT2203 treatment continued for an additional four weeks into the consolidation phase, administered in combination

with 800 mg/day of fluconazole.

The primary endpoint of EnACT was early fungicidal activity, a direct measurement of the quantitative

rate of antifungal activity at the site of infection in the cerebrospinal fluid (CSF) surrounding the brain, a well-recognized key surrogate

marker for survival.

The pre-specified target threshold of 0.20 in EnACT is clinically meaningful and represents a robust degree of fungal

clearance that is associated with enhanced survival.

Early fungicidal activity beyond the >0.20 threshold have not resulted in any

observed incremental benefit.

EnACT also included secondary endpoints of overall survival, prevention of relapse, CSF sterilization,

Cohort 4 data from 40 MAT2203 treatment arm participants and 40 standard of care (SOC) controls were presented during the IDWeek 2022

Data from Cohort 4 confirms the efficacy and safety observed in Cohort 2, which is clinically important given the lack of

any IV amphotericin B loading doses administered in this “all-oral” treatment cohort.

Since the time of the data presentation

in October 2022, we continue to collect data for ongoing patients.

Results from Cohort 4

key interim results from Cohort 4 of EnACT include exceeding the prespecified early fungicidal activity threshold of >0.20 CFU/mL

CSF/day, survival, and the safety of longer-term use of an oral formulation of amphotericin B (MAT2203) for up to 6 weeks.

Key Early Fungicidal Activity Threshold

Cohort 4, the CSF yeast clearance rate exceeded the prespecified primary endpoint threshold target of >0.20, with a mean early fungicidal

activity achieved of 0.353 log10 CFU/mL/day with 95% confidence intervals from 0.22 – 0.49.

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.

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

No deaths were attributed to lack of effect of MAT2203.

patients had fewer Grade ≥3 Clinical adverse events (AEs) (42%) vs.

SOC treatment (59%).

Importantly, the incidence of AEs events

relating to kidney function and anemia were significantly lower for MAT2203 compared with the SOC treatment, with no evidence of kidney

toxicity seen with 6 weeks of oral MAT2203 treatment.

The favorable safety and tolerability data seen in Cohort 4 support the use of

oral MAT2203 for longer-term use, something not previously feasible due to associated toxicities with currently available IV formulations

of amphotericin B.

3 Key trial elements

guidance from multiple positive meetings with FDA based upon the data generated in EnACT, the Company has finalized the design of a single

pivotal Phase 3 registration trial for MAT2203 supporting submission of a New Drug Application (NDA) for a simplified indication for

the treatment of CM.

The open-label trial involves a three arm non-inferiority design in HIV patients with CM:

(A) step-down therapy

with MAT2203 with treatment continuing for 2 weeks;

(B) step-down therapy with MAT2203 with treatment out to 6 weeks (mirroring Cohort

and (C) a SOC control arm of IV amphotericin B induction transitioning to fluconazole.

The non-inferiority margin for both

the primary and key secondary endpoints will be 10% and total enrollment is expected to be approximately 270 patients, with an adaptive,

de-risking design allowing for the potential for additional patients once enrollment has reached 75%.

primary endpoint of the trial will be 2-week all-cause mortality, with a pooled analysis across the two MAT2203 treatment arms compared

with SOC control to support a potential indication for the treatment of CM for up to 2 weeks.

To evaluate opportunities for extending

MAT2203 therapy, a key secondary analysis of 10-week relapse free survival of optimized treatment (2-weeks or 6-weeks) against SOC will

be evaluated for non-inferiority.

Selection of the optimal treatment regimen will be based on predefined and protocolized clinical criteria

and will then form the basis for a final NDA submission.

have also received positive feedback from the European Medicines Agency (EMA) on both our Request for Scientific Advice and our Orphan

Drug Application;

this provides alignment with FDA and positions MAT2203 for global registration in key commercial markets.

from EnACT validates the use of MAT2203 in difficult-to-treat fungal infections, and we believe positions MAT2203 to become a best-in-class

antifungal drug for the treatment of additional IFIs.

Furthermore, the demonstration that MAT2203 effectively crosses the blood-brain

barrier in humans positions our LNC Platform to potentially be used more broadly with many other types of molecules, potentially including

nucleic acids.

Collaborations

addition to advancing MAT2203, we plan to establish a broad internal and external pipeline of drug candidates utilizing our LNC Platform.

Internally, we have increased our efforts to demonstrate, validate and optimize the formulation and intracellular delivery of nucleic

We also are in active discussions with third parties concerning the formulation of proprietary nucleic acids utilizing our LNC

Platform and are concentrating on those parties with demonstrated scientific expertise and competitive advantages in the nucleic acid

We have ongoing collaborations with third parties which have successfully broadened the application of our LNC Platform and remain

December 2019, we announced a feasibility collaboration with Genentech relating to the development of oral formulations of up to

three Genentech proprietary compounds applying the LNC platform delivery technology.

This collaboration has resulted in the successful

formulation of two Genentech compounds and the agreement was recently extended to allow for the formulation and testing of a third

proprietary Genentech compound.

December 2020, we announced a collaboration with the National Institute of Allergy and Infectious Diseases to evaluate oral formulations

of Gilead’s antiviral remdesivir utilizing our LNC platform delivery technology.

To date, successful in vitro and in vivo studies

of LNC formulations of remdesivir have been conducted and another in vivo study is expected to commence in the first quarter of 2022.

three Genentech proprietary compounds applying the LNC Platform.

This collaboration has resulted in the successful formulation of

two Genentech compounds and the agreement was recently extended through 2023.

April 2022, we announced that we entered an exclusive research collaboration with BioNTech to evaluate the combination of mRNA formats

utilizing our proprietary LNC Platform.

The parties expect to collaborate closely on formulation, optimization, and in vitro

Under the terms of the agreement with BioNTech, we received an exclusivity fee in the amount of $2.75 million, and BioNTech

is funding certain of our research expenses related to the collaboration.

We remain in discussions with BioNTech on a potential license

agreement for our LNC Platform.

January 2023 we announced a strategic collaboration with National Resilience, Inc.

(Resilience).

The parties entered into a Material

Transfer and Evaluation Agreement focused on exploring the potential for oral delivery of identified nucleic acids pursuant to which

the parties will collaborate on a research program comprising the design, formulation, optimization, and in vitro and in

vivo testing of these nucleic acid formats in combination with the Company’s proprietary LNC Platform.

continue to evaluate additional potential strategic collaborations with other interested biotechnology and pharmaceutical partners.

collaborations could enable us to grow our external pipeline and generate upfront, license, milestone, and royalty payments as we maximize

the value of the overall LNC platform delivery technology.

are focused on redefining the intracellular delivery of nucleic acids and small molecules through our LNC drug delivery platform and

its application to overcome current challenges in safely and effectively delivering small molecules, nucleic acids, gene therapies, proteins/peptides,

the value of the overall LNC Platform.

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.

elements of our strategy include:

our clinical stage assets based on our LNC platform delivery technology and continuing to expand utilization of this promising technology

into areas of innovative medicine beyond small molecules, including nucleic acids (e.g.

mRNA, DNA, ASOs) and proteins, both internally

and through additional external collaborations and partnerships.

MAT2203 toward NDA filing through the ongoing EnACT study for the treatment of cryptococcal meningitis, which highlights the safety

and efficacy of this promising drug candidate, while also demonstrating the ability of our LNC platform technology to deliver potent

medicines across the blood-brain barrier with oral administration.

the development of MAT2501 through extensive preclinical toxicology and efficacy studies in NTM infections and completing a single

ascending dose (SAD) pharmacokinetic study in healthy volunteers later in 2022, all with the financial support of the CFF.

Lipid Nanocrystal (LNC) Platform Delivery Technology

and safe delivery of medicines remains one of the biggest challenges in the pharmaceutical and biotech industry today.

The importance

of cell-mediated immunity and current challenges associated with effective intracellular drug delivery has created a significant area

Current technology options, including liposomes, lipid nanoparticles (LNPs) and viral vectors, have been widely adopted but

each have significant limitations including inefficient delivery, undesirable and dangerous toxicity and immunogenicity, and unstable

formulations forcing challenging storage conditions (Figure 1).

The method in which these technologies gain access to a cell varies and

often is responsible for significant adverse effects for patients.

Despite these known challenges, adoption has been widespread due to

the lack of viable alternatives.

Today, LNPs and viral vectors are being used to deliver both small molecules and gene therapy.

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.

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 to continue the development of MAT2203 into Phase 3.

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.

Lipid Nanocrystal (LNC) Platform

efficient, and targeted intracellular delivery of medicines remains one of the biggest challenges in the pharmaceutical and biotech industry

An ever-growing understanding of the complex biology within cells has given rise to increasingly sophisticated therapeutic approaches

targeting the genetic machinery driving metabolic activity within cells.

Unfortunately, the currently available options for intracellular

delivery – liposomes, lipid nanoparticles (LNPs) and viral vectors – although widely adopted, continue to have their own

well-recognized limitations, including inefficient delivery, undesirable and dangerous toxicity and immunogenicity, and unstable formulations

which necessitate challenging storage conditions ( Figure 1 ).

now, there have been limited options for intracellular delivery, and, despite these limitations, LNPs have emerged as a primary delivery

vehicle for mRNA, while viral vectors remain the mainstay of DNA delivery and gene therapy.

We have developed our own proprietary lipid

nanocrystal (LNC) delivery platform that we believe may help overcome many of the limitations of both LNPs and viral vectors,

Current Delivery Technologies

proprietary LNCs are primarily composed of two naturally occurring materials:

a phospholipid, like phosphatidylserine (PS), and calcium.

They are stable and have a unique multilayered structure consisting of a large, continuous, solid, lipid bilayer sheet rolled up in a

spiral or as stacked sheets, with no internal aqueous space.

This unique structure provides protection from degradation for molecules

trapped in or between lipid bilayers.

Components within the interior of the LNCs remain intact, even though the outer layers of the LNCs

may be exposed to harsh environmental conditions or enzymes (Figure 2).

2 LNC Formulation

LNCs protect active pharmaceutical ingredients in lipid bilayers and can intercalate into the phospholipid interior or otherwise remain

trapped within the bilayers (Figure 3).

The presence of minimal amounts of calcium keeps the LNCs intact.

3 LNCs Protect API in Bilayers

can be delivered in a variety of ways, including orally, intramuscularly, intravenously and intranasally.

This flexibility represents

a significant advantage over other delivery modalities and presents significant opportunities to efficiently encapsulate many different

molecules, both water soluble and water insoluble, including small molecules, nucleic acids such as antisense oligonucleotides (ASOs),

messenger RNA (mRNA) and small interfering RNA (siRNA), and nucleotides as large as eleven kilobases including DNA plasmids and potentially

CRISPR/Cas9, a gene editing technology.

Intracellular

delivery of molecules is usually accomplished by either endocytosis (through a variety of pathways including phagocytosis, clathrin-mediated

endocytosis (CME), caveolin-mediated endocystosis, and macro- and micropinocytosis), or through membrane fusion.

LNPs are limited

in that they can typically only access a cell via CME, followed by disruption of the endosomal membrane within the cell to gain

access to the cytoplasm.

LNPs typically are very inefficient, and patients also experience injection site adverse events (AEs) and other

toxicities associated with LNPs, thereby limiting chronic use.

LNPs also cannot be delivered orally.

Viral vectors, including

adeno-associated virus, attempt to utilize nature’s intracellular delivery mechanisms to facilitate fusion with the cell membrane

lipid cylinders” were originally described in scientific literature as complex, cylindrical, multi-lamellar structures arising

from the addition of Ca ++ to sonicated liposomal preparations of phosphatidylserine (PS) in an aqueous solution, with the

lamellae folded in a spiral, crystalline configuration that excludes water.

When sufficient external calcium is present, these structures

remain in a crystalline state, while the addition of etheylenediaminetetraacetic acid (EDTA) to these preparations (removing the calcium)

results in the loss of the stable spiral crystalline structure ( Figure 2 ).

Cochleate Formation

have developed techniques to embed cargo molecules within cochleates as they are assembled.

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 .

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.

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 ).

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

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 ).

However, when cells are injured

and/or apoptotic, PS moves from the inner layer to the outer layer and is the primary “eat me” signal driving efferocytotic

clearance of apoptotic cells by professional phagocytes.

with cargo carrying LNCs have documented both a lack of cargo accumulation in the tissues of normal, healthy animals, and significant

cargo delivery to involved tissues in infected animals.

Another important aspect of the underlying stability of LNCs is that they do

not release their cargo within the blood (due to the presence of stabilizing levels of calcium), and delivery of cargo is confined to

involved cells and tissues.

Mechanistically,

the cellular entry of LNCs is driven by PS, which is an important participant in both efferocytotic clearance of apoptotic cells and

in physiologic cellular fusion processes ( Figure 4 ).

As noted, apoptotic cells expressing PS on their surface are recognized and

cleared by professional phagocytes, without eliciting the normal inflammatory responses that might otherwise be anticipated with cell

Professional phagocytes themselves have several very specific PS receptors that facilitate this clearance.

Parenthetically this

mechanism is exploited by enveloped viruses to facilitate viral uptake by immune cells – “viral apoptotic mimicry”

– noting that the “envelope” of enveloped viruses is basically comprised of PS.

Thus, phagocytosis of LNCs by professional

phagocytes (and some non-professional phagocytes) becomes one mechanism for intracellular delivery of LNCs.

Importance of Phosphatidylserine (PS) in apoptotic phagocytosis

described above, in addition to its role as an “eat-me” signal for uptake of apoptotic cells by phagocytes, PS also plays

a very important role in normal physiologic cellular fusion processes – as a “fuse-me” signal (such as with the formation

of myotubules from myoblasts, the formation of osteoclasts from osteoblasts, and the fertilization of an of egg by sperm to form a zygote)

or even as a “heal me” signal (as with axonal fusion after injury or repair of injured cell membranes).

Consequently, the

presence of PS on both the surface of LNCs and on the surface of targeted somatic cells (which themselves may express PS because of injury

or inflammation) creates additional opportunities for intracellular delivery via direct cellular fusion ( Figure 5 ).

5 – Importance of Phosphatidylserine (PS) in Cellular Fusion

Drug Delivery

of their underlying stability, LNCs do not release cargo within the blood (due to the presence of stabilizing levels of calcium), and

the delivery of cargo is confined to involved cells and tissues.

Studies utilizing an LNC formulation of radio-labeled amphotericin showed

no accumulation in normal healthy tissues, in contrast to multiple studies showing clinically meaningful tissue levels of amphotericin

when amphotericin-carrying LNCs were administered in the setting of systemic fungal infections.

oral administration, LNCs are transported across the cells lining the gastrointestinal tract (via transcytosis).

Because of their size,

LNCs do not enter the portal circulation and thereby avoid first pass hepatic metabolism.

Instead, they are transported through the gut

lymphatics to the thoracic duct and enter the circulatory system via the superior vena cava.

Once they have entered the circulation,

LNCs are transported by professional phagocytes (as well as via other non-cellular mechanisms) to sites of injury or infection, where

they are avidly taken up by infected/injured cells that have PS on the outer layer of their cell membranes.

Finally, when exposed to

the very low calcium environment in the interior of a cell, the forces responsible for maintaining the otherwise stable LNC structure

are no longer as strong, and the LNCs release their cargo.

limitations of LNPs and viral vectors

LNPs in blood bind ApoE to their surface and are taken up into cells by clathrin-mediated endocytosis via the ApoE-recognizing LDL receptor.

From within early endosomes, LNPs then act to disrupt the endosomal membrane and gain entry to the cytosol.

Endosomal escape of LNPs

is a very inefficient process, with endosomal escape rates of generally < 5%.

Administration of LNPs can also be associated with injection

site reactions and other toxicities arising from the destruction of the endosomal membrane, which, ultimately, can limit their chronic

Finally, LNPs cannot be delivered orally.

vectors, including adeno-associated virus, attempt to utilize viral cellular entry mechanisms to facilitate fusion with the cell membrane

and delivery of molecules into a cell.

Unfortunately, viral vectors have historically been associated with severe negative immune responses

and, like LNPs, cannot be delivered orally.

We believe LNCs can effectively delivery molecules through both endocytosis and membrane

fusion, in addition to having great flexibility with the desired route of administration.

believe that LNC’s unique ability to enter a cell through endocytosis (including phagocytosis and macropinocytosis), membrane

fusion, or a combination thereof, relates directly to the presence of a phospholipid, like 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.

However, with cell “activation”, which occurs when there is infection, inflammation,

injury, stimulation, cell death or some other issue impacting a particular cell, PS moves from the inner layer to the outer layer and

facilitates fusion with our LNCs (Figure 4).

Certain cells also contain PS receptors, which actively take up LNCs due to the presence

of PS (Figure 5).

Asymmetry of the Phospholipid Membrane

Role of PS and PS Receptors in the Uptake of LNCs into Cells

phagocytosis, macrophage and other cells containing PS receptors readily engulf LNCs and their drug cargo into vesicles, or endosomes,

facilitating intracellular delivery.

LNCs can also fuse with cell membranes and deliver drug cargo directly to the cytoplasm.

been designed to mimic enveloped viruses and can efficiently deliver drugs and/or molecules to cells without adverse immune responses.

some molecules, the goal is simply to achieve safe and effective intracellular delivery.

This is especially relevant when delivering

sensitive genetic material and other molecules desiring cellular impact (i.e., antivirals).

For other molecules, or drugs, utilizing

activated cells as a mechanism to deliver drug to infected tissues or other areas of the body becomes critical.

in pre-clinical studies have been shown to improve existing drugs by providing 1) cell-targeted delivery;

2) reduced blood levels thereby

reducing toxicity;

and 3) oral delivery of drugs now only available intravenously.

For example, LNCs delivered orally work by encapsulating

molecules of drugs in a solid, anhydrous, crystalline structure, protecting them as they pass through the GI tract where they cross the

mucous membrane.

Once the LNCs have crossed the mucosal barrier of the GI tract into the lymphatic system, they are picked up by activated

cells including cells of the mononuclear phagocytic system, such as macrophages and dendritic cells.

Professional phagocytes, with drug-loaded

LNCs inside, are believed to follow natural signal molecule paths and migrate to the site of infection or to the target organ and deliver

their payload.

applications of our proprietary delivery technology have been initially focused on the delivery of several potent and highly efficacious

anti-fungal and anti-bacterial agents, which are currently still associated with serious side effects, including irreversible toxic effects

on kidney and hearing function.

We believe our technology has the potential for targeted delivery of these agents, which positions us

to be at the forefront of dealing with these very serious problems.

We have now also expanded our research and development efforts for

our LNC platform delivery technology to focus on the delivery of a wide range of therapeutic treatments, in particular those in the oligonucleotide

class of agents (antisense oligonucleotides, mRNA, and CRISPR-Cas9).We continue to advance our business development efforts to

further expand our collaborations across pharma and biotech companies who have innovative therapies with delivery challenges, which may

be addressed with our LNC platform delivery technology.

A key innovation of our LNC platform delivery technology is our ability to package medication inside lipid-crystal particles

without leaking.

Because of their crystalline nature, these particles are truly solid and hold on tightly to their medication payload.

This is where the LNC platform delivery technology differs markedly from other lipid-based delivery technology, such as liposomal delivery.

Liposomes are liquid delivery systems which typically leak some of their drug content into the circulatory system, thus still exposing

vulnerable organs and tissues to potential toxic effects.

Keeping potentially organ-toxic medications inside the lipid-crystal particles

significantly differentiates our LNC platform delivery technology from other drug-delivery approaches.

The size of our individual LNCs is typically in the range of 50-500 nanometers.

This is very small and by comparison

close to the size of a large virus or a small bacterium.

Our body produces many activated cell-types that are predisposed to interact

with our LNCs.

These activated cell types, including bone marrow-derived hematopoietic cells such as macrophages, infected cells, injured

cells, tumor cells and epithelial cells are all prone to engulf or fuse with our phosphatidylserine-based LNCs.

Because of the size of

our LNCs and their PS surface structure (the cell membranes of bacteria are also made up from PS), activated cells tend to take up these

LNCs very efficiently and without any adverse immune response.

Many drugs that are currently on the market are only effective in treating diseases when administered intravenously.

For example, many anti-infective drugs must be administered intravenously in order to be effective.

IV administration presents several

challenges to care, such as risk of infection, patient discomfort from injections, and higher cost of care than anti-infective drugs

that can be taken orally (IV delivery must be performed by a doctor or nurse, often within a very expensive hospital setting).

several technologies have been used to attempt to convert IV drugs to orally delivered medications, success has been limited due to the

difficulty in achieving adequate bioavailability (i.e., the amount of drug that is absorbed into the body) with an oral formulation.

We believe that the unique LNC structure in our platform technology protects the drug from degradation when it passes through the GI

tract and that its lipid surface features facilitate the particle being absorbed into the blood stream.

The potential application of

our LNC platform delivery technology for the delivery of injectable medications offers significant clinical and commercial value with

successfully demonstrated safety and efficacy in human clinical trials.

LNC platform technology changes the delivery of medicines in a unique manner and alters the bio-distribution of these medications by

targeting tissues and organs that are affected by infection and inflammation.

In addition to IV-only anti-infectives such as amphotericin

B and amikacin, in animal studies we have orally delivered vaccines, siRNAs, NSAIDs, other anti-infectives such

as atovaquone, and many other compounds across multiple therapeutic areas, demonstrating the potential broad application of our technology.

We have observed rapid local accumulation in infected tissues, which appear to be the result of transport of our drug-loaded LNCs by

and to activated cells.

and even deaths and similar to LNPs, viral vectors cannot be delivered orally.

in which LNCs can help overcome the limitations of LNPs and viral vectors include efficient cellular delivery, a breadth of payload capabilities,

extra-hepatic targeting, reduced toxicity and improved safety, multiple potential routes of administration (including oral) ,and improved

stability and shelf-life.

can be delivered in a variety of ways, including orally, intramuscularly, intravenously, and intranasally.

This flexibility represents

a significant advantage over other delivery modalities and presents significant opportunities to efficiently deliver many different molecules.

multiple potential mechanisms for getting into cells, unlike with LNPs, we believe that intracellular delivery via LNCs is not

primarily confined to the liver, and as noted, LNCs have been used to successfully deliver a wide range of therapeutic compounds –

including small molecules, proteins, ASOs, siRNA, DNA plasmids and DNA-protein complexes, both in vitro and in vivo .

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.

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.

This, in turn, has created potential opportunities to use amphotericin in ways that were not previously

possible with conventional formulations, and endeavor to make amphotericin treatment possible in settings where conventional amphotericin

has proven to be too toxic.

recently, our research and development efforts using the LNC Platform have expanded to address additional therapeutic nucleic acid cargos

– both small oligonucleotides (ASOs, siRNA, etc.) and larger oligonucleotides like DNA and mRNA.

The latter large complex molecules

have their own unique formulation challenges but can be successfully incorporated into a modified LNC structure and have been successfully

delivered in vitro in a variety of different cell types.

LNC Clinical Stage Assets

have leveraged our platform LNC delivery technology to develop two clinical-stage products that we believe have the potential to become

best-in-class drugs in their respective therapeutic classes.

Our lead product candidate, MAT2203, is an orally-administered LNC formulation

of a broad spectrum anti-fungal drug called amphotericin B.

Based on the data generated in Cohort 2 of the EnACT Trial and following

an End of Phase 2 Meeting with FDA, we believe we have a pathway to NDA submission for MAT2203 following confirmatory data to

be generated in an additional cohort (Cohort 5) in the ongoing EnACT Trial.

We additionally believe there are opportunities for approval

of MAT2203 for the treatment of additional invasive fungal infections in areas of high unmet medical need, which we will be evaluating

in a number of preclinical animal models in Candida auris and mucormycosis in 2022.

upon the preclinical data generated by the NIH, the NIH has financially supported a grant application from the University of Minnesota

to conduct the EnACT study in Uganda.

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.

the high morbidity and mortality associated with CM in HIV patients, the clinical unmet need is very high with the global burden estimated

at 1 million cases annually.

We plan to leverage a 505(b)(2) regulatory pathway for MAT2203, in part relying upon FDA’s findings

of safety based upon the available preclinical tox data for IV amphotericin B.

This strategy was discussed with the FDA in June 2019,

where we outlined our development plans for MAT2203 in CM and received FDA approval to proceed with the EnACT study which is currently

enrolling subjects in Cohort 4 of the trial.

We have received four qualified infectious disease (QIDP) designations as well as an orphan

designation for the treatment of cryptococcosis, which, if approved, would result in twelve years of market exclusivity for MAT2203.

We met with the FDA in an End of Phase 2 Meeting in December 2021 to review the Cohort 2 data from the EnACT Trial and discuss a potential

path to NDA filing.

Following our meeting with FDA, we now have a pathway to NDA submission following confirmatory data to be generated

in an additional cohort (Cohort 5) in the ongoing EnACT Trial.

We will be meeting with FDA early in the second quarter of 2022 to gain

agreement on the design of this confirmatory cohort.

second clinical stage LNC-based product candidate is MAT2501, an orally administered formulation of the broad-spectrum aminoglycoside

have leveraged our LNC Platform to develop clinical-stage products that we believe have the potential to become best-in-class drugs in

their respective therapeutic classes.

Our lead product candidate, MAT2203, is an orally administered LNC formulation of a broad spectrum

anti-fungal drug called amphotericin B.

Based on the data generated in Cohorts 2 and 4 of EnACT and following additional follow-up meetings

with the FDA, we believe we have a well-defined pathway to NDA submission for MAT2203 for an initial indication for the treatment of

cryptococcal meningitis.

Our overall development strategy is to ultimately pursue a broader indication for MAT2203 for the treatment

of IFIs, building upon the efficacy bridge we have established with MAT2203 to IV amphotericin B based on the data from EnACT.

Meningitis History and Plan

upon robust preclinical data, the NIH financially supported a grant application from the University of Minnesota to conduct EnACT in

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.

Given the high morbidity and mortality

associated with CM in HIV patients, the clinical unmet need is very high with the global burden estimated at 1 million cases annually.

We plan to leverage a 505(b)(2) regulatory pathway for MAT2203, in part relying upon FDA’s findings of safety based upon the available

toxicology data for IV amphotericin B.

Our strategy was discussed with the FDA in June 2019, where we outlined our development plans

for MAT2203 in CM and received FDA approval to proceed with EnACT.

We have received four qualified infectious disease (QIDP) designations

as well as an orphan designation for the treatment of cryptococcosis, which, if approved, could result in up to twelve years of regulatory

or marketing exclusivity for MAT2203 in the United States.

guidance from multiple positive meetings with FDA based upon the data generated in EnACT, we have finalized the design of a single pivotal

Phase 3 registration trial for MAT2203 supporting submission of a NDA for a simplified blanket indication for the treatment of CM.

open-label trial involves a three arm non-inferiority design in HIV patients with CM:

(A) step-down therapy with MAT2203 with treatment

continuing for two weeks;

(B) step-down therapy with MAT2203 with treatment out to 6 weeks (mirroring Cohort 2 of EnACT);

and (C) a SOC

control arm of IV amphotericin induction transitioning to fluconazole.

The non-inferiority margin for both the primary and key secondary

endpoints will be 10% and total enrollment is expected to be approximately 270 patients, with an adaptive, de-risking design allowing

for the potential for additional patients once enrollment has reached 75%.

Fungal Infection Background and Plan

is an oral LNC formulation of amphotericin B, intended for the treatment of serious life-threatening, invasive fungal infections (IFIs).

Because the active amphotericin B cargo is sequestered within a highly stable LNC crystalline structure, MAT2203 can be administered

orally and delivers amphotericin B directly to the site of infection.

MAT2203 is orally absorbed and has been shown to target infected

tissues to deliver amphotericin B to sites of infection, where it is rapidly taken up by infected cells and fungal hyphae.

The amphotericin

B cargo binds to ergosterol in the fungal cell wall, creating pores, and resulting in the death of the fungal cells.

The use of an oral

LNC delivery system results in very low circulating plasma amphotericin B levels and thereby has the potential to markedly reduce the

risk of systemic amphotericin B toxicity.

has been shown to be effective in numerous nonclinical in vivo models of fungal infections (i.e., CM, aspergillosis, candidiasis,

and mucormycosis).

In addition, results from Cohorts 2 and 4 of a Phase 2 clinical study of CM in HIV patients, demonstrated oral MAT2203

was effective and well-tolerated with a favorable safety profile.

The overall efficacy from EnACT validates the hypothesis that the LNC

drug delivery platform can facilitate the oral administration of amphotericin B across the blood-brain barrier to target the central

nervous system (CNS) site of infection in CM and similarly to directly target other deadly IFIs (e.g., aspergillosis, candidiasis, mucormycosis)

at the sites of disease.

preliminary efficacy and safety results from Cohorts 2 and 4 of EnACT demonstrate that MAT2203 is reaching the intended target of infection,

with efficacy data comparable to the SOC (IV amphotericin B) arm of the trial.

We believe these data (together with the anticipated data

from EnACT3) will provide a pharmacodynamic (PD) bridge to IV amphotericin B, thus supporting the conduct of a single-dose open-label

IFI Phase 3 study in patients with limited treatment options.

The Company plans to leverage data from the proposed Phase 3 IFI registration

trial, together with the already established efficacy of IV amphotericin B to treat IFIs to support the registration of MAT2203 for an

expanded IFI treatment label leveraging a 505(b)(2) pathway and NDA.

will be meeting with the FDA in the second quarter of 2023 to discuss our plans for expanding our registration of MAT2203 for the treatment

of IFIs more broadly.

We have submitted a formal Meeting Request to the FDA to discuss plans for a second Phase 3 study to assess the

efficacy, safety, and tolerability of MAT2203 in patients with serious, life-threatening IFIs with limited treatment options.

synopsis currently includes the treatment of four IFIs:

invasive aspergillosis, invasive candidiasis, chronic coccidioidomycosis (Valley

Fever), and invasive mucormycosis.

Our strategy is to leverage the success and data from EnACT to limit the required size of this study.

We currently plan to enroll approximately 100 patients in a single-arm design with no head-to-head active comparator, which we believe

should be acceptable to FDA given historical precedent and the challenges associated with the target patient population to be evaluated.

During our meeting we plan to discuss our proposed design and strategy for approval.

January 2023, we announced that we were focusing our resources and internal efforts on the upcoming FDA meeting and on potentially securing

non-dilutive funds from industry and/or governmental partners prior to commencing our Phase 3 program.

We believe that FDA guidance on

the IFI Phase 3 study is important to prospective domestic and global partners and governmental sources of nondilutive capital available

to advance the development of MAT2203 based on feedback received to date.

second potential clinical stage LNC-based product candidate is MAT2501, an orally administered formulation of the broad-spectrum aminoglycoside

antibiotic amikacin, which may be used to treat different types of multidrug-resistant bacteria, including NTM, as well as various multidrug-resistant

gram negative and intracellular bacterial infections.

In May 2017, we completed and announced topline results from a Phase 1 single escalating

dose clinical trial of MAT2501 in healthy volunteers in which no serious AEs were reported and where oral administration of MAT2501 at

all tested doses yielded blood levels that were well below the safety levels recommended for injected amikacin, supporting further development

of MAT2501 for the treatment of NTM infections.

Following reformulation work, in 2019 we received a grant from the CFF to complete preclinical

studies with Colorado State University which further demonstrated the potential for MAT2501 in treating CF-associated NTM lung infections.

In November 2020, we received an additional grant from the CFF in the amount of $3.75 million to support the continued development of

MAT2501 through a comprehensive preclinical toxicology program and a SAD study in healthy volunteers with our new and improved formulation

The grant was later increased by $0.3 million in November 2021 to bring the CFF’s total commitment towards the development

of MAT2501 to $4.6 million.

This most recent grant was based upon the positive preclinical proof of concept data generated by Dr.

Ordway at Colorado State University in a rigorous mouse model of NTM infection in mice with underlying CF disease.

We are currently conducting

key acute and long-term toxicology studies to support Phase 2 clinical trials as well as an ongoing Single Ascending Dose (SAD) Trial.

lead anti-fungal product candidate, MAT2203, is an application of our LNC platform delivery technology 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.

To date, there have been little to no reported clinically observed drug-resistance to amphotericin B, further

bolstering the use of this compound as the most likely last resort treatment for fungal infections in the foreseeable future.

the use of amphotericin B is relatively limited because it is currently only available as an IV-administered product and has documented

history of severe toxicity (most notably nephrotoxicity).

By utilizing our LNC platform delivery technology to nano-encapsulate amphotericin

B, there is now 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.

Our LNC delivery of amphotericin B changes the

bio-distribution, resulting in a higher level of amphotericin B at the site of infection and a lower level of free circulating drug.

By reducing the amount of circulating drug, our LNC platform delivery technology may reduce overall toxicity.

Importantly, drug concentrations

will be high only in target tissues due to the migratory nature of drug-carrying phagocytes to inflammatory regions.

Based upon data

generated to date, we believe MAT2203 has the potential to offer improved safety and reduced toxicity and, as a result, we believe MAT2203

will be able to offer a categorically different and improved formulation that delivers orally administered amphotericin B, directly to

the target cell at the site of infection.

In collaboration with the NIH, in multiple studies, we have demonstrated in CM mouse models

that our LNC-delivered amphotericin B, following oral administration, can successfully cross the blood brain barrier to the site of infection

This demonstration provides important data indicating that our LNC platform delivery technology could become an important delivery

solution for a variety of CNS-based disorders and diseases.

These preclinical data have now been born-out in clinical data from Cohort

2 of the EnACT Trial.

believe that MAT2203 has the potential to become a best-in-class induction and consolidation therapy for the treatment of CM in HIV patients

by offering the following key potential benefits:

We have determined to pause development of MAT2501 to focus our existing resources

on MAT2203 and advancement of our LNC Platform into the field of nucleic acids.

We are in communication with the Cystic Fibrosis Foundation,

which has committed up to $4.5 million dollars toward the preclinical development of MAT2501, regarding our decision and working with

them to wind up our current agreement.

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.

there have been little to no reported clinically observed drug-resistance to amphotericin B, further bolstering the use of this compound

as the most likely last resort treatment for fungal infections in the foreseeable future.

However, the use of amphotericin B is relatively

limited because it is currently only available as an IV-administered product and has documented history of severe toxicity (most notably

nephrotoxicity).

By utilizing our LNC Platform to nano-encapsulate amphotericin B, we have created an opportunity for the drug to be

administered orally with targeted delivery to infected cells, which we believe may have fewer side effects than the currently available

IV-formulations of amphotericin B.

Our LNC delivery of amphotericin B changes the bio-distribution, resulting in a higher level of amphotericin

B at the site of infection and a lower level of free circulating drug.

By reducing the amount of circulating drug, our LNC Platform may

reduce overall toxicity.

Importantly, drug concentrations will be high only in target tissues due to the migratory nature of drug-carrying

phagocytes to inflammatory regions.

Based upon data generated to date, we believe MAT2203 has the potential to offer improved safety

and reduced toxicity and, as a result, we believe MAT2203 will be able to offer a categorically different and improved formulation that

delivers orally administered amphotericin B, directly to the target cell at the site of infection.

In collaboration with the NIH, in

multiple studies, we have demonstrated in CM mouse models that our LNC-delivered amphotericin B, following oral administration, can successfully

cross the blood brain barrier to the site of infection.

This demonstration provides important data indicating that our LNC Platform could

become an important delivery solution for a variety of CNS-based disorders and diseases.

These preclinical data have now been validated

in clinical data from Cohorts 2 and 4 of EnACT.

pathogens and infections are an increasing global public health concern.

IFIs are increasing globally due to advancements in the medical

management of critically ill and immunocompromised patients.

The emergence of drug-resistant IFIs has resulted in prolonged hospitalizations

and the increased use of expensive and often highly toxic second-line antifungal agents.

pathogens cause a wide variety of infections but there are only four currently available classes of systemic antifungal treatments (polyene,

azole, echinocandin, pyrimidine), and only two classes (azole, pyrimidine) are available in oral formulations.

Use of these antifungal

agents typically require a considerable degree of expertise to manage potential toxicities and complex drug-drug interactions in these

vulnerable patients and effective polyene and echinocandins require prolonged hospitalization for intravenous administration.

there is a critical unmet need for more effective, well-tolerated, and safe oral antifungal agents to treat patients with serious, life-threatening,

and often drug resistant IFIs.

World Health Organization (WHO) recently recognized IFIs to be a global public health concern.

In late 2022, the WHO released their Fungal

Priority Pathogen List which designates Aspergillus fumigates, Candida auris, and Candida albicans to be in the Critical Priority group

(i.e., highest perceived public health threat), Mucorales, Candida tropicalis, and Candida parapsilosis in the High Priority group, and

Coccidioides species in the Medium Priority group.

Aspergillus, Candida, Coccidioides, and Cryptococcus species are also qualified pathogens

that pose a serious and life-threatening risk and are on the qualified designation list according to 317.2 – CFR – Code of

Federal Regulations Title 21 – FDA.

believe that MAT2203 has the potential to become a best-in-class therapy for the treatment of CM and for other IFIs more broadly by offering

the following key potential benefits:

to treat resistant pathogens .

1 unchanged sentence

fungi, including those resistant to existing azoles and echinocandins, due to amphotericin B’s fungicidal (i.e., killing the

fungi) nature and potency against resistant strains and the potential for our LNC platform delivery technology to provide higher

drug exposure directly at the site of infection early in the course of therapy.

an all-oral therapy.

CM has become the most common cause of adult meningitis in many parts of Africa, where cryptococcosis now

rivals tuberculosis in all-cause mortality.

While long-term survival has improved with widespread use of antiretroviral therapy in

high-income countries, early mortality remains high.

Early mortality rates are often ~ 70% in routine practice where access to diagnostics

or medications is limited or unavailable, intracranial pressure is uncontrolled, or in settings where other barriers to the management

IV administration of amphotericin B is not often possible in resource-limited settings, even when it is available.

and less costly hospital stays and lower outpatient costs .

By providing physicians and patients with access to an orally available,

broad spectrum fungicidal agent in MAT2203, there is the potential to reduce hospital costs, which account for over 70% of the overall

treatment cost of invasive fungal infections.

fungi) nature and potency against resistant strains and the potential for our LNC Platform to provide higher drug exposure directly

at the site of infection early during therapy.

Enabling an all-oral

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 .

By providing physicians and patients with access to an orally available, broad spectrum

fungicidal agent in MAT2203, we believe that there is significant potential to reduce hospital costs, which account for over 70%

of the overall treatment cost of IFIs.

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 invasive fungal infections 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.

The FDA may designate a product candidate as an orphan drug if it is intended to treat a rare disease or condition, which is generally

defined as having a patient population of fewer than 200,000 individuals in the United States, or a patient population greater than 200,000

in the United States where there is no reasonable expectation that the cost of developing the drug will be recovered from sales in the

United States.

The orphan drug designation provides eligibility for orphan drug exclusivity in the United States upon FDA approval if

a product that has orphan drug designation subsequently receives the first FDA approval for a particular active ingredient for the disease

for which it has such designation.

For a product that obtains orphan drug designation based on a plausible hypothesis that it is clinically

superior to the same drug that is already approved for the same indication, in order to obtain orphan drug exclusivity upon approval,

clinical superiority of such product to this same drug that is already approved for the same orphan indication must be demonstrated.

Orphan drug exclusivity means that the FDA may not approve any other applications, including a new drug application (NDA), to market

the same drug for the same indication for seven years, except in limited circumstances such as if the FDA finds that the holder of the

orphan drug exclusivity has not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs

of patients with the disease or condition for which the drug was designated.

Similarly, the FDA can subsequently approve a drug with

the same active moiety for the same condition during the exclusivity period if the FDA concludes that the later drug is clinically superior,

meaning the later drug is safer, more effective or makes a major contribution to patient care.

Orphan drug designation also entitles

a party to financial incentives such as opportunities for grant funding towards clinical trial costs, a waiver from payment of user fees,

an exemption from performing clinical studies in pediatric patients unless the FDA requires otherwise by regulation, and tax credits

for the cost of the clinical research.

The QIDP designation, provided under the Generating Antibiotic Incentives Now Act, or the GAIN

Act, offers certain incentives for the development of new antibacterial or antifungal drugs, including eligibility for Fast Track designation,

priority review and, if approved by the FDA, eligibility for an additional five years of marketing exclusivity.

Fast Track designation

enables more frequent interactions with FDA to expedite drug development and review.

Fast Track designation does not change the standards

for approval, and we can provide no assurances that we can maintain Fast Track designation for MAT2203 or that such designation will

result in faster regulatory review.

The seven-year period of marketing exclusivity provided through orphan designation, if granted, combined

with an additional five years of marketing exclusivity provided by the QIDP designation positions MAT2203 with a potential for a total

of 12 years of marketing exclusivity to be granted at the time of FDA approval.

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.

The FDA may designate a product candidate as an orphan drug if it is intended to treat a rare disease or condition, which is

generally defined as having a patient population of fewer than 200,000 individuals in the United States, or a patient population greater

than 200,000 in the United States where there is no reasonable expectation that the cost of developing the drug will be recovered from

sales in the United States.

The orphan drug designation provides eligibility for orphan drug exclusivity in the United States upon FDA

approval if a product that has orphan drug designation subsequently receives the first FDA approval for a particular active ingredient

for the disease for which it has such designation.

For a product that obtains orphan drug designation based on a plausible hypothesis

that it is clinically superior to the same drug that is already approved for the same indication, to obtain orphan drug exclusivity upon

approval, clinical superiority of such product to this same drug that is already approved for the same orphan indication must be demonstrated.

Orphan drug exclusivity means that the FDA may not approve any other applications, including a NDA, to market the same drug for the same

indication for seven years, except in limited circumstances such as if the FDA finds that the holder of the orphan drug exclusivity has

not shown that it can assure the availability of sufficient quantities of the orphan drug to meet the needs of patients with the disease

or condition for which the drug was designated.

Similarly, the FDA can subsequently approve a drug with the same active moiety for the

same condition during the exclusivity period if the FDA concludes that the later drug is clinically superior, meaning the later drug

is safer, more effective or makes a major contribution to patient care.

Orphan drug designation also entitles a party to financial incentives

such as opportunities for grant funding towards clinical trial costs, a waiver from payment of user fees, an exemption from performing

clinical studies in pediatric patients unless the FDA requires otherwise by regulation, and tax credits for the cost of the clinical

QIDP designation, provided under the Generating Antibiotic Incentives Now Act, or the GAIN Act, offers certain incentives for the development

of new antibacterial or antifungal drugs, including eligibility for Fast Track designation, priority review and, if approved by the FDA,

eligibility for an additional five years of marketing exclusivity.

Fast Track designation enables more frequent interactions with FDA

to expedite drug development and review.

Fast Track designation does not change the standards for approval, and we can provide no assurances

that we can maintain Fast Track designation for MAT2203 or that such designation will result in faster regulatory review.

The seven-year

period of marketing exclusivity provided through orphan designation, if granted, combined with an additional five years of marketing

exclusivity provided by the QIDP designation positions MAT2203 with a potential for a total of 12 years of marketing exclusivity in the

United States to be granted at the time of FDA approval.

- Product Profile

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most notably nephrotoxicity.

We believe that the ability to provide amphotericin B orally using our proprietary LNC platform delivery

technology, may offer a new and promising alternative for patients and doctors.

data from animal toxicity studies for MAT2203 indicate a substantial advantage over other amphotericin B formulations in observed toxicities

and side effects, which we believe is driven by two primary factors:

LNC is a solid particle that does not significantly “leak” its drug content while circulating.

The particle releases

its medication pay-load only when inside the target cells, and thus appears that the use of MAT2203 does not result in off-organ

toxicities normally seen in the kidneys when using current formulations of amphotericin B.

of this targeted delivery, we have been able to increase the therapeutic window on a mg/kg basis as compared to IV amphotericin B

formulations.

We have observed equivalent efficacy at lower doses as well as been able to use oral doses of up to 10x the highest

tolerable IV dose in animal model studies.

History of MAT2203 and Initial Target Indication

We believe that the ability to provide amphotericin B orally using our proprietary LNC Platform, may offer

a new and promising alternative for patients and doctors.

data from animal toxicity and human studies for MAT2203 indicate a substantial advantage over other amphotericin B formulations in observed

toxicities and side effects, which we believe is driven by two primary factors:

a solid crystal that does not significantly “leak” its drug content while circulating.

The crystal releases its medication

pay-load only when inside the target cells, and thus appears that the use of MAT2203 does not result in off-organ toxicities normally

seen in the kidneys when using current formulations of amphotericin B.

Because of this targeted

delivery, we have been able to increase the therapeutic window on a mg/kg basis as compared to IV amphotericin B formulations.

have observed equivalent efficacy at lower doses as well as been able to use oral doses of up to 10x the highest tolerable IV dose

in animal model studies.

History of MAT2203 and Initial Target Indications and Regulatory Interactions

early development strategy for MAT2203 is focused on the treatment of CM as the gateway indication, building upon the extensive preclinical

work conducted by the NIH early in the development of this product.

EnACT provided critical proof of clinical efficacy which was the

basis for the agreement by FDA for the conduct of a single Phase 3 trial for the potential registration of MAT2203 for the treatment

believe the true clinical value of MAT2203 is the potential benefit to patients suffering from IFIs more broadly.

Building upon the positive

data generated in EnACT, we are pursuing the expanded development of MAT2203 for treatment of other deadly IFIs, (aspergillosis, mucormycosis,

coccidioidomycosis, or candidiasis), which will be treated with oral MAT2203 after an initial short course of treatment with IV amphotericin

B (or an IV echinocandin).

We anticipate that the use of MAT2203 will maintain, and potentially improve upon, the clinical efficacy and

safety of the IV formulations of amphotericin B by targeting directly to the site of infection, reducing toxicity by lowering overall

systemic exposure, improving ease of use, and allowing for longer courses of outpatient treatment.

Additionally, we intend to leverage

the pharmacodynamic bridge established in EnACT to IV amphotericin B and seek to leverage a 505(b)(2) pathway for a potentially expanded

indication for the treatment of IFIs.

have met with the FDA several times since 2018 to discuss development plans for MAT2203.

Most recently, in April 2022 we held a clinical

guidance meeting with the FDA to discuss our Phase 3 pivotal, registrational study of MAT2203 in CM and thereafter agreed with FDA on

planned statistical analyses in June 2022.

Phase 3 registration trial of MAT2203 in CM will assess MAT2203 as step-down therapy after only 2 loading doses of IV amphotericin B

(similar to EnACT Cohort 2), building upon the impressive results already documented in EnACT.

This open-label randomized trial, which

we expect will be partially financially supported by the National Institutes of Health (NIH) National Institute of Neurological Disorders

and Stroke (NINDS), involves a three arm non-inferiority design in persons living with HIV who have cryptococcal meningitis:

(A) step-down

therapy with MAT2203 with treatment continuing for 2 weeks;

(B) step-down therapy with MAT2203 with treatment out to six weeks;

SOC control arm of IV amphotericin B induction transitioning to fluconazole.

The non-inferiority margin for both the primary and key

secondary endpoints will be 10% and total enrollment is planned to be approximately 270 patients, with an adaptive, de-risking design

allowing for the potential for additional patients once enrollment has reached 75%.

The primary endpoint will be 2-week all-cause mortality,

with a pooled analysis across the two MAT2203 treatment arms compared with SOC control to support a potential indication for the treatment

of cryptococcal meningitis.

To evaluate opportunities to improve survival by extending MAT2203 therapy, a key secondary endpoint of 10-week

relapse free survival of optimized treatment (2-weeks or 6-weeks) against SOC will be evaluated for non-inferiority.

Selection of the

optimal treatment regimen will be based on predefined and protocolized clinical criteria and will then form the basis for a final NDA

Following substantial collaboration with the FDA and written feedback from the European Medicines Agency (EMA) in the form

of Scientific Advice, as well as external NIH peer-review, our planned Phase 3 study design in CM, including endpoints, is well-positioned

to potentially support registration of MAT2203 in both the U.S.

will next be meeting with the FDA in the second quarter of 2023 to discuss plans for a second Phase 3 study to assess the efficacy, safety,

and tolerability of MAT2203 in patients with serious, life-threatening IFIs with limited treatment options.

Our protocol synopsis for

this Phase 3 study currently includes the treatment of four IFIs:

invasive aspergillosis, invasive candidiasis, chronic coccidioidomycosis

(Valley Fever), and invasive mucormycosis.

Our strategy is to leverage the success and data from EnACT to limit the required size of

We currently plan to enroll approximately 100 patients in a single arm design with no head-to-head active comparator, which

we believe should be acceptable to FDA given historical precedent and the challenges associated with the target patient population to

be evaluated.

Our upcoming meeting with FDA will focus on our proposed design and strategy for potential registration and approval for

an expanded indication for treatment of IFIs.

November 2022, BARDA announced an initiative seeking private sector partners developing late-stage, broad-spectrum antifungal drugs to

treat high priority fungal infections, including aspergillus, mucormycosis, and certain forms of candidiasis.

BARDA has solicited proposals

from industry, and we believe that MAT2203 is a strong candidate for funding based upon its oral, well-tolerated and broad-spectrum profile,

along with its recent clinical success in Phase 2 with cryptococcal meningitis.

We have participated in an initial meeting with BARDA,

and we intend to submit a white paper as part of our funding request following feedback from FDA on the planned Phase 3 IFI trial design.

success of MAT2203 in EnACT has attracted the attention of clinicians and patients without viable options for the treatment of a variety

of fungal infections for which amphotericin B may be suitable, except for significant concerns relating to the toxicity of the currently

available intravenous formulations of amphotericin B.

Currently, there are five (5) patients who have been approved by FDA to receive

MAT2203 on a compassionate use basis since August 2022, including one patient suffering from both mucor and aspergillosis.

Overall, these

patients have responded well to treatment with MAT2203, with notable clinical improvements.

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

MAT2203 has demonstrated antifungal activity when administered orally in several animal models for Cryptococcus , Candida ,

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these studies

were conducted by Dr Peter Williamson at NIH [ Lu et al, 2019 ].

were conducted by Dr.

Peter Williamson at NIH [ Lu et al, 2019 ].

Multiple studies demonstrated the potential for MAT2203 administered

8 unchanged sentences

with conventional amphotericin B.

These studies offer the potential for an efficacious oral formulation of a known fungicidal drug against

intrathecal cryptococcal disease.

These studies suggest the potential for an efficacious oral formulation of a known fungicidal drug

against intrathecal cryptococcal disease.

MAT2203 therefore provides a promising therapeutic option for CM.

preclinical studies of MAT2203 are planned to investigate the treatment of invasive fungal infections, such as Candida auris and

mucormycosis (black fungus), to position MAT2203 for label expansion.

Data is expected in late 2022.

studies conducted and previously completed with MAT2203 include 2 Phase 1 studies in healthy subjects ( Study CAM-102 and Study

MB-70011 ), and 2 Phase 2 studies:

1 completed study in patients with moderate to severe vulvovaginal candidiasis (VVC) ( Study

MB-70005 ) and 1 study in patients with mucocutaneous candidiasis who are refractory or intolerant to standard non-IV therapies (MB-70004).

of the end of January 2022, MAT2203 has been administered to a total of 247 subjects in 5 clinical trials as follows:

52 healthy subjects

(Studies CAM-102 and MB-70011), 36 patients with HIV and 65 patients with cryptococcal meningitis (in EnACT Trial MB-70007), 91 patients

with VVC (MB-70005), and 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 60 months have been safe and well-tolerated.

Results of these studies support efficacy of oral MAT2203 against Cryptococcus and overall safety of longer-term MAT2203 treatment.

EnACT Trial (MB-70007) consists of 2 parts.

Part 1 of the EnACT Trial was conducted in HIV-positive patients with a history of cryptococcosis

evaluated ascending oral doses of MAT2203, and identified a safe maximum tolerated dose for Part 2 of the trial.

2 of the EnACT Trial is a prospective, randomized, open-label clinical trial to investigate the safety, tolerability, and

efficacy of oral MAT2203 compared to Standard of Care (SoC) for the treatment of CM in patients with HIV and was originally divided into

four distinct patient cohorts.

Cohort 2 of the EnACT Study was designed to assess the potential to treat CM infections with oral MAT2203

as a step-down treatment during the induction phase of treatment immediately following only 2 days of IV amphotericin treatment, with

continued treatment with MAT2203 for up to 6 weeks during early maintenance treatment.

We believe that the clinical benefit of step-down

treatment from IV amphotericin to oral MAT2203 will provide compelling clinical evidence of efficacy in treating this deadly infection

with our oral agent.

This cohort of patients also provided key data to support the further advancement of the EnACT Study to ultimately

test the potential to treat CM infections with an all-oral amphotericin dosing regimen in subsequent cohorts (Cohorts 3 and 4).

efficacy endpoint for Part 2 of EnACT is 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 2

weeks of treatment.

Part 2, cohorts 1, 2, and 3 have been completed and Cohort 4 is ongoing.

Enrollment in Cohort 3 has completed with 14 subjects enrolled,

8 of whom are still active in the trial;

10 of the 14 patients received at least 1 dose of MAT2203.

Eight patients have been enrolled

in Cohort 4 as of 26 January 2022;

5 of these 7 patients received at least 1 dose of MAT2203.

Part 2, Cohort 2 of the EnACT Trial (MB-70007), 40 patients with active CM were treated with MAT2203.

The mean EFA for these 40 patients

who received MAT2203 during induction was 0.422 log 10 CFU/mL/day (95% CI:

0.294, 0.550).

The primary efficacy endpoint for

the trial was met because the lower bound of the 95% CI for the mean EFA excluded 0.20 log 10 CFU/mL/day.

In addition, among

patients treated with MAT2203, CSF sterilization rates were greater than 90% and all patients who completed the induction phase achieved

sterile CSF cultures at end of induction or during consolidation treatment.

Survival rates in Cohort 2 were high and there were no relapses

in patients receiving MAT2203 during consolidation.

Additional analysis of final data from Cohort 2 demonstrated survival at Day 30 of

98% in patients receiving MAT2203 vs.

88% in patients receiving IV amphotericin B and culture conversion (sterility) assessed at any

time during the trial of 97% in patients receiving MAT2203 and 76% in patients receiving IV amphotericin B.

was demonstrated to be safe and well-tolerated over 6 weeks of treatment in Part 2, Cohort 2 of EnACT.

The majority of SAEs and AEs reported

were considered to be expected in this HIV patient population and there was no evidence of MAT2203-associated renal toxicity or electrolyte

abnormalities in patients who received MAT2203.

Additionally, GI AEs reported were generally transient, moderate in severity, and did

not have an impact on the ability of patients to tolerate the planned treatment course.

Authority Interactions:

December 2021, the Company had a meeting with FDA to discuss a potential registration pathway for MAT2203.

outcome of the meeting reinforced the FDA’s ongoing commitment to anti-infective drug development generally and to MAT2203 specifically.

During the meeting, the FDA expressed no concerns with any data generated to date related to the efficacy, safety, or tolerability of

Additional confirmatory evidence was requested for an indication for step-down therapy during induction treatment, but there

was no requirement for a separate stand-alone study or enrollment of U.S.

The FDA expressed openness to an expansion of EnACT

to include a new Cohort 5 to run alongside Cohort 4 in Uganda, increasing the number of clinical sites from two to five to streamline

the development program in support of an accelerated NDA submission.

The Company is planning to meet with FDA in April 2022 to finalize

cohort design, including sample size required for non-inferiority and to discuss a potential primary endpoint of 30-day survival.

financial support of EnACT expansion to Cohort 5 is anticipated and the Company continues to evaluate the timing for submission of an

application for Breakthrough Designation.

A key chemistry, manufacturing, and controls (CMC) meeting with FDA is scheduled late in the

first quarter of 2022 to discuss and evaluate our MAT2203 formulation in support of a potential NDA submission in late 2023.

also plans to submit a formal Request for Scientific Advice to the European Medicines Agency (EMA) in 2022 to align and plan for expanding

the regulatory footprint for MAT2203 globally.

preclinical studies of MAT2203 have been conducted to investigate the treatment of other IFIs.

Oral MAT2203 was demonstrated to be effective

in multiple nonclinical studies .

In vitro studies have demonstrated that the MAT2203 LNC formulation did not have an impact on

the antifungal activity of amphotericin B.

Oral MAT2203 was demonstrated to be effective in several mouse models of systemic fungal infection

with Candida, Aspergillus, and Mucor.

In the Candida infection models in both immunocompromised and immunocompetent mice, the efficacy

of oral MAT2203 was comparable to intraperitoneal (IP) amphotericin B in terms of survival and reduction of tissue burden in target organs

of lung, liver, and kidneys of infected animals.

In the Aspergillus mouse models of infection, the efficacy of oral MAT2203 was comparable

to intraperitoneal amphotericin B in terms of survival, with dose-dependent reduction of fungal tissue burden.

Oral MAT2203 also demonstrated

in vivo efficacy in treating R.

delemar or M.

circinelloide s pulmonary infections in immunosuppressed mice and led

to a reduction in fungal spores in lung and brain comparable to results achieved with the liposomal intravenous amphotericin B.

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.

of January 2023, MAT2203 has been administered to a total of 284 subjects in five clinical trials as follows:

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)

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.

In addition, five patients have received MAT2203 via compassionate use requests for the treatment of invasive and

cutaneous IFIs.

consists of two parts.

Part 1 of EnACT was conducted in HIV-positive patients with a history of cryptococcosis, evaluated ascending oral

doses of MAT2203, and identified a safe maximum tolerated dose for Part 2 of the trial.

2 of EnACT is a prospective, randomized, open-label clinical trial to investigate the safety, tolerability, and efficacy of oral MAT2203

compared to SOC for the treatment of CM in patients with HIV and was originally divided into four distinct patient cohorts.

of EnACT was designed to assess the potential to treat CM infections with oral MAT2203 as a step-down treatment during the induction

phase of treatment immediately following only two days of IV amphotericin treatment, with continued treatment with MAT2203 for up to

six weeks during early maintenance treatment.

We believe that the clinical benefit of step-down treatment from IV amphotericin B to oral

MAT2203 will provide compelling clinical evidence of efficacy in treating this deadly infection with our oral agent.

This cohort of patients

also provided key data to support the further advancement of EnACT to ultimately test the potential to treat CM infections with an all-oral

amphotericin B dosing regimen in subsequent cohorts (Cohorts 3 and 4).

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.

Part 2, enrollment in all four cohorts has been completed.

We anticipate database lock and final data analysis will be completed in the

second quarter of 2023.

Phase 1/2 Data Summary

MAT2203 has been administered to 137 patients in Phases 1 and 2 of EnACT (36 patients with HIV and 101 patients with cryptococcal meningitis).

Phase 2 of EnACT was a prospective, randomized, open-label clinical trial to investigate the safety, tolerability, and efficacy of oral

MAT2203 compared to SOC for the treatment of CM in patients with HIV.

objectives for Phase 2 of EnACT were as follows:

To determine if a short course of IV amphotericin B

with early “step down” to oral MAT2203 can be used for induction treatment for CM (Cohort 2).

To determine if an all-oral regimen of oral MAT2203

with flucytosine, without IV amphotericin B can be used for induction treatment for CM (Cohort 4).

To determine if oral MAT2203 can be incorporated into

consolidation treatment for CM (both cohorts).

1 and 3 of EnACT were pilot safety run-ins to establish the safety for Cohorts 2 and 4.

Patients that received MAT2203 in Cohort 2 (n=40)

Patients that received MAT2203 in Cohort 4 (n=40)

Patients that received SOC across all cohorts (control arm) (n=41)

Cohort 2 of EnACT, a strategy of “early step-down” to oral MAT2203 after two days of initial treatment with IV amphotericin

B was demonstrated to be as effective as SOC for the induction and consolidation treatment of CM.

In Cohort 4, an all-oral induction

treatment regimen with MAT2203 was also demonstrated to be as effective as SOC for the induction and consolidation treatment of CM.

primary efficacy endpoint was met for Cohort 2 and 4 because the lower bound of the 95% CI for the mean EFA was higher than 0.20, an

EFA which has been associated with reduced survival in other clinical trials.

More than 90% of MAT2203-treated patients with positive

CSF cultures at baseline had sterile CSF cultures by the end of induction or during consolidation in both Cohorts 2 and 4.

Weeks 2 and 18 for both Cohort 2 and 4 were comparable to SOC.

Cohorts 1-4, MAT2203 was demonstrated to be safe and well-tolerated over six weeks of treatment including induction and early consolidation.

Most SAEs and AEs reported were expected in this HIV patient population.

There was no evidence of MAT2203-associated renal toxicity or

electrolyte abnormalities in patients who received MAT2203.

There were no discontinuations due to AEs.

No deaths were attributed to lack

of effect of MAT2203.

we believe that the results of EnACT validate that the LNC Platform enables targeted oral delivery of amphotericin B across the blood-brain

barrier directly to the site of infection to treat an invasive CNS fungal infection.

The high overall survival rate seen in both Cohort

2 and Cohort 4 of the study, together with the observation that CSF fungal cultures became sterile with favorable EFAs, demonstrate that

the amphotericin B delivered with this technology can cross the blood-brain barrier to the CNS and is effective as a treatment for CM.

In addition, the data represent the opportunity for longer-term use of an amphotericin B product beyond one or two weeks for the treatment

of an IFI, including CM.

As demonstrated by these data, the oral delivery of amphotericin B for a treatment course of six weeks duration,

greatly minimized and avoided nephrotoxicity and other side effects commonly associated with IV amphotericin B.

Oral MAT2203 has the

potential to offer significant benefit to patients with serious fungal infections such as CM who require treatment with amphotericin

Market Opportunity

overall global antifungal market accounted for approximately $11.9 billion in 2018 and is expected to reach approximately $13.9 billion

In 2018, the global invasive fungal infection market was valued at more than $6 billion.

This includes therapies used as active

treatment or prophylaxis (preventative) in the inpatient and outpatient setting, therapies used for the treatment of hospitalized patients

and therapies used for the treatment of patients who are being discharged from the hospital.

We estimate that, each year, there are over

1.5 million cases of invasive fungal infections caused by various species of Candida, Aspergillus and Cryptococcus, the

three most common invasive fungal pathogens, globally.

overall global antifungal market was valued at approximately $13.8 billion in 2021 and is expected to reach approximately $18 billion

In 2018, the invasive fungal infection market was valued at more than $6 billion in the US.

This includes therapies used as

active treatment or prophylaxis (preventative) in the inpatient and outpatient setting, therapies used for the treatment of hospitalized

patients and therapies used for the treatment of patients who are being discharged from the hospital.

Importantly, private insurance

costs per visit range from approximately $40k to $150K per patient (2018 Benedict) mostly due to extended length of stay.

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 estimated incidence in the U.S.

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The rapid progression of disease and high mortality rates

(20% - 50%) associated with documented invasive fungal infections often result in antifungal therapy being administered in suspected

(unconfirmed) cases or as a preventative measure in patients at high risk.

Also, the increasingly widespread use of immune suppressive

drugs as cancer chemotherapy or for organ transplantation or treatment of autoimmune disease has resulted in an increasing population

of patients at risk for invasive fungal infections.

Furthermore, the limited number of systemic antifungal drug classes, consisting of

azoles, echinocandins and polyenes, and their extensive use, has led to increased numbers of infections with drug-resistant strains.

The Centers for Disease Control and Prevention (CDC) has listed fluconazole-resistant Candida as a serious threat requiring prompt

and sustained action and has also identified a rise in echinocandin resistance, especially among Candida glabrata.

In June 2016,

the CDC issued an extraordinary alert for healthcare facilities and providers to be on the lookout for patients with Candida auris ,

a multidrug resistant strain with high mortality (approximately 60%).

Almost half of Candida auris isolates are multidrug resistant

to two or more antifungal classes (large majority resistant to fluconazole, 40% resistant to echinocandins).

We believe this underscores

the urgent need for new agents with demonstrated activity against resistant strains and that can be administered with significantly less

toxicity and the potential to discharge patients earlier to reduce hospital stays and associated costs.

options for the treatment of fungal infections are limited by a lack of innovative therapies.

Several factors have contributed to the

low rate of antifungal drug development, including a previously challenging regulatory environment that necessitated large and costly

clinical trials.

As a result of this regulatory environment and other factors, the number of antifungals in development has decreased,

while anti-microbial resistance has increased.

is an oral, LNC formulation of the broad-spectrum aminoglycoside antibiotic agent amikacin, which utilizes our proprietary LNC platform

to achieve oral bioavailability, limit toxicity, and enable targeted delivery to sites of infection.

Currently, amikacin can only be

delivered parenterally or through inhalation and is used to treat a variety of chronic and acute bacterial infections, including both

NTM infections and various multi-drug resistant gram-negative bacterial infections.

IV and inhaled amikacin, however, are associated

with major side-effects including nephrotoxicity and ototoxicity (permanent loss of hearing) with long-term use.

We believe that MAT2501’s

ability to orally deliver high levels of amikacin directly to the lung and without use-limiting toxicity, distinguishes it from all available

therapies and could provide an important solution for patients and physicians.

We are currently developing MAT2501 for the treatment

of NTM lung disease, including infections in patients with CF.

MAT2501 has been designated as a Qualified Infectious Disease Product

(QIDP) and as an Orphan Drug for the treatment of NTM by the FDA.

lung disease is a chronic, debilitating condition arising from an NTM infection in the lungs and is associated with significant patient

morbidity and mortality.

The signs and symptoms of NTM lung disease often overlap with the underlying lung conditions that increase the

risk for NTM, like CF, bronchiectasis, COPD, and asthma.

The most common pathogens for NTM infections in the United States are Mycobacterium

avium complex (MAC), which accounts for more than 80% of all NTM infections in the US.

Patients with NTM lung infections frequently

require lengthy hospital stays and prolonged courses of antibiotics to manage their disease.

The prevalence of human disease attributable

to NTM has increased over the past two decades and is now growing at more than 8% per year and is even more prevalent than tuberculosis

In 2018, it was estimated that between 75,000 and 100,000 patients were diagnosed with NTM lung disease in the US alone.

infections are extremely difficult to treat, especially so in patients with CF (Eikani, et.

The infecting organisms

are frequently resistant to most antibiotics, and current treatment regimens require combination therapies with highly toxic drugs for

long periods of time, further complicated by challenges in delivering therapeutic levels of these toxic drugs across plasma membranes

of infected cells.

challenges are amplified in CF patients, with the thick buildup of pulmonary secretions that further impair treatment of infecting organisms.

Pulmonary infections represent the most frequent type of infection in CF patients, and are responsible for more than 90% of deaths in

the CF population (Rowe SM, et.al .

MAC and Mycobacterium abscessus complex (MABSC) are NTM species that have emerged in

recent years as important opportunistic pathogens frequently responsible for pulmonary infections in CF patients (Brode SK, et.

Infections due to MAC and MABSC are difficult to treat and to eradicate since these organisms are naturally resistant to most

The recommended treatment for MAC and MABSC pulmonary infections includes a combination of a macrolide (clarithromycin or

azithromycin), an aminoglycoside (amikacin), and an antimycobacterial antibiotic for MAC (rifampin and ethambutol), while MABSC many

times requires intravenous β-lactam (cefoxitin or imipenem) at least for 12 months (Floto RA, et.

The cure rate

is only 25-40% in the case of macrolide resistance, which is present in 40 to 60% of the isolates (Roux AL et.

unsuccessful eradication of MAC and MABSC is considered as a contraindication for lung transplantation by several CF centers, and significantly

restrict therapeutic options in severely ill patients.

Therefore, more specific and active and less toxic antimicrobials are urgently

Previous and Ongoing Studies

most recently completed pre-clinical animal model studies testing the preclinical efficacy of MAT2501 were funded by a grant from the

An additional grant from the CFF was awarded in February of 2020 to support the screening of new optimized formulations of MAT2501

in collaboration with Diane Ordway, Ph.D.

of Colorado State University (CSU).

Most recently, a CFF grant of $3.75 million was awarded

to us in November 2020, and later increased by approximately $0.3 million in November 2021, to support the early development of MAT2501

through the end of Phase 1.

The recent grant from the CF Foundation was based upon the data generated by CSU and summarized below.

and Clinical Studies

Investigational New Drug (IND) application for MAT2501, was opened in January 2016 to investigate MAT2501 in the proposed indication

for treatment of NTM infections.

The early development plan for MAT2501 builds upon the preclinical proof of concept in vitro

studies which have demonstrated antibiotic activity against both sensitive and multidrug resistant strains M.

abscessus and M avium.

The ongoing toxicology program is evaluating the optimized formulation of MAT2501 in a rigorous battery of studies to assess and

characterize the safety profile of MAT2501.

The studies will support the safety package required to progress the development of MAT2501

into Phase 2 clinical trials.

These studies are designed to carefully monitor the safety signals known to be associated with IV amikacin

treatment (hearing loss and kidney/renal safety).

These studies include:

rat toxicity study to assess any potential effects of MAT2501 on hearing and associated side effects;

and 9-month long-term safety study in dog to support longer-term dosing in clinical trials.

are also currently conducting a Single Ascending Dose (SAD) trial with the optimized formulation of MAT2501 which is currently in the

enrollment phase of the study in which we are assessing the PK, safety, and tolerability of escalating doses of MAT2501.

from the trial are expected in the later part of the second quarter of 2022.

Additional Phase 1B and Phase 2 trials for the treatment

of NTM are expected to commence in 2023, pending additional financial support from the CFF.

Treatment Guidelines and Limitations of Current Treatments

American Thoracic Society (ATS), European Respiratory Society (ERS), European Society of Clinical Microbiology and Infectious Diseases

(ESCMIID), and Infectious Diseases Society of America (IDSA) jointly sponsored the recent development of updated NTM Treatment Guidelines

in adults (Daley C, et.al , 2020).

The guidelines recommend a standard NTM lung disease treatment with a combination of 3-4 medications.

These include amikacin (or streptomycin), clarithromycin (or azithromycin), rifampin (or rifabutin), and ethambutol.

Amikacin is an important

drug used for treatment of Mycobacterium abscessus pulmonary disease.

Certain combinations of antibiotics work better together

because of their unique mechanisms of action that work in concert to eliminate the infection.

It is for this reason that sputum samples

are qualified for precise identification of the species and sensitivity testing of the microorganism.

When treatment failures arise,

another combination of antibiotics will be recommended depending on the NTM strain.

drug therapy in NTM lung disease can cause adverse effects, which leads to treatment discontinuation or patient nonadherence.

guidelines recommend monitoring for drug toxicity at repeat intervals.

Gastrointestinal side effects with oral agents are common.

to severe gastrointestinal disturbance, the use of macrolides may require dose adjustment.

Drug-induced hepatotoxicity due to rifampin

and other agents must be monitored by liver function tests and monitoring complete blood count when using rifampin or tigecycline is

Renal function testing is required with IV amikacin use due to its known renal toxicity liability, an issue that we believe

could be addressed with our novel targeted LNC oral formulation of amikacin, MAT2501.

Due to the established risk of otoxicity such as

hearing loss, tinnitus, or vestibular toxicity, patients who receive IV amikacin or streptomycin need to be educated regarding the signs

and symptoms of toxicity with audiometry testing at the start of therapy and again on subsequent visits with discontinuation, or a decrease

in dose or frequency if signs suggestive of toxicity occur.

There remains a significant unmet clinical need for safer, yet potent, agents

for the improved management of NTM lung disease.

MAT2501 has the potential of providing a safer and more targeted approach to the treatment

of NTM disease.

Company continues to evaluate potential options for its legacy asset, LYPDISO™.

LYPDISO is a prescription-only omega-3 fatty acid-based

composition, comprised primarily of EPA and DPA, intended for the treatment of cardiovascular and metabolic conditions.

This next-generation

omega-3 therapy has been shown in two head-to-head studies to provide effective triglyceride-lowering and significantly higher EPA blood

levels than Vascepa ® .

A global process to identity and potentially secure a partner to continue development of LYPDISO

remains ongoing.

Collaborations Using LNC Platform Delivery Technology

believe our LNC platform delivery technology 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.

tested a range of pharmaceutical compounds reformulated by our LNC platform delivery technology in proof-of-concept animal studies, including

oligonucleotides (mRNA, siRNA, DNA plasmids), vaccines, anti-inflammatory agents, NSAIDs and atovaquone.

We intend to pursue opportunities

to develop products, either alone or in partnership with other pharmaceutical or biotech companies, and this remains a key part of our

strategy to maximize the value of this unique and disruptive LNC delivery technology.

December 2019, we announced a feasibility collaboration with Genentech, a Roche company, to evaluate formulations of a number of Genentech

compounds utilizing our LNC platform delivery technology.

Genentech recently extended this collaboration for another year, through 2022.

The original agreement provided for cooperation on up to three proprietary Genentech compounds for initial in vitro testing.

of the programs have been completed.

Each demonstrated the successful intracellular delivery of LNC-formulated small molecules and oligonucleotides,

without accompanying toxicity.

Genentech is evaluating the third proprietary compound to provide the Company for testing, and the Company

anticipates additional data from this program during 2022.

December 2020, we announced a collaboration with the National Institute of Allergy and Infectious Diseases (NIAID) to develop oral formulations

of Gilead’s remdesivir, which is currently only available as an intravenous therapy in the fight against COVID-19.

We believe the

attributes of our LNC platform technology will allow for oral bioavailability and efficient intracellular delivery.

In the fourth quarter

of 2021, the NIAID, together with the Department of Epidemiology at the University of North Carolina at Chapel Hill (UNC), conducted

an in vivo test of our LNC formulation of Gilead Science’s remdesivir (LNC-RDV) in a standard genetically modified mouse

model of SARS-CoV-2 infection.

In this animal model, orally administered LNC-RDV reduced viral titers and improved clinical parameters

of body weight and congestion scores five days following infection, with effects similar to those seen with subcutaneous administered

Following discussion with both NIAID and Gilead, these highly encouraging results position LNC-RDV for further in vivo

work to be conducted at UNC and supported by NIAID.

This preclinical study is anticipated to commence late in the first quarter of

2022, with data expected in the second half of 2022.

(20% - 50%) associated with documented IFIs often result in antifungal therapy being administered in suspected (unconfirmed) cases or

as a preventative measure in patients at high risk.

Also, the increasingly widespread use of immune suppressive drugs as cancer chemotherapy

or for organ transplantation or treatment of autoimmune disease has resulted in an increasing population of patients at risk for IFIs.

Furthermore, the limited number of systemic antifungal drug classes, consisting of azoles, echinocandins and polyenes, and their extensive

use, has led to increased numbers of infections with drug-resistant strains.

The Centers for Disease Control and Prevention (CDC) has

listed fluconazole-resistant Candida as a serious threat requiring prompt and sustained action and has also identified a rise

in echinocandin resistance, especially among Candida glabrata.

In June 2016, the CDC issued an extraordinary alert for healthcare

facilities and providers to be on the lookout for patients with Candida auris , a multidrug resistant strain with high mortality

(approximately 60%).

Almost half of Candida auris isolates are multidrug resistant to two or more antifungal classes (large majority

resistant to fluconazole, 40% resistant to echinocandins).

In 2022, the WHO issued a fungal priority pathogens list including cryptococcal

neoformans, aspergillus fumigatus and c.

albicans as critical priority for antifungal development due to the high unmet

We believe this underscores the urgent need for new agents with demonstrated activity against resistant strains and that can be

administered with significantly less toxicity and the potential to discharge patients earlier to reduce hospital stays and associated

global process to identify parties interested in continuing the development of LYPDISO, our legacy prescription-only omega-3 fatty acid-based

composition was unsuccessful in 2022.

Accordingly, we are no longer pursuing the development of this asset.

Collaborations Using LNC Platform

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.

We have tested a range of pharmaceutical

compounds reformulated by using our LNC Platform in proof-of-concept animal studies, including oligonucleotides (mRNA, siRNA, DNA plasmids),

vaccines, anti-inflammatory agents, NSAIDs and atovaquone.

We intend to pursue opportunities to develop products, either alone or in

partnership with other pharmaceutical or biotech companies, and this remains a key part of our strategy to maximize the value of this

unique and disruptive LNC Platform.

December 2019, we announced a feasibility collaboration with Genentech, a Roche company, to evaluate formulations of several Genentech

compounds utilizing our LNC Platform.

The original agreement provided for cooperation on up to three proprietary Genentech compounds

for initial in vitro testing.

Two of the programs have been completed.

Each demonstrated the successful intracellular delivery

of LNC-formulated small molecules and oligonucleotides, without accompanying toxicity.

Genentech recently extended this collaboration

through 2023.

December 2020, we announced a collaboration with the NIAID to develop oral formulations of Gilead’s remdesivir, which is currently

only available as an intravenous therapy in the fight against COVID-19.

During 2021 and 2022, the NIAID, together with the Department

of Epidemiology at the University of North Carolina at Chapel Hill, conducted two in vivo tests of our LNC formulation of Gilead

Science’s remdesivir (LNC-RDV) in a standard genetically modified mouse model of SARS-CoV-2 infection.

In these animal models,

orally administered LNC-RDV reduced viral titers and improved clinical parameters of body weight and congestion scores five days following

infection, with effects similar to those seen with subcutaneous administered remdesivir.

Following discussion and review of the data

with Gilead, the Company was informed that Gilead would focus on its internally developed prodrugs of remdesivir given their advanced

clinical placement.

April 2022, we, along with BioNTech SE, a global pharmaceutical company focused on mRNA technologies, announced an exclusive research

collaboration to evaluate the combination of BioNTech’s mRNA formats with our proprietary LNC Platform.

We have collaborated closely

on formulation, optimization, and in vitro testing and an in vivo study is planned for the second quarter of 2023.

Under the terms

of the agreement with BioNTech, we received an exclusivity fee in the amount of $2.75 million, and BioNTech has funded certain of our

research expenses related to the collaboration.

We continue to discuss a potential license agreement for our LNC Platform.

January 2023, we announced a strategic collaboration with National Resilience, Inc.

(Resilience).

We entered into a Material Transfer

and Evaluation Agreement focused on exploring the potential for oral delivery of identified nucleic acids pursuant to which the parties

will collaborate with Resilience on a research program comprising the design, formulation, optimization, and in vitro testing

of these nucleic acid formats in combination with our proprietary LNC Platform.

continue to evaluate additional potential strategic collaborations with other interested biotechnology and pharmaceutical partners.

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areas of innovative medicine while capitalizing on the development expertise and financial resources of well-established partners.

from these evaluations could position us as a licensor of our LNC platform delivery technology to numerous strategic partners better

positioned to absorb the risks and costs of drug development while allowing our company to become a royalty aggregator with the potential

to generate upfront license, milestone and royalty payments as we maximize the value of the overall LNC platform delivery technology.

from these evaluations could position us as a licensor of our LNC Platform to numerous strategic partners better positioned to absorb

the risks and costs of drug development while allowing our company to become a royalty aggregator with the potential to generate upfront

license, milestone, and royalty payments as we maximize the value of the overall LNC Platform.

License Agreement with Rutgers University

our acquisition of Aquarius Biotechnologies Inc., we acquired a license from Rutgers University for the LNC platform delivery technology.

We changed the name of Aquarius Biotechnologies Inc.

our acquisition of Aquarius Biotechnologies Inc., we acquired a license from Rutgers for certain patents related to the LNC Platform.

We subsequently changed the name of Aquarius Biotechnologies Inc.

to Matinas BioPharma Nanotechnologies, Inc.

and in February of 2022, the parties

agreed to a Second Amended and Restated Exclusive License Agreement.

The agreement provides for (1) royalties on a tiered basis between

low single digits and the mid-single digits of net sales of products using such licensed technology, (2) a one-time sales milestone fee

of $100,000 when and if sales of products using the licensed technology reach the specified sales threshold and (3) an annual license

fee of $50,000 over the term of the license agreement.

There was also a reduction in the consideration paid to Rutgers in the event of

a sublicense to a third party of the exclusive patent rights granted pursuant to the Agreement.

In consideration of the concessions made

by Rutgers in the license agreement, the Company issued Rutgers 400,000 shares of common stock in February 2022.

agreed to continue to assume the responsibility to pay required patent prosecution and maintenance fees covering the technology.

and in February of 2022,

the parties agreed to a Second Amended and Restated Exclusive License Agreement.

The agreement provides for (1) royalties on a tiered

basis between low single digits and the mid-single digits of net sales of products using such licensed technology, (2) a one-time sales

milestone fee of $100,000 when and if sales of products using the licensed technology reach the specified sales threshold and (3) an

annual license fee of $50,000 over the term of the license agreement.

There was also a reduction in the consideration paid to Rutgers

in the event of a sublicense to a third party of the exclusive patent rights granted pursuant to the Agreement.

In consideration of the

concessions made by Rutgers in the amended license agreement, the Company issued Rutgers 400,000 shares of common stock in February 2022.

We also agreed to continue to assume the responsibility to pay required patent prosecution and maintenance fees covering the technology.

otherwise terminated by either party, the term of the license, on a country-by-country basis, shall be the longer of 8-1/2 years from

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We also rely heavily on know-how and continuing technological innovation to develop and maintain our proprietary position.

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

patents and patent applications that we exclusively license from Rutgers University provide patent protection for the proprietary chemistry

technology used in our process to make our lipid nanocrystal and geodate cochleates and formulate the active pharmaceutical ingredients

delivered inside this delivery technology, as in MAT2203, our lead product comprising the LNC platform delivery technology.

to our license agreement, we acquired rights to a portfolio that currently includes 2 pending applications and 30 issued U.S.

patents, including 20 patents issued within the last 5 years, which extends patent protection until at least 2033.

In addition, over

the past 6 years, we have over 30 Matinas-owned pending patent applications filed both in the United States and in foreign jurisdictions.

We have chosen to file these patent applications in selected foreign markets that we consider important for our product candidates.

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

patents and patent applications that we exclusively license from Rutgers provide some patent protection for the proprietary chemistry

technology used in certain of our processes to make our lipid nanocrystal and geodate cochleates and formulate the active pharmaceutical

ingredients delivered inside this delivery technology, as in MAT2203, our lead product comprising the LNC Platform.

Pursuant to our license

agreement, we acquired rights to a portfolio that currently includes 1 pending application and over 30 issued U.S.

and foreign patents,

including over 25 patents issued within the last 5 years, which extends patent protection until at least 2033.

In addition, over the

past 7 years, we have filed over 30 Matinas-owned patent applications both in the United States and in foreign jurisdictions, which now

include over 20 pending patent applications and 9 issued patents.

have chosen to file these patent applications in selected foreign markets that we consider important for our product candidates.

international markets generally include Europe, China, India, Brazil, Russia, Canada, Japan, Korea, Australia, and Mexico.

These pending

patent applications can extend patent protection through 2040.

This patent portfolio covers our LNC platform delivery technology which

covers a broad spectrum of technology, including amphotericin B LNCs, geodate LNCs, methods of delivering nutrients or biologically relevant

molecules to a host using LNCs, LNC vaccine compositions and protein-lipid vesicles, small interfering RNA LNCs, methods of enhancing

the LNC encapsulation of hydrophilic molecules, LNCs made with low purity soy phosphatidylserine, use of site-regulating agents to control

LNC size, methods of treating Mycobacterial infections, methods of treating cryptococcus infections, and LNC-mediated delivery of nucleic

Matinas-Owned

Intellectual Property Relating to LYPDISO

have sought patent protection in the United States and internationally for our LYPDISO discovery program, and any other inventions to

which we have rights, where available and when appropriate.

Our policy is to pursue, maintain and defend patent rights, whether developed

internally or licensed from third parties, and to protect the technology, inventions and improvements that are commercially important

to the development of our business.

current patent portfolio relating to LYPDISO is comprised of two issued U.S.

patents and one issued foreign patent in Australia.

issued patents cover the Company’s proprietary methods relating to triglyceride levels, total cholesterol, VLDL-cholesterol or

apolipoprotein C-III by administering a pharmaceutical composition comprising omega-3 fatty acids including eicosapentaenoic acid (EPA)

and docosapentaenoic acid (DPA).

These patents provide important protection to LYPDISO through 2033.

In addition, we have eight additional

patent applications across four patent families covering the oil composition for LYPDISO, other omega-3 fatty acid compositions, as well

as formulations of LYPDISO and similar formulations.

All of these filed patent applications also comprise methods of use of such oil

compositions and formulations.

Any patents that may issue from these filed United States patent applications and their counterpart international

application covering the LYPDISO drug substance, formulation, and methods for use in treatment would extend protection until at least

patent applications can extend patent protection through at least 2040.

This patent portfolio covers our LNC Platform which covers a

broad spectrum of technology, including amphotericin B LNCs, geodate LNCs, methods of delivering nutrients or biologically relevant molecules

to a host using LNCs, LNC vaccine compositions and protein-lipid vesicles, small interfering RNA LNCs, methods of enhancing the LNC encapsulation

of hydrophilic molecules, LNCs made with low purity soy phosphatidylserine, use of site-regulating agents to control LNC size, methods

of treating Mycobacterial infections, methods of treating cryptococcus infections, and LNC-mediated delivery of nucleic acids.

cannot be sure that patents will be granted with respect to any of our pending patent applications or with respect to any patent applications

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For example, significant

aspects of our proprietary LNC platform delivery technology are based on unpatented trade secrets and know-how.

Trade secrets and know-how

can be difficult to protect.

We seek to protect our proprietary technology and processes, in part, by confidentiality agreements and

invention assignment agreements with our employees, consultants, scientific advisors, contractors and commercial partners.

These agreements

are designed to protect our proprietary information and, in the case of the invention assignment agreements, to grant us ownership of

technologies that are developed through a relationship with a third party.

We also seek to preserve the integrity and confidentiality

of our data and trade secrets by maintaining physical security of our premises and physical and electronic security of our information

technology systems.

While we have confidence in these individuals, organizations and systems, agreements or security measures may be

breached, and we may not have adequate remedies for any breach.

In addition, our trade secrets may otherwise become known or be independently

discovered by competitors.

To the extent that our contractors use intellectual property owned by others in their work for us, disputes

may arise as to the rights in related or resulting know-how and inventions.

aspects of our proprietary LNC Platform are based on unpatented trade secrets and know-how.

Trade secrets and know-how can be difficult

We seek to protect our proprietary technology and processes, in part, by confidentiality agreements and invention assignment

agreements with our employees, consultants, scientific advisors, contractors and commercial partners.

These agreements are designed to

protect our proprietary information and, in the case of the invention assignment agreements, to grant us ownership of technologies that

are developed through a relationship with a third party.

We also seek to preserve the integrity and confidentiality of our data and trade

secrets by maintaining physical security of our premises and physical and electronic security of our information technology systems.

While we have confidence in these individuals, organizations and systems, agreements or security measures may be breached, and we may

not have adequate remedies for any breach.

In addition, our trade secrets may otherwise become known or be independently discovered by

To the extent that our contractors use intellectual property owned by others in their work for us, disputes may arise as

to the rights in related or resulting know-how and inventions.

also plan to seek trademark protection in the United States and outside of the United States where available and when appropriate.

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or convenience.

we believe that our proprietary LNC platform delivery technology, experience, and knowledge in our areas of focus provide us with competitive

advantages, potential competitors could reduce our commercial opportunities.

For many of our product candidates, we anticipate facing

competition from other products that are available on a generic basis and offered at low prices.

Many of these generic products have

been marketed by third parties for many years and are well accepted by physicians, patients, and payers.

believe that MAT2203 and MAT2501 and any other development candidate we may pursue in the future using our proprietary LNC platform delivery

technology, paralleled with our scientific and development expertise in the field of drug delivery, provide us with competitive advantages

over our peers.

However, we face potential competition from various sources, including larger and better-funded pharmaceutical, specialty

pharmaceutical, and biotechnology companies, as well as from generic drug manufacturers, academic institutions, governmental agencies,

and public and private research institutions.

we believe that our proprietary LNC Platform, experience, and knowledge in our areas of focus provide us with competitive advantages,

potential competitors could reduce our commercial opportunities.

For many of our product candidates, we anticipate facing competition

from other products that are available on a generic basis and offered at low prices.

Many of these generic products have been marketed

by third parties for many years and are well accepted by physicians, patients, and payers.

believe that MAT2203 and any other development candidate we may pursue in the future using our proprietary LNC Platform, paralleled with

our scientific and development expertise in the field of drug delivery, provide us with competitive advantages over our peers.

we face potential competition from various sources, including larger and better-funded pharmaceutical, specialty pharmaceutical, and

biotechnology companies, as well as from generic drug manufacturers, academic institutions, governmental agencies, and public and private

research institutions.

will primarily compete with antifungal classes approved for the treatment of fungal and mold infections, which include polyenes, azoles

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expect that MAT2203 may compete with product candidates that we are aware of in clinical development by third parties, such as rezafungin

acetate (being developed by Cidara Therapeutics, Inc.) and certain products being developed by Viamet Pharmaceuticals Holdings, LLC,

Vical Incorporated and F2G, Ltd.

will primarily compete with aminoglycosides indicated for the treatment of NTM lung infections and will include Arikayce®, an inhaled

formulation of amikacin (marketed by Insmed) and IV amikacin (Amikin;

marketed by Bristol Myers Squibb) as well as a number of generic

manufacturers of IV amikacin.

acetate (being developed by Cidara Therapeutics, Inc.), olorofim (being developed by F2G, Ltd), fosamanogepix (being developed by Pfizer,

Inc), ibrexafungerp (being developed by Scynexis, Inc.) and certain products being developed by Mycovia Pharmaceuticals, Inc.

and Pulmocide,

Manufacturing

currently lease and operate in-house manufacturing capabilities for our lead LNC platform delivery technology product candidates, MAT2203

and MAT2501, and for our LNC platform discovery programs in the gene therapy and vaccine spaces.

While sufficient to produce the clinical

supplies of product necessary to conduct our ongoing clinical trials and potentially early commercialization of MAT2203 and MAT2501,

we are exploring relationships with well-respected third-party contract manufacturers for the formulation and manufacture of MAT2203

necessary to support the filing of an NDA and to support commercial manufacture for this product.

We may also need to expand our internal

manufacturing capabilities in the future.

If we are not able to retain our current manufacturing facilities and if we do not develop

additional in-house manufacturing capability for our MAT2203, MAT2501 and 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.

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.

While sufficient to produce the clinical supplies of product necessary

to conduct our ongoing clinical trials and potentially early commercialization of MAT2203, we are exploring relationships with well-respected

third-party contract manufacturers for the formulation and manufacture of MAT2203 necessary to support the filing of an NDA and to support

commercial manufacture for this product.

We may also need to expand our internal manufacturing capabilities in the future.

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.

the first quarter of 2022, we selected and reached agreement with Thermo Fisher Scientific to support scale-up and manufacturing for

MAT2203 in anticipation of a potential NDA submission.

Thermo Fisher Scientific, with more than 65 locations around the world, provides

integrated, end-to-end capabilities across all phases of development, including APIs, biologics, viral vectors, cGMP plasmids, formulation,

clinical trials solutions, logistics services and commercial manufacturing and packaging.

During 2022 we worked with Thermo Fisher to

prepare for a technology transfer of certain of the processes we use in the formulation and manufacture of MAT2203.

As part of our decision

to prioritize the regulatory feedback from FDA on our plan for a Phase 3 trial 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.

We anticipate the resumption of activities with Thermo Fisher once additional financing from one or more of these

sources have been secured.

are several potential third-party suppliers for amphotericin B, the generic active pharmaceutical ingredient in our lead clinical stage

product candidate – MAT2203 and for amikacin, the generic active pharmaceutical ingredient in our preclinical LNC product candidate

Although to date we have not entered into formal supply agreements to secure sufficient supply of amphotericin B or

amikacin to support our clinical programs for MAT2203 or MAT2501, we believe we will be able to secure supply of amphotericin B and amikacin

to support our clinical programs for MAT2203 and MAT2501 and from one or more third-party suppliers.

As we move through development for

our product candidates, we expect to enter into long term supply arrangements for key active pharmaceutical ingredients.

product candidate – MAT2203.

Although to date we have not entered into formal supply agreements to secure sufficient supply of

amphotericin B to support our clinical programs for MAT2203, we believe we will be able to secure supply of amphotericin B to support

our clinical programs for MAT2203 and 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.

and Marketing

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in the United States must typically undertake the following:

of nonclinical laboratory tests, animal studies and formulation studies in compliance with FDA’s good laboratory practice (cGLP),

to FDA of an investigational new drug applications (IND), which must take effect before human clinical trials may begin;

by an independent institutional review board (IRB) representing each clinical site before each clinical trial may be initiated;

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;

and submission to FDA of an NDA or BLA;

of the product by an FDA advisory committee, where appropriate or if applicable;

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;

of user fees and securing FDA approval of the NDA or BLA;

with any post-approval requirements, including a risk evaluation and mitigation strategy (REMS), and post-approval studies required

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;

payment of user fees and

securing FDA approval of the NDA or BLA;

compliance with any post-approval

requirements, including a risk evaluation and mitigation strategy (REMS), and post-approval studies required by FDA.

studies include laboratory evaluation of the purity and stability of the manufactured drug substance or active pharmaceutical ingredient

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on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;

warning or untitled letters or holds on post-approval clinical trials;

of FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals;

seizure or detention, or refusal to permit the import or export of products;

or the imposition of civil or criminal penalties.

fines, warning or untitled

letters or holds on post-approval clinical trials;

refusal of FDA to approve

pending NDAs or supplements to approved NDAs, or suspension or revocation of product approvals;

product seizure or detention,

or refusal to permit the import or export of products;

injunctions or the imposition

of civil or criminal penalties.

strictly regulates marketing, labeling, advertising and promotion of products that are placed on the market.

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the applicant must certify with respect to each patent that:

required patent information has not been filed;

listed patent has expired;

listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration;

listed patent is invalid, unenforceable or will not be infringed by the new product.

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;

the listed patent is invalid,

unenforceable or will not be infringed by the new product.

certification that the new product will not infringe the already approved product’s listed patents or that such patents are invalid

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priority review voucher program for certain drugs intended to treat rare pediatric diseases until 2026;

creates a new priority

review voucher program for drug applications determined to be material national security threat medical countermeasure applications;

and revises the FDCA to streamline review of combination product applications.

3042 of the Cures Act authorizes a new “Limited Population Pathway” to expedite approval of antimicrobial products intended

to treat serious or life-threatening infections for which there are unmet medical needs.

Drugs approved under this provision would be

required to adhere to special labeling requirements, including a prominent “Limited Population” statement.

Additionally,

in recognition of increasing concerns about drug-resistant infections, the Act requires the U.S.

Government Accountability Office (GAO)

to compile a report on antimicrobial resistance by 2021, which would include a review of any effect of the new Limited Population Pathway

on antibacterial or antifungal resistance.

We will monitor these developments but cannot currently assess how this initiative may impact

our business.

creates a new priority review

voucher program for drug applications determined to be material national security threat medical countermeasure applications;

the FDCA to streamline review of combination product applications.

3042 of the Cures Act authorizes a “Limited Population Pathway” to expedite approval of antimicrobial products intended to

treat serious or life-threatening infections for which there are unmet medical needs.

Drugs approved under this provision are required

to adhere to special labeling requirements, including a prominent “Limited Population” statement.

We will monitor the implementation

of the Cures Act but cannot currently assess how this initiative may impact our business.

Health Care Regulations

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Such restrictions under applicable federal and state healthcare laws and regulations, include the following:

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;

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;

HIPPA imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements

relating to healthcare matters;

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;

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;

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;

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.

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

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;

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.

state laws require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the

5 unchanged sentences

Capital Resources

of February 25, 2022, we had 31 full-time employees.

of March 3, 2023, we had 34 full-time employees.

There are no collective bargaining agreements covering any of our employees.

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and Development

the years ended December 31, 2021 and 2020, we incurred approximately $14.6 and approximately $14.4 million, respectively, on research

and development activities.

These expenses include cash and non-cash expenses relating to the development of our clinical and pre-clinical

programs, including our anti-infective product candidates, MAT2203 and MAT2501 as well as support and enhancement of our drug delivery

Our research and development expenses reflect the reimbursement of certain MAT2501 program expenses of approximately $2.2

million and approximately $0.1 million during the years ended December 31, 2021 and 2020, respectively, related to the CFF grant agreement.

the years ended December 31, 2022 and 2021, we incurred $16,678 thousand and $14,583 thousand, respectively, on research and development

These expenses include cash and non-cash expenses relating to the development of our clinical and pre-clinical programs,

including our anti-infective product candidates, MAT2203 and MAT2501 as well as support and enhancement of our LNC Platform.

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.

and Available Information

20 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business