Matinas appears to be on the verge of signing a deal with BioNTech

It’s been 62 days since MNTB and BNTX announced their exclusive research collaboration to explore the creation of mRNA products using LNC technology.

This was a smaller agreement, with an upfront payment of less than $3M. It was an exclusive deal which meant Matinas would only work with BioNTech in the mRNA field, instead of entertaining other collaborations with companies like Moderna.

Shortly thereafter, the CEO of Matinas said that a full-on licensing agreement (similar to those with upfront cash + milestone payments) was in the works and would be signed within 90-120 days.

I think a buyout is probably a better option in the long-term for BioNTech, but at this point it looks like the licensing agreement is a go. I also think we’ll either see an deal before the 90-day mark, or shortly thereafter. I’d like to see it tomorrow, but if wishes were fishes we’d all be drowning in cod.

Here’s what happening.

1. While hundreds of small biotechs are trading for less than cash, Matinas is trading for about 4.5x cash. This is fantastic for a company with a market cap of only $188M. Given the current biotech market, this is a huge abnormality. If investors or hedge funds thought there was a chance this company was junk, it would be trading much lower.

2. Around May 25th (About 44 days into the BioNTech/Matinas collaboration) the chart for Matinas seems to have separated itself from the biotech indexes IBB and XBI. While they continue to drift sideways, Matinas is clearly heading up. Stocks that trend upwards usually do it for a reason. This is a pattern of both accumulation, and a total unwillingness to sell by current investors. Sentiment for Matinas appears to be incredibly high.

It’s also possible that a hedge fund has gotten wind that the deal is done and trying to stealthily buy up as many shares as possible without moving the price too much. (News always leaks.)

3. On June 8th, Moderna announced that data from their new omicron booster vaccine showed superior antibody response against the omicron variant. mRNA-1273.214 met all primary endpoints in the Phase 2/3 trial. Moderna plans to submit the data to federal agencies and hopes the booster will be available in Fall 2022.

This is important because Covid-19 is very obviously not going away. We’re in an arms race for a better vaccine. Don’t forget, the Covid-19 vaccine market is about $64 billion per year. This will fluctuate depending on the severity of outbreaks, but it’s still a ton of cash that’s up for grabs.

Pfizer and Moderna capture roughly 90% of this market, with the other 10% going to companies like Johnson & Johnson and AstraZeneca.

If Pfizer and BioNTech can successfully create an LNC Covid-19 vaccine that is oral, shelf-stable, more effective, and causes less side effects than Moderna’s next-generation vaccine, then they could add another $20 billion in sales. Possibly more as vaccine uptake could be higher with a pill versus a needle because it’s easier to administer a pill. You can ship it directly to someone’s house. You don’t need a nurse to administer it, etc.

Moderna has pulled ahead here with the Omicron data. Pfizer and BioNTech need to catch up. But they can still win if they focus on creating not just an Omicron booster, but a better vaccine. And the best option on the table right now is collaborating with Matinas. The sooner the deal is signed, the sooner we’ll see an LNC oral Covid-19 vaccine.

4. On June 1st, BioNTech held their annual general meeting. Take a look at slide 15 of their investor presentation.

Next to the mRNA hex, is a Matinas hex. The color-coding indicates that this is a collaboration. Also on this slide are collaborations with Medigene and Crescendo Biologics. Both Medigene and Crescendo have signed licensing agreements with BioNTech. These agreements included upfront cash and milestone payments.

Since the other two companies on the slide marked as collaborators both have licensing agreements, we can infer there is a high chance that Matinas will receive a licensing agreement as well.

5. On June 7th, the CEO of Matinas, Jerry Jabour, gave a presentation at the LD Micro Invitational XII Conference. During the presentation, the CEO mentioned that Matinas is working on several deals, and that the BioNTech licensing deal was quote, “Over the finish line.”

In terms of canaries in the coal mine, this sounds like a pretty dead canary. CEOs, especially lawyers, don’t just go throwing statements like that. So, it’s reasonable to assume that the licensing deal is probably done. Jerry also mentioned that BioNTech wants to control the entire field of mRNA, so the agreement is likely to be on the larger end of the expected deal spectrum.

While it’s unknown how large the upfront cash payment will be, I think his statements at the LD Micro Invitational indicate it’s going to be big. $100 million? $200 million? Time will tell.

But while the deal might done in theory, it could take weeks to draw up on paper. A collaboration of this magnitude would require a lot of paperwork. Double and triple checking by both sides. Because if the licensing deal encompasses the entire field of mRNA, then it’s a lot more products than the deals Medigene and Crescendo signed.

6. At the same conference, the CEO of Matinas also mentioned they’re is seeing good pre-clinical results with their bone marrow program. While this has nothing to do with BioNTech, it’s just another indicator that LNC technology works and is effective.

So far, all we’ve seen are signs that LNC is working as intended, or even better than expected. All of this increases the chance that mRNA LNC vaccines are also a success. BioNTech knows this. They also know that if they can create a shelf-stable, orally administered, and possible more effective vaccine, then it’s good night Moderna.

Even if Moderna’s booster shot works well for future variants, are governments are going to want to buy needles instead of pills? Probably not. Especially since we can assume that BioNTech’s variant boosters will be equally as effective.

Moderna’s market share of Covid-19 sales could shrink dramatically, possibly even bankrupting the company. Without LNC, anything can Moderna does, BioNTech can do better.

7. Again, at this same conference, the CEO of Matinas said that their Chief Business Officer, Thomas Hoover, is headed to San Diego next week. He has more than 40 meetings planned, as well as a quick presentation.

The purpose of the meeting appears to be seeking partners for both MAT2203, and the LNC platform itself. If a buyout was in the works, they probably wouldn’t bother sending Mr. Hoover to have these meetings. So, it’s pretty safe to safe we’re looking at a licensing agreement when it comes to BioNTech.

Here’s the thing about finding partners to sell your products. If you’re desperate for cash, then you’re going to get a worse deal. If other companies know you’re about to go bankrupt, then they’ll lowball you. But if you know that you’re about to sign a monster licensing agreement with big pharma, then you can negotiate from a position of strength. You can save time by not even entertaining these offers.

This is the first time we’ve seen Matinas attend this conference with the purpose of finding a partner for their oral LNC amphotericin B (MAT2203). It’s reasonable to assume they wouldn’t send Mr. Hoover to negotiate from a position of weakness.

Check out the list of sponsors.

This conference is the real deal. Cohort 4 of the MAT2203 trials must be going great if they’re heading there to find a partner. It’s not like a potential partner is going to ask Mr. Hoover, “So, how is Cohort 4 going?” and he answers, “Lol, I have no idea.”

Matinas knows that MAT2203 works. The DSMB knows that MAT2203 works, otherwise they would have halted the trials by now. Small investors know that MAT2203 works because they’ve been following it closely since the stellar Cohort 2 results were released last year. Heck, BioNTech probably knows it works too, since both the CEO of BioNTech and Matinas have had multiple phone conversations.

What it all boils down to is this:

Given all the information available to the public, it’s fairly simple to connect the dots. And the image it paints is that a licensing agreement is inevitable. While nothing in life is 100% certain, this is about as close as it gets.

Matinas currently has a market cap of about $180 million. Given the size of the market at stake with a successful mRNA LNC Covid-19 vaccine, it’s not impossible that the upfront payment on a licensing agreement is larger than the current market cap. If this is the case, then Matinas could be weeks away from multiplying its share price several times. And it doesn’t sound like this is just a Covid-19 deal. BioNTech’s pipeline of mRNA products is pretty fat. They’re going after the flu, shingles, cancer, HIV, etc. This deal could be monstrous.

BioNTech has been doing their due diligence for at least the last 62 days. If they were going to pull out, it’s reasonable to assume they would have done so by now. There is no indication that this has happened, and multiple indications that they’re moving forward.

Don’t sleep on this opportunity. This is as close to a certainty as you’ll ever get with investing. Unless somehow this all turns out to be a catastrophic fraud, then a licensing agreement a big jump in Matinas’ share price is coming soon.

Very soon.

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