Matinas is Go-Flight for Rocket Launch

Disclaimer: This post does not constitute financial advice. Do your own due diligence before making an investment.

When I published this article on Sunday night, I had hoped we would see the MAT2203 cohort 2 trial data soon, but I didn’t think it would be less than eight hours later.

But that’s great. Because the data was amazing. All the metrics were great. Survivability was 95%, fungicidal activity almost doubled the primary endpoint, and the toxicity data was more beautiful than a cotton candy sunset.

Yet, somehow the stock closed up only 27%.

This is nuts. It should have been way higher.

Wall Street isn’t even valuing this company on the market potential for oral amphotericin (an 8B market), let alone the valuation for oral remdesivir, oral amikacin, or oral anything else.

(Hold up: Before you read this article you might want to read this one. And then this one. Done? Okay great. Let’s continue.)

There are thousands of drugs in the world. All of them have toxicity issues. Literally anything, even water, is toxic if you consume too much of it. That’s what’s beautiful about Matinas’ LNC technology. It can reduce toxicity while improving deliverability and efficacy.

The future for this technology is truly bananas. Historians could one day look back at the humans of 2021 and say, “Can you believe they used to inject toxic drugs directly into their veins? That’s insane. What a bunch of cavemen.”

So, what’s next? Hopefully not a buyout.

Yeah, it would be nice to wake up and find yourself 60% richer, but that’s not how major wealth is built. If you want to build an empire while making the world a better place, then you need to invest in great companies that will grow for hundreds of years.

Matinas has that potential. The licensing opportunities are limited purely by the number of toxic non-oral drugs. (And every year new drugs are approved.)

Management is probably euphoric. The cohort 2 data from MAT2203 is everything they could have dreamed of. If the champagne didn’t pop when they saw the data, then it must be against their religion to drink.

WHAT NOW?

Now we wait and watch the stock price go up. There are only 200 million outstanding shares. That’s nothing. If you were watching the stock on Monday September 13th, you would have noticed that someone was buying every share sold at the bid.

For a good chunk of the afternoon, the bid was $1.04, and the ask was $1.05. If someone sold at market, it usually wouldn’t hit $1.04, but rather some odd number in between, like $1.0457. These are algorithms run by hedge funds and large institutions. They’ve instructed their programmers to buy as much as possible. If you were sitting there hoping to get the bid price, you likely went home disappointed.

WHAT DOES THIS ALL MEAN?

It means Wall Street now has enough data to run cashflow simulations. MAT2203 is likely to receive early FDA approval. If that happens, Matinas would probably be required to run conformational studies and provide additional data. But that’s fine. LNC works. We’ve now got three major indicators that it works.

1. Cohort 1 data was great.

2. LNC remdesivir outperformed classic remdesivir.

3. Cohort 2 data was absolutely bonkers.

We haven’t seen any signs LNC technology is a scam, a flop, or a pipe dream. All we’ve seen are signs that LNC is a paradigm shift.

It’s quite possible that LNC is the future of drug delivery.

What I’m expecting to see next is…

…additional partnerships. Every chief medical officer should be looking through their drug portfolio and asking themselves, “Could LNC improve this?”

Gilead is the pole position to make an equity investment. They’ve seen the data from LNC formulations of remdesivir. If anyone is going to make an equity investment with milestone payments, it’ll probably be them.

This could take some time.

Matinas’ last public offering was at $1.55. That was in January of 2020. Now we have validation of the LNC platform. Management would be wise to let the dust settle. See where the share price ends up in a few weeks. Then we can start talking about selling off chunks of the company to big pharma.

For oral remdesivir, an equity investment of $200 million at a $6/share valuation could still be viewed as a lowball bid.

The best, and fairest way to approach monetizing LNC technology is with licensing fees. Want to see an LNC version of your drug outperform the classic version? Offer to pay for the trials, and then pay a licensing fee based on the size of the market.

I’m not a big fan of price targets, but if large pharma were to offer $20/share for $MTNB tomorrow. I would vote no.

For multiple reasons.

1. The value of LNC technology is incalculable.

2. Licensing fees could eventually generate $20/share, or much more, per year.

3. Biotech buyouts have been few and far between in 2021. Small caps have been in a bear market since February. Selling now would be selling into weakness.

If big pharma offered $20/share for Matinas, the share price would immediately jump close to around $19 anyway, giving anyone who wants out near that price the opportunity to do so.

For now, I am holding.

Everything is for sale, but it must be the right price. Given the breathtaking data from cohort 2 and the potential of LNC, anything less than $75 for Matinas is a back-alley mugging.

Long, and Hulk strong.

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