Hey. Good afternoon, everyone. Thanks for joining us here at the Leerink Partners Global Healthcare Conference. My name's Tom Smith. I'm one of the senior biotech analysts here at Leerink and it's my pleasure to introduce our next company, SAB Biotherapeutics, and their management team today represented by CEO Samuel Reich. Samuel, thanks for joining us.
Thanks for having me.
Sam, why don't you kick us off here with a little bit of a background for SAB for those in the audience who may be a little less familiar. I guess, you know, maybe a little bit of progress on 2025 and then what you're looking forward to in 2026.
Sure. SAB BIO is a clinical stage biotech company. Our lead asset, SAB-142, is a multi-specific T-cell engaging agent for autoimmune disease. It's currently in Phase IIb, a pivotal study in newly diagnosed type 1 diabetes patients. The drug SAB-142 is made off a platform which is called Tc Bovine, we're the only company in the world that can make a human anti-thymocyte globulin, which is what SAB-142 is, giving us long-term exclusivity. Our platform has trade secrets, patents, know-how, as well as no biosimilar path for this type of modality, giving SAB-142 long-term exclusivity. Type 1 diabetes is a multibillion-dollar major unmet medical need, a very big market opportunity. SAB-142 is positioned to be a best-in-class product in that space.
We are led by a management team with experience getting drugs approved and launching, commercializing drugs, as well as transacting companies. We think we have all the ingredients for creation of tremendous shareholder value in the years to come. In 2025, we announced positive phase I results from our asset, which validated the thesis of our program, which is that our drug, SAB-142, has the same mechanism of action as a molecule called Thymoglobulin, which is shown to be efficacious with significant safety advantages, making SAB-142 safer and redosable for commercial, the commercial profile of the drug. On that data, we were able to raise $175 million in a PIPE, which included Sanofi as well as other biotech specialist investors.
With that, we kicked off our phase IIb trial, which got underway by the end of the year, and we're excited to be executing on that trial this year.
Awesome. Appreciate the overview. Yeah, we'll go through number of questions on SAFEGUARD, which is the pivotal study that's underway. Maybe just take a step back and help us understand how SAB-142 is differentiated from some of the other T-cell modulators that are also in the T1D space. I think many investors are familiar with Sanofi's Tzield. You mentioned Thymoglobulin, which is rabbit-derived. How does SAB-142 differentiate from those?
That's a great question, those drugs are very important to us also to guide us as we develop our drugs. Tzield is a Sanofi drug they acquired from Provention in 2024, I think, which is approved today for Stage 2 type 1 diabetes, and we hope it'll be approved soon in Stage 3. It is a monoclonal antibody against CD3, which is present on almost all T-cells. That drug has been shown to preserve C-peptide, proving that it's efficacious. We hope it'll be approved, but it has not yet shown the ability to reduce HbA1c, which is another important endpoint for efficacy. Thymoglobulin, like our drug, is multi-specific, also known as a polyclonal, and that has both shown the ability to preserve C-peptide and reduce HbA1c and done that in multiple clinical trials.
Thymoglobulin has the same mechanism of action of our drug. It is encumbered by safety issues because it is a rabbit protein. It causes serum sickness, which has been determined to be an unacceptable AE in this patient population, and it also generates anti-drug antibodies in the majority of patients. The drug can't be redosed. However, the efficacy in two clinical trials is second to none. There's a tremendous amount of excitement and enthusiasm in the academic and clinical community for ATG. What we were able to do with our platform is make a human version of it. Because SAB-142 is the human version of Thymoglobulin, we have the same mechanism of action, which we showed in phase I. We do not cause serum sickness, and we can redose.
We have the great advantage of really showing we can rely on the efficacy generated by Thymoglobulin, and we've already proven in phase I that we have the advantages that we say we have. We go with high confidence into our current study, the SAFEGUARD study.
That's great. Yeah, let's dial in on some of the phase I data that you generated last year. 0% rate of serum sickness, like, obvious advantage over Thymo. Maybe you just talk about the importance of some of the PD-1 and TIGIT marker data that you observed and how that gives you confidence in your exhaustion profile and similarities to rabbit Thymo?
What we know from both Tzield and Thymoglobulin, as well as other agents, is that induction of T-cell exhaustion is what leads to tolerance. It's what leads to preservation of the organ, which in type 1 diabetes is the beta cells of the pancreas, which is where insulin is made. T-cell exhaustion is the clear mechanism that we want to initiate and have the drug sort of induce in the patient. We can look at that by looking at different cell surface markers or look at different markers that show that a T cell is exhausted. PD-1 is one of the markers. We have induced PD-1 exhaustion, which is lasting durable. TIGIT positive T cells are another one, and then cells carrying multiple markers.
We basically looked for the type of exhaustion markers that immunology knows indicate definitively that the T-cells are exhaust, and we have shown in every case that we are inducing durable exhaustion, and that exhaustion is what is associated with tolerance.
I think in that phase I study, you also showed a Treg sparing effect, which is different than what we've seen from other Tzield specifically.
Yeah.
How important is that to preserving beta cell mass?
The, you know, the scientific community believes it's the difference between reducing HbA1c and not. Tzield is a monoclonal antibody that does induce exhaustion, but it is not Treg sparing. The Tregs, which we know are essential for tolerance, that's what our own immune systems have to be tolerant to ourselves, are negatively impacted with Tzield. The sort of most empirical evidence for Thymoglobulin being superior to Tzield is that Thymoglobulin shows a reduction in HbA1c, whereas Tzield between Tzield and Thymoglobulin in our drug is Treg preservation. Thymoglobulin and our drug are able to induce counterproductive mechanism of action. We believe that's the difference that leads to superior efficacy with the multi-specific approach.
Got it. That makes sense. Let's switch gears, talk about SAFEGUARD, and this is a pivotal Phase IIb design, Stage 3 type 1 diabetes. Can you just give us like a high-level overview of the design? You have a part A and a part B, got multiple dosing arm. Like how did we land on the dosing, and how should we think about this part A versus part B portion of the study?
Sure. The SAFEGUARD study is a pivotal phase IIb in patients that have newly diagnosed type 1 diabetes within 100 days of diagnosis, and, greater than or equal to 200 picomolar per liter of C-peptide, which is the objective marker of beta cell mass and function, what we're trying to preserve. Ages five to 40, and they'll be broken into three arms, a higher dose, 2.5 mgs per kg, a lower dose, 1.5 mg per kg or placebo, and stratified by age in the adults, adolescents, and pediatrics to have approximately equal number of the three different age groups. The primary endpoint is one year C-peptide to show preservation compared to placebo. Sort of the first secondary endpoint we're looking at is HbA1c to show improved glycemic control.
We'll also look at other secondary endpoints, which include Time in Range, which is how much time a patient spends in the normal glucose range, which we can measure now because patients wear continuous glucose monitors. Frequency of hypoglycemic events, insulin use, are other secondary endpoints that we're looking at. The part A and the part B is a way to construct the patient population we wanna look at for efficacy. With the regulators, both in global regulators, the regulators require a certain amount of exposure in adults before you're allowed to study younger patients. We want the efficacy component of our study to have an equal distribution of adults, adolescents, and pediatrics.
To accomplish both, we have a part A, which is adults, so that we have that first grouping of adults segregated from the efficacy portion of our study, part B, so that we can have the right distribution of the different age groups in the efficacy analysis. That's the reason for part A and part B.
That makes sense. Remind us the dosing regimen that you're using and how that compares to Tzield?
Yeah. That's a huge differentiator. Thank you for reminding me. We believe based on the evidence from the clinical research to date that, and we certainly see from Thymoglobulin, well, Thymoglobulin is superior to Tzield, based purely on the fact that Thymoglobulin shows a reduction in HbA1c, whereas Tzield does not. In addition to that, Tzield requires 12 days of continuous dosing, 12 continuous days of dosing of the drug, whereas Thymoglobulin can be given in two days. Besides, you know, what it sounds like, which is two days sounds a lot better than 12 days, real-world, real-life experience is that 12 days has been a very tough sell.
Even in the real world, despite the condition and the, you know, diabetes being a serious disease, 12 days is a lot to ask of a patient, and it's a lot for them to get their heads around. Were the drugs, if the base case were to be the drugs were non-inferior, two days versus 12 days alone would win the market.
Maybe you could talk about, I know we just launched the SAFEGUARD study recently? We've dosed the first patient. Like how are we doing on enrollment progress? How many sites are activated? Like, where are we in the sort of, we're early days enrollment, but how is it progressing?
We'll probably give more explicit guidance maybe at our next quarterly report. Today, we're very pleased with enrollment. We're on track, according to our, you know, projections for where we wanna be this time this year. We're happy with our enrollment. We're encouraged by what we're seeing at the sites and the rate at which the doctors are able to get new patients into the study. We think that's 'cause there's a lot of excitement and enthusiasm, as well as just a lot of conviction around ATG, being an efficacious drug.
Yep. Makes sense. The study here is powered, I think it's a 40% difference in C-peptide at that 12-month time point. I guess, just remind us of some of the historical data that drove the powering assumptions. Are you powered to show benefit on those clinical secondary endpoints?
That's a good question. The TN19 study is the fundamental Thymoglobulin study that was conducted by TrialNet, which is a U.S. consortium of diabetes researchers, and published in 2019, Diabetes. That's sort of the foundational study and the study that got us to do our program, Human ATG. We share that data, that actual raw data, with whoever owns it, and we're able to use that data, we're enrolling the same patients, the same patient characteristics, to do the modeling. The diabetes community is pretty accurately able to predict how a placebo patient would perform based on certain characteristics, specifically age and time from diagnosis. We use that to determine, to make assumptions for powering. The study is 80% powered to show a 40% preservation effect of C-peptide.
Thymoglobulin has shown in the previous 2 trials a 50% preservation, which would be a 90% power. As far as the powering on the secondaries, it's not specifically powered, but based on the fact that we assume the effect size and the assumptions about the placebo group are same, it is sort of de facto expected to have statistical significance, based on the fact that HbA1c specifically was met in those patient populations. If we assume the same effect size and the same patient variability, we believe, while not specifically powered, the study will show stat sig on that endpoint.
Can you talk about the regulatory alignment, I guess, around the SAFEGUARD study? Is it your expectation that showing stat sig benefit on C-peptide alone would be sufficient for approval? Or do you feel like, based on the engagement that you've had, there would be a need for benefit on one of these secondary clinical endpoints that seems like historically has been kind of an issue? Yeah, maybe just describe the-
Yeah
The level of alignment.
There's kind of two parts to that answer. In terms of alignment with FDA, the FDA agrees with SAB that the SAFEGUARD study is a pivotal study. That protocol has secondary endpoints, which are the endpoints we all wanna look at. It doesn't specifically address whether C-peptide itself is sufficient. I would say the status quo today is that the FDA is looking for some additional benefit. I don't think it specifically has to be HbA1c. The status quo may change because our preceding drug, Tzield, has filed an sBLA in Stage 3, and they did not hit on any secondary endpoints. If Tzield gets approved in Stage 3 in the next month or couple of months, then the FDA will have set a precedent that C-peptide itself is sufficient for an approval, which is also what Dr.
Makary has said publicly, but we're waiting to see that definitive data with the Tzield decision.
There's been a number of media reports around the Tzield sBLA. They received one of these commissioner national priority vouchers. Some of the media reporting has suggested, like, the timeline's been a bit prolonged and delayed, perhaps some question marks, concerns, debate around the safety profile for Tzield.
Yeah.
Do you have a view, I guess, on approvability of Tzield? Are you guys expecting that to be approved on the basis of PROTECT?
We think from the information we have that it'll be approved. The global type 1 diabetes community believes C-peptide is the end all be all, and Dr. Makary has said that. Tzield has definitively preserved C-peptide. We don't have access to all the information. The safety package is a big component of it. While we can't know what happens till it happens, our feeling is that it will get approved, but we don't know for sure.
We will stay tuned. As we all are on this ever-evolving regulatory path and maybe saga for.
The only other thing I'd like to mention on that point, because a lot of people spend a lot of time talking about secondary endpoints in HbA1c, is that whatever happens, it's the total package.
Yeah.
It's everything about it, and it's not it missed or hit HbA1c. It could be safety. It could be... You know, so we don't know until we see it, but we believe C-peptide is definitive proof of efficacy. The KOL and the scientific community believe C-peptide is definitive proof of efficacy, we'd certainly like to see the FDA acknowledge that. We'd, you know, be very pleased if Sanofi gets approved.
Yep. I think that's a very important point. At the end of the day, it's a risk-benefit.
Yeah
... decision. We may or may not know the decision point of which side of the equation.
Yeah
... led to whatever the decision would be. Okay. I wanna ask you about how you think about the commercial opportunity in Stage 3 T1D, and I guess would contrast it a little bit. You've alluded to the Tzield initial launch being, I think, objectively slow and maybe objectively disappointing. There are a lot of factors that probably go into that. Obviously, the administration safety profile, we could talk about all of those, but one important thing, it's approved in Stage 2, and, like, these patients aren't inherently diagnosed necessarily, right?
Yeah.
It requires additional patient screening, and I suspect that's been a pretty big lift for Sanofi. Maybe if you could just talk about how you think about the Stage 3 opportunity and how 142 could slot in there.
Yeah. Maybe I'll open it by distinguishing between Stage 2 and Stage 3. To date, Tzield is only approved in Stage 2 type 1 diabetes. Stage 2 type 1 diabetes is really pre-diabetes. These patients are asymptomatic. They do not yet need insulin. They're not presenting with any symptoms, and they only are identified if they elect to get screened for autoantibodies, which is not universal, it's not done everywhere, and the average patient does not know that they should go and elect to get screened for autoantibodies. We've met siblings and immediate family members that were surprised that that was something that they could do, and they hadn't done it. These patients are very hard to identify, and it's estimated to be fewer than 10% of patients are identified in Stage 2.
Now, when we talk about type 1 diabetes, generally speaking, we're talking about Stage 3. That's type 1 diabetes. That is a patient who has been diagnosed and most likely needs to supplement with exogenous insulin to maintain blood sugar. That's over 90% of the market, and that's, like, 65,000 new patients in the U.S. alone today with no drug approved. This should be a very transformative and high-impact new drug in a major unmet medical need, which is autoimmune disease. If Tzield gets approved first, that's, you know, that'll be helpful, but we don't think that it's necessary.
SAB-142 will really transform what it means to get a type 1 diabetes diagnosis because there will be a medicine to offer these patients and their families that can change the course of their disease, which has never been an option available to patients and doctors. They've desperately been wanting something for many years, which is why the TrialNet trial that we spoke of is being conducted. Anodia conducts trials is 'cause there's a real sense of desperation in the T1D community for a medicine that actually treats the disease.
That makes sense. I wanna come back to your contrast versus the Stage 2 opportunity. Yeah, the Tzield experience I think was interesting because they inherently got approval there. That wasn't necessarily, I think, the goal from the outset. That was a function of the compelling nature of the TN10 study data.
Right.
As you guys think about indication expansion potential, like, are you contemplating moving into Stage 2 after Stage 3? Like, how do you think about that sort of life cycle management?
I think Stage 2 is essential. This is a drug that confers tolerance to beta cells. If we can capture a patient in Stage 2, which we want to, we have the theoretic possibility that that patient would be insulin free. Our drug could be redosed, the earlier we catch a patient, if we catch them before they need insulin, it's certainly possible that they may never need insulin and really change what it means to have a type 1 diabetes diagnosis. That market is small today, we believe that more and more patients will shift to getting identified in Stage 2 as therapies become available to them. There was really no reason besides peace of mind before Tzield to seek a screening. Stage 2 is very important to us.
I think very important to the diabetes world. It's something that we hope to be a, you know, kind of a fast follower from Stage 3. Just mention about cell therapy, a lot of times people see cell therapy as a cure because maybe a patient with cell therapy can be insulin free. Well, if you catch a patient in Stage 2 and preserve beta cells, that's really a functional cure. They will have never needed insulin, and if they have a durable therapy that they can take, may never need insulin. That's really kind of a very exciting opportunity to have huge impact.
Yeah. Totally agree on the potential transformative nature of that. I guess just coming back to, we get a number of investor questions around some of the emerging islet cell or cell therapy options. In a world, I guess, where you have 142 that's approved in Stage 3, like how do you think, I guess, 142 plays in a world of those cell therapies, assuming one or more of them are successful?
Well, there are millions of patients around the world who are beyond the point where a immunomodulator can help them. Cell therapies could really be life-changing therapies for those patients. We like Immunologists and the endocrinologists tell their colleagues and their peers and their families that a new type 1 diabetes diagnosis should be treated with an urgency, like an emergency, like an acute emergency. If we catch these patients early and preserve their beta cells, we would prevent the need for cell therapies, and over time, cell therapies would become obsolete, theoretically. If we're able to catch patients early and preserve their beta cells, they may never need cell therapy. I think that's a really important distinction.
There are millions of patients today who can benefit from cell therapies. They should be very important and valuable therapies. Over time, if we treat these diseases as an emergency and get them something to preserve their organ, at some point there won't be a need for cell therapies. Another point I'd like to make is that today, cell therapies, by and large use Thymoglobulin as standard of care and require Thymoglobulin. Those endocrinologists that do those therapies are already asking for SAB-142 because Thymoglobulin causes serum sickness and makes the patients really sick, which can actually even interfere with the procedure. The procedures get canceled in many of these patients. There's already inbound demand to replace Thymoglobulin 142, which is standard practice for every cell therapy today.
I wanna build on that aspect because thymo is used not just in the islet cell setting, but solid organ transplants. There's a number of other settings where it is part of the inherent standard of care. Like, how are you thinking about indication expansion beyond T1D and I guess specifically Stage 3 T1D?
Today SAB is a type 1 diabetes company, and at this stage of our, of our growth and maturity, we're focused on type 1 diabetes. The SAFEGUARD study is patients within 100 days of diagnosis. The first thing we wanna do is get more type 1 diabetes patients, so that's before they've been diagnosed, which we call Stage 2 today, and after 100 days. Kind of the next two immediate patient populations we want to go after is to get as many type 1 diabetes patients as possible. Later stage and earlier stage from where SAFEGUARD enrolls.
The next thing that we wanna look at, which would really be after the type 1 diabetes program, is like, you know, on its way to launch, is that SAB-142 is a tolerance-inducing immunotherapy. It is not specific to type 1 diabetes. What it does is induce self-tolerance in the autoimmune patient. Our next most sort of urgent indications would be big unmet needs in autoimmunity where there aren't great options and patient populations need solutions.
We think about things like I feel like you've outlined.
Celiac.
Yeah, celiac.
Psoriasis, derma.
Exactly. SLE.
Yeah.
I mean, these are potentially massive...
Yeah
... end markets. Like, how do we prioritize, you know, resource allocation and, like, development strategy...
Yeah
figure out what to go after next?
Like, we haven't come to that decision point yet, like I said, we're totally focused on type 1 diabetes today. When we get to the stage of SAB's maturity, where we're looking at those under indications, that'll be, you know, that'll be an undertaking that includes numerous factors, you know, the unmet need, the science behind it, what the competitive landscape looks like. We haven't gotten to that point yet. What we do like to do is communicate to the investor that SAB-142 goes beyond type 1 diabetes.
That makes sense. Wanna come back to, 'cause you alluded to this multiple times, and it is a important potential differentiating factor, the ability to redose. You do have a redosing cohort that came out of the phase I experience. I guess what's your sorta base expectation for how that plays out commercially in Stage 3 Type 1 Diabetes? Like, when you think about the trigger for redosing, like, how do you think about that now, and how do you think about potentially pricing around a, a potential chronic redosing regimen relative to Tzield? They generated some redosing data. They didn't see much of a benefit with the redosing.
Yeah.
Let's assume that we do see a redosing. Like, how do we think about pricing for a potential chronic therapy like that?
We believe this is an every six month therapy, and that patients will take this every six months as long as we can preserve beta cells. The pricing would be based sort of on annual cost of treatment as opposed to a one-time-only pricing model. I mean, one thing we know today is that so far Tzield is priced at $200,000, we believe will be superior and therefore you can command a premium. We haven't done extensive pricing exercises yet. We just have that sort of guideline to work off of now.
That's helpful. I wanna come back to the unique manufacturing aspect and just ask you about the cost of this because it is proprietary manufacturing. How do the cogs compare to, like, a typical biologic?
Well, I can tell you that we can probably make a dose of this drug for about $100 at scale, probably just under $100. You know, we're in the disease area, the sort of the rare drug you see that Tzield is priced at $200,000. We're in that sort of $100,000 ± $25,000 annual cost of treatment range with a cost of goods of about $100.
Sounds pretty good. Just in the last 30 seconds or so that we have, I just wanna ask you, 'cause you mentioned the financing, just talk about cash runway, I guess, like, what is explicitly funded and how we think about, you know, next steps. Like, we're funded through SAFEGUARD. Are we funded through launch?
Yeah. Today, with cash on hand, which was $144 million at the end of 2025, we are funded through turning the SAFEGUARD data card with a year runway. We have to mention the fact that we have $175 million in enrollment warrants, which are cash warrants, and they strike at $1.75. Depending on who you talk to, that's something to consider and in which case, in that scenario, we're funded through launch.
Got it. All right. Perfect. Well, we're up against time, but thank you, Sam, for joining us.
Thank you.
We'll stay tuned to the SAB story.
Thank you for having me.
Thanks.
It's a pleasure.
Likewise.