Good morning, and welcome to SAB Bio's conference call to discuss third quarter 2026 financial results and business updates. Listeners are invited to review the full text of the forward-looking statements from this morning's quarterly earnings press release. Company management may provide projections during this call, and actual results could differ materially due to several factors, including those outlined in the company's latest filings with the SEC. Currently, all participants are in a listen-only mode. Following management's remarks, we will open the call for questions. This call is being webcast live and can be accessed on the investors section of SAB Bio's website at ir.sab.bio, where a replay will be available. I'll now turn the call over to Samuel Reich, Chief Executive Officer of SAB Bio.
Thank you, operator. Good morning, and thank you to everyone joining us for our third quarter 2026 earnings call. I'm joined today by Lucy To, our Chief Financial Officer, who will review the third quarter financial results. I'm also joined by Eddie Sullivan, our Co-Founder and President, and Alexandra Kropotova, our Chief Medical Officer. As we begin November, we recognize Diabetes Awareness Month and focus attention on the millions of people living with Type 1 diabetes. We remain committed to advancing new medicines with the potential to change the course of the disease and improve the lives of those affected. That focus continues to drive our work at SAB Bio, and we're pleased to have you with us today to review the progress we made during the third quarter.
We continue to execute on our priorities for SAB-142, with strong momentum in SAFEGUARD enrollment and the FDA granting Fast Track designation to SAB-142 for the treatment of new-onset Stage 3 Type 1 diabetes. For context, SAB-142 is a fully human anti-thymocyte immunoglobulin designed to preserve insulin-producing beta cells in order to slow disease progression in autoimmune Type 1 diabetes. It was developed using our proprietary TC Bovine platform, which allows us to generate fully human multi-specific antibodies without the need for human donors. Because SAB-142 is fully human, it has the potential to overcome key limitations of non-human approaches and enable safe redosing over the long term. We believe SAB-142 represents an opportunity to help people with Type 1 diabetes redefine what a Stage 3 diagnosis can mean.
SAB-142 is currently being evaluated in two clinical trials, the registrational Phase IIb SAFEGUARD study for those newly diagnosed with Stage 3 T1D, and the investigator-led phase III PRISE study for people up to two years from a Stage 3 T1D diagnosis. Let's start with an enrollment update for SAFEGUARD. The performance of our clinical team this quarter has been exemplary. In September, the study's Data Monitoring Committee approved the final step-down to children ages five to 11, helping to further accelerate enrollment. We continue to see strong interest in SAFEGUARD from both patients and investigators, and we're excited to share that the adult and adolescent cohorts are now fully enrolled and closed for screening. With that, we are reaffirming our guidance to complete enrollment of SAFEGUARD in Q4, with top-line data expected in the second half of 2027.
Building on that progress, the PRISE study expects to dose the first patient this quarter. There are seven clinical sites planned across the U.S., Europe, and the U.K. PRISE is an important extension of the SAB-142 clinical program, as it would potentially allow a future label expansion for SAB-142 to T1D patients up to two years from a Stage 3 diagnosis. As a reminder, PRISE is an investigator-led study supported by a grant from Breakthrough T1D and co-funded by SAB Bio. We are grateful to Breakthrough T1D for its support and to Dr. Michael Haller at the University of Florida, who serves as the study's principal investigator. We also want to recognize Dr. Chantal Mathieu at UZ Leuven and Dr. Timothy Tree at King's College London as co-principal investigators for their important contribution to the study.
Beyond our clinical progress, we reached an important regulatory milestone in October when the FDA granted Fast Track designation to SAB-142 for the treatment of new-onset Stage 3 Type 1 diabetes. This designation is intended to facilitate the development and expedite the review of therapies for serious conditions where there is an an unmet medical need, with the goal of bringing important new treatments to patients earlier. For SAB-142, this designation gives the program some serious aura, and importantly, it provides valuable procedural benefits as we advance our program. These include opportunities for more frequent meetings and written communications with the FDA, eligibility for rolling review of a future BLA, and potential eligibility for Priority Review if the applicable criteria are met.
While Fast Track designation does not change the FDA's standards for approval or ensure that SAB-142 will ultimately be approved, we believe the benefits are meaningful as we move toward top-line data. We will continue to work closely with the FDA as we advance the SAB-142 clinical program, and we believe this designation represents meaningful progress toward our goal of bringing SAB-142 to people living with Type 1 diabetes as quickly as possible. With that, I will hand the call over to Lucy To, our Chief Financial Officer, for a recap of our third quarter financials.
Thanks, Sam. We ended the third quarter with $205 million in cash equivalents, and investment securities as of September 30, 2026. We maintain a strong cash position and project that our existing cash balance will fund our operations through 2028. This total includes $13.4 million in gross proceeds received in the third quarter from the exercise of our previously issued enrollment and data release warrants from our July 2025 PIPE. R&D expenses were $18.1 million for the third quarter of 2026, compared to $9 million for the same period in 2025. The increase is primarily driven by ongoing clinical trial costs and related headcount to support the advancement of SAB-142 through the registrational SAFEGUARD study. R&D expenses include non-cash stock-based compensation expense of $3.9 million for the third quarter of 2026, compared to $0.5 million for the same period in 2025.
G&A expenses were $7.8 million for the third quarter of 2026, compared to $3.7 million for the same period in 2025. The increase is primarily driven by personnel-related costs, including non-cash stock-based compensation. G&A expenses include non-cash stock-based compensation expense of $3.6 million for the third quarter of 2026, compared to $0.3 million for the same period in 2025. Other income was $3.6 million for the third quarter of 2026, compared to $58.1 million for the same period in 2025. The decrease primarily reflects the change in fair value of warrant liabilities recognized in 2025. As a result, net loss was $22.3 million for the third quarter of 2026, compared to the net income of $45.4 million for the same period in 2025.
Overall, we reaffirm our position to support SAB-142's clinical development in the SAFEGUARD and PRISE studies through key milestones while preparing for commercial readiness for SAB-142. With that, I can turn it back over to Sam for closing remarks before we open the call for questions.
Thanks, Lucy. We're pleased with the progress we made during the third quarter and enter the final months of the year with a clear focus, completing enrollment in SAFEGUARD and continuing to advance SAB-142 toward top-line data. We're incredibly grateful to our team, our investigators and clinical collaborators, the patients and families participating in SAFEGUARD, and the broader diabetes community. Their commitment and engagement continue to drive our work and reinforce the importance of developing new therapies for people living with Type 1 diabetes. As we look to 2027, we're excited to move toward top-line data from SAFEGUARD while continuing to build the capabilities and infrastructure needed to support SAB-142 over the long term. We believe SAB-142 has the potential to meaningfully change the treatment of Type 1 diabetes, and we are focused on delivering on that promise.
We look forward to sharing our progress as we continue advancing SAB-142 across our clinical programs and executing on our strategy. With that, we're ready to take any questions.
Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. The first question is from Michael Yee from UBS. Please go ahead.
Hey, guys. Good morning. Congrats on the progress on enrollment. As we think about the data ahead next year, could you sort of comment or reiterate your framing of expectations on that result in terms of C-peptide and A1C and how important each of those are to hit for differentiation to TZIELD? Secondly, given that TZIELD now has a new Stage 3 indication, while we've been talking with different docs, what are you hearing out there? What are you seeing? Is that perhaps a pretty good indication of what the opportunity could be, although it's still early there? Thank you.
Thanks, Mike. I'll answer the second part first and then hand it to Alexandra to answer the first question. The second part on TZIELD, we're very encouraged by what we're seeing with TZIELD. The uptake in the community shows the importance of new medicines, and it's paving the way and establishing a pattern with doctors and patients to get treatment, to get a prescription, to preserve the pancreas when the patient is diagnosed. So we're encouraged by what we're seeing, and I think it bodes well for SAB-142, as we believe strongly that it's a competitive product with fewer days of dosing. We'll see with the results on the efficacy, but also will overall have a better profile. So I think everything we're seeing with TZIELD is good news for the field and for SAB-142.
For the first part, I'll hand it over to our Chief Medical Officer, Alexandra, to answer the question.
Thank you very much, Sam. We are very hopeful about our upcoming data release next year. Of course, the primary endpoint of the preservation of the beta cell function, as measured by the area under the curve C-peptide, is our primary endpoint, and we will be reporting the results on that, where the statistically significant results versus control arm will guarantee us the accelerated path to the approval for the drug. ATG is a clinically validated mechanism of action where previous multiple clinical trials showed the important improvements in the glycemic control needed for the full approval of the medications in the disease-modifying therapies. We will be releasing the data on the glycemic control as well, based on the HbA1c and the continuous glucose monitoring.
Now, the third component of a very important differentiation profile of the SAB-142 versus TZIELD is the low immunogenicity due to the full human nature of the antibody that will allow the drug to provide the disease-modifying therapy over a lifetime of the disease of the patients, where the product can be redosed to continue maintaining the C-peptide and preserving the residual beta cells, not only over one or two courses, but for over much longer periods. So immunogenicity data and the safety data associated with the long-term redosing will be part of our top line as well.
Great. Thanks.
The next question is from Ellie Merle from Barclays. Please go ahead.
Hi, this is Teja Song for Ellie. Thanks for taking our question. My first one, just for the study in the patients two years from diagnosis, could you expand on just some of the different cohorts of patients across that two-year timeframe and what you're looking to see in each of those? Then I have a follow-up.
Sure. It's a sister study to the SAFEGUARD study, but the protocol is exactly the same with one exception, which is the time from diagnosis. One cohort is age-matched from the SAFEGUARD population. That's effectively the control, and that's patients within 100 days of diagnosis. One cohort is from 100 days to 365 days, which is that window out to a year, and what we call cohort three, or the third cohort, is from one year to two years. The importance of that and that data is to prove that the thing that matters most with a patient is the amount of beta cells they have and our ability to preserve those.
The T1D community and SAB want as many patients as possible to be able to get access to SAB-142, and the PRISE study is designed to show that we can provide a benefit to patients up to two years from diagnosis.
Great. Just a quick follow-up on timing. When could we expect to get data from any of these cohorts, and how could that be used to support a label expansion or inform a registrational trial in those various populations?
Well, on the timing, I do not know that we are guiding to a specific time yet, as it is an investigator-led study. I think we would expect it to be subsequent to SAFEGUARD data, but we will see, and we will keep you posted on that. As far as the label, pending good outcome, we would hope to and have the potential to have time not be a basis for diagnosis and just beta cells. So if a patient with Type 1 diabetes has adequate beta cells for preservation, there is a possibility that that might be that is all required for being able to get treated and covered.
And maybe if you step it back to just one step more conservative, perhaps, is up to two years from diagnosis, which will markedly expand the available total addressable market, as well as have the ability to increase market penetration by not having this kind of a gun to the head of a patient with, "You have to get it now, or you are not going to be able to get it.
Yeah, really helpful. Thank you.
You are welcome.
The next question is from Roger Song from Jefferies. Please go ahead.
Hi, guys. This is Cha Cha on for Roger. I was hoping that you could give us more color in regards to the September DMC approval. Can you just share more on what safety parameters were particularly important in supporting the expansion to the pediatric population?
Sure. I'll let Alexandra answer that.
Thanks, Sam. We have the independent Data Monitoring Committee that has been a part of the SAB-142 development program for over the last two years. The DMC consists of one adult endocrinologist and two pediatric endocrinologists, along with the independent biostatistician. Four pre-scheduled, predefined DMC meetings, cumulative data for the SAB-142, which means that all data that were accumulated from the beginning, the very first patient enrolled in the trial, all the way until the DMC scheduled meeting were provided. The data were provided to the DMC in an unblinded fashion. It means that the DMC committee saw the data by treatment arm versus control. That's all available safety data across populations, broken also down by the age groups, adult versus adolescent and versus pediatric population. We had the DMC meetings that approved the step-down as planned without any delays, indicating that the product behaves very consistently.
There is no new safety signal identified in the ongoing SAFEGUARD trial. We are very, very pleased with how the product behaves, and it is, again, a very, very consistent safety profile across all age groups.
Thanks, that is helpful.
The next question is from Yatin Suneja from Guggenheim Securities. Please go ahead.
Hi, good morning. This is Iris Gao on for Yatin. Thank you for taking our questions, and congratulations on the progress with both studies. My first question would be, is there an update on how many patients have been redosed so far, and is the drug still clean on ADA? My second question would be about, how does the PRISE study affect the burn rate going forward? Thank you.
We haven't disclosed to date how many patients have been redosed, but it's going according to plan. The second part was, I'm sorry, could you repeat it? I didn't hear.
Oh, yeah.
The second part of the question.
Yeah. How do you expect the PRISE study to affect the burn rate going forward?
We had included that study in our budgeting process, so the burn as guided has accounted for the PRISE expenses and doesn't change.
Thank you.
The next question is from Thomas Smith from Leerink Partners. Please go ahead.
Hey, guys. Good morning. This is Brian on for Tom. Congrats on all the progress, and thanks for taking our questions. First, given adult and adolescent cohorts here are fully enrolled in SAFEGUARD, can you comment on if there's anything notable in the baseline characteristics of the patients in these cohorts, relative to your expectations? Then we have a quick follow-up.
I'll let Alexandra answer that.
Our baseline characteristics for both cohorts are comparable to the baseline characteristics of the respective age cohorts in previous trials, TN-19 and MELD-ATG. The data is very consistent, again, even at the baseline.
Got it. Thanks so much. Our second question, just on the PRISE trial, understanding that in SAFEGUARD, we needed to have that step down from adults to pediatric patients. Can we expect a similar dynamic in PRISE, given at least some of the overlap in patient population? Or can you begin enrolling those pediatric patients once the study begins recruitment, given the safety data you've generated to date? Thanks so much.
Yeah. Excellent question. Yes, we are starting enrollment in the PRISE-hATG study with the early age cohorts, considering that we already have a very significant amount of the safety data accumulated through the SAFEGUARD, and the DMC, independent DMC committees across the program. It's the same DMC who already has seen all the data from the SAB-142 in previous trials, will be guiding and monitoring the safety in the PRISE.
Great. Thanks.
The next question is from Samantha Semenkow from Citi. Please go ahead.
Hello, this is Ben on for Sam. Thanks so much for taking the question. Can you describe the level of physician interest in the PRISE study? What kind of feedback are you receiving based on the site interactions? Then I have a separate question, if I may.
Yes. Physician interest is very high. I think that we mentioned that Dr. Haller at University of Florida, Dr. Chantal Mathieu in Belgium, and Dr. Tim Tree at King's College proposed the study design because of the tremendous interest. If you can imagine that both all the clinical research done with immunomodulation, as well as now the first approved therapy, TZIELD, limits a patient's ability to get dosed to the first up to eight weeks. The SAFEGUARD has been the most inclusive, up to 100 days so far. There's a huge pent-up demand and frustration, both at physician level and the patient level, of people who are being excluded from the ability to get therapy or participate in clinical research. So, interest is high, demand is high, and it really is inbound interest from the T1D community and the academic community to SAB, that we're gladly collaborating with and accommodating.
And then, turning back to SAFEGUARD, what is the pace of the pediatric screening and enrollment? Is it tracking with your expectations?
Yes. It's good. We're pleased by how it's going, and we're reiterating that we expect to complete enrollment this quarter.
Thank you.
The next question is from Keay Nakae from Chardan. Please go ahead.
Good morning. With respect to PRISE, the Cohort C patients, how do you It's not clear to me from the inclusion/exclusion. How do you best handicap which patients at that duration of onset might be best suited to show a positive result?
I think it's all about C-peptide at baseline. It's the same study design as SAFEGUARD. The only difference is that time from diagnosis. So, the amount of C-peptide, which meeting the inclusion criteria for baseline C-peptide is that. Alexandra, do you have anything to add?
The additional parameter is the age groups. Similar to SAFEGUARD, we have predefined parameters for the sample size across the adult, adolescent, and pediatric population in approximately similar one-third of each population fashion, since the disease progression may be dependent on the age as well. So, baseline C-peptide and age are two parameters that participate in the stratification randomization at the baseline of the PRISE-hATG participants.
All right, thanks.
Next question is from Seema Sheoran from Rodman Financial. Please go ahead.
Hi. Thank you for taking my questions, and congrats on the progress. In April, you presented impressive four-patient data, where three patients described as super responders, showing C-peptide levels above baseline at 120 days, at four months. My understanding is that this cohort is not receiving additional doses, whereas SAFEGUARD includes re-dosing. I am just curious to know how C-peptide levels have evolved with longer follow-up in these four patients, and what that suggests about the durability of response without re-dosing. Thank you.
The data we presented from the phase I study was the complete dataset. The study was 120 days long. That was the last study visit, and so we have not collected data beyond that.
I see. Okay. Helpful. Thank you.
This concludes the question-and-answer session, as well as today's teleconference. You may disconnect your lines at this time. Thank you for your participation.