SAB Biotherapeutics, Inc. (SABS) October 20, 2026 Conference Transcript

Great. Okay, well, let's go ahead and get started with this session, Developing Biological Systems as Therapeutics. My name is Kane Akai. I'm the Director of Research. I'm one of the Senior Biotech Analysts at Chardon. Joining me for this discussion is Rich Kincaid, CFO of Helios, and Sam Reich, CEO of SAB Bio. I think the common theme here is that both companies are developing very complex biologic therapies, but in a scalable manner. Rich is focused on cell therapies. SAM is an antibody, a polyclonal antibody with a very unique manufacturing setup, but both designed to be scalable and economic. So, Rich, maybe let me start with you. And as a cell therapy, maybe describe the basic differences between your multipotent adult progenitor cells and pluripotent stem cells that people are maybe a little more familiar with.

Well, our MAPCs don't differentiate in anything. So it's an end-state cell, right? It's the basic difference. And so we're putting it into the body in an IV and, you know, countering acute inflammation. And so the cells don't survive for that long. it's two to three days but their impact goes beyond that in terms of dampening down that inflammation and also the reparative impact that they have thereafter.

And in the your initial indication for ARDS tell me you know what the role they play and in terms of that inflammation.

Well it's like the homeostasis drug and so in the context of ARDS there's this acute inflammatory cascade. It's happening in the lungs. Our cells, when we infuse them, we infuse them in an IV. This is an allogeneic cell therapy. It's frozen, off the shelf. We thaw it, infuse it in an IV. It's very drug-like, and so it takes, call it 30 to 60 minutes to get it into the patient, and on the first pass, it just physically goes to the lungs, and so it's there at the site of the acute inflammation and it's going to work through multiple inflammatory cytokines t-cells neutrophils macrophages and it's going to convert those from a pro-inflammatory type to an anti-inflammatory one or to a neutral environment and restore homeostasis so in ARDS these patients are mechanically ventilated they're effectively drowning on their own fluid in response to this this inflammatory cascade and we showed in our phase two studies that we can get patients off a ventilator much faster we can reduce mortality and we do that by means of converting that inflammatory environment to one that's more one of homeostasis and we see the alveolar edema subside right the patients can breathe on their own again we get the ventilator out faster we reduce their risk of mortality improve their quality life.

Okay, and you mentioned, you know, we're talking about algyneic therapy as opposed to autologous, so almost by definition that means that, you know, as a more off-the-shelf product, perhaps there are huge manufacturing scalability advantages, but specifically for you folks, when you acquired the assets from AtherSys, they were actually quite far down the road in terms of effecting these manufacturing advantages. So maybe talk about what you've got and where you're currently at in terms of your manufacturing.

Thanks very much. Yeah, so atheracist was rather visionary in the development of the therapeutic platform and in particular with respect to manufacturing. And so for those of you who follow cell therapy, you will know that manufacturing is an extraordinary challenge to make a living medicine at scale with a reasonable cost of goods the same way, extremely high-quality control, make it the same every time, all the time, is not straightforward, right? And atheracists leaned in and they spent an extraordinary amount of money, time and effort at developing large-scale bioreactor-based manufacturing for allogenic stem cells. We inherited that, right? And, you know, I think, knock on wood, but it's thanks to their largesse, in effect, their vision, right, and being early at spending a lot of money on this stuff, combined with some grant money we now have from the Japanese government, you know, we have sort of hundreds of millions of dollars of value that we're able to lean on for large-scale, you know, commercially viable cost of goods, sell product. So this was made in 3D bioreactors several years ago as they transitioned from 2D to 3D at Lanza in Singapore. That's the process we're commercializing with in Japan, and so we are going to be getting an approval in Japan in ARDS. It's a conditional approval. We've transitioned that manufacturing process using a Sartorius 50-liter bioreactor, for those of you who follow the space. but with our proprietary process and we have that now up in a suite at Moneris in Yokohama and that's a process that out there's just developed right we've taken ownership of it but they also built up to 500 liter bioreactors same Sartorius platform is much larger scale process is a bit different but we're now putting in place a commercial manufacturing facility in Kobe Japan I like to joke with people who are Japanophiles, like there's Kobe beef and now there will be Kobe stem cells here soon where we're funded by the Japanese government to create this large-scale 500-liter bioreactor commercial facility in Kobe. Cost of goods at 50-liter bioreactor stage is commercially viable, right? and so we can make call it a thousand doses a year in that suite that we have up at Moneris you know we can scale it out if we need to this is for Japan commercialization it's plenty in the near term we haven't disclosed the cogs but it's reasonable and we can make a margin on it and so you know in cell therapy it's a question that you all need to ask cell therapy peers of ours is you know what is it what's the commercial profile of the product like we happen to be in a really good position because of that but the 500 liter process, that facility is being set up to make 40,000 doses a year. One suite makes 5,000 doses a year. Cost of goods drops by two-thirds or more when we go from 50 to 500. And that's all really, again, thanks to AtherSys, and they spent hundreds of millions of dollars, $653 million on the platform. We acquired that through a bankruptcy process for $2.25 million, a dip loan we made back in early 2024. So we're counting our blessings that we're in that position. And I think efficacy matters a ton, obviously, and we showed that, a strong indication of that in these phase twos. But in cell therapy in particular, manufacturing is really mission critical.

And as you mentioned, you're on a path to getting an equivalent of an accelerated approval in Japan for ARDS. but maybe talk about the advantages of being a Japanese-based company within a company that views itself as the leader in regenerative medicines and maybe highlight some of those advantages and why that leads you to be so well-positioned to get this accelerated approval for ARDS.

That's a great question. I think Japan is leading the world in self-therapy development today in terms of the number of products that are being approved and commercialized you know we started off as an IPS cell company and hence you know your question about fluoropotent stem cells versus versus these map sees that we're developing and so we were an early leader in the space this is before dr. Yamanaka won the Nobel Prize the first IPSL derived product put into patients in the world was us that was rp cells in amd patients back in 2013 um we um and so japan is kind of the land of ips cells as people here probably know well um but um the um there are other products that have been approved there too right so there's sort of a degree of regulatory support and path that helps us helps one get an early approval in cell therapy that's established it's been around for a long time and I think it's being optimized you know there's there's funding multiple sources of funding for both manufacturing we got a 50 million dollar grant for this 500 liter facility there's more funding I think emerging for global clinical studies in cell therapy so there's sort of a promotional industrial policy in Japan that is highly cell therapy favorable, that is probably differentiated versus the US. I think the things that we think about in terms of our business advantages and path, and like how do we optimize? is you know japan is it has a lot of cell therapy um talent a lot of strong engineers scientists on the manufacturing side we're doing it there first because we're commercializing there first we're able to do it more cheaply dollar guns super weak there's been like multiple decades of very little inflation there and so just to give you one example like one of the reasons why we moved our manufacturing from lawns in singapore to moneros in yokohama it's like a third of the cost right to manufacture their lawns is expensive but the lawns is great right but they did a good job but they couldn't do it at the cost that we can do in Japan just because of the labor cost is very different their technical acumen very high and you see our burn like it's it's far less than what it would be if we had the equivalent business in the United States so it's all those things regulatory path funding from the government industrial policy cost of doing things at an early stage, but we're under no illusions. The market we need to ultimately focus on is the United States, and that's why we're running a global phase three study.

Okay, so maybe say over the next 12 to 24 months, what are the key milestones that investors should look for the company to achieve?

Sure. So right now, there's a lot to Helios, but the focus is on ARDS, and it's on getting an ARDS approval and we have to get a filing done to get an approval and so while we have the path cleared for those who do cell therapy or no cell therapy getting to a certain place with commercial manufacturing is critical to be able to file and get your approval and so we've been in that for months we did move sites from Singapore to Yokohama to Marist and we've got the process up we're in the midst of some runs now to create the data that's going to take us into that filing. And so in the coming months, you'll see us file, after we file, nine months to approval. It's an orphan drug in Japan. There are 28,000 patients a year in Japan, and so less than 50K is orphan. And you'll see us launch the drug. And so that's the Japan commercialization path. And so you'll hear from us on manufacturing readiness. You have to do process characterization along the way. Another thing we inherited from athrosis was very strong analytics, and so the characterization of the cells, the potency assays that we have, two potency assays, we're in the advanced class and we're just getting it ready for commercial. So while that's happening, you're going to see us, we initiated this study, we've initiated in Japan, we're going to open up other geographies, other sites. Ultimately, our phase three study is going to be about 80 sites globally. this is in pneumonia induced ARDS it's going to be heavily enrolling in the United States we'll have sites in the US websites in Europe websites in Korea Taiwan Australia I was in Shanghai recently we may open up a few sites in China but there's there's a set of milestones around that study as we make progress in it you know there are other things that are going on our business but it's really all hands on deck on those two things move the ball forward on to filing to approval to launch successful launch and and move the study forward all right well great well sam

let's switch to sab um again let's start with your manufacturing because it is so unique you have a herd of genetically engineered cows are able to produce fully humanized polyclonal antibodies so talk about how that's all set up and then we'll talk about your lead indication and type 1 diabetes okay we'll start with the class of compounds because it's not the most you know commonly discussed class of compounds there's a IVIG represents about 40 commercial products US with US approvals and over 20 billion in revenue and it comes into two categories fully human IVIG which comes from human plasmid owners and some of the companies that develop those drugs and sell those drugs or CSL, Griffles, Decada, ADMA has come along and they all require human donors and the drug application or therapeutic areas are limited to what you can get from human donors. And then there are about 12 IVIG based drugs that come from animals and animals are used because you can vaccinate the animal and have their IgG population be targeted and have a specific therapeutic area. The notable one there is thymoglobulin which is a Sinope product and is the standard care for organ transplant. The issue with animal IVIGs is they can only be given once, they make the patient sick, and it's kind of a one and done, and that serum sickness or that adverse event has to be outweighed by the benefit of the drug, so often those are catastrophic sort of situations. Our platform allows us to make human IVIG that's targeted, and that is a genetically engineered cow that is our animal and that cow makes human IVIG so we can vaccinate the cow in the case of antithymocyte globulin with human thymus purified the IVIG from the plasma of those cows and now we have a fully human IVIG and the platform itself is a trans-chromosomic cow that we own that does not make bovine IVG. It makes IVIG or IgG. It makes human IVIG.

Okay, so your initial indication, again, type 1 diabetes, and here, I think what's great about this particular program is there's a version of ATG, the rabbit, that actually has shown quite good results. And so maybe let's start there. Let's talk about what has been proven with rabid ATG, and then how your fully humanized ATG simply improves upon that.

Sure. So in type 1 diabetes, as a first-line therapy, we want to preserve the organ. It's an autoimmune disease. The beta cells in the pancreas, which are being attacked by autoantibodies in the type 1 diabetic patient, and the patient is losing their ability to make insulin their own insulin to the point at which they need exogenous insulin which is classically known as clinical type 1 diabetes are now called stage 3. Various companies and certainly academia and the patient advocacy groups have been looking at immunomodulation and type 1 diabetes for for decades and the most promising compound with the best data is a rabbit antithymocyte immunoglobulin, which is thymoglobulin from Sanofi. It has proven itself efficacious in multiple studies, and the endpoints which demonstrate that are preservation of C-peptide, which is the body's own endogenous insulin production, as well as reduction in HbA1c, which is showing that those patients with their own insulin have better glycemic control than a patient on placebo. And so that has been shown with thymoglobulin in two separate statistically significant randomized double-blinded trials, one is called TN19, one is called MELD, which was recently published in Lancet. And so there's a tremendous amount of efficacy, enough to get the drug approved, demonstrated by this rabbit antithymocytic immunoglobulin, but because it's rabbit, it's foreign IVIG, it cannot be redosed. this is a chronic disease which requires redosing and it also has adverse effects which may not be acceptable in T1D where they're perfectly acceptable in organ transplant and T1D Sanofi at least has made the decision not to commercialize antithymocyte globulin and in fact to go with a different product which is called T-Zeal. So this is where our cow can solve a problem and we have a highly de-risked approach because we can make the human version of a drug we know is efficacious We've already demonstrated that as a human IVIG it can be redosed and it doesn't cause serum sickness so it has a more palatable and acceptable safety profile and this is where our cow allows us to solve a problem which is that animal IVIGs are not safe enough or redosable for certain applications. So we know rabid antithymocyte globulin works. it's non-controversial firmly established and demonstrated by the data but it's not safe enough and it can't be redosed we make an antithymoside globulin in our cow which we've demonstrated has that same activity which is proven to be efficacious and we can redose and we can give it safely okay and maybe you have phase one data and maybe just talk about what you were able to see in the cohort of diabetic patients and then the ability to redose in healthy volunteers? Yes. So we did a pretty substantial phase one, which I think had over 80 subjects and patients overall. We dose escalated, and most of the patients were adult healthy subjects, so they did not have type 1 diabetes. And in those adult healthies, we showed that the drug didn't cause serum sickness. We demonstrated that the drug could be redosed safely and then we added a patient cohort. So we looked at a small group of patients with type 1 diabetes and the patients that got our drug had preserved C-peptide. In fact, on average had absolute increase in C-peptide. So in a small group of patients in an open label fashion, we did show proof of concept, which is that the patients that got our drug had preserved C-peptide, which is the primary endpoint, and that all went to complement the fact that in all the adult healthies, we showed that our drug has the same mechanism of action as thymoglobulin, which is known, which has been proven to be efficacious. Okay, so you're now enrolling in potentially registrational phase two safeguard, and maybe quickly just outline the study design and the the primary endpoints so the safeguard study which has been enrolling this year and is near completion of enrollment is a pivotal study it's called the phase 2b but it has registration of lead points we have agreement with FDA that it is a registrational study it is 159 patients broken into three cohorts a higher dose a lower dose, and a placebo, one-to-one-to-one. These patients are newly diagnosed with type 1 diabetes ages 5 to 40. The primary endpoint is C-peptide, where we intend to show preservation of C-peptide versus placebo, and that shows that the drug is working. We're preserving the organ. We're preserving the patient's ability to make insulin. That is the accepted primary endpoint, And the key secondary endpoint is HbA1c, which is a clinical endpoint, which we hope to show that we will reduce HbA1c in the treated groups, and therefore that patient that has preserved C-peptide, they're making their own insulin, also has improved glycemic control. And that package of patients and endpoints are powered, and the data we have agreement the FDA is sufficient for approval.

Okay, and you mentioned T-SHIELD earlier. Again, it's not an ATG. It works differently, but it has similarities in terms of trying to achieve a T-cell exhaustion. But importantly, more recently, the FDA granted an expanded indication for T-SHIELD based on C-peptide.

So maybe highlight for the audience the importance of that regulatory acknowledgement. of the validity of c-peptide yeah so a huge question in in diabetes and getting new drugs approved for diabetes has been what is required for approval and t-zeal was approved in june so now we know it's required for approval it was approved on c-peptide alone because in their phase three they didn't t-zeal did not demonstrate any other benefit it missed all the other secondary endpoints so the c-peptide is a biologic marker it's not a clinical presentation and there was a lot of question whether that would be sufficient for an approval and it basically was was understood not to be sufficient and then t-zilled got approved having only shown that having only shown c-peptide it's an accelerated approval they still need to demonstrate clinical benefit but post-marketing it's the drug is now commercial and so that resolved the big question which is what is required for approval, we now know from precedent from the T-Zield approval that C-peptide is sufficient for an accelerated approval. Now, with that said, thymoglobulin has always demonstrated reduction in HbA1c, and with C-peptide and any clinical endpoint, HbA1c being the most discussed one, that is a full approval. Okay, and then finally, you have started another Phase three prize and that's led by Dr. Haller who was again one of the PIs in the rabbit studies and so talk about the key benefits that having data from that study will provide you yes so in immunomodulation and type 1 diabetes or using drugs to preserve the patient's ability to make their own insulin as measured by c-peptide the clinical development and clinical strategy strategy has always focused on patients that are newly diagnosed within some timeframe from diagnosis and TZILD which is approved is within the first eight weeks of diagnosis and for sort of clinical strategy and minimizing risk we always want to have the most homogeneous population possible which ends up excluding certain patients from being studied in clinical research and and then from being indicated on the label of the drug. And the PRIZE study aims to get more patients on drugs, study more patients. Our safeguard study, which will be our initial label, is limited to patients within 100 days of diagnosis. And what Dr. Haller and Breakthrough T1D wanted to study is patients beyond 100 days. The prize study has the first 100-day cohort as the control group, and then a cohort of patients up to one year, and a third cohort, cohort three, from patients one year to two years of diagnosis. And what this does is it aims to demonstrate that what is important is C-peptide, or the patient's ability to make insulin, and not the time from diagnosis. And if that study is successful, that will also read on to the label. and patients up to two years from diagnosis will be eligible for therapy, which increases the total addressable market as well as the ability to penetrate that market.

Okay, well, great. We'll reach the end of our time here, but hopefully you can appreciate that in the case of Rich, a potential approval in 2027, in the case of Sam, some very important clinical data in 2027. So thank you.

Thank you.

Thank you.