Leerink Partners Global Healthcare Conference

Good afternoon, everyone. Thanks for joining us here at the Leerink Partners Global Healthcare Conference. My name is 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. And 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 26.

So, SAB Bio is a clinical stage biotech company. Our lead asset, SAB142, is a multi-specific T-cell engaging agent for autoimmune disease. It's currently in Phase 2B, a pivotal study in newly diagnosed type 1 diabetes patients. and the drug SAB142 is made off a platform which is called TC bovine and we're the only company in the world that can make a human antithymocyte globulin which is what SAB142 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 SAB142 long-term exclusivity. Type 1 diabetes is a multi-billion dollar major unmet medical need, a very big market opportunity. SAB142 is positioned to be a best-in-class product in that space. And we are led by a management team with experience getting drugs approved and launching commercializing drugs as well as transacting companies. So we think we have all the ingredients for creation of tremendous shareholder value in the years to come. In 2025, we announced positive phase one results from our asset, which validated the thesis of our program, which is that our drug, SAB142, has the same mechanism of action as a molecule called thymoglobulin, which is shown to be efficacious, with significant safety advantages making SAB142 safer and redosable for 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. and with that we kicked off our phase 2b 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 and yeah

we'll go through a number of questions on safeguard which is the the pivotal study that's underway maybe just take a step back and help us understand how 142 is differentiated from some of other t-cell modulators that are also in the the t1d space i think many investors are familiar with sanofi's t-shield you mentioned thymoglobulin which is rabbit rabbit derived how does 142

differentiate from those yeah that's a great question and those drugs are very important to us also to guide us as we develop our drugs so t-shield is a sanofi drug they acquired from prevention 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 improved but it has not yet shown the ability to reduce hba1c which is another important endpoint for efficacy. Thymoglobulin, like our drug, is multispecific, 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, but it is encumbered by safety issues because it is a rabbit protein. So it causes serum sickness, which has been sort of determined to be an unacceptable AE in this patient population. And it also generates anti-drug antibodies in the majority of patients, and so the drug can't be re-dosed. However, the efficacy in two clinical trials is second to none, and so there's a tremendous amount of excitement and enthusiasm in the academic and clinical community for ATG. And what we were able to do with our platform is make a human version of it, and because SAB142 is the human version of thymoglobulin, we have the same mechanism of action which we showed in phase one, but we do not cause serum sickness and we can redose. So we have the great advantage of really showing we can rely on the efficacy generated by thymoglobulin, and we've already proven in phase one that we have the advantages that we say we have. So we go with high confidence into our current study, the Safeguard study.

That's great. And, yeah, let's dial in on some of the Phase I data that you generated last year. Zero percent 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.

Yes, so what we know from both T-Shield and thymoglobulin, as well as other agents, is that induction of T-cell tolerance is what leads, induction of T-cell exhaustion is what leads to tolerance. It leads to preservation of the organ, which in type 1 diabetes is the beta cells of the pancreas, which is where insulin is made. So 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. PD1 is one of the markers. We have induced PD1 exhaustion, which is lasting durable. TIGIT positive T cells are another one, and then cells carrying multiple markers. So So 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 one study you also showed Treg sparing effect which is different than what we've seen from the T's yield specifically. How important is that to preserving beta cell mass?

So the scientific community believes it's the difference between reducing HbA1c and not. So T-Shield is a monoclonal antibody that does induce exhaustion, but it is not Treg sparing. So 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 T-Shield. And the sort of most empirical evidence for thymoglobulin being superior to T-Shield is that thymoglobulin shows a reduction in HbA1c whereas T-Shield does not. One distinguishing, clear distinguishing feature between T-Shield and thymoglobulin in our drug is Treg preservation. So thymoglobulin and our drug are able to induce durable exhaustion while sparing Tregs. T-Shield is not able to do that. When they induce exhaustion they are also depleting Tregs and having that counterproductive mechanism of action. We believe that's the difference that leads to superior efficacy with the multispecific approach.

Got it. That makes sense. Let's switch gears, talk about Safeguard. And this is a pivotal Phase 2B design, Stage 3 Type 1 diabetes. You just give us like a high-level overview of the design. You have a Part A and a Part B, got multiple dosing. Like, how do we land on the dosing, and how should we think about this Part A versus Part B portion of the study?

So 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 5 to 40, and they will be broken into three arms, a higher dose, 2.5 mg 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. and sort of the first secondary endpoint we're looking at is HbA1c to show improved glycemic control and we'll also look at other secondary endpoints which include time and 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. So the part A and the part B is a way to construct the patient population we want to 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 and we want our the efficacy component of our study to have an equal distribution of adults adolescents and pediatrics and so 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. And 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 T-Zeal.

Yeah, so 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 t-shield based purely on the fact that thymoglobulin shows a reduction in hba1c whereas t-shield does not but in addition to that t-shield requires 12 days of continuous dosing 12 continuous days of dosing of the drug whereas thymoglobulin can be given in two days and 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 so even in in the real world despite the condition and 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 so were the drugs if you the base case were to be the drugs were non-inferior two days versus 12 days alone would would win the market maybe talk about um i know

we 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 uh

we're early days enrollment but how is it progressing so we'll probably give more explicit guidance maybe in at our next quarterly report but today we're very pleased with enrollment We're on track according to our projections for where we want to be this time this year. So 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. And we think that's because there's a lot of excitement and enthusiasm, as well as just a lot of conviction around ATG being an efficacious drug.

Yeah, makes sense. And the study here is powered, I think it's a 40% difference in C-peptide at that 12-month time point. Just remind us of some of the historical data that drove the powering assumptions. And then are you powered to show benefit on those clinical secondary endpoints?

So that's a good question. So 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, HumanATG. 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. So 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 so we use that to determine to make assumptions for powering and the study is 80 percent powered to show a 40 percent preservation effect of c peptide and thymoglobulin has shown in the previous two trials a 50 percent preservation which would be a 90 percent power as far as the powering on the secondaries it's not specifically power but 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. So if we assume the same effect size and the same patient variability, then 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 safeguards study, is it your expectation that showing Statsig 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 level of alignment.

So 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. Now, that protocol has secondary endpoints, which are the endpoints we all want to look at. So 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 proceeding drug, T-SHIELD, has filed an SPLA in stage 3, and they did not hit on any secondary endpoints. So if T-SHIELD 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. Macari has said publicly, but we're waiting to see that definitive data with the T-SHIELD decision.

And there's been a number of media reports around the T-SHIELD supplemental BLA. 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 T's yield. Do you have a view, I guess, on approvability of T's yield? Are you guys expecting that to be approved on the basis of PROTECT?

So we think from the information we have that it will be approved. The global type 1 diabetes community believes C-peptide is the end-all be-all. and Dr. Makkari has said that. T-Gield has definitively preserved C-peptide. We don't have access to all the information. The safety package is a big component of it. So while we can't know what happens until 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. It's the entire, it's everything about, 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. And we'd certainly like to see the FDA acknowledge that. And so we'd be very pleased if Sanofi gets approved.

Yeah, I think that's a very important point. At the end of the day, it's a risk-benefit decision. And we may or may not know the decision point of which side of the equation led to whatever the decision would be. Okay, I want to 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 T-GILD 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 two, and these patients aren't inherently diagnosed necessarily. right? It requires additional patient screening, and I suspect that's been a pretty big lift for Sanofi. But maybe if you could just talk about how you think about the stage three opportunity and how 142 could slot in there. Yeah, well maybe I'll open it by distinguishing between stage two

and stage three. So to date, T-Shield is only approved in stage two type one diabetes. Stage two type one diabetes is really pre-diabetes so these patients are asymptomatic they have 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 out of antibodies and we've met 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 so 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 you 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 percent of the market and that's like 65,000 new patients in the U.S. alone today with no drug approved so this should be a very transformative and high impact new drug in a major unmet medical need which is autoimmune disease and if t shield gets approved first that's you know that'll be helpful but we don't think that it's necessary that this will be sab 142 will really transform what it means to get a type one 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 something an option available to patients and doctors and they desperately been wanting something for many years which is why the trial and that trial that we spoke of is being conducted why Enodia conducts trials is because there's a real sense of desperation in the T1D community for a medicine that actually treats

the disease that makes sense um and I want to come back to your contrast versus the stage two opportunity and yeah the TC old experience I think was interesting because they they inherently got approval there that wasn't necessarily I think the goal from the outset that was a function of the the compelling nature of the tn10 study data right as you guys think about indication expansion potential like are you contemplating moving into stage two after stage three like how do you think

about that sort of life cycle yeah i think stage two is essential this is this is a drug that confers tolerance to beta cells so if we can capture a patient in stage two which we want to we have the theoretic possibility that that patient would be insulin-free because 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, really change what it means to have a type 1 diabetes diagnosis. While 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 t-shield to seek a screening so stage two is very important to us i think very important to the diabetes world and it's something that we hope to be if you know kind of a fast follower from stage three and 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 two and preserve beta cells that's really a functional cure that they will have never needed insulin and if they have a durable therapy that they can take may never need insulin so 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 uh we get a number of investor questions around some of the emerging islet cell or cell therapy options um in a world i guess where you have 142 that's approved in stage three like how do you think i guess 142 plays in a world of of that those those cell therapies

assuming one or more of them are successful yeah well there are millions of patients around the world who are beyond the point where a a immunomodulator can help them and cell therapies could really be life-changing therapies for those patients but we like the immunologists and the endocrinologists tell their colleagues and their peers and the families that a new type 1 diabetes diagnosis should be treated with an urgency like an emergency like an acute emergency and 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. And if we're able to catch patients early and preserve their beta cells, they may never need cell therapy. And so I think that's a really important distinction. There are millions of patients today who can benefit from cell therapies, and they should be very important and valuable therapies. But 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. So those endocrinologists that do those therapies are already asking for SAB142 because thymoglobulin causes serum sickness and makes the patients really sick, which can actually even interfere with the procedure, and procedures get canceled in many of these patients. So there's already inbound demand to replace thymoglobulin 142, which is standard practice for every cell therapy today.

I want to 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 to stage 3 T1D?

So, today, SAB is a type 1 diabetes company, and at this stage of our growth and maturity, we're focused on type 1 diabetes. So the very first expansions we will have will be within type 1 diabetes, and the Safeguard study is patients within 100 days of diagnosis. The first thing we want to do is get more type 1 diabetes patients. So that's before they've been diagnosed, which we call stage two today, and after 100 days. So kind of the next two immediate patient populations we want to go after is to get as many type one diabetes patients as possible. So later stage and earlier stage from where safeguarding rolls. And then the next thing that we want to look at, which would really be after the type one 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. So 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 so we think about things like i i feel like you've outlined celiac yeah celiac derma exactly sle yeah um how do you i mean these are potentially massive yeah and markets like how do we prioritize you know resource allocation and like development strategy

yeah figure out what to go after next so that's like we haven't come to that decision point yet And 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 underindications, 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. So 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. I want to come back to, because you alluded to this multiple times, and it is an important potential differentiating factor, the ability to redose. You do have a redosing cohort that came out of the phase one experience. I guess what's your sort of base expectation for how that plays out commercially in stage three type one diabetes? Is this the case? 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 potential chronic redosing regimen relative to T-Zield? They generated some redosing data. They didn't see much of a benefit with the redosing. Let's assume that we do see a redosing. Like, how do we think about pricing for a potential chronic therapy like that?

So 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. And so 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 T-Shield is priced at $200,000. We believe will be superior, and therefore you can command a premium. But we haven't done extensive pricing exercises yet. We just have that sort of guideline to work off of now.

That's helpful. Well, I want to 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. And, you know, we're in the disease area, sort of the rare drug. You see that T-Shield is priced at $200,000. We're in that sort of $100,000, give or take $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 want to ask you, because 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?

So today, with cash on hand, which was $144 million at the end of 25, we are funded through turning the Safeguard data card with a year runway. And we have to mention the fact that we have $175 million in enrollment warrants. which are cash warrants, and they strike at $1.75. So 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, and we'll stay tuned to the SAB story. Thank you for having me. It's a pleasure.