SAB BIO, formerly known as SAB Biotherapeutics, Inc., is a clinical-stage biopharmaceutical company at the forefront of developing innovative human polyclonal immunotherapeutic antibodies, or hIgGs, to address critical unmet needs in immune system disorders and infectious diseases. The company's lead candidate, SAB-142, is a first-in-class, human anti-thymocyte globulin (hATG) therapy designed to potentially delay the onset or progression of type 1 diabetes (T1D), a debilitating autoimmune disorder.
SAB BIO's Origins and Pioneering Platform
Established in 2014, SAB BIO has its roots in groundbreaking research conducted at the University of Massachusetts Medical School. The company's founders, recognizing the limitations of traditional monoclonal antibody therapies, set out to develop a novel approach that could address the complexities of many immune-mediated disorders. This led to the creation of the company's proprietary DiversitAb platform, which harnesses the power of the human immune system to generate a diverse repertoire of highly targeted, polyclonal hIgGs.
Unlike traditional monoclonal antibodies that target a single epitope, SAB BIO's hIgGs are designed to bind to multiple sites on specific immunogens, making them well-suited to tackle the multifaceted nature of many immune system disorders. This unique approach has enabled the company to advance a robust pipeline of differentiated therapeutic candidates, with SAB-142 as the lead program targeting T1D.
In addition to its T1D program, SAB BIO has made significant progress in other areas. In 2020, the company conducted a Phase 1 clinical trial for SAB-176, an hIgG targeting multiple strains of influenza. The trial demonstrated a favorable safety profile, laying the groundwork for further development. Building on this success, SAB-176 received Fast Track Designation and Breakthrough Therapy Designation from the U.S. Food and Drug Administration in 2023, based on positive clinical data from a Phase 2a trial.
During the COVID-19 pandemic, SAB secured a substantial $203.6 million contract from the U.S. Department of Defense's Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense (JPEO) in 2020 and 2021 to work on a COVID-19 therapeutic. Although this contract was later terminated in 2022, the company's ability to secure such significant funding demonstrates the potential of its technology platform.
Addressing the Unmet Need in Type 1 Diabetes
Type 1 diabetes is a chronic autoimmune condition characterized by the destruction of insulin-producing pancreatic beta cells, leading to the inability to regulate blood sugar levels. Current treatment options, such as insulin therapy, do not address the underlying disease mechanism and are often accompanied by the risk of life-threatening complications. SAB-142 is poised to revolutionize the treatment landscape by potentially delaying or even preventing the progression of T1D.
The company's clinical strategy for SAB-142 is focused on intervening early in the disease process, before the majority of beta cells have been destroyed. By preserving the remaining functional beta cells, SAB-142 aims to maintain the body's natural insulin production and delay the onset of full-blown T1D. This approach holds the promise of significantly improving the quality of life for patients and reducing the long-term burden of the disease.
Positive Phase 1 Results and Ongoing Clinical Development
In 2024, SAB BIO announced positive topline data from a Phase 1 clinical trial of SAB-142 in healthy volunteers. The study demonstrated that the therapy was generally well-tolerated, with no observed instances of serum sickness or the development of anti-drug antibodies at the target dose. These findings support the potential for SAB-142 to be safely re-dosed, a critical factor for effectively managing the progression of T1D.
Building on these promising results, the company is progressing SAB-142 into further clinical development. The next steps include enrolling patients with T1D in the final cohort of the Phase 1 study, followed by the initiation of a Phase 2 clinical trial to evaluate the therapy's safety, tolerability, and biological activity in delaying disease progression.
Financials and Liquidity
SAB BIO's financial position remains strong, with a cash, cash equivalents, and short-term investments balance of $30.4 million as of September 30, 2024. The company has successfully raised capital through government grants and equity financings, including a $7.5 million private placement offering in 2023. This funding has enabled the advancement of SAB-142 and the continued development of the company's broader pipeline.
For the three months ended September 30, 2024, SAB BIO reported total revenue of $1.27 million, all derived from government grants. Research and development expenses were $7.83 million, while general and administrative expenses were $3.48 million, resulting in a net loss of $10.35 million for the quarter. Over the nine-month period ended September 30, 2024, the company generated $1.21 million in total revenue from government grants, with research and development expenses of $22.60 million and general and administrative expenses of $11.51 million, leading to a net loss of $22.71 million.
For the most recent fiscal year, SAB BIO reported an annual net loss of $42.19 million, with annual operating cash flow of -$25.12 million and annual free cash flow of -$25.32 million. The company's debt-to-equity ratio stands at 0.12, indicating a relatively low level of debt relative to equity.
As of September 30, 2024, SAB BIO had $9.17 million in cash and cash equivalents, along with $21.23 million in short-term investments. The company's current ratio and quick ratio both stand at 3.69, suggesting a strong ability to meet short-term obligations.
It's important to note that the company's management has expressed substantial doubt about its ability to continue as a going concern, as current resources are not expected to be sufficient to fund operations for more than 12 months from the date the financial statements were issued. This underscores the importance of securing additional funding to support the company's long-term plans and ongoing clinical development programs.
In addition to its internal research and development efforts, SAB BIO has forged strategic partnerships to bolster its capabilities and expand its reach. In 2023, the company established a new subsidiary in Australia, SAB BIO PTY LTD, to conduct preclinical and clinical activities for its product candidates. This move allows the company to leverage the Australian government's research and development tax credit program, further strengthening its financial resources.
Navigating Challenges and Positioning for Growth
Despite the progress made, SAB BIO has faced its share of challenges, including the termination of a government contract in 2022 related to its JPEO Rapid Response program. This termination led to a significant decrease in revenue, with the company reporting no revenue for the quarter ended September 30, 2024, compared to $1.27 million in the prior year quarter. However, the company recognized $1.20 million in deferred grant income related to the JPEO Rapid Response Contract in the nine months ended September 30, 2024.
SAB BIO has navigated this setback by prioritizing the development of SAB-142 and actively exploring potential partnerships, co-development opportunities, and licensing arrangements to supplement its funding and advance its pipeline. The company's operations are primarily based in the United States, with its Australian subsidiary focused on conducting preclinical and clinical activities that qualify for Australian research and development tax credits.
As the company continues to execute its strategy, it remains committed to addressing the significant unmet need in type 1 diabetes. With the positive Phase 1 data for SAB-142 and a robust financial position, SAB BIO is well-positioned to drive its lead candidate through further clinical trials and potentially bring a transformative therapy to patients.
Looking Ahead: Unlocking the Promise of Polyclonal Immunotherapies
SAB BIO's innovative approach to hIgG development holds immense promise for the future of immune system disorder treatment. Beyond its lead program in T1D, the company's DiversitAb platform has the potential to generate a diverse pipeline of novel therapeutic candidates targeting a wide range of indications.
SAB-142, the company's lead candidate, is a first-in-class, human, multi-target ATG treatment designed to provide superior efficacy and safety in delaying the onset or progression of T1D. The mechanism of action of SAB-142 is to maintain the level of C-peptide, a validated surrogate endpoint for endogenous insulin production, which is essential for the prevention of progression of T1D. Data from prior trials with rabbit ATG showed that a single dose can sustain significantly higher C-peptide levels compared to placebo over a two-year period in recent-onset T1D patients.
Importantly, SAB-142 is expected to have a zero serum sickness rate and zero incidence of neutralizing anti-drug antibodies based on data from over 700 human subjects treated with antibodies produced by the company's platform. This is a significant advantage over rabbit ATG, which saw more than 65% of treated patients acquire serum sickness, a side effect that often requires steroid treatment and can impair diabetes management.
The company initiated a Phase 1 clinical study with SAB-142 in November 2023 and expects to report topline results by the end of 2024. This study will establish the safety and pharmacokinetic profiles of SAB-142 in human subjects, with plans to then advance the program to Phase 2 trials to evaluate proof-of-concept and dose-ranging in adults and adolescents with T1D.
As SAB BIO navigates the regulatory landscape and advances its clinical programs, investors will closely monitor the progress of SAB-142 and the company's ability to unlock the full potential of its pioneering technology. With its strong financial footing, experienced management team, and innovative approach, SAB BIO is poised to play a pivotal role in revolutionizing the treatment of type 1 diabetes and other immune-mediated disorders.