SAB Biotherapeutics, Inc. (SABS) Earnings Call Transcript & Summary

Good morning, and welcome to SAB BIO's Conference Call to discuss Second 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. [Operator Instructions] 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 Second Quarter 2026 Earnings Call. I'm joined today by Lucy To, our Chief Financial Officer, who will review the second quarter financial update. I'm also joined by Eddie Sullivan, our Co-Founder and President; and Alexandra Kropotova, our Chief Medical Officer. We're pleased to have you with us today to share the progress we've made in the second quarter. We remain focused on execution, delivering meaningful progress in our SAFEGUARD study and advancing key clinical and operational priorities. For those who may be new to the SAB BIO's story, we are a clinical stage biopharmaceutical company focused on developing disease-modifying therapies for type 1 diabetes and other autoimmune diseases. Our mission today is to redefine what it means to be diagnosed with type 1 diabetes by developing a medicine to change the course of disease. With millions of people living with type 1 diabetes worldwide, we are pursuing a multibillion-dollar market opportunity through the development of a disease-modifying therapy. Our lead product candidate, SAB-142, is a fully human anti-thymocyte globulin designed to preserve insulin-producing beta cells with the goal of slowing disease progression in autoimmune type 1 diabetes. We produce SAB-142 using our proprietary Tc Bovine platform, which allows us to generate fully human multi-specific antibodies without the need for human donors. Phase I data for SAB-142 showed a favorable safety profile, further validated its mechanism of action and demonstrated early signals of beta cell preservation. We are now focused on enrolling our registrational Phase IIb clinical trial called SAFEGUARD in patients with newly diagnosed Stage 3 type 1 diabetes. With that context, let's move into key updates from the second quarter, starting with enrollment updates for SAFEGUARD. We are proud to report on the team's considerable progress with over 60 clinical sites actively recruiting. We are seeing increased engagement from investigators and patients, which is reflected in steady growth in both screening and randomization. As a reminder, Part A completed enrollment last quarter. Part B is actively enrolling and the first step-down to adolescent patients aged 12 and older was approved. We have seen an increase in enrollment driven by the activation of additional clinical sites. With this momentum, we remain on track to complete enrollment in Q4 with topline data expected in the second half of 2027. Building on this progress, we were excited to announce that Breakthrough T1D awarded a grant to Dr. Michael Haller, Professor and Chief of Pediatric Endocrinology at the University of Florida in support of PRISE-hATG, a clinical study evaluating SAB-142 in patients with recent- and extended-onset Stage 3 type 1 diabetes. We believe this support is particularly meaningful because it represents external belief in our approach from an organization dedicated to advancing therapies for people living with type 1 diabetes. We are happy to be co-funding this study and continuing our collaboration with Dr. Haller and Breakthrough T1D. PRISE is an investigator-led Phase III study designed to assess the safety, efficacy and tolerability of SAB-142 in patients with Stage 3 type 1 diabetes who are 100 days to 2 years from diagnosis. This is an area of significant unmet need as it represents a critical window where residual beta cell function may still be preserved. PRISE complements SAFEGUARD and extends the clinical evaluation of SAB-142 in a broader patient population. Importantly, if successful, PRISE has the potential to support a future label expansion that could extend eligibility to patients up to 2 years for Stage 3 type 1 diabetes diagnosis. Our top priority in 2026 is clinical trial execution and on-time delivery of our key clinical milestones. At SAB, 2026 is the year of trial matching, putting clinical trial execution at the center of everything we do. That focus on execution is what we believe will unlock the full value of our pipeline for patients and shareholders alike. Beyond clinical development, we also continued investing in our Tc Bovine platform. This quarter, we began construction of a second farm facility in South Dakota. This facility establishes a redundant herd in order to reduce operational risk and support long-term commercial supply for SAB-142. And with that, I'll turn it over to Lucy to review our second quarter financial update.

Thanks, Sam. We ended the quarter with $208 million in cash, cash equivalents and investment securities as of June 30, 2026. We continue to have a strong cash position with operational runway through 2028. R&D expenses were $16.2 million for the second quarter of 2026 compared to $7 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. G&A expenses were $7.2 million for the second quarter of 2026 compared to $2.7 million for the same period in 2025. The increase is driven by higher headcount costs, including related stock-based compensation. Other income was $0.9 million for the second quarter of 2026 compared to an expense of $0.4 million for the same period in 2025. This change is driven by an increase in interest and dividend income as a result of higher average balances in our investment portfolios, partially offset by changes in fair value of warrant liabilities. As a result, net loss was $22.5 million for the second quarter of 2026 compared to $10.1 million for the same period in 2025. Overall, we are well capitalized to support SAFEGUARD and PRISE through key milestones while preparing for commercial readiness for SAB-142. And with that, I can turn it back over to Sam for closing remarks before we open the call for questions.

Thanks, Lucy. As we look ahead to the rest of the year, our focus remains on execution, completing enrollment of SAFEGUARD in Q4 this year and continuing to build the capabilities needed to support SAB-142 over the long term. The recent FDA approval of Tzield for children and adolescents recently diagnosed with Stage 3 type 1 diabetes is an important milestone for the T1D community and for our field, reinforcing the value of early disease-modifying intervention and further establishing the regulatory path and commercial foundation for therapies like SAB-142. We're encouraged by the pace of enrollment in SAFEGUARD and the enthusiasm we're seeing from investigators and patients, which underscores both the interest in SAB-142 and the broader momentum behind disease-modifying approaches. Our goal is simple: to deliver a therapy that can change the course of type 1 diabetes and make that benefit available to as many patients as possible. We are excited about what lies ahead and look forward to sharing our progress as we continue advancing our programs and executing on our strategy. And with that, we're ready to take any questions.

[Operator Instructions] We'll take our first question from Michael Yee with UBS.

This is Roy on for Mike. As it pertains to the data from SAFEGUARD and then PRISE, could you maybe talk a little bit about the rationale behind the labeling strategy here and also the planned sequencing and timing of the filings?

Well, PRISE extends the patient population. The rationale is that patients with type 1 diabetes still have C-peptide and still can make insulin even after 100 days and that there's a tremendous unmet need and demand in the T1D community to be able to treat a patient after this window of diagnosis that's been created by kind of, clinical trial protocols. So one of the reasons why Michael Haller applied for this grant and Breakthrough T1D was granted it is because this is a major unmet medical need, and this is an underserved market. And we should be able to treat as many patients as possible regardless of when they were diagnosed as long as they're still making their own insulin. The PRISE trial is, of course, staggered behind SAFEGUARD. And so the data from PRISE would come later in the form of an sBLA to hopefully get that label expansion and treat patients up to 2 years after diagnosis.

We'll move on now to Ellie Merle with Barclays.

This is Tejas on for Ellie. Could you just walk us through maybe the timelines for that PRISE study in this expanded population? And then just relative to the opportunity in those patients under 100 days, how much larger could this expanded cohort be? And what would the data look like in this larger population relative to the initial population?

We expect PRISE to start enrolling in the second half of this year. And so there are 64,000 new patients diagnosed with type 1 diabetes every year. And when they get diagnosed, they have a lot of decisions to make. It's a major life change. And they may right away feel overwhelmed by the new way they have to manage their life. And so 100 days is a very short time to make that decision. And if they're at 200 days or 400 days and they've got -- and they still are making C-peptide, we want to be able to offer the medicine to them, and they want to be able to get it. And so it's just -- it's the same 64,000 patients, but it's a bigger opportunity for those patients to have time to make decisions and to get the drug. I mean we see patients also on a regular basis that are past 100 days that want to be enrolled in the trial or if they're past 8 weeks, they want to get Tzield, there's no options for them. We expect the data to be quite similar because it's somewhat arbitrary, right? So it's the same disease. It's the point at which they start the drug, and we hope to preserve C-peptide. And so that's the goal, and it shouldn't look dramatically different. I think I forgot the second half of your question, Tejas. What was that?

We'll move on now to Cha Cha Yang with Jefferies.

It's Cha Cha on for Roger. Two questions from us. So one is, can you tell us more about what drove the acceleration of recruitment for your Phase II? And then the second one also on PRISE for Phase III. Can you just speak to more about the package or the data that convinced the FDA to allow you to start this Phase III study?

First question was on enrollment?

Acceleration.

We now have over 60 clinical sites actively recruiting. We continue to build momentum and see great engagement and increased engagement from investigators and patients, and that has led to a growth in both screening and randomizations. But the major factor leading to the increased rate of enrollment is having more active clinical sites. There was the second part -- can you repeat the second part of your question?

Yes. Second part is just about your Phase III study and what data you package to convince the FDA and also to your team to allow you to start the Phase III?

This is the PRISE study? I mean all the data we've shared to date, it was primarily the Phase I data results and the excellent safety profile we have, redosability and then you've seen that early evidence of efficacy from the patient cohort. That was what we submitted in the amended IND and it led to opening that trial.

We'll move on now to Thomas Smith with Leerink Partners.

I was just wondering if you could elaborate a bit on your thoughts regarding the recent FDA approval for Tzield in the Stage 3 T1D population. And specifically wondering how you think this potentially impacts the regulatory bar for success from the SAFEGUARD program and how you're thinking about the potential competitive landscape? And just remind us how you view your competitive profile relative to the Tzield competitive profile. And then if I could ask just a follow-up on SAFEGUARD. Wondering if you're able to comment at all on how the baseline characteristics of patients entering Part B are tracking versus your internal expectations? And how should we think about the baseline characteristics of these patients relative to the subjects in the T1D cohort from the Phase I study?

Well, Tzield's approval is great news for both the type 1 diabetes community and for us. This approval will help drive market awareness and education for disease-modifying therapies in T1D, and it further confirms C-peptide alone is sufficient for accelerated approval. So in terms of the regulatory bar or the regulatory path, I mean, we now have precedent that the FDA is allowing C-peptide for accelerated approval in T1D. And in terms of the second part of your question, I'm going to ask our Chief Medical Officer, Alexandra Kropotova, to answer that.

As far as the baseline characteristics in the ongoing SAFEGUARD trial, as you know, protocol requires -- our SAFEGUARD protocol requires at least 36 patients 5 to 11 years of age, 2/3 of the population below 18 years of age, and as far as the adult population, we are capping the adult population at 45 patients total. So therefore, with the protocol requirements, our incoming baseline characteristics is very much in line with our expectations as we designed the protocol. Your second part of the question, as far as the difference between the SAFEGUARD population and the Phase I population, SAFEGUARD population enrolls new-onset Stage 3 type 1 diabetes would be up to 100 days from the disease onset. In the Phase I population, it was -- the time from the onset was beyond 100 days. That Phase I population is closer to the PRISE target patient population as far as the time from the disease onset. The rest of it is very identical as far as the preserved C-peptide at or above 0.2 nanomolar per liter.

And in terms of advantages of SAB-142, I think the data shows we believe that SAB-142 offers fundamental efficacy, safety and dosing advantages over Tzield. Because of low to no immunogenicity, SAB-142 is well positioned for safe redosing over the lifetime of the disease so long as C-peptide is preserved. It is a 2-day dosing versus a 12-day dosing. And just a reminder that in the PROTECT study, Tzield hit C-peptide but missed secondary endpoints, whereas in the sort of our reference molecule rabbit ATG or rabbit anti-thymocyte globulin, HbA1c has been shown to be reduced in both the TN-19 and the MELD-ATG study.

We'll move on now to Samantha Semenkow with Citi.

This is Ben on for Samantha. Can you talk about the population you're enrolling in the PRISE study and how it compares to SAFEGUARD? Other than the time since diagnosis, how similar are these populations? And should we expect them to have less beta cell function? Or is that not always the case?

Outside of the time from the disease onset, the rest of the inclusion/exclusion criteria are identical between the SAFEGUARD and the PRISE study. As I mentioned earlier, the PRISE protocol has the inclusion criterion for the C-peptide at the baseline, identical to SAFEGUARD or many other trials in the new onset where the C-peptide is required to be at or above 0.2 nanomolar per liter. So we don't expect that the PRISE patient population will have lower level of the baseline C-peptide, which is very much in line with the vast majority of the epidemiological data on natural history of the disease progression that shows that patients beyond 100 days have the preserved C-peptide for years and years after the disease onset. DCCT cohort, as an example, shows that the C-peptide can be preserved for up to 15 years from the disease onset in both pediatric and adult patient population.