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

We would agree.

Okay. And we'll see that. We'll see that in the data over time. Okay. And then when you speak with endocrinologists, what is on their wishlist [indiscernible] therapy like 142 that could prevent the progression of type 1 diabetes? And how did they think about the target profile that they want to see you achieve to maximize their interest and how they would use 142?

Well, I think I need to start the answer by perhaps stating the obvious, which is that the first wish on everyone's list is to make a patient insulin free. That's what we're all going for. And with our drug, if you address the patient in Stage 2, which is our next indication we're going after, with the ability to redose, we offer the promise -- we offer the possibility of keeping patients insulin free. I think more and more patients will get diagnosed at Stage 2 over time and the ability to have an effective and redose of drug and treat a patient when they have enough beta cells that they don't yet need insulin, you could keep those patients at a beta cell count where they don't need insulin. So that's the -- it's got to be said when we talk about type 1 diabetes. Next, the wish list for a Stage II patient, of course, which is our initial indication, it means that the patient already needs insulin is making their diabetes easier to manage. So diabetes is a constant day-to-day, hour-to-hour struggle with diet, exercise, sleep, insulin treatment, hypoglycemic events. And the first thing on the doctor's wish list is let's make their life easier which is borne out by the data in long-term studies. If you preserve beta cells, then everything else is better. If you have enough power, there's the [ EDIC ] study and [ DTCC ] study in the [ TOMI ] study, more beta cells and any patient means an easier life and easier day-to-day management of the disease. The next thing I would see is the convenience of dosing because patients now very recently have the availability of [indiscernible], that's a 2-week course, going over 1 week. And doctors are saying, we need something that's more convenient. And we have with SAB 142, a drug that can be dosed in 2 days, which is a dramatic improvement. And if you get it every 6 months, it's a total of 4 days a year. And if you think about other biologics and other infused drugs and you think about it in 4 days a year, that's a very attractive, reasonable product profile and burden on the patient. 4 days a year to preserve beta cells is considered by the KOLs also very attractive. So yes.

And on safety and tolerability, what has that data shown so far from your Phase I study?

I mean we think we'll have an attractive AE profile. And what we're seeing so far looks like it will be competitive, if not the best AE profile. Of course, it's early days, but that was what we're seeing in Phase 1, and it should be very competitive.

And then just from a commercial strategy perspective, as you look forward and think about launching 142, how will you go about initially targeting this population? Like is it at academic centers? Or obviously, patients are treated very broadly in their community endocrinologist offices? How -- is it a referral network then that you need? Like -- the strategy to get this to the most patients that you possibly can?

Well, certainly, the KOLs and the academic institutions first in the pediatric population, the vast majority are immediately referred to an academic institution. So the first approach to addressing the market is to be at academic centers. There's -- that's something you can address with the field sales force of like 50 reps, very easily addressed. That's the first market. And yet, we don't want to ignore the community -- and when market research has shown that when you get to adults, more are not getting to an academic center. And we're still thinking about that and working that through. But the [ lion's ] share of the focus will be at KOLs and having some operation in place that doesn't ignore the community. And I think we must say that a huge component of this in this indication is medical education -- will be addressed by medical affairs and MSLs and doing a lot of education for everyone, which addresses the community aspect of it or not at a KOL aspect about the need to treat patients and the benefit of preserving C-peptide and the benefit of redosing because if a drug can't be redosed, something doctors need to know is if you're preserving their C-peptide, they're going to want to keep preserving cap. And -- so that's the basic strategy. It's early days, but market research already shows from [indiscernible] and we've heard from doctors. So Sanofi is sort of trailblazing here. And I think we have a second comer advantage because they're doing a lot of the heavy lifting, a lot of the medical education, getting used to patients prescribed doctors prescribing, getting used to infusions. They're doing 12-day infusion. So the infusion the practice, the practice of getting a patient in infusion, the kind of Sanofi is leading the way, and we can follow that, which I think is a huge advantage. And we have heard from doctors that now today, which they wouldn't have said a year ago, they would consider it malpractice to not tell a patient that these drugs are available when they get diagnosed at the time of diagnosis.

Right. Like these drugs are that important. This field is that important for sure. Okay. That's very helpful context for how we should think about the commerciality of 142. Lucy, you mentioned the prize trial in passing, but I want to spend some time that. It's designed to evaluate the patients up to 2 years from diagnosis. And we know that there are patients that [indiscernible] through that time point. So to your point, it builds on that population for Safeguard and there was only 100 days from diagnosis. Just maybe to put a finer point on, I think, what you were alluding to before, how much does that the commercial opportunity for 142 if successful?

I think initially, when we file an sBLA for that patient population, it should double right the 64,000 patient. So 128,000 patients just initially that first year. So whatever market share you want to take off of that. But then they'll be redosed and then after that, it will be 64,000 patients every year. But you'll get an initial bolus of the market opportunity, I guess, sort of overnight once we get the label expansion for that patient population?

If you consider it in the context of just the current market, having a time clock and when you could diagnose is a barrier. And just -- so you could imagine a scenario where a patient has just gotten diagnosed with this disease, it's just learning about how to use insulin. And then they're being presented with this option of getting this drug that has to be infused, and there's a clock and you have 100 days. Well, if that clock goes away and now a patient has a year, that's just more penetration of the market that already exists because patients have more time to decide.

Great. That flexibility is really important for both the patient and even a timing to get into that endocrinologists office perspective or for some institutions. And we've talked about this, Sam, but that 100 days post dose diagnosis is arbitrary, right? It was chosen to make an ease of clinical trial. I mean, is that fair? And what data do we have to suggest that post 100 days, is there still C-peptide to that is available to be preserved?

Yes. Well, the idea that it's arbitrary is discussed. So I don't know if we can conclude it, but the KOLs largely think that it's arbitrary. When all of us designed clinical trials, we want to find ways to narrow the patient population and make it as homogeneous as possible to increase the likelihood of success. However, patients, by and large, do still have C-peptide after 100 days. We can still preserve C-peptide, we know that from other trials in our 4 patients in our Phase I, we're well out past 2 years, and we'll prove it in the PRI study that -- so we'll answer the question definitively, which will say this 100 days was arbitrary. I think it's also to point out that [ TZield ] has 8 weeks on the label, 56 days. So we're already increasing the opportunity with 100 days. And then when you go to -- the question was about the arbitrariness, well, the price -- the specific purpose of the prior study was to prove that concept. It's [ Michael Hawler ] study. He designed that he was interested in it. Breakthrough T1D was interested in funding in the price study is a grant award to Mike our from the breakthrough T1D. That was a huge question. Is it arbitrary? And that's why the study is designed the way it is. The control group is patients within the first 100 days. Cohort 2 is 100 to 1 year and cohort 3 is 1 year to 2 years. So it's specifically designed to prove that point that it is arbitrary and successful results, we'll establish that.

Yes. Looking forward to it. And the prize in [indiscernible], they're very similar trials other than that time from diagnosis and, of course, site number and things like that. But if [ Safeguard ] works, particulars we head on both the primary some of the key secondaries, how much does that impact your confidence that price? Will also read out positively given the hypothesis that 100-day cutoff is not necessary?

Well, tremendously because now you're working with a drug that's been demonstrated to be effective. I think the question is still there until you get the results. But when -- I think Safeguard working is a prerequisite. So when you've demonstrated that, it makes the risk of price go down dramatically, but we consider it a win-win, right? Safeguard is our trial to prove efficacy and get the drug approved and it doesn't rely on price. But price hits, we're just expanding the market with really no downside risk.

Yes. I think it's great. So I want to switch gears a bit maybe and talk about that is perhaps near and dear to your heart, your [ C bovine ] platform. You've recently announced that you began construction on a second South Dakota facility to really establish a redundant heard. Maybe just talk through the platform a bit, some of the advantages there, some of the IP benefits that you've alluded to? And the most important strategic benefits of this investment as you move closer to commercialization.

Yes. So our platform is [ trans chromosome ] cows that are all clones, and they are genetically engineered so that they make human and they become plasma donors for human IVIG. And the advantage of a cow, which doesn't exist in humans is we can give them vaccinations for a drug target and produce a targeted IgG that's fully human. [ Bimaglobulin], which is our sort of reference comparator is a rabbit [ IVIg ] that's made by vaccinating rabbits with human [indiscernible], and you have a rabbit [ anti-dieseIVIG ] product. that has the downsides of serum sickness and the inability to redose. You cannot redose that product. So by our cows allow us to make the human version of that drug that we know is effective. and that is an incredibly powerful platform. The advantage, again, is no serum sickness in the ability to redose and we've talked today about the ability to redose and chronically dose these patients. so our cows are plasma donors of human IVIG and because their cows we can target them. From an IP perspective, I mean, I think it's pretty easy to understand that we effectively have IP into perpetuity. Because we have multilevel IP protection, which includes trade secrets, which in IP 101, by the way, is the most valuable form of IP because there's no expiration, nobody knows it. Patents expire. So we will have patents on the drug that will expire in 20 years, but we have the cows, the trade secrets, the know-how to make a cow. And then in addition to that, there is no biosimilar pathway for plasma-derived IVIg. So there's -- you'd also have to start from IND and it would be a new molecule, not a biosimilar. The combination of those 3 is very attractive IP or exclusivity package that I think is very uncommon in biotech.

[ Agreed. And then just the redundancy of that second allows you to further shore up the manufacturing ability.

Right. So to address the investment in the second farm, these cows are very valuable to us, and there is some outside risk that something catastrophic could happen, God forbid, which would either be some kind of an outbreak or a weather event. And our first risk mitigation strategy had been and continues to be stockpiling plasma. We can stockpile plasma, and it's stable for 10 years, we can make much more than we need. The redundant farm allows us to have a redundant heard so that if something were to happen to 1 herd, we always have cows at another facility ready to be plasma producers.

And South Dakota was chosen on purpose, right?

South Dakota is considered to be the state with the sort of climate and infrastructure. That's the most friendly for cows. It has the most cows per capita of any state in the U.S. And when we needed and continue to need all the infrastructure that goes into housing cows, South Dakota is the place to be. And I will point out since we're talking about it, that to contextualize what the operation is like, it is akin to a dairy farm. So the cows are dairy cows and they're housed and fed and treated just like a dairy.

Excellent. And so then just beyond SAB 142, I'm wondering what other opportunities exist to leverage our platform across other autoimmune diseases or immunological indications? And how should we think about broadening it beyond type 1 diabetes?

Yes, that's a great question. So if we start with the human IVIG business and look at companies like CSL bearing, that's a $20 billion business at a much lower price point and you can only get basically general IVIg that exists in the human population. And when you look at the animal IVIG drugs, there's about 12 [ imeglovulin ] is the biggest one. They're highly limited because they can't be redosed and they make the patient 6, so they've been used very scarcely, we have an animal in which we can make human IVIG. So that's -- that's a huge unmet market and opportunity that we can tap into and no 1 else can. Today, the company is laser-focused on being a type 1 diabetes company. And as our 142 program matures, we will expand to other autoimmune conditions, firstly that are addressable by 142 SAB 142 is a drug that confers tolerance without immunosuppression. And that's important for many autoimmune diseases, T-cell-mediated autoimmune diseases and while today, we are focused on the type 1 diabetes program. As that program advances, the first thing we'll do is look to expand the label and make AB42 available in other autoimmune indications. So I think the market opportunity goes beyond those big numbers that are already in T1D, and this really will become a big franchise product.

Got it. Okay. Well, I think we've been quite efficient with our time. I'm going to turn it back to you, Sam, for any closing remarks you might have. And then if you could just also remind us your cash runway and recap what way you should look forward to over say, the next 12 months?

Sure. I think we have a very exciting opportunity here at SAB where the next in line to be a leading T1D company. And our mission is to transform what it means to get diagnosed with T1D. Up until today, it meant you need insulin and you need CGM. And now when with the advent of [indiscernible], but with the advent of our drug, it's about preserving the organ and if you catch it early enough, becoming insulin free at some point. We are looking forward to announcing the trial being fully enrolled by the end of the year. and very excited to share top line data at the second half of 2027. So keep an eye on it. And I'll let Lucy take it from there with cash runway.

And with cash, we ended the last quarter with $208 million of cash. So that gets us to the end of 2028. That should see us through the safeguard data, the initiation of prize and pre-commercial activities and manufacturing activities. That does not include our enrollment tranche that we expect perhaps the end of this year, early next year. Those expire 30 days once we fully enroll [ Safeguard ]. So we have a pretty good cash runway to see us through the data point.

Excellent. Well, this has been wonderful. Thank you both so much for the time. And yes, thank you.

Thank you. Thanks for the time.