SAB Biotherapeutics (NASDAQ:SABS) reported first-quarter financial results on Tuesday. The transcript from the company's first-quarter earnings call has been provided below.

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Summary

SAB Biotherapeutics reported strong progress with its SAB142 program, focusing on treating autoimmune type 1 diabetes, with phase 1 data showing promising results in beta cell preservation and a favorable safety profile.

The company initiated its phase 2b Safeguard trial, with enrollment on track for completion by the end of 2026, and top-line data expected in the second half of 2027.

SAB Biotherapeutics secured a multi-year agreement with Emergent Biosolutions for the manufacturing of SAB142, enhancing readiness for a potential commercial launch.

The FDA confirmed that C peptide can be used as a surrogate endpoint for accelerated approval of SAB142, de-risking the regulatory path.

Financially, the company ended the first quarter with $217.6 million in cash, supporting operations through 2028. R&D expenses increased due to investment in the Safeguard trial, while net loss rose to $18.9 million compared to $5.2 million in the previous year.

Full Transcript

OPERATOR

Good morning. Good morning and welcome to the SAB Biotherapeutics conference call to discuss first quarter 2026 financial results and business updates. Listeners are invited to review the full text of the forward looking statements from the morning's quarterly earnings press release. Company Management may provide projections during the call and actual results could differ materially due to several factors including those outlined in the company's latest filings with the SEC. Currently, all participants are in a listen only mode. Following Management's remarks, we will open the call for questions. This call is being webcast live and can be accessed on the Investor SECtion of SAB Biotherapeutics website at the Investor Relations section of the SAB Biotherapeutics website where a replay will be available. I'll now turn the call over to to Samuel Reich, Chief Executive Officer of SAB Bio.

Samuel Reich (Chief Executive Officer)

Thank you Operator. Good morning and thank you to everyone joining us for our first earnings call. We're excited to have you with us to share the progress our team has made in the first quarter, progress that sets a strong foundation for the rest of 2026. For those of you who may be new to our story, let me take a moment to introduce SAB Biotherapeutics, our mission and our focus. SAB Biotherapeutics is a clinical stage biopharmaceutical company focused on developing fully human anti-thymocyte immunoglobulin for type 1 diabetes and other autoimmune diseases. Our mission is to dramatically redefine what it means to be diagnosed with type 1 diabetes by developing a medicine to change the course of disease, not just treat the symptoms. Our lead product candidate, SAB-142 is a potentially disease modifying redosable immunotherapy in clinical development for the treatment of autoimmune type 1 diabetes. We produce SAB-142 using our proprietary transchromosomic bovine platform which allows us to generate fully human immunoglobulin without the need for human donors. SAB-142 works by directly targeting multiple immune cells involved in destroying insulin producing beta cells. Its mechanism of action has been clinically validated in U.S. clinical trials with rabbit antithymocyte globulin. We have generated highly positive phase one data demonstrating encouraging efficacy signals and a validated mechanism of action with sustained immunomodulation. SAB-142's phase one data showed early C-peptide signals demonstrating beta cell preservation and a favorable safety profile resulting in no serum sickness and low or no immunogenicity allowing for chronic redosing. Following these results, we advanced SAB-142 into a registrational phase 2b trial called SAFEGUARD which was initiated last year with the first patient dosed in December. We believe SAB-142 has the potential to fundamentally change how type 1 diabetes is treated and address a major unmet medical need. In the US there are over 2 million people diagnosed with stage 3 or symptomatic type 1 diabetes and approximately 64,000 patients newly diagnosed each year. Now to the first quarter update. I am thrilled with the progress our team has made this quarter. We executed on every front and we're standing on business. The momentum is real and it's building. Here's how. Starting with the SAFEGUARD trial, enrollment is progressing on schedule and remains on track to be completed by the end of this year, with top line data expected in the second half of 2027. We are continuing to activate multiple clinical trial sites across the U.S., Australia, New Zealand, the UK and the European Union. To remind everyone on the call, the SAFEGUARD trial will enroll a total of 159 stage 3 type 1 diabetes patients between the ages of 5 and 40, all within 100 days of diagnosis. It is structured in two parts. Part A, our dose ranging study in 12 adult patients completed enrollment during the first quarter, representing a notable milestone. Part B, our randomized double blind placebo controlled study enrolling 147 pediatric, adolescent and adult patients, was initiated in the first quarter and is actively enrolling now. Additionally, our study Data Monitoring committee recently approved the first step down to enroll patients ages 12 and older. The pace of enrollment and the enthusiasm from investigators reinforces the urgent and unmet need in the type 1 diabetes community for therapies that go beyond insulin management to actually address the underlying autoimmune disease. Another significant highlight this quarter was that we received written correspondence from the FDA confirming that C-peptide may serve as a surrogate endpoint for accelerated approval. This represents a meaningful de risking of our regulatory path. This written confirmation gives us greater confidence and clarity as we execute Safeguard and plan our path to market. We also recently shared new findings from SAB-142's Phase 1 study at the Immunology of Diabetes Society Congress. The data presented highlighted SAB-142's mechanism of action along with demonstrating that the mechanism translates into clinical benefit for people with type 1 diabetes. The phase 1 data for SAB-142 showed preservation of C-peptide levels correlated with evidence of T-cell exhaustion. Of the four SAB-142 treated participants, three demonstrated a super responder profile with C-peptide levels at or above baseline at day 120. Those treated participants showed improved glycemic control with mean time and range increasing from 73% at baseline to 85% at day 120 without an associated increase in exogenous insulin use. While early and exploratory, these results are encouraging and further build confidence as we advance SAB-142 in the safeguard trial. For more details, you can explore the full data presentation on our website. Finally, on the business side, on April 29th we executed a multi year agreement with Emergent BioSolutions to support the process development as well as clinical and commercial manufacturing of SAB142 in anticipation of regulatory approval. This agreement positions us to scale manufacturing in support of a potential commercial launch. We are confident having such a capable and experienced partner like Emergent in place as we advance towards that milestone. And with that, I'll turn the call over to Lucy to our Chief Financial Officer to review our first quarter earnings and financial updates.

Lucy (Chief Financial Officer)

Thanks Sam. We ended the first quarter with 217.6 million in cash, cash equivalents and available for sale securities as of March 31, 2026. The strong cash position provides us with an operational Runway through 2028 fully supporting the execution of Safeguard and our pre commercial activities. Contributing to this position was our public offering that was completed in March. Following the initial closing, the underwriters exercised their overallotment option resulting in aggregate gross proceeds of approximately 95 million. We are well capitalized and well positioned to execute our plan. Our R&D expenses were $13.4 million for the first quarter of 2026 compared to $7.7 million for the same period in 2025. The increase is driven by the ongoing investments made to advance the SAB142 program in the Safeguard trial including site activation and patient enrollment. This is exactly where we expect to be investing. G&A expenses were 6.6 million for the first quarter of 2026 compared to 3.1 million for the same period in 2025. The increase was primarily driven by higher non cash stock based compensation expenses and personnel related costs associated with our expanded team. As we scale these investments in our operational foundation are necessary and expected. Other income was $1.1 million for the first quarter of 2026 compared to $5.6 million for the same period in 2025. This decrease was driven by the change in fair value of warrant liabilities. As a result of these factors, net loss was $18.9 million for the first quarter of 2026 compared to $5.2 million for the same period in 2025. The financial results Reflect a company that has the resources, discipline and Runway to see Safeguard through to completion and to begin building toward commercial readiness. And with that, I can turn it back over to Sam for closing remarks before we open the call up for questions.

Samuel Reich (Chief Executive Officer)

Thanks, Lucy. To close, I want to reiterate how much we believe in the mission we are pursuing. Type 1 diabetes affects millions of people globally and today the standard of care is insulin, which treats the symptoms but does not address the underlying disease. SAB-142 has the potential to change that and transform what it means to have a type 1 diabetes diagnosis. We entered 2026 with a clear plan and we are executing against it. Part A of Safeguard is fully enrolled. Part B is underway. Our cash runway is secured through 2028. Our regulatory path has been de risked. We have a lot of work ahead of us, but we are exactly where we need to be and we are focused on what matters most. Completing Safeguard enrollment and advancing SAB-142 toward the patients who need it. We are grateful for the support of our investors, our investigators, our patients and our team. We look forward to continuing to update you on our progress. And with that, we're ready to take any questions.

OPERATOR

Ladies and gentlemen, we will now begin the question and answer session. If you would like to ask a question, please press star and one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Ladies and gentlemen, we will wait for a moment while we poll for questions. Our first question comes from Michael Yee with ubs. Please state your question.

Matt

Hey guys, this is Matt on for Mike. Thank you so much for taking our question. I wanted to ask if you could talk a little bit about mechanistically how SAB-142 and anti-thymocyte globulin broadly is differentiated from CD3 antibodies antibodies and how this translates to both clinical activity and safety tolerability, especially as it relates to immunodepletion and immunomodulation. Just how these work overall. That'd be great. Thank you so much. Well, the anti CD3 antibodies antibody is monoclonal, so it has a singular effect on one target. And when that drug gets into the range at which it's inducing exhaustion, it also has an impact on T-regulatory cells, which can be a counterproductive mechanism which works against T cell exhaustion. T-regulatory cells are essential for self tolerance and having a negative impact on T-regulatory cells. Will have a negative impact on the patient's autoimmune condition. The thymoglobulin, which is rabbit antithymocyte globulin, as well as SAB-142, which is human antithymocyte globulin, are able to be dosed in because they're polyclonal and because they are binding multiple targets across the spectrum of T cells. We're able to induce T cell exhaustion at a very low dose in which T-regulatory cells are preserved or possibly even activated. And that is a cumulative benefit with the polyclonal approach rather than kind of a counterproductive effect which happens, which appears to happen with anti CD3 antibodies. And we believe that will lead to better clinical outcomes. I think something that's very important with the human antithymocyte globulin is that there's no immunogenicity and no serum sickness. And we showed in phase one that we can safely redose and re initiate that exhaustion. So another advantage which is unique to our drug in comparison to both T-shield as well as thymoglobulin, is that we can safely chronically dose the patients, maintain exhaustion, and hopefully maintain preservation of beta cells indefinitely. Does that answer your question? Michael, that's great. Thank you so much.

OPERATOR

The next question comes from Iris Gao with Guggenheim. Please state your question.

Iris Gao (Equity Analyst at Guggenheim)

Hi, good morning. This is Iris. Congratulations on the progress and thank you for taking my questions. My first question is really quick. So, like, would you plan to disclose the part A data ahead of part B? My second question is, I wonder if there is a pattern in the four patients from phase one that could probably guide the design of indication expansion studies into established type 1 diabetes patients. Thank you.

Samuel Reich (Chief Executive Officer)

Sure. At this time, we don't have any plans on releasing patients from part A. That's not in our current plans right now, so we're not guiding to that. Your second question? Certainly. So the four patients dosed in phase one were mature patients. They had had the disease for two years or more. And in that patient population, we showed the desired effect, a very exciting outcome. So that does certainly provide support for this disease being effective in more mature patients, which we do intend to pursue, and that certainly expands our addressable market if we're able to capture that label, which we hope to.

Iris Gao (Equity Analyst at Guggenheim)

Thank you very much.

OPERATOR

Our next question comes from Thomas Smith with Leering Partners. Please state your question. Hey, guys. Good morning.

Thomas Smith (Equity Analyst at Leering Partners)

Congrats on the progress and thanks for taking our questions. With respect to the written correspondence from FDA confirming C peptide may be used as A surrogate endpoint for accelerated approval. Obviously encouraging feedback. Can you just elaborate on the timing and the path for receiving that feedback and how this correspondence is similar or different from the feedback you received last year when you initiated safeguarding?

Samuel Reich (Chief Executive Officer)

Well, we have developed the safeguards study in our clinical regulatory plan along with correspondence with the FDA. And so this is a very important program to sab. And so we believe we have full alignment and are very confident in our plan. So generally our correspondence with FDA are written and, you know, we updated as stated in that in the last response, we did receive confirmation that C-peptide is sufficient endpoint for an accelerated approval. So, you know, I'll just say that, you know, we've developed safeguard and continued to work on our clinical regulatory plan with alignment with FDA and with confidence, we're moving forward, you know, with the following. The expectations of the agency.

Thomas Smith (Equity Analyst at Leering Partners)

Got it. That's encouraging. And then with respect to safeguard enrollment progress, nice to see part A enrolled. And the DMC approved the step down to patients 12 and older. Can you just walk us through the path from here on part A? What's sort of the process and expected timing for potentially stepping down to dosing children 5 and older? Thanks so much.

Samuel Reich (Chief Executive Officer)

You're welcome. So we expect to step down to patients 5 and older in the coming months. As we mentioned, we have stepped down to 12 and above, which is a great first step. And we continue to look at safety out of the patients and follow the same path that we did to get to 12. And so as patients come in 12 and up and we collect enough patients, then we'll step down to 5 and older.

OPERATOR

Thank you. Our next question comes from Albert Lowe with Craig Hallam. Please state your question.

Albert Lowe (Equity Analyst at Craig Hallam)

Hi. Thanks. Maybe along the lines of what you were just saying, can you tell us a little bit more about what kind of data the study data monitoring committee got to see to approve the step down?

Samuel Reich (Chief Executive Officer)

Yes. So the data monitoring committee decision is based on part A, safety data up to four weeks from randomization. So essentially looking at four weeks of safety data of those 12 patients, and based on that safety review, they approved opening enrollments to patients 12 and older.

Albert Lowe (Equity Analyst at Craig Hallam)

Great. Thank you.

OPERATOR

Our next question comes from Emily Bodnar with HC Wainwright. Please state your question.

Emily Bodnar

Hi, good morning. Thanks for seeing the question. Maybe given the type 1 diabetes cohort from your phase 1, where three of the patients had increased C peptide at the end of the study, could you kind of walk through your thinking for if this is something you can feasibly show in the Safeguard trial or Is your baseline just to show preserved peptide? Thanks.

Samuel Reich (Chief Executive Officer)

Well, the expectation when we take a mean change in baseline from a larger group of patients with A, from adults to adolescents in pediatrics is to preserve C-peptide. Our goal is to preserve C-peptide. So the fact that we had these super responders that increased C-peptide is very exciting and we're certainly thrilled that we got that result, which is evidence of the therapeutic effect that we propose that our drug has. But when we look at a larger group of patients over a longer period of time, the goal is to show preservation. And we'll certainly be very happy if patients at one year have their C-peptide the same as it was when they started. That's the goal.

OPERATOR

Our next question comes from Leland Ghoshir with Oppenheimer and Company. Please state your question.

Leland Ghoshir (Equity Analyst at Oppenheimer and Company)

Hey. Presuming success in Safeguard, I wanted to ask if you could share your thoughts on further development plans for the BIPFIL program toward the FDA application and to what extent might you include repeat dosing given the presumed advantage over rabbit ATG in terms of safety with repeat doses of 114? Thanks. So we hope chronic dosing will get into our label. The patients in the Safeguard study are getting at least two doses. The long term extension study allows every patient in every group, if they complete their 12 month visit and still have some C peptide, to continue and get four doses. So there will be data in the package which has some number of patients having gotten four doses and followed for two years. And we plan, we hope that that's sufficient for chronic dosing on the label and for patients to be able to get this drug chronically and preserve C peptide for many years. Thank you. Our next question comes from Kumar Raja with Brooklyn Capital Markets. Please state your question. Yeah, good morning. Thanks for taking my questions.

Kumar Raja (Equity Analyst at Brooklyn Capital Markets)

With REGARD to this, 159 patients, how do you think it will split in terms of geographies where you will be recruiting? I just want to get a sense how many patients would be here from the U.S. thank you.

Samuel Reich (Chief Executive Officer)

We have a substantial number of sites in the US and we expect to have 20% or more of the patients enrolled in the US. 60% or so in Europe based on the number of sites we have in Europe and then the rest in Australia. I'm counting UK and Europe. So UK and Europe, but based on the number of sites and the enrollment to date, we would expect to have 20 or more percent of the patients be US based. Okay, great. You made comments about feedback from the fda.

Kumar Raja (Equity Analyst at Brooklyn Capital Markets)

Can you share what kind of feedback you got from other Regulatory agencies. Is the expectation very similar from ema too. Thank you.

Samuel Reich (Chief Executive Officer)

Yeah, I mean, I think it's consistent across the board. And, you know, we're not really sharing the intricate details of all the different. The different things we've heard from the different agencies, but we are confident that we have alignment and, You know, there's similar feedback across the agencies. Okay, and will you be pursuing accelerated approval pathways in the other regions, too? Thank you. I'm all fixed. I think it's a little too early to say, although what I will say is that we plan on seeking approval globally for this product, or at least in the U.S. europe and other agencies. But, you know, our focus and our priority is the US but this is a global program where we. Where we will eventually, you know, go to have the drug commercial globally.

OPERATOR

Thank you. Our next question comes from Iris Gao with Guggenheim. Please state your question.

Iris Gao (Equity Analyst at Guggenheim)

Yeah, thank you very much for taking that question. Again, a quick one. Can you double click on the scale of the manufacturing agreement with Emerging Bio Solutions, like how many doses could they supply post commercialization? Thank you.

Samuel Reich (Chief Executive Officer)

Well, we are currently planning to be able to supply the market in year one with Emergent. In terms of specific number of doses, I don't think we've disclosed that to date, but our plan with Emergent does have us ready when we launch to have a strong lung and have more than enough drug supply to supply the demand.

Iris Gao (Equity Analyst at Guggenheim)

Great. Thank you,

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