SAB Biotherapeutics, Inc.

Good morning and welcome to the SAB BIOS 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 such 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 SABBIO's website at ir.sab.bio.com. 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 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 Bio, our mission, and our focus. SAB Bio 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, SAB142, is a potentially disease-modifying, redosable immunotherapy in clinical development for the treatment of autoimmune type 1 diabetes. We produce SAB142 using our proprietary TC Bovine platform, which allows us to generate fully human immunoglobulin without the need for human donors. SAB142 works by directly targeting multiple immune cells involved in destroying insulin-producing beta cells. Its mechanism of action has been clinically validated in numerous clinical trials with rabbit anti-thymocyte globulin. We have generated highly positive Phase I data demonstrating encouraging efficacy signals and a validated mechanism of action with sustained immunomodulation. SAB142's Phase I 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 SAB142 into a registrational Phase IIb trial called Safeguard, which was initiated last year, with the first patient dosed in December. We believe SAB142 has the potential to fundamentally change how type 1 diabetes is treated and address a major unmet medical need. In the U.S., 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 U.K., 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 SAB 142 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.

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 over-allotment option, resulting in aggregate gross proceeds of approximately $95 million. We are well capitalized and well positioned to execute our plans. 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 SAB 142 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. 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.

Ladies and gentlemen, We will now begin the question and answer session. If you would like to ask a question, please press star and 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star and 2 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.

Hi, 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 SAB142 and ATG probably is differentiated from CD3 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 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 Tregs, which can be a counterproductive mechanism, which works against T cell exhaustion. Tregs are essential for self-tolerance, and having a negative impact on Tregs will have a negative impact on the patient's autoimmune condition. Both thymoglobulin, which is rabbit antithymocyte globulin, as well as SAB142, which is human antithymocyte globulin, are able to be dosed 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 Tregs are preserved or possibly even activated. And that is a cumulative benefit with the polyclonal approach rather than kind of a counterproductive effect, which appears to happen with anti-CD3. And we believe that will lead to better clinical outcomes. I think something that's very important with the human anti-thymocyte globulin is that there's no immunogenicity and no serum sickness. And we showed in phase one that we can safely redose and reinitiate that exhaustion. So another advantage which is unique to our drug in comparison to both T-Shield as well as thymoglobulin as we can safely chronically dose to patients, maintain exhaustion, and hopefully maintain preservation of beta cells indefinitely.

Does that answer your question, Michael? That's great. Thank you so much.

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

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, like, I wonder if there is a pattern in the four patients from Phase 1 that could probably guide a design of indication expansion studies into established Type 1 diabetes patients? Thank you.

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 I 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.

Thank you very much.

Our next question comes from Thomas Smith, with layering partners. Please state your question.

Hey guys, good morning. 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 Safeguard?

Well, we have developed the Safeguard study in our clinical regulatory plan along with correspondence with the FDA. And so this is a 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 we updated as stated 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, following the expectations of the agency.

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. 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 five and older.

Thank you.

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

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?

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.

Great, thank you.

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

Hi, good morning. Thanks for taking 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 C-peptide?

Thanks.

Well, the expectation when we take a mean change in baseline from a larger group of patients with a from adults to adolescents and 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, you know, 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, you know, patients at one year have their C-peptide the same as it was when they started. That's the goal.

Okay, thanks.

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

Hey, presuming success and safeguard, I wanted to ask if you could share your thoughts on further development plans, you know, for the BIFL program toward the FDA application, and to what extent might you include repeat dosing given, you know, the presumed advantage of a rapid ATG in terms of safety with repeat doses of 142? Thanks.

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 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. 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 will be here from the U.S. Thank you.

Yeah.

We have a substantial number of sites in the U.S., and we expect to have 20% or more of the patients enrolled in the U.S., 60% or so in Europe based on the number of sites we have in Europe, and then the rest in Australia. I'm counting U.K. and Europe, so U.K. 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. Can you share what kind of feedback you got from other regulatory agencies with the expectation very similar from EMA too? Thank you.

Yeah, I mean, I think it's consistent.

across the board, and we're not really sharing the intricate details of all the different things we've heard from the different agencies, but we're confident that we have alignment, and there's similar feedback across the agencies.

Okay. And will you be pursuing accelerated approval process in the other regions too? Thank you. I'm all for it.

I think it's a little too early to say, although what I will say is that we plan on, you know, seeking approval globally for this product, or at least in the U.S., Europe, and other agencies. But our focus and our priority is the U.S., but this is a global program where we will eventually go to have the drug commercial globally.

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

Yeah, thank you very much for taking my question again. A quick one. Can you double-click on the scale of the manufacturing agreement with Emergent BioSolutions? Like, how many doses could they supply post-commercialization? Thank you.

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 launch and have more than enough drug supply to supply the demand.

Okay, thank you.

Ladies and gentlemen, that concludes the question and answer session and the conference call of SAB Bio. Thank you for your participation. You may now disconnect your lines.