Chardan Healthcare Conference – 10 Years of Disruptive Innovation - SAB BIOTHERAPEUTICS INC

Financial Performance:

• Helios acquired the Atherosys platform (including manufacturing assets and intellectual property) for $2.25 million in early 2024, securing hundreds of millions of dollars in prior value without bearing the R&D costs.
• Manufacturing cost of goods (COGS) at the 50-liter bioreactor stage is commercially viable with reasonable margins; scaling to a 500-liter facility is projected to reduce COGS by two-thirds or more.
• Helios received a $50 million grant from the Japanese government to fund the construction of a large-scale 500-liter bioreactor commercial facility in Kobe.
• Manufacturing costs in Japan (Yokohama/Kobe) are approximately one-third of those at previous locations (e.g., Lonza Singapore) due to lower labor costs and decades of deflation.

Guidance and Future Outlook:

• Helios targets conditional regulatory approval for ARDS in Japan within 9 months of filing, with a commercial launch expected thereafter, potentially leading to US/EU Phase 3 enrollment.
• SABbio anticipates key Phase IIb "Safeguard" registrational data in 2026 and potential US approval for Type 1 Diabetes around 2027.
• SABbio's Phase III "Prize" study aims to expand the eligible treatment window from 100 days post-diagnosis to up to two years, significantly increasing the Total Addressable Market (TAM).
• Helios plans to file for approval shortly after completing process characterization and potency assays, leveraging an orphan drug pathway in Japan (28,000 annual patients).

Business Segments and Product Lines:

• Helios (MAPC Therapy): Focuses on Multipotent Adult Progenitor Cells (MAPCs) for Acute Respiratory Distress Syndrome (ARDS). Unlike pluripotent stem cells, MAPCs are end-state cells that do not differentiate; they dampen acute inflammation via IV infusion (30-60 mins) to restore homeostasis and reduce ventilator time/mortality.
• Helios Manufacturing: Utilizes 3D bioreactors (Sartorius 50L currently, scaling to 500L) in Japan, transitioning from Lonza Singapore to Moneris Yokohama and a new Kobe facility to achieve commercial scale (1,000 doses/year currently; 40,000 doses/year potential).
• SABbio (Polyclonal Antibody Platform): Produces fully humanized polyclonal antibodies using genetically engineered trans-chromosomic cows. The lead candidate is a humanized anti-thymocyte globulin (ATG) for Type 1 Diabetes (T1D), designed to be redosable and free of serum sickness compared to animal-derived ATG.
• SABbio Clinical Pipeline: Enrolling the Phase IIb "Safeguard" study (159 newly diagnosed T1D patients, 5-40 years old) to assess C-peptide preservation; initiating Phase III "Prize" study to expand treatment eligibility to patients 1-2 years post-diagnosis.

Market and Competitive Landscape:

• Cell Therapy: Japan is positioned as the global leader in cell therapy approvals and commercialization, offering a favorable regulatory path, government funding, and established infrastructure compared to the US.
• IVIG/Immunomodulation: The global IVIG market exceeds $20 billion. Human-derived IVIG is limited by donor supply, while animal-derived IVIG (e.g., Sanofi's Thymoglobulin) is effective but non-redosable due to serum sickness risks.
• Competitive Context: SABbio's technology solves the redosing limitation of established drugs like Sanofi's Thymoglobulin and mimics the mechanism of Sanofi's T-Zield, which was approved on C-peptide alone (accelerated approval).

Risks and Challenges:

• Regulatory Risk: Reliance on Japan's conditional approval pathway creates a dependency on specific regulatory outcomes before US/EU commercialization can proceed.
• Manufacturing Complexity: Scaling cell therapy manufacturing to large bioreactors (500L) while maintaining quality control and cost-efficiency remains a significant operational hurdle.
• Clinical Risk: The success of SABbio's therapy hinges on replicating the C-peptide preservation results of rabbit ATG and demonstrating clinical benefit (HbA1c reduction) to secure full approval beyond accelerated status.
• Market Adoption: Need to convince stakeholders that humanized ATG is superior to existing therapies (like T-Zield) regarding safety profiles and redosing capabilities in a chronic disease setting.

Management Commentary and Tone:

• Helios (CFO Rich Kincaid & CEO Sam Reich): Expressed high confidence in the "off-the-shelf" scalability inherited from Atherosys; tone is pragmatic about Japan's cost advantages but firm on the necessity of US/EU Phase 3 trials for global market access.
• SABbio (CEO Sam Reich): Tone is cautious optimism; highlights the de-risked nature of their approach by leveraging established efficacy data from rabbit ATG while solving the safety/redosing constraints.
• Both companies emphasized that efficacy alone is insufficient; manufacturing scalability and regulatory strategy are mission-critical components of their business models.

Analyst Questions and Answers:

• Q: Difference between MAPCs and pluripotent stem cells? A: MAPCs are end-state cells that do not differentiate, acting as "homeostasis drugs" to counter inflammation, whereas pluripotent cells can differentiate into various tissues.
• Q: Manufacturing cost advantages in Japan? A: Transitioning to Japanese manufacturing reduces costs to one-third of previous levels due to lower labor rates and government support, enabling commercial viability at the 50L scale and 500L expansion.
• Q: Why is T-Zield approval significant for SABbio? A: T-Zield's approval based solely on C-peptide (a biomarker) resolves a long-standing regulatory debate, establishing that C-peptide preservation is sufficient for accelerated approval in T1D, which SABbio leverages for its own Phase IIb endpoints.
• Q: What is the strategic goal of the Prize study? A: To prove that C-peptide preservation is the primary driver of efficacy rather than time since diagnosis, thereby expanding the label to include patients up to two years post-diagnosis.

Other Key Points:

• Helios' facility in Kobe is nicknamed "Kobe Stem Cells" (playing on "Kobe Beef"), funded by government grants to support industrial policy in regenerative medicine.
• SABbio's cow platform produces fully human IVIG, avoiding the "serum sickness" associated with animal-derived antibodies (like Thymoglobulin) and the scarcity of human plasma donors.
• Helios' MAPCs have a short in-vivo half-life (2-3 days) but provide long-term reparative benefits through cytokine modulation.
• SABbio's Phase I data showed an average absolute increase in C-peptide in treated patients and confirmed safety/redosability in healthy volunteers.