SAB Biotherapeutics, Inc.
For the period ended Mar 31, 2025. Filed May 9, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 9, 2025
SABS$3.03+3.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-06.
0000950170-24-122443
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-09.
0000950170-25-067554
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 128 previous paragraphs and 85 current paragraphs.
49 unchanged; 27 reworded; 9 added; 49 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 17 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
Since its recent announcement of positive topline data results for the Phase 1 clinical trial of SAB-142 on January 28, 2025, SAB BIO provided a clinical trial progress update on DATE SAB BIO announced patient dosing concluded in the last cohort of the Phase 1 clinical study of SAB-142.
Current report
Given SAB-142 was generally well-tolerated among healthy volunteers and data from Phase 1 trial confirms SAB-142 does not cause serum sickness or anti-drug antibodies at target dose, we maintain that study results support that SAB-142 is well-positioned for re-dosing in outpatient setting for type 1 diabetes. Based on the data, SAB BIO plans to advance SAB-142 into a Phase 2b trial in 2025 to evaluate the therapeutic candidate in adult and pediatric patients with new-onset T1D.
Current report
General and administrative expenses decreased by $1.1 million, or 25.6%, in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to salaries and benefits (year-over-year decrease of $0.5 million, 25.0%), project consulting (year-over-year decrease of $0.1 million, 28.7%), insurance costs (year-over-year decrease of $0.1 million, 25.3%) and other immaterial administrative support fees relating to IT and human resources (year-over-year decrease of $0.4 million, 25.9%).
Current report
While administrative support and non-capitalized financing costs declined as of March 31, 2025 as compared to March 31, 2024, we anticipate that general and administrative expenses will rise as we expand our workforce and invest in the advancement of our lead therapeutic candidate in preparation for potential commercialization. Additionally, as our operations grow in complexity and we progress toward commercialization, we may incur higher costs related to accounting, audit, legal, regulatory compliance, director and officer insurance, and investor relations.
Current report
Future interest income will be largely dependent on our total liquid cash and investment balances, which are in turn influenced by our capital resources and future fundraising activities.
Current report
At March 31, 2025 and December 31, 2024, we recognized approximately $139 thousand and $276 thousand, respectively, as an insurance financing note payable in our condensed consolidated balance sheets. We incurred $4 thousand and $8 thousand of interest expense related to the insurance financing note for the three months ended March 31, 2025 and 2024, respectively. Our current insurance financing agreement is being repaid through installment payments, with the final payment scheduled for September 22, 2025.
Current report
In 2023, we entered into an agreement with First Insurance Funding, which assigned them a first-priority lien on the security interest in the financed policies and associated rights. During the three months ended March 31, 2024, we made payments on the prior insurance financing agreement with First Insurance Funding with an original principal balance of $765 thousand and an annual interest rate of 7.96%. This prior agreement, structured with similar lien and collateral terms, was fully repaid upon the final installment on September 22, 2024
Current report
Net cash used by investing activities increased by $36.0 million in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to increased purchases of short-term investments following the completion of the September 2023 Offering. Capital expenditures were minimal in 2024, as major asset purchases in prior years were primarily related to leasehold improvements at our corporate headquarters. We do not anticipate a significant increase in capital asset purchases in the near term, as our investment focus remains on advancing our lead therapeutic candidate through Phase 2 clinical trials.
Current report
Net cash used by financing activities decreased by $0.2 million in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to the absence of any material equity financing activities in 2024.
Removed paragraphs (49)
Previous report
Company Overview
Previous report
In addition to SAB-142, we also have clinical stage assets targeting infectious diseases that have significant mortality and morbidity in the general population and in high-risk patients. To date, we have conducted seven clinical trials, including Phase 1, Phase 2 and Phase 3, totaling more than 700 individuals dosed with our proprietary hIgGs. In May of 2023, we received Fast Track Designation and Breakthrough Therapy Designation from the U.S. Food and Drug Administration (the “FDA”) Center for Biologics Evaluation and Research (“CBER”) for our SAB-176 immunoglobulin targeting multiple strains of influenza based upon positive clinical data from a Phase 2a trial.
Previous report
SAB provided a clinical trial progress update on September 9, 2024 at the European Association for the Study of Diabetes Annual Meeting. The update confirmed that SAB-142 has completed Phase 1 enrollment of all planned cohorts in healthy volunteers and is progressing to enroll patients with type 1 diabetes in the last cohort of the study. Further, the target dose of SAB-142 2.5mg/kg is complete with no observation of serum sickness.
Previous report
SAB has elected to add a T1D patient cohort to establish safety, tolerability, pharmacokinetic and immunogenicity profile of SAB-142 in patients with T1D prior to initiation of an upcoming Phase II SAFEGUARD study in patients with new-onset T1D.
Previous report
SAB-142 believes that it remains on track for a topline Phase 1 data readout by the end of the year.
Previous report
Our Product Pipeline
Previous report
SAB-142: Human Anti-Thymocyte Globulin for Type 1 Diabetes
Previous report
The following table summarizes our drug candidate, SAB-142 and its existing clinical plan and proposed stages of development.
Previous report
Figure 1. An overview of phased milestones for SAB-142, starting with Phase 1 study cohorts 1-5 starting end of 2023 through beginning of 2025, with Phase 1 topline results anticipated in late 2024. Phase 2 study POC/DRF is anticipated to begin in early 2025 with Phase 2 (SAFEGUARD) topline results expected at the end of 2027.
Previous report
Figure 2. An overview of the SAB-142 pipeline, including potential future anticipated studies for other indications and anticipated milestones.
Previous report
SAB-142 is a first-in-class, human, multi-target anti-thymocyte globulin treatment designed to provide superior efficacy and safety in delaying the onset or progression of T1D. SAB-142 is expected to reduce autoimmune β-cell destruction and delay progression or onset of T1D in patients with Stage 3 or Stage 2 T1D respectively.
Previous report
In addition to potentially preserving beta cell function in early T1D patients, SAB-142 offers the potential of re-dosing when examining clinically meaningful indicators such as C-peptide levels and glycosylated hemoglobin (HbA1c), without the potential risk of inducing major immune reactions of analogous animal derived IgGs. The overall long-term safety profile of a low-dose ATG is supportive of the vision to use SAB-142 as a lifelong disease-modifying treatment without a risk of immunosuppression associated with clinically significant effects such as infections, malignancies or suppressed humoral response.
Previous report
Mechanism of Action
Previous report
Maintenance of the level of connecting peptide, a short 31 amino acid polypeptide that connects insulin’s A chain to its B chain in the proinsulin molecule, commonly referred to as C-peptide, is a validated surrogate endpoint for endogenous insulin production, essential for the prevention of progression of T1D. Placebo controlled trials with low-dose rabbit ATG, defined as a single dose of 2.5 milligram per kilogram (mg/kg), have shown statistically significant maintenance of C-peptide levels and thus a delay in progression of recent onset T1D.
Previous report
Based on the results of a Phase 2 clinical trial conducted at the University of Florida, a single dose of rabbit ATG showed sustained benefit in T1D over a two-year period by maintaining significantly higher C-peptide levels than a placebo control. However, more than 65% of treated patients in this study acquired serum sickness due to the infusion of a non-human antibody, with symptoms that included rash, malaise, fever, and joint swelling. The symptoms often required treatment with steroids that control serum sickness but impair diabetes management and reduces the capacity to re-dose rabbit ATG when C-peptide levels begin to drop.
Previous report
While the mechanism of action of our compound closely resembles rabbit ATG, SAB-142 has clear advantages that are fundamental for safe and reliable re-dosing required to delay disease progression. Data from more than 700 human subjects treated with antibodies produced by our platform support expectation of a zero serum sickness rate and zero incidence of neutralizing anti-drug antibodies (“ADA”) within the upcoming SAB-142 trials. There is an established regulatory path for T1D indications using the SAB-142 modality. We initiated the Phase 1 clinical study with the first patient dosed November 2023. Finally, our next steps will be to file a clinical trial application (“CTA”) in the European Union, and an investigational new drug (“IND”) application in the United States to expand the clinical trials to global jurisdictions.
Previous report
Rabbit ATG shows therapeutic promise but offers problematic potential for adverse events that could inhibit long term disease modification and redosing; we believe those issues are resolved by SAB-142. SAB-142 represents an opportunity to offer a novel human alternative to rabbit- or equine-derived ATG IgGs with potential for safe and reliable re-dosing while avoiding the risk factors observed with currently available therapies.
Previous report
Clinical Strategy
Previous report
Immunological processes resulting in the breakdown of self-tolerance and gradual destruction of pancreatic beta cells by the patient’s own immune system preceding the clinical onset of disease oftentimes starts very early in patients’ lives, sometimes as early as in utero. The average age of clinical onset of T1D is 13 years old. Stage 1 is the start of T1D, marked by individuals having two or more diabetes-related autoantibodies and still normal blood sugar concentrations. In Stage 2, individuals have dysglycemia but without symptoms. Stage 3 is the time of a full clinical diagnosis. Unfortunately, when an individual is first diagnosed with clinical stage T1D, 50- 90% of pancreatic insulin-producing beta cells are already destroyed. Hence, it is critical to start therapy that preserves the remaining fully functional beta cells as soon as possible as it may provide the highest benefit throughout the patient’s lifetime.
Previous report
In addition to the currently approved and ongoing Phase 1, we plan to bring this program to IND and CTA filings with global regulatory authorities by the mid-2024. As there are unmet medical needs globally for disease-modifying treatments of T1D, we plan to work with global health authorities and file clinical trial applications and clinical trial notifications in other countries to have a global footprint and reach patients with T1D worldwide. We anticipate topline results by the end of 2024. Topline data will include the safety data to support re-dosing along with proof of biological activity. Topline data will further enable global Phase 2 clinical proof of concept and dose-range finding trials in adults and even more importantly, in adolescent T1D population, another critical milestone for 2024 as T1D onset most often occurs in pediatric and adolescent patient populations.
Previous report
SAB-176: Human Anti-Influenza Globulin for High-Risk Influenza
Previous report
SAB-176 represents a comprehensive approach to treatment and prophylaxis (PreP and PEP) of high-risk patients with influenza as a broadly neutralizing -human polyclonal immunoglobulin therapeutic with several anti-viral mechanisms. SAB-176 was evaluated in an ascending dose, double-blind, randomized, placebo-controlled Phase 1 safety trial in 27 healthy volunteers in 2020. The FDA allowed us to initiate a Phase 1 trial in healthy adults based on the safety profile in the preclinical data set. A Safety Review Committee (“SRC”) monitored adverse events after each cohort was infused and recommended that each later cohort could be infused with the next highest dose according to the study protocol. Although anticipated adverse events were noted among the SAB-176 and placebo participants, no drug related serious adverse events (“SAEs”) were identified by the SRC.
Previous report
In March 2024, SAB announced that the Navy Medical Research Command (“NMRC”) would be moving forward with a safety and tolerability study to evaluate SAB-176 pursuant to the Cooperative Research and Development Agreement governing the relationship between SAB and the NMRC, with funding for the study provided by the Henry Jackson Foundation.
Previous report
Key Factors Affecting Our Results of Operations and Future Performance
Previous report
Components of Results of Operations
Previous report
Our revenue has historically been generated through grants from government and other (non-government) organizations. We currently have no commercially approved products.
Previous report
Grant revenue is recognized for the period that the research and development services occur, as qualifying expenses are incurred or conditions of the grants are met. We concluded that payments received under these grants represent conditional, nonreciprocal contributions, as described in ASC 958, Not-for-Profit Entities, and that the grants are not within the scope of ASC 606, Revenue from Contracts with Customers, as the organizations providing the grants do not meet the definition of a customer. Expenses for grants are tracked by using a project code specific to the grant, and the employees also track hours worked by using the project code.
Previous report
The National Institute of Health – National Institute of Allergy and Infectious Disease (“NIH-NIAID”) and Geneva Foundation grants, totaling approximately $4.2 million, were completed as of June 30, 2023. No grant income was recognized for these grants in the three and nine months ended September 30, 2024. The Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense Enabling Biotechnologies (“JPEO”) Rapid Response Contract (the “JPEO Rapid Response Contract”), initially awarded for up to $25 million and later expanded to $203.6 million, was terminated in 2022 (the “JPEO Rapid Response Contract Termination”). A final settlement was reached with the US Department of Defense (the “DoD”) in January 2023. Approximately $1.2 million in deferred grant income was recognized for the JPEO Rapid Response Contract in the nine months ended September 30, 2024. A remaining $115 thousand is expected to be recognized as wind-down activities are completed, subject to potential adjustments from negotiations with third-party vendors.
Previous report
See Note 2, Summary of Significant Accounting Policies, to our condensed consolidated financial statements for further information about our established revenue recognition process and Note 4, Revenue, to our condensed consolidated financial statemetns for further information about revenue recognized from government grants for the three and nine months ended September 30, 2024 and 2023.
Previous report
Results of Operations
Previous report
Revenue decreased by $0.7 million, or 37.6%, in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to the JPEO Rapid Response Contract Termination. Included in revenues for the nine months ended September 30, 2024, are closeout activities and charges of $1.2 million due to outside services for laboratory supply disposal, as compared to $0.5 million for supplies, $0.1 million for labor, and $1.4 million for contract manufacturing for the nine months ended September 30, 2023.
Previous report
Research and development expenses increased by $3.8 million, or 94.8%, for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, primarily due to increases in outside lab services (year-over-year increase of $1.3 million, 595.8%, salaries and benefits (year-over-year increase of $1.1 million, 49.5%), overhead (year-over-year increase of $0.1 million, 16.8%), project consulting (year-over-year increase of $0.2 million, 300.5%), clinical trial costs (year-over-year increase of $1.3 million, 475.4%), laboratory supplies (year-over-year increase of $0.2 million, 67.7%), offset by a decrease in contract manufacturing (year-over-year decrease of $0.4 million, 100.0%).
Previous report
General and administrative expenses increased by $908 thousand, or 35.3%, in the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, primarily due to salaries and benefits (year-over-year increase of $883 thousand, 68.3%), project consulting (year-over-year increase of $159 thousand, 3.3%), human resources, legal, and other administrative support fees relating to IT (year-over-year increase of $15 thousand, 4.0%), offset by a decrease in insurance costs (year-over-year decrease of $149 thousand, 31.7%). We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our continued research activities and development of our product candidates. We anticipate incurring expenses related to the remediation of material weaknesses in our internal control over financial reporting, which involve implementing new processes and engaging with a third-party firm.
Previous report
General and administrative expenses increased by $2.6 million, or 29.1%, in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to salaries and benefits (year-over-year increase of $2.6 million, 72.3%), project consulting (year-over-year increase of $0.3 million, 36.7%), and other immaterial administrative support fees relating to IT and human resources, offset by a decrease in insurance costs (year-over-year decrease of $0.4 million, 29.8%). We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our continued research activities and development of our product candidates. We anticipate incurring expenses related to the remediation of material weaknesses in our internal control over financial reporting, which involve implementing new processes and engaging with a third-party firm.
Previous report
Total non-operating income increased by $9.3 million, or 918,690.41% in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to the change in fair value of warrant liabilities (year-over-year increase of $7.8 million, 8,097.5%), and Australian research and development tax credit (year-over-year increase of $1.2 million) and income received from non-interest bearing short-term investments (year-over-year increase of $0.3 million).
Previous report
Interest expense in the nine months ended September 30, 2024 was consistent with interest expense in the nine months ended September 30, 2023, with the added interest expense on the 8% Unsecured Convertible Note in the current fiscal period offset by lower interest expenses associated with our finance leases in the same period of the prior year.
Previous report
Interest income increased by $1.0 million, or 1,039.14%, during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2024, primarily due to interest earned on our investments in debt securities, and higher interest earning cash, and cash equivalent balances.
Previous report
Liquidity and Capital Resources
Previous report
Sources of Liquidity
Previous report
8% Unsecured Convertible Note
Showing the first 40 of 49 passages. Open the source sections for the rest.
Reworded paragraphs (27)
Previous wording
We are a clinical-stage biopharmaceutical company focused on the development of human polyclonal immunotherapeutic antibodies, or hIgG, to address immune system disorders and infectious diseases. Our antibodies are both target-specific and polyclonal, meaning they are comprised of multiple hIgGs and can bind to multiple sites on specific immunogens, making them ideally suited to address the complexities associated with many immune-mediated disorders. Our lead candidate, SAB-142 is a human ATG focused on preventing or delaying the progression of T1D. We recently initiated a Phase 1 trial of SAB-142 to establish its safety and pharmacokinetic profiles in human subjects.
Current wording
We are a clinical-stage biopharmaceutical company focused on the development of human polyclonal immunotherapeutic antibodies, or human immunoglobulins (hIgG), to address immunology disorders. Our programs are based on mechanisms of action that have achieved proof-of-concept in clinical trials in indications with significant unmet medical needs. We are focused on developing product candidates for disease targets where a differentiated approach has the greatest potential to be either first-in-class against novel targets or best-in-class against complex targets to treat diseases, including type 1 diabetes (T1D) and other autoimmune disorders. Our internally discovered antibodies are both target-specific and polyclonal, meaning they are comprised of multiple hIgGs and can bind to multiple sites on targeted immunogens, making them ideally suited to address the complexities associated with many immune-mediated disorders.
Previous wording
More broadly, we believe that our proprietary platform, referred to as DiversitAb,™ holds the potential to generate additional novel therapeutic candidates to expand our pipeline. DiversitAb,™ utilizes the human immune response to generate the optimal repertoire of IgGs for drug targets of interest. We believe it is the only technology capable of producing disease-targeted, hIgG in large quantities without the need for human plasma donors. We have optimized genetic engineering in the development of transchromosomic cattle, or Tc Bovine, which produce hIgGs. Our engineering of the DiversitAb production system drives IgG1 production across our pipeline. As our lead program SAB-142 advances, we intend to expand our pipeline in complimentary indications through strategic utilization of our platform.
Current wording
Our proprietary platform, referred to as holds the potential to generate additional novel therapeutic candidates to expand our pipeline. Our platform utilizes the human immune response to generate the optimal repertoire of IgGs for drug targets of interest. We believe it is the only technology capable of producing disease-targeted, hIgG in large quantities without the need for human plasma donors. We have optimized genetic engineering in the development of transchromosomic cattle, or Tc Bovine, which produce hIgGs. Our engineering of our production platform drives IgG1 production across our pipeline. In addition, this differentiated approach using polyclonal antibodies has no biosimilar pathway which provides a significant barrier to competitive polyclonal approaches.
Previous wording
Leveraging our proprietary production system will help us advance a robust pipeline of differentiated hIgG-based therapies for the treatment of immune system disorders and infectious diseases. Our hIgGs have been safely demonstrated up through Phase 3 clinical trials with a patient safety database that includes over 700 patients who were safely administered our hIgG therapeutics.
Current wording
Our proprietary platform represents the first technology of its kind to produce large-scale human high-titer and high-avidity antibodies across multiple modalities. Leveraging our proprietary production system will help us advance a robust pipeline of differentiated hIgG-based therapies for the treatment of immune system disorders and infectious diseases. Our hIgGs have been safely demonstrated in Phase 3 clinical trials with a patient safety database that includes over 700 patients who were safely administered our hIgG therapeutics.
Previous wording
There was no revenue recognized from government grants for the three months ended September 30, 2024 and total revenue recognized from government grants was approximately $1.2 million for the nine months ended September 30, 2024, and $1.3 million and $1.9 million for the three and nine months ended September 30, 2023, respectively.
Current wording
There was no revenue recognized for the three months ended March 31, 2025. Total revenue recognized from government grants was approximately $0.9 million for the three months ended March 31, 2024. The Company had various grants from the US Department of Defense that terminated in 2022. The Company satisfied all obligations under these arrangements as of December 31, 2024.
Previous wording
Research and development activities consist of discovery research for our platform development and the indications we are working on. For SAB-142, Avance Clinical PTY, Ltd (“Avance”), acts as the contract research organization (“CRO”) overseeing our Phase 1 safety study. This study started in December 2023 and the terms of that agreement are subject to confidentiality and the status of the agreement is that it is current. For the three and nine months ended September 30, 2024 and 2023, we continued to incur costs to advance our progress towards commercialization of SAB-142. We expect to continue to incur substantial research and development expenses as we conduct discovery research to enhance our platform and work on our indications. We expect to hire additional employees and continue research and development and manufacturing activities. As a result, we expect that our research and development expenses will continue to increase in future periods and vary from period to period.
Current wording
Research and development activities consist of discovery research for our platform development and the indications we are working on. For SAB-142, Avance Clinical PTY, Ltd (“Avance”), acts as the contract research organization (“CRO”) overseeing our Phase 1 safety study. This study started in December 2023 and the terms of that agreement are subject to confidentiality and the status of the agreement is that it is current. For the three months ended March 31, 2025 and 2024, we continued to incur costs to advance our progress towards commercialization of SAB-142. We expect to continue to incur substantial research and development expenses as we conduct discovery research to enhance our platform and work on our indications. We expect to hire additional employees and continue research and development and manufacturing activities. As a result, we expect that our research and development expenses will continue to increase in future periods and vary from period to period.
Previous wording
Major components within our research and development expenses are salaries and benefits (laboratory & farm), laboratory supplies, animal care, contract manufacturing, clinical trial expense, outside laboratory services, project consulting, and facility expenses. Our platform allows us to work on multiple projects with the same resources, as the research and development process of each product is very similar (with minimal differences in the manufacturing process).
Current wording
Major components within our research and development expenses are salaries and benefits (laboratory & animal care), laboratory supplies, animal care, contract manufacturing, clinical trial expense, outside laboratory services, project consulting, and facility expense.
Previous wording
Research and development expenses by component for the three and nine months ended September 30, 2024 and 2023:
Current wording
Research and development expenses by component for the three months ended March 31, 2025 and 2024:
Previous wording
General and administrative expenses primarily consist of salaries, benefits, and stock-based compensation costs for employees in our executive, accounting and finance, project management, corporate development, office administration, legal and human resources functions as well as professional services fees, such as consulting, audit, tax and legal fees, general corporate costs and allocated overhead expenses. General and administrative expenses also include rent and facilities expenses allocated based upon total direct costs. We expect that our general and administrative expenses will continue to increase in future periods, primarily due to increased headcount to support anticipated growth in the business and due to incremental costs associated with operating as a public company. These costs include expenses related to compliance with rules and regulations applicable to companies listed on a securities exchange, reporting obligations pursuant to SEC and stock exchange listing standards, public relations, insurance, and professional services. Additionally, we anticipate incurring expenses related to the remediation of material weaknesses in our internal control over financial reporting, which involve implementing new processes and engaging with a third-party firm. We expect these expenses to vary from period to period in absolute terms and as a percentage of revenue.
Current wording
General and administrative expenses primarily consist of salaries, benefits, and stock-based compensation costs for employees in our executive, accounting and finance, project management, corporate development, office administration, legal and human resources functions as well as professional services fees, such as consulting, audit, tax and legal fees, general corporate costs and allocated overhead expenses. General and administrative expenses also include rent and facilities expenses allocated based upon total direct costs. We anticipate that general and administrative expenses will rise as we expand our workforce and invest in the advancement of our lead therapeutic candidate in preparation for potential commercialization. Additionally, as our operations grow in complexity and we progress toward commercialization, we may incur higher costs related to accounting, audit, legal, regulatory compliance, director and officer insurance, and investor relations. We expect these expenses to vary from period to period in absolute terms and as a percentage of revenue.
Previous wording
Comparison of the three and nine months ended September 30, 2024 and 2023
Current wording
Comparison of the three months ended March 31, 2025 and 2024
Previous wording
Revenue decreased by approximately $1.3 million, or 100.0%, in the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, primarily due to the JPEO Rapid Response Contract Termination. There was no revenue for the three months ended September 30, 2024, as compared to $413 thousand for supplies and $855 thousand for contract manufacturing, for the three months ended September 30, 2023.
Current wording
Revenue decreased by $0.9 million, or 100.0%, in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, due to the JPEO Rapid Response Contract Termination. There was no revenue recognized for the three months ended March 31, 2025. Included in revenues for the three months ended March 31, 2024, are closeout activities and charges of $0.9 million due to outside services for laboratory supply disposal.
Previous wording
As a result of the JPEO Rapid Response Contract Termination, we expect future revenues to be lower as our primary pipeline development target of Type 1 diabetes remains independently financed as we explore potential partnerships, co-development opportunities, and licensing arrangements.
Current wording
As a result of the JPEO Rapid Response Contract Termination, we do not expect to generate revenues during the development phase of our primary pipeline development target of Type 1 diabetes, which remains independently financed as we explore potential partnerships, co-development opportunities, and licensing arrangements.
Previous wording
Research and development expenses increased by $10.4 million, or 85.0%, for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to increases in outside lab services (year-over-year increase of $4.0 million, 739.0%), salaries and benefits (year-over-year increase of $2.5 million, 41.5%), an out-of-period adjustment of $0.9 million of amortization expense, overhead (year-over-year increase of $0.5 million, 11.9%), project consulting (year-over-year increase of $0.4 million, 82.6%), clinical trial costs (year-over-year increase of $2.5 million, (814.2%), laboratory supplies (year-over-year increase of $0.3 million, 11.8%) offset by a decrease in animal care (year-over-year decrease of $0.4 million, 58.3%) and contract manufacturing (year-over-year decrease of $0.4 million, 100.0%).
Current wording
Research and development expenses decreased by $0.5 million, or 6.0%, for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to decreases in outside lab services (year-over-year decrease of $0.9 million, 56.8%), a decrease of an out-of-period adjustment of $0.2 million of amortization expense, overhead (year-over-year decrease of $1.2 million, 35.3%), project consulting (year-over-year decrease of $0.1 million, 35.3%), laboratory supplies (year-over-year decrease of $0.1 million, 32.0%) offset by an increase in salaries and benefits (year-over-year increase of $0.9 million, 41.5%) and clinical trial costs (year-over-year increase of $1.1 million, (139.1%). We expect Research and Development expenses to increase in future years as we advance our lead therapeutic candidate through Phase 2 clinical trials and invest in the necessary foundation to support potential commercialization.
Previous wording
Total non-operating income increased by $0.5 million, or 175.7% in the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, primarily due to the other income attributable to the Australian research and development tax credit (year-over-year increase of $0.6 million) and dividend income received from non-interest bearing short-term investments (year-over-year increase of $0.1 million), offset by the change in fair value of warrant liabilities (year-over-year decrease of $0.2 million, 96.5%),
Current wording
Total non-operating income decreased by $0.4 million, or (6.07)% in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to the change in fair value of warrant liabilities (year-over-year decrease of $0.4 million, 7.9%), offset by a $0.1 million increase in the Australian research and development tax credit.
Previous wording
Interest expense in the three months ended September 30, 2024 was consistent with interest expense in the three months ended September 30, 2023, with the added interest expense on the 8% Unsecured Convertible Note in the current fiscal period offset by lower interest expenses associated with our finance leases in the same period of the prior year.
Current wording
Interest expense in the three months ended March 31, 2025 was consistent with interest expense in the three months ended March 31, 2024.
Previous wording
Interest income increased by $0.3 million, or 1829.6%, during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023, primarily due to interest earned on our investments in debt securities, along with higher interest earning cash and cash equivalent balances.
Current wording
Interest income decreased by $0.4 million, or (87.45)%, during the three months ended March 31, 2025 as compared to the three months ended March 31, 2025, primarily due to interest earned on our investments in debt securities, and lower interest earning cash, and cash equivalent balances.
Previous wording
As of September 30, 2024 and December 31, 2023, we had $30.4 million and $56.6 million, respectively, of cash, cash equivalents, and investments.
Current wording
As of March 31, 2025 and December 31, 2024, we had $12.9 million and $20.8 million, respectively, of cash, cash equivalents, and investments.
Previous wording
We have incurred operating losses for the past several years. While we intend to continue to keep operating expenses at a reduced level there can be no assurance that our current level of operating expenses will not increase or that other uses of cash will not be necessary. Based on our current level of operating expenses, existing resources will not be sufficient to cover operating cash needs through the twelve months following the date these financials are made available for issuance. We intend to seek additional capital through equity and/or debt financings, collaborative or other funding arrangements. Should we seek additional financing from outside sources, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital when required or on acceptable terms, we may be required to scale back or discontinue the advancement of product candidates, reduce headcount, liquidate our assets, file for bankruptcy, reorganize, merge with another entity, or cease operations.
Current wording
We have incurred operating losses for the past several years. While we intend to continue to keep operating expenses at a reduced level there can be no assurance that our current level of operating expenses will not increase or that other uses of cash will not be necessary. Based on our current level of operating expenses, existing resources will not be sufficient to cover operating cash needs through the twelve months following the date these financials are made available for issuance. These conditions raise substantial doubt about our ability to continue as a going concern. We intend to seek additional capital through equity and/or debt financings, collaborative or other funding arrangements. Should we seek additional financing from outside sources, we may not be able to raise such financing on terms acceptable to us or at all. If we are unable to raise additional capital when required or on acceptable terms, we may be required to scale back or discontinue the advancement of product candidates, reduce headcount, liquidate our assets, file for bankruptcy, reorganize, merge with another entity, or cease operations.
Previous wording
We obtained financing for certain Director & Officer liability insurance policy premiums. The agreement assigns First Insurance Funding (“Lender”) a first priority lien on and security interest in the financed policies and any additional premium required in the financed policies including (a) all returned or unearned premiums, (b) all additional cash contributions or collateral amounts assessed by the insurance companies in relation to the financed policies and financed by Lender, (c) any credits generated by the financed policies, (d) dividend payments, and (e) loss payments which reduce unearned premiums. If any circumstances exist in which premiums related to any Financed Policy could become fully earned in the event of loss, Lender shall be named a loss-payee with respect to such policy.
Current wording
We obtained financing for certain Director & Officer liability insurance policy premiums. In 2024, we entered into an agreement that assigned to AFCO Direct (the “Lender”) a first priority lien on and security interest in the financed policies and any additional premium required in the financed policies including (a) all returned or unearned premiums, (b) all additional cash contributions or collateral amounts assessed by the insurance companies in relation to the financed policies and financed by Lender, (c) any credits generated by the financed policies, (d) dividend payments, and (e) loss payments which reduce unearned premiums. If any circumstances exist in which premiums related to any Financed Policy could become fully earned in the event of loss, Lender shall be named a loss-payee with respect to such policy.
Previous wording
The total premiums, taxes and fees financed is approximately $765 thousand with an annual interest rate of 7.96%. In consideration of the premium payment by Lender to the insurance companies or the Agent or Broker (as such terms are defined in the agreement with Lender), we unconditionally promise to pay Lender the amount financed plus interest and other charges permitted under the agreement. We paid the insurance financing note through installment payments with the last payment for the current note being September 22, 2024. We recognized no insurance financing note payable in its condensed consolidated balance sheet as of September 30, 2024 and recognized approximately $509 thousand of insurance financing note payable in its condensed consolidated balance sheet as of December 31, 2023. We incurred less than $1 thousand of interest expense related to the insurance financing note for the three months ended September 30, 2024 and 2023 and approximately $13 thousand and $13 thousand for the nine months ended September 30, 2024 and 2023, respectively.
Current wording
The total premiums, taxes, and fees financed under the current insurance financing agreement are approximately $516 thousand, for AFCO Direct with an annual interest rate of 7.37%. In consideration of the premium payment by the Lender to the insurance companies or the Agent or Broker (as defined in the agreement with the Lender), we unconditionally promise to pay the Lender the amount financed plus interest and other charges permitted under the agreement.
Previous wording
Please refer to Note 9, Notes Payable, to our condensed consolidated unaudited financial statements for additional information on our debt.
Current wording
Please refer to Note 9, Notes Payable, in our condensed consolidated financial statements for additional information on our debt.
Previous wording
The following table summarizes our cash flows for the nine months ended September 30, 2024 and 2023:
Current wording
The following table summarizes our cash flows for the three months ended March 31, 2025 and 2024:
Previous wording
Net cash used in operating activities increased by $13.1 million in the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023, primarily due to an increase in cash used in operating activities related to change in our operating assets and liabilities of $3.2 million and an increase in our net loss adjusted for non-cash items of $9.9 million. Year-over-year changes in cash used by operating activities is explained by shifts in the working capital balances as we continue to invest in the development of our lead product candidate, SAB-142.
Current wording
Net cash used in operating activities increased by $3.0 million in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024, primarily due to a decrease in cash used in operating activities related to change in our operating assets and liabilities of $3.8 million and an increase in our net loss adjusted for non-cash items of $0.9 million. Year-over-year changes in cash used by operating activities is explained by shifts in the working capital balances as we continue to invest in the development of our lead product candidate, SAB-142.
Previous wording
We enter into contracts in the normal course of business with third parties, including CROs.
Current wording
We enter into contracts in the normal course of business with third parties, including contract research organizations (“CRO”).
Previous wording
We continue to record a valuation allowance on its net deferred tax assets. The valuation increased by approximately $6.8 million during the nine months ended September 30, 2024. We have not recognized any reserves for uncertain tax positions.
Current wording
We continue to record a valuation allowance on its net deferred tax assets. The valuation increased by approximately $2.5 million during the three months ended March 31, 2025. We have not recognized any reserves for uncertain tax positions.
Previous wording
The accompanying unaudited condensed consolidated financial statements have been prepared assuming we will continue as a going concern, which contemplates continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the normal course of business. We have experienced net losses, negative cash flows from operations and, as of September 30, 2024, and had an accumulated deficit of $112.8 million. We anticipate we will continue to generate losses for the foreseeable future and expect the losses to increase as we continue the development of, or seek regulatory approvals for, product candidates, and begin commercialization of products. As a result, we will require additional capital to fund operations in order to support our long-term plans.
Current wording
The accompanying unaudited condensed consolidated financial statements have been prepared assuming we will continue as a going concern, which contemplates continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the normal course of business. We have experienced net losses, negative cash flows from operations and, as of March 31, 2025, and had an accumulated deficit of $129.4 million. We anticipate we will continue to generate losses for the foreseeable future and expect the losses to increase as we continue the development of, or seek regulatory approvals for, product candidates, and begin commercialization of products. As a result, we will require additional capital to fund operations in order to support our long-term plans.
Previous wording
We currently expect that our cash, cash equivalents, and short-term investments of $30.4 million as of September 30, 2024 will not be sufficient to fund our operating expenses and capital requirements for more than 12 months from the date the financial statements are issued. These conditions raise substantial doubt about our ability to continue as a going concern.
Current wording
We currently expect that our cash, cash equivalents, and short-term investments of $12.9 million as of March 31, 2025 will not be sufficient to fund our operating expenses and capital requirements for more than 12 months from the date the financial statements are issued. These conditions raise substantial doubt about our ability to continue as a going concern.
Previous wording
Our most critical accounting estimates and assumptions are included in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 29, 2024 and our most recent Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 filed with the SEC on August 8, 2024. There have been no significant changes to our critical accounting policies during the three months ended September 30, 2024. See Note 2, Summary of Significant Accounting Policies, to our condensed consolidated financial statements for further details.
Current wording
Our most critical accounting estimates and assumptions are included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 31, 2025. There have been no significant changes to our critical accounting policies during the three months ended March 31, 2025. See Note 2, Summary of Significant Accounting Policies, to our condensed consolidated financial statements for further details.
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Previous report — wording carried elsewhere
Special Note Regarding Forward-Looking Statements
Previous report — wording carried elsewhere
DiversitAb,™ represents the first technology of its kind to produce large-scale human high-titer and high-avidity antibodies across multiple modalities.
Previous report — wording carried elsewhere
The following tables set forth our results of operations for the nine months ended September 30, 2024 and 2023: