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What changed in SAB Biotherapeutics, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of SAB Biotherapeutics, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+446 added−802 removedSource: 10-K (2024-03-29) vs 10-K (2023-04-14)

Top changes in SAB Biotherapeutics, Inc.'s 2023 10-K

446 paragraphs added · 802 removed · 303 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

100 edited+72 added−373 removed83 unchanged
Biggest changeFigure 2: DiversitAb Platform Produces a Natural Mixture of Many Human hIgGs that bind to Multiple Epitopes but are Regulated as a Single Product 3 Table of Contents Recent Milestones Since September 2019, we achieved multiple milestones, including: ● Established proof-of-concept for our DiversitAb platform and Chemistry, Manufacturing and Controls (CMC) for multiple disease indications. ● Performed multiple clinical trials establishing the safety profile of hpAbs produced in DiversitAb platform in hundreds of patients and have demonstrated proof of clinical concept for our DiversitAb platform across three SAB-sponsored INDs and one CTA (filed Ex-US) that encompass seven clinical trials from Phase 1 to Phase 3 across treatment of three indications (MERS, Influenza, and COVID-19) briefly summarized below (Figure 3) o Completed Phase 2a challenge study for SAB-176 in adults infected with influenza virus and Phase 2 study for SAB-185 in adults infected with SARS-CoV-2 virus. o Announced topline data demonstrating SAB-176 met its primary endpoint in our Phase 2a challenge study in adults infected with influenza virus. o Reported positive topline Phase 2 virology data demonstrating SAB-185 met criteria for advancement to Phase 3 and completed 50% enrollment in Phase 3.
Biggest changeRECENT MILESTONES We have achieved multiple recent milestones, including: • Initiated a Phase 1 clinical trial of SAB-142 for safety and tolerability in autoimmune disorders including T1D. • Financing of up to $110 million in gross proceeds dedicated to clinically advance SAB-142 to 2026 and topline Phase 2 results. • Completed IND enabling in-vivo pilot and GLP toxicity safety and pharmacodynamic studies for SAB-142 for disease-modifying approach for autoimmune disorders including T1D. • Completed manufacturing and release testing of two lots of Phase 1 clinical drug product of SAB-142. • Initiated in-vivo GLP juvenile toxicity safety and pharmacodynamic studies to enable Phase 2b clinical trial advancement to adolescent patients for SAB 142. • Secured Fast Track Designation and Breakthrough Therapy Designation from FDA for SAB-176 for treatment and prophylaxis of influenza virus, providing an accelerated regulatory timeline for this asset as well as evidence of a clear regulatory strategy for all production system assets. • Established proof-of-concept for our DiversitAb ™ production system and Chemistry, Manufacturing and Controls (CMC) for multiple disease indications. • Performed multiple clinical trials establishing the safety profile in >700 patients of hIgG produced in the DiversitAb ™ production system and have demonstrated proof of clinical concept for our DiversitAb ™ production system across three SAB-sponsored INDs and one CTA (filed in UK) that encompass seven clinical trials from Phase 1 to Phase 3 across treatment of three indications (MERS, Influenza, and COVID-19).
In the United States, the patent term of a patent that covers an FDA-licensed biologic may also be eligible for patent term extension, which permits patent term restoration as compensation for the patent term lost during the FDA regulatory review process. The Hatch-Waxman Act permits a patent term extension of up to five years beyond the expiration of the patent.
In the United States, the patent term that covers an FDA-licensed biologic may also be eligible for patent term extension, which permits patent term restoration as compensation for the patent term lost during the FDA regulatory review process. The Hatch-Waxman Act permits a patent term extension of up to five years beyond the expiration of the patent.
Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. If any future product candidates identified through our current lead programs are eventually approved for sale, they will likely compete with a range of treatments that are either in development or currently marketed for use in those same disease indications.
Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. 16 If any future product candidates identified through our current lead programs are eventually approved for sale, they will likely compete with a range of treatments that are either in development or currently marketed for use in those same disease indications.
While the influenza season differs each year, the CDC estimates there are on average 9 to 41 million cases of influenza each year, with 140,000-710,000 hospitalizations and 12,000-52,000 deaths per year (average 2010-2020). Oseltamivir phosphate (branded: Tamiflu®) is an effective therapy for treating the flu if used within two days of onset.
While the influenza season differs each year, the CDC estimates there are on average 9 to 41 million cases of influenza each year, with 140,000-710,000 hospitalizations and 13 12,000-52,000 deaths per year (average 2010-2020). Oseltamivir phosphate (branded: Tamiflu®) is an effective therapy for treating the flu if used within two days of onset.
The initial PSP must include an outline of the pediatric study or studies that the sponsor plans to conduct, including study objectives and design, age groups, relevant endpoints and statistical approach, or a justification for not including such detailed information, and any request for a deferral of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric studies along with supporting information.
The initial PSP must include an outline of the pediatric study or studies that the sponsor plans to conduct, including study objectives and design, 22 age groups, relevant endpoints and statistical approach, or a justification for not including such detailed information, and any request for a deferral of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric studies along with supporting information.
Moreover, a given patent may only be extended once based on a single product. The U.S. PTO, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. Government Regulation In the United States, we expect our hIgG product candidates to be regulated by the FDA as biological products.
Moreover, a given patent may only be extended once based on a single product. The U.S. PTO, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration. x1. Government Regulation In the United States, we expect our hIgG product candidates to be regulated by the FDA as biological products.
In this study, SAB-176 also appeared to be safe and well tolerated. No SAB-176-related serious adverse events (SAEs) were observed, and most adverse events were mild to moderate. Phase 1 Trial SAB-176 was evaluated in an ascending dose, double-blind, randomized, placebo-controlled Phase 1 safety trial in 27 healthy volunteers in 2020.
In this study, SAB-176 also appeared to be safe and well tolerated. No SAB-176-related serious adverse events (SAEs) were observed, and most adverse events were mild to moderate. e. Phase 1 Trial SAB-176 was evaluated in an ascending dose, double-blind, randomized, placebo-controlled Phase 1 safety trial in 27 healthy volunteers in 2020.
Expedited Review and Approval Programs The FDA has various programs, including fast track designation, priority review, accelerated approval and breakthrough therapy designation, that are intended to expedite or simplify the process for the development and FDA review of biological products that are intended for the treatment of serious or life-threatening diseases or conditions and demonstrate the potential to address unmet medical needs.
Expedited Review and Approval Programs The FDA has various programs, including fast track designation, priority review, accelerated approval and breakthrough therapy designation, which are intended to expedite or simplify the process for the development and FDA review of biological products that are intended for the treatment of serious or life-threatening diseases or conditions and demonstrate the potential to address unmet medical needs.
Importantly, EUAs are not full marketing approvals. Rather, EUAs are only effective for the duration of the applicable EUA declaration. Full approval of the product under applicable standards established under the FDCA would be necessary to continue to distribute the product absent an EUA. EUAs may also be revised or revoked by FDA at any time.
Importantly, EUAs are not full marketing approvals. Rather, EUAs are only effective for the duration of the applicable EUA declaration. Full approval of the product under applicable standards established under the FDCA would be necessary to continue to distribute the product absent an EUA. EUAs may also be revised or revoked by FDA at any time. 8.
The public may read and copy any materials that we file with the SEC electronically through the SEC website (www.sec.gov). The information contained on the SEC’s website is not incorporated by reference into this Annual Report on Form 10-K and should not be considered to be part thereof.
The public may read and copy any materials that we file with the SEC electronically through the SEC website (www.sec.gov). The information contained on the SEC’s website is not incorporated by reference into this Annual Report on Form 10-K and should not be considered to be part thereof. XV.
Under the Prescription Drug User Fee Act, as amended, or the PDUFA, each BLA may be accompanied by a significant user fee. Under federal law, the submission of most applications for approval of drug and biologic products is subject to an application user fee. The sponsor of an approved application is also subject to an annual program fee.
Under the Prescription Drug User Fee Act (PDUFA), as amended, each BLA may be accompanied by a significant user fee. Under federal law, the submission of most applications for approval of drug and biologic products is subject to an application user fee. The sponsor of an approved application is also subject to an annual program fee.
Prior to the institution of any manufacturing changes, a determination needs to be made whether FDA approval is required in advance. If not done in accordance with FDA expectations, the FDA may restrict supply and may take further enforcement action. Annual product reports are required to be submitted annually.
Prior to the institution of any manufacturing changes, a determination needs to be made whether FDA approval is required in advance. If not done in accordance with FDA expectations, the FDA may restrict supply and may take further enforcement action. Annual product reports are required to be submitted.
We could see a reduction or elimination in our commercial opportunity if our competitors develop and commercialize drugs that are safer, better tolerated, more effective, more convenient to administer, less expensive, more resistant to viral escape, or receive a more favorable label than our product candidates.
We could see a reduction or elimination in our commercial opportunity if our competitors develop and commercialize drugs that are safer, better tolerated, more effective, more convenient to administer, less expensive, more resistant to viral escape, or receive a more favorable label than our product candidates. VIII.
The patent term restoration period generally is- once the patent issues- one-half the time between the effective date of an IND and the submission date of a biologics license application ("BLA") less any time the sponsor did not act with due diligence during the period, plus the time between the submission date of a BLA and the approval of that application less any time the sponsor did not act with due diligence during the period.
The patent term restoration period generally is- once the patent issues- one-half the time between the effective date of an IND and the submission date of a biologics license application (“BLA”) less any time the sponsor did not act with due diligence during the period, plus the time between the submission date of a BLA and the approval of that application less any time the sponsor did not act with due diligence during the period.
This founding company was purchased and became a wholly owned subsidiary of Kirin in Tokyo, Japan in 2005. In 2007, the pharmaceutical division of Kirin became Kirin Pharma and in 2008 merged with Kyowa Hakko Kogyo to become Kyowa Hakko Kirin (KHK). The technology was developed through 2012 by Hematech as a wholly owned subsidiary of KHK.
This founding company was purchased and became a wholly owned subsidiary of Kirin in Tokyo, Japan in 2005. In 2007, the pharmaceutical division of Kirin became Kirin Pharma and in 2008 merged with Kyowa Hakko Kogyo to become Kyowa Hakko Kirin (“KHK”). The technology was developed through 2012 by Hematech as a wholly owned subsidiary of KHK.
The FDA does not always meet its PDUFA goal dates, and the review process is often significantly extended by FDA requests for additional information or clarification. Once the submission is accepted for filing, the FDA begins an in-depth substantive review of the NADA and BLA.
The FDA does not always meet its PDUFA goal dates, and the review process is often significantly extended by FDA requests for additional information or clarification. 20 Once the submission is accepted for filing, the FDA begins an in-depth substantive review of the NADA and BLA.
We believe that we are in material compliance with applicable environmental laws and that continued compliance therewith will not have a material adverse effect on our business. We cannot predict, however, how changes in these laws may affect our future operations.
We believe that we are in material compliance with applicable environmental laws and that continued compliance therewith will not have a material adverse effect on our business. We cannot predict, however, how changes in these laws may affect our future operations. XII.
However, some patients still develop severe disease and are resistant to treatment (estimates of resistance vary: 3-27%). As such, we see the potential for an additional treatment for flu, particularly in higher-risk patients.
However, some patients still develop severe disease and are resistant to treatment (estimates of resistance vary: 3-27%). As such, we see the potential for an additional treatment for flu, particularly in higher-risk patients. c.
The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements.
The FDA may, on its own initiative or at the request of the applicant, grant deferrals for submission of some or all pediatric data until after approval of the product for use in adults, or full or partial waivers from the pediatric data requirements. 10.
On October 22, 2021, BCYP consummated the Business Combination with Legacy SAB, which changed its name from SAB Biotherapeutics, Inc. to Legacy SAB. In connection with the closing of the Business Combination, BCYP changed its name to SAB Biotherapeutics, Inc. and Legacy SAB became a wholly-owned subsidiary of SAB Biotherapeutics, Inc.
On October 22, 2021, BCYP consummated the Business Combination with Legacy SAB, which changed its name from SAB Biotherapeutics, Inc. to Legacy SAB. In connection with the closing of the Business Combination, BCYP changed its name to SAB Biotherapeutics, Inc. and Legacy SAB became a wholly-owned subsidiary of SAB Biotherapeutics, Inc. XIV.
Furthermore, fast track designation, priority review, accelerated approval and breakthrough therapy designation do not change the standards for approval and may not ultimately expedite the development or approval process.
Furthermore, fast track designation, priority review, accelerated approval and breakthrough therapy designation do not change the standards for approval and may not ultimately expedite the development or approval process. 7.
We have fully compliant quality control testing facilities and we have further developed our own internal antigen (immunogen) discovery and production capabilities to accommodate the Tc Bovine immunizations that improve our overall plasma production speed and efficiency further enhancing our drug discovery and clinical manufacturing timeline.
We have fully GLP and cGMP compliant quality control testing facilities and we have further developed our own internal antigen (immunogen) discovery and production capabilities to accommodate the Tc Bovine immunizations that improve our overall plasma production speed and efficiency further enhancing our drug discovery and clinical manufacturing timeline.
Our success will partially depend on our ability to obtain, maintain, enforce, and defend patents and other intellectual property rights with respect to our IgGs that are proven to be safer or more effective or are less expensive than competing products.
Our success will partially depend on our ability to obtain, maintain, enforce, and defend patents and other intellectual property rights with respect to our hIgGs that are proven to be safer or more effective or are less expensive than competing products.
Bovine were selected because they are large animals that produce large amounts of plasma, and as ruminants, have high concentrations of circulating hIgGs with a robust response to immunogen challenge that produces high potency, high avidity human immunoglobulins (hIgGs).
Bovine were selected because they are large animals that produce large amounts of plasma, and as ruminants, have high concentrations of circulating hIgGs with a robust response to immunogen challenge that produces high potency, high avidity hIgGs.
We expect our global patent protection to extend to 2041 and beyond with respect to producing commercial-scale human IgGs using our chromosome engineering that generates high concentrations of human IgGs in ungulates. However, we recognize that patents and other intellectual property rights in biotechnology are constantly evolving with many risks and uncertainties, which may affect those rights.
We expect our global patent protection to extend to 2041 and beyond with respect to producing commercial-scale hIgGs using our chromosome engineering that generates high concentrations of hIgGs in ungulates. However, we recognize that patents and other intellectual property rights in biotechnology are constantly evolving with many risks and uncertainties, which may affect those rights.
Our goal is to continue expansion of the breadth of claims and length of claim protections. Our technologies may be difficult to replicate, creating potential barriers to entry, as our genetic engineering know-how and suite of proprietary platform IP and trade secrets have been developed and optimized over nearly two decades.
Our goal is to continue expansion of the breadth of claims and length of claim protections. Our technologies may be difficult to replicate, creating potential barriers to entry, as our genetic engineering know-how and suite of proprietary production system IP and trade secrets have been developed and optimized over nearly two decades.
The technology was originally contemplated in 1998 by professors at the University of Massachusetts Amherst and Amherst College who recognized a significant gap in immunotherapy applications, namely, using the natural way our bodies fight disease through a human immunoglobulin response. The technology founders established a biotech company called Hematech to develop the technology.
The technology was originally contemplated in 1998 by professors at the University of Massachusetts Amherst and Amherst College who recognized a significant gap in immunotherapy applications, namely, using the way our bodies fight disease through a human immunoglobulin response. The technology founders established a biotech company called “Hematech” to develop the technology.
For more information, please see “Risk Factors – Risks Related to Our Intellectual Property.” The portfolio of intellectual property and trade secrets that we have developed includes patents related to the activity of our human artificial chromosome and methods that we expect to generate fully human IgGs at commercial scale. The patent portfolio includes composition and method patents.
For more information, please see “Risk Factors – Risks Related to Our Intellectual Property”. The portfolio of intellectual property and trade secrets that we have developed includes patents related to the activity of our human artificial chromosome and methods that we expect to generate human IgGs at commercial scale. The patent portfolio includes composition and method patents.
The Biologics Price Competition and Innovation Act of 2009, or BPCIA, which was enacted as part of the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (ACA), created an abbreviated approval pathway for biological products that are demonstrated to be “biosimilar” or “interchangeable” with an FDA-licensed reference biological product via an approved BLA.
The Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), which was enacted as part of the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Reconciliation Act of 2010 (the “ACA”), created an abbreviated approval pathway for biological products that are demonstrated to be “biosimilar” or “interchangeable” with an FDA-licensed reference biological product via an approved BLA.
As of December 31, 2022, none of our employees were represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good.
As of December 31, 2023, none of our employees were represented by labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good.
Intellectual Property We actively seek to protect the intellectual property and proprietary technology platform that we believe is important to our business, which includes seeking and maintaining patents covering our technology platform and products, and any other inventions that are commercially or strategically important to the development of our business.
INTELLECTUAL PROPERTY We actively seek to protect the intellectual property and proprietary technology production system that we believe is important to our business, which includes seeking and maintaining patents covering our technology production system and products, and any other inventions that are commercially or strategically important to the development of our business.
Phase 2a Challenge Trial In December 2021, we announced topline data for a Phase 2a challenge trial that was initiated in June 2021. This was a randomized, double-blind, placebo-controlled study evaluating the safety and treatment efficacy of SAB-176 in 60 healthy adults challenged with a pandemic influenza virus strain (pH1N1).
( See Figure 12 ) . d. Phase 2a Challenge Trial In December 2021, we announced topline data for a Phase 2a challenge trial that was initiated in June 2021. This was a randomized, double-blind, placebo-controlled study evaluating the safety and treatment efficacy of SAB-176 in 60 healthy adults challenged with a pandemic influenza virus strain (pH1N1).
The current platform relies on advanced genetic engineering that functionally replaces bovine IgGs with human hIgGs (resulting in our Tc Bovine) produced from the full germ-line repertoire of human antibody heavy chain and kappa light chain genes on an engineered human artificial chromosome (HAC).
The production system relies on advanced genetic engineering that functionally replaces bovine IgGs with human hIgGs (resulting in our Tc Bovine) produced from the full germ-line repertoire of human antibody heavy chain and kappa light chain genes on an engineered human artificial chromosome (HAC).
We believe that the speed with which we can deploy our DiversitAb platform to develop countermeasures for emerging diseases and pandemics represents a significant advantage relative to other antibody manufacturers.
We believe that the speed with which we can deploy our DiversitAb ™ production system to develop countermeasures for emerging diseases and pandemics represents a significant advantage relative to other antibody manufacturers.
Further, when FDA reviews and approves a NADA, FDA generally conducts a review of environmental risks pursuant to the requirements of the National Environmental Policy Act (NEPA), if any and where required.
Further, when FDA reviews and approves a NADA, FDA generally conducts a review of environmental risks pursuant to the requirements of the National Environmental Policy Act (NEPA), if any and where required. 2. U.S.
In the United States, new animal drugs are subject to regulation under the Federal Food, Drug, and Cosmetic (FD&C) Act, and under the FD&C Act, in general, a new animal drug is “deemed unsafe” and adulterated unless the FDA has approved a new animal drug application (NADA) for its intended use or unless the drug is only for investigational use and conforms to specified exemptions for such use under an investigational new animal drug (INAD) exemption.
In the United States, new animal drugs are subject to regulation under the Federal Food, Drug, and Cosmetic (the “FDCA”), and under the FDCA, in general, a new animal drug is “deemed unsafe” and adulterated unless the FDA has approved a new animal drug application (NADA) for its intended use or unless the drug is only for investigational use and conforms to specified exemptions for such use under an investigational new animal drug (INAD) exemption.
Human Capital As of December 31, 2022, we had 56 full-time employees, including 8 who hold advanced degrees. Of these employees, 35 were engaged in research and development activities, 7 were engaged in clinical activities and 14 were engaged in general and administrative activities.
Human Capital As of December 31, 2023, we had 57 full-time employees, including 8 who hold advanced degrees. Of these employees, 35 were engaged in research and development activities, 7 were engaged in clinical activities and 14 were engaged in general and administrative activities.
Under the performance goals and policies implemented by the FDA under the Prescription Drug User Fee Act (PDUFA) for original BLAs, the FDA targets ten months from the filing date in which to complete its initial review of a standard application and respond to the applicant, and six months from the filing date for an application with priority review.
Under the performance goals and policies implemented by the FDA under the PDUFA for original BLAs, the FDA targets ten months from the filing date in which to complete its initial review of a standard application and respond to the applicant, and six months from the filing date for an application with priority review.
("BCYP"), pursuant to which we debuted as a publicly traded company (the "Business Combination"). BCYP was incorporated as a special purpose acquisition company in the State of Delaware on November 12, 2020. On January 14, 2021, BCYP completed its initial public offering.
(“BCYP”), pursuant to which we debuted as a publicly traded company (the “Business Combination”). BCYP was incorporated as a special purpose acquisition company in the State of Delaware on November 12, 2020. On January 14, 2021, BCYP completed its initial public offering.
Biological Products Development Process In the United States, biologic products are licensed by the FDA for marketing under the Public Health Service Act, (PHS Act), and regulated under the Federal Food, Drug, and Cosmetic Act (FDCA).
Biological Products Development Process In the United States, biologic products are licensed by the FDA for marketing under the Public Health Service Act, (PHS Act), and regulated under the FDCA.
Figure 20: Development and Manufacturing Using DiversitAb ™ Platform Through our DiversitAb platform, we have engineered a targeted human immunoglobulin production system that emulates the way that the natural human immune system synergistically targets the complexity of human disease. The discovery, development and production process represent a “plug-and-play” approach: ● Develop Immunogen for Disease Target .
Through our DiversitAb ™ production system, we have engineered a targeted human immunoglobulin production system that emulates the way that the human immune system synergistically targets the complexity of human disease. The discovery, development and production process represent a “plug-and-play” approach: • Develop Immunogen for Disease Target .
Additionally, in manufacturing our product candidates, we alter the genomic DNA in animals, and FDA considers such altered genomic DNA in an animal to be a new animal drug, which require submission and approval of a New Animal Drug Application (NADA) prior to being marketed in the United States. Regulation of Transgenic Animals and New Animal Drugs The U.S.
Additionally, in manufacturing our product candidates, we alter the genomic DNA in animals, and FDA considers such altered genomic DNA in an animal to be a new animal drug, which require submission and approval of a New Animal Drug Application (NADA) prior to being marketed in the United States. 18 1.
Our Annual Reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and proxy statements, and all amendments thereto, are available free of charge on our website. These reports are posted on our website as soon as reasonably practicable after they are electronically filed with the SEC.
Our Annual Reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and proxy statements, and all amendments thereto, are available free of charge on our website. These reports are posted on our website as soon as reasonably practicable after they are electronically filed with the U.S. Securities and Exchange Commission (the “SEC”).
We designed these programs to support employees’ physical and mental health by providing tools and resources to improve or maintain their health status and encourage engagement in healthy behaviors. 41 Table of Contents
We designed these programs to support employees’ physical and mental health by providing tools and resources to improve or maintain their health status and encourage engagement in healthy behaviors. 24
An immunogen is developed for a specific target in much the same that human vaccines are developed. The platform is designed to address virtually any target including bacteria (whole killed), viruses, toxins, nucleic acids (i.e., RNA and DNA vaccines), whole cells, and human tissues. ● Hyperimmunize Tc Bovine .
An immunogen is developed for a specific target in much the same that human vaccines are developed. The production system is designed to address virtually any target including 15 bacteria (whole killed), viruses, toxins, nucleic acids (i.e., RNA and DNA vaccines), whole cells, and human tissues. • Hyperimmunize Tc Bovine . Tc Bovine are genetically engineered to produce human IgGs.
In the case of a product that is developed from animals with intentionally altered genomic DNA as the donor material source, the process is more complex and involves both CVM, to oversee the intentionally altered genomic DNA in animals and the Office of Tissues and Advanced Therapies (OTAT) at FDA’s Center for Biologics Evaluation and Research (CBER) to oversee the immunoglobulin products.
In the case of a product that is developed from animals with intentionally altered genomic DNA as the donor material source, the process is more complex and involves both CVM, to oversee the intentionally altered genomic DNA in animals and the Office of Tissues and Advanced Therapies (“OTAT”) at CBER to oversee the immunoglobulin products.
SAB-176 met the primary endpoint of significantly reducing patient pH1N1 influenza viral load in the treated subjects (p = 0.026, one sided). 7 Table of Contents Figure 8: Phase 2a Double-Blind, Placebo-Controlled Study Secondary end points produced similar results, showing separation of SAB-176 vs placebo.
SAB-176 met the primary endpoint of significantly reducing patient pH1N1 influenza viral load in the treated subjects (p = 0.026, one sided). 14 Figure 13: Phase 2a Double-Blind, Placebo-Controlled Study Secondary endpoints produced similar results, showing separation of SAB-176 vs placebo.
Owners of approved NADAs continue to have ongoing responsibilities under the FD&C Act, including registration and listing, recordkeeping, filing supplements, and periodic reporting.
Owners of approved NADAs continue to have ongoing responsibilities under the FDCA, including registration and listing, recordkeeping, filing supplements, and periodic reporting. 6.
Competition and SAB-176 Value Proposition Figure 7: Only SAB-176 Provide Potential for “ EVERGREEN ” Influenza Biologic with Low Risk of Escape Mutants To summarize, a few key differentiation aspects of this asset include a multi-pronged approach by neutralizing the virus directly and by inducing Antibody Dependent Cellular Cytotoxicity (ADCC), coupled with a long half-life aimed at providing an extended protection against viral shedding and recrudescent infection, low risk of antiviral resistance/escape mutants, and potential to treat patients infected with anti-viral resistant strains.
To summarize, a few key differentiation aspects of this asset include a multi-pronged approach by neutralizing the virus directly and by inducing Antibody Dependent Cellular Cytotoxicity (ADCC), coupled with a long half-life aimed at providing an extended protection against viral shedding and recrudescent infection, low risk of antiviral resistance/escape mutants, and potential to treat patients infected with anti-viral resistant strains.
Other post-approval requirements applicable to biological products include reporting of GMP deviations that may affect the identity, potency, purity and overall safety of a distributed product, record-keeping requirements, reporting of adverse events, reporting updated safety and efficacy information, and complying with electronic record and signature requirements.
Other post-approval requirements applicable to biological products include reporting of GMP deviations that may affect the identity, potency, purity and overall safety of a distributed product, record-keeping requirements, reporting of adverse events, reporting updated safety and efficacy information, and complying with electronic record and signature requirements. Additionally, rigorous and extensive FDA regulation of new animal drugs continues after approval.
Competition The biopharmaceutical industry is highly competitive and subject to rapid and significant technological change as research provides a deeper understanding of the pathology of diseases and new technologies and treatments are developed.
To produce more product, more animals are added to the program and immunized to the target. VII. COMPETITION The biopharmaceutical industry is highly competitive and subject to rapid and significant technological change as research provides a deeper understanding of the pathology of diseases and new technologies and treatments are developed.
The accreditation process includes an extensive internal review conducted by the institution applying for accreditation. 29 Table of Contents The FDA considers, with limited exclusions, the altered genomic DNA in an animal to be a drug because such altered DNA is an article intended to affect the structure or function of the body of the animal, and, in some cases, intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in the animal.
The FDA considers, with limited exclusions, the altered genomic DNA in an animal to be a drug because such altered DNA is an article intended to affect the structure or function of the body of the animal, and, in some cases, intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in the animal.
Department of Agriculture (USDA) regulates the company’s Tc Bovine husbandry activities, including housing, healthcare, and general management of these specialized animals. This includes regulations and periodic facility inspections and reporting. We also are voluntarily accredited by the American Association for Accreditation of Laboratory Animal Care (AAALAC).
Regulation of Transgenic Animals and New Animal Drugs The U.S. Department of Agriculture (USDA) regulates the company’s Tc Bovine husbandry activities, including housing, healthcare, and general management of these specialized animals. This includes regulations and periodic facility inspections and reporting. We also are voluntarily accredited by the AAALAC.
It may also be modified to address annual strain changes when needed. Nonclinical and clinical data suggests that SAB-176 offers broad protection against diverse influenza strains, even those that were not specifically targeted, potentially because of its strong cross-reactive potencies to conserved epitopes.
Nonclinical and clinical data suggests that SAB-176 offers broad protection against diverse influenza strains, even those that were not specifically targeted, potentially because of its strong cross-reactive potencies to conserved epitopes.
Government for work performed and winddown activities on this award in November 2022 and January 2023 which totaled approximately $16.8M. 26 Table of Contents Manufacturing Strategy In support of our operations, we currently operate two plasma fractionation purification facilities in Sioux Falls, South Dakota: a 50L small batch scale cGMP suite that has produced clinical grade drug product to accommodate Pre-Clinical and Phase 1 studies, and a 200L scale larger batch cGMP suite that was completed in 2021 which can be used to produce clinical grade drug substance and drug product to accommodate larger sized advanced Phase 2 clinical studies or Emergency Use.
Manufacturing Strategy In support of our operations, we currently operate two plasma fractionation purification facilities in Sioux Falls, South Dakota: a 50L small batch scale cGMP suite that has produced clinical grade drug product to accommodate Pre-Clinical and Phase 1 studies, and a 200L scale larger batch cGMP suite that was completed in 2021 which can be used to produce clinical grade drug substance and drug product to accommodate larger sized advanced Phase 2 clinical studies or Emergency Use.
We have successfully utilized our DiversitAb platform technology to generate early proof –of concept and initial clinical lots that address specified immunotherapy targets in as little as 128 days, including completion of IND-enabling studies, in response to the COVID-19 pandemic. We have vertically integrated the platform technology across a significant series of value inflection points.
We have successfully utilized our DiversitAb ™ production system technology to generate early proof of concept and initial clinical lots that address specified immunotherapy targets in as little as 128 days, including completion of IND-enabling studies, in response to the COVID-19 pandemic. VI.
We have made strategic filings in jurisdictions including the United States, Australia, Canada, China, Europe, Japan, Korea, and Mexico. 27 Table of Contents These patent families cover: ● Granted U.S. patent relating to methods of cloning a non-human mammal using transgenic ungulate embryos of one or more cells that have a human chromosome fragment and transgenic ungulate embryos of one or more cells that have a human chromosome fragment, and methods for making them (expiring in 2023 and 2025). ● Granted patents in the U.S., Europe, Japan, and other major markets relating to a human artificial chromosome vector comprising a gene encoding the human antibody heavy chain, a gene encoding the human antibody light chain, and a gene encoding IgM heavy chain constant region derived (at least in part) from a nonhuman animal (expiring in 2033). ● Granted patents U.S., Europe, Japan, and other major markets relating to large-scale production of human IgGs by transgenic animals with high production of fully human hIgG of at least 1 g/L in sera (expiring in 2030 and in the U.S., 2031). ● A granted U.S. patent relating to reprogramming a call to express a T-cell receptor reactive with an antigen of interest (expiring in 2025). ● A granted U.S. patent and a pending U.S. application relating to methods for producing human IgGs against a pathogen comprising injecting a non-human animal with a viral pathogen-derived DNA vaccine in at least two locations of the animal (expiring in 2036). ● Granted U.S. patents covering cloned transgenic ungulates (e.g., bovines) in which prion protein activity is reduced by one or more genetically engineered mutations (expiring in 2023 and 2025). ● Related to anti-thymocyte globulin (ATG) products, pending patent applications in the U.S., Europe, Japan, and other major markets covering ungulate-derived polyclonal immunoglobulin compositions comprising fully human or substantially human immunoglobulins that specifically bind human thymocytes, T cells, B cells, and/or monocytes, and methods of making and using the same in treating or preventing organ transplant rejection or type 1 diabetes (if issued, naturally expiring in 2041). ● Pending international and U.S. patent applications covering ungulate-derived human immunoglobulins that specifically bind coronavirus S protein, and methods of making and using the same in treating or preventing coronavirus disease (if issued, naturally expiring in 2041). ● Pending U.S. provisional application covering ungulate-derived human immunoglobulins that specifically bind influenza antigen, and methods of making and using the same in treating or preventing influenza (if issued, naturally expiring in 2042).
These patent families cover: • Granted patents in the U.S., Europe, Japan, and other major markets relating to a human artificial chromosome vector comprising a gene encoding the human antibody heavy chain, a gene encoding the human antibody light chain, and a gene encoding IgM heavy chain constant region derived (at least in part) from a nonhuman animal (expiring in 2033. • Granted patents in the U.S., Europe, Japan, and other major markets relating to large-scale production of human IgGs by transgenic animals with high production of -human IgG of at least 1 g/L in sera (expiring in 2030 and in the U.S., 2031). • A granted U.S. patent and a pending U.S. application relating to methods for producing human IgGs against a pathogen comprising injecting a non-human animal with a viral pathogen-derived DNA vaccine in at least two locations of the animal (expiring in 2036). • Granted U.S. patent covering ungulate-derived human immunoglobulins that specifically bind coronavirus S protein, and methods of making and using the same in treating or preventing coronavirus disease (expiring in 2041). • Related to anti-thymocyte globulin (ATG) products, pending patent applications in the U.S., Europe, Japan, and other major markets covering ungulate-derived polyclonal immunoglobulin compositions comprising -human or substantially human immunoglobulins that specifically bind human thymocytes, T cells, B cells, and/or monocytes, and methods of making and using the same in treating or preventing organ transplant rejection or T1D (if issued, naturally expiring in 2041). • Pending U.S. provisional application covering ungulate-derived human immunoglobulins that specifically bind influenza antigen, and methods of making and using the same in treating or preventing influenza (if issued, naturally expiring in 2042). • Granted U.S. patent relating to methods of cloning a non-human mammal using transgenic ungulate embryos of one or more cells that have a human chromosome fragment and transgenic ungulate embryos of one or more cells 17 that have a human chromosome fragment, and methods for making them (expiring in 2025).
Tc Bovine are genetically engineered to produce fully-human IgGs, and then hyperimmunized with the immunogen, driving the immune response beyond protective levels that have been shown in some cases to be 40-60 times more potent than hIgGs produced in convalescent patients. ● Collect Plasma .
They are then hyperimmunized with the desired immunogen, driving the immune response beyond protective levels that have been shown in some cases to be 40-60 times more potent than hIgGs produced in convalescent patients. • Collect Plasma . The target specific human IgGs are collected from the Tc Bovine by plasma donations. • Isolate Human IgGs .
Multitarget Immunoglobulin Diversity in a Single Vial Designed to Effectively Treat Complex Disease Another key product differentiator of our hIgGs is the ability to produce a multitarget product that addresses the complexity of disease in a single drug product vial.
Another key product differentiator of our platform is the ability to produce a multitarget product that addresses the complexity of disease in a single drug product vial.
FDA licensure also must be obtained prior to marketing of biologic products. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial financial resources and time. Multiple immunoglobulin and monoclonal antibody products have been approved by the FDA to prevent or treat human diseases.
FDA licensure also must be obtained prior to marketing of biologic products. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial financial resources and time. 3.
However, more than 65% of treated patients in this study acquired serum sickness due to infusion of an animal antibody (rather than human) that included rash, 3-4 days of malaise, fever, and joint swelling.
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.
This is a particularly powerful multivalent combination when multiple antigen targets are combined with the natural muti-epitope targeting of a single antigen (described above), as the therapeutic advantage is expanded to address multiple disease modalities all within a single vial. We believe single or combinatorial monoclonal antibody therapies are significantly challenged to reproduce this competitive product advantage.
This is a particularly powerful multivalent combination when multiple antigen targets are combined with the muti-epitope targeting of a single antigen (described above), as the therapeutic advantage is expanded to address multiple disease modalities all within a single vial. 2.
Orphan drug designation must be requested before submitting a BLA. After the FDA grants orphan drug designation, the generic identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA.
Orphan drug designation must be requested before submitting a BLA. After the FDA grants orphan drug designation, the generic identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. The orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review or approval process. 9.
The AAALAC International accreditation program evaluates organizations that use animals in research, teaching or testing. Those that meet or exceed AAALAC standards are awarded accreditation.
The AAALAC International accreditation program evaluates organizations that use animals in research, teaching or testing. Those that meet or exceed AAALAC standards are awarded accreditation. The accreditation process includes an extensive internal review conducted by the institution applying for accreditation.
SAB-176 has the potential to complement seasonal vaccine programs to achieve better efficacy than small molecule anti-influenza antivirals in the general population, avoid development of resistant strains, and serve as a protective prophylactic in high-risk populations.
SAB-176 has the potential to complement seasonal vaccine programs to achieve better efficacy than small molecule anti-influenza antivirals in the general population, avoid development of resistant strains, and serve as a protective prophylactic in high-risk populations. We believe that this promising therapy is well-suited to address highly mutating viruses that have significant annual health impacts as well as pandemic potential.
PTO in examining and granting a patent considering delays on the part of the patentee or may be shortened if a patent is terminally disclaimed over an earlier filed patent.
In the United States, a patent’s term may potentially be lengthened by patent term adjustment, which compensates a patentee for administrative delays by the U.S. PTO in examining and granting a patent considering delays on the part of the patentee or may be shortened if a patent is terminally disclaimed over an earlier filed patent.
Our discovery process simply involves antigen design and production as the vaccinated Tc Bovine does the rest including antibody design, down selection, and scaled production all in one system. Our regulatory pathway has also been established with the FDA. The FDA regulates polyclonal hIgGs and mAbs completely differently as mAbs are regulated through CDER and pAbs through CBER.
Our discovery process simply involves antigen design and production as the vaccinated Tc Bovine does the rest including antibody design, down selection, and scaled production all in one system. Our regulatory pathway has also been established with the US FDA as well as MHRA in the United Kingdom and TGA in Australia.
Biosimilarity is demonstrated in steps beginning with rigorous analytical studies or “fingerprinting,” in vitro studies, in vivo animal studies and generally at least one clinical study, absent a waiver from the Secretary of the HHS. The biosimilarity exercise tests the hypothesis that the investigational product and the reference product are the same.
Biosimilarity is demonstrated in steps beginning with rigorous analytical studies or “fingerprinting,” in vitro studies, in vivo animal studies and generally at least one clinical study, absent a waiver from the Secretary of the U.S. Department of Health and Human Services (“HHS”). 11.
In addition, biological products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval and may be approved on the basis of adequate and well-controlled clinical trials establishing that the biological product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments.
In addition, biological products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval and may be approved on the basis of adequate and well-controlled clinical trials establishing that the biological product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality, that is reasonably likely to predict an effect on irreversible morbidity or mortality or other clinical benefit, taking into account the severity, rarity or prevalence of the condition and the availability or lack of alternative treatments. 21 Under the FDA Safety and Innovation Act enacted in 2012, a sponsor can request designation of a product candidate as a “breakthrough therapy.” A breakthrough therapy is defined as a drug or biological product that is intended, alone or in combination with one or more other drugs or biologics, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the drug or biological product may demonstrate substantial improvement over existing therapies on one or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.
Our Corporate History SAB Sciences, Inc. (formerly SAB Biotherapeutics, Inc.) was incorporated in April 2014 as a Delaware corporation (“Legacy SAB”). We acquired all the intellectual property rights to Tc Bovine and the DiversitAb platform from Sanford Applied Biosciences, a wholly owned subsidiary of Sanford Health, to develop targeted human IgGs to specific targets and advance clinical development and commercialization.
We acquired all the intellectual property rights to Tc Bovine and the DiversitAb ™ production system from Sanford Applied Biosciences, a wholly owned subsidiary of Sanford Health, to develop targeted human IgGs to specific targets and advance clinical development and commercialization.
The symptoms often required treatment with steroids that impair diabetes management and reduces capacity to give the rabbit ATG again as C-peptide levels begin to drop as shown in Figure 13 below.
The symptoms often required treatment with steroids that control serum sickness but impair diabetes management and reduces the capacity to re-dose rATG when C-peptide levels begin to drop as shown in Figure 2 below. 4 Figure 1: Rabbit ATG Study for Type 1 diabetes d.
If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions, and criminal prosecution.
If we fail to comply with applicable foreign regulatory requirements, we may be subject to, among other things, fines, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions, and criminal prosecution. 23 XIII. Our Corporate History SAB Sciences, Inc. (formerly SAB Biotherapeutics, Inc.) was incorporated in April 2014 as a Delaware corporation (“Legacy SAB”).
We will rely, and expect to continue to rely, on third parties to produce clinical and commercial quantities of any products that we may commercialize. Manufacturers of our products are required to comply with applicable requirements in the GMP regulations, including quality control and quality assurance and maintenance of records and documentation.
Manufacturers of our products are required to comply with applicable requirements in the GMP regulations, including quality control and quality assurance and maintenance of records and documentation.
In each of these areas, the FDA and other regulatory authorities have broad regulatory and enforcement powers, including the ability to levy fines and civil penalties, suspend or delay issuance of approvals, seize or recall products and withdraw approvals. Information about certain clinical trials must be submitted within specific timeframes to the NIH for public dissemination on its clinicaltrials.gov website.
In each of these areas, the FDA and other regulatory authorities have broad regulatory and enforcement powers, including the ability to levy fines and civil penalties, suspend or delay issuance of approvals, seize or recall products and withdraw approvals. 4. U.S.
Item 1. Business. Overview We are a clinical-stage biopharmaceutical company focused on the development of proprietary immunotherapeutic fully-human antibodies, or fully-human immunoglobulins (hIgGs), to treat and prevent immune and autoimmune disorders as well as infectious diseases that have significant mortality and health impacts on high-risk patients.
Item 1. Business. I. OVERVIEW We are a clinical-stage biopharmaceutical company focused on the development of human polyclonal immunotherapeutic antibodies, or human immunoglobulins (hIgG), to address immune system disorders and infectious diseases.
Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the biologic has been associated with unexpected serious harm to patients. 32 Table of Contents Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the physical characteristics of the biologic as well as finalize a process for manufacturing the product in commercial quantities in accordance with GMP requirements.
Concurrent with clinical trials, companies usually complete additional animal studies and must also develop additional information about the physical characteristics of the biologic as well as finalize a process for manufacturing the product in commercial quantities in accordance with GMP requirements.
Objectives: ● Determine the potential toxicity of SAB-142 vs. an anti-thymocyte globulin (ATG) when given by single intravenous infusion to non-human primates ● Characterize mechanism of action, toxicokinetic & immunogenicity profile of SAB-142 Results: ● GLP-tox study demonstrated SAB-142 is well tolerated at escalating doses tested ● Both SAB-142 and its active control, an FDA-approved rabbit-derived ATG, induced transient and prolonged lymphodepletion for the duration of the study.
Objectives: • Determine the potential toxicity of SAB-142 vs. an anti-thymocyte globulin (ATG) when given by single intravenous infusion to non-human primates. • Characterize mechanism of action, toxicokinetic and immunogenicity profile of SAB-142.
These IgGs are then ready for use as a human immunotherapy treatment or prophylactic. 16 Table of Contents Our DiversitAb platform is replicable and scalable since the Tc Bovine are all clones. If more plasma is needed, more animals can be produced through cloning technology and plasma fractionation is a well-established and scalable GMP process.
Human IgGs are then isolated from the plasma through a well-established plasma fractionation process and Quality Control tested. These IgGs are then ready for use as a human immunotherapy treatment or prophylactic. Our DiversitAb ™ production system is replicable and scalable given Tc Bovine are genetic clones.
Michael Haller at the University of Florida, a single dose of rabbit ATG (Thymoglobulin) showed sustained benefit in T1D over two years by maintaining significantly higher C-peptide levels (a marker of pancreatic beta cell function) than placebo controls.
Based on the results of a Phase 2 clinical trial conducted at the University of Florida, a single dose of rATG showed sustained benefit in T1D over a two-year period by maintaining significantly higher C-peptide levels than a placebo control.
Our IgGs are engineered to primarily produce the IgG1 isotype, and to a lesser extent the IgG2 isotype, and have fully functional unmodified antibody variable regions (or Fab domains) that specifically bind to target antigens that provide natural multivalent properties. This multiepitope targeting neutralizes highly mutating targets and prevents mutation escape.
Our IgGs are engineered primarily to produce >90% of the IgG1 isotype with fully functional human antibody variable regions (or Fab domains) that specifically bind to target antigens, thus providing multivalent properties. This multi-epitope capability can address individual variability of epitopes associated with immunological diseases and neutralize highly mutating targets, thus preventing mutation escape in infectious diseases.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn the future, we may identify additional material weaknesses or otherwise fail to maintain an effective system of internal control over financial reporting or adequate disclosure controls and procedures, which may result in material errors in our financial statements or cause us to fail to meet our period reporting obligations, and adversely affect the trading price of our common stock. ● Our warrants are accounted for as liabilities and changes in value of the warrants could have a material effect on our financial results. ● The market price of our securities may be volatile, which could cause the value of any investment in our securities to decline. ● An investment in our common stock is extremely speculative and there can be no assurance of any return on any such investment. ● There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq. ● Our failure to meet the continuing listing requirements of Nasdaq could result in a de-listing of our securities. ● Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall. ● We have a significant number of warrants which are currently exercisable for shares of our common stock, and the exercise thereof would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders. ● Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price. ● We may be subject to securities litigation, which is expensive and could divert management attention. ● Our ability to continue to operate as a going concern depends on our ability to obtain adequate financing in the future. ● Changes in tax laws and regulations or exposure to additional tax liabilities could adversely affect our financial results.
Biggest changeIn the future, we may identify additional material weaknesses or otherwise fail to maintain an effective system of internal control over financial reporting or adequate disclosure controls and procedures, which may result in material errors in our financial statements or cause us to fail to meet our period reporting obligations, and adversely affect the trading price of our common stock. • Our warrants are accounted for as liabilities and changes in value of the warrants could have a material effect on our financial results. • The market price of our securities may be volatile, which could cause the value of any investment in our securities to decline. • An investment in our common stock is extremely speculative and there can be no assurance of any return on any such investment. 26 • There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq. • Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity plans, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall. • We have a significant number of (i) warrants which are currently exercisable for shares of our common stock or shares of preferred stock convertible into shares of our common stock, and (ii) shares of preferred stock convertible into shares of common stock, and the exercise or conversion thereof would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders. • We may be subject to securities litigation, which is expensive and could divert management attention. • Changes in legislation in U.S. and foreign taxation of international business activities or the adoption of other tax reform policies, as well as the application of such laws, could adversely impact our financial position and operating results.
All of our other product candidates are in earlier stages of development and will require substantial additional investment for clinical development, regulatory review and approval in one or more jurisdictions. If any of our product candidates encounters safety or efficacy problems, development delays or regulatory issues or other problems, our development plans and business would be materially harmed.
If any of our product candidates encounters safety or efficacy problems, development delays or regulatory issues or other problems, our development plans and business would be materially harmed. All of our other product candidates are in earlier stages of development and will require substantial additional investment for clinical development, regulatory review and approval in one or more jurisdictions.
As a result, we are, and expect to remain, dependent on third parties to perform some of our research and preclinical studies and any future clinical trials of our product candidates, including but not limited to governmental agencies and university laboratories, contract manufacturers, CROs, distribution and supply (logistics) services organizations, contract testing organizations (CTOs), consultants or consultant organization with specialized knowledge based expertise.
As a result, we are, and expect to remain, dependent on third parties to perform some of our research and preclinical studies and any future clinical trials of our product candidates, including but not limited to governmental agencies and university laboratories, contract manufacturers, contract research organizations (CROs), distribution and supply (logistics) services organizations, contract testing organizations (CTOs), consultants or consultant organization with specialized knowledge based expertise.
These provisions include: ● the right of our board of directors to issue shares of preferred stock and to fix the terms of such shares; ● no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; ● a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our board of directors; ● the right of our board of directors to elect a director to fill a vacancy created by the expansion of our board of directors or the resignation, death or removal of a director in certain circumstances, which prevents stockholders from being able to fill vacancies on our board of directors; ● a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; and ● requirement that a meeting of stockholders may only be called by members of our board of directors and the ability of our stockholders to call a special meeting is specifically denied, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors.
These provisions include: • the right of our Board to issue shares of preferred stock and to fix the terms of such shares; • no cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; • a classified Board with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of our Board; • the right of our Board to elect a director to fill a vacancy created by the expansion of our Board or the resignation, death or removal of a director in certain circumstances, which prevents stockholders from being able to fill vacancies on our Board; • a prohibition on stockholder action by written consent, which forces stockholder action to be taken at an annual or special meeting of our stockholders; and • requirement that a meeting of stockholders may only be called by members of our Board and the ability of our stockholders to call a special meeting is specifically denied, which may delay the ability of our stockholders to force consideration of a proposal or to take action, including the removal of directors.
Any collaboration that we enter into in the future may pose a number of risks, including the following: ● collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; ● collaborators may not perform their obligations as expected; ● collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities; ● collaborators may decide not to continue the development of collaboration products and could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; ● a collaborator with marketing, distribution and commercialization rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of any such product candidate; ● disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development of any product candidates, might cause delays or termination of the research, development or commercialization of such product candidates, might lead to additional responsibilities for us with respect to such product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; ● collaborations may be terminated at the convenience of the collaborator or for a material breach by either party, and, if a collaboration is terminated, we could be required to make payments to the collaborator or have our potential payments under the collaboration reduced; and ● in the event of the termination of a collaboration, we could be required to raise additional capital to pursue further development or commercialization of the product candidates returned to us by our former collaborator.
Any collaboration that we enter into in the future may pose a number of risks, including the following: • collaborators have significant discretion in determining the efforts and resources that they will apply to these collaborations; • collaborators may not perform their obligations as expected; • collaborators may not pursue development and commercialization of any product candidates that achieve regulatory approval or may elect not to continue or renew development or commercialization programs based on clinical trial results, changes in the collaborators’ strategic focus or available funding, or external factors, such as an acquisition, that divert resources or create competing priorities; 51 • collaborators may decide not to continue the development of collaboration products and could independently develop, or develop with third parties, products that compete directly or indirectly with our products or product candidates if the collaborators believe that competitive products are more likely to be successfully developed or can be commercialized under terms that are more economically attractive than ours; • a collaborator with marketing, distribution and commercialization rights to one or more of our product candidates that achieve regulatory approval may not commit sufficient resources to the marketing and distribution of any such product candidate; • disagreements with collaborators, including disagreements over proprietary rights, contract interpretation or the preferred course of development of any product candidates, might cause delays or termination of the research, development or commercialization of such product candidates, might lead to additional responsibilities for us with respect to such product candidates, or might result in litigation or arbitration, any of which would be time-consuming and expensive; • collaborations may be terminated at the convenience of the collaborator or for a material breach by either party, and, if a collaboration is terminated, we could be required to make payments to the collaborator or have our potential payments under the collaboration reduced; and • in the event of the termination of a collaboration, we could be required to raise additional capital to pursue further development or commercialization of the product candidates returned to us by our former collaborator.
In addition, failure to comply with FDA and non-U.S. regulatory requirements may, either before or after product approval, if any, subject our company to administrative or judicially imposed sanctions, including: ● restrictions on our ability to conduct clinical trials, including full or partial clinical holds on ongoing or planned trials; ● restrictions on the products’ marketing, promotion, distribution or manufacturing processes; ● warning letters or untitled letters alleging violations; ● civil and criminal penalties; ● injunctions; ● suspension or withdrawal of regulatory approvals; ● product seizures, detentions or import bans; ● voluntary or mandatory product recalls and publicity requirements; ● imposition of restrictions on operations, including costly new manufacturing requirements; ● suspension of substantive review of pending applications, such as NADAs, BLAs, INADs, or INDs, pending data validation; and ● refusal to approve pending NADAs or BLAs or supplements to approved NADAs or BLAs.
In addition, failure to comply with FDA and non-U.S. regulatory requirements may, either before or after product approval, if any, subject our company to administrative or judicially imposed sanctions, including: • restrictions on our ability to conduct clinical trials, including full or partial clinical holds on ongoing or planned trials; • restrictions on the products’ marketing, promotion, distribution or manufacturing processes; • warning letters or untitled letters alleging violations; 30 • civil and criminal penalties; • injunctions; • suspension or withdrawal of regulatory approvals; • product seizures, detentions or import bans; • voluntary or mandatory product recalls and publicity requirements; • imposition of restrictions on operations, including costly new manufacturing requirements; • suspension of substantive review of pending applications, such as NADAs, BLAs, INADs, or INDs, pending data validation; and • refusal to approve pending NADAs or BLAs or supplements to approved NADAs or BLAs.
If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could result in the imposition of significant fines or other sanctions, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgement, imprisonment, additional integrity reporting and oversight obligations, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, diminished profits and future earnings and curtailment of operations, any of which could adversely affect our ability to operate our business and our results of operations.
If any such actions are instituted against us and we are not successful in defending ourselves or asserting our rights, those actions could result in the imposition of significant fines or other sanctions, including the imposition of significant civil, criminal and administrative penalties, damages, monetary fines, disgorgement, imprisonment, additional integrity reporting and oversight obligations, possible exclusion from participation in Medicare, Medicaid and other federal healthcare programs, contractual damages, reputational harm, 44 diminished profits and future earnings and curtailment of operations, any of which could adversely affect our ability to operate our business and our results of operations.
Regardless of the merits or eventual outcome, liability claims may result in: ● decreased demand for any of our future approved products; ● injury to our reputation; ● withdrawal of clinical trial participants; ● termination of clinical trial sites or entire trial programs; ● significant litigation costs; ● substantial monetary awards to, or costly settlements with, patients or other claimants; ● product recalls or a change in the indications for which they may be used; ● loss of revenue; ● diversion of management and scientific resources from our business operations; and ● the inability to commercialize our product candidates.
Regardless of the merits or eventual outcome, liability claims may result in: • decreased demand for any of our future approved products; • injury to our reputation; • withdrawal of clinical trial participants; • termination of clinical trial sites or entire trial programs; • significant litigation costs; • substantial monetary awards to, or costly settlements with, patients or other claimants; • product recalls or a change in the indications for which they may be used; • loss of revenue; 39 • diversion of management and scientific resources from our business operations; and • the inability to commercialize our product candidates.
The applicable federal, state and foreign healthcare laws and regulations that may affect our ability to operate include, but are not necessarily limited to: ● the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs, such as Medicare and Medicaid; ● federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which impose criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent, making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government, or the knowing retention of an overpayment from government health care programs; HIPAA, which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; ● HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, which impose obligations on covered healthcare providers, health plans, and healthcare clearinghouses, as well as their business associates that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; ● the federal Physician Payments Sunshine Act, which requires manufacturers of certain drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services, or CMS, information related to “payments or other transfers of value” made to physicians, which is defined to include doctors, dentists, optometrists, podiatrists and chiropractors, and certain teaching hospitals and applicable manufacturers to report annually to CMS ownership and investment interests held by the physicians and their immediate family members.
The applicable federal, state and foreign healthcare laws and regulations that may affect our ability to operate include, but are not necessarily limited to: • the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward, or in return for, either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made under federal and state healthcare programs, such as Medicare and Medicaid; • federal civil and criminal false claims laws and civil monetary penalty laws, including the federal False Claims Act, which impose criminal and civil penalties, including civil whistleblower or qui tam actions, against individuals or entities for knowingly presenting, or causing to be presented, to the federal government, including the Medicare and Medicaid programs, claims for payment that are false or fraudulent, making a false statement to avoid, decrease or conceal an obligation to pay money to the federal government, or the knowing retention of an overpayment from government health care programs; the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which imposes criminal and civil liability for executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; • HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH, and their respective implementing regulations, which impose obligations on covered healthcare providers, health plans, and healthcare clearinghouses, as well as their business associates that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission of individually identifiable health information; • the federal Physician Payments Sunshine Act, which requires manufacturers of certain drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, with specific exceptions, to report annually to the Centers for Medicare & Medicaid Services, or CMS, information related to “payments or other transfers of value” made to physicians, which is 40 defined to include doctors, dentists, optometrists, podiatrists and chiropractors, and certain teaching hospitals and applicable manufacturers to report annually to CMS ownership and investment interests held by the physicians and their immediate family members.
If any of our future clinical trial sites terminates for any reason, we may experience the loss of follow-up information on subjects enrolled in such clinical trials unless we are able to transfer those subjects to another qualified clinical trial site, which may be difficult or impossible. We are limited in our ability to manufacture pharmaceutical products.
If any of our future clinical trial sites terminates for any reason, we may experience the loss of follow-up information on subjects enrolled in such clinical trials unless we are able to transfer those subjects to another qualified clinical trial site, which may be difficult or impossible. 45 We are limited in our ability to manufacture pharmaceutical products.
Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC.
Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of periodic management evaluations and annual independent 57 registered public accounting firm attestation reports regarding the effectiveness of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC.
For example, the Biden administration has proposed changes to federal income tax laws that would, among other things, impose a 15% minimum tax on corporate book income for certain taxpayers and strengthen the global intangible low-taxed income regime imposed by the Jobs Act of 2017 while eliminating related tax exemptions.
For example, the Biden administration has proposed changes to federal income tax laws that would, among other things, impose a 15% minimum tax on corporate book income for certain taxpayers and strengthen the global intangible low-taxed income regime imposed by the Tax Cuts and Jobs Act of 2017 while eliminating related tax exemptions.
Any negative views as to the risk-benefit profile of the product candidates we are developing for our lead programs or any product candidates we may develop in the future could lead FDA or comparable foreign regulatory authorities to require that we conduct additional clinical trials or could require more onerous clinical trial designs for any then-ongoing or future clinical trials.
Any negative views as to the risk-benefit profile of the product candidates we are developing for our lead programs or any product candidates we may develop in the future could lead FDA 37 or comparable foreign regulatory authorities to require that we conduct additional clinical trials or could require more onerous clinical trial designs for any then-ongoing or future clinical trials.
Factors affecting the trading price of our securities may include, but are not solely limited to, the risk factors identified herein. The stock market in general, and Nasdaq and biopharmaceutical companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies.
Factors affecting the trading price of our securities may include, but are not solely limited to, the risk factors identified herein. 60 The stock market in general, and Nasdaq and biopharmaceutical companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies.
Our long-term growth strategy to develop and market additional products and product candidates is heavily dependent on precise, accurate and reliable scientific data to identify, select and develop promising pharmaceutical product candidates and products. Our business decisions may therefore be adversely influenced by improper or fraudulent scientific data sourced from third parties.
Our long-term growth strategy to develop and market additional products and product candidates is heavily dependent on precise, accurate and reliable scientific data to identify, select and develop promising pharmaceutical product candidates and 38 products. Our business decisions may therefore be adversely influenced by improper or fraudulent scientific data sourced from third parties.
In addition, we could incur higher manufacturing costs if manufacturing processes or standards change and we could need to replace, modify, design or build and install equipment, all of which would require additional capital expenditures. We have not entered into definitive long term manufacturing and supply agreements with any producers.
In addition, we could incur higher manufacturing costs if manufacturing processes or standards change and we could need to replace, modify, design or build and install equipment, all of which would require additional capital expenditures. We have not entered into long term manufacturing and supply agreements with any producers.
The SEC Staff Statement focused on certain accounting and reporting considerations related to warrants of a kind similar to warrants that we issued prior to the Business Combination at the time of our initial public offering and the exercises by the underwriters of their over-allotment options in January 2021.
The SEC Staff Statement focused on certain accounting and reporting considerations related to warrants of a kind similar to warrants that we issued prior to the 58 Business Combination at the time of our initial public offering and the exercises by the underwriters of their over-allotment options in January 2021.
Any decision to declare and pay dividends as a public company in the future will be made at the discretion of our board of directors and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and other factors that our board of directors may deem relevant.
Any decision to declare and pay dividends as a public company in the future will be made at the discretion of our Board and will depend on, among other things, our results of operations, financial condition, cash requirements, contractual restrictions and other factors that our Board may deem relevant.
Even if we obtain regulatory approval for a product candidate, our products will remain subject to regulatory scrutiny. Even if we obtain regulatory approval in a jurisdiction for our product candidates, they will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, recordkeeping, and submission of safety and other post-market information.
Even if we obtain regulatory approval for a product candidates, our products will remain subject to regulatory scrutiny. Even if we obtain regulatory approval in a jurisdiction for our product candidates, they will be subject to ongoing regulatory requirements for manufacturing, labeling, packaging, storage, advertising, promotion, sampling, recordkeeping, and submission of safety and other post-market information.
We expect that our operating expenses will continue to increase significantly, including as we: ● continue the research and development of our clinical- and preclinical-stage product candidates and discovery stage programs, including further pre-clinical and clinical development of SAB-176, SAB-195 and SAB-142; ● advance our preclinical-stage product candidates into clinical development; ● invest in our technology and platform; ● seek to identify, acquire and develop additional product candidates, including through business development efforts to invest in or in-license other technologies or product candidates; ● seek regulatory approvals for any product candidates that successfully complete clinical trials; ● market and sell our solutions to existing and new partners; ● hire additional clinical, quality control, medical, scientific and other technical personnel to support our operations; ● maintain, expand, enforce, protect, and defend our intellectual property portfolio; ● create additional infrastructure to support operations; ● add operational, financial, and management information systems and personnel to support operations as a public company; ● seek regulatory approvals for any product candidates that successfully complete clinical trials; ● undertake any pre-commercialization activities to establish sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products on our own or jointly with third parties; and ● experience any delays or encounter issues with any of the above.
We expect that our operating expenses will continue to increase significantly, including as we: • continue the research and development of our clinical- and preclinical-stage product candidates and discovery stage programs, including the clinical trials of SAB-142; • advance our preclinical-stage product candidates into clinical development; • invest in our technology and platform; • seek to identify, acquire and develop additional product candidates, including through business development efforts to invest in or in-license other technologies or product candidates; • seek regulatory approvals for any product candidates that successfully complete clinical trials; • market and sell our solutions to existing and new partners; • hire additional clinical, quality control, medical, scientific and other technical personnel to support our operations; • maintain, expand, enforce, protect, and defend our intellectual property portfolio; • create additional infrastructure to support operations; • add operational, financial, and management information systems and personnel to support operations as a public company; • seek regulatory approvals for any product candidates that successfully complete clinical trials; • undertake any pre-commercialization activities to establish sales, marketing and distribution capabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize our products on our own or jointly with third parties; and • experience any delays or encounter issues with any of the above.
From time to time, we may publicly announce the expected timing of some of these milestones, such as the completion of an ongoing clinical trial, the initiation of other clinical programs, receipt of marketing approval or a commercial launch of a product. The achievement of many of these milestones may be outside of our control.
From time to time, we may publicly announce the expected timing of some of these milestones, such as the completion of an 36 ongoing clinical trial, the initiation of other clinical programs, receipt of marketing approval or a commercial launch of a product. The achievement of many of these milestones may be outside of our control.
We have limited human resources and our future success will depend in part on our ability to attract, train, retain and motivate highly skilled executive level management, research and development, and sales personnel and to establish and maintain effective strategic alliances with key companies in our industry.
We have limited human resources and our future success depends and will depend in part on our ability to attract, train, retain and motivate highly skilled executive level management, research and development, and sales personnel and to establish and maintain effective strategic alliances with key companies in our industry.
The supply of our product candidates can be adversely impacted by outbreaks of livestock diseases, which can have a significant adverse impact on our financial condition. Our animals produced by the recipient herd do not typically become productive until 15-18 months from the start of gestation.
The supply of our product candidates can be adversely impacted by outbreaks of livestock diseases, which can have a significant adverse impact on our financial condition. Our animals produced by the recipient herd do not typically become productive until 18 months from the start of gestation.
We depend upon our senior management and senior scientific staff, and their loss or unavailability could put us at a competitive disadvantage. Our success depends largely on the skills, experience and reputation of certain key management and personnel, in particular our directors, executive officers and senior scientific staff.
We depend on our senior management and senior scientific staff, and their loss or unavailability could put us at a competitive disadvantage. Our success depends largely on the skills, experience and reputation of certain key management and personnel, in particular our directors, executive officers and senior scientific staff.
Components of our product candidates are currently manufactured for us in small quantities for use in our preclinical and clinical studies. We will require significantly greater quantities to commercialize any given product. We may not be able to find alternate sources of comparable components.
Components of our product 48 candidates are currently manufactured for us in small quantities for use in our preclinical and clinical studies. We will require significantly greater quantities to commercialize any given product. We may not be able to find alternate sources of comparable components.
Compliance with these requirements is costly, and any failure to comply or other issues with our product candidates post-approval could adversely affect our business, financial condition and results of operations. All of our product candidates are in preclinical or clinical development.
Compliance with these requirements is costly, 28 and any failure to comply or other issues with our product candidates post-approval could adversely affect our business, financial condition and results of operations. All of our product candidates are in preclinical or clinical development.
There can be no assurance that we will be able to establish sales and distribution capabilities or be successful in gaining market acceptance for our products. We are subject to stringent environmental regulation and potentially subject to environmental litigation, proceedings, and investigations.
There can be no assurance that we will be able to establish sales and distribution capabilities or be successful in gaining market acceptance for our products. 52 We are subject to stringent environmental regulation and potentially subject to environmental litigation, proceedings, and investigations.
If we or a regulatory agency discovers previously unknown problems with a product such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured or with the integrity or sufficiency of data, records, or documentation, or disagrees with the promotion, marketing or labeling of that product, a regulatory agency may impose restrictions relative to that product, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing. 54 Table of Contents If we or a regulatory agency later discovers previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or if we fail to comply with applicable regulatory requirements following approval of any of our product candidates, a regulatory agency may: ● issue a warning letter asserting that we are in violation of the law; ● seek an injunction or impose civil or criminal penalties or monetary fines; ● suspend or withdraw regulatory approval; ● suspend any ongoing clinical trials; ● refuse to approve a pending BLA or comparable foreign marketing application (any supplements thereto) submitted by us or our strategic partners; ● restrict the marketing or labeling of the product; ● restrict manufacturing of the product, the approved manufacturers or the manufacturing process; ● restrict product distribution or use; ● demand a recall; ● seize or detain product or otherwise require the withdrawal of product from the market; ● impose fines, restitution or disgorgement of profits or revenues; ● impose consent decrees, injunctions or the imposition of civil or criminal penalties; ● refuse to permit the import or export of products; or ● refuse to allow us to enter into supply contracts, including government contracts.
If we or a regulatory agency discovers previously unknown problems with a product such as adverse events of unanticipated severity or frequency, or problems with the facility where the product is manufactured or with the integrity or sufficiency of data, records, or documentation, or disagrees with the promotion, marketing or labeling of that product, a regulatory agency may impose restrictions relative to that product, the manufacturing facility or us, including requiring recall or withdrawal of the product from the market or suspension of manufacturing. 42 If we or a regulatory agency later discovers previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or if we fail to comply with applicable regulatory requirements following approval of any of our product candidates, a regulatory agency may: • issue a warning letter asserting that we are in violation of the law; • seek an injunction or impose civil or criminal penalties or monetary fines; • suspend or withdraw regulatory approval; • suspend any ongoing clinical trials; • refuse to approve a pending BLA or comparable foreign marketing application (any supplements thereto) submitted by us or our strategic partners; • restrict the marketing or labeling of the product; • restrict manufacturing of the product, the approved manufacturers or the manufacturing process; • restrict product distribution or use; • demand a recall; • seize or detain product or otherwise require the withdrawal of product from the market; • impose fines, restitution or disgorgement of profits or revenues; • impose consent decrees, injunctions or the imposition of civil or criminal penalties; • refuse to permit the import or export of products; or • refuse to allow us to enter into supply contracts, including government contracts.
Negative or inconclusive results from our clinical trials or preclinical studies could mandate repeated or additional clinical trials and, to the extent we choose to conduct clinical trials in other indications, could result in changes to or delays in clinical trials of our product candidates in such other indications.
Negative or inconclusive results from our clinical trials or preclinical studies could mandate repeated or additional clinical trials and, to the extent we choose to conduct clinical trials in other indications, could result in changes to or delays in clinical trials of our 35 product candidates in such other indications.
Beginning in 2022, applicable manufacturers also will be required to report such information regarding payments and transfers of value provided during the previous year to physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified nurse anesthetists and certified nurse-midwives; and ● analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
Certain manufacturers also are required to report such information regarding payments and transfers of value provided during the previous year to physician assistants, nurse practitioners, clinical nurse specialists, anesthesiologist assistants, certified nurse anesthetists and certified nurse-midwives; and • analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to sales or marketing arrangements and claims involving healthcare items or services reimbursed by non-governmental third party payors, including private insurers; state and foreign laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state and foreign laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thus complicating compliance efforts.
The Hatch-Waxman Amendments permit a patent extension term of up to five years as compensation for patent term lost during the FDA regulatory review process.
The Hatch-Waxman Amendments permit a 55 patent extension term of up to five years as compensation for patent term lost during the FDA regulatory review process.
We have also concluded that our disclosure controls and procedures were not effective as of December 31, 2022, all as described in Item 9A, “Controls and Procedures,” of this Annual Report on Form 10-K. Management is actively engaged in the planning for, and implementation of, remediation efforts to address our material weaknesses.
We have also concluded that our disclosure controls and procedures were not effective as of December 31, 2023, all as described in Item 9A, “Controls and Procedures,” of this Annual Report on Form 10-K. Management is actively engaged in the planning for, and implementation of, remediation efforts to address our material weaknesses.
Our employees and indep endent contractors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could negatively impact our business, prospects, financial condition and operating results. We are exposed to the risk that our employees, independent contractors, consultants, commercial partners, suppliers and distributors may engage in fraudulent or illegal activity.
Our employees and independent contractors may engage in misconduct or other improper activities, including noncompliance with regulatory standards and requirements, which could negatively impact our business, prospects, financial condition and operating results. We are exposed to the risk that our employees, independent contractors, consultants, commercial partners, suppliers and distributors may engage in fraudulent or illegal activity.
Our product candidates are based on materials produced by genetically engineered bovines. We maintain a herd of approximately 200 genetically engineered production animals at a single location in South Dakota and a larger herd of recipient animals at other locations. Our ability to produce product candidates is dependent on the continued health and productivity of these animals.
Our product candidates are based on materials produced by genetically engineered bovines. We maintain a herd of approximately 80 genetically engineered production animals at a single location in South Dakota and a larger herd of recipient animals at other locations. Our ability to produce product candidates is dependent on the continued health and productivity of these animals.
Under the supervision and with participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2022, and we have concluded that our internal controls over financial reporting were not effective as of December 31, 2022, due to the existence of material weaknesses in such controls.
Under the supervision and with participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2023, and we have concluded that our internal controls over financial reporting were not effective as of December 31, 2023, due to the existence of material weaknesses in such controls.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled “ Management ’ s Discussion and Analysis of Financial Condition and Results of Operations ” The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities, and equity and the amount of revenue and expenses that are not readily apparent from other sources.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities, and equity and the amount of revenue and expenses that are not readily apparent from other sources.
We expect that the requirements of these rules and regulations will continue to increase our legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly and place significant strain on our personnel, systems and resources. 65 Table of Contents The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
We expect that the requirements of these rules and regulations will continue to increase our legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly and place significant strain on our personnel, systems and resources. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting.
These setbacks have been caused by, among other things, preclinical findings made while clinical trials were underway or safety or efficacy observations made in preclinical studies and clinical trials, including previously unreported adverse events. 48 Table of Contents We may incur unexpected costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.
These setbacks have been caused by, among other things, preclinical findings made while clinical trials were underway or safety or efficacy observations made in preclinical studies and clinical trials, including previously unreported adverse events. We may incur unexpected costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of our product candidates.
There can be no assurance that our competitors, suppliers, service providers, collaborators or other parties will not succeed in asserting rights that are or become contrary to our interests. 63 Table of Contents Changes in patent law in the United States and in ex-U.S. jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products.
There can be no assurance that our competitors, suppliers, service providers, collaborators or other parties will not succeed in asserting rights that are or become contrary to our interests. Changes in patent law in the United States and in ex-U.S. jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our products.
Our failure to timely complete our current and planned clinical trials would delay the approval and commercialization of our product candidates, impair the commercial performance of our product candidates, may decrease the period of commercial exclusivity and consequently harm our business and results of operations. 46 Table of Contents Our preclinical studies and clinical trials may fail to demonstrate substantial evidence of the safety and efficacy of our product candidates, or serious adverse or unacceptable side effects may be identified during the development of our product candidates, which could prevent, delay or limit the scope of regulatory approval of our product candidates, limit their commercialization, increase costs or necessitate the abandonment or limitation of the development of some of our product candidates.
Our failure to timely complete our current and planned clinical trials would delay the approval and commercialization of our product candidates, impair the commercial performance of our product candidates, may decrease the period of commercial exclusivity and consequently harm our business and results of operations. 31 Our preclinical studies and clinical trials may fail to demonstrate substantial evidence of the safety and efficacy of our product candidates, or serious adverse or unacceptable side effects may be identified during the development of our product candidates, which could prevent, delay or limit the scope of regulatory approval of our product candidates, limit their commercialization, increase costs or necessitate the abandonment or limitation of the development of some of our product candidates.
If all or a material number of the productive herd were to become diseased, injured or die as a result of bacterial, fungal or viral infections, such as foot and mouth disease, or natural disaster or other occurrences of any kind, it would have a material adverse effect on our ability to produce product candidates and on our business, financial condition and results of operations 60 Table of Contents Extreme factors or forces beyond our control could negatively impact our business.
If all or a material number of the productive herd were to become diseased, injured or die as a result of bacterial, fungal or viral infections, such as foot and mouth disease, or natural disaster or other occurrences of any kind, it would have a material adverse effect on our ability to produce product candidates and on our business, financial condition and results of operations. 50 Extreme factors or forces beyond our control could negatively impact our business.
We may experience difficulties in patient enrollment in clinical trials for a variety of reasons, including: ● the size and nature of the patient population; ● the design of the trial, including the patient eligibility criteria defined in the protocol; ● the size of the study population required for analysis of the trial’s primary endpoints; ● the proximity of patients to trial sites; ● our ability to recruit clinical trial investigators with the appropriate competencies and experience; ● competing clinical trials for similar therapies or other new therapeutics; ● clinicians’ and patients’ perceptions as to the potential advantages and side effects of the drug candidate being studied in relation to other available therapies, including any new drugs or treatments that may be approved for the indications we are investigating; ● travel restrictions and other potential limitations by federal, state, or local governments affecting the workforce or affective clinical research policies implemented in response to the COVID-19 pandemic or similar public health emergencies that may arise in the future; ● delays in or temporary suspension of the enrollment of patients in our anticipated clinical trials due to the COVID-19 pandemic or similar public health emergencies that may arise in the future; ● proximity and availability of clinical trial sites for prospective patients; ● the risk that patients enrolled in clinical trials will not complete a clinical trial; and ● the availability of approved therapies that are similar in mechanism to our product candidates.
We may experience difficulties in patient enrollment in clinical trials for a variety of reasons, including: • the size and nature of the patient population; • the design of the trial, including the patient eligibility criteria defined in the protocol; • the size of the study population required for analysis of the trial’s primary endpoints; • the proximity of patients to trial sites; • our ability to recruit clinical trial investigators with the appropriate competencies and experience; • competing clinical trials for similar therapies or other new therapeutics; • clinicians’ and patients’ perceptions as to the potential advantages and side effects of the drug candidate being studied in relation to other available therapies, including any new drugs or treatments that may be approved for the indications we are investigating; • our ability to obtain and maintain patient consents; • travel restrictions and other potential limitations by federal, state, or local governments affecting the workforce or affecting clinical research site policies implemented in response to public health emergencies that may arise in the future; • delays in or temporary suspension of the enrollment of patients in our anticipated clinical trials due to the public health emergencies that may arise in the future; • proximity and availability of clinical trial sites for prospective patients; • the risk that patients enrolled in clinical trials will not complete a clinical trial; and • the availability of approved therapies that are similar in mechanism to our product candidates.
We currently have no products approved for sale and are investing substantially all of our efforts and financial resources in the development of our DiversitAb platform and clinical development of our current lead programs.
We currently have no products approved for sale and are investing substantially all of our efforts and financial resources in the development of our immunotherapy platform and clinical development of our current lead programs.
We have identified a material weakness in our internal control over financial reporting and determined that our disclosure controls and procedures were ineffective as of December 31, 2022.
We have identified a material weakness in our internal control over financial reporting and determined that our disclosure controls and procedures were ineffective as of December 31, 2023.
You should carefully consider the full risk factor disclosure outlined in this Annual Report, in addition to the other information herein, including the section of this report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes. ● We are a clinical-stage biopharmaceutical company and have incurred significant losses since our inception.
You should carefully consider the full risk factor disclosure outlined in this Form 10-K, in addition to the other information herein, including the section of this report titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes. • We are a clinical-stage biopharmaceutical company and have incurred significant losses since our inception.
We intend to establish a sales and marketing organization, either on our own or in collaboration with third parties, with technical expertise and supporting distribution capabilities to commercialize SAB176 and our other product candidates that may receive regulatory approval in key territories.
We intend to establish a sales and marketing organization, either on our own or in collaboration with third parties, with technical expertise and supporting distribution capabilities to commercialize SAB-142, and our other product candidates that may receive regulatory approval in key territories.
If our lab facilities were to be damaged or destroyed by fire, flood, other natural disaster or other occurrences of any kind, it would have a material adverse effect on our ability to produce product candidates and on our business, financial condition and results of operations. We must comply with applicable cGMP, regulations and guidelines.
If our lab facilities were to be damaged or destroyed by fire, flood, other natural disaster or other occurrences of any kind, it would have a material adverse effect on our ability to produce product candidates and on our business, financial condition and results of operations. We must comply with applicable current Good Manufacturing Practice, or cGMP, regulations and guidelines.
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815-40, Derivatives and Hedging — Contracts in Entity ’ s Own Equity provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of income.
Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity provides for the remeasurement of the fair value of such derivatives at each balance sheet date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of income.
Changes in legislation in U.S. and foreign taxation of international business activities or the adoption of other tax reform policies, as well as the application of such laws, could adversely impact our financial position and operating results.
Risks Related to Tax Changes in legislation in U.S. and foreign taxation of international business activities or the adoption of other tax reform policies, as well as the application of such laws, could adversely impact our financial position and operating results.
Risks Related to Our Business and Operations We are a clinical-stage biopharmaceutical company and have incurred significant losses since our inception. We realized net losses in the fiscal years ended December 31, 2022 and 2021, we expect to continue to incur net losses for the foreseeable future, and we may never achieve or maintain profitability in the future.
Risks Related to Our Business and Operations We are a clinical-stage biopharmaceutical company and have incurred significant losses since our inception. We realized net losses in the fiscal year ended December 31, 2023 and 2022, we expect to continue to incur net losses for the foreseeable future, and we may never achieve or maintain profitability in the future.
Some of these events could be the basis for FDA action, including injunction, request for recall, seizure, or total or partial suspension of production. 57 Table of Contents If we fail to successfully operate our animal production facility, it may adversely affect our clinical trials and the commercial viability of our product candidates.
Some of these events could be the basis for FDA action, including injunction, request for recall, seizure, or total or partial suspension of production. 46 If we fail to successfully operate our animal production facility, it may adversely affect our clinical trials and the commercial viability of our product candidates.
If we are unable to successfully complete clinical development, obtain regulatory approval for or commercialize one or more of our product candidates, or if we experience delays in doing so, our business will be materially harmed. ● The regulatory approval processes of the FDA is lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed. ● We may never obtain FDA approval for any product candidates in the United States, and even if we do, we may never obtain approval for or commercialize any product candidates in any other jurisdiction, which would limit our ability to realize their full market potential. ● If our clinical trials fail to replicate positive results from earlier preclinical studies or clinical trials conducted by us or third parties, we may be unable to successfully develop, obtain regulatory approval for or commercialize our product candidates. ● If we do not achieve our projected development and commercialization goals in the timeframes we announce and expect, the development and commercialization of our product candidates may be delayed, and our business and results of operations may be harmed. ● Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following regulatory approval, if obtained. ● Our current and future relationships with customers and third party payors in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, transparency, health information privacy and security and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, administrative burdens and diminished profits and future earnings. ● Regulatory approval for any approved product is limited by the FDA to those specific indications and conditions for which clinical safety and efficacy have been demonstrated. ● Current and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize any product candidates we or our collaborators develop and may adversely affect the prices for such product candidates. ● We depend upon our senior management and senior scientific staff, and their loss or unavailability could put us at a competitive disadvantage. ● We rely on third parties to perform some of our research and preclinical studies and we plan to rely on third parties to conduct our clinical trials.
If we lose our ability to operate in Australia, or if our subsidiary is unable to receive the research and development tax credit allowed by Australian regulations, our business and results of operations could suffer. • The regulatory approval processes of the FDA are lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed. • We may never obtain FDA approval for any product candidates in the United States, and even if we do, we may never obtain approval for or commercialize any product candidates in any other jurisdiction, which would limit our ability to realize their full market potential. • If our clinical trials fail to replicate positive results from earlier preclinical studies or clinical trials conducted by us or third parties, we may be unable to successfully develop, obtain regulatory approval for or commercialize our product candidates. • If we do not achieve our projected development and commercialization goals in the timeframes we announce and expect, the development and commercialization of our product candidates may be delayed, and our business and results of operations may be harmed. • Our product candidates may cause undesirable side effects or have other properties that could delay or prevent their regulatory approval, limit the commercial profile of an approved label, or result in significant negative consequences following regulatory approval, if obtained. • Our current and future relationships with customers and third party payors in the United States and elsewhere may be subject, directly or indirectly, to applicable anti-kickback, fraud and abuse, false claims, transparency, 25 health information privacy and security and other healthcare laws and regulations, which could expose us to criminal sanctions, civil penalties, contractual damages, reputational harm, administrative burdens and diminished profits and future earnings. • Regulatory approval for any approved product is limited by the FDA to those specific indications and conditions for which clinical safety and efficacy have been demonstrated. • Current and future legislation may increase the difficulty and cost for us to obtain marketing approval of and commercialize any product candidates we or our collaborators develop and may adversely affect the prices for such product candidates. • We depend upon senior management and senior scientific staff, and their loss or unavailability could put us at a competitive disadvantage. • We rely on third parties to perform some of our research and preclinical studies, and we plan to rely on third parties to conduct our clinical trials.
In response to the SEC Staff Statement we determined to classify the warrants as derivative liabilities measured at fair value, with the initial valuation occurring on October 22, 2021, the "Closing Date" of the Business Combination, with changes in fair value each period reported in earnings.
In response to the SEC Staff Statement, we determined to classify the warrants as derivative liabilities measured at fair value, with the initial valuation occurring on October 22, 2021, the “Closing Date” of the Business Combination, with changes in fair value each period reported in earnings.
These provisions, alone or together, could delay hostile takeovers and changes in control or changes in our board of directors and management.
These provisions, alone or together, could delay hostile takeovers and changes in control or changes in our Board and management.
In addition, our product candidates could fail to receive regulatory approval, or regulatory approval could be delayed, for many reasons, including the following: ● the FDA or comparable foreign regulatory authorities may not file or accept our NADA, BLA or other marketing applications for substantive review; ● the FDA or comparable foreign regulatory authorities may disagree with the dosing regimen, design or implementation of our clinical trials; ● we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that our product candidates are safe and effective for any of their proposed indications; ● the results of our clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval; ● we may be unable to demonstrate that our product candidates’ clinical and other benefits outweigh their safety risks; ● the data collected from clinical trials of our product candidates may not be sufficient to the satisfaction of the FDA or comparable foreign regulatory authorities to support the submission of a NADA, BLA or other comparable submissions in foreign jurisdictions or to obtain regulatory approval in the United States or elsewhere; ● the FDA or comparable foreign regulatory authorities may find deficiencies with or fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and ● the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval.
In addition, our product candidates could fail to receive regulatory approval, or regulatory approval could be delayed, for many reasons, including the following: • the FDA or comparable foreign regulatory authorities may not file or accept our NADA, BLA or other marketing applications for substantive review; • the FDA or comparable foreign regulatory authorities may disagree with the dosing regimen, design or implementation of our clinical trials; • we may be unable to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that our product candidates are safe and effective for any of their proposed indications; • the results of our clinical trials may not meet the level of statistical significance required by the FDA or comparable foreign regulatory authorities for approval; • we may be unable to demonstrate that our product candidates’ clinical and other benefits outweigh their safety risks; • the data collected from clinical trials of our product candidates may not be sufficient to the satisfaction of the FDA or comparable foreign regulatory authorities to support the submission of a NADA, BLA or other comparable submissions in foreign jurisdictions or to obtain regulatory approval in the United States or elsewhere; • the FDA or comparable foreign regulatory authorities may find deficiencies with or fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; and • the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval. 34 If our clinical trials fail to replicate positive results from earlier preclinical studies or clinical trials conducted by us or third parties, we may be unable to successfully develop, obtain regulatory approval for or commercialize our product candidates.
Before you make a decision to buy our securities, in addition to the risks and uncertainties discussed above under “ Special Note Regarding Forward-Looking Statements, ” you should carefully consider the risks and uncertainties described below together with all of the other information contained in this Annual Report, including our financial statements and related notes included at the end of this Annual Report and in the section titled “ Management ’ s Discussion and Analysis of Financial Condition and Results of Operations. ” If any of the events or developments described below were to occur, our business, prospects, operating results and financial condition could suffer materially, the trading price of our securities could decline and you could lose all or part of your investment.
Before you make a decision to buy our securities, in addition to the risks and uncertainties discussed above under “Special Note Regarding Forward-Looking Statements,” you should carefully consider the risks and uncertainties described below together with all of the other information contained in this Form 10-K, including our financial statements and related notes included at the end of this Form 10-K and in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” If any of the events or developments described below were to occur, our business, prospects, operating results and financial condition could suffer materially, the trading price of our securities could decline, and you could lose all or part of your investment.
We may not have the financial resources to continue development of our product candidates if we experience any issues that delay or prevent regulatory approval of, or our ability to commercialize, our product candidates, including: ● our inability to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that our product candidates are safe and effective; ● insufficiency of our financial and other resources to complete the necessary clinical trials and preclinical studies; ● negative or inconclusive results from our clinical trials, preclinical studies or the clinical trials of others for product candidates similar to ours, leading to a decision or requirement to conduct additional clinical trials or preclinical studies or abandon a program; ● product-related adverse events experienced by subjects in our clinical trials, including unexpected toxicity results, or by individuals using drugs or therapeutic biologics similar to our product candidates; ● delays in submitting an INAD or IND or comparable foreign applications or delays or failure in obtaining the necessary approvals from regulators to commence a clinical trial or a suspension or termination, or hold, of a clinical trial once commenced; ● conditions imposed by the FDA or comparable foreign regulatory authorities regarding the scope or design of our clinical trials; ● poor effectiveness of our product candidates during clinical trials; ● delays in enrolling subjects in our clinical trials; ● higher than anticipated clinical trial or manufacturing costs; ● failure of our third-party contractors or investigators to comply with regulatory requirements or the clinical trial protocol or otherwise meet their contractual obligations in a timely manner, or at all; and ● delays and changes in regulatory requirements, policy and guidelines, including the imposition of additional regulatory oversight around clinical testing generally or with respect to our therapies in particular. 47 Table of Contents The regulatory approval processes of the FDA is lengthy, time-consuming and inherently unpredictable, and if we are ultimately unable to obtain regulatory approval for our product candidates, our business will be substantially harmed.
If any of our product candidates encounters safety or efficacy problems, development delays or regulatory issues or other problems, our development plans and business would be materially harmed. 32 We may not have the financial resources to continue development of our product candidates if we experience any issues that delay or prevent regulatory approval of, or our ability to commercialize, our product candidates, including: • our inability to demonstrate to the satisfaction of the FDA or comparable foreign regulatory authorities that our product candidates are safe and effective; • insufficiency of our financial and other resources to complete the necessary clinical trials and preclinical studies; • negative or inconclusive results from our clinical trials, preclinical studies or the clinical trials of others for product candidates similar to ours, leading to a decision or requirement to conduct additional clinical trials or preclinical studies or abandon a program; • product-related adverse events experienced by subjects in our clinical trials, including unexpected toxicity results, or by individuals using drugs or therapeutic biologics similar to our product candidates; • delays in submitting an INAD or IND or comparable foreign applications or delays or failure in obtaining the necessary approvals from regulators to commence a clinical trial or a suspension or termination, or hold, of a clinical trial once commenced; • conditions imposed by the FDA or comparable foreign regulatory authorities regarding the scope or design of our clinical trials; • poor effectiveness of our product candidates during clinical trials; • delays in enrolling subjects in our clinical trials; • higher than anticipated clinical trial or manufacturing costs; • failure of our third-party contractors or investigators to comply with regulatory requirements or the clinical trial protocol or otherwise meet their contractual obligations in a timely manner, or at all; and • delays and changes in regulatory requirements, policy and guidelines, including the imposition of additional regulatory oversight around clinical testing generally or with respect to our therapies in particular.
These factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve on our audit committee and compensation committee, and qualified executive officers.
These factors could also make it more difficult for us to attract and retain qualified members of our board of directors (the “Board”), particularly to serve on our Audit Committee of the Board (the “Audit Committee”) and compensation committee of the Board (the “Compensation Committee”), and qualified executive officers.
For so long as we remain an “emerging growth company” as defined in the Tax Cuts and Jobs Act of 2017 (the "JOBS Act"), we may take advantage of certain exemptions from various requirements that are applicable to public companies that are not “emerging growth companies,” including not being required to comply with the independent auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley-Act), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, being required to provide fewer years of audited financial statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
For so long as we remain an “emerging growth company” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), we may take advantage of certain exemptions from various requirements that are applicable to public companies that are not “emerging growth companies,” including not being required to comply with the independent auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, being required to provide fewer years of audited financial statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
We have a significant number of warrants which are currently exercisable for shares of our common stock, and the exercise thereof would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.
We have a significant number of (i) warrants which are currently exercisable for shares of our common stock or shares of preferred stock convertible into shares of our common stock, and (ii) shares of preferred stock convertible into shares of common stock, and the exercise or conversion thereof would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders.
Regulatory agencies can delay, limit or deny approval of a product candidate for many reasons, including: ● the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials; ● the results of clinical trials may not meet the level of statistical or clinical significance required by the FDA or comparable foreign regulatory authorities for approval; ● the clinical trial results may not confirm the positive results from earlier preclinical studies or clinical trials; ● the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; ● the data collected from clinical trials of our product candidates may not be sufficient to the satisfaction of FDA or comparable foreign regulatory authorities to support the submission of a BLA or other comparable submission in foreign jurisdictions or to obtain regulatory approval in the United States or elsewhere; ● regulatory agencies might not approve or might require changes to our manufacturing processes or facilities; and ● regulatory agencies may change their approval policies, clinical development guidelines and recommendations, or adopt new regulations in a manner rendering our clinical data insufficient for approval.
Regulatory agencies can delay, limit or deny approval of a product candidate for many reasons, including: • the FDA or comparable foreign regulatory authorities may disagree with the design or implementation of our clinical trials; • the results of clinical trials may not meet the level of statistical or clinical significance required by the FDA or comparable foreign regulatory authorities for approval; • the clinical trial results may not confirm the positive results from earlier preclinical studies or clinical trials; • the FDA or comparable foreign regulatory authorities may disagree with our interpretation of data from preclinical studies or clinical trials; • the data collected from clinical trials of our product candidates may not be sufficient to the satisfaction of FDA or comparable foreign regulatory authorities to support the submission of a BLA or other comparable submission in foreign jurisdictions or to obtain regulatory approval in the United States or elsewhere; • regulatory agencies might not approve or might require changes to our manufacturing processes or facilities; and • regulatory agencies may change their approval policies, clinical development guidelines and recommendations, or adopt new regulations in a manner rendering our clinical data insufficient for approval. 29 This lengthy approval process, as well as the unpredictability of future clinical trial results, may result in our failing to obtain regulatory approval to market our product candidates, which would significantly harm our business, results of operations and prospects.
The manufacturing facilities on which we rely may not continue to meet regulatory requirements and may have limited capacity. All parties involved in the preparation of therapeutics for clinical trial or commercial sale are subject to extensive regulation.
We and our contract manufacturers are subject to significant regulatory oversight with respect to manufacturing our products. The manufacturing facilities on which we rely may not continue to meet regulatory requirements and may have limited capacity. All parties involved in the preparation of therapeutics for clinical trial or commercial sale are subject to extensive regulation.
On August 2, 2011, the Budget Control Act of 2011 was signed into law, which, among other things, included reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013, and, due to subsequent legislative amendments to the statute, will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through December 31, 2021, unless additional Congressional action is taken.
On August 2, 2011, the Budget Control Act of 2011 was signed into law, which, among other things, included reductions to Medicare payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect through 2030, unless additional Congressional action is taken.
Investors may find our common stock less attractive because we may rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile and may decline.
If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock, and our stock price may be more volatile and may decline.
On January 15, 2022, outstanding warrants to purchase an aggregate of 5,958,600 shares of our common stock became exercisable, in accordance with the terms of the warrant agreement governing those securities. The exercise price of these warrants is $11.50 per share.
On January 15, 2022, outstanding warrants to purchase an aggregate of 5,958,600 shares of our common stock (595,860 shares following the Reverse Stock Split) became exercisable, in accordance with the terms of the warrant agreement governing those securities. The exercise price of these warrants is $115.00 per share following the Reverse Stock Split.
Even if an active market for our securities develops and continues, the trading price of our securities could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control.
In addition, fluctuations in the price of our securities could contribute to the loss of all or part of your investment. Even if an active market for our securities develops and continues, the trading price of our securities could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control.
Our manufacturing capabilities could be affected by cost-overruns, resource constraints, unexpected delays, equipment failures, labor shortages or disputes, natural disasters, power failures and numerous other factors that could prevent us from realizing the intended benefits of our manufacturing strategy, jeopardize our ability to produce our product candidates, and have a material adverse effect on our business, financial condition, results of operations and prospects.
Our manufacturing capabilities could be affected by cost-overruns, resource constraints, unexpected delays, equipment failures, labor shortages or disputes, natural disasters, power failures and numerous other factors that could prevent us from realizing the intended benefits of our manufacturing strategy, jeopardize our ability to produce our product candidates, and have a material adverse effect on our business, financial condition, results of operations and prospects. 47 Our product candidates are uniquely manufactured, and we may encounter difficulties in production, particularly with respect to scaling our manufacturing capabilities.
For example, over the last several years, including for 35 days beginning on December 22, 2018, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities.
For example, over the last several years, including for 35 days beginning on December 22, 43 2018, the U.S. government has shut down several times and certain regulatory agencies, such as the FDA, have had to furlough critical FDA employees and stop critical activities. Since that time, there have been several threatened “shutdowns” of the U.S. federal government.
GAAP and our key metrics require management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes and amounts reported in our key metrics.
The preparation of financial statements in conformity with U.S. GAAP and our key metrics require management to make estimates and assumptions that affect the amounts reported in the Consolidated financial statements and accompanying notes and amounts reported in our key metrics.
Furthermore, there is a risk that others will independently develop or duplicate similar technology or products or circumvent the patents issued to us. Third parties may claim we infringe their intellectual property rights.
We also cannot be sure that we will develop additional proprietary products that are patentable. 53 Furthermore, there is a risk that others will independently develop or duplicate similar technology or products or circumvent the patents issued to us. Third parties may claim we infringe their intellectual property rights.
Patent and Trademark Office (“USPTO”) or enforced by the federal courts. Therefore, we do not know whether any particular patent applications will result in the issuance of patents, or that any patents issued to us will provide us with any competitive advantage. We also cannot be sure that we will develop additional proprietary products that are patentable.
Patent and Trademark Office (“USPTO”) or enforced by the federal courts. Therefore, we do not know whether any particular patent applications will result in the issuance of patents, or that any patents issued to us will provide us with any competitive advantage.
Any failure or delay in the development of our or third parties’ internal sales, marketing and distribution capabilities would adversely impact the commercialization of SAB 176 and our other product candidates and other future product candidates. 51 Table of Contents Factors that may inhibit our efforts to commercialize our product candidates on our own include: ● our inability to recruit and retain adequate numbers of effective sales and marketing personnel; ● our inability of sales personnel to obtain access to or persuade adequate numbers of physicians to prescribe any future products; ● the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and ● unforeseen costs and expenses associated with creating an independent sales and marketing organization.
Factors that may inhibit our efforts to commercialize our product candidates on our own include: • our inability to recruit and retain adequate numbers of effective sales and marketing personnel; • our inability of sales personnel to obtain access to or persuade adequate numbers of physicians to prescribe any future products; • the lack of complementary products to be offered by sales personnel, which may put us at a competitive disadvantage relative to companies with more extensive product lines; and • unforeseen costs and expenses associated with creating an independent sales and marketing organization.
Any provision of our certificate of incorporation, bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of common stock and could also affect the price that some investors are willing to pay for our common stock. 67 Table of Contents The market price of our securities may be volatile, which could cause the value of any investment in our securities to decline.
Any provision of our certificate of incorporation, bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit the opportunity for our stockholders to receive a premium for their shares of common stock and could also affect the price that some investors are willing to pay for our common stock.
In addition to our current collaborations, we may in the future seek third-party collaborators for the development and commercialization of product candidates. If we enter into such collaborations, we will have limited control over the amount and timing of resources that our collaborators will dedicate to the development or commercialization of our product candidates.
If we enter into such collaborations, we will have limited control over the amount and timing of resources that our collaborators will dedicate to the development or commercialization of our product candidates.
We may also sell our common stock as part of entering into strategic alliances, creating joint ventures or collaborations or entering into additional licensing arrangements with third parties that we believe will complement or augment our development and commercialization efforts. If we sell common stock, convertible securities or other equity securities, investors may be materially diluted by subsequent sales.
We may also sell our common stock as part of entering into strategic alliances, creating joint ventures or collaborations or entering into additional licensing arrangements with third parties that we believe will complement or augment our development and commercialization efforts.
In the United States and certain non-U.S. jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could, among other things, prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our or our collaborators’ ability to profitably sell any product candidates that obtain marketing approval.
In the United States and certain non-U.S. jurisdictions, there have been, and we expect there will continue to be, a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could, among other things, prevent or delay marketing approval of our product candidates, restrict or regulate post-approval activities and affect our or our collaborators’ ability to profitably sell any product candidates that obtain marketing approval. 41 For example, in March 2010, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, collectively the Affordable Care Act, was enacted in the United States.
We may not achieve our intended objectives and any of these changes could cause our product candidates to perform differently than we expect, potentially affecting the results of future clinical trials. 58 Table of Contents Although we continually attempt to optimize our manufacturing process, doing so is a difficult and uncertain task and there are risks associated with scaling to the level required for future initial clinical trials, advanced late-stage clinical trials or commercialization, including, among others, cost overruns, potential problems with process scale-up, process reproducibility, stability issues, lot consistency and timely availability of reagents or raw materials.
Although we continually attempt to optimize our manufacturing process, doing so is a difficult and uncertain task and there are risks associated with scaling to the level required for future initial clinical trials, advanced late-stage clinical trials or commercialization, including, among others, cost overruns, potential problems with process scale-up, process reproducibility, stability issues, lot consistency and timely availability of reagents or raw materials.
If microbial, viral or other contaminations are discovered in our product candidates or in the manufacturing facilities in which our product candidates are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination. 59 Table of Contents We and our contract manufacturers are subject to significant regulatory oversight with respect to manufacturing our products.
If microbial, viral or other contaminations are discovered in our product candidates or in the manufacturing facilities in which our product candidates are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination.
In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq. Our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting until after we are no longer an “emerging growth company” as defined in the JOBS Act.
Our independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial reporting until after we are no longer an “emerging growth company” as defined in the JOBS Act.
The impact of future changes to U.S. and foreign tax law on our business is uncertain and could be adverse, and we will continue to monitor and assess the impact of any such changes. Changes in tax laws and regulations or exposure to additional tax liabilities could adversely affect our financial results.
The impact of future changes to U.S. and foreign tax law on our business is uncertain and could be adverse, and we will continue to monitor and assess the impact of any such changes.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeResearch Center As of December 31, 2022, our facilities include current Good Manufacturing Practice (cGMP) operations where drug products are manufactured in the clinical manufacturing facility located within the 60,000 square foot laboratory bay at the Sanford Research Center (the "Research Center") in Sioux Falls, South Dakota encompassing a 17,300 square foot manufacturing area that includes the clinical manufacturing facility, -20°C plasma storage, and a controlled warehouse.
Biggest changeResearch Center As of December 31, 2023, our facilities include current Good Manufacturing Practice (cGMP) operations where drug products are manufactured in the clinical manufacturing facility located within the 60,000 square foot laboratory bay at the Sanford Research Center (the “Research Center”) in Sioux Falls, South Dakota encompassing a 17,300 square foot manufacturing area that includes the clinical manufacturing facility, -20°C plasma storage, and a controlled warehouse.
Following plasmapheresis, the plasma bioprocessing bags are labeled and shipped to SAB manufacturing facility or to contract manufacturers. The Pharm real property lease in Canton, South Dakota is currently set to expire in November 2038. Corporate Headquarters The Company leases its corporate headquarters located at 2100 East 54th Street North, Sioux Falls, SD 57104.
Following plasmapheresis, the plasma bioprocessing bags are labeled and shipped to the Company’s manufacturing facility or to contract manufacturers. The Pharm real property lease in Canton, South Dakota is currently set to expire in November 2038. Corporate Headquarters The Company leases its corporate headquarters located at 2100 East 54th Street North, Sioux Falls, SD 57104.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeParticipants in our industry face frequent claims and litigation, including securities litigation, claims regarding patent and other intellectual property rights, and other liability claims. As a result, we may be involved in various legal proceedings from time to time in the future.
Biggest changeParticipants in our industry face frequent claims and litigation, including securities litigation, claims regarding patent and other intellectual property rights, and other liability claims. As a result, we may be involved in various legal proceedings from time to time in the future. Item 4. Mine Safety Disclosures. Not Applicable. 65 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeCertain shares are held in “street” name and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities.
Biggest changeHolders of Our Common Stock As of March 18, 2024, we had 260 holders of record of our common stock. Certain shares are held in “street” name and accordingly, the number of beneficial owners of such shares is not known or included in the foregoing number.
Investors should not purchase our common stock with the expectation of receiving cash dividends. Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements, general business conditions, and other factors that our board of directors may deem relevant.
Any future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition, operating results, capital requirements, general business conditions, and other factors that our board of directors may deem relevant.
Recent Sales of Unregistered Securities All sales of unregistered securities by us during the year ended December 31, 2022 have been included previously in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K.
Recent Sales of Unregistered Securities All sales of unregistered securities by us during the year ended December 31, 2023 have been included previously in a Quarterly Report on Form 10-Q or in a Current Report on Form 8-K. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. Item 6. [Reserved]. 66
Securities Authorized for Issuance Under Equity Compensation Plans Information about our equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Form 10-K.
Dividend Policy We currently intend to retain all available funds and any future earnings to fund the growth and development of our business. We have never declared or paid any cash dividends on our capital stock. We do not intend to pay cash dividends to our stockholders in the foreseeable future.
This number of holders of record also does not include stockholders whose shares may be held in trust by other entities. Dividend Policy We currently intend to retain all available funds and any future earnings to fund the growth and development of our business. We have never declared or paid any cash dividends on our capital stock.
Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock and public warrants are listed on Nasdaq under the symbols “SABS” and “SABSW”, respectively.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our common stock and warrants are listed on Nasdaq under the symbols “SABS” and “SABSW”, respectively. On March 18, 2024, the closing price of our common stock was $5.40 per share and the closing price of our warrants was $0.0301 per warrant.
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On March 22, 2023, the closing price of our common stock was $0.51 per share and the closing price of our warrants was $0.05 per warrant. Holders of Our Common Stock As of March 28, 2023, we had 246 holders of record of our common stock.
Added
We do not intend to pay cash dividends to our stockholders in the foreseeable future. Investors should not purchase our common stock with the expectation of receiving cash dividends.
Removed
Purchases of Equity Securities by the Issuer and Affiliated Purchasers In the first quarter of 2022, the Company held $6.3 million in escrow pending the final settlement of the Forward Share Purchase Agreement; upon final settlement of the Forward Share Purchase Agreement, $817,060 in cash was released to the Company and the remaining $5.5 million was delivered to Radcliffe for the repurchase of 546,658 shares of the Company's common stock at a price of $10.10 per share—these shares are accounted for as treasury stock at cost within the consolidated statements of changes in stockholders’ equity (deficit).

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

68 edited+37 added−63 removed31 unchanged
Biggest changeNon-operating (Expense) Income Year Ended December 31, 2022 2021 Change % Change Changes in fair value of warrant liabilities $ 10,399,200 $ (4,151,068 ) $ 14,550,268 (350.5 )% Gain on debt extinguishment of Paycheck Protection Program SBA Loan — 665,596 $ (665,596 ) (100.0 )% Other income 33,754 5,488 $ 28,266 515.1 % Total non-operating (expense) income $ 10,432,954 $ (3,479,984 ) Total non-operating (expense) income changed by $13.9 million in 2022, primarily due to changes in the fair value of the warrant liabilities, partially offset by the forgiveness of the PPP Loan, plus accrued interest, in the first quarter of 2021.
Biggest changeNon-operating (Expense) Income Year Ended December 31, 2023 2022 Change % Change Changes in fair value of warrant liabilities $ (4,823,237 ) $ 10,399,200 $ (15,222,437 ) (146.4 )% Other income 435,089 33,754 401,335 1,189.0 % Total non-operating income $ (4,388,148 ) $ 10,432,954 Total non-operating income decreased by $14.8 million, or 142.1% for the year ended December 31, 2023 as compared to the year ended December 31, 2022 primarily due to changes in the fair value of the warrant liabilities (year-over-year decrease of $15.2 million, 146.4%), primarily offset by the Australian research and development tax credit of $0.3 million. 71 Interest Expense Year Ended December 31, 2023 2022 Change % Change Interest expense $ 315,284 $ 301,584 $ 13,700 4.5 % Total interest expense $ 315,284 $ 301,584 Interest expense increased for the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to the 8% Unsecured Convertible Note accrued interest payable realized over a full year.
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.
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.
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.
The agreement assigns First Insurance Funding (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.
We expect to continue to incur significant expenses, and we expect such expenses to increase substantially in connection with our ongoing activities, including as we: ● invest in research and development activities to optimize and expand our DiversitAb platform; ● develop new and advance preclinical and clinical progress of pipeline programs; ● market to and secure partners to commercialize our products; ● expand and enhance operations to deliver products, including investments in manufacturing; ● acquire businesses or technologies to support the growth of our business; ● continue to establish, protect and defend our intellectual property and patent portfolio; ● operate as a public company.
We expect to continue to incur significant expenses, and we expect such expenses to increase substantially in connection with our ongoing activities, including as we: • invest in research and development activities to optimize and expand our immunotherapy platform; • develop new and advance preclinical and clinical progress of pipeline programs; • market to and secure partners to commercialize our products; • expand and enhance operations to deliver products, including investments in manufacturing; • acquire businesses or technologies to support the growth of our business; • continue to establish, protect and defend our intellectual property and patent portfolio; • operate as a public company.
We expect these expenses to vary from period to period in absolute terms and as a percentage of revenue. Nonoperating (Expense) Income Gain on change in fair value of warrant liabilities Gain on change in fair value of warrant liabilities consists of the changes in the fair value of the warrant liabilities.
We expect these expenses to vary from period to period in absolute terms and as a percentage of revenue. Nonoperating (Expense) Income Gain (loss) on change in fair value of warrant liabilities Gain (loss) on change in fair value of warrant liabilities consists of the changes in the fair value of the warrant liabilities.
These provisions include, but are not limited to: ● being permitted to present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Annual Report; ● not being required to comply with the auditor attestation requirements on the effectiveness of our internal controls over financial reporting; ● not being required to comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis); ● reduced disclosure obligations regarding executive compensation arrangements; and ● exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
These provisions include, but are not limited to: • being permitted to present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations in this Form 10-K; • not being required to comply with the auditor attestation requirements on the effectiveness of our internal controls over financial reporting; • not being required to comply with any requirement that may be adopted by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis); • reduced disclosure obligations regarding executive compensation arrangements; and • exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Compensation expense related to stock-based transactions is measured and recognized in the financial statements at fair value of our post-merger common stock based on the closing market price at closing on the date of grant.
We determine the fair value of our common stock based on the closing market price at closing on the date of grant. Compensation expense related to stock-based transactions is measured and recognized in the financial statements at fair value of our post-merger common stock based on the closing market price at closing on the date of grant.
While our significant accounting policies are described in more detail in Note 3 in our consolidated financial statements, Summary of Significant Accounting Policies, we believe the following accounting policies to be critical to the judgments and estimates used in the preparation of our consolidated financial statements.
While our significant accounting policies are described in more detail in Note 2, Summary of Significant Accounting Policies, in our consolidated financial statements, we believe the following accounting policies to be critical to the judgments and estimates used in the preparation of our consolidated financial statements.
Our incremental borrowing rate was used in the calculation of our right-of-use assets and lease liabilities. Recently Issued Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 4 in our consolidated financial statements, New Accounting Standards.
Our incremental borrowing rate was used in the calculation of our right-of-use assets and lease liabilities. 77 Recently Issued Accounting Pronouncements A description of recently issued accounting pronouncements that may potentially impact our financial position and results of operations is disclosed in Note 3, New Accounting Standards, in our consolidated financial statements .
Until the date that we are no longer an emerging growth company or affirmatively and irrevocably opt out of the exemption provided by Section 7(a)(2)(B) of the Securities Act upon issuance of a new or revised accounting standard that applies to our financial statements and that has a different effective date for public and private companies, we will disclose the date on which we will adopt the recently issued accounting standard. 83 Table of Contents Item 7A.
Until the date that we are no longer an emerging growth company or affirmatively and irrevocably opt out of the exemption provided by Section 7(a)(2)(B) of the Securities Act upon issuance of a new or revised accounting standard that applies to our financial statements and that has a different effective date for public and private companies, we will disclose the date on which we will adopt the recently issued accounting standard.
See Note 13 in our consolidated financial statements, Stock Option Plan, for information concerning certain specific assumptions we used in applying the Black-Scholes option pricing model to determine the estimated fair value of our stock options granted for the years ended December 31, 2022 and 2021.
See Note 11, Stock Option Plan, in our consolidated financial statements for information concerning certain specific assumptions we used in applying the Black-Scholes option pricing model to determine the estimated fair value of our stock options granted for the for the years ended December 31, 2023 and 2022.
Item 7. Management ’ s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties.
Sanford Health shall have the right, but not the obligation, to convert all or any part of the outstanding Principal of the 8% Unsecured Convertible Note, together with any accrued and unpaid interest thereon to the date of such conversion, into such number of fully paid and non-assessable shares of the Company’s common stock, at any time and from time to time, prior to the later of the Maturity Date and the date on which the 8% Unsecured Convertible Note is paid in full, subject to certain restrictions, at a conversion price per share of Common Stock equal to greater of (x) $1.50 and (y) the price at which the Company sells shares of common stock in any bona fide private or public equity financing prior to the Maturity Date.
Sanford Health shall have the right, but not the obligation, to convert all or any part of the outstanding Principal of the 8% Unsecured Convertible Note, together with any accrued and unpaid interest thereon to the date of such conversion, into such number of fully paid and non-assessable shares of our common stock, at any time and from time to time, prior to the later of the Maturity Date and the date on which the 8% Unsecured Convertible Note is paid in full, subject to certain restrictions, at a conversion price per share of common stock equal to greater of (x) $15.00 and (y) the price at which the we sells shares of common stock in any bona fide private or public equity financing prior to the Maturity Date.
Based on our current level of operating expenses, existing cash and cash equivalents may 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.
Based on our current level of operating expenses, existing resources will 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.
We have elected to take advantage of certain of the reduced disclosure obligations in this Annual Report and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our shareholders may be different than the information you receive from other public companies in which you hold stock.
We have elected to take advantage of certain of the reduced disclosure obligations in this Form 10-K and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our shareholders may be different than the information you receive from other public companies in which you hold stock.
Subsequent to the Business Combination, the board of directors elected to determine the fair value of our post-merger common stock based on the closing market price at closing on the date of grant. In determining the fair value of our stock-based awards, we utilize the Black-Scholes option-pricing model, which uses both historical and current market data to estimate fair value.
The board of directors elected to determine the fair value of our common stock based on the closing market price at closing on the date of grant. In determining the fair value of our stock-based awards, we utilize the Black-Scholes option-pricing model, which uses both historical and current market data to estimate fair value.
These factors also pose important challenges that we must successfully address in order to sustain our growth and improve our results of operations. Our ability to successfully address these challenges is subject to various risks and uncertainties, including those described in Part I, Item 1A of this Annual Report.
These factors also pose important challenges that we must successfully address in order to sustain our growth and improve our results of operations. Our ability to successfully address these challenges is subject to various risks and uncertainties, including those described in Part I, Item 1A of this Form 10-K.
The terms of that agreement are subject to confidentiality, and the status of the agreement is that it is current, in good standing and approximately 95% of the contract has been paid through December 31, 2022. SAB has also contracted with hVIVO Services Limited to conduct the Phase 2a influenza study on SAB-176.
SAB has also contracted with hVIVO Services Limited to conduct the Phase 2a influenza study on SAB-176. The terms of that agreement are subject to confidentiality, and the status of the agreement is that it is current, in good standing and 100% of the contract has been paid as of December 31, 2023.
To date, we have primarily financed our operations from government agreements and the issuance and sale of common stock. Our net loss for the year ended December 31, 2022 was $18.7 million and our net loss for the year ended December 31, 2021 was $17.1 million.
To date, we have primarily financed our operations from government agreements and the issuance and sale of common stock and preferred stock. Our net loss for the year ended December 31, 2023, was $42.2 million and our net loss for the year ended December 31, 2022 was $18.7 million.
For more information, see Note 1 to the Company's consolidated financial statements, Nature of Business . Key Factors Affecting Our Results of Operations and Future Performance We believe that our financial performance has been, and in the foreseeable future will continue to be, primarily driven by multiple factors as described below, each of which presents growth opportunities for our business.
Key Factors Affecting Our Results of Operations and Future Performance We believe that our financial performance has been, and in the foreseeable future will continue to be, primarily driven by multiple factors as described below, each of which presents growth opportunities for our business.
National Institute of Health – National Institute of Allergy and Infectious Disease (“NIH-NIAID”) (Federal Award #1R44AI117976-01A1) – this grant was for $1.4 million and started in September 2019 through August 2021. The grant was subsequently amended to extend the date through August 2022.
National Institute of Health – National Institute of Allergy and Infectious Disease (“NIH-NIAID”) (Federal Award #1R44AI117976-01A1) – this grant was for $1.4 million and started in September 2019 through August 2021. This grant was subsequently amended to extend the end date to August 2022. No grant income was recognized for the year ended December 31, 2023.
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.
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.
Our carryforwards are subject to review and possible adjustment by the appropriate taxing authorities. These carryforwards may generally be utilized in any future period but may be subject to limitations based upon changes in the ownership of our shares in a prior or future period. We have not quantified the amount of such limitations, if any.
These carryforwards may generally be utilized in any future period but may be subject to limitations based upon changes in the ownership of our shares in a prior or future period. We have not quantified the amount of such limitations, if any.
No awards may have a term in excess of ten years. Forfeitures are recorded when they occur. Stock-based compensation expense is classified in our consolidated statements of operations based on the function to which the related services are provided. We recognize stock-based compensation expense over the expected term.
We recognized stock-based compensation expense over the expected term. Forfeitures are recorded when they occur. Stock-based compensation expense is classified in our consolidated statements of operations based on the function to which the related services are provided. We recognize stock-based compensation expense over the expected term.
In exchange for the Abated Rent, effective as of October 1, 2022, we issued to Sanford Health an 8% unsecured, convertible promissory note (the "8% Unsecured Convertible Note"). Pursuant to the 8% Unsecured Convertible Note, we shall pay the sum of $541,644 (the “Principal”) plus accrued and unpaid interest thereon on September 31, 2024 (the “Maturity Date”).
In exchange for the Abated Rent, effective as of October 1, 2022, we issued to Sanford Health an 8% unsecured, convertible promissory note (the “8% Unsecured Convertible Note”). Pursuant to the 8% Unsecured Convertible Note, we shall pay the sum of approximately $542 thousand plus accrued and unpaid interest thereon on September 30, 2024.
The initial fair value of the warrant liabilities was measured at fair value on the Closing Date, and changes in the fair value of the warrant liabilities were presented within changes in fair value of warrant liabilities in the consolidated statement of operations for the year ended December 31, 2022.
The initial fair value of the warrant liabilities were measured at fair value on the issuance date, and changes in the fair value of the warrant liabilities were presented within changes in fair value of warrant liabilities in the consolidated statements of operations for the years ended December 31, 2023 and 2022.
For the years ended December 31, 2022 and 2021, we worked on the following grants: Government grants The total revenue for government grants was approximately $23.9 million and $60.9 million, respectively, for the years ended December 31, 2022 and 2021.
For the years ended December 31, 2023 and 2022, we received the following grants: Government grants The total revenue for government grants was approximately $2.2 million and $23.9 million, respectively, for the years ended December 31, 2023 and 2022.
For the years ended December 31, 2022 and 2021, there was approximately $182,000 and $518,000, respectively, in grant income recognized from this grant. This grant was completed in 2022. NIH-NIAID (Federal Award #1R41AI131823-02) – this grant was for approximately $1.5 million and started in April 2019 through March 2021.
For the year ended December 31, 2022 there was approximately $182 thousand in grant income recognized from this grant. This grant was completed in 2022. NIH-NIAID (Federal Award #1R41AI131823-02) – this grant was for approximately $1.5 million and started in April 2019 through March 2021. The grant was subsequently amended to extend the date through March 2023.
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. 80 Table of Contents Stock-Based Compensation We recognize compensation cost relating to stock-based payment transactions using a fair-value measurement method, which requires all stock-based payments to employees, directors, and non-employee consultants, including grants of stock options, to be recognized in operating results as compensation expense based on fair value over the requisite service period of the awards.
Stock-Based Compensation We recognize compensation cost relating to stock-based payment transactions using a fair-value measurement method, which requires all stock-based payments to employees, directors, and non-employee consultants, including grants of stock options, to be recognized in operating results as compensation expense based on fair value over the requisite service period of the awards.
We then considered this implied volatility in selecting the volatility for the application of a Black-Scholes Merton model for the Private Placement Warrants.
Specifically, we considered a MCS to derive the implied volatility in the publicly listed price of the Public Warrants We then considered this implied volatility in selecting the volatility for the application of a Black-Scholes Merton model for the Private Placement Warrants.
The grants for JPEO Rapid Response contract are cost reimbursement agreements, with reimbursement of our direct research and development expense (labor and consumables) with an overhead charge (based on actual, reviewed quarterly) and a fixed fee (9%).
The grants for the JPEO Rapid Response contract are cost reimbursement agreements, with reimbursement of qualified direct research and development expense (labor and consumables) with an overhead charge (based on actual, reviewed quarterly) and a fixed fee (9%). On August 3, 2022, we received notice from the DoD terminating the JPEO Rapid Response contract (the “JPEO Rapid Response Contract Termination”).
We have not historically tracked our research and development expenses on a product candidate-by-product candidate basis. For the years ended December 31, 2022 and 2021, we had contracts with multiple CRO to conduct and complete clinical studies.
We have not historically tracked our research and development expenses on a product candidate-by-product candidate basis. For the years ended December 31, 2023 and 2022, we had contracts with multiple CROs to conduct and complete clinical studies. In the case of SAB-185, the CRO has been contracted and paid by the US government.
We incurred research and development expenses of $36.4 million and $57.2 million for the years ended December 31, 2022 and 2021, respectively, and general and administrative expenses of $16.4 million and $17.1 million for the years ended December 31, 2022 and 2021, respectively.
We incurred research and development expenses of $16.5 million and $36.4 million for the years ended December 31, 2023 and 2022, respectively, and general and administrative expenses of $23.8 million and $16.4 million for the years ended December 31, 2023 and 2022, respectively.
Revenue Recognition Our revenue is primarily generated through grants from government and other (non-government) organizations. 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.
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.
The fair value of our Public Warrant liabilities is determined by reference to the quoted market price. The warrants are accounted for as liabilities in accordance with ASC 815-40, Derivatives and Hedging — Contracts in Entity ’ s Own Equity , and were presented within warrant liabilities on the consolidated balance sheet as of December 31, 2022.
The warrants are accounted for as liabilities in accordance with ASC 815-40, Derivatives and Hedging — Contracts in Entity ’ s Own Equity , and were presented within warrant liabilities on the consolidated balance sheets as of December 31, 2023 and 2022.
Research and development expenses by component for the years ended December 31, 2022 and 2021 were as follows: Year Ended December 31, 2022 2021 Salaries & benefits $ 12,032,720 $ 9,944,717 Laboratory supplies 6,441,181 14,471,878 Animal care 1,560,099 4,636,515 Contract manufacturing 5,256,518 12,665,794 Clinical trial expense 271,283 5,299,817 Outside laboratory services 4,561,696 4,735,373 Project consulting 805,994 1,812,292 Facility expense 5,354,356 3,415,518 Other expenses 154,666 201,685 Total research and development expenses $ 36,438,513 $ 57,183,589 General and Administrative Expenses 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.
Research and development expenses by component for the years ended December 31, 2023 and 2022 were as follows: Year Ended December 31, 2023 2022 Salaries & benefits $ 6,623,281 $ 12,032,720 Laboratory supplies 1,006,756 6,441,181 Animal care 936,192 1,560,099 Contract manufacturing 388,518 5,256,518 Clinical trial expense 809,678 271,283 Outside laboratory services 987,613 4,561,696 Project consulting 371,235 805,994 Facility expense 5,278,702 5,354,356 Other expenses 113,030 154,666 Total research and development expenses $ 16,515,005 $ 36,438,513 69 General and Administrative Expenses 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.
NIH-NIAID through Geneva Foundation (Federal Award #1R01AI132313-01, Subaward #S-10511-01) – this grant was for approximately $2.7 million and started in August 2017 through July 2021. The grant was subsequently amended to extend the date through July 2023. For the years ended December 31, 2022 and 2021, there was approximately $1,052,000 and $94,000, respectively, in grant income recognized from this grant.
For the years ended December 31, 2023 and 2022, approximately $192 thousand and $328 thousand, respectively, in grant income was recognized from this grant. This grant was completed as of June 30, 2023. NIH-NIAID through Geneva Foundation (Federal Award #1R01AI132313-01, Subaward #S-10511-01) – this grant was for approximately $2.7 million and started in August 2017 through July 2021.
We anticipate that we will continue to generate losses for the foreseeable future, and we expect the losses to increase as we continue the development of, and seek regulatory approvals for, our product candidates, and begin commercialization of our products.
We anticipate that we will continue to generate losses for the foreseeable future, and we expect the losses to increase as we continue the development of, and seek regulatory approvals for, our product candidates, and begin commercialization of our products. As a result, we will require additional capital to fund our operations in order to support our long-term plans.
We determined the fair value of the Public Warrants by reference to the quoted market price. 81 Table of Contents The Public Warrants were classified as a Level 1 fair value measurement, due to the use of the quoted market price, and the Private Placement Warrants held privately by Big Cypress Holdings LLC, a Delaware limited liability company which acted as our sponsor in connection with the IPO (the "Sponsor"), were classified as a Level 3 fair value measurement, due to the use of unobservable inputs.
We determined the fair value of the Public Warrants by reference to the quoted market price. 75 The Public Warrants were classified as a Level 1 fair value measurement, due to the use of the quoted market price, and the Private Placement Warrants held privately by assignees of Big Cypress Holdings LLC, were classified as a Level 3 fair value measurement, due to the use of unobservable inputs.
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. The total premiums, taxes and fees financed is approximately $1,236,000 with an annual interest rate of 5.47%.
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.
We engaged in negotiations with the DoD to compensate us for services provided prior to the JPEO Rapid Response Contract Termination and costs we would be expected to bear in future periods. 74 Table of Contents Operating Expenses Research and Development Expenses Research and development expenses primarily consist of salaries, benefits, incentive compensation, stock-based compensation, laboratory supplies and materials for employees and contractors engaged in research and product development, licensing fees to use certain technology in our research and development projects, fees paid to consultants and various entities that perform certain research and testing on our behalf.
Operating Expenses Research and Development Expenses Research and development expenses primarily consist of salaries, benefits, incentive compensation, stock-based compensation, laboratory supplies and materials for employees and contractors engaged in research and product development, licensing fees to use certain technology in our research and development projects, fees paid to consultants and various entities that perform certain research and testing on our behalf.
Simple interest shall accrue on the outstanding Principal from and after the date of the October Note, and shall be payable on the Maturity Date.
Simple interest shall accrue on the outstanding Principal from and after the date of the 8% Unsecured Convertible Note and shall be payable on September 31, 2024 (the “Maturity Date”).
The tractor was paid off in full in November 2022. Please refer to Note 11 in our consolidated financial statements, Notes Payable, for additional information on our debt.
Please refer to Note 9, Notes Payable , in our consolidated financial statements for additional information on our debt.
The measurement as of December 31, 2021 for the Public Warrant liability was approximately $428,000 and the change in fair value of the Public Warrant liability was approximately $417,000 for the year ended December 31, 2022.
The measurement as of December 31, 2023 and 2022 for the Private Placement Warrant liability was approximately $6 thousand and $10 thousand, respectively, and the change in fair value of the Private Placement Warrant liability was approximately $4 thousand and $417 thousand, for the years ended December 31, 2023 and 2022, respectively.
The grant was subsequently amended to extend the date through March 2023. For the years ended December 31, 2022 and 2021, approximately $328,000 and $51,000, respectively, in grant income was recognized from this grant. Approximately $429,000 in funding remains for this grant as of December 31, 2022.
The grant was subsequently amended to extend the end date to July 2023. For the years ended December 31, 2023 and 2022, there was approximately $273 thousand and $1.1 million, respectively, in grant income recognized from this grant. This grant was completed as of June 30, 2023.
Year-over-year changes in cash provided (used) by operating activities is explained by shifts in the company's non-cash working capital balances as we continue to advance our lead programs after the JPEO Rapid Response Contract Termination.
Year-over-year changes in cash used by operating activities is explained by shifts in the working capital balances as we continue to advance our lead programs after the JPEO Rapid Response Contract Termination. 73 Investing Activities Net cash used by investing activities decreased by $1.9 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to a decrease in purchases of equipment.
These payments are not included in the table above, as the amount and timing of such payments are not known. As of December 31, 2022, there were no material changes outside of the ordinary course of business to our commitments and contractual obligations. Income Taxes We had $22.0 million of federal net operating loss carryforwards as of December 31, 2022.
As of December 31, 2023, there were no material changes outside of the ordinary course of business to our commitments and contractual obligations. Income Taxes We had $40.8 million of federal net operating loss carryforwards as of December 31, 2023. Our carryforwards are subject to review and possible adjustment by the appropriate taxing authorities.
Results of Operations The following tables set forth our results of operations for the years ended December 31, 2022 and 2021: Year Ended December 31, 2022 2021 Revenue Grant revenue $ 23,904,181 $ 60,876,078 Total revenue 23,904,181 60,876,078 Operating expenses Research and development 36,438,513 57,183,589 General and administrative 16,383,285 17,085,692 Total operating expenses 52,821,798 74,269,281 Loss from operations (28,917,617 ) (13,393,203 ) Other income (expense) Changes in fair value of warrant liabilities 10,399,200 (4,151,068 ) Gain on debt extinguishment of Paycheck Protection Program SBA Loan — 665,596 Other income 33,754 5,488 Interest expense (301,584 ) (294,459 ) Interest income 71,072 23,115 Total other income 10,202,442 (3,751,328 ) Loss before income taxes (18,715,175 ) (17,144,531 ) Income tax expense 25,629 — Net loss $ (18,740,804 ) $ (17,144,531 ) Comparison of the Years Ended December 31, 2022 and 2021 Revenue Year Ended December 31, 2022 2021 Change % Change Revenue $ 23,904,181 $ 60,876,078 $ (36,971,897 ) (60.7 )% Total revenue $ 23,904,181 $ 60,876,078 Revenue decreased by $37.0 million, or 60.7%, in 2022, primarily due to the JPEO Rapid Response Contract Termination (year-over-year decrease of $38 million, (63.1)%).
Results of Operations The following tables set forth our results of operations for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Revenue Grant revenue $ 2,238,991 $ 23,904,181 Total revenue 2,238,991 23,904,181 Operating expenses Research and development 16,515,005 36,438,513 General and administrative 23,799,306 16,383,285 Total operating expenses 40,314,311 52,821,798 Loss from operations (38,075,320 ) (28,917,617 ) Other income (expense) Changes in fair value of warrant liabilities (4,823,237 ) 10,399,200 Interest expense (315,284 ) (301,584 ) Interest income 584,966 71,072 Other income 435,089 33,754 Total other income (expense) (4,118,466 ) 10,202,442 Loss before income taxes (42,193,786 ) (18,715,175 ) Income tax expense (benefit) — 25,629 Net loss $ (42,193,786 ) $ (18,740,804 ) 70 Comparison of the Years Ended December 31, 2023 and 2022 Revenue Year Ended December 31, 2023 2022 Change % Change Revenue $ 2,238,991 $ 23,904,181 $ (21,665,190 ) (90.6 )% Total revenue $ 2,238,991 $ 23,904,181 Revenue decreased by $21.7 million, or 90.6%, in 2023, primarily due to the JPEO Rapid Response Contract Termination.
Warrant Valuations Liability Classified Warrants We are required to periodically estimate the fair value of our Private Placement Warrant liabilities with the assistance of an independent third-party valuation firm. The assumptions underlying these valuations represented our best estimates, which involved inherent uncertainties and the application of significant levels of our judgment.
Warrant Liabilities Valuations Liability Classified Warrants We are required to periodically estimate the fair value liability of our private placement warrants issued simultaneously with the closing of our initial public offering (the “Private Placement Warrant”) liabilities with the assistance of an independent third-party valuation firm.
On the Closing Date, we established the fair value of the Private Placement Warrants utilizing both the Black-Scholes Merton formula and a Monte Carlo Simulation (“MCS”) analysis. Specifically, we considered a MCS to derive the implied volatility in the publicly-listed price of the Public Warrants.
Public Warrants and Private Placement Warrants The fair value of the Private Placement Warrants was determined utilizing both the Black-Scholes Merton formula and a Monte Carlo Simulation (“MCS”) analysis.
The terms of that agreement are subject to confidentiality, and the status of the agreement is that it is current, in good standing and approximately 95% of the contract has been paid through December 31, 2022.
For SAB-176, PPD Development, LP, acting as CRO oversaw the Phase 1 safety study. The terms of that agreement are subject to confidentiality, and the status of the agreement is that it is current, in good standing and 100% of the contract has been paid as of December 31, 2023.
Interest income Interest income consists of interest earned on cash balances in our bank accounts. 75 Table of Contents Interest expense Interest expense consists primarily of interest related to borrowings under notes payable for equipment. Income Tax Expense Income tax expense consists primarily of domestic federal and state income taxes.
Other income Other income primarily consists of income associated with the refundable portion of Australian research and development tax credits. Interest income Interest income consists of interest earned on cash balances in our bank accounts. Interest expense Interest expense consists primarily of interest related to borrowings under notes payable for equipment, abated rent, and insurance financing.
We intend to continue to invest in our business and, as a result, may incur operating losses in future periods.
Liquidity and Capital Resources As of December 31, 2023 and December 31, 2022, we had $56.6 million and $15.0 million, respectively, of cash and cash equivalents. We intend to continue to invest in our business and, as a result, may incur operating losses in future periods.
For the years ended December 31, 2022 and 2021, approximately $22.2 million and $60.2 million, respectively, in grant income was recognized from this grant. This grant was terminated in 2022.
Additional contract modifications were added to this contract in 2020 and 2021 for work on a COVID therapeutic, bringing the contract total to $203.6 million. For the years ended December 31, 2023 and 2022, there was approximately $1.8 million and $22.2 million, respectively, in grant income recognized from this grant. This grant was terminated in 2022.
Determining the fair value of stock option awards at the grant date requires judgment, including estimating the expected volatility, expected term, risk-free interest rate, and expected dividends. 82 Table of Contents Lease Liabilities and Right-of-Use Assets We are party to certain contractual arrangements for equipment, lab space, and an animal facility, which meet the definition of leases under ASC 842.
Lease Liabilities and Right-of-Use Assets We are party to certain contractual arrangements for equipment, lab space, and an animal facility, which meet the definition of leases under FASB ASC Topic 842, Leases (“ASC 842”).
The key inputs into the valuations as of the Closing Date and December 31, 2022 were as follows: December 31, December 31, 2022 2021 Risk-free interest rate 4.00 % 1.24 % Expected term remaining (years) 3.81 4.81 Implied volatility 82.0 % 43.0 % Closing common stock price on the measurement date $ 0.59 $ 7.81 Equity Classified Warrants On December 7, 2022, as a part of our 2022 Private Placement, the Company issued PIPE Private Placement Warrants to investors to purchase up to 7,363,377 shares of Common Stock.
The key inputs into the valuations as of December 31, 2023 and 2022 were as follows: December 31, 2023 December 31, 2022 Risk-free interest rate 4.03 % 4.00 % Expected term remaining (years) 2.81 3.81 Implied volatility 85.0 % 82.0 % Closing common stock price on the measurement date $ 0.69 $ 0.59 September 2023 Purchase Agreement Warrants We established fair value of the Preferred Warrants utilizing the Black-Scholes Merton formula.
Cash Flows The following table summarizes our cash flows for the years ended December 31, 2022 and 2021: 2022 2021 Net cash provided (used) by operating activities $ (23,459,511 ) $ 1,986,873 Net cash used in investing activities (2,090,024 ) (10,943,657 ) Net cash provided by financing activities 1,051,411 35,891,419 Net decrease in cash, cash equivalents, and restricted cash $ (24,498,124 ) $ 26,934,635 Operating Activities Net cash provided (used) by operating activities decreased by $25.4 million in 2022, primarily due to a $15.5 million decrease in operating income, an $11.9 million increase in non-cash working capital, offset by an increase of $2.7 million in non-cash expenses.
Cash Flows The following table summarizes our cash flows for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Net cash used in operating activities $ (25,119,405 ) $ (23,459,511 ) Net cash used in investing activities (152,704 ) (2,090,024 ) Net cash provided by financing activities 66,773,137 1,051,411 Effect of exchange rate changes on cash and cash equivalents 18,144 — Net increase (decrease) in cash and cash equivalents $ 41,519,172 $ (24,498,124 ) Operating Activities Net cash used by operating activities increased by $1.7 million in the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to an increase in our net loss adjusted for non-cash items of $4.2 million, offset by a decrease in cash used in operating activities related to change in our operating assets and liabilities of $2.5 million.
Notes payable and Convertible Debt As of December 31, 2022 and 2021 we had total debt balances of $1,314,309 and $1,796,724, respectively. 8% Unsecured Convertible Note Pursuant to the Fourth Amendment to our lease with Sanford Health, we agreed to a period of Abated Rent from October 1, 2022 to September 30, 2023 pertaining to our leased laboratory bay at the Sanford Research Center.
Equity Financings and Option Exercises As of December 31, 2023, we have raised approximately $157.4 million since our inception from the issuance and sale of convertible preferred shares, net of issuance costs associated with such financings, the merger transaction in 2021, proceeds from private placements of securities, and exercises of employee stock options. 72 Notes payable 8% Unsecured Convertible Note Pursuant to the Fourth Amendment to our lease with Sanford Health, we agreed to a period of abated rent (“Abated Rent”) from October 1, 2022 to September 30, 2023 pertaining to our leased laboratory bay at the Research Center.
In consideration of the premium payment by Lender to the insurance companies or the Agent or Broker, we unconditionally promise to pay Lender the amount Financed plus interest and other charges permitted under the Agreement. At December 31, 2022 and 2021 we recognized approximately $773,000 and $1,772,000, respectively, as insurance financing note payable in its consolidated balance sheet.
In consideration of the premium payment by Lender to the insurance companies or the agent or broker, we unconditionally promise to pay lender the amount financed plus interest and other charges permitted under the agreement. We paid the financing through installment payments with the last payment for the current note being September 22, 2023.
Capital asset purchases completed in 2022 relate substantially to leasehold improvements at the Corporate Headquarters and completion of the clinical manufacturing facility at the Sanford Research Center. Financing Activities Net cash provided by financing activities decreased by $34.8 million in 2022, primarily due to $34.4 million in proceeds from the Business Combination being fully realized in 2021.
Capital asset purchases completed in 2022 relate substantially to leasehold improvements at the Company’s corporate headquarters and completion of the clinical manufacturing facility at the Research Center.
In addition, we are executing on two research collaborations with global pharmaceutical companies, including CSL Behring and an undisclosed collaboration. We generated total revenue of $23.9 million and $60.9 million for the years ended December 31, 2022 and 2021, respectively (60.7% decline). Our revenue to date has been primarily derived from government grants.
We started phase 1 trials in the fourth quarter of 2023. We generated total revenue of $2.2 million and $23.9 million for the years ended December 31, 2023 and 2022, respectively (90.6% decline). Our revenue to date has been primarily derived from government grants.
Approximately $0.4 million in funding remaining for this grant as of December 31, 2022. DoD, JPEO through Advanced Technology International – this grant was for a potential of $25 million, awarded in stages starting in August 2019 and with potential stages running through February 2023.
Department of Defense (“DoD”), Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense Enabling Biotechnologies (“JPEO”) through Advanced Technology International – this grant was for a potential of $25 million, awarded in stages starting in August 2019 and with potential stages running through February 2023.
Included in revenues for the year ended December 31, 2022 are $5.3 million for contract manufacturing, $3.1 million for labor, and $5.4 million for supplies as compared to $12.7 million for contract manufacturing, $3.9 million for fixed asset reimbursement, $6.1 million for labor, and $16.7 million for supplies for the year ended December 31, 2021.
Included in revenues for the year ended December 31, 2023, are amounts for billable costs related to closeout activities and charges of $0.1 million for labor, $0.8 million for supplies, and $1.3 million for outside research manufacturing services, as compared to $3.1 million for labor, $5.4 million for supplies, and $5.3 million for outside research manufacturing services for the year ended December 31, 2022.
General and Administrative Year Ended December 31, 2022 2021 Change % Change General and administrative $ 16,383,285 $ 17,085,692 $ (702,407 ) (4.1 )% Total general and administrative expenses $ 16,383,285 $ 17,085,692 General and administrative expenses decreased by $0.7 million, or (4.1)%, in 2022, primarily due to decreased administrative salaries and benefits (year-over-year decrease of $2.3 million), decreases in business, regulatory and marketing consulting (year-over-year decrease of $0.7 million), offset by an increase in insurance costs (year-over-year increase of $2.0 million), and public reporting expenses (year-over-year increase of $0.3 million).
General and Administrative Year Ended December 31, 2023 2022 Change % Change General and administrative $ 23,799,306 $ 16,383,285 $ 7,416,021 45.3 % Total general and administrative expenses $ 23,799,306 $ 16,383,285 General and administrative expenses increased by $7.4 million, or 45.3%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to other administrative support fees relating to IT, human resources, and legal (year-over-year increase of $7.7 million, 131.5%), and salaries and benefits (year-over-year increase of $2.2 million, 35.5%), offset by insurance costs (year-over-year decrease of $1.4 million, 51.5%), project consulting (year-over-year decrease of $1.2 million, 73.6%).
As a result of the JPEO Rapid Response Contract Termination, we expect future revenues to be lower as our primary pipeline development targets of Clostridioides difficile Infection, influenza, and immune system disorders remain independently financed as we explore potential partnerships, co-development opportunities, and licensing arrangements 76 Table of Contents Research and Development Year Ended December 31, 2022 2021 Change % Change Research and development $ 36,438,513 $ 57,183,589 $ (20,745,076 ) (36.3 )% Total research and development expenses $ 36,438,513 $ 57,183,589 Research and development expenses decreased by $20.7 million, or (36.3)%, in 2022, primarily due to decrease in laboratory supplies (year-over-year decrease of $8.2 million, (42.7)%) , contract manufacturing costs (year-over-year decrease of $7.4 million, (58.3)%), clinical trial and project consulting expense (year-over-year decrease of $6.0 million, (84.5)%), and animal care costs (year-over-year decrease of $3.1 million, (65.2)%), offset by an increase in salaries and benefits (year-over-year increase of $2.1 million, 21.2%), and facility costs (year-over-year increase of $1.9 million, 52.8%).
Research and Development Year Ended December 31, 2023 2022 Change % Change Research and development $ 16,515,005 $ 36,438,513 $ (19,923,508 ) (54.7 )% Total research and development expenses $ 16,515,005 $ 36,438,513 Research and development expenses decreased by $19.9 million, or 54.7%, for the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to decreases in laboratory supplies (year-over-year decrease of $5.4 million, 84.4%), contract manufacturing costs (year-over-year decrease of $4.9 million, 92.6%), salaries and benefits (year-over-year decrease of $5.4 million, 45.0%), outside lab services due to the JPEO Rapid Response Contract Termination (year-over-year decrease of $3.6 million, 78.3%), project consulting (year-over-year decrease of $0.4 million, 53.9%) and offset by overhead costs (year-over-year increase of $0.1 million, 1.7%).
Warrants classified as equity are initially measured at fair value. Subsequent changes in fair value are not recognized as long as the warrants continue to be classified as equity. The initial fair value of each PIPE Private Placement Warrant and PIPE Placement Agent Warrant issued has been determined using the Black-Scholes option-pricing model.
(2) Reflects a 5% discount for lack of marketability. The initial fair value of each Preferred Placement Agent Warrant issued and exercisable at $6.30 has been determined using the Black-Scholes option-pricing model.
We have applied advanced genetic engineering and antibody science to develop transchromosomic (Tc) Bovine™. Our versatile DiversitAb™ platform is applicable to a wide range of serious unmet needs in human diseases. It produces natural, specifically targeted, high-potency, fully-human polyclonal immunotherapies without the need for human donors.
We have applied advanced genetic engineering and antibody science to develop transchromosomic (Tc) Bovine™. Our novel immunotherapy platform that is developing fully-human hIgC for delaying the onset or progression of T1D. We are advancing clinical programs in two indications, and preclinical development in three indications.
All relevant terms and conditions for the PIPE Private Placement Warrant and PIPE Placement Agent Warrant are identical with the exception of the exercise prices of $1.08 and $1.35, respectively; the key inputs into the valuations as of the initial measurement date were as follows: Initial Measurement Risk-free interest rate 3.62 % Expected term remaining (years) 5.00 Implied volatility 89.0 % Closing common stock price on the measurement date, less discount for lack of marketability (1) $ 0.66 (1) As the underlying shares are restricted from sale for a period of 180 days from the date of the 2022 Private Placement, the fair value of the warrants were estimated using the Black-Scholes option pricing model that uses several inputs, including market price of our common shares at the end of each reporting period (a level one input), less a discount for lack of marketability (a level two input).
The key inputs into the valuations as of the October 3, 2023 initial measurement date were as follows: Initial Measurement Risk-free interest rate 4.80 % Expected term remaining (years) 5.00 Implied volatility 85.0 % Closing common stock price on the measurement date $ 0.63 Upon initial measurement, the fair value of each Preferred Placement Agent Warrant was determined to be $4.40, per warrant for a value of approximately $3.7 million.
Removed
We currently have multiple drug development programs underway and collaborations with the US government and global pharmaceutical companies. The platform has been expanded and validated through funding awarded from U.S. government emerging disease and medical countermeasures programs with cumulative grant award totals of approximately $203.6 million. We are advancing clinical programs in two indications, and preclinical development in three indications.
Added
In addition, we are executing on two research collaborations with global pharmaceutical companies, including CSL Behring and an undisclosed collaboration. We formed SAB Australia, in order to qualify for the Australian government’s research and development tax credit for research and development dollars spend in Australia. The primary purpose of SAB Australia is to conduct clinical trials for SAB-142.
Removed
As of December 31, 2022, $0.4 million in funding remains for our current government grants, with an additional $0.4 million remaining for our current government grants pending approval of extensions on the funding for two of the grants.
Added
As of December 31, 2023, we had an accumulated deficit of $90.1 million, and cash and cash equivalents totaling $56.6 million. Recent Developments Effective January 5, 2024, we filed articles of amendment to our articles of incorporation to affect a one-for-ten reverse split of our issued and outstanding shares of Common Stock.
Removed
As of December 31, 2022, we had an accumulated deficit of $47.9 million, and cash and cash equivalents totaling $15.0 million.
Added
All references to common stock, warrants and options to purchase 67 common stock, including per share data and related information contained in the accompanying Consolidated Financial Statements have been retroactively adjusted to reflect the effect of the Reverse Stock Split for all periods presented.
Removed
Recent Developments Private Placement On December 7, 2022, we consummated a private placement with certain institutional and accredited investors, whereby we issued an aggregate of 7,363,377 shares of common stock and warrants to purchase up to 7,363,377 shares of common stock (the “PIPE Warrants”), each share and PIPE Warrant sold at a combined purchase price of $1.08.
Added
We engaged in negotiations with the DoD to compensate us for services provided prior to the JPEO Rapid Response Contract Termination and costs we would be expected to bear in future periods.
Removed
The PIPE Warrants become exercisable on the six-month anniversary of the date of grant for a price of $1.08 per share and are exercisable for five years from the date of issuance. The issuance of shares of common stock upon exercise of the PIPE Warrants may result in material dilution to existing stockholders.
Added
A termination and settlement proposal was submitted to the DoD on September 9, 2022; we submitted a final invoice on December 15, 2022; 68 and received payment from the DoD on or about January 12, 2023.
Removed
Termination of Contract with US Department of Defense On August 3, 2022, we received notice from the DoD to terminate the Department of Defense, JPEO Rapid Response contract, dated as of August 7, 2019 with the DoD most recently amended as of September 14, 2021, relating to prototype research and development of a Rapid Response Antibody Program and advanced clinical development through licensure and commercial manufacturing for SAB-185 (the "JPEO Rapid Response Contract Termination").
Added
The terms of the arrangement provide for a cost-reimbursable structure, and state that the parties will work in good faith equitable reimbursement for work performed toward accomplishment of tasks provided in the agreement.

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