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What changed in SAB Biotherapeutics, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of SAB Biotherapeutics, Inc.'s 2023 and 2024 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 2024 report.

+397 added−446 removedSource: 10-K (2025-03-31) vs 10-K (2024-03-29)

Top changes in SAB Biotherapeutics, Inc.'s 2024 10-K

397 paragraphs added · 446 removed · 294 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

91 edited+35 added−78 removed86 unchanged
Biggest changeIn 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.
Biggest changeIn 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.
We recently completed an expansion of our research and development laboratory facilities to accommodate our discovery programs, support for our pre-clinical pipeline programs, and process development research for our product candidates. The upstream process is easily scalable. Animals donate plasma three times per month (2.1% of bodyweight each time).
We recently completed an expansion of our research and development laboratory facilities to accommodate our discovery programs, support for our pre-clinical pipeline programs, and process development research for our clinical product candidates. The upstream process is easily scalable. Animals donate plasma three times per month (2.1% of bodyweight each time).
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 and 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 product to accommodate larger sized advanced Phase 2 clinical studies or Emergency Use scale.
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.
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.
Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the United States, or 200,000 or more individuals in the United States for which there is no reasonable expectation that the cost of developing and making available in the United States a drug or biologic for this type of disease or condition will be recovered from sales in the United States for that drug or biologic.
Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant orphan designation to a drug or biologic intended to treat a rare disease or condition, which is a disease or condition that affects fewer than 200,000 individuals in the United States, or 200,000 or more individuals in the United States for which there is no reasonable expectation that the cost of developing and making available 14 in the United States a drug or biologic for this type of disease or condition will be recovered from sales in the United States for that drug or biologic.
These targeted ideals may include annual bonuses, stock-based compensation awards, a 401(k) plan with employee matching opportunities, healthcare, and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, family care resources, and/or employee assistance programs. We also provide our employees with access to various innovative, flexible, and convenient health and wellness programs.
These 16 targeted ideals may include annual bonuses, stock-based compensation awards, a 401(k) plan with employee matching opportunities, healthcare, and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, family care resources, and/or employee assistance programs. We also provide our employees with access to various innovative, flexible, and convenient health and wellness programs.
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.
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.
Based on birth cohorts from 1950 to 2040, 6.85 million lives will be lost by 2040 if people are unable to access interventions to diagnose and treat T1D. According to these estimates, T1D stands to become one of the world’s largest deadly chronic health conditions, similar in scale and impact to HIV. c.
Based on birth cohorts from 1950 to 2040, 6.85 million lives will be lost by 2040 if people are unable to access interventions to diagnose and treat T1D. According to these estimates, T1D stands to become one of the world’s largest deadly chronic health conditions, similar in scale and impact to HIV.
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.
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.
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.
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 scaled clinical manufacturing timeline.
If the FDA concludes a REMS is needed, the sponsor of the BLA must submit a proposed REMS; the FDA will not approve the BLA without a REMS, if required. 5. Post-Approval Requirements Maintaining substantial compliance with applicable federal, state, and local statutes and regulations requires the expenditure of substantial time and financial resources.
If the FDA concludes a REMS is needed, the sponsor of the BLA must submit a proposed REMS; the FDA will not approve the BLA without a REMS, if required. Post-Approval Requirements Maintaining substantial compliance with applicable federal, state, and local statutes and regulations requires the expenditure of substantial time and financial resources.
Patent Term Restoration Depending upon the timing, duration, and specifics of FDA approval of product candidates, some of a sponsor’s U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Amendments.
US Patent Term Restoration Depending upon the timing, duration, and specifics of FDA approval of product candidates, some of a sponsor’s U.S. patents may be eligible for limited patent term extension under the Drug Price Competition and Patent Term Restoration Act of 1984, or the Hatch-Waxman Amendments.
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.
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”).
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.
To produce more product, more animals are added to the program and immunized to the target. 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 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.
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.
Similarly, an IRB can suspend or terminate approval of a clinical trial at its institution if the clinical trial is not being 19 conducted in accordance with the IRB’s requirements or if the biologic has been associated with unexpected serious harm to patients.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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. U.S.
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”).
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. Our Corporate History SAB Sciences, Inc. (formerly SAB Biotherapeutics, Inc.) was incorporated in April 2014 as a Delaware corporation (“Legacy SAB”).
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
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.
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.
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.
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.
We expect our global patent protection to extend to 2041 and beyond with respect to producing commercial-scale hIgG using our chromosome engineering that generates high concentrations of hIgG 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.
Owners of approved NADAs continue to have ongoing responsibilities under the FDCA, including registration and listing, recordkeeping, filing supplements, and periodic reporting. 6.
Owners of approved NADAs continue to have ongoing responsibilities under the FDCA, including registration and listing, recordkeeping, filing supplements, and periodic reporting.
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.
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.
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.
Our success will partially depend on our ability to obtain, maintain, enforce, and defend patents and other intellectual property rights with respect to our hIgG that are proven to be safer or more effective or are less expensive than competing products.
As of March 2024, our patent portfolio includes over 40 issued patents or pending applications. We have made strategic filings in jurisdictions including the United States, Australia, Canada, China, Europe, Japan, Korea, and Mexico.
As of March 2025, our patent portfolio includes over 40 issued patents or pending applications. We have made strategic filings in jurisdictions including the United States, Australia, Canada, China, Europe, Japan, Korea, and Mexico.
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.
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. 12 U.S.
Regulation Outside of the United States In addition to regulations in the United States, we are, and will continue to be, subject to a variety of regulations in other jurisdictions governing, among other things, clinical studies and any commercial sales and distribution of our products.
Government Regulation - Regulation Outside of the United States 15 In addition to regulations in the United States, we are, and will continue to be, subject to a variety of regulations in other jurisdictions governing, among other things, clinical studies and any commercial sales and distribution of our 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 hIgGs.
Bovine were selected because they are large animals that produce large amounts of plasma, and as ruminants, have high concentrations of circulating hIgG with a robust response to immunogen challenge that produces high potency, high avidity hIgG.
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.
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 Regulations in the United States In the United States, we expect our hIgG product candidates to be regulated by the FDA as biological products.
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.
In the United States, new animal drugs are subject to regulation under the Federal Food, Drug, and Cosmetic (FDCA), and under the FDCA, in general, a new animal drug is “deemed unsafe” and adulterated unless the FDA has approved a NADA for its intended use or unless the drug is only 11 for investigational use and conforms to specified exemptions for such use under an investigational new animal drug (INAD) exemption.
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.
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 hIgG response. The technology founders established a biotech company called “Hematech” to develop the technology.
Type 1 Diabetes Background T1D is a complex and life-threatening autoimmune disease in which the body mistakenly attacks the insulin-producing beta cells of the pancreas. Living with this disease requires daily, sometimes hourly, intensive insulin management with the potential for numerous complications.
Background On Type 1 Diabetes High Prevalence in Type 1 Diabetes T1D is a complex and life-threatening autoimmune disease in which the body mistakenly attacks the insulin-producing beta cells of the pancreas. Living with this disease requires daily, sometimes hourly, intensive insulin management with the potential for numerous complications.
We believe that targeted human IgGs can be produced against the same immunogen or multiple immunogens, depending on the disease target and indication, in as many Tc Bovine as necessary to generate sufficient doses to fully supply the target market.
We believe that targeted hIgG can be produced against the same immunogen or multiple immunogens, depending on the disease target and indication, in as many Tc Bovine as necessary to generate sufficient doses to fully supply the target market.
Since acquiring the technology in 2014, we have continued to develop intellectual property and specifically targeted human IgGs to multiple disease indications, and we have conducted or collaborated in eight clinical trials (six of which are in review), where we have demonstrated safety and efficacy in multiple Tc Bovine-derived human IgG product candidates.
Since acquiring the technology in 2014, we have continued to develop intellectual property and specifically targeted hIgG to multiple disease indications, and we have conducted or collaborated in eight clinical trials (six of which are in review), where we have demonstrated safety and efficacy in multiple Tc Bovine-derived hIgG product candidates.
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).
The production system relies on advanced genetic engineering that functionally replaces bovine immunoglobulin with hIgG (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 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.
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 and should not be considered to be part thereof.
From a drug development perspective, shifting away from chronic disease management and towards disease-modifying therapies has the potential to change and save millions of lives. • According to the T1D Index, a global data simulation tool launched by Juvenile Diabetes Research Foundation (“JDRF”) in 2022, the prevalence of T1D has increased at four times the rate of population growth in every country across the globe since 2000. • Nearly 1 in 300 children in the United States will be diagnosed with T1D during childhood, and one in every seven healthcare dollars can be attributable to the cost of managing diabetes over the lifetime. • An estimated 8.4 million people were living with T1D worldwide in 2021, and this number is predicted to increase to 17.4 million by 2040.
From a drug development perspective, shifting away from chronic disease management and towards disease-modifying therapies has the potential to change and save millions of lives. • According to the T1D Index, a global data simulation tool launched by Breakthrough T1D Foundation, formerly known as the Juvenile Diabetes Research Foundation (JDRF), in 2022, the prevalence of T1D has increased at four times the rate of population growth in every country across the globe since 2000. • Nearly 1 in 300 children in the United States will be diagnosed with T1D during childhood, and one in every seven healthcare dollars can be attributable to the cost of managing diabetes over the lifetime. • An estimated 9.4 million people were living with T1D worldwide in 2024, and this number is predicted to increase to 17.4 million by 2040.
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 .
Through our production platform, we have engineered a targeted hIgG production platform 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 .
Human IgG consistency of product is achieved by testing the potency of IgGs contained in each plasma collection and then combining plasma collections in a manufacturing pool that generates specified potencies within a specified antibody protein concentration.
Consistency of hIgG product is achieved by testing the potency of hIgG contained in each plasma collection and then combining plasma collections in a manufacturing pool that generates specified potencies within a specified antibody protein concentration.
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.
An immunogen is developed for a specific target in much the same that human vaccines are developed. The production 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. 8 • Hyperimmunize Tc Bovine . Tc Bovine are genetically engineered to produce hIgG.
In addition to potentially preserving beta cell function in early T1D patients, SAB-142 offers the potential of re-dosing when examining clinically meaningful indicators such as C-peptide levels and glycosylated hemoglobin (HbA1c), without the potential risk of inducing major immune reactions of animal derived IgGs.
In addition to potentially preserving beta cell function in early T1D patients, SAB-142 offers the potential of safe and reliable re-dosing when examining clinically meaningful indicators such as C-peptide levels and HbA1c, without the potential risk of inducing major immune reactions of animal derived immunoglobulins.
The average age of clinical onset of T1D is 13 years old. Stage 1 is the start of T1D, marked by individuals having two or more diabetes-related autoantibodies and still normal blood sugar concentrations. In Stage 2, individuals have dysglycemia but without symptoms. Stage 3 is the time of a full clinical diagnosis.
Stage 1 is the start of T1D, marked by individuals having two or more diabetes-related autoantibodies and still normal blood sugar concentrations. In Stage 2, individuals have dysglycemia but without symptoms. Stage 3 is the time of a full clinical diagnosis.
For more information regarding the risks related to our intellectual property, see the section titled “Risk Factors – Risks Related to Our Intellectual Property”. X. U.S.
For more information regarding the risks related to our intellectual property, see the section titled “Risk Factors – Risks Related to Our Intellectual Property”.
The human antibody genes have been further engineered to efficiently produce a diverse repertoire of human immunoglobulin G (which is referred to as hIgG) in bovine B-cells in response to specifically targeted immunogens as a result of the hyperimmunization of the Tc Bovine.
The human antibody genes have been further engineered to efficiently produce a diverse repertoire of hIgG in bovine B-cells in response to specifically targeted immunogens as a result of the hyperimmunization of the Tc Bovine.
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.
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 United States Patent and Trademark Office (the “US 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.
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.
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.
These patents are not material to the Company at this time, and we believe patents issued subsequently allow the Company to maintain its competitive position. IX. U.S. PATENT SYSTEM In most countries in which we file, including the United States, the patent term is 20 years from the earliest date of filing a non-provisional patent application.
These patents 10 are not material to the Company, and we believe patents issued subsequently allow the Company to maintain its competitive position. US Patent System In most countries in which we file patents, including the United States, the patent term is 20 years from the earliest date of filing a non-provisional patent application.
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.
We acquired all the intellectual property rights to Tc Bovine and the production platform from Sanford Applied Biosciences, a wholly owned subsidiary of Sanford Health, to develop targeted hIgG to specific targets and advance clinical development and commercialization.
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).
These patent families cover: • Granted patents in the U.S., Europe, Japan, and other major markets relating to a HAC 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 hIgG by transgenic animals with high production of hIgG 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 hIgG 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 hIgG that specifically bind influenza antigen, and methods of making and using the same in treating or preventing influenza (if issued, naturally expiring in 2042). • 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).
Following IV administration, both rATG and SAB-142 have been shown to target key circulating immune cell types involved in an autoimmune response in T1D. Both ATGs cause a dose-proportional transient reduction of CD4+ and CD8+ T-cells while sparing T regulatory (Treg) cells in addition to modulating other autoimmune pathways involved in T1D pathophysiology. These include macrophages and B cells.
Following IV 6 administration, both rATG and SAB-142 have been shown to target key circulating immune cell types involved in an autoimmune response in T1D. Both ATGs cause a dose-proportional sustained exhaustion of CD4+ and CD8+ T-cells while sparing T regulatory (Treg) cells in addition to modulating other autoimmune pathways involved in T1D pathophysiology.
Placebo controlled trials with low-dose rATG, defined as a single dose of 2.5 milligram per kilogram (mg/kg), have shown statistically significant maintenance of C-peptide levels and thus a delay in progression of recent onset T1D.
Placebo controlled trials with low-dose rATG, defined as a single dose of 2.5 milligram per kilogram (mg/kg) administered intravenously over two days in an ambulatory setting, have shown statistically significant maintenance of C-peptide levels and thus a delay in progression of recent onset T1D.
We emphasize several measures and objectives in managing its human capital assets, including, among others, (i) employee safety and wellness, (ii) talent acquisition and retention, (iii) employee engagement, development, and training, (iv) diversity and inclusion and (v) compensation.
We consider our relationship with our employees to be good. We emphasize several measures and objectives in managing its human capital assets, including, among others, (i) employee safety and wellness, (ii) talent acquisition and retention, (iii) employee engagement, development, and training, (iv) diversity and inclusion and (v) compensation.
The FDA regulates polyclonal hIgGs and mAbs differently, as mAbs are regulated through the Center for Drug Evaluation and Research (“CDER”) while pAbs are regulated by CBER. CBER has approved over 36 IgG products from both human- and animal-derived plasma. Further, CBER is very familiar with our DiversitAb ™ production system and pAb product.
The FDA regulates polyclonal hIgG and mAbs differently, as mAbs are regulated through the Center for Drug Evaluation and Research (CDER) while pAbs are regulated by CBER. CBER has approved over 36 immunoglobulin products from both human- and animal-derived plasma. Further, CBER is very familiar with our production platform and pAb products.
Therapeutic Potential of the Polyclonal Modality in New-Onset Type 1 Diabetes Maintenance of the level of connecting peptide, a short 31 amino acid polypeptide that connects insulin’s A chain to its B chain in the proinsulin molecule, commonly referred to as C-peptide, is a validated surrogate endpoint for endogenous insulin production, essential for the prevention of progression of T1D.
Clinical Validation of Anti-Thymocyte Globulin in New Onset Type 1 Diabetes Maintenance of the level of connecting peptide (C-peptide), a short 31 amino acid polypeptide that connects insulin’s A chain to its B chain in the proinsulin molecule, is a validated surrogate endpoint for endogenous insulin production, essential for delaying progression of T1D.
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.
Our technologies may be difficult to replicate, creating potential barriers to entry, as our genetic engineering know-how and suite of proprietary production platform IP and trade secrets have been developed and optimized over nearly two decades.
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 .
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 hIgG produced in convalescent patients. • Collect Plasma .
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.
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.
Figure 7: SAB-142 Production Similar to FDA Approved rATG i . Indication and Clinical Strategy for SAB-142 Immunological processes resulting in the breakdown of self-tolerance and gradual destruction of pancreatic beta cells by the patient’s own immune system preceding the clinical onset of disease oftentimes starts very early in patients’ lives, sometimes as early as in utero.
Clinical Strategy for SAB-142 Immunological processes resulting in the breakdown of self-tolerance and gradual destruction of pancreatic beta cells by the patient’s own immune system preceding the clinical onset of disease oftentimes starts very early in patients’ lives, sometimes as early as in utero. The average age of clinical onset of T1D is 13 years old.
Following approval, the manufacturing facilities are subject to periodic inspections by the FDA, and such inspections may result in an issuance of FDA Form 483 deficiency observations, an untitled letter, or a warning letter, which can lead to plant shutdown and other more serious penalties and fines.
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. 13 Following approval, the manufacturing facilities are subject to periodic inspections by the FDA, and such inspections may result in an issuance of FDA Form 483 deficiency observations, an untitled letter, or a warning letter, which can lead to plant shutdown and other more serious penalties and fines.
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.
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.
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.
However, more than 65% of treated patients in this study reported serum sickness due to the infusion of a non-human antibody, with symptoms that included rash, malaise, fever, and joint swelling, with over 50% of those subject developing serum sickness of Grade 3-4 (severe and life-threatening according to the CTCAE criteria).
Additional Regulation In addition to the foregoing, state and federal laws regarding environmental protection and hazardous substances, including the Occupational Safety and Health Act, the Resource Conservancy and Recovery Act and the Toxic Substances Control Act, affect our business.
As previously mentioned, there is no biosimilar pathway for the complexity that exists in a polyclonal antibody drug product. Additional Regulation In addition to the foregoing, state and federal laws regarding environmental protection and hazardous substances, including the Occupational Safety and Health Act, the Resource Conservancy and Recovery Act and the Toxic Substances Control Act, affect our business.
Figure 5: SAB-142 Demonstrates Similar T-Cell Subset Mechanism of Action as rATG A review of safety parameters based on both short and long-term safety data (up to five years from three separate clinical trials conducted with low-dose rATG in Stage 3 T1D patients) highlights issues associated with dosing humans with rabbit-derived antibodies.
A review of safety parameters based on both short and long-term safety data (up to five years from three separate clinical trials conducted with low-dose rATG in Stage 3 T1D patients) highlights that safety issues associated with dosing humans with rabbit-derived antibodies are predominantly focused on the serum sickness, high immunogenicity, and CD4+ sustained lymphodepletion.
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.
Department of Agriculture (the “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. The AAALAC International accreditation program evaluates organizations that use animals in research, teaching or testing.
Animals can be produced through cloning technology and plasma fractionation to meet market demand through a well-established and scalable GMP process.
Our production platform is replicable and scalable given Tc Bovine are genetic clones. Animals can be produced through cloning technology and the plasma fractionation process scaled to meet market demand through a well-established GMP process.
Data from more than 700 human subjects treated with antibodies produced by our platform support expectation of a zero serum sickness rate and zero incidence of neutralizing anti-drug antibodies (ADA) within the upcoming SAB-142 trials. There is an established regulatory path for T1D indications using the SAB-142 modality.
The mechanism of action of SAB-142 has been clinically validated in numerous clinical trials with a rabbit anti-thymocyte globulin (rATG). In 3 addition, data from more than 700 human subjects treated with antibodies produced by our platform support expectation of a zero-serum sickness rate and zero incidence of neutralizing anti-drug antibodies (ADA) within the upcoming SAB-142 clinical trials.
The ultimate vision for SAB-142 is founded on the potential ability to safely re-dose by delivering a consistent and effective dose of this medication only once per year to fully halt progression of established clinical disease or delay its onset indefinitely. j. Preclinical Studies for SAB-142 We have completed the GLP toxicology study that enables filing an IND submission.
The ultimate vision for SAB-142 is founded on the potential ability to safely re-dose by delivering a consistent and effective dose of this medication only once per year to fully halt progression of established clinical disease or delay its onset indefinitely. 7 Clinical Development of SAB-142 On January 28, 2025 we announced positive topline phase 1 clinical results with the Company’s potentially disease-modifying T1D therapy SAB-142.
Our antibodies are both target-specific and polyclonal, meaning they are comprised of multiple hIgGs and can bind to multiple sites on specific immunogens, making them ideally suited to address the complexities associated with many immune-mediated disorders. Our lead candidate, SAB-142 is a human anti-thymocyte globulin (ATG) focused on preventing or delaying the progression of type 1 diabetes (T1D).
Our internally discovered antibodies are both target-specific and polyclonal, meaning they are comprised of multiple hIgG and can bind to multiple sites on targeted immunogens, making them ideally suited to address the complexities associated with many immune-mediated disorders.
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.
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. 9 Intellectual Property We actively seek to protect the intellectual property and proprietary technology production platform that we believe is important to our business, which includes seeking and maintaining patents covering our technology production platform and products, and any other inventions that are commercially or strategically important to the development of our business.
In this patient population, we will aim to delay the onset of full clinical T1D along with evaluation of the re-dosing potentially aimed at fully preventing clinical onset of disease.
Stage 2 patients are those who do not yet have a full clinical onset of T1D and have functional beta cells that can be further preserved. In this patient population, we will aim to delay the onset of Stage 3 clinical T1D along with evaluation of the re-dosing potentially aimed at fully preventing clinical onset of disease.
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.
The target specific hIgG is collected from the Tc Bovine by plasma donations. • Isolate hIgG . hIgG is then isolated from the plasma through a well-established plasma fractionation and purification process and Quality Control tested. This highly purified hIgG is then ready for use as a human immunotherapy treatment or prophylactic.
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 portfolio of intellectual property and trade secrets that we have developed includes patents related to the activity of our HAC and methods that we expect to generate hIgG at commercial scale. The patent portfolio includes composition and method patents. Our goal is to continue expansion of the breadth of claims and length of claim protections.
More broadly, we believe that our proprietary platform, referred to as DiversitAb, ™ holds the potential to generate additional novel therapeutic candidates to expand our pipeline. DiversitAb utilizes the human immune response to generate the optimal repertoire of IgGs for drug targets of interest.
Our proprietary platform holds the potential to generate additional novel therapeutic candidates to expand our pipeline, utilizing the human immune response to generate the optimal repertoire of hIgG for drug targets of interest. We believe it is the only technology capable of producing disease-targeted, hIgG in large quantities without the need for human plasma donors.
Unfortunately, when an individual is first diagnosed with clinical stage T1D, 50- 90% of pancreatic insulin-producing beta cells are already destroyed.
Unfortunately, when an individual is first diagnosed with clinical stage T1D, 50- 90% of pancreatic insulin-producing beta cells are already destroyed. Hence, it is critical to start therapy that preserves the remaining fully functional beta cells as soon as possible as it may provide the highest benefit throughout the patient’s lifetime.
These diverse and high-potency hIgGs can be targeted to human immunogens for immune disorders or cancer, viruses, bacteria, and toxins.
Proprietary Production Platform Overview Our proprietary production platform gives us the unique ability to generate targeted, hIgG without the need for human donors or plasma. Diverse and high-potency hIgG can be targeted to human immunogens for immune disorders or cancer, viruses, bacteria, and toxins.
Serum sickness is defined as a Type 3 hypersensitivity reaction. The heterologous nature of rATG also results in the production of neutralizing anti-drug antibodies (ADAs) in the majority of patients even after a single course of therapy. Neutralizing anti-drug antibodies, or NAbs, are a subset of ADAs that bind to the drug and inhibit its pharmacologic action or activity.
It is well established that treatment with heterologous proteins such as rATG can result in serum sickness, which can trigger Grade 3 or higher adverse events. Serum sickness is defined as a Type 3 hypersensitivity reaction. The heterologous nature of rATG also results in the production of neutralizing ADAs in most patients even after a single course of therapy.

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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. 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.
Biggest changeIf these collaborations are not successful, our business could be adversely affected. • We operate in a highly competitive industry. • We have no sales and marketing experience. • We are subject to stringent environmental regulation and potentially subject to environmental litigation, proceedings, and investigations. • If we or any contract manufacturers and suppliers we engage fail to comply with environmental, health and safety laws and regulations, we could become subject to fines or penalties or incur costs that could have a material adverse effect on the success of our business. • Our success depends on our ability to maintain the proprietary nature of our technology. • Third parties may claim we infringe their intellectual property rights. 19 • We may become involved in litigation to protect or enforce our patents or the patents of our collaborators or licensors, which could be expensive and time-consuming. • If patent laws or the interpretation of patent laws change, our competitors may be able to develop and commercialize our discoveries. • We have third party collaborators that might claim rights in or to our technology and/or assets. • 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. • We may not be able to protect our intellectual property rights throughout the world. • If we do not obtain patent term extension and data exclusivity for any product candidates we may develop, our business may be materially harmed. • If our trademarks and trade names are not adequately protected, then we may not be able to build name recognition in our markets of interest and our business may be adversely affected. • We are an “emerging growth company,” and our election to comply with the reduced disclosure requirements as a public company may make our common stock less attractive to investors. • We incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could adversely affect our business, financial condition, and results of operations. • If we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce timely and accurate financial statements or comply with applicable regulations could be impaired. • Our warrants are accounted for as liabilities and changes in value of the warrants could have a material effect on our financial results. • Our business, financial condition, and results of operations may fluctuate on a quarterly and annual basis, which may result in a decline in our stock price if such fluctuations result in a failure to meet the expectations of securities analysts or investors. • Changes in accounting principles may cause previously unanticipated fluctuations in our financial results, and the implementation of such changes may impact our ability to meet our financial reporting obligations. • If our estimates or judgments relating to our critical accounting policies prove to be incorrect, our business, financial condition, and results of operations could be adversely affected. • Anti-takeover provisions contained in our certificate of incorporation as well as provisions of Delaware law, could impair a takeover attempt. • 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. • Because we have no current plans to pay cash dividends on our common stock for the foreseeable future, investors may not receive any return on their investment unless they sell their common stock for a price greater than the price paid. • Sales of a substantial number of shares of our common stock in the public market could cause our stock price to fall. • 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. • Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud. • 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. • If securities or industry analysts do not publish research or reports about our business or publish negative reports, the market price of our common stock could decline. 20 • Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our common stock. • 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. • Tariffs could adversely affect our business and financial results.
To the extent such warrants are exercised, additional shares of our common stock will be issued, which will result in dilution to the holders of shares of our common stock and increase the number of shares eligible for resale in the public market.
To the extent such public warrants are exercised, additional shares of our common stock will be issued, which will result in dilution to the holders of shares of our common stock and increase the number of shares eligible for resale in the public market.
Sales of substantial numbers of such shares in the public market or the fact that such warrants may be exercised could adversely affect the market price of our common stock.
Sales of substantial numbers of such shares in the public market or the fact that such public warrants may be exercised could adversely affect the market price of our common stock.
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.
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 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.
We may also experience numerous unforeseen events during our clinical trials that could delay or prevent our ability to receive marketing approval or commercialize the product candidates we develop, including: • regulators, institutional review boards (IRBs), or other reviewing bodies may not authorize us or our investigators to commence a clinical trial, or to conduct or continue a clinical trial at a prospective or specific trial site; • we may not reach agreement on acceptable terms with prospective contract research organizations (CROs), and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • we may experience challenges or delays in recruiting principal investigators or study sites to lead our clinical trials; • the number of subjects or patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be insufficient or slower than we anticipate, and the number of clinical trials being conducted at any given time may be high and result in fewer available patients for any given clinical trial, or patients may drop out of these clinical trials at a higher rate than we anticipate; • our third-party contractors, including those manufacturing our product candidates or conducting clinical trials on our behalf, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; • we may have to amend clinical trial protocols submitted to regulatory authorities or conduct additional studies to reflect changes in regulatory requirements or guidance; • regulators or other reviewing bodies may find deficiencies with, fail to approve or subsequently find fault with the manufacturing processes or facilities of third-party manufacturers with which we enter into agreements for clinical and commercial supplies, or the supply or quality of any product candidate or other materials necessary to conduct clinical trials of our product candidates may be insufficient, inadequate or not available at an acceptable cost, or we may experience interruptions in supply; and • the potential for approval policies or regulations of the FDA or the applicable foreign regulatory agencies to significantly change in a manner rendering our clinical data insufficient for approval.
We may also experience numerous unforeseen events during our clinical trials that could delay or prevent our ability to receive marketing approval or commercialize the product candidates we develop, including: • regulators, institutional review boards (IRBs), or other reviewing bodies may not authorize us or our investigators to commence a clinical trial, or to conduct or continue a clinical trial at a prospective or specific trial site; • we may not reach agreement on acceptable terms with prospective contract research organizations (CROs), and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • we may experience challenges or delays in recruiting principal investigators or study sites to lead our clinical trials; • the number of subjects or patients required for clinical trials of our product candidates may be larger than we anticipate, enrollment in these clinical trials may be insufficient or slower than we anticipate, and the number of clinical trials being conducted at any given time may be high and result in fewer available patients for any given clinical trial, or patients may drop out of these clinical trials at a higher rate than we anticipate; • our third-party contractors, including those manufacturing our product candidates or conducting clinical trials on our behalf, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all; 29 • we may have to amend clinical trial protocols submitted to regulatory authorities or conduct additional studies to reflect changes in regulatory requirements or guidance; • regulators or other reviewing bodies may find deficiencies with, fail to approve or subsequently find fault with the manufacturing processes or facilities of third-party manufacturers with which we enter into agreements for clinical and commercial supplies, or the supply or quality of any product candidate or other materials necessary to conduct clinical trials of our product candidates may be insufficient, inadequate or not available at an acceptable cost, or we may experience interruptions in supply; and • the potential for approval policies or regulations of the FDA or the applicable foreign regulatory agencies to significantly change in a manner rendering our clinical data insufficient for approval.
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.
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.
Further, our reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured product candidates ourselves, including: • inability to meet our product specifications and quality requirements consistently; • delay or inability to procure or expand sufficient manufacturing capacity; • issues related to scale-up of manufacturing; • costs and validation of new equipment and facilities required for scale-up; • our third-party manufacturers may not be able to execute our manufacturing procedures and other logistical support requirements appropriately; • our third-party manufacturers may fail to comply with cGMP requirements and other inspections by the FDA or other comparable regulatory authorities; • our inability to negotiate manufacturing agreements with third parties under commercially reasonable terms, if at all; • breach, termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us; • reliance on single sources for drug components; • lack of qualified backup suppliers for those components that are currently purchased from a sole or single-source supplier; • our third-party manufacturers may not devote sufficient resources to our product candidates; • we may not own, or may have to share, the intellectual property rights to any improvements made by our third-party manufacturers in the manufacturing process for our product candidates; • operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier; and • carrier disruptions or increased costs that are beyond our control.
Further, our reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured product candidates ourselves, including: • inability to meet our product specifications and quality requirements consistently; • delay or inability to procure or expand sufficient manufacturing capacity; • issues related to scale-up of manufacturing; • costs and validation of new equipment and facilities required for scale-up; • our third-party manufacturers may not be able to execute our manufacturing procedures and other logistical support requirements appropriately; • our third-party manufacturers may fail to comply with cGMP requirements and other inspections by the FDA or other comparable regulatory authorities; 40 • our inability to negotiate manufacturing agreements with third parties under commercially reasonable terms, if at all; • breach, termination or nonrenewal of manufacturing agreements with third parties in a manner or at a time that is costly or damaging to us; • reliance on single sources for drug components; • lack of qualified backup suppliers for those components that are currently purchased from a sole or single-source supplier; • our third-party manufacturers may not devote sufficient resources to our product candidates; • we may not own, or may have to share, the intellectual property rights to any improvements made by our third-party manufacturers in the manufacturing process for our product candidates; • operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including the bankruptcy of the manufacturer or supplier; and • carrier disruptions or increased costs that are beyond our control.
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 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; 25 • 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.
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.
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.
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.
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.
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.
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.
Our future arrangements with third party payors, distributors, retailers, marketers and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations, including, without limitation, the federal Anti-Kickback Statute, the federal False Claims Act, and similar state or foreign laws which may constrain the business or financial arrangements and relationships through which we sell, market and distribute any product candidates for which we obtain marketing approval.
Our future arrangements with third party payors, distributors, retailers, marketers and customers may expose us to broadly applicable fraud and abuse and other healthcare laws and regulations, including, without limitation, the federal Anti-Kickback Statute, the federal False Claims Act, and similar state or foreign laws which may constrain the business or financial arrangements and relationships through which we sell, market and distribute any product candidates for which we obtain marketing 34 approval.
If we or any of our CROs, CTOs, or clinical trial sites fail to adhere to our clinical trial protocols or to comply with applicable GLP or GCP requirements, as applicable, the data generated in our future preclinical studies or clinical trials may be deemed unreliable, and the FDA or comparable foreign regulatory authorities may require us to perform additional preclinical studies or clinical trials before accepting for review or approving our marketing applications.
If we or any of our CROs, CTOs, or clinical trial sites fail to adhere to our clinical trial protocols or to comply with applicable GLP or GCP requirements, as applicable, the data 39 generated in our future preclinical studies or clinical trials may be deemed unreliable, and the FDA or comparable foreign regulatory authorities may require us to perform additional preclinical studies or clinical trials before accepting for review or approving our marketing applications.
Third-party payors could require us to conduct additional studies, including post-marketing studies related to the cost effectiveness of a product, to qualify for reimbursement, which could be costly and divert our resources. If government and other healthcare payors were not to provide coverage and adequate reimbursement for our products once approved, market acceptance and commercial success would be reduced.
Third-party payors could require us to conduct additional studies, including post-marketing studies related to the cost effectiveness of a product, to qualify for reimbursement, which could be costly and divert our 22 resources. If government and other healthcare payors were not to provide coverage and adequate reimbursement for our products once approved, market acceptance and commercial success would be reduced.
If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly limited. On January 26, 2024, we entered into a Controlled Equity Offering℠ Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co.
If we are unable to obtain adequate financing or financing on terms satisfactory to 56 us, when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly limited. On January 26, 2024, we entered into a Controlled Equity Offering℠ Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co.
Any predictions you make about our future success or viability may not be as accurate as they would otherwise be if we had a longer operating history or a history of successfully developing and 27 commercializing pharmaceutical products. We may encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors in achieving our business objectives.
Any predictions you make about our future success or viability may not be as accurate as they would otherwise be if we had a longer operating history or a history of successfully developing and commercializing pharmaceutical products. We may encounter unforeseen expenses, difficulties, complications, delays and other known or unknown factors in achieving our business objectives.
If we lose our ability to operate SAB Australia, or if in the future we are ineligible or unable to receive the research and development tax credit or are required to refund any research and development tax credit previously received or have to reserve for such credit in our financial statements, or if the Australian government significantly reduces or eliminates the tax credit, our business and results of operation may be adversely affected.
If we lose our ability to operate SAB Australia, or if in the future we are ineligible or unable to receive the research and development tax credit or are required to refund any research and development tax credit previously received or have to reserve for such credit in our 27 financial statements, or if the Australian government significantly reduces or eliminates the tax credit, our business and results of operation may be adversely affected.
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.
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.
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.
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.
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.
On January 15, 2022, outstanding public 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 public warrants is $115.00 per share following the Reverse Stock Split.
Moreover, if one or more of the analysts who cover us downgrade our common stock or if reporting results do not meet their expectations, the market price of our securities could decline. Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our common stock.
Moreover, if one or more of the analysts who cover us downgrade our common stock or if reporting results do not meet their expectations, the market price of our securities could decline. 57 Reports published by analysts, including projections in those reports that differ from our actual results, could adversely affect the price and trading volume of our common stock.
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.
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.
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.
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.
Regulatory approval for the genetic modification of animals, including those from which antibodies are isolated for injection into human patients, requires the approval of a New Animal Drug Application (NADA), which can be a lengthy and expensive process with uncertain outcomes, delays to which could substantially harm our business.
Regulatory approval for the genetic modification of animals, including those from which antibodies are isolated for injection into human patients, requires the approval of a New Animal Drug Application, which can be a lengthy and expensive process with uncertain outcomes, delays to which could substantially harm our business.
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.
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.
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.
Some of these events could be the basis for FDA action, including injunction, request for recall, seizure, or total or partial suspension of production. 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.
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.
In addition, we could incur higher manufacturing costs if manufacturing processes or standards change 42 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.
Factors that may contribute to the variability of our operating results include, but are not limited to: our ability to attract new clients and partners, retain existing clients and partners and maximize engagement and enrollment with existing and future clients; changes in our sales and implementation cycles, especially in the case of our large clients; new solution introductions and expansions, or challenges with such introductions; changes in our pricing or fee policies or those of our competitors; the timing and success of new solution introductions by us or our competitors or announcements by competitors or other third parties of significant new products or acquisitions or entrance into certain markets; any other change in the competitive landscape of our industry, including consolidation among our competitors; increases in operating expenses that we may incur to grow and expand our operations and to remain competitive; our ability to successfully expand our business, whether domestically or internationally; breaches of security or privacy; changes in stock-based compensation expenses; the amount and timing of operating costs and capital expenditures related to the expansion of our business; adverse litigation judgments, settlements, or other litigation-related costs; changes in the legislative or regulatory environment, including with respect to privacy or data protection, or enforcement by government regulators, including fines, orders, or consent decrees; the cost and potential outcomes of ongoing or future regulatory investigations or examinations, or of future litigation; changes in our effective tax rate; our ability to make accurate accounting estimates and appropriately recognize revenue for our solutions for which there are no relevant comparable products; changes in accounting standards, policies, guidance, interpretations, or principles; instability in the financial markets; general economic conditions, both domestic and international; volatility in the global financial markets; political, economic, and social instability, including terrorist activities and health epidemics (including the recent outbreak of COVID-19), and any disruption these events may cause to the global economy; and changes in business or macroeconomic conditions.
Factors that may contribute to the variability of our operating results include, but are not limited to: our ability to attract new clients and partners, retain existing clients and partners and maximize engagement and enrollment with existing and future clients; changes in our sales and implementation cycles, especially in the case of our large clients; new solution introductions and expansions, or challenges with such introductions; changes in our pricing or fee policies or those of our competitors; the timing and success of new solution introductions by us or our competitors or announcements by competitors or other third parties of significant new products or acquisitions or entrance into certain markets; any other change in the competitive landscape of our industry, including consolidation among our competitors; increases in operating expenses that we may incur to grow and expand our operations and to remain competitive; our ability to successfully expand our business, whether domestically or internationally; breaches of security or privacy; changes in stock-based compensation expenses; the amount and timing of operating costs and capital expenditures related to the expansion of our business; adverse litigation judgments, settlements, or other litigation-related costs; changes in the legislative or regulatory environment, including with respect to privacy or data protection, or enforcement by government regulators, including fines, orders, or consent decrees; the cost and potential outcomes of ongoing or future regulatory investigations or examinations, or of future litigation; changes in our effective tax rate; our ability to make accurate accounting estimates and appropriately recognize revenue for our solutions for which there are no relevant comparable products; changes in accounting standards, policies, guidance, interpretations, or principles; instability in the financial markets; general economic conditions, both domestic and international; volatility in the global financial markets; political, economic, and social instability, including terrorist activities and health epidemics, and any disruption these events may cause to the global economy; and changes in business or macroeconomic conditions.
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.
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.
Our expenses could increase beyond expectations for a variety of reasons, including due to our growth strategy and the increase in the scope and complexity of our operations. In executing our strategy and plans to invest in enhancing and scaling our business, we will need to generate significant additional revenue to achieve and maintain future profitability.
Our expenses could increase beyond expectations for a variety of reasons, including due to our growth strategy and the increase in the scope and complexity of our operations. In executing our strategy and plans to invest in enhancing and scaling 21 our business, we will need to generate significant additional revenue to achieve and maintain future profitability.
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.
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.
We cannot predict the impact of such changes and cannot be certain of our future compliance. In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our research, development or production efforts.
We cannot predict the impact of 47 such changes and cannot be certain of our future compliance. In addition, we may incur substantial costs in order to comply with current or future environmental, health and safety laws and regulations. These current or future laws and regulations may impair our research, development or production efforts.
Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad.
Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. We cannot predict the likelihood, nature or extent of 36 government regulation that may arise from future legislation or administrative action, either in the United States or abroad.
There can be no assurance that these and other efforts by potential competitors will not be successful, or that other methods will not be developed to compete with our technology. There are specific products and technologies that compete with our current product pipeline and that may outperform or be more competitive than our products.
There can be no 46 assurance that these and other efforts by potential competitors will not be successful, or that other methods will not be developed to compete with our technology. There are specific products and technologies that compete with our current product pipeline and that may outperform or be more competitive than our products.
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.
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.
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.
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.
At such time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed or operating.
At such 52 time, our independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed or operating.
Any of these difficulties, if they occur and are not resolved to the satisfaction of the FDA or other regulatory agency, could lead to significant delays and possibly the termination of the future development or commercial program for such product candidate.
Any of these 41 difficulties, if they occur and are not resolved to the satisfaction of the FDA or other regulatory agency, could lead to significant delays and possibly the termination of the future development or commercial program for such product candidate.
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.
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.
Investors will be subject to substantial risks involved in an investment in us, including the risk of losing their entire investment. There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq.
Investors will be subject to substantial risks involved in an investment in us, including the risk of losing their entire investment. 55 There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq.
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.
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.
The loss or unavailability of any of these individuals for any significant period of time could have a material adverse effect on our business, prospects, financial condition and results of operations.
The loss or unavailability of any of these individuals for any 38 significant period of time could have a material adverse effect on our business, prospects, financial condition and results of operations.
Additionally, advertising and promotion of any product candidate that obtains approval outside of the United States will be heavily scrutinized by comparable foreign entities and stakeholders.
Additionally, advertising and promotion of any product candidate that obtains approval outside of 37 the United States will be heavily scrutinized by comparable foreign entities and stakeholders.
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.
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.
Furthermore, we have no assurance that the results of any clinical trials that we conduct for our product candidates in Australia will be accepted by the FDA or applicable foreign authorities. In addition, current Australian tax regulations provide for a refundable research and development tax credit equal to 39.5% of qualified expenditures.
Furthermore, we have no assurance that the results of any clinical trials that we conduct for our product candidates in Australia will be accepted by the FDA or applicable foreign authorities. In addition, current Australian tax regulations provide for a refundable research and development tax credit equal to 48.5% of qualified expenditures.
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.
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, 2024 and 2023, we expect to continue to incur net losses for the foreseeable future, and we may never achieve or maintain profitability in the future.
The requirements governing development and approval of a new animal drug are largely analogous to those for new human drugs, requiring a demonstration of the safety and efficacy of the drug for the target indication, a demonstration that the manufacturing facilities, processes and controls are adequate with respect to such product candidate to assure safety, purity and potency, and a review of potential environmental impacts from the altered genomic DNA and the transgenic animals pursuant to the requirements of the National Environmental Policy Act (NEPA).
The requirements governing development and approval of a new animal drug are largely analogous to those for new human drugs, requiring a demonstration of the safety and efficacy of the drug for the target indication, a demonstration that the manufacturing facilities, processes and controls are adequate with respect to such product candidate to assure safety, purity and potency, and a review of potential environmental impacts from the altered genomic DNA and the transgenic animals pursuant to the requirements of the NEPA.
Further, the performance of our third parties on which we rely may be interrupted by the ongoing COVID-19 pandemic, including due to travel or quarantine policies, heightened exposure of CRO staff who are healthcare providers to COVID-19 or prioritization of resources toward the pandemic (similar public health emergencies that may arise in the future).
Further, the performance of our third parties on which we rely may be interrupted by future pandemics similar to the COVID-19 pandemic, including due to travel or quarantine policies, heightened exposure of CRO staff who are healthcare providers to such pandemics or prioritization of resources toward the pandemic (similar public health emergencies that may arise in the future).
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.
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.
Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained.
Recent U.S. Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained.
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.
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.
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 these warrants (the “public 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.
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.
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.
As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry involve both technological and legal complexity, and is therefore costly, time-consuming and inherently uncertain. In addition, the United States has recently enacted and is currently implementing and proposing wide-ranging patent reform legislation. Recent U.S.
As is the case with other biopharmaceutical companies, our success is heavily dependent on intellectual property, particularly patents. Obtaining and enforcing patents in the biopharmaceutical industry involve both technological and legal complexity, 49 and is therefore costly, time-consuming and inherently uncertain. In addition, the United States has recently enacted and is currently implementing and proposing wide-ranging patent reform legislation.
If these collaborations are not successful, our business could be adversely affected. In addition to our current collaborations, we may in the future seek third-party collaborators for the development and commercialization of product candidates.
Collaborations with third parties may be important to our business. If these collaborations are not successful, our business could be adversely affected. In addition to our current collaborations, we may in the future seek third-party collaborators for the development and commercialization of product candidates.
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.
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. 51 We may lose our emerging growth company status and become subject to the U.S.
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.
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; 28 • 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.
Our business is highly dependent on the success 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. We have not completed the development of any 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. We have not completed the development of any product candidates.
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.
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 fail to obtain results in our planned and future preclinical and clinical activities and studies sufficient to meet the requirements of the relevant regulatory agencies, the development timeline and regulatory approval and commercialization prospects for any potential product candidate, and, correspondingly, our business and financial prospects, would be materially adversely affected.
If we fail to obtain results in our planned and future preclinical and clinical activities and studies sufficient to meet the requirements of the relevant regulatory agencies, the development timeline and regulatory approval and commercialization prospects for any potential product candidate, and, correspondingly, our business and financial prospects, would be materially adversely affected. 26 Our business is highly dependent on the success 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. 50 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.
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.
The impact of future changes to U.S. and foreign tax law on our business, including the impact of Australian tax law on our business and operations in Australia, is uncertain and could be adverse, and we will continue to monitor and assess the impact of any such changes.
As a public company, we are required to provide an annual management report on the effectiveness of our internal control over financial reporting commencing with our Form 10-K.
As a public company, we are required to provide an annual management report on the effectiveness of our internal control over financial reporting.
Although each stockholder for whom the shares of common stock registered for resale is not permitted to convert their Preferred Stock into shares of common stock to the extent that after giving effect to such conversion, such holder would (together with such holder’s affiliates and related parties) beneficially own in excess of 4.99% (or 9.99% at the election of the holder) of the shares of common stock outstanding immediately after giving effect to such conversion, the market price of our common stock could decline if the holders of such shares sell them over time or are perceived by the market as intending to sell them. 62 Risks Related to Capital Markets If securities or industry analysts do not publish research or reports about our business or publish negative reports, the market price of our common stock could decline.
Although each stockholder for whom the shares of common stock registered for resale is not permitted to convert their Preferred Stock into shares of common stock to the extent that after giving effect to such conversion, such holder would (together with such holder’s affiliates and related parties) beneficially own in excess of 4.99% (or 9.99% at the election of the holder) of the shares of common stock outstanding immediately after giving effect to such conversion, the market price of our common stock could decline if the holders of such shares sell them over time or are perceived by the market as intending to sell them.
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.
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.
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.
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; 23 • 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.
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.
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.
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.
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.
Even if we are able to obtain a license, the license would likely obligate us to pay license fees or royalties or both, and the rights granted to us might be non-exclusive, which could result in our competitors gaining access to the same intellectual property.
These licenses may not be available on acceptable terms, or at all. Even if we are able to obtain a license, the license would likely obligate us to pay license fees or royalties or both, and the rights granted to us might be non-exclusive, which could result in our competitors gaining access to the same intellectual property.
In addition, we may suffer reputational harm or face litigation or adverse regulatory action as a result of cyber-attacks or other data security breaches and may incur significant additional expense to implement further data protection measures. See Item 1C. “Cybersecurity”, of this Annual Report on Form 10-K for more information. Collaborations with third parties may be important to our business.
In addition, we may suffer reputational harm or face litigation or adverse regulatory action as a result of cyber-attacks or other data security breaches and may incur significant additional expense to implement further data protection measures. 45 See Item 1C. “Cybersecurity”, of this Annual Report on Annual Report for more information.
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.
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.
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.
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.
As a result of our limited operating history, it is difficult to accurately forecast revenues or to predict operating expenses. Our current and future expense estimates are based, in large part, on our estimates of future revenue and on our research, development and commercialization plans.
We commenced operations in April 2014 and became a public company in October 2021. As a result of our limited operating history, it is difficult to accurately forecast revenues or to predict operating expenses. Our current and future expense estimates are based, in large part, on our estimates of future revenue and on our research, development and commercialization plans.
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.
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. 43 We and our contract manufacturers are subject to significant regulatory oversight with respect to manufacturing our products.
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.
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.
Any of these occurrences could diminish the usage or otherwise limit the commercial success of our product candidates and prevent us from achieving or maintaining market acceptance of the affected product candidate, if approved by applicable regulatory authorities, and may adversely affect our business, financial condition and prospects significantly.
Any of these occurrences could diminish the usage or otherwise limit the commercial success of our product candidates and prevent us from achieving or maintaining market acceptance of the affected product candidate, if approved by applicable regulatory authorities, and may adversely affect our business, financial condition and prospects significantly. 32 The future commercial success of our product candidates will depend on the degree of market acceptance of our potential products among physicians, patients, healthcare payers, and the medical community.
In addition, any revenue we receive will depend in whole or in part upon the efforts of these third parties, which may not be successful and are generally not within our control. If we are not successful in commercializing any approved products, our future product revenue will suffer, and we may incur significant additional losses.
In addition, any revenue we receive will depend in whole or in part upon the efforts of these third parties, which may not be successful and are generally not within our control.
Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our common stock.
Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, resulting in a decline in the trading price of our common stock. 54 Risks Related to our Common Stock Anti-takeover provisions contained in our certificate of incorporation as well as provisions of Delaware law, could impair a takeover attempt.
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.
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.
The future commercial success of our product candidates will depend on the degree of market acceptance of our potential products among physicians, patients, healthcare payers, and the medical community. When available on the market, our products may not achieve an adequate level of acceptance by physicians, patients and the medical community, which may result in us failing to achieve profitability.
When available on the market, our products may not achieve an adequate level of acceptance by physicians, patients and the medical community, which may result in us failing to achieve profitability.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAlthough we have not experienced cybersecurity incidents, a significant cybersecurity incidence could reasonably have a material adverse effect as against us, such as malware or ransomware attacks or DoS attacks, which could lead to business disruptions, unplanned downtimes or outages, particularly in critical systems or services, may impact our ability to operate efficiently, affecting business continuity.
Biggest changeThese types of events, which could lead to business disruptions, unplanned downtimes or outages, particularly in critical systems or services, may impact our ability to operate efficiently, affecting business continuity. Governance We have implemented standard operating procedures to define the channels by which cybersecurity threats are communicated to the Board.
Governance We have implemented standard operating procedures to define the channels by which cybersecurity threats are communicated to the Board. This ensures that Board has oversight and effective governance in managing risks associated with cybersecurity threats. Board of Directors Oversight The Audit Committee is central to the Board’s oversight of cybersecurity risks and bears the primary responsibility for this domain.
This ensures that Board has oversight and effective governance in managing risks associated with cybersecurity threats. Board of Directors Oversight The Audit Committee is central to the Board’s oversight of cybersecurity risks and bears the primary responsibility for this domain.
This includes the deployment of advanced security measures and regular system audits to identify potential vulnerabilities. In the event of a cybersecurity incident, the IT department is equipped with a well-defined written procedure. This plan includes immediate actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents.
This includes the deployment of advanced security measures and regular system audits to identify potential vulnerabilities. In the event of a cybersecurity incident, the IT department is equipped with a well-defined written procedure.
Oversee Third-party Risk Because we are aware of the risks associated with third-party service providers, we conduct security assessments of all third-party providers before engagement to ensure compliance with industry cybersecurity standards and frameworks. This includes assessments performed by our Senior Director of IT, who oversees the Company’s cybersecurity function.
Our collaborations with this third-party include regular system audits, threat assessments, 24-hour monitoring, and consultation on security enhancements. Oversee Third-party Risk Because we are aware of the risks associated with third-party service providers, we conduct security assessments of all third-party providers before engagement to ensure compliance with industry cybersecurity standards and frameworks.
This process ensures that the Board maintains thorough oversight and is equipped to offer informed guidance on critical cybersecurity issues.
Moreover, matters of significant cybersecurity importance, along with strategic risk management decisions, are promptly escalated to the Board of Directors . This process ensures that the Board maintains thorough oversight and is equipped to offer informed guidance on critical cybersecurity issues.
Reporting to Board of Directors The Senior Director of IT consistently communicates with the Audit Committee regarding critical cybersecurity risks and incidents, ensuring that the organization's highest governance bodies remain well-informed about our cybersecurity status and 64 potential vulnerabilities. Moreover, matters of significant cybersecurity importance, along with strategic risk management decisions, are promptly escalated to the Board of Directors.
This plan includes immediate actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents. 59 Reporting to Board of Directors The Senior Director of IT consistently communicates with the Audit Committee regarding critical cybersecurity risks and incidents, ensuring that the organization's highest governance bodies remain well-informed about our cybersecurity status and potential vulnerabilities.
Our IT Department works closely with our leadership and key operating personnel to evaluate and address cybersecurity risks in alignment with our business objectives and operational needs. 63 Engage Third-parties on Risk Management Due to the complexity and evolving nature of cybersecurity threats, we engaged with a cybersecurity assessment firm as an external expert, to evaluate and test our risk management systems.
Engage Third-parties on Risk Management Due to the complexity and evolving nature of cybersecurity threats, we engaged with a cybersecurity assessment firm as an external expert, to evaluate and test our risk management systems. This partnership enables us to leverage specialized knowledge and insights, of dedicated cybersecurity firms.
This ensures that cybersecurity considerations are integrated into our decision-making processes to monitor and manage risk.
This ensures that cybersecurity considerations are integrated into our decision-making processes to monitor and manage risk. 58 Our IT Department works closely with our leadership and key operating personnel to evaluate and address cybersecurity risks in alignment with our business objectives and operational needs.
Removed
This partnership enables us to leverage specialized knowledge and insights, of dedicated cybersecurity firms. Our collaborations with this third-party include regular system audits, threat assessments, 24-hour monitoring, and consultation on security enhancements.
Added
This includes assessments performed by our Senior Director of IT, who oversees the Company’s cybersecurity function. Risks from Cybersecurity Threats The Company does not believe that it has experienced any cybersecurity threats or incidents that have materially affected or are reasonably likely to materially affect the Company and its business strategy, results of operations and/or financial condition.
Removed
Risks from Cybersecurity Threats We have not encountered cybersecurity challenges that have materially impaired our operations or financial standing.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeFollowing 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.
Biggest changeThe Research Center lease is currently set to expire in December 2029. Research and Development Campus The Company leases its research and development campus at 2100 East 54th Street North, Sioux Falls, SD 57104 (the “Research and Development Campus”).
Research 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.
Research Center As of December 31, 2024, 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.
A pest control program is instituted to control vermin. The biosecurity program is managed using a combination of procedural controls, facility design features (such as barriers, fencing and housing), controlled access and employee training into or out of the site. Tc Bovine plasma is collected from the animals in designated areas at the Pharm.
The biosecurity program is managed using a combination of procedural controls, facility design features (such as barriers, fencing and housing), controlled access and employee training into or out of the site. Tc Bovine plasma is collected from the animals in designated areas at the Pharm. The areas are cleaned and maintained per the rules and regulations of the FDA.
Production animal pens consist of concrete feeding floors, water fountains and outdoor dirt lots. A biosecurity program is critical to the production of human pharmaceuticals from animals. The production herd is considered “closed” from a biosecurity perspective and inputs (feed, nutritional additives, medications, etc.) and outputs to the system are carefully monitored according to the appropriate regulations.
A biosecurity program is critical to the production of human pharmaceuticals from animals. The production herd is considered “closed” from a biosecurity perspective and inputs (feed, nutritional additives, medications, etc.) and outputs to the system are carefully monitored according to the appropriate regulations. A pest control program is instituted to control vermin.
The areas are cleaned and maintained per the rules and regulations of the FDA. The Fenwal Auto-C plasmapheresis machine (human device) is used to collect plasma. Plasma is collected aseptically under standard sanitary conditions using a closed system and sterile bags to avoid microbial contamination.
The Fenwal Auto-C plasmapheresis machine (human device) is used to collect plasma. Plasma is collected aseptically under standard sanitary conditions using a closed system and sterile bags to avoid microbial contamination. Following plasmapheresis, the plasma bioprocessing bags are labeled and shipped to the Company’s manufacturing facility or to contract manufacturers.
The Research Center lease is currently set to expire in August 2024. TC Cattle Facility Transchromosomic (Tc) cattle used for hyperimmunization, and plasma collection are housed at our animal facilities which we refer to as the “Pharm”. The Pharm is a biosecure site dedicated to housing and rearing these animals.
TC Cattle Facility Transchromosomic (Tc) cattle used for hyperimmunization, and plasma collection are housed at our animal facilities which we refer to as the “Pharm”. The Pharm is a biosecure site dedicated to housing and rearing these animals. The physical surroundings are maintained in accordance with various governmental regulations. This site also includes surgical suite and plasma collection areas.
The physical surroundings are maintained in accordance with various governmental regulations. This site also includes surgical suite and plasma collection areas. Facilities are appropriate for cattle housing and give adequate protection from inclement weather conditions. Double barrier fencing (perimeter fencing and locked exterior gating) is designed to prevent Tc cattle from escaping or other unwanted animals from entering.
Facilities are appropriate for cattle housing and give adequate protection from inclement weather conditions. Double barrier fencing (perimeter fencing and locked exterior gating) is designed to prevent Tc cattle from escaping or other unwanted animals from entering. Production animal pens consist of concrete feeding floors, water fountains and outdoor dirt lots.
The lease covers approximately 49,600 square feet of office and laboratory space, with approximately 18,400 square feet of space dedicated to research and development activities. The Company believes that its existing facilities and other available properties will be sufficient for its needs for the foreseeable future.
The Company believes that its existing facilities and other available properties will be sufficient for its needs for the foreseeable future. The Corporate Headquarters lease is set to expire in September 2029. 60
Added
The lease covers approximately 49,600 square feet of office and laboratory space, with approximately 18,400 square feet of space dedicated to research and development activities. The Research and Development Campus lease is set to expire in October 2026 with a Company option to extend for an additional three-year term with a final expiration of October 2029.
Added
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 777 W 41st Suite 401, Miami Beach, FL (the “Corporate Headquarters”). The lease covers approximately 1,272 square feet of office space.

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. Item 4. Mine Safety Disclosures. Not Applicable. 65 PART II
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. 61 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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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.
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.
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.
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 Annual Report.
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
Recent Sales of Unregistered Securities All sales of unregistered securities by us during the year ended December 31, 2024 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]. 62
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.
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.
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.
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.
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.
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.
Removed
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.
Added
On March 21, 2025, the closing price of our common stock was $1.72 per share and the closing price of our public warrants was $0.025 per warrant. Holders of Our Common Stock As of March 21, 2025, we had 254 holders of record of our common stock.

Item 7. Management's Discussion & Analysis

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

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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.
Biggest changeThis increase was primarily driven by changes in the fair value of the warrant liabilities (year-over-year increase of $10.2 million, 211.6%); a $1.6 million increase in the Australian research and development tax credit; and a $0.4 million increase in income from non-interest-bearing short-term investments, primarily consisting of dividend income and realized gains and losses. 67 Interest expense Year Ended December 31, 2024 2023 Change % Change Interest expense $ 318,401 $ 315,284 $ 3,117 0.99 % Total interest expense $ 318,401 $ 315,284 Interest expense for the year ended December 31, 2024 remained consistent with interest expense for the year ended December 31, 2023, primarily due to the stability of our finance lease portfolio year-over-year.
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 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.
Research and development expenses are tracked by target/project code. Indirect general and administrative costs are allocated based upon a percentage of direct costs. We expense all research and development costs in the period in which they are incurred. Research and development activities consist of discovery research for our platform development and the various indications we are working on.
Research and development expenses are tracked by target/project code. Indirect general and administrative costs are allocated based upon a percentage of direct costs. We expense all research and development costs in the period in which they are incurred. Research and development activities consist of discovery research for our platform development and the indications we are working on.
These include 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 behalf of us, and expenses related to animal care, research-use equipment depreciation, salaries, benefits, and stock-based compensation granted to employees in research and development functions.
These include licensing fees to use certain technology in our research and development projects, fees paid to consultants and various entities that 70 perform certain research and testing on behalf of us, and expenses related to animal care, research-use equipment depreciation, salaries, benefits, and stock-based compensation granted to employees in research and development functions.
All research and development costs are expensed as incurred except when we are accounting for nonrefundable advance payments for goods or services to be used in 74 future research and development activities. In these cases, these payments are capitalized at the time of payment and expensed in the period the research and development activity is performed.
All research and development costs are expensed as incurred except when we are accounting for nonrefundable advance payments for goods or services to be used in future research and development activities. In these cases, these payments are capitalized at the time of payment and expensed in the period the research and development activity is performed.
Major components within our research and development expenses are salaries and benefits (laboratory & farm), laboratory supplies, animal care, contract manufacturing, clinical trial expense, outside laboratory services, project consulting, and facility expense.
Major components within our research and development expenses are salaries and benefits (laboratory & animal care), laboratory supplies, animal care, contract manufacturing, clinical trial expense, outside laboratory services, project consulting, and facility expenses.
The Black-Scholes option-pricing model incorporates various assumptions, such as the value of the underlying common stock, the risk-free interest rate, expected volatility, expected dividend yield, and expected life of the options. For awards with performance-based vesting criteria, we estimate the probability of achievement of the performance criteria and recognize compensation expense related to those awards expected to vest.
The Black-Scholes option-pricing model incorporates various assumptions, such as the value of the underlying common stock, the risk-free interest rate, expected volatility, expected dividend yield, and expected life of the options. For awards with performance-based vesting criteria, we estimate the probability of achievement of the performance criteria and recognizes compensation expense related to those awards expected to vest.
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.
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 (the “Principal”) plus accrued and unpaid interest thereon on September 30, 2024 (the “Maturity Date”).
Research and development expenses Costs incurred in connection with research and development activities are expensed as incurred.
Research and development expenses Expenses incurred in connection with research and development activities are expensed as incurred.
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.
Included in revenues for the year ended December 31, 2024, are amounts for billable costs related to closeout activities and charges of $1.3 million for supplies, as compared to $0.1 million for labor, $0.8 million for supplies, and $1.4 million for outside research manufacturing services for the year ended December 31, 2023.
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.
We determine the fair value of common stock based on the closing market price at closing on the date of the grant. In determining the fair value of stock-based awards, we utilize the Black-Scholes option-pricing model, which uses both historical and current market data to estimate fair value.
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.
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.
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.
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.
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.
Our Public Warrants were classified as a Level 1 fair value measurement, due to the use of the quoted market price, and our 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.
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.
As of December 31, 2024, there were no material changes outside of the ordinary course of business to our commitments and contractual obligations. Income Taxes We had $59.9 million of federal net operating loss carryforwards as of December 31, 2024. Our carryforwards are subject to review and possible adjustment by the appropriate taxing authorities.
Contractual Obligations and Commitments We enter into contracts in the normal course of business with third parties, including CROs. These payments are not included in the table above, as the amount and timing of such payments are not known.
Contractual Obligations and Commitments We enter into contracts in the normal course of business with third parties, including contract research organizations (“CRO”). These payments are not included in the table above, as the amount and timing of such payments are not known.
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.
For the year ended December 31, 2024, the agreement assigns AFCO Direct as 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.
As a result, we expect that our research and development expenses will continue to increase in future periods and vary from period to period as a percentage of revenue.
We expect to hire additional employees and continue research and development and manufacturing activities. As a result, we expect that our research and development expenses will continue to increase in future periods and vary from period to period.
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.
No awards may have a term in excess of ten years. Forfeitures are recorded when they occur. Stock-based compensation expense is classified in the consolidated statements of operations based on the function to which the related services are provided. We recognize stock-based compensation expense over the vesting period.
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.
Cash Flows The following table summarizes our cash flows for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Net cash used in operating activities $ (34,292,009 ) $ (25,119,405 ) Net cash used in investing activities (11,962,267 ) (152,704 ) Net cash provided by (used in) financing activities (1,172,626 ) 66,773,137 Effect of exchange rate changes on cash and cash equivalents (241,198 ) 18,144 Net increase (decrease) in cash and cash equivalents $ (47,668,100 ) $ 41,519,172 Operating Activities Net cash used by operating activities increased by $9.2 million in the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to an increase in our net loss adjusted for non-cash items of $4.5 million, compounded by an increase in cash used in operating activities related to change in our operating assets and liabilities of $4.6 69 million.
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.
Research and development expenses by component for the years ended December 31, 2024 and 2023 were as follows: Year Ended December 31, 2024 2023 Salaries & benefits $ 10,159,122 $ 6,623,281 Laboratory supplies 1,408,336 1,006,756 Animal care 524,937 936,192 Contract manufacturing — 388,518 Clinical trial expense 4,169,487 809,678 Outside laboratory services 5,721,954 987,613 Project consulting 1,442,436 371,235 Facility expense 6,636,750 5,278,702 Other expenses 188,645 113,030 Total research and development expenses $ 30,251,667 $ 16,515,005 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.
For SAB-142, Avance, acting as CRO oversaw Phase 1 safety study. This study started in December 2023 and the terms of that agreement are subject to confidentiality and the status of the agreement is that it is current.
For SAB-142, Avance Clinical PTY, Ltd (“Avance”), acts as the contract research organization (“CRO”) overseeing our Phase 1 safety study. This study started in December 2023 and the terms of that agreement are subject to confidentiality and the status of the agreement is that it is current.
Should we seek additional financing from outside sources, we may not be able to raise such financing on terms acceptable to us or at all.
We intend to seek additional capital through equity and/or debt financings, collaborative or other funding arrangements. Should we seek additional financing from outside sources, we may not be able to raise such financing on terms acceptable to us or at all.
If 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.
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. For the year ended December 31, 2023, we entered into a similar agreement with First Insurance Funding.
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.
In consideration of the premium payment by the AFCO Direct to the insurance companies or the Agent or Broker (as defined in the agreement with the lender), we unconditionally promise to pay the lender the amount financed plus interest and other charges permitted under the agreement.
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.
This further streamlines our ability to develop new and novel drug products rapidly and efficiently where single target mAbs cannot replicate or duplicate our drug product attributes. 63 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.
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.
The initial fair value of the warrant liabilities was measured at fair value at the Closing Date, and changes in the fair value of the warrant liabilities were presented within changes in fair value of warrant liabilities in our consolidated statements of operations.
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%).
General and administrative Year Ended December 31, 2024 2023 Change % Change General and administrative $ 13,981,263 $ 23,799,306 $ (9,818,043 ) (41.3 )% Total general and administrative expenses $ 13,981,263 $ 23,799,306 General and administrative expenses decreased by $9.8 million, or 41.3%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to other administrative support fees relating to IT, human resources, and legal (year-over-year decrease of $1.5 million, 25.3%); non-capitalized financing costs (year-over-year decrease of $7.5 million, 100.0%); salaries and benefits (year-over-year decrease of $0.2 million, 2.6%); insurance costs (year-over-year decrease of $0.5 million, 31.7%); and forgiveness of a trade payable of $0.7 million; offset by project consulting (year-over-year increase of $0.6 million, 131.5%).
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”).
Simple interest shall accrue on the outstanding Principal from and after the date of the 8% Unsecured Convertible Note and shall be payable on the Maturity Date. We repaid the Principal of $542 thousand and total accrued interest of $87 thousand during the year ended December 31, 2024.
As actual costs become known to us, we adjust our accrual; such changes in estimate may be a material change in our clinical study accrual, which could also materially affect our results of operations. Revenue Recognition Our revenue is primarily generated through grants from government and other (non-government) organizations.
As actual costs become known, we will adjust the accrual; such changes in estimate may result in a material change in our clinical study accrual, which could also materially affect reported results of operations.
As used in this report, unless the context suggests otherwise, “we,” “us,” our” or “the Company” refer to SAB Biotherapeutics, Inc. and its subsidiaries.
As used in this report, unless the context suggests otherwise, “we,” “us,” our” or “the Company” refer to SAB Biotherapeutics, Inc. and its subsidiaries. Company Overview We are a clinical-stage biopharmaceutical company focused on the development of human polyclonal immunotherapeutic antibodies, or hIgG, to address immunology disorders.
Interest Income Year Ended December 31, 2023 2022 Change % Change Interest income $ 584,966 $ 71,072 $ 513,894 723.1 % Total interest income $ 584,966 $ 71,072 Interest income increased by $514 thousand, or 723.1% for the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to higher interest rates and interest earning cash balances.
Interest income Year Ended December 31, 2024 2023 Change % Change Interest income $ 1,285,998 $ 584,966 $ 701,032 119.84 % Total interest income $ 1,285,998 $ 584,966 Interest income increased by $701 thousand, or 119.84% for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to interest earned on our investments in debt securities, and higher interest earning cash, and cash equivalent balances.
Please refer to Note 9, Notes Payable , in our consolidated financial statements for additional information on our debt.
This prior agreement was fully repaid, with the final installment made on September 22, 2024. Please refer to Note 9, Notes Payable , in our consolidated financial statements for additional information on our debt.
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%).
Research and development Year Ended December 31, 2024 2023 Change % Change Research and development $ 30,251,667 $ 16,515,005 $ 13,736,662 83.2 % Total research and development expenses $ 30,251,667 $ 16,515,005 Research and development expenses increased by $13.7 million, or 83.2%, for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to increases in outside lab services (year-over-year increase of $4.7 million, 479.4%), laboratory supplies (year-over-year increase of $0.4 million, 39.9%), an out-of-period adjustment of $0.9 million, salaries and benefits (year-over-year increase of $3.5 million, 53.4%), project consulting (year-over-year increase of $1.1 million, 288.6%), overhead costs (year-over-year increase of $0.5 million, 9.0%), clinical trial costs (year-over-year increase of $3.4 million, 415.0%), offset by contract manufacturing costs (year-over-year decrease of $0.4 million, 100.0%) and animal care (year-over-year decrease of $0.4 million, 43.2%).
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.
Based on our current level of operating expenses, existing resources will not be sufficient to cover operating cash needs through the twelve months following the date these financials are made available for issuance. These conditions raise substantial doubt about our ability to continue as a going concern.
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.
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. Government grants Total revenue recognized from government grants was approximately $1.3 million and $2.2 million for the years ended December 31, 2024 and 2023, respectively.
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 .
See Note 12, Warrants for further details on our warrants classified as equity. 71 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 .
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.
Interest expense Interest expense consists primarily of interest related to abated rent and insurance financing. 65 Results of Operations The following tables set forth our results of operations for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Revenue Grant revenue $ 1,322,410 $ 2,238,991 Total revenue 1,322,410 2,238,991 Operating expenses Research and development 30,251,667 16,515,005 General and administrative 13,981,263 23,799,306 Total operating expenses 44,232,930 40,314,311 Loss from operations (42,910,520 ) (38,075,320 ) Other income (expense) Changes in fair value of warrant liabilities 5,385,009 (4,823,237 ) Interest expense (318,401 ) (315,284 ) Interest income 1,285,998 584,966 Other income 2,452,605 435,089 Total other income (expense) 8,805,211 (4,118,466 ) Loss before income taxes (34,105,309 ) (42,193,786 ) Net loss $ (34,105,309 ) $ (42,193,786 ) Comparison of the Years Ended December 31, 2024 and 2023 Revenue Year Ended December 31, 2024 2023 Change % Change Revenue $ 1,322,410 $ 2,238,991 $ (916,581 ) (40.9 )% Total revenue $ 1,322,410 $ 2,238,991 Revenue decreased by $0.9 million, or 40.9%, in 2024, primarily due to the JPEO Rapid Response Contract Termination.
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.
Nonoperating Income (Expense) 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.
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.
We intend to continue to invest in our business and, as a result, may incur operating losses in future periods.
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.
On the Closing Date, the Company established the fair value of the Private Placement Warrants utilizing both the Black-Scholes Merton formula and a Monte Carlo Simulation (the “MCS”) analysis. Specifically, we considered an MCS to derive the implied volatility in the publicly-listed price of the Public Warrants.
(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.
The initial fair value of each Ladenburg Warrant, PIPE Warrant and PIPE Placement Agent Warrant issued was determined using the Black-Scholes option-pricing model.
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.
We then considered this implied volatility in selecting the volatility for the application of a Black-Scholes Merton model for the Private Placement Warrants. We determined the fair value of the Public Warrants by reference to the quoted market price. See Note 12, Warrants , for the key inputs and further details for our warrants classified as liabilities.
At December 31, 2023 and 2022 we recognized approximately $509 thousand and $773 thousand, respectively as an insurance financing note payable in our consolidated financial statements. We will pay the insurance financing through installment payments with the last payment for the current note being on September 22, 2024.
At December 31, 2024, and 2023, we recognized approximately $276 thousand and $509 thousand, respectively, as an insurance financing note payable in our consolidated balance sheets. We incurred $17 thousand and $22 thousand of interest expense related to the insurance financing note for the years ended December 31, 2024, and 2023, respectively.
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.
Sources of Liquidity Since our inception, we have financed our operations primarily from revenue in the form of government grants and from equity financings. 68 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 (the “Abated Rent”) from October 1, 2022 to September 30, 2023.
We expect to continue to incur substantial research and development expenses as we conduct discovery research to enhance our platform and work on our indications. We expect to hire additional employees and continue research and development and manufacturing activities.
For the years ended December 31, 2024 and 2023 we continued to incur costs to advance our progress towards commercialization of SAB-142. We expect to continue to incur substantial research and development expenses as we conduct discovery research to enhance our platform and work on our 64 indications.
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.
Other income (expense) Other income primarily consists of income associated with the refundable portion of the Australian research and development tax credit and dividend income from non-interest bearing short-term investments. Interest income Interest income consists of interest earned on our investments in debt securities, cash, and cash equivalents.
Revenue recognized subsequent to the JPEO Rapid Response Contract Termination relates to satisfaction of residual obligations under the termination and settlement agreement—see Note 2, Summary of Significant Accounting Policies for further information about our established revenue recognition process.
See Note 2, Summary of Significant Accounting Policies , to our consolidated financial statements for further information about our established revenue recognition process and Note 4, Revenue, to our consolidated financial statements for further information about revenue recognized from government grants for the years ended December 31, 2024 and 2023.
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.
Warrants Liability Classified Warrants We account for our Public Warrants, Private Placement Warrants, and Preferred Warrants as liabilities in accordance with ASC 815-40, Derivatives and Hedging — Contracts in Entity ’ s Own Equity.
Financing Activities Net cash provided by financing activities increased by $65.7 million for the year ended December 31, 2023 as compared to the year ended December 31, 2022, primarily due to increased proceeds from equity issuances of $59.7 million, a reduction in stock repurchases of $5.5 million, and reduced net payments on notes payable of $0.8 million.
Financing Activities Net cash provided by (used in) financing activities decreased by $67.9 million for the year ended December 31, 2024 as compared to the year ended December 31, 2023, primarily due to the absence of any material equity financing activities in 2024.
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.
No grant income was recognized for these grants for the year ended December 31, 2024 and for the year ended December 31, 2023, we recognized approximately $0.4 million in total grant income, $0.2 million from each grant, respectively.
General and administrative expenses also include rent and facilities expenses allocated based upon total direct costs.
General and administrative expenses also include rent and facilities expenses allocated based upon total direct costs. We anticipate that general and administrative expenses will rise as we expand our workforce and invest in the advancement of our lead therapeutic candidate in preparation for potential commercialization.
The total fair value of the Preferred PIPE Placement Agent Warrants was recognized as a non-cash expense and allocated to additional paid-in capital within the consolidated statement of changes in stockholders’ equity and consolidated balance sheet.
As such, they are presented within additional paid-in capital within our consolidated statements of changes in stockholders’ equity and consolidated balance sheets. 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.
We also anticipate that we will incur increased accounting, audit, legal, regulatory, compliance, director and officer insurance costs as well as investor and public relations expenses associated with being a public company.
Additionally, as our operations grow in complexity and we progress toward commercialization, we may incur higher costs related to accounting, audit, legal, regulatory compliance, director and officer insurance, and investor relations.
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.
The Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense Enabling Biotechnologies (“JPEO”) Rapid Response Contract (the “JPEO Rapid Response Contract”), initially awarded for up to $25 million and later expanded to $203.6 million, was terminated in 2022 (the “JPEO Rapid Response Contract Termination”).
See Note 12, Warrants, for further information regarding the Public Warrants and Private Placement Warrants.
See Note 13, Fair Value Measurements, for changes in fair value of the Private Placement Warrants.
Removed
Overview We are a clinical-stage, biopharmaceutical company focused on the development of powerful and proprietary immunotherapeutic polyclonal human antibodies to treat and prevent infectious diseases and immune and autoimmune disorders, including infectious diseases resulting from outbreaks and pandemics as well as immunology, gastroenterology, and respiratory diseases that have significant mortality and health impacts on immunocompromised patients.
Added
Our programs are based on mechanisms of action that have achieved proof-of-concept in clinical trials in indications with significant unmet medical needs.
Removed
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.
Added
We are focused on developing product candidates for disease targets where a differentiated approach has the greatest potential to be either first-in-class against novel targets or best-in-class against complex targets to treat diseases, including T1D and other autoimmune disorders.
Removed
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.
Added
Our internally discovered antibodies are both target-specific and polyclonal, meaning they are comprised of multiple hIgG and can bind to multiple sites on targeted immunogens, making them ideally suited to address the complexities associated with many immune-mediated disorders. Our proprietary platform, referred to as holds the potential to generate additional novel therapeutic candidates to expand our pipeline.
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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.
Added
Our platform utilizes the human immune response to generate the optimal repertoire of hIgG for drug targets of interest. We believe it is the only technology capable of producing disease-targeted, hIgG in large quantities without the need for human plasma donors. We have optimized genetic engineering in the development of transchromosomic cattle, or Tc Bovine, which produce hIgG.
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We plan to focus a substantial portion of our resources on continued research and development efforts towards deepening our technology and expertise with our platform and as well as indications in infectious disease and autoimmune indications. As a result, we expect to continue to make significant investments in these areas for the foreseeable future.
Added
Our engineering of our production platform drives IgG1 production across our pipeline. In addition, this differentiated approach using polyclonal antibodies has no biosimilar pathway which provides a significant barrier to competitive polyclonal approaches. Recent Developments On January 28, 2025 we announced positive topline phase 1 clinical results with the Company’s potentially disease-modifying T1D therapy SAB-142.
Removed
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.
Added
Based on the data, we plan to advance SAB-142 into a Phase 2b trial in 2025 to evaluate the therapeutic candidate in adult and pediatric patients with new-onset T1D. The SAB-142 Phase 1 trial was designed as a randomized, double-blind, placebo-controlled, single-ascending dose, adaptive design clinical study among healthy volunteers and one cohort of participants with T1D.
Removed
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.
Added
The objectives include establishing the safety, tolerability, pharmacokinetic, immunogenicity and pharmacodynamic profile for SAB-142. SAB-142 demonstrated a favorable safety profile with no reported serum sickness or anti-drug antibodies (ADA) across Phase 1 doses (0.03mg/kg to 2.5mg/kg), supporting chronic ambulatory dosing, while exhibiting sustained immunomodulation and a multi-target mechanism of action analogous to rabbit ATG, with correlations to C-peptide preservation.
Removed
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.
Added
Corporate Strategy We are focused on developing product candidates for disease targets where a differentiated approach has the greatest potential to be either first-in-class against novel targets or best-in-class against complex targets to treat diseases with significant unmet medical needs, including immune and autoimmune disorders including T1D.
Removed
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.
Added
Our business strategy is focused on SAB-142 as a first-in-class, human, multi-target antibody treatment designed to provide superior efficacy and safety in delaying the onset or progression of T1D. Our proprietary platform, represents the first technology of its kind to produce large-scale human high-titer and high-avidity antibodies across multiple modalities.
Removed
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.
Added
Leveraging our proprietary production system will help us advance a robust pipeline of differentiated hIgG-based therapies for the treatment of immune system disorders and infectious diseases. Our hIgG have been safely demonstrated up through Phase 3 clinical trials with a patient safety database that includes over 700 patients who were safely administered our hIgG therapeutics.
Removed
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.
Added
We have a demonstrated regulatory pathway through each of the FDA, CBER, MHRA, and TGA. These organizations understand our science and are familiar with the multivalent and multitarget properties of our single vial drug products.
Removed
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.
Added
We had two grants from The National Institute of Health – National Institute of Allergy and Infectious Disease (“NIH-NIAID”). The first grant, directly from NIH-NIAID, totaled approximately $1.5 million, and the second grant through Geneva Foundation, totaling approximately $2.7 million. Both of these grants were completed as of June 30, 2023.

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Other SABSW 10-K year-over-year comparisons