After 'live fire exercise' with COVID-19, SAB turns tactical experience back to diabetes program

In September 2019, a tiny company named SAB Biotherapeutics signed a little contract with the U.S. Department of Defense (DOD) that included the test development of an antibody treatment into phase 1 for “an unknown threat.”

There's no way that SAB CEO Eddie Sullivan, Ph.D., could have seen what was coming next. The contract would be completed not as a test but as a real-life scramble to find a treatment to address a rapidly spreading global pandemic. SAB’s journey could be a cautionary tale of a biotech that jumped in to help fight a global threat but ultimately lost when the pandemic moved faster than anyone could have predicted. After all, the same thing happened to companies that launched into testing Ebola meds, only to have the health emergency pass before the drugs ever reached the shelf.

CEO Eddie Sullivan
Eddie Sullivan, Ph.D. (SAB Biotherapeutics)

But the pandemic gave SAB the chance to revolve through the clinical cycle, from phase 1 to 2 to 3 in the space of about three years. That’s experience not a lot of companies get—and now SAB is hoping to parlay that once-in-a-lifetime whirlwind into its next act.

Live fire

The original three-stage contract with the DOD included a six-month challenge to demonstrate the SAB platform’s ability to develop cGMP material at scale, then increase production to meet a prespecified target with fully demonstrated readiness, and then, finally, the biotech needed to produce an antibody treatment to the unknown threat, to be selected by the agency as a “live fire” exercise. The prototype had to demonstrate efficacy through phase 1.

In announcing the full details of the contract in March 2020, Sullivan said, perhaps ominously, “If we can perform under the most demanding of scenarios to challenging targets, it builds confidence that translates to a broader array of therapeutic programs.”

But instead, everything went sideways.

“Before we ever got to those various stages, of course, the pandemic hit and the DOD came to us and said, ‘Okay, just make us a polyclonal antibody to the SARS-CoV-2 virus. And we did exactly that,” Sullivan told Fierce Biotech in an interview, reflecting on the early days of the pandemic.

The tiny company, which had just 48 employees when the pandemic hit, churned out the antibody treatment SAB-185 and was dosing healthy volunteers in a phase 1/2 study by August 2020. By that point, the DOD and BARDA had thrown even more contracts SAB’s way, totaling $72 million.

“We felt it was our responsibility to at least put forward a significant effort in the response of the disease without knowing, ultimately, what would become of it,” Sullivan said.

Almost everything else SAB had been working on was paused. That meant a collection of fully human polyclonal antibodies for autoimmunity, infectious diseases, inflammation and oncology, plus a Type 1 diabetes treatment—more on that later.

The COVID treatment rolled through the clinic. SAB used the goodwill to go public in June 2021 through a special purpose acquisition company deal valued at $118 million. SAB-185 hit phase 3 by September 2021 in a trial sponsored by the National Institutes of Health comparing the treatment with Regeneron’s monoclonal antibodies. Everything seemed to be going well with the COVID-19 polyclonal antibody. Then came omicron.

The NIH cut the sponsored phase 3 trial as hospitalizations waned and the pandemic changed course. Regeneron’s antibodies became inactive and so the trial couldn’t be conducted as designed. SAB, which wasn't the only biotech to get snarled up as the government programs ended, tried to go it alone with late-stage testing but ultimately was unsuccessful.

According to Sullivan, SAB-185 worked. It reduced symptoms seven days faster in an active comparator trial and offered a different mechanism of action to the drugs currently being used to treat patients with COVID-19.

“When you're dealing with the uncertainties of an emerging disease and a pandemic, it does make it risky, but given the fact that the world was facing a worldwide pandemic, we felt like it was our responsibility to at least offer the opportunity,” Sullivan said.

The new (old) SAB

Sullivan might do it all again if called on: “We would never say we would not do it.” But SAB now has a new focus—or a new, old focus, to be more accurate. The company has turned back to its original pipeline, which included infectious disease treatments and one for Type 1 diabetes. The latter is the new lead indication as COVID and SAB-185 falls into the rearview.

SAB announced a $130 million private placement on Oct. 2 to fund SAB-142, a fully-human alternative to rabbit anti-thymocyte globulin (rATG), for patients with new or recent onset of stage 3 T1D. Sullivan says the therapy has the potential to slow down disease progression—a disease modifying treatment, in biotech parlance—instead of just addressing symptoms.

SAB-142 targets the immune cells involved in the destruction of pancreatic beta cells with the aim of protecting these insulin-producing cells. Sullivan said the therapy is similar to a rATG candidate previously tested by Sanofi, which is derived from rabbits.

But SAB’s fully-human option means it should be possible to safely re-dose, which is key for the chronic, life-long condition of T1D. Animal-based immunoglobulin G antibodies can cause major immune reactions. But previous testing of these similar candidates has shown that a single dose of rATG can modulate the body’s immune response to slow down beta cell destruction and preserve insulin production.

SAB hopes to move its lead candidate into the clinic this quarter.

While Sullivan acknowledges that his biotech probably can’t propel itself into the clinic with quite the speed of the government-sponsored COVID trials, he’s happy to be in the driver’s seat this time around. The funding for the trial was raised by SAB through a clutch of new investors, led by RA Capital Management plus BVF Partners, Sessa Capital, Commodore Capital, RTW Investments, Marshall Wace, and the JDRF T1D Fund.

“It's important to understand that government priorities may shift … particularly [when] answering a pandemic,” Sullivan said. But for T1D, which can be diagnosed as early as 13 years old, the opportunity never really goes away to find a better treatment—particularly one that might address the underlying cause of the disease.

So as SAB came off the pandemic wave, T1D was an easy choice for the new lead indication. The company is not the same as it was before, even if the SAB-142 program isn’t brand new. Sullivan said his team now knows how to quickly grow manufacturing capacity, speed from phase 1 to phase 3 and more.

The new funding has paved a runway into 2026 through phase 2 testing for SAB-142, according to Sullivan. SAB also has a flu program, SAB-176, that managed to continue on through the pandemic and for which it’s seeking partners. The company remains small—while its ranks swelled during the immediate COVID response, the head count now sits around 56 people—but whether the term “emerging biotech” applies to SAB anymore is up for debate.

“We developed capacities well beyond what we were prior to the pandemic, just based upon the experience that we had in developing SAB-185, ” Sullivan said. “And so, certainly, all of that lends itself to the opportunity to use that experience and the things that we gained as a company in the development of SAB-142 for Type 1 diabetes.”