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On Tuesday, H.C. Wainwright maintained a Buy rating and a $6.00 price target for SAB Biotherapeutics (NASDAQ:SABS) shares, following the company’s announcement of positive results from a Phase 1 trial of SAB-142. The drug is being developed to potentially delay the onset or progression of type 1 diabetes (T1D). The micro-cap biotech company, currently valued at $12.55 million, has seen its shares trading near 52-week lows at $1.36, having declined over 64% year-to-date. According to InvestingPro analysis, the stock appears slightly undervalued at current levels.
The trial, which commenced on January 28, 2025, was a randomized, double-blind, placebo-controlled study involving healthy volunteers and a cohort of participants with T1D. It assessed the safety and pharmacodynamic activity of SAB-142, which is a fully human anti-thymocyte globulin (ATG). The study successfully met its primary objectives, indicating that SAB-142 was generally well tolerated with the majority of adverse events being mild, linked to the initial days of infusion, and resolving within the first week.
SAB-142 stands out due to its clinically validated mechanism of action that promotes sustained immunomodulation without causing sustained lymphodepletion—a significant distinction from other treatments such as Tzield (teplizumab) and rabbit ATG (rATG). The drug exhibited a multi-target T-cell exhaustion profile and was Treg-sparing. It was shown to have a similar mode of action to rATG in parameters correlated with the preservation of C-peptide, which is a critical outcome for the mechanism.
The study included 40 healthy volunteers who received SAB-142 and 14 who were given a placebo. It explored doses ranging from 0.03mg/kg to 2.5mg/kg administered intravenously on two consecutive days. There were no drug-related serious adverse events, and the grade 3 and 4 adverse events observed were associated with transient lymphopenia during the first two days of infusion. These events were considered to be non-concerning laboratory findings by a key opinion leader (KOL).
With these positive findings, SAB Biotherapeutics is optimistic about the potential for re-dosing SAB-142 in an outpatient setting for individuals with T1D. The encouraging results of the Phase 1 trial have reinforced H.C. Wainwright’s confidence in the stock, leading to the reaffirmation of their Buy rating and price target. InvestingPro data shows the company maintains a healthy balance sheet with more cash than debt and a strong current ratio of 3.69. Investors should note that the company’s next earnings report is due in just 3 days, which could provide additional clarity on the development pipeline. For deeper insights into SABS’s financial health and 14 additional ProTips, consider exploring InvestingPro.
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