SAB Biotherapeutics, Inc. Common Stock Chardan's 10th Annual Healthcare Conference

Well, our MAPCs don't differentiate anything. It's an end state cell. It's the basic difference. We're putting it into the body in an IV and countering acute inflammation. The cells don't survive for that long. It's 2 to 3 days, but their impact goes beyond that in terms of dampening down that inflammation and also the reparative impact that they have thereafter.

Well, it's like the homeostasis drug. In the context of ARDS, there's this acute inflammatory cascade. It's happening in the lungs. Our cells, when we infuse them, we infuse them in an IV. This is an allogeneic cell therapy. It's frozen off the shelf. We thaw it, infuse it in an IV. It's very drug-like. It takes 30 to 60 minutes to get it into the patient. On the first pass, it just physically goes to the lungs. It's there at the site of the acute inflammation. It's going to work through multiple inflammatory cytokines, T cells, neutrophils, macrophages, and it's going to convert those from a pro-inflammatory type to an anti-inflammatory one or to a neutral environment and restore homeostasis. In ARDS, these patients are mechanically ventilated. They're effectively drowning on their own fluid in response to this inflammatory cascade.

We showed in our phase II studies that we can get patients off a ventilator much faster. We can reduce mortality, and we do that by means of converting that inflammatory environment to one that's more one of homeostasis. We see the alveolar edema subside. The patients can breathe on their own again. We get the ventilator out faster, we reduce their risk of mortality, improve their quality of life.

Sure. Thanks very much, Ken. Yeah, Athersys was rather visionary in the development of the therapeutic platform, and in particular with respect to manufacturing. For those of you who follow cell therapy, you will know that manufacturing is an extraordinary challenge to make a living medicine at scale with a reasonable cost of goods, the same way extremely high quality control, make it the same every time, all the time is not straightforward. Athersys leaned in, and they spent an extraordinary amount of money, time and effort at developing large-scale bioreactor-based manufacturing for allogeneic stem cells. We inherited that. I think, knock on wood, but it's thanks to their largesse in effect, their vision, and being early at spending a lot of money on this stuff, combined with some grant money we now have from the Japanese government.

We have sort of hundreds of millions of dollars of value that we're able to lean on for large scale, commercially viable cost of goods cell product. This was made in 3D bioreactors several years ago as they transitioned from 2D to 3D at Lonza in Singapore. That's the process we're commercializing with in Japan, and so we are going to be getting an approval in Japan in ARDS. It's a conditional approval. We've transitioned that manufacturing processes using a Sartorius 50-liter bioreactor, for those of you who follow the space, but with our proprietary process, and we have that now up in a suite at Minaris in Yokohama. That's a process that Athersys developed. We've taken ownership of it. They also built up to 500-liter bioreactors, same Sartorius platform, just much larger scale.

Process is a bit different, but we are now putting in place a commercial manufacturing facility in Kobe, Japan. I like to joke with people who are Japanophiles, like there is Kobe beef, and now there will be Kobe stem cells here soon, where we are funded by the Japanese government to create this large-scale 500-liter bioreactor commercial facility in Kobe. Cost of goods at 50-liter bioreactor stage is commercially viable, right? We can make, call it 1,000 doses a year in that suite that we have up at Minaris. We can scale it out if we need to. This is for Japan commercialization. It is plenty in the near term. We have not disclosed the COGS, but it is reasonable, and we can make a margin on it.

In cell therapy, it is a question that you all need to ask cell therapy peers of ours is, what is the commercial profile of the product? We happen to be in a really good position because of that. The 500-liter process, that facility is being set up to make 40,000 doses a year. One suite makes 5,000 doses a year. Cost of goods drops by two-thirds or more when we go from 50 to 500. That is all really, again, thanks to Athersys, and they spent hundreds of millions of dollars, $653 million on the platform. We acquired that through a bankruptcy process for $2.25 million, a diploma we made back in early 2024. So we are counting our blessings that we are in that position. I think efficacy matters a ton, obviously, and we showed a strong indication of that in these phase IIs.

In cell therapy, in particular, manufacturing is really mission-critical.

That's a great question. I think Japan is leading the world in cell therapy development today in terms of the number of products that are being approved and commercialized. We started off as an iPS cell company, hence your question about pluripotent stem cells versus these MAPCs that we're developing. We were an early leader in the space. This is before Dr. Yamanaka won the Nobel Prize. The first iPS cell-derived product put into patients in the world was us. That was RPE cells in AMD patients back in 2013. Japan is kind of the land of iPS cells, as people here probably know well, but there are other products that have been approved there, too, right? There's a degree of regulatory support and path that helps one get an early approval in cell therapy that's established.

It's been around for a long time, and I think it's being optimized. There's funding, multiple sources of funding for both manufacturing. We got a $50 million grant for this 500-liter facility. There's more funding, I think, emerging for global clinical studies in cell therapy. There's a promotional industrial policy in Japan that is highly cell therapy favorable, that is probably differentiated versus the U.S. I think the things that we think about in terms of our business advantages and path, and how do we optimize, Japan has a lot of cell therapy talent, a lot of strong engineers, scientists on the manufacturing side. We're doing it there first because we're commercializing there first. We're able to do it more cheaply. Yen, again, super weak. There's been multiple decades of very little inflation there.