Bond.az - Jefferies initiated coverage on SAB Biotherapeutics (NASDAQ:SABS) with a Buy rating and a price target of $11.00. The stock currently trades at $3.55, implying significant upside potential. Analyst price targets range from $6 to $15.
The company is developing SAB-142 as a potential first therapy for Stage 3 Type 1 diabetes to preserve C-peptide and delay disease progression in recently diagnosed patients who have only had standard-of-care insulin for the past 100 years.
Jefferies sees the program as having the potential to meaningfully alter the treatment landscape for Type 1 diabetes by preserving endogenous C-peptide production and reducing the risk of long-term complications such as kidney disease and diabetic retinopathy.
The Phase 2 topline data readout expected in the second half of 2027 represents an important inflection point that could set up SAB-142 for potential accelerated approval if data is positive and significantly derisk the company's pipeline expansion and platform.
The company's financial position appears solid heading into this critical trial period. SABS holds more cash than debt on its balance sheet, with a current ratio of 11.45 indicating strong short-term liquidity.
The firm estimates approximately $2.2 billion adjusted peak U.S. revenue in Stage 3 Type 1 diabetes with a 45% probability of success. SAB Biotherapeutics has approximately $218 million in cash with runway through 2028. The biotech company carries a market cap of $249 million and has delivered a 92.65% return over the past year.
The DCF-based price target includes approximately $7 for SAB-142 in Stage 3 Type 1 diabetes, approximately $1 for the company's earlier pipeline and platform, and approximately $2 for cash. Jefferies believes SAB-142 has a decent probability of showing a meaningful C-peptide difference between the treatment group and placebo to demonstrate efficacy in delaying Type 1 diabetes progression along with a good safety and tolerability profile.
