June 22, 2021

Sioux Falls-based SAB Biotherapeutics plans to merge with a Miami-based firm, which will allow it to be traded on the Nasdaq stock exchange.

Big Cypress Acquisition Corp. is a “blank check company,” meaning it is a special purpose acquisition company designed to help a private company trade publicly without it actually doing an initial public offering.

“What this means is headquarters stays in Sioux Falls, and we continue to control the company and of course our management team stays in place,” co-founder and SAB CEO Eddie Sullivan said.

“It’s a very good way for us to enter the public arena.”

Once the proposed transaction closes, SAB would be listed on the Nasdaq with a post-merger value of approximately $325 million, or $10.10 per share, and it’s expected to provide the combined company with about $118 million of pro forma cash to fuel development and commercialization of its DiversitAb platform, which leverages cattle to produce fully human polyclonal antibody therapeutics for a wide range of immune system disorders, cancer and infectious diseases without the need for human donors.

The combined company will operate as SAB Biotherapeutics and will continue to operate under the SAB management team, with two representatives of Big Cypress Acquisition  joining the board of directors. Samuel Reich and Jeffrey Spragens of Cypress will join the seven-person board, while current executive chairman, Dr. Edward Hamilton, plans to transition to a board observer role while remaining active in the company. Reich is expected to assume the role of executive chairman.

Proceeds from the business combination are expected to support advancement of SAB’s pipeline and platform through multiple catalysts across several programs. The move comes following a year of unprecedented expansion and exposure for SAB. Its therapeutic for COVID-19 is one of a small handful being tested in a large-scale national clinical trial and the only one to attack the virus using polyclonal antibodies.

“The execution of this merger agreement caps 18 months of tremendous progress at SAB,” said Eddie Sullivan, co-founder and CEO of SAB.

“Years of innovation and investment in our unique human polyclonal antibody platform have enabled us to rapidly respond to the COVID-19 pandemic, moving a therapeutic candidate from concept to the clinic in less than five months. The awarded funding and our collaboration with the federal government, as part of COVID-19 Response (formerly Operation Warp Speed), has enabled us to test, refine and advance our novel therapeutic development and internal production and regulatory processes, as well as provide a model for future rapid response.”

The period of intense activity has left the company well-positioned to advance its portfolio of therapies for immune system disorders, cancer and other infectious diseases, he said.

“The unique attributes of our DiversitAb platform power our diversified strategy that includes rapid response, development of our own novel therapeutics and a variety of pharma collaborations,” Sullivan said. “We are excited at the expanded opportunities afforded by the merger to put our platform to work generating important new therapies for unmet medical needs.”

Big Cypress went public at the beginning of the year with the intent of effecting a merger, share exchange, asset acquisition, share purchase or reorganization within the life sciences industry. It screened more than 60 biotech companies in its search for a “perfect merger partner,” said CEO Sam Reich.

“We were thrilled when we found SAB Biotherapeutics, a distinctive and exciting approach to marrying the power of nature with advanced genomic technology. SAB met or exceeded our criteria, demonstrating de-risked early development processes, clinical proof-of-concept, therapeutic targets with large unmet needs and what we expect to be manageable Phase 3 trials, high-value indications and the ability to efficiently put additional capital to work advancing a high potential pipeline,” he said.

“We like that SAB’s innovative technology and management team are unconventional by biotech standards, with their novel DiversitAb platform leveraging Tc bovine herds that rapidly produce fully human polyclonal antibodies with almost unlimited therapeutic potential, as well as their location in our nation’s heartland. We look forward to working with the exceptional SAB team to advance this important technology.”

The transaction has been unanimously approved by both Big Cypress’ and SAB’s respective boards of directors. It is subject to shareholder and regulatory approval and is expected to close in the fourth quarter of the year.

For SAB, using the SPAC allows it to trade publicly while accessing additional cash and foregoing the expenses associated with an IPO. Additionally, while it was a fast process, there was great chemistry with Big Cypress, Sullivan said.

“This is a group that has had success in the past in forming companies and being successful at mergers and acquisitions and taking companies public,” he said. “We recognized that there was a lot of similar perspective between SAB and the sponsors of the SPAC and if you’re doing a deal like this there has to be chemistry.”

Current SAB shareholders will have their shares converted to stock of the combined company.

The timing is key, Sullivan said. SAB is going through clinical trials with its therapeutics to treat COVID-19 and influenza while moving forward with research and development in other areas. The COVID-19 therapeutic is showing it has not lost significant protections against any of the emerging variants, including the delta variant from India, Sullivan said.

It’s being tested at 75 sites in the U.S., adding more weekly and planning to begin to be tested overseas.

“Those opportunities to show value creation for investors are essential,” he said. “And that’s exactly the stage that SAB is at, really that growth phase of the company.”

It has expanded to 150 people in Sioux Falls, and Sullivan said the longterm vision is to continue as a fully vertically integrated biopharmaceutical company “from discover through clinical product manufacturing and clinical trials and on to the approval of drugs,” he said. “Part of our business potential is the potential for licensing our products and particularly those early products we will be moving forward to advanced development, but the opportunity will continue to afford itself for us to grow this as a fully vertically integrated company.”

SAB Biotherapeutics takes another big step with COVID-19 therapeutic