Stellar Biotechnologies Inc. (SBOT:NASDAQ) announced on March 1 that it has entered into an agreement to supply KLH to Amaran Biotechnology Inc. in connection with clinical studies of immunotherapies for metastatic breast cancer and other cancers.
Stellar noted that the agreement "follows a two-year development collaboration between the companies involving the optimization of manufacturing processes for a KLH-conjugated vaccine known as Adagloxad Simolenin (formerly OBI-822), now in late-stage clinical studies. Adagloxad Simolenin is part of a new class of treatments, known as active immunotherapies, which are designed to stimulate a patient's own immune system to recognize and attack targeted tumor cells."
"This supply agreement with Stellar secures sustainable access to KLH, a key ingredient required to manufacture Adagloxad Simolenin, a therapeutic cancer vaccine which Amaran is producing for its client, OBI Pharma, Inc.," said Tessie Che, Amaran's general manager and Chair of its Board of Directors.
Stellar President and CEO Frank Oakes said, "This new agreement with Amaran provides us with another validation of the Stellar KLH carrier platform and marks an important step in the development of new treatment options for devastating cancers."
Stellar also noted that "under the terms of the supply agreement, Amaran has committed to purchase Stellar KLH in amounts necessary to meet its requirements for vaccine production. Stellar will maintain a master file with the U.S. FDA for the KLH product used by Amaran. In addition to Adagloxad Simolenin, the exclusive supply agreement covers cancer immunotherapies and vaccines that combine tumor antigens known as Globo H to one of Stellar's KLH product formulations."
Jason McCarthy, an equity research analyst with Maxim Securities, in his interview with The Life Sciences Report published March 1, noted that Maxim has a target price of $4/share for Stellar. When asked what drives that price, McCarthy said, "The $4 price target is based on its partners, the companies that are using its KLH, hitting their clinical milestones and that translating into supply contracts or partnerships for Stellar."
After the Amaran announcement on March 1, Stellar's stock rose from $1.52/share to $1.73.
Editor's note: Stellar's stock closed at $1.94 on March 3, a 27% gain since the Amaran announcement on March 1.
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