I know the title may sound a bit far-fetched, but this may end up going down as one of the most exciting biotech stories of the next few years.
At the heart of the issue is a compound called Keyhole Limpet Hemocyanin, or KLH for short.
Most likely unfamiliar to anyone without a PHD in Biochemical engineering or Pharmacology, KLH is one of the most important base-ingredients for the creation and evaluation of new pharmaceuticals.
The reason is, KLH is one of the most widely-applied ‘carrier proteins‘ currently in use.
It is the molecule which, by virtue of its shape, has the ability to deliver the active ingredient of a multitude of medicines to key receptors points inside cell walls.
Over 100 existing medications from some of the world’s leading drug companies absolutely rely on KLH to deposit their patented physiology-altering molecules and compounds where they’re needed.
Think of as the car, with the passengers being the actual drug.
And because KLH works on an intra-cellular level, it will be a necessary component of any future drugs designed to kill malignant cancer cells… Which means that the future cure for cancer itself will likely rely on KLH to get function.
If that weren’t enough, KLH is used to test immune response, as well as the toxicity of certain drugs – a process mandated by the Food and Drug Administration.
Here is the big problem: There is no method for the production of synthetic KLH.
Currently, its only source is the Giant Keyhole Limpet – a super rare species of mollusk that exists in the wild in only a very select few places in the world, and in increasingly rare numbers.
At the moment, marine biologists estimate that as few as 100,000 of these sea snails live in the wild.
Because the process of extracting KLH kills the mollusk, and because these mollusks are so rare, enriched KLH protein ends up costing between $35,000 and $900,000 per gram… Or if you prefer, between $980,000 and $25.2 million per ounce.
To put this all in to perspective, a single new drug requires between 300 and 500 grams to be developed into a commercialized product…
So you can see the magnitude of this market.
Today, however, one California-based company has demonstrated impressive technical and niche-seizing shrewdness, by flipping this problem into an opportunity.
Port Hueneme-based Stellar Biotechnologies Inc (KLH.V/SBOTF) specializes in the extraction of essential KLH protein from living mollusks, and has taken a step forward revolutionizing the production process.
Actually, three steps.
Stellar is the only company which can can sustain and reproduce the Giant Keyhold Limpet in a controlled, land-based environment… And it is the only company capable of extracting Keyhole Limpet Hemocyanin without killing the host organism.
It’s a striking advantage in an industry which is only guaranteed to expand with the exponential increase in new pharmaceuticals, and FDA-authored testing requirements.
And it means some pretty serious potentially for what is a very young $36 million company, currently trading in the neighborhood of 70 cents.
Action on this stock has been building steadily since January, as Stellar Biotech began a series of presentations to industry specialists across the nation, and promises to continue trending in that direction as key announcements are anticipated this summer.
Stellar already has agreements with 7 of the 15 biggest industries in biotech today, and priced the way it is, just one single successful drug introduced to the commercial market by one of its clients could take shares into the multiple dollar range.
Get a little background on the properties of Keyhole Limpet Hemocyanin right here… And prepare to watch this stock grow from a small-cap research firm, into an major biochemical industrial supplier to some of the worlds largest drug companies, in the next few years.