Small-Cap Investor Forum

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Stellar Biotechnologies, Inc. (SBOTF) Shares Tick Higher on FY14 Financial Results, Improved Cash Position

Shares of Stellar Biotechnologies are trading higher in Wednesday’s mid-day trade as the premier manufacturer of Keyhole Limpet Hemocyanin (“KLH”), an important immune-stimulating protein used in wide-ranging immunotherapeutic markets, reports financial and operational results for the 12 months ended August 31, 2014.

Revenues were $372,132 for the fiscal year ended August 31, 2014, compared to $545,469 for the fiscal year ended August 31, 2013. Product and contract services sales increased to $143,553 and $192,000, respectively, while grant revenue decreased to $37,579 from $409,414 due to completion of NSF phase 2/2B in fiscal 2013 with the close out period ended November 2013.

Net loss for the year was $8.4 million, or $0.11 per share, compared to a net loss of $14.5 million, or $0.28 per share, for the fiscal year ended August 31, 2013. The lower loss in the current year was primarily affected by noncash changes in fair value of warrant liability.

Stellar amped up its research and development expenses to conduct preclinical research on C. diff immunotherapy studies, spending $2.5 million on R&D in fiscal 2104 compared to $2.0 million in fiscal 2013.

As of the fiscal year ended August 31, 2014, Stellar recorded cash, cash equivalents and short-term investments of $13.9 million, an improvement over $ 7.9 million reported at August 31, 2013. The company said it believes its current cash position is sufficient to meet estimated working capital requirements and fund planned program development through 2015.

Stella also issued operational updates, including recent collaboration agreements related to the company’s core technology platform for the sustainable manufacturing of KLH.

• November 2014 – signed an exclusive supply agreement with Araclon Biotech SL to meet Araclon’s phase 2 and 3 clinical trial requirements for KLH used in Araclon’s active immunotherapies against Alzheimer’s disease.

• October 2014 – executed a supply agreement with Biovest International, Inc. for the supply of KLH used in Biovest’s active immunotherapy to treat follicular non-Hodgkin’s lymphoma.

• December 2013 – entered into collaboration with Amaran Biotechnology, Inc. to develop and evaluate methods for the potential manufacture of OBI Pharma’s active immunotherapy against metastatic breast cancer (OBI-822).

Stellar views these collaborations as opportunities for multiple prospective commercial pathways, including increased KLH sales and participation in the development of new KLH-based immunotherapies in a range of disease targets.

On the R&D side, Stellar is actively engaged in research and development focused primarily on aquaculture of the Giant Keyhole Limpet, improvements in KLH protein manufacturing, and new uses for KLH in immunotherapy. In 2014, Stellar’s activities involved both internal programs and external collaborations with other biopharmaceutical companies.

“Over the past year we significantly advanced a number of key programs in our core Stellar KLH™ manufacturing business. Of particular note is our recent expansion of KLH clinical supply agreements,” Frank Oakes, president and chief executive officer of Stellar, stated in the news release. “Building a robust KLH customer base across diverse disease arenas is of strategic importance to Stellar because we believe it will generate long-term revenue potential as well as provide us with a presence in multiple important immunotherapy programs targeting cancers, immune disorders, inflammatory disease, and Alzheimer’s.”

For more information visit www.stellarbiotech.com