Kraig Biocraft Laboratories Inc (KBLB)

[DimesForShares]

Setting the record straight.

First, both you and I know that the patent you referenced discusses ways to improve the efficiency of fibron-like proteins. From the patent: "Fibroin is a fibrous protein that is found in spider's thread and silkworm's thread." As far as I can tell, all of the other 21 patents that Spiber has obtained mention fibron-like proteins. There is nothing in their patent record that indicates Spiber is pivoting away from the production of proteins that bear a strong resemblance to spider silk.

You said:

Spibers website has already pivoted away from comparing the brewed proteins with the strength of spider silk fibers.

Yeah, but there could well be a lot of applications for brewed fibers that don't require the toughness of spider silk. Textiles, for example, don't require that much toughness. If they can achieve many of the desirable qualities of spider silk without quite as much strength, that may well be sufficient for any number of applications. Even making a washable silk that matched the strength and toughness of silkworm silk could have an enormous range of applications. In fact, there aren't very many applications I know of that require the toughness of spider silk. These all tend to be special-purpose military applications that may mean a decent market for KBLB, but nothing like the apparel market of Spiber.

Next, we both know that the yield of 2.7 g/l does not necessarily represent the best yield they can realize in production. The purpose of the patent was to describe methods of increasing the efficiency of fibron production by controlling their expression by adjusting factors in their environment. In this patent, they describe experiments that demonstrate their methods work as advertised: Yield can be increased by delaying expression until there are a lot of bacteria to produce fibron. That is all they were required to demonstrate for the patent. Nowhere did they state "2.7 g/l is the best we can achieve."

I presume you caught the language that the patent covers fibron expression both within the cells and extracellular expression? And they explicitly indicate different food sources other than glucose? In both continuous and batch production modes?

Now we will come to what I admit is more speculative aspects of producing brewed fibron-like proteins. First, this is not a pharmaceutical grade process. They don't need quite the purity that drug manufacturers are shooting for. Next, the fibron proteins are long and can be precipitated out of suspension in ways that may not be possible for something like insulin. So I believe there could be ways to produce fibron-like proteins without the costly requirements of other proteins such as insulin.

Finally, I believe the venture capitalists who are dumping millions of dollars into Spiber are sophisticated enough to understand that the company must be profitable and have asked hard questions about the economics of production. If they hadn't gotten satisfactory answers, I don't think they would have opened up their checkbooks.

In short, Spiber is a well-financed company with 22 patents that has produced and sold products to consumers. KBLB is a poorly-financed company with 0 patents that has never produced or sold products to consumers. Spiber has expressed a keen interest in the under-$100 dollars/kilo market, while all KBLB has said is "less than $300/kilo." Spiber may not be able to compete against KBLB in all markets, but they may be able to compete in a sufficient range of markets to really hurt KBLB's sales.