Biotechnology companies and investors follow a specific pattern to success. While there are some variances along the way, the path to bringing a drug to market is very similar throughout the industry simply because it is so highly regulated. It’s literally moving from point A to point B to point C, and so on.
In many cases, the process starts with a developmental biotechnology company doing a lot of the legwork and working through all of the pre-clinical research and then into early stages of clinical trials before big pharmas enter the picture to take a closer look at what is being developed. It generally takes seeing the new compound showing promising pre-clinical research on animals and then some positive safety and efficacy data in humans before conversations about strategic partnerships and acquisitions or anything of that nature will commence.
But, it is the Holy Grail for the developmental biotech because the dollar figures for human trials surge well into the tens of millions and is still a lengthy process that many could not survive without partnering with a big pharma, not to mention the financial reward that can come to the smaller company through an acquisition.
All of that aside, success at the most basic level starts with completion of initial research on small animals. Port Hueneme, California-based Stellar Biotechnologies, Inc. (TSX-Venture:KLH) is focused on the manufacturing of pharmaceutical grade immune carrier proteins (ICP), particularly with regard to the present most important pharmaceutical protein in this class, Keyhole Limpet Hemocyanin (KLH).
Stellar reached a key milestone as announced this morning with the successful completion of preclinical toxicity and immunogenicity testing of Stellar KLH/IMG and Stellar Subunit KLH in rodent and non-rodent species. These experiments enabled the Company to realize one of the three-part set of important milestones that are critical to the development of Stellar KLH/IMG for human use, as a standardized, primary immune response diagnostic.
The research reached and exceeded its target endpoints, but, as explained by Stellar’s VP of Product Development, Dr. Herb Chow, produced information that may prove very valuable in the future. In Dr. Chow’s words, "…it is most exciting to believe that KLH will dramatically change the ways cancer vaccines are administered, and we found reason to believe we may be on the track of valuable new IP regarding KLH."
Fundamental traders like to read that sort of news. Technical traders are watching the price per share hold $1.00 while trying to generate some additional volume to pop back through resistance at $1.14 where there is some static resistance and also dynamic resistance from the 50 day moving average. Support is being drawn from $1.00 as that is a common psychological area of support, but there is more not too far away at 90 cents.
The chart is at a pivotal point as it was making a new all-time high at $1.50 less than one month ago and is consolidating at this point, but needs to hold here without falling through the bottom support.
The lower indicators have slid over to the bearish side with the MACD dropping below the zero line and classic momentum indicators such as the RSI and Full Stochastics trending down, but there are hints of a possible reversal being given with the dollar level maintaining strength as slight curls in the indicators are starting to happen.
As with any biotechnology play, the road is long, but the rewards are phenomenal if targets are continually met throughout the process. Stellar appears to be positioning itself to receive attention from both fundamental and technical traders as for them and their immediate goals; it’s one target down, two more to go.
