Maxim Group reduced its price target for Stellar Biotechnologies (NASDAQ:SBOT) to $4 from $7, saying demand for the company’s keyhole limpet hemocyanin (KLH) is a slow climb. The stock was quoted at $2.59 at midday Dec 2.
Analyst Jason McCarthy writes that Stellar’s partners have hit speed bumps: OBI Pharma’s vaccine for breast cancer did not meet its primary endpoint in a Phase 2/3 trial and Neovacs, with a vaccine for lupus in a Phase 2b trial, has extended the timeline to provide data until 2017.
“The result has been downward pressure on Stellar,” Mr. McCarthy said. If that is not enough, high expectations for immunotherapies, targeting Alzheimer’s disease, particularly the “amyloid hypothesis,” have been dampened by the failure of Lilly’s Solanezumab.
“As a vaccine backbone, we continue to believe that KLH is an ideal choice, particularly when the desired immune response is humoral (antibodies),” he said. “However, it is going to take more time due to a lack of near-term catalysts from KLH partners and negative trends in large indications like AD,” he added.
