Stellar Biotechnologies harvests mollusks for KLH protein

A mollusk living in the coastal waters off California from Monterey to the Baja Peninsula may hold the key to new therapies to treat cancer and autoimmune diseases.

Stellar Biotechnologies (OTCQB:SBOTF; TSX-V:KLH) has pioneered technology to grow the mollusk, known as the Giant Keyhole Limpet, and produce and purify KLH, or keyhole limpet hemocyanin, an important carrier and immune system-stimulating protein.

“We have applied decades of specialized aquaculture science to a pharmaceutical industry challenge and created the only KLH production facility of its kind in the world,” Frank Oakes, chairman, president and CEO, says in an interview with

“Not only have we developed the proprietary ability to sustainably produce GMP-grade KLH, but we have set unprecedented benchmarks for its manufacture and sustainable supply.”

Mr. Oakes explains that KLH can only be obtained from the Giant Keyhole Limpet, which is a scarce marine source. “Our ground-breaking achievements in aquaculture science and KLH production ensure that this critical natural resource thrives,” he adds.

KLH is used extensively in clinical research as a carrier protein in order to stimulate a response from the immune system in the form of antibody production.

“KLH is the most widely employed carrier protein for this purpose, fueling a rapid growth in development of active immunotherapies and therapeutic vaccines,” he points out.

Many immunotherapies now in clinical trials contain Stellar’s KLH and its customers’ proprietary antigens, Mr. Oakes contends, adding that Stellar also makes the purified KLH molecule in an injectable form that pharmaceutical companies and researchers use as a diagnostic to measure and assess an immune response to new drugs. Even a single subunit of the KLH molecule can be an effective vaccine carrier.

“Our commercial strategy has multiple high-value pathways that cover direct sales and research collaborations for our finished products to long-term supply agreements of KLH for therapeutic vaccines and immunotherapies, as well as strategic alliances, licensing fees and milestones,” he says.

The therapeutic use of KLH originated with cancer research, and clinical testing is most advanced in that area. In addition to cancer, KLH is being developed to treat inflammatory diseases, immune disorders, Alzheimer’s disease and infectious diseases.

As an example of how Stellar is monetizing KLH, Mr. Oakes points to a $5-million investment by Amaran Biotechnology of Taiwan in September 2013. Amaran was formed to be the commercial manufacturer of OBI Pharma’s cancer vaccines.

The companies signed a collaborative agreement in December 2013 to optimize Amaran’s manufacturing methods for OBI Pharma’s breast cancer vaccine, OBI-822, with Stellar’s KLH as a key ingredient. OBI also is developing a therapeutic vaccine for ovarian cancer.

Stellar also has a long-term relationship with Neovacs, a French biotechnology company developing the next generation of therapeutic vaccines for autoimmune and inflammatory diseases like rheumatoid arthritis, Crohn’s disease and lupus. “These commercial opportunities are significantly greater than cancer drugs,” Mr. Oakes says.

Neovacs’ two vaccines are in mid-stage clinical trials and KLH is being used as a carrier molecule in Neovacs’ kinoid immunotherapy technology, he points out. “We have been involved as a supplier to Neovacs from the very beginning of their clinical journey, and we see this as a huge opportunity.”

He estimates that KLH’s market potential could be $10-million to $200-million per disease category for approved products based on either royalties or a commercial fixed fee structure at current prices. In addition, one gram of GMP KLH has a commercial value of $40,000 to $50,000.

Stellar also is active in identifying complementary technologies to expand its presence in immunotherapy and leverage its core leadership position in KLH technology.

In 2013, the company acquired an exclusive, worldwide license from the University of Guelph in Ontario to a patented technology for the development of human immunotherapies against Clostridium difficile infection (C. diff). C. diff is a major and growing cause of mortality and morbidity in hospitalized patients.

In preclinical studies, Stellar’s cell-surface polysaccharides (PS)-KLH active immunotherapy program demonstrated protection against C. diff in mice, as measured by improved survival rates. The study concluded that the C. diff PS-KLH immunotherapy approach was well tolerated and efficacious in a preclinical model. Additional preclinical research is underway.

According to Mr. Oakes, the supply dynamics of KLH favor Stellar. “We are the only company with the ability to increase production capacity over time as opposed to relying on a diminishing resource.” He points out that protein-rich hemocyanin can be extracted three times a year from the Giant Keyhole Limpet. However, citing commercial scale constraints, he notes that the Giant Keyhole Limpet requires five years to reach maturity.

Mr. Oakes also figures that Stellar is five-to-10 years ahead of any potential competitor, citing R&D and capital costs for land, plant and equipment. “That makes the barriers to competition high.”